Dear Mr. Berko: I have an opportunity to buy a $250,000 half-unit in a multiunit art-related limited partnership. A friend will buy the other half. The partnership will buy very expensive old masterpieces, and I’ve included the partnership papers for your review. Two other people we know are also investing and have checked out the general partners. What can you tell me, good or bad, about this?
— TS, Oklahoma City
Dear TS: It’ll be obvious from my answer that I know very little except that this is a leveraged partnership in which the general partners can borrow money using the masterpieces as collateral. Leverage can be dangerous.
The big problem with most new Joe Billionaires, those who hopscotch from St. Moritz to Monaco to London, is they’re bored. They have too much money and need to find a place where they can be noticed spending it and earn bragging rights. Any billionaire can buy a Lamborghini, a Park Avenue apartment or a monster 300-foot yacht. That’s so plebeian. If your ego really needs stroking and you need to announce your ascendency to the altar of the superrich, your public relations adviser might counsel you to buy a van Gogh or a Warhol for a ghastly sum. Buying something that’s as utterly useless as a Pollock or a Rothko is like lighting a Cuban cigar with a $100 bill. Most of the superrich need to light those cigars in public, but there are a few — such as Joe Jamail, Philippe Kahn, B. Wayne Hughes and James Dyson — who would light it in private or don’t even care for cigars.
During the first half of this year, Sotheby’s offloaded $4.5 billion of art belonging to the superrich. During the second half, stuff by Munch, Picasso, Matisse and Kahlo needs to be sold, and Sotheby’s is hoping other superrich buyers will be dumb enough to write even bigger checks. In my opinion, there’s nothing resembling art in their globs of paint. Real art is Michelangelo’s Moses, a painting by Rockwell, Daniel Chester French’s Lincoln Memorial and The Kiss, by Rodin, certainly not the nightmarish hallucinations of Picasso, Dali and Munch. David Hockney’s “Pacific Coast Highway and Santa Monica,” which recently sold for an absurd $28.5 million, could have been painted by my daughter when she was 10. And Modigliani’s sterile, reclining nude for which some sucker recently paid $157.2 million is less art than fart.