Due Diligence

Art Secured Lending: Due Diligence Report Cy Twombly’s Untitled (New York City) (1968)

Premise The following report is in response to a request by a private bank to provide a due-diligence report on Cy Twombly’s Untitled (New York City) (1968) which they are considering accepting as collateral for a 5 year-fixed bullet loan.

Data Collection The data set for Cy Twombly’s paintings sales were collected from Artprice and Twombly’s exhibition history were gathered from ArtFacts. Indices and rankings created by both databases were included in this report in order to reflect Twombly’s current market.

Table of Contents 1 1.1

Artist Specific Information Cy Twombly, (1928-2011)

2 2.1

Object Specific Information Untitled (New York City), 1968

3 3.1 3.1.1 3.2 3.2.1 3.2.2 3.3 3.3.1 3.3.2 3.3.3

Artist Market Analysis Primary Market Gallery Representation Institutional Recognition Public Institutions / Private Galleries Solo Shows / Group Shows Secondary Market Twombly 2006-2016 Paintings Top 10 Sales for Twombly Paintings Geographic Distribution - Paintings 2006-2016

4 4.1 4.2 4.3 4.3.1 4.3.2 4.3.3 4.3.4

Value Appraisal Sale History Indices Comparables Twombly 1967-1971 Series Paintings that feature loops Paintings that feature blue scribbles Closest comparables

5 5.1 5.1.1 5.1.2 5.2 5.2.1 5.2.1.1 5.2.1.2 5.2.1.3 5.2.2 5.2.2.1 5.2.2.2 5.2.2.3

Risk Appraisal Market Risks Liquidity Guarantees Art Work Specific Risks Quantitative Volatility Potential Peak of Twombly’s Market; 2014-15 Price-Risk Qualitative Object Risks Eco-System Endorsement Risks

6

Final Recommendation

Bibliography Appendix

2

1 | Artist Specific Information 1.1

Cy Twombly, (1928-2011) Edwin Parker “Cy” Twombly, Jr. was born in Lexington, Virginia, USA on April 25, 1928 and passed away in Rome on July 5, 2011 (Cy Twombly Foundation, 2017). From 1947–49 he studied at the School of the Museum of Fine Arts (Boston), then the Art Students League (New York) from 1950–51, and finally at the Black Mountain College (North Carolina) from 1951–52 (Gagosian, 2017). Travelling across African and Europe had huge influences on the artist’s interests and style (Cy Twombly Foundation, 2017).

Returning to New York in the mid-1950s, Twombly became part of an emerging group of artists, including his friends and contemporaries Robert Rauschenberg and Jasper Johns (Gagosian, 2017). Twombly’s works have been featured in the most reputable institutions around the world including the Guggenheim Museum of Modern and Contemporary Art (Bilbao), the Kunstmuseum Basel (Basel), and the Whitney Museum of American Art (New York City) to name a few (ArtFacts, 2017).

Artprice’s artist ranking is established by sales in the secondary market in comparison to the rest of the artists in the marketplace. Twombly currently ranks 10 th in 2016, with his lowest ranking in the last decade being 148th in 2006 and his highest being 7th in 2015.

ArtFacts’ artist ranking is established based on the number and quality of exhibitions a given artist has in relation to other artists in their database. Twombly currently ranks 84 th in 2016 with his lowest ranking in the last decade being 136th in 2007 and highest being his 2016 rank.

Artist Ranking 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

0 20 40 60

80 100 120 140 160 Artprice

ArtFacts

Source: Artprice and ArtFacts Figure 1: Artprice and ArtFacts Ranking

3

2 | Object Specific Information 2.1

Untitled (New York City), 1968 Untitled (New York City) is a 152.4 by 173-centimeter, oil-based house-paint and wax crayon on canvas, signed and dated NYC 1968 on the reverse (Sotheby’s, 2016). New to the market, this piece was purchased from the Leo Castelli Gallery, New York (LC #57) in January 1969 and has since been in the property of its last owner in an important private European collection (Sotheby’s, 2016). It has been featured in Ed Heiner Bastian’s Cy Twombly: Catalogue Raisonné of the Paintings, Volume III, 1966-1971 (1994) (Sotheby’s, 2016). According to the auction catalogue the work appears to be in excellent condition, “framed in a stained wood frame with gilt silver facing and a small float” (Sotheby’s, 2016).

Created in 1968, this piece falls in one of the most prized series of Twombly’s career between 1967 to 1971 (Sotheby’s, 2016). During these years, Twombly was based in New York City and created a group of works nicknamed the “Blackboard paintings,” after Robert-Pincus Witten’s praise for their gray grounds and chalk-like scribbles but is the only piece in the series to feature its vibrant, blue hue (Sotheby’s, 2016). This piece was created the same year in which Twombly received his first solo museum exhibition at the Milwaukee Art Centre (Sotheby’s, 2016).

Though Twombly’s style has been hard to classify, this Post-War artist is most commonly noted for taking influence from Abstract Expressionism, Minimalism, and Pop Art (Sotheby’s, 2016). Aspects of each movement are captured Untitled (New York City) from the gestural abstraction of the Abstract Expressionists to the simplified shapes and palette of the Minimalists and the repetition of the Pop Artists (Sotheby’s, 2016).

Source: Sotheby’s Website Figure 2: Untitled (New York City), 1968 4

3 | Artist Market Analysis 3.1

Primary Market

3.1.1

Gallery Representation Twombly was most famously represented by the Leo Castelli Gallery in New York City, pivotal for representing Pop, Minimal, and Conceptual artists since the 1950s (Castelli Gallery, 2017). Castelli championed some of the most well-known contemporaries of Twombly’s time, giving Jaspar Johns, Frank Stella, and Roy Lichtenstein their first solo exhibitions and bringing attention to artists like Robert Rauschenberg, Andy Warhol, and Donald Judd (Russell, 1999). ArtFacts has 35 other dealers also listed who have represented Twombly, including the Gagosian Gallery and Dominique Lévy Gallery. Of ArtFacts’ list of dealers, 19 are from the US, 5 are from Switzerland, 4 are from the UK, and 7 others remain dispersed among Japan and Europe (ArtFacts, 2017).

3.2

Institutional Recognition Cy Twombly has exhibited in 597 public shows since 1953, of which 434 were between the years of 2006-2016 (ArtFacts, 2017). Within the last decade, 66.4% were in public institutions, 32.7% were in private galleries, and 0.9% were in festivals and biennials (ArtFacts, 2017). Of the 434, 81.3%were group shows and 18.7% were solo shows (ArtFacts, 2017). In his overall career, Twombly has exhibited most in the USA (219), Germany (123), France (49), United Kingdom (43), and Italy (43) (ArtFacts, 2017).

Some of his most significant exhibitions were his first retrospective in 1968 at the Milwaukee Art Center, several displays at the Venice Biennial (1978, 1988, 2001, 2003), Cy Twombly: A Retrospective in 1994 at the MoMA, and Tate Modern’s 2008 retrospective Cy Twombly: Cycles and Seasons (ArtFacts, 2016).

Institutions Location Leo Castelli Gallery (New New York, US York) Gagosian Gallery (New New York, US York) Collection Lambert Avignon, France Margo Leavin Gallery California, US The Menil Collection Texas, US Source: ArtFacts Website Table 1: Twombly’s highest number of shows by institution.

Number of Exhibitions 24 13 11 9 9

5

3.2.1

Public Institutions / Private Galleries

Art Insitutions by Type: 1995-2016 40 35 30 25 20 15 10

5

Public Institutions

Private Galleries

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

0

Festivals, Biennials, etc

Source: ArtFacts Figure 3: Art Institutions by Type: 1995-2016

Instiutional Exhibitions by Percentage 0.9%

32.7%

66.4%

Public Institutions

Private Galleries

Festivals, Biennials, etc

Source: ArtFacts Figure 4: Institutional Exhibitions by Percentage: 1995-2016

6

3.2.2

Solo Shows / Group Shows

Solo vs Group Exhibitions 40 35 30 25 20 15 10

5

Solo Show

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

0

Group Show

Source: ArtFacts Figure 5: Solo vs Group Exhibitions: 1995-2016

Solo vs Group Exhibitions by Percentage

18.7%

81.3%

Solo Show

Group Show

Source: ArtFacts Figure 6: Solo vs Group Exhibitions by Percentage: 1995-2016 3.3

Secondary Market From 2006-2016, Twombly’s total painting sales have generated $521,342,619 USD and experienced a Bought In Rate of 23% (Artprice, 2017). In 2006, Twombly’s total sales were $7,728,910. In 2007, Twombly experiences a boost in solo shows compared to the year before and his 2008 retrospective at Tate Modern most definitely secured the artist’s credibility leading to an increase of sales that year to $11,142,715. (ArtFacts, 2017).

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Despite having the most solo and group shows in his career in 2009, Twombly’s market took a hit, after the Lehman Brothers filed for bankruptcy and only generated $4,619,194 (ArtFacts, 2017).

In 2011, Twombly experienced the second highest year of solo and group shows to date and his market experiences an exponential growth after the artist’s death in 2011. While 7 lots appeared at auction in 2010, only 5 were sold with a total of $7,970,240 however of the 6 lots that appeared in 2011, 5 were sold at $29,000,000 generating over three times the total of last year’s sales.

Like the rest of the Post War and Contemporary art market, Twombly’s sales continue to increase until 2015 however the market experiences a drop in 2016. This is most likely a result of the number of lots coming up to auction being cut by 58.3% due to instability in the art market and a lack of guarantees issued in 2016 (Deloitte, 2015).

While the market appears to be weaker after 2015 due to the lack of lots and total sales, it should be noted that following 2011, yearly sales have consistently reached or surpassed the low estimates. Especially in the cases of 2014-2016 where sales have exceeded the high estimate values by $2,343,602, $24,154,149, and $40,711,995.

3.3.1

Twombly 2006-2016 Paintings

Twombly - Paintings: Total Auction Sales 200000000 150000000 100000000 50000000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total Sales

Low Estimate

High Estimate

Source: Artprice Figure 7: Twombly Paintings – 2006-2016: Total Auction Sales

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Twombly - Paintings: Average Price vs Estimate 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average Price

Average Low Estimate

Average High Estimate

Source: Artprice Figure 8: Twombly Paintings – 2006-2016: Average Price vs Estimate

Twombly - Paintings: Total Sold vs Unsold Lots 30 25 20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Lots Sold

Bought-In

Source: Artprice Figure 9: Twombly Paintings – 2006-2016: Total Sold vs Unsold Lots

BI Rate 2006-2016

23% 77%

Lots Sold

Bought-In

Source: Artprice Figure 10: Twombly Paintings – 2006-2016: Bought In Rate

9

Auction House Total Sales USD Sotheby’s 254,492,371 Christie’s 242,068,985 Phillips 10,699,500 Phillips de Pury 13,500,000 & Company Other 581,763 Source: Artprice Table 2: Twombly 2006-2016 Paintings

% of Total Sales 48.81% 46.43% 2.05% 2.59%

Total Lots 55 52 3 2

Lots Sold 46 40 1 2

0.11%

10

5

Location Total Sales USD New York 405,120,000 London 109,543,615 Other 4,634,234 Source: Artprice Table 3: Twombly 2006-2016 Paintings

% of Total Sales 77.71% 21.40% 0.89%

Total Lots 73 34 15

Lots Sold 55 29 10

3.3.2

Top 10 Sales for Twombly Paintings The top ten lots in Twombly’s auction history have all been within the last 6 years, from 2012-2016. This rise in the market is most likely affected by Twombly’s relatively small oeuvre and his passing in 2011. Only two out of ten fall outside of the 1967-1971 range and five out of ten are part of the “Blackboard painting” series. Most of the works are single, large scale pieces framing from 143.5-206 x 173-253 cm apart from Poems to the Sea. Eight of the ten lots were sold in New York, emphasizing the strength of Twombly’s US market at 80%, with UK sales trailing behind at 20%. The top lots seem to reflect the overall geographic distribution of Twombly paintings between 2006-2016 with a 60/40 split of sales between Sotheby’s and Christie’s.

Rank Title

Date

Size

1

1968

2

Untitled (New York City) Untitled

3

Untitled

1969

4

Untitled (New York City) Untitled (New York City) Poems to the Sea (3 works) Untitled (Rome)

968

172.7 x 228.6 cm 155.5 x 190 cm 200.7 x 239.4 cm 152.4 x 173 cm 144.69 x 177.8 cm 30.3-34.6 x 31 cm 206 x 253 cm

5 6 7

1970

1970 1959 1964

Hammer Price USD 62,750,000 62,000,000 38,000,000 32,500,000 26,663,000 19,200,000 17,747,640

Auction Location House Sotheby’s New York, NY Christie’s New York, NY Christie’s New York, NY Sotheby’s New York, NY Christie’s London, UK Sotheby’s New York, NY Sotheby’s London, UK

Sale Date 11-112015 12-112014 13-052015 11-052016 11-022015 13-112013 12-022014

10

8 9

Untitled

1971

147.6 x 195.8 cm 143.5 x 177.8 cm 200 x 240 cm

15,500,000

Christie’s

New York, NY Sotheby’s New York, NY Sotheby’s New York, NY

Untitled (New 1970 15,500,000 York City) 10 Untitled 1969 13,600,000 (Bolsena) Source: Artprice Table 4: Top ten sales records for Twombly paintings throughout the artist’s career.

3.3.3

10-112015 09-052012 14-052013

Geographic Distribution - Paintings 2006-2016 The United States dominate Twombly’s painting sales from 2006-16 with a 73.5% share, followed by the United Kingdom at 26.2%, with Italy and South Korea sharing the smallest percentage at 0.3%.

This perhaps reflects the number of exhibitions Twombly has had over the length of his career with 219 shows in the US and 43 in the UK. However, this does not account for the apparent lack of market in Germany, France and Italy with their respective number of exhibitions of 123, 29, and 43 with only 1 exhibition in Italy and none in South Korea.

Source: Artprice Figure 11: Geographic Distribution – Twombly Paintings 2006-2016

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4 | Value Appraisals 4.1

Sale History On May 11, 2016, Twombly’s Untitled (New York City) (1968) appeared at auction for the first time having never previously been exhibited or placed on loan (Sotheby’s, 2016).

The work was the cover lot for the Sotheby’s Contemporary Art Evening Auction, fetching a hammer price of $32,500,000 USD and $36,650,000 USD after the buyer’s premium (Artprice, 2017). While the sale secures the fourth highest auction price for Twombly paintings, it was just short of the presale estimate of $40 million USD (ArtNet, 2016). The work was sold to the only bid of the night, an anonymous phone bidder through Patti Wong, the Hong Kong-based chairman of Sotheby’s Asia (Tully, 2016).

Per Castelli Gallery archive records, the piece was originally acquired in November 1968 for $2600 USD, making 2016’s sale price 12,500 times the original price (Tully, 2016).

4.2

Indices To understand whether Twombly’s market, Artprice’s Price Index was used for this report. With a base 100 in 2000, “the value of an 'average' work reflecting the artist's output” was collected and compared with Artprice’s Global Art Index and the S&P 500 Index. The former representing the global art market in terms of auction sales and the latter representing 500 large companies that commonly have shares listed in the American stock exchange.

If the same amount was invested in 2000, Twombly’s total return of 433% is the greatest compared to Artprice Global Art and S&P 500’s 43.3% and 39.1%. Both Artprice Global Art and S&P 500 indices show steady growth of 2.14% and 1.96% year-over-year return with 2.27% and 2.08% CAGR. While Twombly’s total return is the highest, his index shows the highest annual standard deviation of 67.3% raising doubts about the stability of the market from year to year however the overall trajectory is positive over the seventeen-year period.

Artprice Global Art and S&P 500 indices appear to have a moderate positive correlation at +0.46 while both have little to no correlation with Twombly’s index. This can be positive as Twombly’s market seems unaffected by the swells of the stock market as well as the overall art market.

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Comparative Price Index 600 500 400 300 200 100 0

Cy Twombly Index

Artprice Global Art Index

S&P 500 Index

Source: Artprice Figure 12: Twombly’s price index in comparison to Artprice’s Global Art and the S&P 500 Indices Indices Total Return Annual Return CAGR Annual Standard Deviation Cy Twombly 433% 10.34% 11.02% 67.3% Artprice Global 43.3% 2.14% 2.27% 15.4% Art S&P 500 39.1% 1.96% 2.08% 18.2% Source: Data gathered from Artprice.

Table 5: Risk/Return comparison of Cy Twombly’s overall artist index with Artprice Global Art and S&P 500 indices.

Cy Twombly

Artprice Global Art

S&P 500

Cy Twombly Artprice Global Art 0.19 S&P 500 0.07 0.46 Source: Data gathered from Artprice.

Table 6: Correlation Matrix of Cy Twombly’s artist index, Artprice Global Art and S&P 500 indices.

Included below is Twombly’s price index in juxtaposed against the top three artists who he most frequently exhibits with. All three artists, Warhol, Rauschenberg, and Johns, rank higher than Twombly on ArtFacts, however his index’s trajectory shows the highest standing in 2016 and a lower volatility than Warhol and Rauschenberg’s indices.

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Comparative Price Index 1000 800 600 400 200

Cy Twombly Index

Warhol Index

Rauschenberg Index

Johns Index

1/1/16

1/1/15

1/1/14

1/1/13

1/1/12

1/1/11

1/1/10

1/1/09

1/1/08

1/1/07

1/1/06

1/1/05

1/1/04

1/1/03

1/1/02

1/1/01

1/1/00

0

Source: Artprice Figure 13: Twombly’s price index in comparison to Andy Warhol, Robert Rauschenberg, and Jasper Johns.

Most exhibitions shown ArtFacts Rank Number of Times with Andy Warhol 1 182 Robert Rauschenberg 12 148 Jasper Johns 56 137 Source: ArtFacts Table 7: Top three artists who Twombly has most exhibitions shown with.

4.3

Comparables

4.3.1

Twombly 1967-1971 Series Sales from Twombly’s 1967-1971 series are collected here to show market size and demand for this timeframe in the artist’s career as they are comparable in execution.

Auction House Total Sales USD Christie’s 177,474,800 Sotheby’s 152,237,056 Phillips de Pury & 5,500,000 Company Source: Artprice Table 8: Twombly 1967-1971 Series

% of Total 52.9% 45.4% 1.6%

# of Lots 18 17 1

14

Location Total Sales USD New York 301,110,000 London 34,101,856 Source: Artprice Table : Twombly 1967-1971 Series

% of Total 89.8% 10.2%

# of Lots 29 7

Twombly Paintings - 1967-1971: Total Auction Sales 180000000 160000000 140000000 120000000 100000000 80000000 60000000 40000000 20000000 0 2006

2007

2008

2009

Total Sales

2010

2011

2012

Low Estimate

2013

2014

2015

2016

2015

2016

High Estimate

Source: ArtPrice Figure : Twombly Paintings – 1967-71: Total Auction Sales

Twombly Paintings - 1967-1971: Average Price vs Estimate 25000000 20000000 15000000 10000000 5000000 0 2006

2007

Average Price

2008

2009

2010

2011

Average Low Estimate

2012

2013

2014

Average High Estimate

Source: Artprice Figure : Twombly Paintings – 1967-71: Average Price vs Estimate

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Twombly Paintings - 1967-1971: Total Sold vs Unsold Lots 14 12 10 8 6 4 2 0 2006

2007

2008

2009

2010

2011

Lots Sold

2012

2013

2014

2015

2016

Bought-In

Source: Artprice Figure : Twombly Paintings – 1967-71: Sold vs Unsold Lots

Twombly Paintings - 1967-1971: BI Rate 2006-2016 13.9%

86.1%

Lots Sold

Bought-In

Source: Artprice Figure : Twombly Paintings – 1967-71: Bought In Rate from 2006-2016 4.3.2

Paintings that feature loops These pieces appearing at auction from 2012-2016 are included because they were created in the same 1967-71 series and feature similar “loops” in artist’s strokes.

Title New York City Untitled Untitled

Date 1969 1969 1971

Size 76.2 x 101.6 cm 69.9 x 87 cm 52.1 x 36.5 cm

Hammer Price USD 900,000 4,400,000 1,900,000

Sale Year 2010 2012 2013

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Untitled 1967 52.7 x 57.1 cm 4,500,000 Untitled 1970 155.5 x 190 cm 62,000,000 Rome 1969 70 x 87 cm 5,028,540 Untitled 1969 85.1 x 76.2 cm 3,800,000 Untitled (New 1968 172.7 x 228.6 cm 62,750,000 York City) Untitled 1970 44.5 x 35.6 cm 2,500,000 Untitled (New 1968 152.4 x 173 cm 32,500,000 York City) Source: Artprice Table 9: Works that sold from 2012-2016 that featured loops.

4.3.3

2014 2014 2015 2015 2015 2016 2016

Paintings that feature blue scribbles These pieces appearing at auction from 2012-2016 are included as comparables because they were created in the same 1967-1971 series and feature Twombly’s infamous, illegible scribbles in blue.

Title Date Size Hammer Price USD Untitled 1970 70.2 x 87 cm 1,300,000 Untitled 1971 52.1 x 36.5 cm 1,900,000 Untitled 1970 70 x 90 cm 1,295,230 Untitled 1970 44.5 x 35.6 cm 2,500,000 Untitled (New 1968 152.4 x 173 cm 32,500,000 York City) Source: Artprice Table 10: Works that sold from 2012-2016 that featured blue scribbles.

4.3.4

Sale Year 2012 2013 2015 2016 2016

Closest comparables Of the works listed in 4.3.2 and 4.3.3, the following works were chosen as the closest comparables to Untitled (New York City) (1968) due to their execution and size.

Twombly’s Untitled (New York City) (1968) – Sold 11 Nov 2015 This piece has the same title, year of creation, and materials as Untitled (New York City).

Featuring similar crescendos of six bands of loops, both works sold at Sotheby’s (New York) as the star lot of their respective sales, however this work sold at the height of Twombly’s market in 2015. This work also features a longer provenance as part of important collections including Fred Mueller, the Saatchi Collection, and Mr. and Mrs. Sydney Irmas and was previously exhibited at the Museum Ludwig in den Rheinhallen der Kölner Messe (Cologne) (Sotheby’s, 2015). This work achieved over the presale estimate of $60M USD, holds the highest record for this artist, and was the top lot in Sotheby’s worldwide sales in 2015 fetching “more than 10 times the $3.9 million [it realised] when it last appeared at auction in 1990” (Financial Times and Sotheby’s, 2015).

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Title Date Size Hammer Price USD Untitled (New 1968 172.7 x 228.6 cm 62,750,000 York City) Untitled (New 1968 152.4 x 173 cm 32,500,000 York City) Source: Artprice Table 11: Auction records of both Untitled (New York City) paintings.

Sale Year 2015 2016

Source: Sotheby’s Website Figure : Untitled (New York City), 1968 4.3.5

Twombly’s Untitled (1970) – Sold 12 Nov 2014 This piece was chosen as a comparable because of its similar size 152.4 by 173 cm vs 172.7 x 228.6 cm and that its provenance also shows that the work was directly acquired from the artist. Untitled (1970) features 4 similar bands of loops as opposed to 6, but has previously been exhibited at the Kunsthalle Bern and Munich and the American Academy in Rome.

Title Date Size Hammer Price USD Untitled 1970 155.5 x 190 cm 62,000,000 Untitled (New 1968 152.4 x 173 cm 32,500,000 York City) Source: Artprice Table 12: Auction records of Untitled (New York City) and Untitled.

Sale Year 2014 2016

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Source: Christie’s Website Figure : Untitled, 1970

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5 | Risk Appraisals 5.1

Market Risks

5.1.1

Liquidity Liquidity continues to remain a risk for the art market in 2016 according to Deloitte’s 2016 Art and Finance Report. The “economic uncertainty [of 2015-2016] has dampen[ed] confidence in the global art market,” making it look more uncertain and “less liquid,” with “lower values” projected for 2016, affecting “aspects the art and finance industry, such as art investment funds and the art-secured lending market” (Deloitte, 2015).

This is visible in Twombly’s market as the number of auctions, lots, and average sales price per work continues to drop.

Year Number of Auctions Number of Lots 2014 13 19 2015 11 24 2016 9 10 Source: Data collected from Artprice Table 13: Liquidity based on auction results 2014-16.

5.1.2

Average Price/Work 7,959,606 11,195,114 7,059,062

Guarantees As mentioned in 3.3, guarantees have cooled in 2015 with powerhouse Christie’s reducing its number of guaranteed lots from 51.4% to 26% (Deloitte, 2015). This seems to have greatly affect the number of lots and sales appearing in 2016.

Reduced number of guarantees might continue to be a trend after 2016 with a renewed focus on the middle market. According to Jussi Pylkkänen, Christie’s global president, the auction house worked to “reinvigorate sales in its “core market”, referring to works priced between $100,000 and $2M” (Gerlis, 2016). Sotheby’s seems to confirm this sentiment as chief executive, Tad Smith, “highlights the middle market—which he defines as being between $25,000 and $1m—as an area of focus for 2016” (Gerlis, 2016).

5.2

Art Work Specific Risks

5.2.1

Quantitative Risks

5.2.1.1 Volatility Using Artprice’s Indicator projections of Untitled (New York City), an index was created to compare the work’s value to Twombly’s artist index. The work’s returns appear promising with its total returns, annual returns, and CAGR surpassing Twombly’s overall market with its annual standard deviation a little less volatile than the market’s.

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Indices

Total Return Annual Return

CAGR

Annual Standard Deviation

Cy Twombly 433% 10.34% 11.02% 67.3% Untitled (New 641.5% 12.51% 13.34% 65.6% York City) Source: Artprice Table 14: Risk/Return comparison of Untitled (New York City) and Cy Twombly’s overall artist index.

5.2.1.2 Potential Peak of Twombly’s Market; 2014-15 With a sales total of $190,316,931 in paintings in 2015, 2016 was an important year to see whether Twombly’s market would remain strong despite the 50% decline in the PostWar & Contemporary Art market (Petterson, 2017). While Twombly’s market saw 58.3% less works come to auction this year compared to 2015, the Bought In Rate remained low at 20% producing $56,472,495 in sales with total sales exceeding the high estimate by $40,711,995. This figure outshone the previous two years with 2014 only surpassing the high estimates by $2,343,602 with a Bought In Rate of 21% and 2015 surpassing by $24,154,149 with a Bought In Rate of 29%. It should be noted however that the average price per work in 2016 was slightly lower at $7,059,062 in comparison to 2014’s $7,959,606 and 2015’s $11,195,114.

5.2.1.3 Price-Risk The chances of Untitled (New York City) falling 50% below its current value seems unlikely as Twombly’s career trajectory continues to grow at a strong and conservative rate. This is especially true as there is little to no doubt of its provenance and place in Twombly’s Catalogue Raisonné. Moreover, this piece belongs to the most sought after “Blacboard paintings” series with many works “comparable in scale and execution belong to the world’s most renowned museums and institutions, including: The Museum of Contemporary Art, Los Angeles; The Menil Collection, Houston; The Solomon R. Guggenheim Museum, New York; and the Benesse House Museum, Naoshima.”

(Sotheby’s, 2016) 5.2.2

Qualitative Risks

5.2.2.1 Object Risks Like most of Twombly’s “Blackboard” paintings, Untitled (New York City) was created with oil-based house-paint and wax crayon on canvas. Twombly’s process often included paint diluents, wiping away at the oil surface (Video: Cy Twombly’s Untitled, 1970, 2014). Similar to other 1950s and 60s artists who thinned paint in order to loosen the application, Twombly’s oil-based paint should have a longer longevity compared to other artists who chose to work with acrylic emulsion (Tate, 2004). However the conservation needed over time is still unknown as the work has remained in excellent condition as part of a private collection for approximately the last five decades.

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5.2.2.2 Eco-System As a crucial artist of the American and Post-War canons, Twombly’s institutional interest remains high with 24 exhibitions in 2014, 32 exhibitions in 2015, and 22 exhibitions in 2016 (ArtFacts, 2016). Five exhibitions have currently been announced for 2017 at the Kunstareal München, Munich (until Feb. 12, 2017), the Gagosian in Paris (until Feb. 18, 2017), the Galerie Karsten Greve (until Feb. 18, 2017), the National Gallery Oslo (from Jun. 23, 2017) and a major retrospective at the Centre Pompidou including 140 of Twombly’s works (until Apr. 24, 2017) (ArtFacts, 2016).

5.2.2.3 Endorsement Risks Risk and Uncertainty in the Art World “details the role of the taste-maker and the process of endorsement which allows for identification, selection and retention of some artists above others” (Dempster, 2014). Twombly’s works are in the collections of 58 public institutions including trendsetters in the art world like the MoMA, Tate Modern, and The Broad. Private collectors like Francois Pinault and Yvon Lamber also hold powerful roles as collecting tastemakers. Atop his market’s current success, Twombly’s history with key figures like Leo Castelli and his relationships with art history figures like Rauschenberg and Johns will continue to strengthen his roots in the art world.

Social media’s role in art market growth has been undeniable in recent years. While the staying power of individual companies are uncertain, it is important to note that Twombly continues to have a presence on these platform, for example with his 9983 followers on ArtStack and 4884 followers on Artsy (ArtStack and Artsy, 2017).

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6 | Final Recommendation 6.1

Final Recommendation Based on this report, the final recommendation is that the value of Untitled (New York City) will most likely remain the same or will drop insignificantly. As mentioned in 5.2.1.3, Twombly’s painting oeuvre is comparatively small with many of his most valued “Blackboard paintings” already belonging to collections around the world with this piece standing out from the series due to its blue loops. Twombly’s art historical significance remains strong and 2017 has already shown signs of incredible institutional recognition, including his Centre Pompidou blockbuster.

Though high and low estimates for both the Untitled (New York City) works were unpublished to the public, a region of $40M and $60M were given as the estimates.

Along with Untitled’s low and high estimate of $35M – 55M, the range for similar size works in the “Blackboard series” featuring the same maturation and energy as these three pieces should fall between the $35-60M range. While both the pieces sold in 2014 and 2015 far exceeded these estimates, they were sold at the peak of Twombly’s market and since 2016 favored more conservative estimates (especially as Untitled (New York City) sold just short of its estimate range of $40M), this range allows Untitled (New York City) space to appreciate in the next 5 years, but also gives leeway for the market to drop slightly due to the risks mentioned in section 5.

While the art market has yet to prove itself stable at the end of 2016, Twombly’s artist trajectory seems to be flattening out and stabilizing as opposed to falling after its 2015 all-time high and is outperforming other artists in its peer group. While there is a risk of an abrupt decline in value year-by-year, Twombly’s trajectory indicates that the work’s value should conservatively continue to appreciate over time.

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Bibliography ArtFacts. (2017). Cy Twombly 1928-2011, US profile. Available at: https://www.artfacts.net/en/artist/cy-twombly-684/profile.html, (Accessed: 27 December 2016).

ArtFacts. (2017). Cy Twombly 1928-2011, US career analyser. Available at: http://www.artfacts.net/index.php/pageType/career_analyser/artist/684/lang/1/, (Accessed: 27 December 2016).

Artnet. (2017). Cy Twombly. Available at: http://www.artnet.com/artists/cy-twombly/, (Accessed: 10 January 2017).

Artprice. (2017). Auction results for Cy TWOMBLY in Painting. Available at: http://www.artprice.com/artist/28957/cy-twombly/lots/pasts/1/Painting, (Accessed: 23 December 2016).

Artprice. (2017). Decision support tools for Cy TWOMBLY. Available at: http://www.artprice.com/artist/28957/cy-twombly/index, (Accessed: 23 December 2016).

ArtStack. (2017). Cy Twombly. Available at: https://theartstack.com/artists/cy-twombly, (Accessed: 10 January 2017).

Artsy. (2017). Cy Twombly. Available at: https://www.artsy.net/artist/cy-twombly, (Accessed: 10 January 2017).

Boucher, B. (2016). Cy Twombly Canvas Leads Sotheby’s $242 Million Contemporary Art Sale: Yusaku Maezawa continued his buying spree. Available at: https://news.artnet.com/market/sothebys-contemporary-art-242-million-twombly-495107, (Accessed: 29 December 2016).

Castelli Gallery. (2017). About. Available at: http://castelligallery.com/about.html, (Accessed 3 January 2017).

Childs, M. (2015). ‘Cy Twombly picture fetches $70m at New York Sotheby’s sale: Price sets record for the artist as 10-day auction stretch nears end’, Financial Times, 12 November [Online]. Available at: https://www.ft.com/content/97cbb644-88fa-11e5-90de-f44762bf9896 https://news.artnet.com/market/sothebys-295-million-sale-70-million-twombly-361568, (Accessed: 6 January 2017).

Christie’s. (2014). Lot 20: Cy Twombly (1928-2011), Untitled. Available at: http://www.christies.com/Lotfinder/lot_details.aspx?hdnSaleID=24479&LN=20&intsaleid=2447 9&sid=4368aca2-61eb-4bc8-958e-436093e90ae5, (Accessed 23 December 2016).

Cy Twombly Foundation. (2017). Cy Twombly: Chronological Notes. Available at: http://www.cytwombly.info/twombly_biography.htm, (Accessed: 23 December 2016).

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Deloitte and ArtTactic. (2015). “Art and Finance Report 2016”, Deloitte. [Online]. Available at: https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/financialservices/artandfinance/lu-en-artandfinancereport-21042016.pdf, (Accessed: 6 January 2017).

Dempster, A. (2014). Risk and uncertainty in the art world. London: Bloomsbury Press.

Gagosian. (2017). Cy Twombly: Artist Biography. Available at: http://www.gagosian.com/artists/cy-twombly, (Accessed 23 December 2017).

Gerlis, M. (2016). ‘Christie’s and Sotheby’s battle for the middle market: Auction houses rethink priorities amid global economic uncertainty’, The Art Newspaper, 1 February [Online]. Available at: http://theartnewspaper.com/news/let-battle-commence-for-the-auction-middle-market-/ (Accessed: 6 January 2017).

Jablonski, E., Learner, T., Hayes, J. and Golden, M. (2004). 'Conservation Concerns for Acrylic Emulsion Paints: A Literature Review', Tate Papers, 2 (Autumn 2004), [Online]. Available at: http://www.tate.org.uk/research/publications/tate-papers/02/conservation-concerns-for-acrylicemulsion-paints-literature-review (Accessed: 8 January 2017).

Petterson, A (2016) Post-War & Contemporary Art Evening Sales in New York [PowerPoint presentation]. The Ecology of the Art World and the Construction of Value. Available at: https://online.sothebysinstitute.com/courses/824/files/61121?module_item_id=33380 (Accessed 3 January 2017).

Russell, J. (1999). ‘Leo Castelli, Influential Art Dealer, Dies at 91’, New York Times, 23 August [Online]. Available at: http://www.nytimes.com/1999/08/23/arts/leo-castelli-influential-artdealer-dies-at-91.html (Accessed: 8 January 2017).

Sotheby’s. (2015). Contemporary Art Evening Auction. Available at: http://www.sothebys.com/en/auctions/2015/contemporary-art-evening-auction-n09420.html, (Accessed 23 December 2016).

Sotheby’s. (2015). Lot 18: Cy Twombly, Untitled (New York City). Available at: http://www.sothebys.com/en/auctions/ecatalogue/2015/contemporary-art-evening-auctionn09420/lot.18.html, (Accessed 23 December 2016).

Sotheby’s. (2015). “Contemporary art at Sotheby’s – November 2015,” Sotheby’s. [Online].

Available at: http://files.shareholder.com/downloads/BID/0x0x861172/917660B9-A127-4EDB88AB-45F9F3B4FCA6/Contemporary_PostSale_PR_Nov15_cs.pdf (Accessed: 6 January 2017).

Sotheby’s. (2016). Contemporary Art Evening Auction. Available at: http://www.sothebys.com/en/auctions/2015/contemporary-art-evening-auction-n09500.html, (Accessed 23 December 2016).

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Sotheby’s. (2016). Lot 21: Cy Twombly, Untitled (New York City). Available at: http://www.sothebys.com/en/auctions/ecatalogue/2015/contemporary-art-evening-auctionn09500/lot.21.html, (Accessed 23 December 2016).

Tully, Judd. (2016). Sotheby’s Soothing Contemporary Evening Sale. Available at: http://www.blouinartinfo.com/news/story/1399890/sothebys-soothing-contemporary-eveningsale, (Accessed: 29 December 2016).

Video: Cy Twombly’s Untitled, 1970 (2014) YouTube video, added by Christie’s [Online].

Available at https://www.youtube.com/watch?v=ux6jw-f4inQ&t=97s (Accessed: 3 January 2017).

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Appendix

Artprice Auction Results - Twombly Paintings from 2006-2016

Analysis of Artprice Auction Results - Twombly Paintings from 2006-2016

Artprice Auction Results - Twombly 1967-1971 Series

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Analysis of Artprice Auction Results - Twombly 1967-1971 Series 1.1 Artprice and ArtFacts Ranking Artprice (ranked by sales per year) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Rank 148 101 51 98 98 34 21 23 8 7 10

ArtFacts – (ranked by exhibitions per year (number and quality of shows) Year Rank 2006 135 2007 136 2008 135 2009 103 2010 109 2011 89 2012 100 2013 104 2014 113 2015 104 2016 84

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3.2.1 Public Institutions / Private Galleries Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Public Institutions 15 19 16 20 14 24 18 23 18 18 18 14 11 11 14 8 11 3 2 3 3 5

Public Institutions 66.4%

Private Galleries 7 12 8 7 13 10 6 12 10 7 4 8 7 5 7 4 3 1 3 3 4 1 Private Galleries 32.7%

Festivals, Biennials, etc 1

1 1

1

Festivals, Biennials, etc 0.9%

3.2.2 Solo / Group Shows Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Solo Show 4 2 3 1 3 2 6 3 5 2 1 6

Group Show 2 6 3 4 4 11 11 15 14 13 20 21 19

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2008 2009 2010 2011 2012 2013 2014 2015 2016 Solo Shows 18.7%

4 8 2 7 8 1 2 5 6

24 27 22 27 19 26 22 27 16 Group Show 81.3%

4.2 Indices – Twombly, Artprice Global Art and S&P 500

Indices – Twombly, Warhol, Rauschenberg and Johns

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