Kwok In Hock at Auction Block

London -- In February, Olyvia Kwok was in the sales room at Sotheby’s for its contemporary art auction. Two other Basquiats had sold well above their estimates already but, when it came to the Water-Worshipper canvas, the bidding was quiet. The auctioneer’s hammer was falling when Kwok signaled the final bid for £2.49 million.

As she left the salesroom, she told a journalist that it was a bargain, reckoning it would double over the next 18 months.

Art collectors of Art Kabinett social media network were stunned when news broke last week that Sotheby’s was suing Kwok for non-payment.

The bill was £2,947,000 — also for the Cy Twombly she bought that day — plus interest.

Kwok is young, immaculately presented, from the nouveau riche China, and she examines the financials of a painting more closely than the brush strokes.

Balance Sheet

She regards a painting in terms of a balance sheet.

A Georg Baselitz, a Wade Guyton and a Marc Quinn hang on the walls of her Knightsbridge townhouse. When calculating her fundamentals, she wants to know the age of the artist, how long he was been painting, how many he does a year, how many come up at auction, and the frequency. Are the prices coming within the estimate or above or below, what the thresholds are, how each year the price has moved?

When she speaks, there is no mention of the quality of the art, though she did feel the Basquiat was a decent picture, comparable to one that had sold for $9 million dollars in New York not long before. The Marc Quinn, of sunflowers, was “easy to accept” for potential foreign buyers, and she prefers abstract over figurative work.

As for Sotheby’s, Kwok has been rattled by the publicity. She is keen to explain how her purchase fell through:

Kwok runs a company called Willstone Management, which acts as agent for high-net-worth clients looking to invest in art around £1 million to £2 million. She bought the Basquiat and Twombly for a European living in Hong Kong. The client “reneged” on his side of the deal.

Art World Boom

Kwok, age 31, has been working in the art market for nearly a decade. She is one of many who are the attendant agents on the art world boom, where canvases and installations are bought as trophies and dealers such as Larry Gagosian achieve rock-star status.

Sotheby’s and Christie’s issue a stream of press releases about new records being broken.

Last week Tracey Emin’s unmade bed sold for £2.5 million — twice the estimate — and Francis Bacon’s triptych of his lover George Dyer hit £27.6 million.

Names are brands: once you’ve acquired your Chanel handbag or Patek Philippe watch, next on the shopping list is the blockbuster contemporary artist.

Much of it doesn’t even see a wall. It may well end up sitting in a free port — a customs-free zone — waiting for a crest in prices to be returned to the market. Or that, at least, is what Kwok is waiting for.

She observes that Basquiat is one of the top three names that will come up when talking to foreigners. They may know Damien Hirst, and they will surely know Warhol.

High-Class Pedigree

Kwok’s career started with the Chinese contemporary art market boom ten years ago. The daughter of a Chinese banker, she was educated at British boarding schools and under the wing of her godfather Conor Mahoney, a former vice-president of Sotheby’s Chinese division who introduced her to the art market.

After a degree from Queen Mary University — in math rather than art history — and a course at the British Museum, Kwok launched her first gallery, Olyvia Oriental, in St James’s.

The Chinese contemporary market collapsed in 2008 and Kwok quickly shifted out of that niche into general contemporary, but that business was also shuttered a few years later and now she prefers the private deals and the number-crunching.

She previously worked with an art fund run by a Swiss bank, a portfolio bought for longer-term investment, but her new philosophy is the short term -- never more than five years.

Fluctuating Market

She advises her clients that art prices have peaks, implicitly saying that taste changes and there is nothing intrinsically valuable.

The situation of the buyers also fluctuates:

There are many unforeseen reasons in politics and the economy: what’s going to happen to the tax situation in France, what’s going to happen to the presidency in America, how is China going to land, is Japan in a distressed situation again, is England really recovering?

What she thinks is suffering at the moment in the art market is American Minimalism, and meanwhile she’s tipping German Expressionism, like a financial broker telling you to sell tech shares and buy bonds.