This month, Jeff Koons made headlines when his stainless steel sculpture Rabbit (1986) sold for $91.1 million at Christie’s, making it the most expensive work by a living artist to ever sell at auction. Rumours circulated around the identity of the buyer whose purchase unseated David Hockney as the world’s most expensive artist but it was ultimately revealed that the mystery buyer was in fact Robert Mnuchin, famous art dealer, gallery owner and father of Steven Mnuchin, United States Secretary of Treasury.
News of the final hammer price expectedly inspired a wide array of reactions that may have included “Robert Mnuchin, as in Steven Mnuchin’s father?” Yes. That Mnuchin, and this is not exactly a coincidence.
Bidding for the work started at $40 million and in less than two minutes climbed to $60 million. The bidding continued, as did Mnuchin in calmly raising his paddle. The New York Times reported that “there was nothing flashy about Mnuchin, who was on a black Casio Ravine flip phone” as the numbers climbed up. Eventually, he had the winning bid of $80 million which amounted to $91.1 million with fees.
One well-known perspective on the art world is that it often operates as a playground for the mega-rich. The sculpture, after all, was auctioned from the collection of the late publishing mogul S.I. Newhouse Jr. who owned Conde Nast, publisher of Vogue, The New Yorker and Vanity Fair. Newhouse had previously bought it from the artist Terry Winters via Larry Gagosian.
Understanding Robert Mnuchin’s background however will help make sense of the price he ultimately paid for the rabbit, and indeed, the art world as a whole.
Robert Mnuchin came into the art world after retiring from Goldman Sachs as a VP. During his tenure, he earned the nickname “Coach” for his hands-on management approach and leading the types of deals that are now referred to as block trading. His son later making a ton of money in mortgage-backed securities comes at no surprise.
Mnuchin originally started collecting while he was at Goldman, starting with works by Rothko, Franz Kline, De Kooning and a few others, thanks to Xavier Fourcade, the dealer that showed these artists at the time. After retiring, Mnuchin and his wife were collecting and dealing art out of their home, which today still houses the Mnuchin Gallery in New York City. It hasn’t all been just about flipping however, Mnuchin has put on celebrated exhibitions in the past with artists like David Hammons, arguably the greatest living American artist.
This goes to show that the purchase wasn’t entirely out of the norm for Mnuchin, and if anyone is to put together such a sum of money for a Koons, it’s him. Mnuchin famously bought a Rothko in 2012 for $75 million, and said that he purchased it for someone else. It’s likely that the rabbit was also bought on behalf of someone else as well.
Several reports believed that Mr. Mnuchin was working on behalf of Mitchell Rales, the chairman of the executive committee at the Danaher Corporation. Mnuchin had helped build Rales’ collection, which currently sits in a private museum in Maryland.
However, people with more insider knowledge like Kenny Schatcher of artnet, revealed a more likely situation which was that Mnuchin was purchasing it for Steven Cohen, the art collector and billionaire who was banned from managing any money that isn’t his own as part of a settlement over insider trading at his hedge fund SAC Capital Advisors.
Art dealing is certainly a lucrative business but is an entirely margins game. It’s unlikely that anyone will personally take on such a high price tag with the hopes of flipping it. All we know for certain however, is that this modus operandi continues to simply enrich the rich.
If you find yourself becoming a billionaire, it can seem enticing to take cues from the likes of Mnuchin, Rales and Cohen in how to spend your money, but you certainly don’t have to. If you’re looking for ideas, consider billionaire investor Robert F. Smith who recently stunned the entire graduating class at Morehouse College by announcing that he would pay off all their student loans, estimated to be at $40 million. For the price of the bunny, you could do that twice and even keep $10 million! Pretty good deal.