The story of the original and greatest art fund

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Getty archives reveal how in 1914 André Level organised sale of works by artists including Picasso and Matisse

Level acquired Picasso’s Family of Saltimbanques, for the fund in 1908. Image © National Gallery of Art, Washington, D.C.

The history of art funds is littered with dashed hopes and discarded business models. The past decade particularly has witnessed numerous attempts at pooling investors’ money to buy and sell art instead of, say, stocks. These are often announced with great fanfare, but it sometimes turns out that the fund has not raised enough money to operate and that the fund manager is no longer responding to phone calls.

Still, the dream never seems to fade, and articles this year by the New York Observer and CNN have proclaimed, despite scant evidence, a new “boom” in art funds. And there are a couple of examples of undeniable success, beginning with La Peau de l’Ours, run by the Paris-based businessman André Level from 1904 until the fund’s sale through Drouot in 1914.

Level borrowed the phrase La Peau de l’Ours from the moral of an anti-speculation fable by Fontaine: “Never sell the skin of the bear before you’ve actually killed it.” In this case, to mix metaphors, the investors did kill it. Level’s investors spent FF27,500 in ten years on 145 works that made nearly four times the original outlay when they were sold in a high-profile auction at Drouot. The highlight was Picasso’s Les Bateleurs, 1905 (known as The Family of Saltimbanques and now in the National Gallery of Art in Washington, DC), which made FF11,500 against a purchase price of FF1,000. According to the French consumer price index, one French franc from that period is worth roughly four euros today.

The New Yorker columnist James Surowiecki and Noah Horowitz, the author of Art of the Deal, acknowledge La Peau de l’Ours as the first successful art investment fund. In her book Art as an Investment, Melanie Gerlis, The Art Newspaper’s art market editor (Europe, Asia and Africa), suggests that it could also be the last successful one. But writers, collectors and fund managers seem to know relatively little about how the fund operated. Why was it so successful? What art did it buy, and how? Did the fund manager work with galleries or circumvent them?

To explore these issues, I spent several weeks at the Getty Research Institute in Los Angeles, consulting the two books written by Level, archival correspondence to him from artists such as Henri Matisse and André Derain, the Peau de l’Ours auction catalogue published by Hotel Drouot in 1914 and contemporaneous newspaper coverage of the sale. What emerges is a portrait of an extraordinary collector with pioneering tastes, almost as radical as his contemporaries Gertrude and Leo Stein. Level, who was born in 1880 to a family of industrialists, was, like the Steins, wealthy and well-placed; his Memoirs of a Collector depicts a grandmother who once danced with the French novelist and playwright Honoré de Balzac. Level’s collecting began seriously after university—not with fine art, but with rare books, as he made the rounds of the “bouquinistes” who had stalls on the Seine. He describes his purchases in detail, with a bibliophile’s attention to editions, dedications and prices: they include works by Gustave Flaubert, Paul Verlaine, Rémy de Gourmont and Edgar Allan Poe. One line is particularly telling. After listing a number of rare-book purchases (most well under FF10), Level acknowledges that “I constantly sold my books infinitely too early and without great profit, in order to buy others”.

The notion of appetites outstripping finances is a hallmark of art collectors everywhere—and a theme that Level would later cite as one reason for founding La Peau de l’Ours. He dates his shift from books to Modern art to 1895, after a seaside encounter with one of the Bernheim sons. Level began to visit the family’s art dealership on Rue Laffitte, then the epicentre of the Parisian galleries, and started to buy relatively inexpensive etchings by Adolphe Hervier and drawings by Constantin Guys. He also became a client of Berthe Weill, one of the few gallerists to promote next-generation painters. Then came the “Salon d’Automne” of 1903, a platform for Matisse, Picabia, Villon, Bonnard and Vuillard, and an event that Level describes in language usually reserved for religious rapture. “It was a revelation,” he writes, describing the “boldness and edginess” of the works by young artists. “I had seen there the canvases that seemed to me, without the slightest doubt, the authentic art of our time and the near future. I believed in it; I had faith.”

There was a catch, however. Level had a job as a manager of a shipping company in Marseilles, but he was starting a family and his personal expenses were already hefty. So he hit on an idea. Why not gather together some intimate associates to form “une collection indivise”, to give would-be collectors a “taste for the works of painters as young as them”?

Level laid out the basic principles in a contract signed in February 1904. Each investor would contribute FF250 a year towards art purchases for the collection, to be dissolved after ten years. Should the enterprise prove profitable, they would receive their money back, plus 3.5% interest. Any further profits would be distributed to Level (20%) and the artists (20%) before going to the investors. In the meantime, investors would have access to the works to decorate their homes. Level would serve as the director and would decide on each acquisition, with the help of a two-person advisory committee that had the power of veto. The group was young (most members were under the age of 30), and most were bankers and businessmen who played cards together.

Level got to work right away. In the first year, he bought three paintings by Matisse, two canvases by Paul Sérusier, six drawings by Guys, a “beautiful Vuillard” interior of a woman in a blue dress and black hat, and “a large canvas by Gauguin, painted… in the style of Tahiti, of the violoncellist Schnéklud”.

Judging from the letters in the Getty, Level established a strong relationship with Matisse before the famous dealer Ambroise Vollard gave the artist his first solo show in June 1904. Matisse had written to Level in March of that year to acknowledge the receipt of FF550 for two paintings: Still Life with Eggs, 1896, and Snow Scene, 1899. The pair’s letters become increasingly intimate in tone. In one, dated 22 April 1904, Matisse apologises for having been out when Level visited his home. The artist then mentions his desire to show Level some photographs he has made, and asks to borrow Still Life with Eggs for a show with Vollard.

Michael FitzGerald, the author of Making Modernism and one of the few art historians to cover La Peau de l’Ours in depth, suggests that Level’s idea of an art fund may even have come from Matisse, who, in 1903, tried to form a “syndicate” of buyers who would pay FF200 a year in exchange for two paintings, sight unseen, each year.

Level’s purchase of Picasso’s Les Bateleurs in 1908 reveals an affection for artists, an eye for future masterpieces and a knack for negotiation. In talking to the circus-clown-turned-art-dealer Clovis Sagot, Level learned that Picasso was looking to make some quick cash by selling a major canvas. Level used another dealer, Lucien Moline, as an intermediary to gain access to see the work. Level immediately recognised the painting of acrobats as the culmination of Picasso’s Blue Period, but the piece was out of reach. “The work was powerful, but our budget was minuscule. We could only spend FF1,000,” Level writes, noting that Picasso mentioned collectors in Russia or Germany who might pay a higher price.

Knowing that Picasso was cash-strapped, Level made him an attractive offer: the fund would give the artist FF300 as a deposit towards a purchase price of FF1,000 while he explored other options, and if Picasso found a better price within a month, he could reimburse the fund. The artist took the money and finalised the sale 15 days later. “This is how I made the acquaintance of a man who became my friend and a painter who has given me the greatest pleasures as a collector,” Level writes. Picasso acknowledged the collector by pasting one of his business cards onto a 1914 collage that is now in the Centre Pompidou.

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