Adam Sender is well know for managing one of the more successful hedge finds in recent memory. He was able to make a lot of people a significant amount of money, and now he is in fact making a huge score off a decision he made while still managing that fund. If everything goes right with the Sotheby’s auction, Sender is expected to get $70 million dollars when his 400 piece Contemporary art collection sells.
The story in which how Sender amassed his enormous art collection is somewhat unconventional. Back when the art world was in a lull and his hedge fund was exploding with profits, Sender decided to invest in art rather than pump the money back into his fund. While he could have surely made some nice profits reinvesting into his own fund, he took a calculated gamble and began to buy Contemporary art.
Now where the story of Sender takes a strange turn is that he didn’t gamble on the well known artists who had masterpieces up for auction. Rather than dump a million dollars on a Warhol, Sender took the road less traveled and bought top pieces from much lesser known artists at the time. He began to accumulate so many pieces, that he tested the market back in 2006 by auctioning off 40 pieces of his growing collection. They all sold and brought in over $20 million dollars. Sender still had 400 pieces in his collection and quickly realized he was sitting on a gold mine.
Sender has since closed down that hedge fund, but now he stands to make a huge profit on those art pieces he has been collecting for all these years. Sotheby’s estimates that when the collection is completely sold off in about 18 months that Sender will walk away with $70 million dollars. If you consider the acquisition costs were covered by his sale back in 2006, he is banking all profit this time. That is a considerable difference in the money he could have made reinvesting into a hedge fund.
The reason the collection is expected to fetch so much money is because Sender got those pieces at bargain basement prices a decade ago. Pieces he was scooping up for $100,000 a piece are now worth up to $3 million dollars each. These are not even pieces by the top artists in the world, just the best pieces by artists a little less recognized. Of the 400 pieces that are hitting the auction block, they are made up of roughly 139 different artists.
Trying to buy the very best work proves to be something that will reward Sender for many years to come. This is a great lesson to all looking to invest off the beaten path.