In October, Sotheby’s reached a significant milestone by announcing a remarkable $1 billion investment from ADQ, a sovereign wealth fund backed by the Abu Dhabi government.
This partnership is set to reshape the auction house’s leadership, expanding the board to nine members, including three representatives from ADQ.
Governance Changes
This transition signifies a pivotal change in Sotheby’s governance, moving away from its historically Western-centric leadership, predominantly filled with financial experts and attorneys.
Adding to the excitement, official disclosures from the UK revealed that H.E. Mohamed Hassan Alsuwaidi, the UAE’s Minister of Investment and CEO of ADQ, will join Sotheby’s board.
With a respected reputation in the UAE, Alsuwaidi has been instrumental in overseeing the Mubadala Investment Company, another influential sovereign wealth fund in the region.
His presence on the board underscores the significant role Abu Dhabi’s government will play in shaping Sotheby’s UK operations.
Joining Alsuwaidi are two other representatives from the UAE’s financial community: Murtaza Hussain and Aziz Moolji.
Hussain is a managing partner at Lunate, an investment firm founded in 2024 and primarily owned by Chimera Investment LLC—part of Sheikh Tahnoun’s Royal Group.
Previously, he served as ADQ’s chief investment officer.
Moolji, also a partner at Lunate, brings extensive experience from his former role as the director of ADQ’s M&A and Alternative Investments division.
Financial Outlook
Although Sotheby’s has yet to formally announce these board changes, a spokesperson later confirmed the appointments to ARTnews, but no additional comment was made.
For Sotheby’s, these new board additions mark an exciting new chapter, especially as the auction house strives for recovery and growth in the wake of pandemic-related challenges.
While net profit figures remain private, it has been reported that Sotheby’s UK branch saw a concerning decline in art sales profits, plummeting by 36 percent from £34.5 million in 2021 to £22 million in 2023.
Additionally, the UK financial services sector faced setbacks, including a loss of $1.2 million.
Notably, sales turnover dipped by 4 percent, and the workforce shrunk from 450 to 403 during this same period.
Despite these challenges, Sotheby’s CFO, David Kownator, expressed optimism regarding the company’s financial health, emphasizing the stability afforded by ADQ’s investment and assuring that profitability is aligning with past years.
It’s crucial to recognize that these statistics reflect the recent struggles of the UK branch and may not fully represent Sotheby’s overall performance.
Kownator’s statements could not be independently verified.
An interesting trend noted in recent turnover is the significant art acquisitions by unidentified key managers or their relatives.
In 2020, purchases from Sotheby’s reached about £65 million, surging to £104.9 million in 2022—the same year the remarkable collection belonging to Harry and Linda Macklowe fetched an astonishing $922 million at auction.
However, this soared figure dropped to around £20 million in 2023.
Board Composition
In the world of auction houses, much like prominent galleries, high-value art collections are often amassed by stakeholders—owners investing personally in coveted pieces, significantly impacting annual sales figures.
The remaining members of the Sotheby’s board represent the Altice Group, its parent company.
This includes Arthur Clement Fernand Dreyfuss, CEO of Altice France, and Dennis Lodewijk Okhuijsen, an advisor to Altice Europe; both bring valuable perspectives to the team.
Alongside them is Natacha A. Marty, a legal counsel based in Switzerland, contributing to the board’s diverse skill set.
Other board members include CEO Charles Stewart, former CFO Jean-Luc Berrebi, and owner Patrick Drahi.
This nine-member board is instrumental in guiding Sotheby’s financial strategies, distinctly separate from the daily operations.
Traditionally, the board does not include art professionals; however, Sotheby’s also has a non-voting advisory group called the Sotheby’s International Council, which focuses on the interests of collectors.
With this refreshed leadership and the partnership with ADQ, Sotheby’s is poised for a promising future, reaffirming its dedication to excellence and growth in the art auction arena!