As markets implode, picture the real art of making money

As markets suffered their worst collapse since 2001, the auction of Hirst's collection fetches a record £71 million.

**  FILE  ** This is a Monday Sept. 8, 2008 file image of  British artist Damien Hirst as he poses with his work 'The Incredible Journey' at an auction house in London.  Damien Hirst's gamble has paid off.  A sale of pickled sharks, butterfly paintings and other pieces by the provocative British artist has raised more than 94 million pounds (US$168 million) on Monday Sept. 15, 2008,  a record for an auction of works by a single artist.  And it's not over yet.  Sotheby's auction house said that two-thirds of the way through the two-day sale, with 87 of the 223 lots still to go, the sales total was 94.8 million pounds (US$169 million), as collectors bid in person or by phone for a piece of Brit-art history. (AP Photo/Sang Tan) *** Local Caption ***  LON107_Britain_Damien_Hirst.jpg
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As markets suffered their worst collapse since 2001, the auction by Sotheby's of Hirst's collection entitled Beautiful Inside My Mind Forever - replete with new versions of his famous pickled creatures, including a calf with gilded hooves - fetched a record £71 million (Dh465m) on Monday, the first of a two-day frenzy.

That means Hirst has already smashed Sotheby's best expectations and the record 1993 sale of Picassos. Hirst's auction is unique and his tactics are truly modern. Instead of selling his work in the traditional way through long-standing art dealers, such as the White Cube and Gagosian galleries which have helped make Hirst the brand that the hedge fund elite must acquire, Hirst has attempted to cut out the middle men by taking his formaldehyde tanks and dead butterfly arrangements straight to the auction house.

It was a risky move. Sotheby's and Christies typically exclude the sale of anything less than five years old. So why does Hirst's bet seemed to have paid off? Sotheby's global ambitions and Hirst's brand certainly helped. Canny marketing has been a hallmark of the group of formerly young British artists from which Hirst emerged. It also no doubt helps that Sotheby's estimates that less than 10 per cent of its top 500 buyers over the last five years have made their fortune in financial services.

So it had a wider pool than Hirst's loyal galleries to lure new buyers. Yet, Hirst's biggest hand may have come from his collectors and disgruntled dealers. Collectors are anxious to support the value of the creations they own. And White Cube set the tone for the auction by offering almost £1m, twice the upper estimate, for the first lot on the block, the pinned butterfly triptych called Heaven Can Wait. Only two months ago White Cube, which has yet to find a buyer for Hirst's diamond-encrusted platinum skull, denied rumours that it was sitting on a mountain of unsold Hirst works.

Perhaps Hirst's story is not such an antithesis to trends in the financial markets after all. Indeed, in the same way that investment banks such as Lehman Brothers and Merrill Lynch were reluctant to write down the value of the swathes of exotic credit products held on their books, collectors and dealers are leveraged up with Damien Hirst. He, and they, must hope the value of Hirst-related assets do not follow those of Wall Street's.