The George Lindemann Journal by George Lindemann

On a fall evening in 2007, New York-based dealer Arne Glimcher sat in a Sotheby's BID +2.46% Sotheby's U.S.: NYSE ^$51.99 +1.25+2.46% Nov 15, 2013 2:20 pm Volume (Delayed 15m) : 685,095 P/E Ratio 33.76 Market Cap $3.49 Billion Dividend Yield 0.77% Rev. per Employee $536,709 5352515010a11a12p1p2p3p 11/14/13 Peltz Holds On to Mondelez Sta... 11/14/13 'Pink Star' Diamond Fetches Re... 11/12/13 Stocks to Watch: Sarepta, Dish... More quote details and news » BID in Your Value Your Change Short position auction room in London and watched bidding soar for "Garden of Earthly Delights III," a fantastical painting by artist Raqib Shaw.

The seascape—made with glitter, rhinestones and enamel—featured underwater fights between marine chimaera, including a toucan-headed man attacking a malevolent creature with piranha fangs. When the hammer fell, the painting sold for $5.5 million, almost seven times its $811,000 low estimate. (Mr. Glimcher had given up after $2.5 million.)

Seeing the works convinced Mr. Glimcher that the Calcutta-born artist would be a perfect addition to Pace, his New York-based gallery. The dealer began wooing Mr. Shaw with an ambitious plan to fill three of Pace's four Manhattan spaces with the artist's work for his debut gallery show in America.

That exhibition, "Paradise Lost," opened last week and runs through Jan. 11. It depicts bizarre fantasy worlds being destroyed by violent savagery through 10 paintings, three sculptures and three works on paper. The show has been drawing 1,000 visitors a day—a lot for a small gallery space—and represents four years of labor for Mr. Shaw, a self-described "recluse" who goes weeks without leaving his London studio. He lives there with his dogs Minty and Mr. C and a collection of over 50 indoor bonsai trees.

"I don't do friends and family. I think they're a waste of time," he says, adding that he leaves the long-term safekeeping of his career to Mr. Glimcher, who nurtured the careers of heavyweight artists Robert Rauschenberg and Agnes Martin.

At the Pace show in New York, Mr. Shaw's paintings run from $500,000 to $1.5 million, his works on paper are $275,000 and his sculptures are $375,000 to $3 million. All have already sold.

Each of Mr. Shaw's works requires several months. The 39-year-old artist says that their painstaking detail has ensured that he hasn't taken a vacation in 15 years.

He spends weeks crafting intricate drawings on vellum parchment before transferring them to absorbent, high-grain birchwood panels reinforced by metal. Then, Mr. Shaw uses flammable enamels including Mercedes-Benz auto paint to create fantasy characters in loud colors, including neon green and orange.

In "Arrival of the Rain King—Paradise Lost II," Mr. Shaw depicts an imposing neoclassical edifice being torn apart by zebras with human arms and lion-like heads. The creatures also battle for dominance, tearing off chunks of each other's flesh.

Mr. Shaw's inspiration was the contemporary clash between Eastern and Western cultures, the writings of John Milton and the apocalyptic paintings of Hieronymus Bosch, he says.

The trio of sculptures by Mr. Shaw all feature athletic male nudes with smooth bodies that contrast sharply with the heads of reptiles, rams and rhinoceroses. Each creature wears a pair of trendy, lace-up boots, a reference to Mr. Shaw's original wish to become a fashion designer as a child.

"I can't do scissors and stitching," he says.

It is almost certainly the biggest trove of missing 20th-century European art discovered since the end of World War II, and the first glimpse of it on Tuesday brought astonishment but also anger and the early stirrings of what will likely be a prolonged battle over who owns the works.

For the first time, German authorities described how they discovered 1,400 or so works during a routine tax investigation, including ones by Matisse, Chagall, Renoir, Toulouse-Lautrec, Picasso and a host of other masters. Some were previously not known to have existed. Others appear to have disappeared around the time the Nazis raided German museums and public collections in the late 1930s to confiscate works they classified as “degenerate.”

Meike Hoffmann, an art historian called in to evaluate the discoveries in the spring of 2012, said she could not believe her eyes, realizing that “we are missing a part of our culture” that the Nazis had tried to destroy and that had now miraculously reappeared.

“These are truly museum-quality works, and you simply do not find these on the market anymore,” she said.

But she and German officials offered only a peek — pictures of a mere handful of the works and a short list of artists — at a packed news conference on Tuesday in Augsburg, an old Bavarian town, leaving many unanswered questions and provoking mounting criticism of officials’ slow and perhaps overly discreet handling of the trove.

Fully aware that the discovery is bound to set off a storm of claims — already being mobilized — officials in Augsburg would not release a complete inventory of what they know so far about their discovery, citing privacy rights and concerns that tracing the provenance of the works will be a costly labor that could take years. Officials would not say where the works are stored. They would not even confirm the name of the man who is believed to have kept the art hidden for decades in his Munich apartment. Nor, they said, do they know where that man is now.

The discovery of the works was first reported by Focus magazine on Sunday. They were thought to have been found in the apartment of Cornelius Gurlitt, 79 or 80, the son of Hildebrand Gurlitt, who was stripped of two museum posts by the Nazis after it was determined that he had a Jewish grandparent. Nonetheless, the elder Mr. Gurlitt later became one of the few art dealers selected by Joseph Goebbels to sell to buyers abroad the Modernist works banned by the Nazis.

Some of the works seized in the apartment appear to resemble the titles of works that were in the custody of American and German investigators sent to safeguard cultural treasures in the late 1940s, said Marc Masurovsky, founder of the Holocaust Art Research Project. In 1950 that unit ultimately returned 115 works to the elder Mr. Gurlitt because he convinced the unit that the works were not illegally acquired, said Mr. Masurovsky, whose organization recently joined with the Paris-based dealer and restitutions expert Elizabeth Royer. For example, American cultural advisers returned “Self-Portrait,” by Otto Dix, and “Lion Tamer,” by Max Beckmann, both names of works that have been identified as being in Mr. Gurlitt’s possession.

The heirs of Jewish and other German collectors whose missing artworks may be among those discovered minced few words, accusing the Germans of failing to live up to the spirit of the 1998 Washington accords on restituting confiscated art or works that sellers were forced to give up for rock-bottom prices in order to flee Nazi Germany.

One of the only former owners to be publicly identified is Paul Rosenberg, a French dealer whose family has spent decades searching for hundreds of confiscated works. His granddaughter Marianne Rosenberg said she was angry that her family members had not been contacted and that they were still unable to get more information about a Matisse that reports have identified as belonging to her grandfather.

“We were aware of the name Gurlitt,” she said. “We are trying to track down things ourselves and fail to understand why the German authorities have said nothing to date.”

Renée Price, director of the Neue Galerie in New York, which specializes in German Modernism, said that the discovery was a bombshell. “I think many people thought that works like these were never going to be found,” she said.

Jonathan Petropoulos, a professor of history at Claremont McKenna College in California and the author of “The Faustian Bargain: The Art World in Nazi Germany,” called the trove “the most important discovery of Nazi-looted art since the Allies discovered the hoards in the salt mines and the castles.” The only comparable revelation in terms of numbers of works that disappeared from Nazi-era Germany was the public display at the Hermitage in 1995 of Impressionist and Post Impressionist works, mostly from private collections, looted by the Red Army at the end of World War II.

Mr. Petropoulos added that one reason the younger Mr. Gurlitt might not have been on the radar of those looking for missing art was that his father died relatively soon after World War II, in a car crash in 1956, and had said that his papers about art transactions had been destroyed.

The son, Cornelius Gurlitt, is assumed to be the man German officials have said was searched by customs officials on Sept. 22, 2010, on a train from Zurich to Munich, and whose conduct, or possessions, prompted suspicion that led the police and customs officials to raid his Munich apartment 17 months later, on Feb. 28, 2012.

There they uncovered 1,258 artworks that were unframed and 121 more framed works, said Reinhard Nemetz, head of the state prosecutors’ office in Augsburg, in whose jurisdiction the initial encounter on the train occurred. It is unclear how many of the works are paintings and how many are drawings, prints and other works on paper.

Evidently stunned by their find, the authorities took three days to pack up the works and take them to a special storage facility. In March 2012, Ms. Hoffmann was summoned to start evaluating the collection, which she said included drawings, lithographs, prints and watercolors.

Many of the works cited by Ms. Hoffman on Tuesday were by German artists of the Expressionist period that is her specialty, including Max Beckmann, Otto Dix, Ernst Ludwig Kirchner and Emil Nolde. A previously unknown Chagall painting and a previously unknown Dix self-portrait, thought to have been painted in 1919, just after his service in battle in World War I, were among the few images of works shown.

The descendants of Alfred Flechtheim, a Jewish gallery owner and dealer forced to flee Germany before dying penniless in London in 1937, called for the results of research done so far to be made public, in keeping with the Washington accords, which stress that speedy release of information can be crucial for aging heirs.

David Rowland, a lawyer representing several families and heirs trying to find and reclaim art, said: “They should publish a photo of each artwork, front and back, and any and all provenance information that they have.”

Ms. Hoffmann said the decision not to disclose a list of the findings was due partly to the difficulty of researching each work, made harder because there are no records to build on. “This was not about keeping something secret,” she said. “We had, of course, to reach a certain level of knowledge about this collection to understand what we had.”

Charles Goldstein, counsel for Commission for Art Recovery, which is based in New York and was founded by Ronald S. Lauder, said his group had heard a few months ago “that a cache had been found,” and that it had belonged to “one of Hitler’s dealers.”

He expressed some understanding for the Germans’ difficulty in proceeding. “They’ve got a hot potato,” he said. “This stuff belongs to Gurlitt, and they have no proof that it’s not his. In order to determine that it’s not his, they have to make a determination that it was stolen or taken from the museums.”

He added that it was not clear that some or even most of the art can be restituted because of the statute of limitations and problems proving ownership.

Focus cited as just one example the case of Henri Hinrichsen, a Leipzig collector who was said to have died in Auschwitz in 1942. His two granddaughters are still looking for the works taken from him, Markus Krischer, one of the two Focus journalists who broke the story, said in a telephone interview.

A copy of a letter, obtained by The Times from the state archives in Berlin, sheds light on the matter. It is a copy of correspondence dated Dec. 5, 1966, sent to Helene Gurlitt, the widow of Hildebrand and mother of Cornelius.

She was asked if she knew anything about the whereabouts of four pictures said to have belonged to Mr. Hinrichsen, by the French artist Camille Pissarro and three German artists. She replied that her husband’s entire collection had been destroyed in the bombing of Dresden in 1945.

“Dear Sirs!

“Regarding your inquiry from December 5, 1966, which according to the enclosed envelope was received on January 1, 1967, I can only tell you that all business records and inventories of our company were incinerated on February 13, 1945 — during the major attack on Dresden, where we had moved to from Hamburg.

“My husband died on November 9, 1956 in Düsseldorf. The art gallery Dr. H. Gurlitt hasn’t opened since 1945.

“Sincerely,

“Helene Gurlitt”

So you want to be the next Peggy Guggenheim. Besides wealth, what does it take to qualify as a heavyweight art collector today? Kelly Crow has answers on Lunch Break. Photo: André Klotz for The Wall Street Journal.

Last year, Brazilian collector Pedro Barbosa spotted a tumbling spiral made with hundreds of rubber tires at the Swiss fair Art Basel. The next day, Mr. Barbosa told a collector friend, Luiz Augusto Teixeira de Freitas, that he intended to buy the tires, actually a $150,000 installation by British artist Mike Nelson.

Surprised, Mr. Augusto reminded Mr. Barbosa that the artwork wouldn't fit inside Mr. Barbosa's São Paulo home. "Doesn't matter," Mr. Barbosa said. "I bet I can lend it to some museum in America." (For now, he is storing the work with a dealer in Italy).

It takes great wealth—and a little hubris—to ascend the ranks of the world's top art collectors. Mr. Barbosa, a 48-year-old former bond trader, is determined to qualify. Like many collectors of his generation, he began buying art on a whim just over a decade ago, but his pursuit has steadily grown serious. By collecting younger, hard-to-get Brazilian artists like Paulo Nazareth along with global superstars like Olafur Eliasson, he has earned a reputation as a highflying tastemaker on the international art scene. Mr. Barbosa employs a personal curator, Jacopo Crivelli Visconti, to manage his collection and allows guest curators to organize shows inside his spacious home in São Paulo's prestigious Jardins neighborhood. He also keeps an apartment around the corner where favored artists like Amalia Pica can stay to make and show their work. Friends say he is ever on the move, traveling to far-flung biennials and fairs from London to Istanbul to the United Arab Emirates. Altogether, his 500-piece collection amounts to roughly half his net worth, he said.

Mr. Barbosa is part of an emerging class of collectors springing up from all corners of the globe who are transforming the art marketplace with their willingness to splurge on art that suits their own tastes—not only the canons of New York or London. From Beijing to Bogotá, new art hubs are thriving in large part because these up-and-comers continue to amass art—in good economic times and bad. Many are investing heavily in contemporary art, the most speculative end of the spectrum, and changing the way the market functions.

Pedro Barbosa's Art Collection

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Pedro Barbosa has earned a reputation as a high-flying tastemaker on the international art scene by collecting younger, hard-to-get Brazilian artists like Jonathas de Andrade, shown here. This piece is titled 'Education for Adults' (2010). Jonathas de Andrade/Galeria Vermelho

A few generations ago, collectors like Henry Tate or Peggy Guggenheim needed aristocratic ties—or robber-baron-level fortunes—to ascend the ranks of the art world elite. Today, there are no rules for assembling a group of contemporary artworks that will one day prove iconic. Newcomer collectors say they pick up clues where they can. Some, like French investment banker Edouard Carmignac, have created art prizes to ferret out fresh discoveries—which they later showcase in their own art spaces. Others such as Roman entrepreneur Pierpaulo Barzan run foundations that mount traveling museum-style shows featuring artists they also happen to buy. Plenty more, like Costa Rican real-estate developer Judko Rosenstock, give pieces by hotshot artists to major museums like the Tate—moves that could bolster the cachet of his own pieces by those artists.

Mr. Barbosa's evolution is emblematic. Early on, he said he only collected artists from Brazil, but last year he decided to "go global," and he's been "going nuts" ever since—traveling to international fairs to collect artists like Germany's Wolfgang Tillmans and Lebanon's Rayyane Tabet. These additions serve to diversify his holdings, he said, but they also put his Brazilian pieces into a broader art context. To the same end, he also recently donated pieces by two young Brazilian artists, Jonathas de Andrade and Andre Komatsu, to London's Tate Modern.

It helps that his growing ambitions also coincide with his country's emergence as a global art hub. Until a few years ago, Brazil's art market was steady but relatively insular, anchored by South American collectors who were willing to pay as much as $50,000 for Lygia Clark's foldable aluminum sculptures or $15,000 for Beatriz Milhazes's flowery abstracts. But as Brazil's economy has expanded, local collectors have found themselves increasingly competing for their hometown favorites with buyers from around the globe—and prices have spiked as a result.

Even now as Brazil confronts higher inflation and signs of tapering growth, collectors keep bidding record sums for Brazilian modern and contemporary art. In May, Phillips in New York sold Ms. Clark's 1959 black-and white abstract, "Against Relief (Object No. 7)," for $2.2 million, the most ever paid for a work of Brazilian art.

                                  

Pedro Barbosa's collection includes 'Fine Tapestry' by Adriano Costa Adriano Costa/Mendes Wood DM, Sao Paulo

The auction record still represents a fraction of what China's counterpart collectors have paid lately for their own masterpieces, so market-watchers say Brazilian art still has plenty of room to grow, price-wise.

All this attention is pointing a bigger spotlight on the handful of Brazilian contemporary collectors who have positioned themselves as regional kingmakers, such as Mr. Barbosa. "The galleries look at everything Pedro is buying," said Mr. Freitas, the collector who saw the tires with him in Basel.

One of Mr. Barbosa's latest moves is telling. In September, he invited a curator from London's nonprofit Chisenhale Gallery, Polly Staple, to visit Brazil. He helped pay for her stay, and one morning he picked her up from her hotel for a tour of a few nonprofit art spaces and galleries. He had borrowed his wife Patricia Moraes ' black SUV for the occasion: "Welcome to an armored, bulletproof car," he said, chuckling, as Ms. Staple climbed in.

First up was Pivô, a nonprofit art incubator that opened last year in a former dentist's office inside architect Oscar Niemayer's undulating Copan building in downtown São Paulo. Next, they stopped by Galeria Vermelho—vermelho means "red" in Portuguese—to see a group show with artists like Cildo Meireles exploring issues of crime. The gallery had been robbed the week before, but the thief only took a CD player, so Vermelho didn't press charges. "The guy didn't think to steal the art," said dealer Akio Aoki.

An untitled work by Francesca Woodman Francesca Woodman/Mendes Wood DM, São Paulo

Mr. Barbosa also took Ms. Staple to meet Jaqueline Martins, a new dealer who specializes in selling São Paulo artists from the 1970s who have since been "overlooked" by the market, Mr. Barbosa said. Ms. Martins' roster includes Genilson Soares, a conceptual artist in his 70s who was once hailed for making large geometric installations often employing colored lighting and optical illusions. A few weeks after Mr. Barbosa's guided tour with Ms. Staple, Ms. Martins displayed one of Mr. Soares's oversize triangle works from 1973 at London's Frieze Art Fair—even though it wasn't technically for sale. "I bought that a month ago," Mr. Barbosa said. (He paid around $20,000.)

In São Paulo, Mr. Barbosa is well known for scouting Brazilian art schools and often buys pieces from promising students—a collecting tactic that's commonplace in New York but still relatively rare in São Paulo, dealers say. Local gallery Mendes Wood DM recently signed up one of his latest discoveries, sculptor Michael Dean. When Mr. Barbosa created an artist residency, one of the first artists he invited was Ms. Pica, another early find who just had her first U.S. solo museum show at the Museum of Contemporary Art in Chicago. Next up: New Yorkers Ken Okiishi and Nick Mauss.

Mr. Barbosa doesn't move through art circles with the panache of some of his countrymen, though. He is a millionaire, but he can't spend apace with Brazil's best-known collector, Bernardo Paz, a billionaire mining magnate from the Belo Horizonte region who reportedly spends $60 million a year commissioning and installing artworks throughout his vast jungle compound called Inhotim. Mr. Barbosa said he usually spends between $8,000 and $250,000 apiece on his art purchases. Still, he has found other ways to stand out.

A few weeks ago, Mr. Barbosa attended the opening party for the Mercosul Biennial in the southern Brazilian city of Porto Alegre. The event was held at the hilltop mansion of the biennial's president Patricia Fossati Druck, with partygoers like steel titan Jorge Gerdau Johannpeter dressed in designer suits. By contrast, Mr. Barbosa showed up wearing bluejeans, a baby-blue gingham shirt and Pac-Man cuff links. Shunning the glowing swimming pool and bar set up nearby to serve Brazil's favorite sugary cocktail, the caipirinha, Mr. Barbosa spent the night huddled on the lawn with artists like Mario Garcia Torres and Inhotim director Eungie Joo.

Ms. Joo mentioned her favorite piece in the biennial was a rusty landscape installation by Brazilian artist Cinthia Marcelle —at which point Mr. Barbosa leaned toward her and whispered, "I might have the best collection of Cinthia's work." Ms. Joo's eyes widened, and she grinned her approval.

Half of São Paulo's 40-odd contemporary-art galleries are less than five years old. Mr. Barbosa knows the strengths and weaknesses of their rosters better than anyone, said Buenos Aires collector Mauro Herlitzka. This market intelligence gives Mr. Barbosa's collection a competitive edge. But as Mr. Barbosa's collection takes in more artworks from beyond Brazil, his ancillary costs have also mounted. Because of Brazil's punishing import-tax laws, he must pay up to 50% above a foreign artwork's sale price just to bring it into his country—a markup he may not be able to recoup unless the art's value appreciates significantly over time. Dealers say some Brazilian collectors have found ways to avoid these import taxes by buying and storing pieces abroad or smuggling them into their luggage. Mr. Barbosa said he buys from the local SP-Arte fair, where taxes are typically discounted by the government. He said he also has proof he has paid the appropriate fees for everything displayed in his house.

Mr. Barbosa and his wife Patricia, who is head of investment banking for JP Morgan in Brazil, and their two children live in a cream-colored, two-story house on a leafy block in the wealthy São Paulo district of Jardins. Throughout their home, they have arranged a mix of sleek, geometric pieces by contemporary classics like Sérgio de Camargo and Jesús Rafael Soto alongside newer sculptures made from ordinary materials like hair curlers. In their backyard, a pair of conjoined shopping carts by Marcelo Cidade stands sentry beside the pool. On a bench in their living room sits a row of handbags that were dipped in concrete like candlesticks by Mr. Tabet, the artist from Lebanon. Even the walls of the children's bedrooms have been commandeered for art: "Sometimes my son complains, but I run a dictatorship," Mr. Barbosa said, grinning.

His own introduction to art was considerably less in-your-face. His father was a high-school gym teacher who only wanted his three children to get a solid education, which they did. Mr. Barbosa's first cousin was a major art dealer, Raquel Arnaud, but he said he rarely hung out in her gallery growing up—he preferred to hang out in nearby Ibirapuera Park and sell ballpoint pens to his friends for a profit. (He stuffed the clear pen cases with shredded currency to add cachet.) After he married in 1999 and settled into a life as a banker specializing in emerging markets and depressed bonds, he started buying art.

His first piece was a $20,000 Soto that he bought from his cousin, but he later switched to buying cheaper pieces by younger living artists, and he's largely stuck to that pattern ever since. When he finds an artist with potential, he tells them he likes to buy several works at a time, but he warns them he will likely stop collecting their work after they turn 40. He said he does this because it compels him to keep seeking fresh talent rather than pay ever-higher premiums for examples by artists he already owns.

Increasingly, Mr. Barbosa is looking farther afield for his art. The shift started in 2008 when he went to Frieze in London for the first time and marveled at how few collectors had turned up in the wake of the Lehman Bros. closure weeks earlier. Walking around the fair's vacant aisles, he realized he could ask galleries for steep discounts if he was willing to broaden the scope of his collection beyond Brazil. He took home pieces by Mr. Eliasson and Tomas Saraceno.

Last year, he ratcheted things up again by hiring his curator, Mr. Visconti, who has planned Brazil's pavilion for the Venice Biennale. Besides paying Mr. Visconti an undisclosed monthly retainer, Mr. Barbosa pays him to travel and inform him about artists to consider. The pair now invites young curators to mount shows of Mr. Barbosa's collection.

In a few more years, the plan is to publish a book about these shows—yet another way Mr. Barbosa hopes to lend lasting credibility to his collection. It's a tactic museums have been using for years, after all. "I don't want to spend too much on the parts," he said. "I'm more interested in the whole."

Write to Kelly Crow at kelly.crow@wsj.com