Hedge Fund Woes May Slash Art Prices

The subprime mortgage market collapse is poised to sink a very different kind of market: the art market.

Los Angeles billionaire Eli Broad knows both markets well. He’s one of the top ten art collectors in the world, according to ARTnews, and he was also part of a group of investors pouring $1 billion into a troubled Goldman Sachs hedge fund. And he says losses in the latter industry are going to have a big effect on the former.

“Many of the buyers of contemporary are have been hedge-fund managers and other investors who obviously are having a difficult time and have lost lots of money,” he said in an e-mail statement.