The National Gallery in London is facing a hurdle in securing a Jacopo Pontormo portrait after raising more than £30m to acquire it. The American owner, who bought the painting last year and then applied for an export licence to bring it to the US, has not yet accepted the gallery’s offer to match the price he paid for the work, although he is obliged to do so under UK export regulations.
Portrait of a Young Man in a Red Cap (1530), depicting the Florentine aristocrat Carlo Neroni, was sold last year by the Earl of Caledon, going to an anonymous foreign buyer for £30.7m. The Art Newspaper has identified the new owner as Tomilson (Tom) Hill, the New York hedge fund banker at the Blackstone Group, who has recently emerged as a major art collector.
After purchasing the painting, Hill or his agent applied for a UK export licence. This was deferred by the UK government in December 2015 to allow a British buyer the chance to raise funds to acquire the work. After strenuous efforts, the National Gallery succeeded in finding the money required to secure the purchase. Since the usual tax concession was not available, because of the way the US sale had been made, the Treasury eventually offered a special grant of nearly £19m to cover the extra cost. Grants were also awarded by the Heritage Lottery Fund and the Art Fund. The gallery’s £30.7m matching offer was made just before the export licence deferral ended on 22 October.
The owner’s apparent delay in accepting the matching offer may be due to changes in the dollar-sterling exchange rate. Hill bought the Pontormo last year when the value of sterling against the dollar was much higher. Accepting a £30.7m matching offer would now involve a loss of around £5m, because of the British currency’s steep fall in value, particularly following the Brexit referendum.
All foreign buyers facing deferred UK export licences face the risk of exchange rate losses (and they would be unlikely to voluntarily return any gains made if exchange rate fluctuations went the other way). What is unusual in this case is the combination of the high price of the work and the fact that this year the sterling exchange rate has fallen much more than the usual currency fluctuations, which means the loss is very high.
The foreign buyer made a commitment to “accept a matching offer” when the Pontormo case was considered by the Export Reviewing Committee on 14 October 2015 and this was reiterated in writing by the owner last April. The National Gallery is still waiting to hear whether Hill will accept its matching offer. If he decides not to abide by his commitment, he will have to keep the painting in the UK. Neither the gallery nor Hill’s office were willing to comment.