Alberto Mugrabi was having a drink in the lobby at Claridge’s Hotel when his cell phone flashed to tell him Larry Gagosian was calling. It was June 2009, and they were in London for a week of auctions. Gagosian and Mugrabi are among the richest and most powerful figures in the art world, though the two function differently. Working primarily as a gallerist, Gagosian puts on exhibitions for several dozen artists and is responsible for building their careers—or, in the case of the deceased artists he also shows, representing their estates. Mugrabi, along with his father and brother, operates a private art dealership and trades with other collectors behind a cloak of relative obscurity. Gagosian and the Mugrabis collect several of the same artists and sometimes purchase pictures together as a way not so much of halving their own respective costs but of ensuring that they are committed to the same investments.
That was why Gagosian was phoning. In a couple of hours, Sotheby’s big evening contemporary sale would begin at the auction house’s Mayfair headquarters. There were three paintings by Andy Warhol on the block that Gagosian and the Mugrabis were following closely, offerings from, according to the catalogue, “an important European collection.” The owner was Josef Froehlich, a wealthy engineer of automotive parts from Stuttgart, who since the early eighties had painstakingly built a formidable Sammlung of German and American artists: Gerhard Richter, Georg Ba...