One of the neat things about the art world and the plutocrats it serves is that gushing press about collections and the minor curatorial controversies they engender acts as an iron veil over the operations and interstices which create vast capital, a minor slice of which is used to buy blue chip art.
Let us consider Dakis Joannou, the founder of a feast of exquisite corpses called "Skin Fruit," just opened at the New Museum. Greece, the country from which this Cypriot industrialist operates, is currently in default, subject to nationwide worker strikes and protests, and such a threat to the very conservative financiers of Germany, who hold much of the Greek debt, that German officials are seriously proposing that the Greek government sell some of its islands to satisfy its obligations. The German press has suggested that Corfu alone might be enough to keep the German wolf from the Athenian door.
Dakis Joannou is the chairman of J&P (Overseas) and J&P-AVAX, publicly traded companies on the Athenian stock exchange. His son Christos is the chief operating officer of the two companies. The strategy of these companies is to form partnerships with other capital entities to develop every kind of public and private facility in Greece, the Arab Mideast, Poland and the rest of Eastern Europe. J&P participates top to bottom in these developments, including capital formation, design, construction and operation.
Among the projects J&P has pursued to completion and beyond in the Arab world are the Four Seasons Sharm El Sheikh, the Albussan Palace in Muscat and the Doha International Hotel. In 2007, J&P won the contract to build and develop, plus a 25-year deal to operate, the new airport in Amman, Jordan. With a 20 percent stake, J&P is the largest shareholder in the Amman strip.
In spite of the severe debt and liquidity problems of the Greek nation, J&P, which currently trades at €2 on the Athens Stock Exchange, continues to make deals aggressively on a daily basis. Just last month, J&P created a consortium with SorensaSpA Ltd. to acquire the hotel business Argestis SA, a deal which awaits approval by the European Union. In addition to its flagship hotels in Athens, the SemiRamis, designed by starchitect Karim Rashid, and the Athens Intercontinental, J&P is currently building the YES! Athens hotel, scheduled to open at the end of 2010, designed by two more starchitects, the Campana Brothers. Tourism is, of course, a major industry in Greece.
In this hotel project and other new projects, J&P has joined forces with Dolphin Capital Partners, whose principal, Milton Kambourides, is a former partner in Soros Real Estate Partners. An overview of the Dakis Joannou/J&P operations could yield two divergent prospects for a complex, interlocking business, dependent on amortization and wide debt-to-capital ratios. The first is that Dakis is smart enough and aggressive enough to take advantage of buying opportunities during a worldwide recession and increase his bottom line significantly. The second is that J&P is so overleveraged and so dependent on the luxury market that it is at serious risk of default, should its capital pipeline dry up. J&P's low stock price would indicate a potential problem in this area.
Either way, the art world, blind and uncurious about the way the world works, must satisfy Dakis, an Art King surrounded by eunuch courtiers.
CHARLIE FINCH is co-author of Most Art Sucks: Five Years of Coagula (Smart Art Press).