Expert View: Never mind the stink, high rollers are drawn to art

You haven't made it if you haven't got your second Warhol by 3

With some sense of urgency, the police broke down the door of a slum flat in Paris. They had been alerted by neighbours, suspicious about the stench of rotting flesh that had been emitted for some weeks.

What did they find? Not a maniac but a penniless artist. Chaim Soutine had been so obsessed with his work, he had been oblivious to the side-effects of his model: a carcass hanging from the ceiling. True Art.

As I sipped my champagne at the Christie's auction house, surrounded by City golden boys, this bizarre story came back to haunt me. The final canvas from Soutine, who died in 1943, was certainly striking, but was it really worth £7.8m - the sum someone paid for the "Butcher's shop window"?

What one excited PR described as the richest art sale in history took place in London last week. Sotheby's and Christie's combined forces to stage a series of auctions of Impressionist, modern and contemporary works. Art (under-)estimated at some £400m went under the hammer, achieving eye-popping results including, incidentally, another work by Soutine that achieved £8.75m.

For Sotheby's and Christie's, those two giants of the art market, business has never been so good. Christie's, for example, sold a record £2.1bn of art last year - a 36 per cent increase on 2005. Both houses have used the current boom conditions to break new barriers: the fabulous Bacon "Pope" sold last week was a record for post-Second World War artwork. Auctioneers' commissions are the highest ever: the previous regime was 20 per cent on the first £100,000 (12 per cent thereafter); the new price scale pushed through last week lifted that first ceiling to over £250,000. And all this has come about despite the frequent and extraordinary secrecy imposed by Sotheby's and Christie's on provenance: the true identity of the Bacon seller was the talk of London, with the hot money being on Sophia Loren.

The events in London are part of a global feeding fest, including the recent Christie's sale in Hong Kong, for example, or the extraordinary New York sur mer orgy of consumption in December at Art Basel Miami Beach, to snap up delights such as the $100,000 (£51,000) mud painting possibly created just weeks before. Interestingly, this fair is sponsored by UBS, the lead player in the global "high net worth" market. UBS even publishes art research for clients.

Yes, if you want to see the hottest alternative play now pursued by global investors, you'll find it hanging on their walls. Whereas the art boom of the 1980s was hugely driven by Japanese real-estate fortunes, the current buying elite, the 1,500 or so high rollers who attended the London sale, are a diverse, cosmopolitan bunch. They include, alongside the traditional collectors borne of inherited wealth, the full range of emerging market fortune: the Russians, the Chinese, the Indians, and above all else the ultimate arrivistes: hedge-fund managers.

In the hedge-fund capital of Greenwich, Connecticut, they say you haven't made it unless you buy your second Warhol by the time you're 30. They have as their idol men like hedge-fund superstar Steve Cohen, who snapped up Damien Hirst's shark in formaldehyde (but pulled out of his $139m purchase of a Picasso when the seller elbowed the canvas). Last week saw their ever-ascendant London cousins match and raise this - with Soutine and Bacon.

Inevitably, an invasion of the money men on so dramatic a scale is accelerating the commercialisation of art. A New York database company called Artnet now mashes 3.5 million auction records involving some 200,000 artists to create its "fine art index". This shows a return of 12.6 per cent against 9 per cent for the Standard & Poor's index.

I was invited to a party of the movers and shakers - the gallery owners. Some of London's leading artists were there and, still keen to shock, a very famous one exposed himself at dinner. Strangely, I sensed I would feel more at home on the Stock Exchange than in a Paris garret.

Christopher.walker@tiscali.co.uk