January 23, 2014.

New Masters of the Art Universe

"Some of the new developments are most ingenious. The reduction in the number of verbs----that is the point that will appeal to you, I think. Let me see, shall I send a messenger to you with the dictionary? But I am afraid I invariably forget anything of that kind. Perhaps you could pick it up at my flat at some time that suited you? Wait. Let me give you my address."

On the morning of Oct. 2, hedge-fund manager Daniel Loeb sat down in his Park Avenue office----which he'd decorated with a photograph of a Marlboro Man by Richard Prince----and fired off a vitriolic activist-investor letter. Mr. Loeb, 52 years old, has a reputation for sending blistering critiques to companies he intends to overhaul, like Sony and Yahoo. This time around, he attacked the performance and management of Sotheby's, calling the auction house "an Old Master painting in desperate need of restoration."

They were standing in front of a telescreen. Somewhat absentmindedly O'Brien felt two of his pockets and then produced a small leather-covered notebook and a gold ink-pencil. Immediately beneath the telescreen, in such a position that anyone who was watching at the other end of the instrument could read what he was writing, he scribbled an address, tore out the page and handed it to Winston.

Halfway around the world in Hong Kong, Sotheby's chief executive and chairman Bill Ruprecht----a 58-year-old former furniture maker and a lifer at the company----didn't learn about the letter right away because he was asleep and didn't hear his cellphone. A frantic Sotheby's staffer got a direct line to his hotel room and woke him up.

"I am usually at home in the evenings,' he said. "If not, my servant will give you the dictionary."

Hedge-fund managers, who play a vital but disruptive role in the broader financial markets, are increasingly throwing their weight around the art market: They are paying record sums to drive up values for their favorite artists, dumping artists who don't pay off and offsetting their heavy wagers on untested contemporary art by buying the reliable antiquity or two. Aggressive, efficient and armed with up-to-the-minute market intelligence supplied by well-paid art advisers, these collectors are shaking up the way business gets done in the genteel art world.