First thing in the morning, Heinz Berggruen liked to greet his beloved paintings. Wandering around the Berlin villa that houses his remarkable collection of 20th-century art, above all Picasso, you almost expect the diminutive collector to appear to greet visitors – and his paintings – with an off-colour anecdote about his pal Pablo.

“Pour mon ami Berggruen,” reads the scrawled dedication on one work by the Spanish artist to his German-born friend. Berggruen died six years ago aged 93 but not before he sold his collection of top-drawer Picasso, Klee, Cézanne and Giacometti works at a knock-down price to Berlin. It was a remarkable gesture of reconciliation to the city of his birth, the city the young Jewish man left in 1936 to escape the growing Nazi terror, the city to which he returned six decades later to make his peace.

“We have quite a close relationship, my pictures and I,” said Berggruen shortly before his death. “I view them all as my children. Sometimes a Picasso annoys me, Klee is always very restrained, Matisse is very severe but, all in all, we get on well.”

The Berggruen Museum opened originally in 1996 in a Jugendstil building once used to house the kaiser’s horses opposite Charlottenburg Palace. Berggruen lived in a top-floor apartment and would often pop down to mingle with visitors – 1.5 million visited the museum in its first decade.

For years he loaned his collection to London’s National Gallery before he decided the intimate rooms offered to him in Berlin were more suited to the personal character of what is considered one of the world’s leading collections of 20th-century art.

After years of space and crowd problems, the gallery decided to extend into a neighbouring building. After almost 18 months, the doors have reopened and, on a grey weekday afternoon this week, the museum is buzzing. It is like a family gathering, with everyone anxious to renew their acquaintance with familiar faces in what is considered one of the world’s great small art galleries.

Picasso collection
The modest entrance hall of the building by August Stüler yields to a spectacular spiral staircase around a cylindrical stairwell, topped by a glazed rotunda, itself crowned with stone pillars and a dome. The kaiser's horses certainly lived well.

Apart from Alberto Giacometti's striking sculpture Grande femme debout in the stairwell, the reordered collection devotes the original Stüler building to Berggruen's Picasso collection or, more accurately, his Picassos collection. The artists is best known for his multi-faceted cubist works, but Berggruen's Picasso collection presents visitors with key works from many other periods in the painter's varied and productive life.

The collection opens with Picasso’s teenage sketches of dogs and rabbits and moustachioed men. There’s a pencil sketch on brown card of Picasso’s arrival in Paris in 1900, a spiky portrait of the artist as a young man in a hurry – complete with Sherlock Holmes coat and overnight bag.

The collection moves on to works from Picasso's close collaboration with French painter Georges Braque from 1909 that opened the door to an avant-garde style later dubbed cubism. The Berggruen collection contains one of Picasso's earliest cubist works, the ochre-hazed Houses on the Hill from 1909, where the dusty facades of a Spanish rural village are opened flat alongside the merging landscape and sky.

There are works from Picasso’s blue and rose periods, cubist still lifes from the 1920s, as well as every other artistic gear shift that accompanied the churning female cast in Picasso’s life.

“When the woman in his life changed, everything else changed too – house, friends, style,” remarked the photographer and painter Dora Maar. Born Henriette Theodora Markovitch, she became Picasso’s muse in 1936 and, in the Berggruen collection, gets her own room.

Two of Picasso's best-known cubist portraits, Dora Maar with Green Fingernails and The Yellow Sweater , are complemented by other lesser-known, more traditional portraits that capture from every angle the striking beauty that fascinated Picasso for seven years. Yellow Sweater was Berggruen's favourite Picasso but he collected works inspired by all of Picasso's women. From ballet-dancer wife Olga Khokhlova, or to Marie-Thérèse Walter, Picasso's mistress and mother of daughter Maya, Berggruen knew them all.

While his women fought over him, Picasso channelled the sexual energy into provocative works, such as the 1935 etching La Minotauromachie .

A brush with Kahlo

Berggruen was born into an assimilated Jewish family in Berlin’s Wilmersdorf neighbourhood in 1914. His aspiration to be a journalist was dashed in the anti-Semitic Third Reich.

He left for California in 1936 and, shortly after marrying, met and had a fling with Frida Kahlo. He never collected any of her work, though, saying later that "Frida the woman" was quite enough for him.

Berggruen served in the US army in the second World War and, after revisiting his ruined home town, opened a gallery in his new home, Paris, and began exhibiting and collecting the city’s leading artists.

In the French capital, Picasso was just emerging from a difficult wartime period, documented in the Berggruen collection with works such as a gloomy reclining nude from 1942.

All shadows and khaki green, it was painted by an isolated Picasso in occupied France, separated from exiled friends, unable to exhibit or attend a 1942 New York retrospective.

Today, 70 years later and four decades after his death, Picasso retrospectives remain big business. But these professional, institutional trawls of other professional institutions are a world away from the Berggruen Collection. The works on display in Berlin are less a trawl than a selective catch by an art fly fisher, a visual Picasso autobiography as compiled by a gallerist friend.

The decision to double the museum's exhibition space from 18 to 28 rooms has drawn mixed reviews. To see Berggruen's Cézannes ( Young Girl with Open Hair ) and 80 playful works by Paul Klee, visitors walk through a glazed pergola to a neighbouring building. Here, too, are 20 works by Matisse, including the energetic paper-cut Seilspringerin . A selection of Alberto Giacometti sculptures also stretch their spindly limps here.

After a long, dull winter in Berlin, the reopened Berggruen Museum and its 250 masterworks of 20th-century art lends the city a welcome, bright gleam.

Museum Berggruen, Schloßstr 1 14059 Berlin is open Tuesday to Sunday. smb.museum/mb