The Fine Art of Financing: The Jpmorgan Private Bank and Lending Against Art

15 Pages Posted: 30 May 2017 Last revised: 14 Mar 2018

See all articles by Richard B. Evans

Richard B. Evans

University of Virginia - Darden School of Business

Roman Kräussl

Luxembourg School of Finance; Hoover Institution, Stanford University

Pedro Matos

University of Virginia - Darden School of Business; European Corporate Governance Institute (ECGI)

Christophe Spaenjers

HEC Paris - Finance Department

Abstract

Due to an increase in the number of wealthy individuals the demand for artwork had increased, and artwork was considered an investment asset. Artwork was listed as a “treasure asset” or an “investment of passion” by investment industry publications, recognizing its importance in the portfolios of the wealthy. The financialization of the art market went hand in hand with a growing understanding of the investment properties of art. Developing this knowledge took time because measuring the returns to a heterogeneous and illiquid asset like art—or real estate—was challenging.

Excerpt

UVA-F-1760

Rev. Mar. 5, 2018

The Fine Art of Financing:

The JPMorgan Private Bank and Lending Against Art

With total assets exceeding USD2.5 trillion, JPMorgan Chase & Co. was the largest bank in the United States. The merger of JPMorgan & Co. with Chase Manhattan Corporation in 2000 had created a financial behemoth that offered clients access to commercial banking, investment banking, investment management, wealth management, brokerage, and private banking services.

Walking into any of the JPMorgan buildings in the United States and around the world, visitors were likely to encounter works of art from the firm's corporate art collection. With approximately 30,000 pieces of art, including sculptures, paintings, and photographs from such artists as Andy Warhol, Jean-Michel Basquiat, Roy Lichtenstein, and Milton Avery spread over 450 different locations, it was one of the largest corporate collections in existence. The driving force behind JPMorgan's corporate art program was David Rockefeller, the grandson of John D. Rockefeller and former president, CEO, and chairman of Chase Manhattan Bank. Rockefeller initiated the collection in 1959, out of a desire to both beautify Chase buildings and enable employees, clients, and others to appreciate great works of art.

. . .

Keywords: investment asset, art, illiquid assets, investment vehicles, video

Suggested Citation

Evans, Richard B. and Kraeussl, Roman and Matos, Pedro and Spaenjers, Christophe, The Fine Art of Financing: The Jpmorgan Private Bank and Lending Against Art. Darden Case No. UVA-F-1760. Available at SSRN: https://ssrn.com/abstract=2974588

Richard B. Evans (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4030 (Phone)
434-243-7680 (Fax)

HOME PAGE: http://faculty.darden.virginia.edu/evansr/

Roman Kraeussl

Luxembourg School of Finance ( email )

4, rue Albert Borschette
Luxembourg, 1246
Luxembourg
+3524666445442 (Phone)

HOME PAGE: http://www.art-finance.com

Hoover Institution, Stanford University ( email )

Stanford, CA 94305
United States

Pedro Matos

University of Virginia - Darden School of Business ( email )

University of Virginia
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434 243 8998 (Phone)
434 924 0726 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty-research/directory/pedro-matos/

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Christophe Spaenjers

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

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