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

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.

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