A Loan For Your Picasso / by Raymond Merritt

Pablo Picasso,  Les femmes d'Alger (Version 'O'),  1955

Pablo Picasso, Les femmes d'Alger (Version 'O'), 1955

It turns out that Wall Street is increasingly becoming more interested in the art world. Two major financial firms recently announced initiatives to integrate themselves into the art market. With eye-popping auction results at each new contemporary sale at Christie's and Sotheby's, how could Wall Street ignore the art boom?

Private equity firm The Carlyle Group recently announced an art financing venture called the Athena Art Finance Corporation. Put simply, Athena will allow collectors to borrow money against their art collections. Say you own a $50 million Picasso painting. You will now be able to head to Athena's offices to take out a loan for up to $25 million in cash. As long as you pay your loan back in time, that Picasso gets to keep decorating your living room. See the New York Times announcement of the Athena lending operation here.

Elsewhere on Wall Street, Morgan Stanley has announced the Blue Rider Group within their Private Wealth Management division. As Citigroup recently did as well, Morgan Stanley has recognized that there is a demand amongst high-net-worth individuals for financial services related to their art collections. Morgan Stanley's Blue Rider Group consists of three professionals with experience in the worlds of both art and finance. This experience allows the Blue Rider Group to provide advice to clients on constructing a collection, as well as to lend money against those collections similarly to the aforementioned Athena group. Read the artnet article on the Blue Rider Group here.

It is clear, with major players like Carlyle and Morgan Stanley increasingly entering the art finance field, that Wall Street is well aware of the art world. With works selling at auction for $179 million, how could they not?