Bloomberg picks apart reports that Michael Steinhardt, the former hedge fund manager, has used his art collection as collateral on loans for a real estate project in Manhattan’s financial district. The $250 million hotel, residential and retail complex project may be funded for less than 3% because Steinhardt was willing to offer his art as collateral, according to Katya Kazakina and Miles Weiss:
According to a UCC financing statement filed by JPMorgan in July, the Steinhardts pledged three oil paintings that Picasso created between 1922 and 1936, along with two works on paper, including a charcoal entitled ‘Homme a la sucette’ that he drew in 1938. The collateral also includes four works by Klee, two by Johns, and single works by Honore Daumier, Henri Matisse, Piet Mondrian, as well as a Pollock that, according to Beverly Schreiber Jacoby, the president of BSJ Fine Art in New York, once belonged to Si Newhouse Jr., the chairman of Advance Publications Inc.
Steinhardt is not the only well-heeled investor using art as get-free-money pass from the banks:
Other fund managers who have secured loans by art in recent years include billionaire [Steven] Cohen, founder and chairman of SAC Capital Advisors LP in Stamford, Connecticut. Cohen, an avid collector who recently sold a portrait of Elizabeth Taylor by Andy Warhol for $26.9 million, pledged undisclosed “works of fine art” to Deutsche Bank Trust Co. Americas under an Oct. 30, 2009, borrower security agreement, according to New York state records. […]
[Nelson] Peltz, the billionaire who co-manages Trian Fund Management LP, pledged 15 works by artists such as Henri Matisse, Claude Monet, Edgar Degas and Pierre-Auguste Renoir to Bank of America NA, according to a financing statement filed in May 2009. Peltz also secured the lending arrangement with antiques, including a pair of Louis XV commodes, a set of four Italian white marble busts dating as far back as the 17th century, and four Chinese side chairs that were made around 1725, the document shows.