Opportunities for Private Banking, Family Office and Art collectors
Have you considered Art-secured lending for your High net worth individual (HNWI) and Ultra High Net Worth individual (UHNWI) clients?
Art-secured lending is a niche-credit service
Art-secured lending is a niche-credit service targeted to (U)HNWI individuals who wish to unlock liquidity out of their collection or art assets for investment or personal finance purposes.
In a basic transaction, art-secured lending terms range between 6 months to 5 years and collateralised by museum quality fine art that is both marketable and holds a significant Fair Market Valuation (FMV) i.e. a price that similar works of art sell at auction is generally accepted to be a reasonable estimate of fair market value. Art secured lending business is not new, as the service was first pioneered in the 1970s.
A potential opportunity is Art secured lending
High net worth individuals (HNWIs) and Ultra High Net Worth individuals (UHNWIs) client acquisitions and retentions are central issues facing wealth management services. Given the commercial opportunities afforded by this client segment and their rising level of passion/art investment, wealth managers seek opportunities to tailor their services to (U)HNWIs and their art investments.
Several favourable art market trends are pushing demand for individuals to think financially about their assets; increasing levels of art allocations in recession ridden countries, the rising level of pricing in the art market and the generational transfer art collections being inherited worldwide. The new generation are also viewing art in a more financial manner and such wish to turn it into a working asset.
With the construction of the Luxembourg Freeport, a dedicated storage facility for fine art and collectibles it presents a significant opportunity for art secured lending services in Luxembourg from Q3 2014. This secured facility with links to leading global art markets and the Luxembourg financial centre will create logistical synergies highly beneficial for art secured lending.