Shinnecock Partners has launches an open-ended, standalone dedicated alternative art lending fund, ALF, building on its seven-year non-bank lending history and fine-art secured lending experience.
“Niche investment strategies offer the most compelling investment opportunities in today’s low yield environment,” says Alan Snyder (pictured), managing partner of Shinnecock Partners. “The art market is vibrant and growing, and boutique lenders like Shinnecock have a competitive edge. Speed of execution, flexibility to custom tailor a loan, constructive insights and independence from auction houses or tied-in banking relationships combine for custom adaptability in loan terms.”
Deloitte Touche Tohmatsu Ltd. reported last year that outstanding art secured loans were estimated to be USD20 billion, up over USD13 billion, and boutique lenders have been growing fast at 15 per cent. The potential market is growing as the report indicates with 87 per cent of art dealers looking for financing. In addition, demand for financing is growing among collectors according to Art Dealer Finance, which reports that more than 50 per cent of collectors are interested in using their art as collateral for loans (Art Dealer Finance 2018).
Similar to traditional asset-based lending, art-secured lending is a loan backed by fine art instead of more traditional forms of collateral (e.g., real estate, equipment, inventory or receivables). The frequency of fine art auctions offers the surety that art collectors will be brought together, fostering a solid sales channel if required.
Deloitte & Touche (auditor) and SS&C (administrator) provide third-party oversight, and accredited investors are able to participate in a tax-advantaged structure with a low investment minimum.