New Players


Art loans are perhaps the most established portion of a market in which people take out personal loans on possessions of all types, ranging from wine collections to historical artifacts. Loans backed by art are expected to surpass $10 billion this year, doubling since 2011, according to art market research company Skate’s.

Carlyle and the private equity unit of Pictet, a Geneva- based wealth manager, said this month they are backing Athena Art Finance Corp. with $280 million of equity capital. Athena will offer loans equaling as much as 50 percent of the low estimate of a client’s collection, ranging from six months to seven years.

Morgan Stanley launched its Blue Rider Group unit in July, run by wealth manager Dan Desmond and Lauren Welsh Sparrow, to offer art loans and also handle investments for artists, collectors and museums.

Falcon Group, which specializes in corporate financing, last year started offering art loans through its Falcon Fine Art. The volume of deals is expected to reach $100 million in the next six months, said Chris Howarth, director at Falcon Fine Art.


Fastest Growth


For Sotheby’s, its financial services division has become the most profitable and fastest growing unit by making loans and advances that often help land consignments for the New York- based auction house, according to a Moody’s report published last month. Sotheby’s in June almost doubled the credit facility used to finance art loans to $1 billion, according to filings.

Although its interest rates are higher than at banks, Sotheby’s global presence, in-house network of experts and lawyers, and 25 years of underwriting allows it to move faster than others, Jan Prasens, managing director of Sotheby’s Financial Services, said in an interview.

Bank of America wants to double the $3 billion of art loans it has outstanding, in part by offering bargain basement rates, according to a person familiar with the Charlotte, North Carolina, company. Regulatory filings show that Bank of America has provided art loans to investor Arthur Samberg as well as a trust tied to Howard Marks, co-chairman of Oaktree Capital Group LLC, a Los Angeles-based money management firm.

One of the nation’s best known collectors, Wynn often displays art in his resorts, including several of the pieces pledged to Bank of America. He joins Steven A. Cohen, Tom Hill and Michael Steinhardt among the wealthy collectors who have previously taken bank loans against their art holdings, according to filings. Collectors typically take loans to fund other ventures, buy more art, or pay off debt.