Athena Art Finance Corp, a New York-based specialty lender focused on the art market, has launched with $280 million in funding. The Carlyle Group and the Pictet Group‘s private equity unit led the round.
New York – Collectors of high-end art now have a new resource to tap their collections’ intrinsic value. Athena Art Finance Corp. is launching today with $280 million of equity capital led by The Carlyle Group (NASDAQ: CG) and the private equity unit of the Pictet Group, which co-founded the company with CEO Andrea Danese, a structured finance veteran.
The New York-based global specialty lender will offer non-recourse loans exclusively collateralized by works of fine art, starting with the upcoming auction and art-fair season. Equity for Carlyle’s investment comes from Carlyle Global Financial Services Partners II, a $1 billion fund closed in 2014.
Conceived by Carlyle Group Managing Director and head of the Global Financial Services Group, Olivier Sarkozy, Athena aims to bring a disciplined approach to the way art is financed by accepting as collateral only works of art with a deep and liquid market resulting in demonstrated value. The company will offer up to 50% of the low estimate values of individual artworks or collections.
“The $3 trillion-plus global art market is one of the least developed and least financially sophisticated market of substantial size in the world,” said Mr. Sarkozy. “Athena’s substantial resources and relevant expertise bring a professionalized financial services approach to this underserved market.”
Athena will offer 6-month to 7-year loans of at least $1 million at competitive rates, enabling clients to leverage their art without pledging their other personal assets. The firm seeks to distinguish itself by not aiming to sell or take an ownership interest in any of the works backing its loans.
“For too long serious art collectors and other market participants have been faced with limited choices when they want to borrow against art,” said Mr. Danese, who brings more than 20 years of experience in structured finance and financial technology to Carlyle’s investment expertise. “We aim to be an independent, trustworthy and flexible source of financing for the art market.”
The loans will be made against artworks with highly marketable value, meeting the needs of high net worth individuals, family offices, and other market participants whose current options are limited to the recourse art-loans offered by the major private banking institutions or the short-term loans offered at double digit-rates by boutique lenders.
Athena expects to provide additional flexibility to financial advisors, estate planners, lawyers and other professionals who may now manage their clients’ collections as rationally as the rest of their asset-portfolio.
Founded in March, the company quickly raised significant capital in support of its growth plans and a business model which complements the activities of the most established auction houses and financial services firms. Pictet’s relationships with high net worth individuals will be an important resource for the company.
Said Remy Best, Partner in charge of Pictet Wealth Management, “Pictet is pleased to be able to offer its private clients a loan facility using their art collections as collateral, thanks to the help of external partners. We believe alternative investments are increasingly important for large wealth owners. Art has always been a diversification asset for our clients, in some cases because of their passion for art in many forms, or in others because it serves as a true investment vehicle.”
Athena will allow collectors to retain ownership of their artworks, enabling them to make other investments or finance unexpected expenses while simultaneously protecting the rest of their assets.
“The resulting increased liquidity for our clients will improve the art market’s transparency and efficiency,” said Mr. Danese. ”We are unlocking collectors’ personal balance sheets in a thoughtful way and giving them reliable flexibility as they manage their cherished art collections.”
About Athena Art Finance
Athena Art Finance is an independent specialty finance company, dedicated to serving the needs of the global art market. Building upon the strength of our founding shareholders, The Carlyle Group and the private equity unit of the Pictet Group, we specialize in lending solutions that are secured by blue-chip fine art collections.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $193 billion of assets under management across 128 funds and 159 fund of funds vehicles as of June 30, 2015. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,700 people in 35 offices across six continents.
About the Pictet Group
Founded in Geneva in 1805, Pictet is today one of Europe’s leading independent wealth and asset managers, with USD 449 billion in assets under management or custody at 30 June 2015. The Pictet Group is owned and managed by seven partners with principles of ownership and succession that have remained unchanged since foundation.
The Pictet Group, headquartered in Geneva, employs more than 3,800 people. It is also present in Amsterdam, Barcelona, Basel, Brussels, Dubai, Frankfurt, Hong Kong, Lausanne, London, Luxembourg, Madrid, Milan, Montreal, Munich, Nassau, Osaka, Paris, Rome, Singapore, Taipei, Tel Aviv, Turin, Tokyo, Verona and Zurich.