Shinnecock Partners launches its open-ended, standalone dedicated alternative art lending fund, ALF, building on its 7-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,” noted Alan Snyder, 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 $20 billion, up over $13 billion, and boutique lenders have been growing fast at 15%. The potential market is growing as the report indicates with 87% 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% 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. A blue-chip advisory board offer further and significant domain expertise and include:
- Susan Ginsburg – faculty member, School of Visual Arts in New York
- Amanda Langer – exhibition coordinator, Dietl International Services in New York
- Andrew C. Rose – manager, Art Finance Partners (AFP)
- Chase W. Rynd – member, the International Council of Museums and American Alliance of Museums
- David Paul Steiner – principal, David Steiner & Associates