New Athena Art Finance Backed by Carlyle Group Will Loan Money Against Blue Chip Art
Athena offers another way of tapping into the booming global art market.
Athena Art Finance is the latest financial company to delve into the booming art market, by making loans available to collectors who wish to use their valuable blue chip art as collateral. Athena launched October 8 with $280 million of equity capital led by The Carlyle Group, which is listed on the Nasdaq exchange, and the private equity arm of Pictet Group, a wealth and asset manager founded in Geneva in 1805.
According to a statement released today, Athena, which will be based in New York, will offer loans “exclusively collateralized by works of fine art, starting with the upcoming auction and art fair seasons.”
The lending unit was conceived by Olivier Sarkozy who is managing director of the Carlyle Group and head of its Global Financial Services Group. “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 Sarkozy. “Athena’s substantial resources and relevant expertise bring a professional financial services approach to this underserved market.”
Other financial companies, including Citi Private Bank and JP Morgan also operate art lending services where artwork is used as collateral. Such arrangements allow art collectors to gain liquidity from high-value works without having to sell them. Sales of art remain among the highest where capital gains taxes are concerned.
Athena said it will offer six-month to seven-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 Athena CEO Danese, who is a structured finance specialist.
The loans will be made “against artworks with highly marketable value,” according to the press release, “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 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.”
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