Auction house Forum Auctions has teamed up with financier Unbolted to create a new finance facility.
A collector bought a Shakespeare first folio worth £850,000 as the first deal using the services.
The new innovative liquidity facility allows buyers to combine asset-backed loans with auction advances to bring a greater benefit to the buyer and seller.
This hybrid arrangement bears similarities to both the generic market for asset-backed loans used to fund everything from business deals to auction purchases and to auction advances offered by the global auction houses for blue-chip trophy art.
The efforts are hoped to open up the fine art auction market to a much wider range of buyers and sellers, reaching farther than the UHNW market.
Taking place at the point-of-sale, the facility works on a simple basis, the money is advanced by Unbolted to buy the folio via a private treaty, the collector then consigns other material from their collection to Forum to repay the loan.
The facility offers collectors the chance to purchase their desired object immediately when the item becomes available rather than having to wait to find the money to purchase it. This new service will bring the auction house new sellers and buyers in addition to new material for the sales.
Forum auctions was launched earlier this year by Stephen Ludwig with an opening two day sale of books and works on paper which amounted to over £1 million. Ludwig started out as an investment banker, having worked at Credit Suisse and Nomura Securities, he was a founding shareholder of The Fine Art Auction Group which he helped take to a ‘Top 5’ position before it was sold to Stanley Gibbons in 2013. The deal with unbolted is supposed to be the first of many innovations for the new auction house.
“Whilst lending against art collateral has become an arguably generic private banking service, the use of a credit-rating agnostic online financing platform establishes a new frontier in this market. This tripartite transaction is highly innovative and opens opportunities for access to increased liquidity for the acquisition of collectibles by a far wider range of both collectors and traders.” says Ludwig.
Unbolted have been offering peer-to-peer short-term loans on luxury assets since their launch in 2015, these loans use the value of the asset to determine the loan criteria.
Unbolted co-founder Rito Haldar says “We believe that the auction industry can leverage us to better serve their customers, both buyers and sellers. We have enjoyed working with Forum Auctions on this transaction and look forward to developing other relevant products with them over the coming months.”