CNBC covers the well-trod ground of art loans but reveals an interesting new wrinkle: UBS is outsourcing its art loans to Emigrant’s Andy Augenblick:
Megan Stinson, a UBS spokeswoman, said the service was started at the request of brokers. “Prior to this, UBS WMA had no way of solving for certain ultra-high-net-worth client requests where art was part of the collateral equation,” she said. “We have significant investor appetite.” […] Although the UBS loans are marketed to brokers through the securities-backed lending department of UBS Bank USA, they are made and underwritten by Emigrant Bank Fine Arts Finance, a subsidiary of privately held Emigrant Bank, which since 2005 has employed a small group of art world experts to assess collateral values. Emigrant pays a referral fee for each client sent by UBS. […]
Banks in the business offer relatively uniform interest rates — art loans are currently made at about 5.25 percent — but specialists outside private banking such as Emigrant offer longer maturities than the one- to three-year preference of the private banks. They also tend to have higher loan minimums than the $1 million floors that Emigrant and other specialists accept from UBS and other financial institutions.