Wine Passes Another Milestone on Path to Asset Class

Bloomberg did some nice digging in the UCC filings to find that a former Goldman Sachs executive has secured loans from the private bank with his wine as an asset. Why is that important? Well, the move toward treating so-called SWAG investments as viable assets reaches another level when banks are willing to accept the asset as collateral.

Let’s not take this too far. No one who gets a loan secured by their wine or art is without other assets or means to repay that loan. Nonetheless, the discovery is another step toward treating this “passion” assets as something with long-lasting value:

Goldman Sachs Group Inc. (GS) accepted almost 15,000 bottles of fine wine as loan collateral from a former high-ranking executive, according to a regulatory filing last month. Andrew Cader, a former senior director at Goldman Sachs’s specialist-trading unit, pledged a secured interest in the wines, which are primarily from the Burgundy and Bordeaux regions of France, the filing showed.

Goldman Sachs’s move stands out because private banks that lend money to wealthy clients against assets such as artwork and real estate have been less willing to extend loans backed by fine wines, said four specialty lenders and attorneys

Goldman Loan to Ex-Trader Cader Is Backed by 15,000 Wines (Bloomberg)