From: Richard Joslin To: Eileen Alexanderson , Jeffrey E. <jeevacation®gmail.com>, lawrence delson Subject: Deloitte art financing Date: Wed, 11 Jun 2014 18:44:53 +0000 Attachments: 2013_Art_&_Finance_Report.pdf I attach and extract from Deloitte report. Deutsche Bank, Citi, JPMorgan, US Trust and Bank of America are private banks with most exposure. Non-recourse lenders include Art Finance Partners (U.S.), Art Capital Group (U.S.), Art Assure (USA), Montage Finance (U.S.) and Platinium Art (U.S.). Recent entrants include Borro in the UK and Medallion Financial Corp. The report also notes that the Chinese government allows art as collateral. Perhaps they might be a lender? Challenges: what do you see as the biggest challenge in offering your clients a loan against an artwork? Of the many hurdles that private banks face when using art as collateral, the difficulty of assessing the risk (83%) and the lack of liquidity (83%) are cited as most important. These are closely followed by the difficulty of conducting due diligence (77%) and the lack of mark-to-market valuations (77%). The unregulated nature of the market is problematic for 70% and the legal aspects are an important hurdle for 63% of wealth managers (up from 39% in 2011). Secure storage has become a major hurdle according to 60% of European wealth managers (up from 28% in 2011). The advent of the new freeport in Luxembourg in 2014 should allay concerns around secure storage and contribute to the development of the European art finance and lending market. Recent developments in art secured lending • Borro is expanding short-term art secured lending in the UK and U.S.: Borro has emerged as one of the new leaders in this segment. The company was established in August 2008, and has seen lending volumes grow significantly in the last four years • Medallion has expanded into art secured lending: the New York-based financial services company recently announced it will offer art secured lending