Suros Capital is a specialist lender catering to a narrow but well-defined demographic of collectors and owners of exceptional value assets.
The company was purposely created to fill an obvious gap in the market and offers short term and bridging loans to owners of rare cars, wines, whisky, art collections, and generally investment assets that have a proven auction track record and/or provenance.
Interestingly, Suros is also prepared to lend against NFTs (non-fungible tokens), or “nifties” as these are known for short.
NFTs came to wider prominence with Christie’s eye-watering sale of an NFT by digital artist Beeple for $69 million earlier this year.
Ray Palmer, a director of Suros, explains the process:
<< NFTs are a new area for the lending market and have high volatility. We are, nevertheless, able to lend against them based on market valuation. Typically, we take over the crypto key of the wallet that has the asset for the lending period and return it once the loan has been paid off>>
Suros works with major players and for now, prefers to lend against tangible assets that are less speculative than “nifties”: major art collections (primarily, but not exclusively paintings, rather than sculptures, the provenance of the latter being harder to establish), rare wines and whisky in casks, watches, gems and jewellery.
These represent a safer and proven investment, and Suros is able to offer 50-70% on the value, based on auction market valuation. Due diligence is carried out by both internal and external experts.
The loans work well for asset-rich individuals who may need a sale advance/quick cash injection but do not wish to liquidate their core assets.
Since November 2020 Suros have seen £50m worth of lending inquiries which demonstrates that filling this particular lending niche is timely.