LONDON--(BUSINESS WIRE)--OMNIA Global has launched OMNIA Asset Solutions, a new division dedicated to art finance.
The company helps collectors raise finance against their high value luxury assets, generating liquidity and releasing equity.
With low yields and limited investment options available, art and collectibles are one of the alternative assets that are increasingly considered a store of value – a motivation that remains significant among collectors and art professionals.
With many asset collectors unaware they can generate income from valuable assets while retaining ownership, OMNIA Asset Solutions is offering a unique service.
As Daniel Hansen, CEO, OMNIA Global, explains: “Many high net worth individuals have fortunes stored in assets, such as fine art, classic cars and diamonds.
“These collections will be appreciating in value and becoming a bigger part of the combined wealth of our clients, but not accumulating cash flow.
“We have structured a solution which allows clients to use their assets as the base of a cash flow.”
At OMNIA, art functions as ‘backup’ for private equity investments. For the art owner there is an unleveraged private equity portfolio protecting the pledged assets.
OMNIA Asset Solutions secures the ‘Asset Portfolio’ which underpins the operation of OMNIA Bonds II, a subsidiary of OMNIA Global, which raises funds secured by high value assets.
OMNIA Asset Solutions is headed by Amelia Hunton, who joined OMNIA Global earlier this year. Previously, she worked at insurance firm Jelf (previously Bluefin) where she set-up and ran the art insurance division two-and-a-half years ago.
“With an academic background in art history and with experience working within the art finance sector insuring art loans and having developed OMNIA’s exclusive art finance insurance wrap she definitely is the right one for the job,” says Hansen.
As she says: “It is important to recognise the role the art insurance industry plays in driving market practices for luxury asset markets, this is what puts me in a strong position for navigating the niche field of the art finance market and what stands me out from my competitors.”
OMNIA Global launched in 2009 as an alternative source of finance to entrepreneurs running privately held companies. Over the past few years OMNIA have expanded their footprint within Private Equity investments in SME’s as well as Yachts and Aviation. OMNIA saw art finance as an under-served market in which to invest, says Hansen.
Annual art market reports support the growing consensus of viewing art as an asset class build year-on-year. With Deloitte’s prediction of $2.7 trillion being dedicated to art-related wealth by 2026, who wouldn’t be looking to provide a sophisticated finance solution.
OMNIA’s cash flow solution
“We are interested in assets where we can make a difference, our clients find themselves asset-rich but cash poor, and looking for an alternative to traditional art loans or banks. They don’t want to guarantee a loan personally or via their business,” says Hansen.
OMNIA Asset Solutions offers individuals, corporations, foundations and institutions the ability to earn an annual income from an agreed fixed percentage of the appraisal value during the contractual pledge period of five years, with the possibility of retaining full ownership of the asset at the end of the bond term.
OMNIA is focused on finding high value luxury assets, such as fine art by established blue-chip secondary market artists or classic cars.
“We are open to special cases but generally are looking for what is considered to be stable artists with an abundance of auction sale data, for example, we currently hold artworks by Picasso and Rodin in our pledged asset portfolio.
“The asset portfolio will continue to grow with a diversified portfolio of assets, as it is important to spread the exposure minimising the risk,” says Hunton.
A typical transaction will be valued at £1million upwards of the agreed value leveraged. The contractual period for the pledged assets is five years.
“Currently the assets are required to be held in professional facilities,” Hunton says, “but we are keen to allow the asset owners to keep possession of art in the future, should they wish to do so.”