Being part of the 1 percent just took on new meaning.
That’s about the rate at which billionaire Steve Wynn is borrowing against his extensive art collection as wealth management firms push to win business from the world’s ultra-rich.
The casino mogul pledged 59 works of art as collateral for a loan from Bank of America Corp., one of several steps he recently took to raise cash, according to interviews and regulatory filings. The 73-year-old founder of Wynn Resorts Ltd. said the arrangements permit him to borrow at less than 1 percent.
“This is a great time to be poised with ample cash,” Wynn said in an e-mail through his spokesman.
The favorable terms highlight the increasing competition in the market for art lending, where wealth managers are seeking to win and retain top clients with lower interest rates than ever. Art loans have been traditionally dominated by auction houses and banks such as Citigroup Inc., JPMorgan Chase & Co. and Bank of America. Record prices for art and a surge in wealth among the world’s richest are attracting new players, including one venture backed by private equity firm Carlyle Group LP and Swiss wealth manager Pictet Group.
“We regularly hear from people interested in getting into this field, including private equity firms, commercial banks and individuals who want to fund deals on a one-off basis,” said Thomas C. Danziger, managing partner at Danziger, Danziger & Muro who represents major banks and other lenders in structuring and documenting art loans. “My expectation is that it will only grow.”