Creating income from Art – finding smart ways to release new funds

Daniel Hansen is the founder and CEO of investment firm, OMNIA Global, the parent company of OMNIA Assets Solutions. A life-long entrepreneur and investment specialist he works with high net worth clients across the world, to help them source investment opportunities and release funds. Their OMNIA Assets Solutions division supports clients who want to make the most of their high worth assets, including works of art, to create new income streams. Here he shares his guide to understanding the process and making it work.

What’s in storage?
Investing against high-worth assets – anything from super yachts to cars or art works – is an increasingly popular way to raise funds. The art market in particular is an interesting one and one that is thriving right now. Often companies or individuals hold extremely valuable assets that they cannot or do not want to dispose of. At the same time 80 per cent of owners say they don’t want to sell assets which may be family heirlooms or hold sentimental value. It is thought that 70 per cent of privately-owned art is currently held in storage and there is $2.5 trillion of art work that hasn’t been borrowed against.

Why now?
Typically these assets were purchased 40 or 50 years ago for a fraction of their current value making them a solid form of equity. At the same time the cost of owning art is increasing. Rising insurance premiums and high security fees are driving up maintenance costs – making it an expensive asset to hold.

Next steps
Our expert OMNIA Assets Solutions team can help arrange a new kind of flexible, asset financing to offset these increased costs and create ongoing revenue. We can facilitate borrowing against art assets – one that allows people to retain ownership and create a reliable income stream, instead of the more traditional loan systems. This kind of arrangement allows us to share some of the financial risks with art owners – making it an even more attractive prospect.

Verification you can trust
Authentication is an important part of this process. We work with our expert teams of fine art experts and insurers to carry out vigorous checks and verification work.

So how do owners leverage value without having to sell?
Owners pledge their art works to us and we issue bonds against them. Investment in these bonds then provides a regular income stream, as the asset continues to grow in value.