Goldman Sachs loan backed by 15k fine wines

Wall Street bank Goldman Sachs has accepted some 15,000 fine wines as collateral for a loan to a former high-ranking executive.

Goldman Sachs has accepted 15,000 bottles of fine wine as collateral for a loan to a former executive

According to Bloomberg, the loan to Andrew Cader, a former senior director at the investment bank, was amended last month to include the liquid assets, made up primarily of fine wines from Bordeaux and Burgundy.

The collection includes a bottle of 1929 Domaine de la Romanée-Conti, which is currently on the market for around £2,500.

Before the amendment, the loan was backed entirely by Cader’s interests in various funds, including Goldman Sachs’ “Whitehall” real estate fund.

Like many private banks, Goldman Sachs offers asset-based lending. Wealthy clients of can borrow against a range of assets, including financial securities like stocks and bonds, and other interests such as art collections, yachts and music rights.

Goldman’s move stands out because private banks that lend money against assets have been less willing in the past accept fine wine as collateral.

Goldman Sachs’ HQ on Wall Street

“While we do not comment on individual loans due to client confidentiality, we take great care to apply high standards of risk management and appropriately value any form of collateral on all loans,” a spokesman for Goldman Sachs said.

According to the Financial Times, collateralised lending has increased sharply since the financial crisis of 2007, with big banks accepting a range of esoteric assets – from cheese to pigs – as securities to back up their loans.

The trend has led some wine businesses to jump on the loan bandwagon.

London-based specialist lender Bordeaux Cellars offers borrowers with fine wine collections 12-18 month loans capped at 35% of the market value of their cellars.

Though the proliferation of fake wines on the market has led to a decrease in demand to loan against wines made before the ‘80s due to the risk that they might be counterfeit.

“I’d be reluctant to lend on wines predating 1982 because the provenance is hard to prove,” said Bordeaux Cellars’ founder Stephen Burton.

Cader was co-chief executive of the trading specialist Spear, Leeds & Kellog. He made £55m when Goldman Sachs bought the company for £4bn in 2000.