The private bank of Goldman Sachs has snapped up an unusually liquid set of assets as collateral for a loan to a former executive – almost 15,000 bottles of fine wine.
The loan to Andrew Cader, who landed at Goldman after the US investment bank bought Spear, Leeds & Kellog back in 2000, was amended last month to include the grand cru collateral, according to a filing.
Before that the loan was backed purely by Mr Cader’s interests in various funds, including Goldman’s Whitehall real estate vehicles.
Like other private banks, Goldman Sachs USA undertakes collateralised or asset-based lending on behalf of its customers. Wealthy clients of private banks can borrow against a range of assets, including basic financial securities like stocks and bonds, and more esoteric ownership interests such as art collections and yachts.
“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 GS Bank USA said in a statement.
Seth Lapidow, a lawyer for Mr Cader, declined to comment on the loan.
Goldman’s new collateral includes wines mostly from the Bordeaux and Burgundy regions of France. The collection of grand cru, which was first reported by Bloomberg News, includes a 1929 bottle of Domaine de la Romanee Conti that is selling for $3,886.67 at FinestWine.com and for $2,944.44 at WeinArt Wolf & Co.
Collateralised lending increased sharply in the years after the financial crisis, with big banks, governments and central banks accepting a range of unusual assets - from cheese to pigs and music rights as securities to back up their loans.
Some private businessmen have sought to tap into the jump in demand for collateralised lending as well as resurgent interest in wine collecting. Bordeaux Cellars, the London-based specialist lender, offers would-be borrowers with fine wine collections 12-18 month loans capped at 35 per cent of the market value of their wine portfolios, for instance.
Mr Cader was co-chief executive of the trading specialist, Spear, Leeds & Kellog. He made at least $85m when Goldman bought the company for $6.5bn.
Todd Christie, the brother of New Jersey governor Chris Christie and a former managing director at Spear, reportedly earned more than $60m from the deal.
Mr Cader has dabbled with various investments since leaving Goldman. He has since been embroiled in an acrimonious lawsuit filed by Warren Lichtenstein, the chairman of the activist fund Steel Partners, concerning child support payments where Mr Lichtenstein has accused Mr Cader of helping his former lover, Annabelle Bond, downplay her financial assets.
Mr Lichtenstein has a daughter with Ms Bond, the British socialite.