Most collectors probably think of their personal collectibles purely as a hobby and might not give much thought beyond simply buying or selling. The reality is that collectibles, particularly high-end collectibles, have now undeniably matured into an alternative asset class. On top of now being able to securely house your collectibles in outside vaulting services (even more dedicated than your personal lockbox at the bank), many collectibles are now able to be used as actual collateral for loans and other forms of capitalization.
Before getting too far into this, think about two scenarios here — asking your bank to hold a Babe Ruth card as collateral for a personal loan, or taking your Babe Ruth card to a pawn shop! A banker would scratch his head as to how to answer you and would probably think you are joking. And if you would actually consider pawning a Babe Ruth card, chances are high that you might not know much about what you own.
This is the additional proof that the collectibles industry is maturing deeper and deeper into an alternative asset class. A release has been sent out by PWCC Marketplace has established a $175 million asset-based credit facility in its efforts to add liquidity for loans and cash advances to its clients who are using trading cards as collateral. PWCC and its affiliated entities have already been involved in offering advances and loans to its customers prior to this news. But to the tune of $175 million?
Other lending and financial services already exist for trading cards and other collectibles. But a specific financing to the tune of $175 million? An announcement this size effectively puts high-end sports cards and trading cards in much of the same light as fine art. Perhaps some of those recent multi-million card sales mean more to the hobby than just high prices.
PWCC announcement shows that the $175 million was led by WhiteHawk Capital Partners, LP as the sole lead arranger and book runner. It also notes that Wingspire Capital LLC is the revolver agent, with D.A. Davidson & Co. named as PWCC’s exclusive financial adviser in this financing. More details of this financing are available on the press release issued through PR Newswire.
If you need additional proof as to this alternative asset class status for collectibles, the press release also indicates that the PWCC Vault already stores assets of more than $750 million in value. This image was included in that press release.
For disclosure purposes, I am a client of PWCC Marketplace and I also use the PWCC Vault services.