The Intermediary – January 2026 - Flipbook - Page 45
I N P RO F I L E
property transactions, either to leverage better
value from the deal, or make up for the unexpected
costs that often arise during a deal.
Palmer says: “I often see asset-backed finance
as an opportunity to dovetail with, say, property
transactions and provide a top-up – like a
mezzanine – so that a deal can get done.
“You could even argue that it’s the equivalent,
in some cases, of adding 5% to 10% to the loan-tovalue (LTV). So, if there’s a £1m house and they can
only get £700,000 out of it and need £800,000,
the extra can come from somewhere else and
suddenly they’ve got 80% LTV, which you wouldn’t
get in bridging, or at least you’re going to pay a
heavy price for it.
“It’s not always going to be the solution in its
own right, but it’s going to be part of a solution to
give people the money they need.”
Around 45% of the lender’s book goes to
businesses, namely those with simple corporate
structures, including those that deal in luxury
items looking to leverage their own stock
much like others would with machinery or
equipment. The individuals, meanwhile, tend to
be “sophisticated, and typically high net worth
[HNW].”
Palmer adds: “There are HNW and business
purpose exemptions in consumer credit, which
means you’re dealing with a more sophisticated
client in the first place. They know what they’re
getting into, unlike your ‘average Joe’ who just
walks into a mortgage broker.”
Strong foundations
With such variety even just among the assets
being used to leverage deals, specialist expertise
is paramount at Suros Capital. At its core,
the business has a combined 100-plus
yearss of in-house expertise in areas
such as watches and jewellery.
This includes the ability to value
items, as well as identify fakes,
understand market fluctuations,
and model risks.
almer says: “They can pick
Palmer
these things up and, even
by the feel, spot fakes. And
ourse, they’re aware of
of course,
changes in the market and
everything else.”
or those areas that need
For
xternal valuation, Suros partners
external
with big names. Palmer explains:
“When it comes to other assets
that are out of our remit, we
aree in touch with all of the
auction houses – Sotheby’s,
Christie’s, Bonhams,
RAY PALMER
Phillips, and some more of the provincial houses
around the country.
“We also have a panel of experts that we can
turn to when it comes to cars, wine, art.”
Human expertise is an important part of the
process, but Palmer also points to the increasing
use of data as part of valuation, particularly when
it comes to art. ArtNet, for example, is a database
of all auction results going back 30 years, while
Overstone Art Services uses a combination of
AI tools and expert insights to independently
measure financial risks and indicators.
Much more so than in the world of property,
these valuations must take into account a flurry of
market trends.
“For example, the biggest thing in diamonds
right now is the influx of synthetic stones,
grown in laboratories,” Palmer explains. “They’re
devaluing the diamond market for rarer, naturally
occurring stones.”
In the art world, meanwhile, authentication
challenges outweigh the hurdles around pricing
a piece, particularly with fine art where some
foundations will no longer authenticate, due to the
legal and reputational risks of getting it wrong.
The art world has also seen consecutive annual
declines in the current period, as well as a shift
away from the Old Masters and towards more
contemporary and modern names. Palmer does
predict that the art market will likely return to
form once prices reduce enough to attract new
buyers.
Gold has seen its values shoot up 50% in 2024,
with a substantial rise in borrowers leveraging
gold collections rather than selling them. P
Palmer
points to examples of multi-million-pound ggold
holdings being used to fund business launches.
Palmer says: “Gold is a safe-haven investment
vehicle when markets are in turmoil. LLook at
currency – when that’s going bad, people
turn to gold. That’s where we’ve stepped
in. People want to leverag
leverage gold that
they’ve maybe bought and ccollected over
time – they don’t want to liquidate it, as
they still feel that it’s ggoing to continue
to grow as an investment over time.”
sa a peak in late
The watch market saw
2023, followed by a sharp ccorrection
and then stabilisation and rrenewed
growth.
All of these patterns will affect how
much a borrower is able to lend, in
addition to the terms and criteria on o
offer.
Suros Capital uses different LLTVs based
on, for example, the ease of liquidation
of an asset, and uses covenants to manag
manage
depreciation risk that, for example, ac
account
for additional cash or assets if the value
January 2026 | The Intermediary
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