Excelsior Capital Ventures (ECV) LLC is to provide "substantial liquidity" to the mid-stream diamond and jewelry industry.
The New York based firm, founded by Nehal Modi, said it expects to begin lending operations on October 3 and will provide loans secured by diamond and precious metal inventories, according to a statement. Modi said, "We are in an environment where the diamond and jewelry industry is experiencing a significant contraction in lending. There is a dire need for new capital and greater liquidity in order to expand the companies and industry at large."
Excelsior said there is an estimated $6 billion shortfall in market liquidity and it aims to close the gap by at least $1.5 billion in total loans by 2019. The firm said that a key development since it began establishing its infrastructure and operations in 2015, is its ability to fund select consignment programs at approved major retailers. It will be providing loans of up to $20 million per borrower, and is in discussions with all the major diamond banks. "We are working diligently to determine how we can co-lend with them on a client-by-client basis," said Jon Mitchell, Chief Operating Officer.
"We are also meeting with prospective borrowers daily to better understand their capital needs and to ensure that we are fully equipped to service them. Either way, we are demonstrating our long term commitment to the industry by pledging a large pool of capital.” He added that Excelsior has engaged recycled diamonds and jewelry firm White Pine Trading LLC, as its infrastructure, logistics, and distribution services partner for ECV borrowers.
Michael O’Hara, CEO of diamond and jewelry investment bank Consensus which is ECV’s investment banking firm, said, "The vehicle Excelsior created has attracted significant interest from major sources of capital that recognize the need for liquidity in the jewelry industry but who have historically had structural concerns about lending to the asset class. Excelsior’s model is both unique and innovative and will remove the sector’s historical barriers to capital deployment.”