Art work Due­ diligence report

2,500 WORDS (including footnotes and citations, excluding appendices)

You have been asked by a private bank to provide a due-diligence report on an individual art work which they are considering accepting as collateral for a 5 year-fixed bullet loan. Pick a fine art object of your choice (must have a market value above $100,000) and carry out the following due-diligence research:

 

1.    Artist specific information

2.    Object specific information

3.    Artist Market Analysis

4.    Value appraisal

5.    Risk appraisal

1.    Market Risks

2.    Art work specific risks:

1.    Quantitative: volatility and price-risk

2.    Qualitative: object risks, eco-system/ endorsement risks

3.    Final recommendation

 

This assignment will be assessed according to the following criteria:

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Structure and clarity: Is the proposal clearly and professional presented? Is it logically structured? Are the key points convincingly argued?

 

Rigour of research: What tools/methodology has been used to undertake the research? Are a range of relevant sources used to inform the discussion?

 

Application of the theory: Is there evidence of understanding of underlying theory taught in the course? Are there references to appropriate academic research that can inform practical choices?

 

Quantitative and Qualitative valuation and risk factors: Does the student demonstrate knowledge and skills in applying both quantitative and qualitative tools to the analysis.

 

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Credibility: Would the bank be willing to lend against the object based on this proposal?