Excelsior Capital Ventures LLC  (ECV), a New York-based finance company that caters exclusively to the diamond and jewellery industry, plans to make “substantial liquidity available to the mid-stream diamond and jewellery industry”, the firm announced yesterday.  

EVC was  founded in 2015 by trade veterans Nehal Modi – also its President & Chief Executive Officer and the visionary behind the venture --  Jon Mitchell, and David Barr. The company aims  to not only provide working capital loans to midstream borrowers, but also offers  “a host of value added services to enhance clients’ businesses”.

“We are in an environment where the diamond and jewellery industry is experiencing a significant contraction in lending,” Modi said, while making the announcement. “There is a dire need for new capital and greater liquidity in order to expand the companies and industry at large.”

Lending operations are expected to commence from October 3, 2016 and EVC will extend loans secured against diamond and precious metal inventories.  The firm estimates that the  business is currently  challenged with a shortfall to the tune of around US$  6 billion in financing and hopes to contribute   to the extent of about US$ 1.5 billion by 2019 towards closing this gap. It is understood that the Company will be providing loans of up to $20 million per borrower.

ECV's business model encompasses secure asset management, risk-mitigated logistics, spot market appraisals, asset monetisation and assisted marketing solutions for customers’ inventory, a press statement from the Company  noted.  “A key development since ECV began establishing its infrastructure and operations in 2015, is its ability to fund select consignment programmes at approved major retailers,” EVC said.

Apart from its own financing,  EVC also plans to work with industry stakeholders to address the  liquidity crisis. Jon Mitchell, Chief Operating Officer of ECV, said that the firm 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,” he elaborated. “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.”

Further,  Mitchell added that  the Company  has engaged White Pine Trading LLC, “as its infrastructure, logistics, and distribution services partner for ECV borrowers”.

White Pine CEO Benjamin Burne commented, “Collectively with Excelsior, we have reconsidered the needs of industry borrowers and developed comprehensive solutions that address the critical issues companies are facing today.”

Michael O’Hara, CEO of leading diamond and jewellery investment bank Consensus and ECV’s investment banking firm, commented: "The vehicle Excelsior created has attracted significant interest from major sources of capital that recognise the need for liquidity in the jewellery 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.”