Key Details:
- Client Type: Internationally based high-net-worth individual
- Asset Type: Illiquid private company shares
- Funding Requirement: Circa £2 million for a UK residential property purchase
- Solution: Bespoke non-recourse forward-contract-style facility
The client was an internationally based high-net-worth individual holding a substantial stake in an illiquid private company. The objective was to preserve long-term ownership of the shares while accessing liquidity to fund the purchase of a UK residential property.
The client required circa £2 million of funding and sought a structure that would provide access to capital without selling the shares or breaching existing ownership and contractual restrictions. The cross-border nature of the transaction also meant that the proposed facility needed to take account of the relevant legal, corporate and jurisdictional considerations.
The shares presented the principal structuring challenge. They were illiquid and subject to contractual restrictions that prevented conventional security arrangements, such as placing a direct lien over the shares. The client also wished to avoid diluting their exposure to the underlying company or triggering a taxable disposal. From the lender’s perspective, the challenge was to establish sufficient visibility and contractual protection around an asset that could not readily be sold or pledged in the conventional manner.
Enness identified a specialist lender capable of considering a bespoke forward-contract-style structure. The facility was designed to provide the lender with appropriate contractual protection without requiring a direct lien over the shares. It was structured on a non-recourse basis, with repayment linked to a future liquidity event, such as a sale or potential IPO, and a pre-agreed cost of capital.
The resulting structure enabled the client to access liquidity while retaining ownership of the underlying shares and working within the applicable contractual restrictions. Subject to lender approval, asset characteristics and individual circumstances, structures of this nature can provide an alternative route to liquidity where conventional secured lending is not suitable.
This case demonstrates how specialist lending can be considered for clients holding substantial but illiquid private company interests. By assessing the underlying asset, contractual framework and potential future liquidity event together, Enness was able to identify a bespoke financing approach aligned with the client’s objectives.
Crypto Disclaimer:
Enness does not give crypto advice or recommendations and you should seek professional advice to discuss your personal circumstances and requirements.
Securities Backed Lending Disclaimer:
Enness does not give advice on Securities Backed Lending or investments; and lender introductions are unregulated.
This case study is for information and illustrative purposes only and nothing contained within should be construed as advice or a recommendation and is not an invitation to buy or sell securities.
Risk Warning:
The value of private company shares can fall as well as rise and such investments can be illiquid. Borrowing secured or otherwise linked to investments carries risks, including potential loss of assets and exposure to future changes in the value or liquidity of the underlying investment.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
