- Client: UK-based individual
- Share Value: Circa £2M
- Loan Amount: Circa £500K
- Loan-to-Value: Approximately 60%
Owning a valuable share portfolio does not always translate into readily available liquidity. A UK-based high-net-worth client approached Enness seeking to release capital from a concentrated listed equity holding without selling the shares. Retaining ownership was important to the client, who wanted to access funds for wider liquidity requirements without disposing of the investment.
The structure presented a challenge from the outset. Many lenders are cautious about lending against a single listed stock, particularly at higher loan-to-value ratios, as concentrated portfolios can present greater volatility than diversified investments. This reduced the number of lenders willing to consider the transaction.
The client also required a facility that aligned with their wider financial and tax planning objectives. Rather than simply sourcing liquidity, the priority was to identify a lending structure capable of meeting the client's requirements while providing the flexibility associated with a securities-backed facility.
Drawing on relationships with specialist private banks and securities-backed lenders, Enness identified a provider comfortable lending against a concentrated listed equity position. A flexible line of credit was arranged at approximately 60% loan-to-value, subject to lender approval and facility terms. Interest was payable only on the amount drawn, allowing the client to access liquidity as required rather than incurring financing costs on the full approved facility.
This transaction highlights how specialist Lombard lending can provide an alternative to selling investments when capital is required. Access to lenders experienced in concentrated equity positions allowed Enness to identify a structure aligned with the client's liquidity requirements while retaining ownership of the underlying shares.
ENNESS DOES NOT GIVE ADVICE ON SECURITIES BACKED LENDING OR INVESTMENTS; AND LENDER INTRODUCTIONS ARE UNREGULATED.
Read the UK version of this case study.
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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.
