A private equity partner sits on a carry portfolio worth tens of millions. On paper, exceptionally strong. Yet when it comes to financing a property purchase, the conversation often stops at the same question: what is your income?
The answer is rarely straightforward.
For many private equity professionals, income may consist of a relatively modest salary, irregular distributions, and significant accrued carry that remains unrealised for years. Faced with this, many assume traditional borrowing simply is not available to them.
As a result, they begin looking elsewhere. Selling down liquid investments. Drawing on facilities they would rather leave untouched. Restructuring holdings purely to release capital.
In many cases, the simpler solution was available all along: a mortgage against their home.
Why This Assumption Exists
Traditional mortgage underwriting is built around affordability.
For most lenders, that means a relatively simple equation: stable income, predictable expenditure, and whether monthly cash flow comfortably supports the debt being requested.
For private equity professionals, the model often breaks down.
Their wealth is substantial, but frequently deferred, unevenly distributed, and spread across multiple structures that conventional affordability calculations were never designed to assess. A mainstream lender sees an income profile that does not fit its model and declines.
The borrower often interprets this as a limitation on their borrowing capacity.
In reality, it is simply a limitation of the lender itself.
The distinction matters because specialist lenders often assess the exact same client very differently.
How Private Banks View Income Differently
A number of private banks take a significantly broader view of what constitutes income for sophisticated borrowers.
Rather than focusing on a single salary line, underwriting often begins with a full analysis of the client’s overall financial position.
This can include PAYE income, domestic and international dividends, interest income, capital gains, directors’ loan account movements, retained earnings, and wider investment holdings.
Where a salaried borrower may have one clear income stream, a private equity executive often has multiple sources of wealth sitting across several structures.
A lender capable of assessing the full picture will often arrive at a very different conclusion.
Monetising Liquid Investment Portfolios
One route available through specialist lenders is the ability to monetise liquid portfolios.
Rather than requiring a borrower to sell investments, the lender assumes a percentage of liquid holdings could theoretically be converted into cash annually and uses that capacity to support affordability.
The portfolio remains invested.
However, the lender recognises that liquidity itself can function as an income source when assessing the transaction.
For borrowers whose wealth sits primarily in marketable securities rather than traditional salary, this approach can fundamentally change what becomes possible.
Lending Against Carried Interest
Some private banks go further and assess the carry portfolio itself.
This is often the point where many executives assume financing becomes impossible.
In reality, specialist lenders familiar with private equity structures may view carried interest as a legitimate asset within the broader credit assessment.
A lender that understands fund structures, liquidation timelines, vintage maturity and future distributions can often structure borrowing around assets that mainstream lenders simply ignore.
When Traditional Affordability Is Not Relevant
In some cases, affordability analysis is not the route at all.
Certain lenders can structure short-term facilities designed specifically around expected future liquidity events.
For example, a borrower may secure a two or three-year mortgage facility aligned to anticipated carry distributions, with interest prepaid for the duration of the term.
The structure is relatively simple.
On a £1 million facility at an indicative 5% interest rate, three years of interest is placed into a segregated account with the lender at completion. The lender draws monthly interest payments directly from that account, removing the need for ongoing affordability analysis during the term.
For borrowers with substantial future liquidity and clearly defined timelines, the structure effectively bridges the gap between current capital requirements and future wealth realisation.
Why Demand Has Increased
Private equity liquidation timelines have lengthened.
Exits that previously crystallised within relatively predictable timeframes are now taking significantly longer, leaving substantial wealth temporarily inaccessible.
The capital still exists.
The timing has simply changed.
Meanwhile, life does not pause.
Property acquisitions continue. International relocations move ahead. Investment opportunities arise. Capital calls still need funding.
Increasingly, sophisticated borrowers are using property-backed borrowing not because they lack wealth, but because accessing that wealth at the right moment has become more complicated.
The Reality Most Borrowers Miss
There are lenders, and then there are lending structures.
A private equity executive who assumes borrowing is unavailable is often reacting to the limitations of one lender rather than the wider market.
Read the full balance sheet properly. Monetise liquid portfolios. Structure around carried interest. Build short-term facilities aligned to future liquidity events.
The outcome changes entirely.
Very often, the financing solution exists long before the borrower realises it.
FAQs
Can private equity professionals get a mortgage with low declared income?
Yes. Specialist lenders and private banks often assess a borrower’s wider financial position rather than relying solely on salary or conventional affordability calculations.
Can lenders consider investment portfolios when assessing borrowing capacity?
Yes. Certain lenders can monetise liquid investment holdings and use this as part of the affordability assessment without requiring the borrower to sell underlying assets.
Can carried interest be considered when applying for a mortgage?
In some cases, yes. Certain private banks familiar with private equity structures can assess carried interest and future distributions as part of the wider credit analysis.
Why are private equity professionals borrowing more frequently today?
Lengthening liquidation timelines have delayed access to carried interest, while capital requirements, property purchases and investment opportunities continue uninterrupted.
Do I need to liquidate investments to secure financing?
Not necessarily. Depending on the lender and structure, it may be possible to borrow without selling investments or restructuring broader holdings.
This article is for general informational purposes only and does not constitute financial, mortgage, investment, tax or legal advice. Lending is subject to status, underwriting and lender criteria. Rates referenced are indicative only and may vary depending on individual circumstances. Your property may be repossessed if you do not keep up repayments on a mortgage or other secured borrowing. Independent professional advice should always be sought before entering into any financial arrangement.
