- Client: UK national and resident
- Loan Amount: Circa £500,000
- LTV: 75%
- Security: Liquid securities portfolio
- Purpose: Purchase of a luxury asset
Enness was approached by a UK national looking to finance the purchase of a high-value luxury asset. Rather than using traditional luxury asset finance, the client wanted to explore whether their existing investment portfolio could be used to raise the required capital.
The client held a liquid securities portfolio, making securities-backed lending a potential alternative to borrowing directly against the asset being purchased. However, the size of the portfolio presented a challenge. Many lenders operating in this market have minimum portfolio requirements, with some preferring portfolios of more than £1 million.
That significantly reduced the number of lenders available to the client, despite the underlying portfolio being suitable for lending. Enness therefore focused on finding a lender whose criteria aligned with the size and composition of the client's assets.
Following a review of the available options, Enness identified a lender willing to consider the portfolio and provide the required facility. Terms were secured for approximately £500,000 at 75% LTV, providing the client with the liquidity required for the purchase.
Using the investment portfolio as security meant the client could access the required capital without having to sell their underlying investments. It also provided an alternative to financing the luxury asset directly, with the final structure reflecting the client's existing asset position rather than relying solely on the item being purchased as security.
The case demonstrates how securities-backed lending can provide an alternative source of liquidity for clients who hold investment portfolios. However, lender appetite can vary considerably depending on the size, composition and liquidity of the portfolio, so specialist lender selection can be particularly important.
For clients considering using an investment portfolio to fund a high-value purchase or release liquidity, speak to a Securities-Backed Lending Specialist to discuss the available options.
Disclaimer:
This case study is for illustrative purposes only and does not constitute investment, financial, legal or tax advice. Enness does not provide investment advice or recommendations. Securities-backed lending is subject to lender criteria and the characteristics of the underlying assets. The value of securities can fall as well as rise, and a fall in the value of the collateral may result in additional collateral requirements or the need to repay borrowing. Terms and availability will vary depending on individual circumstances and the assets being offered as security.
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.
