- Client: UK national and UK resident
- Challenge: Concentrated single-stock portfolio requiring specialist lender appetite
- Loan Amount: £300K Lombard loan facility at circa 60% LTV
A UK-based investor approached Enness seeking to release liquidity against a concentrated listed equity portfolio valued at approximately £2M. The portfolio consisted primarily of a single high-growth technology stock, creating a structure that many lenders may consider higher risk from a securities-backed lending perspective. The client's objective was to access £300K in liquidity to support personal expenditure without selling shares or materially changing the portfolio structure.
The primary challenge in this case related to the concentrated nature of the portfolio. Many lenders prefer diversified securities portfolios when structuring Lombard lending facilities, as concentration risk can affect margin thresholds and borrowing availability. Identifying a lender willing to assess the position based on the underlying characteristics and liquidity of the listed equity holding, rather than applying standard diversification requirements, was therefore an important consideration.
Enness introduced the client to a specialist private banking lender experienced in structuring Lombard facilities secured against concentrated listed equity positions. A £300K line of credit facility was arranged at approximately 60% LTV, structured on an indefinite-term basis with pricing agreed at circa 2% above the base rate. The facility provided access to liquidity while allowing the client to retain exposure to the underlying investment.
This case demonstrates how specialist securities-backed lending solutions can be considered by investors with concentrated listed equity holdings where lender requirements around portfolio diversification may limit available options. Private banking lenders may assess factors including the underlying securities, concentration levels, liquidity and the client's wider financial circumstances when considering a Lombard facility.
ENNESS DOES NOT GIVE ADVICE ON SECURITIES BACKED LENDING OR INVESTMENTS; AND LENDER INTRODUCTIONS ARE UNREGULATED.
THE VALUE OF SHARES CAN FALL AS WELL AS RISE. BORROWING AGAINST INVESTMENTS MAY INVOLVE MARGIN CALLS OR THE SALE OF SECURED ASSETS IF REPAYMENT OBLIGATIONS ARE NOT MET.
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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.
