- Client: UK-based individual
- Share Value: Circa £2M
- Loan Amount: Circa £500K
- Loan to Value: Approximately 60%
Enness was approached by a high-net-worth individual seeking to raise capital against a concentrated shareholding in Tesla Inc. The client wished to access liquidity while retaining ownership of the shares, with the funds intended to support various personal expenses. Maintaining exposure to the underlying investment was an important consideration, as the client did not want to sell the shares to raise the required capital.
The primary challenge was identifying a lender willing to provide funding against a concentrated single-stock position at an appropriate loan-to-value ratio. Many lenders prefer diversified portfolios as collateral, which can reduce the concentration associated with individual equities. The client also required a structure that took account of relevant UK tax considerations, requiring a lender able to consider the proposed contractual arrangements.
Enness leveraged its relationships with specialist lenders in the securities-backed lending market to identify a suitable provider. The solution provided a flexible line of credit secured against the Tesla shareholding. The facility allowed borrowing of up to approximately 65% loan-to-value and was priced from around 2% over SONIA, with final terms subject to lender approval, market conditions and the specific characteristics of the underlying security. Interest was payable only on the portion of the facility actually drawn.
This structure allowed the client to access liquidity while maintaining exposure to the underlying investment. The case demonstrates how specialist securities-backed lending can provide an alternative source of finance for clients holding concentrated equity positions.
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.
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.
