- Client: UK resident
- Challenge: Unlocking liquidity from a concentrated holding in a listed blue-chip company without selling the shares
- Facility: Circa £600,000 Lombard loan
- Portfolio Value: Circa £1 million
- Loan-to-Value: Up to 60%
A UK resident approached Enness Global seeking to unlock liquidity from a significant holding in a single listed blue-chip company. The client had benefited from the company’s recent growth and wanted to access capital without selling the shares, potentially crystallising a capital gains tax liability or reducing their exposure to the investment.
Although the client had substantial equity available, raising finance against a concentrated portfolio can be more challenging than borrowing against a diversified investment portfolio. Many lenders apply specific criteria to single-line equity positions because of the concentration risk associated with one underlying asset. Finding a lender able to consider this type of transaction required access to specialist providers rather than the mainstream market.
Enness approached lenders experienced in securities-backed lending and sourced indicative terms from a specialist investment provider. The proposed structure allowed the client to retain ownership of the underlying shares while using them as security for a Lombard lending facility. Indicative terms included a facility of circa £600,000, representing approximately 60% loan-to-value, with no custody, management or arrangement fees under the proposed structure.
This case highlights how specialist Lombard lending can provide an alternative to selling valuable investments when capital is required. Through access to private banks and specialist lenders, Enness can identify potential solutions for clients whose borrowing requirements fall outside conventional lending criteria, subject to lender assessment and the underlying securities.
ENNESS DOES NOT PROVIDE ADVICE ON SECURITIES-BACKED LENDING OR INVESTMENTS. LENDER INTRODUCTIONS ARE UNREGULATED. TERMS AND AVAILABILITY ARE SUBJECT TO THE INDIVIDUAL CIRCUMSTANCES, UNDERLYING ASSETS AND LENDER CRITERIA.
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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.
