- Client: UK-based individual
- Share Value: Circa £2 million
- Loan Amount: Circa £500,000
- 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 unlock liquidity while retaining ownership of the shares, with the funds intended to support various personal expenses. Maintaining the long-term investment position in the stock was an important priority, as the client wanted to avoid selling the asset and potentially missing future upside.
The primary challenge in this case was identifying a lender willing to provide funding against a concentrated single-stock portfolio at an appropriate loan-to-value ratio. Many lenders prefer diversified portfolios as collateral, which helps mitigate volatility risk associated with individual equities. In addition, the client required the facility to be structured in a way that complied with relevant UK tax considerations. This meant sourcing a lender capable of offering a bespoke contractual structure that would align with UK regulatory and tax requirements while still delivering suitable terms.
Acting quickly, Enness leveraged its relationships with specialist lenders in the securities-backed lending market to identify a suitable provider. The solution delivered 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. Importantly, the structure enabled the client to pay interest only on the portion of the loan that was actually drawn down, offering greater flexibility and cost efficiency.
This structure allowed the client to access liquidity while maintaining exposure to the underlying investment. By leveraging specialist lenders comfortable with concentrated equity positions, Enness was able to deliver a financing solution that aligned with both the client’s liquidity needs and broader structuring considerations.
Important Information
Securities-backed lending is typically an unregulated form of borrowing in the UK. This case study is provided for informational purposes only and does not constitute advice or a recommendation.
Risk Warning
The value of shares and other investments can fall as well as rise, and you may receive back less than your original investment. Where borrowing is secured against investments, a fall in value may result in margin calls or the forced sale of assets. Failure to meet repayment obligations may result in the loss of the secured assets.
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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.
