- Client: UK-based individual
- Share Value: Circa £2 million
- Loan Amount: Circa £500,000
- Loan-to-Value: Approximately 60%
Owning a valuable share portfolio does not always translate into readily available liquidity. A UK-based high-net-worth client approached Enness looking to release capital from a concentrated listed equity holding without selling the shares. Retaining ownership was important, as the client remained confident in the investment's long-term prospects and wanted to avoid crystallising a sale while still accessing funds for wider liquidity requirements.
The structure presented a challenge from the outset. Many lenders are cautious about lending against a single listed stock, particularly at higher loan-to-value ratios, as concentrated portfolios are generally viewed as carrying greater volatility than diversified investments. This significantly reduced the number of lenders willing to consider the transaction.
The client also required a facility that aligned with their wider financial and tax planning objectives. Rather than simply sourcing liquidity, the priority was to secure a lending structure capable of meeting specific contractual and regulatory requirements while providing the flexibility expected from a securities-backed facility.
Drawing on relationships with specialist private banks and securities-backed lenders, Enness identified a provider comfortable lending against a concentrated listed equity position. A flexible line of credit was arranged, allowing borrowing of up to approximately 65% loan-to-value, subject to lender approval and facility terms. Interest was payable only on the amount drawn, enabling the client to access liquidity as required rather than paying financing costs on the full approved facility.
This transaction highlights how specialist Lombard lending can provide an alternative to selling valuable investments when capital is required. With access to lenders experienced in concentrated equity positions, Enness was able to structure a solution that balanced liquidity needs with the client's objective of remaining fully invested for the longer term.
Regulatory Notice
Depending on the structure, securities-backed lending and related financing solutions may fall outside FCA regulation. Regulatory treatment depends on the borrower's circumstances, the purpose of the borrowing and the assets used as security.
Disclaimer
This case study is provided for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Enness acts as a broker and not as a lender. Lending is subject to status, underwriting, asset suitability and lender criteria. Securities-backed lending carries risks, including the possibility of additional collateral requirements or the sale of pledged assets if their value falls. Independent professional advice should be sought before entering into any financial arrangement.
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.
