Structuring a £30 million Lombard facility without selling the investment portfolio
A high-net-worth international investor wanted to fund an equity commitment into a major US construction project while keeping a substantial UK-custodied securities portfolio invested. Wesley Ranger recommended an execution-only Lombard structure designed to release approximately £30 million without transferring investment discretion to the lender.
Wesley Ranger
Wesley assessed the portfolio security, custody, jurisdiction and currency requirements together, identifying a private-bank structure intended to support the immediate capital requirement while preserving the client’s investment discretion and scope for future borrowing.
The case at a glance
- The challenge
- Raise approximately £30 million in Sterling for a US project commitment without liquidating a substantial investment portfolio held in the UK.
- The recommendation
- An execution-only Lombard facility combining securities-backed lending, custody and multi-currency capability within a suitable private-bank relationship.
- The intended benefit
- Keep the long-term portfolio invested while creating significant liquidity and retaining flexibility for further borrowing, subject to portfolio values and lender criteria.
Significant liquidity was needed without dismantling the portfolio.
The client was a high-net-worth Saudi national with a diversified portfolio of quoted securities custodied in the United Kingdom. The portfolio had been built for long-term wealth preservation and growth, but a separate opportunity required a substantial equity commitment into a major construction project in the United States.
Selling investments could have generated the capital, but that would have interrupted the existing strategy. The preferred approach was therefore to use the strength of the portfolio as collateral and raise approximately £30 million in Sterling before moving funds overseas.
- Portfolio quality mattered more than headline value A Lombard lender needed to assess liquidity, diversification, volatility and concentration holding by holding before assigning a lending value.
- Cross-border underwriting added complexity The client’s Saudi status, UK custody arrangements and intended transfer of funds to the United States all formed part of lender selection and due diligence.
- Investment control had to be preserved The client wanted an execution-only arrangement, retaining discretion over investment decisions rather than moving into a discretionary investment-management proposition.
- The facility needed room to evolve The immediate requirement was around £30 million, but additional capital might be required later as the US project progressed.
Match the private bank to the portfolio, not just the requested loan.
Wesley identified a private-banking institution capable of combining custody and securities-backed lending while supporting an execution-only relationship. That avoided treating the case as a simple percentage of total portfolio value and instead aligned the facility with the quality of the underlying securities, the client’s preferred investment control and the cross-border use of funds.
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Assess the lendable portfolio
Review the quoted securities for diversification, concentration, liquidity and volatility so the lender could determine which holdings were eligible and what lending value to apply.
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Combine custody with execution-only lending
Use an institution able to hold the relevant securities and provide the secured facility while leaving investment decisions with the client, subject to the lender’s collateral requirements.
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Build in currency and future-capacity flexibility
Structure the immediate requirement around Sterling borrowing, with multi-currency capability for Sterling or US Dollar funding and potential scope for further borrowing if portfolio values and lender criteria continued to support it.
Pricing was considered as part of the wider institutional relationship rather than in isolation. Initial indications were approximately 0.50% above the lender’s cost of funds, with illustrative all-in borrowing costs of around 4.24% on a variable Sterling basis or approximately 4.73% for a two-year fixed structure. These figures were subject to full underwriting and market conditions.
Preserve the investment strategy while creating usable capital.
The central rationale was that the client already held substantial liquid assets capable of supporting specialist lending. A securities-backed facility could therefore provide liquidity without requiring an outright disposal of investments or a wider restructuring of the portfolio.
The recommended institution also addressed the operational side of the case. Bringing custody and lending together could simplify the security arrangements, while the execution-only structure was intended to preserve the client’s discretion over investment decisions. Multi-currency capability added flexibility because the borrowing was initially required in Sterling but the capital would ultimately be deployed in the United States.
A proposed facility with indicative pricing, subject to underwriting.
The information supplied records the lending strategy Wesley structured, the type of institution identified and the pricing indications discussed. It does not state that the facility was formally approved, drawn or completed.
The intended result was to make approximately £30 million of liquidity available for the US project while leaving the long-term investment portfolio in place and retaining the option to consider additional borrowing later, subject to ongoing portfolio values, lender appetite and normal credit requirements.
For a large Lombard facility, lender fit depends on the securities, custody, jurisdiction, currency and downside resilience—not simply the portfolio’s headline value.
Understanding this approach.
Can I borrow against an investment portfolio without selling the assets?
Potentially. Lombard lending uses eligible investments as collateral, so the assets can remain invested while borrowing is outstanding. The lender will decide which holdings qualify, the lending value assigned to them and the conditions that apply throughout the facility.
How does a private bank decide how much it will lend?
There is no single loan-to-value that applies to every portfolio. Lenders typically assess each holding for liquidity, volatility, diversification and concentration, then apply their own advance rates or haircuts. Custody, jurisdiction, borrowing purpose and the wider client relationship can also affect the structure.
What happens if the pledged investments fall in value?
The lender may require more collateral, partial repayment or a reduction in the facility if the portfolio falls below its maintenance requirements. In some circumstances assets may be sold. Building sufficient headroom into the initial structure is therefore an important part of managing Lombard lending risk.
Can Lombard lending be arranged in more than one currency?
Some private banks can provide multi-currency facilities, subject to the assets, lender and client circumstances. Currency choice should be considered carefully because exchange-rate movements can increase the effective cost or repayment burden where the borrowing currency and the use of funds differ.
Does an execution-only structure mean the lender has no control over the portfolio?
No. Execution-only can preserve the client’s investment decision-making, but the pledged assets still need to remain within the lender’s collateral rules. Changes to holdings may affect eligibility, lending value or required security, so investment decisions and borrowing constraints need to be coordinated.
Need liquidity without dismantling a long-term portfolio?
If you hold a substantial investment portfolio and are considering a significant capital raise, the Willow team can assess likely lender fit, custody requirements, currency choices and downside risks before you decide whether to proceed.
Understand your options before you commit. Your initial conversation, assessment and presentation of suitable options are free, with no obligation. Any fees are explained before you decide whether to proceed.
- 01 Outline the portfolio Share broad asset classes, approximate value and current custody arrangements.
- 02 Define the capital need Explain the required facility, currency, purpose and timing without sending sensitive documents by ordinary email.
- 03 Compare suitable structures Review lender appetite, collateral terms, costs and risk before deciding whether to proceed.
Please keep your initial message brief and do not attach financial statements, identification or other sensitive documents.
Wesley Ranger
Adviser at Willow Private FinanceWesley structured the recommendation in this case. New enquiries are handled by the Willow team, who can assess the circumstances and route the case appropriately.
Enquire with the Willow team Call 0207 082 5175