The ultra-wealthy are increasingly using their investment portfolios as a source of liquidity rather than selling valuable holdings when they need to purchase property or meet other major commitments.

Barron’s reports that Merrill ended the second quarter of 2026 with record lending balances of $171 billion, 11% higher than a year earlier. The total includes securities-backed facilities, customised loans and mortgages, while balances within its more bespoke lending business reportedly increased by 21%.

The growth reflects a wider change in how wealthy clients are approaching major purchases. Instead of maintaining large cash balances or selling investments whenever capital is required, qualifying borrowers are increasingly using securities-backed facilities to release money against marketable portfolios.

Property is one of the clearest applications. J.P. Morgan Private Bank identifies real-estate purchases as a common use of securities-backed credit, allowing clients to borrow against eligible investments while retaining ownership of the underlying assets.

For entrepreneurs, executives and family-office principals, that can provide a more efficient route to liquidity than selling an appreciated or strategically important holding. It may also allow a buyer to proceed more quickly than would be possible through a conventional mortgage.

However, borrowing against investments changes rather than removes the financial risk. The client preserves exposure to the portfolio while adding variable-rate debt and a collateral requirement that can tighten if markets fall.

Wealthy Clients Often Have Assets but Limited Immediate Liquidity

Many high-net-worth property buyers are not short of wealth. Their difficulty is that the wealth is held in assets they do not want to sell at the point a purchase becomes available.

A founder may hold a concentrated position in a listed company. A senior executive may have accumulated substantial employer shares, while another client may hold a diversified investment portfolio intended to remain in place for many years.

Selling those investments can create several disadvantages. The disposal may crystallise a gain at an inconvenient time, interrupt a long-term strategy or reduce exposure to an asset the client still expects to appreciate.

It can also weaken the buyer’s position if a property needs to be secured before the investment sale can be completed and the cash transferred.

Securities-backed lending offers an alternative. The bank takes security over eligible investments and advances a proportion of their value, creating liquidity without requiring an immediate disposal.

Barron’s highlighted one client whose holding in a leading artificial-intelligence business had grown from approximately $1 million to around $10 million. Instead of selling $3 million of shares to fund a home purchase, the investor borrowed against the holding.

The transaction allowed the client to retain the shares, but it also left the borrower exposed to both the performance of a concentrated investment and the continuing cost of the loan.

That trade-off is central to the growing use of Lombard and securities-backed facilities.

Property Purchases Are Driving Demand for Portfolio-Backed Liquidity

Prime property transactions often move more quickly than traditional mortgage processes.

A buyer may need to exchange rapidly, compete with a cash purchaser or complete before a business sale, bonus payment or other liquidity event. Even a financially strong client can lose negotiating power if the purchase depends on arranging and documenting a large mortgage.

Borrowing against an established investment portfolio can shorten that process because the lender already has visibility over the collateral and may be able to make funds available through an existing private-bank relationship.

The facility may be used to acquire the property outright, supplement a mortgage deposit or bridge the period before longer-term property finance is put in place.

For some clients, this can create the appearance and practical strength of a cash purchase without requiring them to hold the entire acquisition price in cash.

The strategic benefit is not simply speed. It is the ability to separate the timing of the property purchase from the timing of the investment sale.

A client can secure the property while deciding later whether the borrowing should be repaid through a mortgage, the sale of another asset, business proceeds or a more orderly reduction in the investment portfolio.

Private Banks Are Expanding Lending Around Client Assets

The growth in bespoke lending also illustrates why credit has become increasingly important to private banks and wealth-management businesses.

A large investment portfolio creates more than fee income. It can also support secured lending, strengthening the broader commercial relationship between the institution and the client.

Private banks can combine investment custody, Lombard facilities, large residential mortgages and other customised loans within one relationship. That allows the bank to assess the client’s balance sheet more broadly than a lender focused solely on salary and expenditure.

For the client, the attraction is access to capital without dismantling an established investment strategy. For the bank, the facility can deepen the relationship and make assets less likely to move elsewhere.

This alignment does not mean that the lending is automatically the most suitable or least expensive option.

A securities-backed facility may require the investments to be held with the lending institution. The client could therefore face investment-management, custody and lending costs within the same arrangement.

A competitive interest margin can appear less attractive once the cost and restrictions of the wider wealth relationship are taken into account.

Concentrated Shareholdings Are Creating More Bespoke Loans

The increase in customised lending is particularly relevant to entrepreneurs and executives whose wealth is concentrated in one company.

A diversified portfolio of listed equities and high-quality bonds is relatively straightforward for a private bank to value and monitor. A single large shareholding presents a different risk because the collateral can fall sharply following a company-specific event.

Banks may respond by applying a lower lending value, requiring a substantial collateral buffer or imposing additional restrictions on the facility.

Even then, a concentrated listed holding is generally easier to finance than shares in a private company. Private-company interests lack a continuously observable market price and may be difficult to sell if the borrower defaults.

Barron’s reports that specialist lenders are increasingly considering facilities against private-company shares, particularly where founders have substantial paper wealth but limited liquidity. These arrangements tend to be more expensive and structurally complex than conventional securities-backed lending.

The article cited indicative borrowing costs of around 6% against public securities, compared with at least 8.5% for some loans secured against private-company equity. A private-share facility may also include an equity kicker, allowing the lender to participate in future upside.

This shows how far bespoke wealth lending can extend, but it also demonstrates the difference between a conventional Lombard loan and a highly structured facility against illiquid assets.

Borrowing Can Delay an Investment Sale, Not Eliminate It

For clients with appreciated investments, borrowing may avoid an immediate disposal and the tax consequences associated with it.

That can make the facility attractive where a sale would occur at an inconvenient time or interfere with wider planning. However, the debt must eventually be repaid.

The repayment may come from income, a later investment sale, business proceeds, property refinancing or another asset disposal. The client is therefore deferring the liquidity decision rather than removing it.

This can be entirely rational where the expected repayment event is credible and the borrowing period is relatively short. It becomes more speculative where the client relies on continued investment growth to justify maintaining the debt.

If the portfolio falls, the borrower could eventually be forced to sell at a less favourable price than would have been available when the facility was arranged.

The tax position can also become more complicated if the lender liquidates investments to restore its collateral coverage. Any tax consequences should be reviewed by the client’s regulated tax adviser rather than assumed from the lending structure alone.

Market Falls Can Turn Flexible Credit Into an Immediate Liability

The defining risk of portfolio-backed borrowing is that the collateral is continually revalued.

The bank assigns a lending value to each eligible investment and monitors whether the total collateral remains sufficient to support the amount borrowed. If investment values fall, the client may be required to provide more assets, reduce the balance or repay the facility.

If the borrower cannot act quickly enough, the lender may have the right to sell investments.

This differs fundamentally from a conventional mortgage. A mortgage lender does not normally demand additional capital simply because the property market has weakened after completion, provided the borrower continues to meet the agreed terms.

A securities-backed facility can create precisely that obligation because the loan is managed against the current value of the portfolio.

The risk is particularly acute where the client borrows close to the maximum available amount or relies heavily on one company or sector. A diversified portfolio may be more resilient, but it is not immune from a broad market fall.

Clients using Lombard borrowing for a property purchase therefore need more than a repayment strategy. They also need a contingency plan for adverse movements before the intended repayment takes place.

Variable Interest Rates Can Increase the Cost During the Loan

Securities-backed lending is commonly priced at a variable reference rate plus a margin set by the lender.

The borrower may therefore experience a higher interest cost even if the portfolio remains stable. If interest rates rise while asset values fall, both sides of the structure can move against the client at the same time.

Pricing depends on the size of the facility, quality of the collateral, currency and strength of the wider private-bank relationship. Larger and more diversified portfolios can generally secure better terms than smaller or concentrated holdings.

The variable structure makes the intended borrowing period particularly important. A facility may be commercially attractive as short-term acquisition finance but less suitable as permanent property debt.

A wealthy client completing a prime purchase may accept a higher variable cost for several months in exchange for speed and certainty. Leaving that borrowing in place for years requires a different assessment.

The client should compare the expected total interest cost with the cost and flexibility of longer-term mortgage finance, rather than viewing the initial availability of the Lombard facility as the end of the decision.

A Mortgage May Still Be the Better Long-Term Structure

Conventional and private-bank mortgages remain relevant even where a client has sufficient investments to support portfolio-backed borrowing.

A mortgage is secured against the property and can provide a fixed rate, defined term and greater protection from short-term financial-market volatility.

The client can also retain greater freedom over the investment portfolio because the holdings are not pledged to the lender. Assets can be sold, transferred or rebalanced without affecting the property loan.

For clients intending to maintain the borrowing for many years, that stability can be more valuable than the speed and flexibility of a securities-backed line.

The difficulty is that a large mortgage can take longer to arrange, particularly where the borrower has complex income, international assets, trust structures or an unusual property.

A client may therefore use investment-backed borrowing to secure the purchase and then replace some or all of it with a mortgage once the property transaction has completed.

This allows the short-term and long-term requirements to be addressed separately.

Blended Borrowing Can Reduce Dependence on One Facility

The strongest solution may not require choosing entirely between a mortgage and a Lombard loan.

A blended structure can use property-backed debt for the long-term core borrowing and a smaller securities-backed facility for the deposit, transaction costs or temporary liquidity.

This limits the amount exposed to investment-market collateral calls while allowing the client to preserve more of the portfolio at the point of purchase.

Another client may use a conventional mortgage for the majority of the acquisition while borrowing against investments to avoid selling a concentrated position at an unattractive time.

The appropriate balance depends on the borrower’s objectives, portfolio composition and expected repayment events.

A diversified investor expecting a known liquidity event within six months may be comfortable with a larger Lombard element. A founder whose wealth is concentrated in a volatile holding may prefer greater reliance on property-backed finance, even where the mortgage process is slower.

The decision should be based on the risk attached to each source of capital rather than the apparent prestige or sophistication of the facility.

Bridging Finance Can Provide an Alternative Source of Speed

Lombard lending is not the only way to strengthen a buyer’s position where time is critical.

A property bridge can also provide acquisition finance before a sale or longer-term mortgage completes. The facility is primarily secured against the property rather than the investment portfolio.

Bridging finance generally carries a higher interest rate and additional valuation, legal and arrangement costs. However, it avoids placing a liquid investment portfolio at risk of a collateral call.

This can be important where the client’s assets are concentrated, volatile or already pledged elsewhere.

The comparison should therefore examine the expected holding period, total finance cost, repayment strategy and nature of the security.

A Lombard facility may be more efficient for a client with a substantial diversified portfolio and an established banking relationship. A bridge may be safer for a borrower who does not want short-term market volatility to influence the financing of a long-term property asset.

Neither should be selected solely because it can complete quickly.

The Best-Funded Buyer May Not Be Holding the Most Cash

The rise of securities-backed lending is changing the meaning of liquidity in prime property transactions.

A buyer no longer needs to hold the full purchase price in cash to proceed with the strength of a cash purchaser. A well-structured lending facility can make invested wealth available quickly while leaving the underlying assets intact.

This can reduce the opportunity cost of maintaining a large, unproductive cash balance while waiting for the right property.

However, access to liquidity should not be confused with an absence of risk. The buyer who relies heavily on pledged investments remains exposed to market movements, variable rates and lender discretion.

A client with several available routes may be in a stronger position than one relying entirely on cash, a single mortgage approval or the value of one concentrated shareholding.

For advisers, the market development creates a clear reason to consider property and investment liquidity together.

The central question is not simply whether the client has sufficient wealth to buy. It is which assets should be sold, which should remain invested and which should be used as collateral.

Property Finance Should Be Compared Before Assets Are Sold

The growing use of portfolio-backed borrowing does not mean wealthy clients should automatically borrow rather than sell.

Selling investments may be the most appropriate option where the client wants to reduce risk, rebalance an overconcentrated portfolio or avoid adding leverage. A conventional mortgage may provide more stable and less intrusive long-term debt.

Lombard lending becomes most compelling where the client values speed, expects a relatively short borrowing period and has sufficient diversified collateral to withstand market movements.

Private banks can provide highly effective structures, but their facility should still be compared with large-loan mortgages, specialist lenders and bridging finance.

A client should also understand whether the proposed lending requires investments to be transferred, how the collateral will be valued and what happens if the portfolio falls sharply.

These questions need to be addressed before the property purchase creates urgency.

The increase in securities-backed and customised lending shows that wealthy clients are becoming more deliberate about how they release capital. They are no longer assuming that a major purchase must be funded by selling assets or maintaining large cash reserves.

For HNW and UHNW buyers, the choice is increasingly between several forms of liquidity, each carrying a different cost and risk.



The most sophisticated solution is not necessarily the one involving the most complex lending. It is the structure that allows the client to complete the transaction without creating a greater financial vulnerability elsewhere.