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10 Jan 2023

Case study: Could you invest your bonus and borrow against the portfolio?

It may be possible to invest long-term while funding your short-term goals.

 

Some of our clients who work in financial services choose to invest a proportion of their income in a managed portfolio. Understandably, they may want to leave their portfolio intact in an effort to build returns over time.

But many have short-term aspirations too. Their goals can include moving home, buying a new car, supporting relatives or taking a holiday.

With a portfolio loan, it’s possible to borrow against the value of the Investec Wealth and Investment portfolio to release funds in an efficient and flexible way, without selling-down assets. The loan can potentially be serviced with income from the portfolio.

Here’s how we helped one investment banking professional purchase a holiday home in Portugal.

The client

We were recently approached by a high net worth investment banking professional who had invested a proportion of his income in stocks and shares held within an ISA and General Investment Account (GIA) portfolio.

 

Sun loungers by swimming pool
How does a portfolio loan work?

With a portfolio loan, it’s possible to borrow against the value of the Investec Wealth and Investment portfolio to release funds in an efficient and flexible way, without selling-down assets.

 

The challenge

Our client wanted to buy a holiday home in Portugal without liquidating his portfolio and potentially triggering an immediate capital gains tax liability. He also wanted to receive the funds quickly.

The solution

Investec was able to offer the client a €1.95m portfolio loan secured against the value of the investments held with Investec Wealth & Investment.

We provided the loan in Euros to facilitate the property purchase and held the funds in a currency access account. Our dedicated Foreign Exchange team then executed the transfer of the deposit and balance to support the house purchase.

While applications are considered on a case-by case basis, this on-demand lending solution is available for most legal purposes such as buying property, a luxury item, gifting money to children, investing in a business or refinancing existing borrowing. Clients can even use the funds to re-invest back into the investment portfolio.

The service is provided by the Investec private banking team who are dedicated to working with financial services professionals and providing bespoke borrowing.

 

Looking to leverage your bonus or another investment? Please contact our private banking team today.


Important information

This article is for general information purposes only and should not be used or relied upon as professional advice. It is advisable to contact a professional advisor if you need financial advice.

Separate eligibility criteria, terms and conditions apply to Investec Wealth & Investment Limited and Investec Bank plc.