IN FOCUS6-8 min read

Investment? Absolutely – but clients borrow from us too

Short-term borrowing against your portfolio or property can be an effective part of financial planning.


There are countless reasons why asset-rich individuals might face a short-term need for capital. But selling investments is not always the most advisable way to raise it. After a period of strong market performance – as we have seen in many asset classes in recent years – it can trigger significant capital gains tax liabilities. It could also result in unwelcome changes to the composition of your portfolio. These are just two reasons why borrowing could be the most flexible, cost-effective way to raise funds – especially in a low interest rate environment.

While wealth management is primarily about investment, clients often come to us to help them meet their borrowing requirements. We lend against discretionary portfolios managed by Cazenove Capital and UK residential property.

Three scenarios where it’s paid to borrow

A £2.8 million loan for clients with a short-term bridging requirement.

Our clients wanted to buy a new home and had identified an ideal property. We arranged a loan for them, secured against their current principal residence. With financing in place, our clients were able to move quickly on the new property and secure a discount on the price. They refurbished it and moved in before selling their previous home. The loan was agreed on a variable rate so there were no redemption costs on repayment after 10 months.

A £2 million loan secured against a discretionary Cazenove Capital portfolio.

We agreed a two-year loan to purchase a principal residence and provide additional funds for refurbishment costs, which were drawn down in tranches following the purchase of the property. The clients did not want to rush into selling their former residence and, by using a loan, had the flexibility to sell it on the terms they wanted. They made repayment 18 months later when this sale completed (with no redemption penalty as it was on a variable rate).

A £2.2 million loan over five years to purchase commercial property.

Our clients’ UK investment company purchased a commercial property using a loan provided by our banking team. The team’s long experience of dealing with trusts and investment companies allowed us to structure a loan on attractive terms. In this case, a family trust provided security by way of a guarantee and a charge over the Cazenove Capital portfolio.

Meeting out-of-the-ordinary requirements

Mainstream lenders are typically constrained in what they will accept as loan security. They may have other restrictions in relation to borrowers’ ages or incomes. We take a far more flexible approach. We are familiar with the often complex structures through which assets are held, such as trusts. We are generally able to provide loans secured against portfolios quickly – in some cases within a few days of the request being received. Our minimum loan secured by a client portfolio is £250,000.

We also provide loans secured by UK-sited residential property, although not for development purposes. We arrange short-term bridge financing in relation to new property purchases and can also lend for the longer term (up to five years). Our loans can apply to either a principal residence or an investment (“buy-to-let”) property. When lending is secured by residential property, the minimum loan considered by the bank is £500,000, up to a maximum of 60% of the value of the property.

We are one of the few lenders in the market prepared to accept a mixed package of securities, including a charge over one or more investment portfolios combined with a charge over a residential property. We are able to lend in sterling, euros or US dollars.

If you have a need to borrow, please contact your portfolio manager in the first instance who will then discuss your requirements with our banking team and provide an introduction. The banking team will deal with all aspects of the lending process, with your portfolio manager remaining your lead contact.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.



Real Estate
In Focus
Economic views

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.