A £5M facility secured against private equity carried interest provided a senior executive with liquidity to meet investment commitments without selling assets, demonstrating how specialist lending can unlock value from otherwise illiquid wealth.

Carried interest is the engine of private equity compensation. It is also one of the most illiquid assets a wealthy person can hold. A senior dealmaker can have tens of millions of pounds in carry tied up and still struggle to raise a fraction of it in cash. We saw this play out recently on a deal where we arranged a £5M facility for a UK private equity executive, secured against their carried interest, at roughly 50 per cent loan-to-value, and completed within a month.

The mechanics of carry are what make it so awkward to borrow against. Carried interest is a share of a fund's profits paid to the executives who run it, but only once the fund has returned capital to its investors and cleared its hurdle rate. Until those exits happen, the carry is unrealised and contingent. Its value depends on how the underlying portfolio performs and when each investment is sold. None of that is fully within the executive's control. For a lender, that is a difficult asset to value and an even more difficult one to enforce against.

So most lenders simply decline. A high street bank or a mainstream private bank wants security it can price quickly and sell easily: cash, listed shares, property. Carry is none of those things. The result is a strange situation where some of the wealthiest people in finance are, on paper, asset-rich and cash-constrained at exactly the moments they most need capital.

In this case, the timing pressure was specific. The executive wanted to commit to the next fund the firm was raising, and that window would not wait for the existing fund to distribute. Selling other assets was not the preferred route. The cleaner answer was to borrow against the carry itself.

The work was not about convincing a single lender to stretch. It was about knowing which lenders will engage with this kind of asset at all. There is a small group of specialist lenders active in structured finance against private equity positions and deferred compensation. They underwrite differently. Rather than focusing only on the borrower, they assess the fund backing the carry: its performance, anticipated exit events, and projected distributions. That requires confidential fund information and a lender prepared to do real diligence on it. Once that lender was comfortable, a £5M facility at around 50 per cent loan-to-value followed, which is a serious advance against an asset that is still contingent.

This is not a one-off. The wider pattern matters more than the single deal. Fund hold periods have lengthened, exit activity has been subdued, and distributions back to investors have slowed across the industry. That means senior dealmakers are holding larger paper positions for longer, with realisations pushed years into the future. Their liquidity needs, whether reinvesting in their own funds, buying property, or planning around tax, do not pause while they wait.

Conventional private banking is not set up to meet that need. The lenders who can are specialist, relationship-driven, and not easy to find without knowing the market. For executives sitting on substantial carry, the lesson is that the value is borrowable, but only with the right lender and the right structure. The asset that looks unfinanceable on a standard credit application can, in the right hands, become a genuine source of liquidity.

Property values can fall as well as rise, and where borrowing is secured against an asset, that asset may be at risk if repayments are not maintained.

Read the full case study here: https://www.ennessglobal.com/insights/case-studies/pound-5m-facility-secured-against-private-equity-carried-interest