Alternative capital for efficient portfolio management

Access to flexible, cost-effective funding is a powerful tool in managing equity investments

Equities are an attractive asset class for any investor, conferring a share of ownership and dividend payments – as well as the potential for long-term capital appreciation. In some situations, however, money tied up in equities may generate a better return elsewhere, particularly at a time when investors are turning bearish and dividend yields remain low.

After closing at a record high 70 times in 2021, the S&P 500 tumbled over 5% in January 2022 – its worst start to a year since 2009. The US benchmark currently pays out a dividend of just 1.33%, close to record lows.[1] In the technology-focused sector, 50 of the Nasdaq 100 pay zero dividend, including popular names such as Amazon, Netflix and Tesla.[2]

Further appreciation is far from guaranteed at a time when central banks are beginning to pare back their monetary support and inflation is rising. The ongoing Covid-19 pandemic also continues to give investors plenty to think about: should any new variant send economies back into lockdown, equity valuations are sure to be seriously affected.

Investors who continue to see long-term potential in their equity positions can consider ways to make their capital work harder by using these assets to access cost-effective financing.

Borrowing against shares near the top of the market can be an efficient way to manage risk, as it puts a floor under the price of the stock without sacrificing its long-term potential. Similarly, monetizing investments in unloved sectors allows investors to optimize their portfolio by diversifying into other assets while waiting for the valuations to recover.

In both scenarios, equity-backed lending offers an alternative to outright disposals by unlocking value from shareholdings without giving up the potential for long-term capital gains.

Long-term potential

Structured as a sale and repurchase agreement, financing from EquitiesFirst allows investors to use their shares to raise low-cost funding. At the end of the agreed term, EquitiesFirst returns the same number of shares to the borrower, who is then able to benefit from any price increase in the underlying stock.

EquitiesFirst offers attractive terms with loan-to-value ratios of 60%-70% and interest rates of around 3%-4%. Borrowers retain complete flexibility over the use of proceeds, allowing them to consider other investments with higher potential returns – whether it is a renovation that will add to the value of a property.

We work only with long-term shareholders and structure every financing to suit individual circumstances. As a long-term partner to our clients, we only lend against shares after a thorough fundamental and technical analysis, and we run a diversified portfolio across sectors and geographies to mitigate broader market risks. Our own in-house research capabilities help ensure full vetting of every opportunity and careful collateral management.

Together with low borrowing costs and complete flexibility over the use of proceeds, equity-backed lending can be a compelling alternative for investors looking to manage their capital more effectively.




Past performance does not guarantee future returns, and individual returns are not guaranteed or warranted.

This Document is intended solely for accredited investors, sophisticated investors, professional investors, or otherwise qualified investors, as may be required by law or otherwise, and it is not intended for, and should not be used by, persons who do not meet the relevant requirements. The content provided herein is for informational purposes only and is general in nature and not targeted to any specific objective or financial need. The views and opinions expressed in this Document have been prepared by third parties and do not necessarily reflect the views and opinions of EquitiesFirst.  EquitiesFirst has not independently examined or verified the information provided herein, and no representation is made that it is accurate or complete.  Opinions and information herein are subject to change without notice.  The content provided does not constitute an offer to sell (or solicitation of an offer to purchase) any securities, investments, or any financial products (“Offer”). Any such Offer shall only be made through a relevant offering or other documentation which sets forth its material terms and conditions. Nothing contained in this Document shall constitute a recommendation, solicitation, invitation, inducement, promotion, or offer for the purchase or sale of any investment product by First Holdings, LLC or its subsidiaries (collectively, “EquitiesFirst”), nor shall this Document be construed in any way as investment, legal, or tax advice, or as a recommendation, reference, or endorsement by EquitiesFirst. You should seek independent financial advice prior to making an investment decision about a financial product.

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Australia: Equities First Holdings (Australia) Pty Ltd (ACN: 142 644 399) holds an Australian Financial Services Licence (AFSL Number: 387079). All rights reserved.

The information contained on this Document is intended for persons located in Australia only and classified as a Wholesale Client only as defined in Section 761G of the Corporations Act 2001. The distribution of information to persons outside this criteria may be restricted by law and persons who come into possession of it should seek advice and observe any such restriction.

The material contained in this Document is for information purposes only and should not be construed as an offer or solicitation or recommendation to buy or sell financial products.

The information contained in this Document is intended to be general in nature and is not personal financial product advice. Any advice contained in the Document is general advice only and has been prepared without considering your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. You should seek independent financial advice and read the relevant disclosure statements or other offer documents prior to making an investment decision about a financial product.

Hong Kong: Equities First Holdings Hong Kong Limited is licensed under the Money Lenders Ordinance (Money Lender’s Licence No. 1681/2023) and to carry on the business of dealing in securities (Type 1 licence) under the Securities and Futures Ordinance (“SFO”) (CE No. BFJ407).  This Document has not been reviewed by the Hong Kong Securities and Futures Commission. It is not intended as an offer to sell securities or a solicitation to buy any product managed or provided by Equities First Holdings Hong Kong Limited and is only intended for persons who qualify as Professional Investors under the SFO. This document is not directed to individuals or organizations for whom such offers or invitations would be unlawful or prohibited.

Korea: The foregoing is intended solely for sophisticated investors, professional investors or otherwise qualified investors who have sufficient knowledge and experience in entering into securities financing transactions.  It is not intended for, and should not be used by, persons who do not meet those criteria.  

United Kingdom: Equities First (London) Limited is authorised and regulated in the UK by the Financial Conduct Authority (“FCA”).  In the UK, this Document is only being distributed and made available to persons of the kind described in Article 19(5) (investment professionals) and Article 49(2) (high net worth companies, unincorporated associations etc.) of Part IV of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (‘’FPO’’) and any investment activity to which this presentation relates is only available to, and will only be engaged in with, such persons. Persons who do not have professional experience in matters relating to investment or who are not persons to whom Article 49 of the FPO applies should not rely on this document. This Document is only prepared for and available to persons who qualify as Professional Investors under the Markets in Financial Instruments Directive.