Vest Financial LLC (Vest) has introduced Synthetic Borrow™, its new portfolio-based financing offering. The offering uses “listed derivatives” as the core strategy, and targets fixed-term, institutional-grade financing for advisors and their clients.
In the traditional financing market, portfolio financing was dominated by pledged asset lines (PALs) and margin lending. Now, Vest seeks to disrupt that space with alternative borrowing via listed derivatives.
With Synthetic Borrow™, advisors can onboard clients online and review sample borrowing terms in seconds. This eliminates the need for banks, credit checks, or forced sales of securities.
Moreover, Vest says users can lock in fixed, market-based rates up front, and keep their portfolios fully invested while accessing liquidity. That design emphasizes stability and flexibility in portfolio financing.
Vest highlights its track record: it currently oversees over US$54 billion in options-based strategies and executed more than US$350 million in box trades since 2024 — the underlying derivative structure for Synthetic Borrow™.
The company states: “We rebuilt portfolio financing from the ground up by utilising implied financing available in the listed derivatives markets and delivering it for easy access through a tech-enabled platform.”
For advisors seeking alternative borrowing mechanisms, Synthetic Borrow™ could offer a competitive option by marrying derivatives expertise with portfolio liquidity. However, Vest also warns of key risks: use of options strategies, market and interest-rate risks, margin requirements, potential for forced liquidation under certain circumstances, and tax complexity.
In summary, Vest’s launch of Synthetic Borrow™ seeks to change portfolio-based financing. It uses listed derivatives and tech-based platforms. This will provide an alternative to traditional borrowing.
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News Source: Businesswire.com