Imagine you’re buying a new home and need $1 million to complete the purchase. You have the money, but it’s invested in a portfolio you’d rather not sell. Liquidating investments could trigger a substantial tax bill, while borrowing from a bank could mean paying more in interest than necessary.

What if there were a better option?

At Hill Investment Group, we believe great investment management extends well beyond selecting investments. It’s also about finding ways to reduce costs, manage taxes, and make our clients’ wealth work more efficiently. Sometimes, that means identifying opportunities in places most investors wouldn’t think to look.

One example is the Hill Internal Lending Program (HILP), a financing strategy developed and executed by our investment team that allows clients to access cash without selling their investments.

HILP uses an established financial market strategy called a box spread to obtain financing through the options market. The mechanics are sophisticated, but the concept is straightforward: a client receives cash today and agrees to repay a predetermined amount at a future date. The difference represents the cost of financing.

Why go to this trouble? Because the savings can be substantial.

We’ve historically seen financing rates 2 to 5 percentage points below certain traditional borrowing alternatives, including pledged asset lines and mortgage loans. To put that in perspective, a 2% difference on $1 million represents $20,000 in annual savings.

There can also be meaningful tax advantages. Depending on how a transaction is structured and a client’s individual tax circumstances, box spread financing costs may generate capital losses that can offset taxable capital gains. That’s another potential benefit worth evaluating alongside the financing rate.

Of course, the economics depend on market conditions, financing terms, and each client’s circumstances. But the opportunity to borrow more efficiently can be significant.

We’ve identified several situations where this approach can be particularly valuable:

• Buying a home before selling another. HILP can provide bridge financing without requiring clients to liquidate investments or arrange a conventional short-term loan.
• Financing a home purchase. In some circumstances, HILP may offer an attractive alternative to a traditional mortgage, particularly for clients with substantial investment portfolios.
• Managing long-term wealth and estate planning. Borrowing against appreciated investments can allow clients to fund spending needs without immediately realizing capital gains. In certain estate plans, retaining appreciated assets until death may also provide tax advantages through a step-up in cost basis under current law.

These opportunities don’t come without risks. Borrowing against an investment portfolio introduces leverage, and significant market declines can create additional collateral requirements or potentially force asset sales. Financing maturities and refinancing needs also require careful planning.

That’s why HILP isn’t appropriate for everyone. The goal isn’t to encourage borrowing. It’s to give our advisors another tool to consider when helping clients make thoughtful financial decisions.

Here’s something we’re particularly proud of: our investment team handles these transactions directly.

Many wealth management firms don’t offer this type of financing. Others rely on outside specialists who may charge additional fees to structure and execute the transactions.

By developing this expertise internally, we can avoid an additional layer of fees, maintain control over execution, and integrate financing decisions directly into each client’s broader investment and financial plan.

This reflects something fundamental about how we approach our work at Hill. We don’t believe investment management begins and ends with building a portfolio. We continually look for opportunities to improve the details surrounding it, whether through better trading, smarter tax management, or more efficient financing.

Sometimes those improvements are small. Sometimes they can save a client tens of thousands of dollars.

HILP is one more example of what happens when a dedicated investment team combines technical expertise with a genuine commitment to improving client outcomes.

Great investment management isn’t just about what you own. It’s about how intelligently you manage everything surrounding it.

That’s what it means to Take the Long View.