Variable Prepaid Forward Share (VPFS)
Monetise a concentrated share position with built-in downside protection — receiving an upfront cash payment today in exchange for delivering a variable number of shares at a future date.
The Structure, Explained
A Variable Prepaid Forward Share (VPFS) transaction lets a holder of a large, concentrated equity position receive a substantial upfront cash payment while deferring the tax event and retaining some upside exposure. In exchange, the holder agrees to deliver a variable number of shares to the counterparty at a future settlement date.
The structure combines an equity collar — a purchased put for downside protection and a sold call that caps upside — so the number of shares delivered at settlement depends on where the share price lands within a defined range. If the price falls, fewer shares (or cash) are delivered; if it rises above the cap, more shares are delivered. The upfront payment is calibrated to this risk profile.
We originate VPFS transactions by connecting concentrated-position holders with the right counterparty, coordinating the collar mechanics, negotiation, and the disclosure and regulatory considerations relevant to the listing jurisdiction.
Upfront Cash Today
The holder receives a meaningful cash payment upfront — unlocking liquidity for diversification, investment, or personal use — without an immediate sale of the position.
Downside Floor
A purchased put establishes a floor price, so the holder is protected if the share price declines below the strike during the term of the structure.
Defined Upside Range
A sold call caps participation above a ceiling, but the holder retains upside within the collar range — sharing appreciation with the counterparty rather than forfeiting it.
Deferral Mechanics
Because share delivery is variable and occurs at a future date, the structure is generally designed to defer the taxable sale event — subject to the holder’s own tax advice and jurisdiction.
Cash or Share Settlement
At settlement the holder may deliver shares, cash, or a combination, depending on the share price outcome and the contract’s settlement terms.
Pre-arranged, Not Market
A VPFS is a bilateral, pre-arranged structure rather than an open-market sale — limiting market impact and preserving discretion for large positions.
Coordinated Across Jurisdictions
- 01VPFS structures carry specific disclosure obligations in many listing jurisdictions, including reporting to the exchange and regulator; we coordinate these with the holder’s counsel before execution.
- 02The collar strikes, term, and settlement mechanics are negotiated with the counterparty to align with the holder’s price view, tax position, and liquidity timing.
- 03For cross-border holders, the governing law, counterparty jurisdiction, and settlement mechanics must all be coordinated — we manage this across the collateral’s and holder’s jurisdictions.
- 04Holders should obtain independent legal, tax, and financial advice on the structure’s accounting and tax treatment in their specific circumstances.
Share-Backed Financing
Liquidity against listed equity without a forced sale, retaining ownership and upside.
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Short-term, collateralised funding against eligible securities across currencies.
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Committed capital facilities for private placements and structured equity lines.
ExploreDiscuss This Structure
If this instrument fits your opportunity, share it with us. Our teams will coordinate the structure across the relevant jurisdictions.
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