Source
Ten years on from the 2008 financial crisis, some of the market
conditions from that time are returning, including contracted
liquidity, according to Tom Kehoe Global Head of Research, AIMA. In a
research study, AIMA explores the issue of liquidity
and alternative investments, looking at several facets. Kehoes
explains that since 2008, asset managers collaborated and formed
bespoke liquidity conditions for specific alternative investment
funds to match the requirements of invested instruments, and
established investor-level gates to prevent forced portfolio
liquidation to meet redemptions. He argues that from an investor
perspective, portfolio and fund liquidity should work together, as
liquid funds provide less space to gate or suspend redemptions.
Since alternative investments can offer greater liquidity, the
assets managers handling them should be compensated accordingly,
unless investors agree to lower fees and longer lock-ups.
