LiquidX is the global network for
illiquid assets, providing an efficient and flexible platform for participants to transact across the trade finance, working capital and trade credit insurance asset classes.
The FCA revealed that at one stage the equity income fund had around 20% invested in
illiquid assets - those that are hard to trade, sell or value.
IRAs must be valued for certain purposes, and
illiquid assets are not as easy to value as listed securities or mainstream savings instruments.
Life insurance will be great in providing for the cash to pay estate taxes especially when the net estate to be left behind is in the form of
illiquid assets like property.
The CEM methodology also introduces a new standardization process for
illiquid assets, including Unlisted Real Estate and Private Equity, to eliminate the reporting lag between the time when an underlying asset changes value and when that value is reported to the pension fund.
For people whose estates include
illiquid assets such as a business or real estate, heirs can use the proceeds from a life insurance policy to pay estate taxes instead of having to sell the business or real estate holdings to raise proceeds for that purpose.
Taking all this together, clients are clearly expressing demand for the potential return premium offered by
illiquid assets, BlackRock says.
"If you do have
illiquid assets, that is why it is more important that you plan for that particular asset."
Illiquid assets include stocks with low trading volume, real estate and antiques.
Laibson (1997) suggests that
illiquid assets, which are a class of assets held for future consumption, are a form of precommitment device, or a way for people to lock money away.
" These results seem sensible since funds that are aggressive in their trading, as well as funds that trade
illiquid assets, will see their high trading costs reap smaller profits when competing in a more crowded industry," according to the authors.
"The Solvency II debate has seen a shift from corporate bonds and gilts into more
illiquid assets, such as social housing, infrastructure, and private finance initiative loans, as insurers search for yield," she says.
