Illiquid Asset

(redirected from Illiquid Investment)
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Related to Illiquid Investment: Illiquid Asset, Liquid Markets

Illiquid Asset

An asset that is difficult to sell because of its expense, lack of interested buyers, or some other reason. Examples of illiquid assets include real estate, stocks with low trading volume, or collectibles. Illiquid assets still have value and, in many cases, very high value, but are simply difficult to sell. See also: Liquid.
References in periodicals archive ?
Noting that most of the illiquid investment in the authors' data is in housing, he reminded everyone of Robert Shiller's view that housing is not a particularly stellar long-term investment.
The first thing to be aware of is that art is an extremely illiquid investment.
Our team started raising money in 2009 for properties that were a particularly illiquid investment with a lock-up of eight years.
The right piece of art can reap huge rewards but it is a highly illiquid investment, as the value of art fluctuates depending on economic conditions, fashion and timing.
Private equity is also often grouped into a broader category called private capital, generally used to describe capital supporting any long-term (5-10 year holding period), illiquid investment strategy.
A number of banks experienced considerable liquidity strain due to their sizeable illiquid investment portfolios and reliance on wholesale short term funding.
"It is clear from the speed with which we achieved majority control, that many Adelaide Energy shareholders have taken the opportunity to receive cash for their investment ahead of significant funding requirements, and what will become an increasingly illiquid investment. The offer price is at a significant premium to the price the shares were trading at prior to the offer being made, so we continue to encourage remaining shareholders to accept the offer," Mr Nelson added.
A single-family home is also a highly illiquid investment, as selling a home typically requires significant time and effort.
In the circumstances, the large and illiquid investment in houses, with their recurring maintenance costs, mean a very large, often unbearable, opportunity cost.
Once a transaction closes, the buyer controls the company and generally has an illiquid investment. Any shortfalls in expectations, such as uncollectible accounts receivable, obsolete inventories and poor customer relations will impact future earnings and value.
Of seminars probed by examiners, 23% involved possibly unsuitable recommendations, such as an illiquid investment suggested to an investor who would soon need the cash.
Assuming all other factors are equal, an illiquid investment is inferior to and worth less than a liquid investment.