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.
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