A pension fund, facing a limited number of suitable investment opportunities in public markets, has decided to hire an investment consultant to explore options within less liquid markets in the United States. What characteristics of these less liquid markets should the consultant communicate to the pension fund managers?

Exam-Like

Municipal bonds are usually more liquid than pinksheet over-the-counter equities.

10.5%

The traditional public, liquid markets of stocks and bonds are larger than the total wealth held in illiquid assets.

21.1%

The share of illiquid assets in institutional portfolios has generally gone up in the past 2 decades.

57.9%

During the 2008-2009 Financial Crisis, liquidity dried up in repo markets but not in commercial paper markets.

10.5%

Financial Risk Manager Part 2