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Greater access to liquidity solutions has the potential to transform the alternative investment landscape in ways that benefit a wide range of stakeholders. Here are a few possible scenarios Ben sees once investors have improved access to liquidity for their alternative investments:
- High net worth individuals would be able to more confidently plan for the future and respond to unexpected life and market events while being nimble enough to fund present needs.
- Smaller institutions, including foundations, endowments, and pension plans, may be able to create more robust and diverse portfolios that cater to both short- and long-term needs, putting them on even footing with large institutions without the added management fees and expenses required to invest like the big institutions.
- Wealth managers could more confidently increase allocations to private market alternative investments and have greater flexibility with estate planning services for clients.
- General partners may be able to introduce innovative managed or preferred liquidity programs for their investor base and reach more limited partners who have otherwise been hesitant to lock up funds for a decade or more.
Ben believes that to expand the industry, liquidity providers should strive to deliver liquidity at or near Net Asset Value.
Ben believes that by modernizing investors’ access to liquidity for their alternative investments through a simple, rapid, and cost-effective approach, more investors will consider owning alternative investments with the knowledge that they can more easily enter and exit the alternatives market. This would likely have positive effects for all market participants in the alternatives space over the long term.