Private Market Liquidity Considerations
Private markets continue to be a destination of choice for institutional investors to achieve greater yield and potentially higher returns. With an array of alternative exposures available, investors are considering high yield, public real assets, and bank loan ETFs to provide flexibility and efficient access to liquidity to complement private market allocations.
With a Liquidity Crisis Looming, Investors Must Switch Their Thinking
Gaurav Mallik, Chief Investment Strategist discusses three investment drivers to liquidity concerns and implications for investors.
Key Takeaways
Investors need to develop a framework to stress test their assumptions on future liquidity and should retain access to cash-like holdings to take advantage of liquidity-driven opportunities.
Investors should proactively identify areas of stress through monitoring of key indicators such as true trading volumes at pinch points, costs and fund flows, while keeping a close watch on areas of the market that have suffered stress in the past.
Diversification across sources of liquidity remains imperative. Good management of liquidity can enable investors to harness opportunities while avoiding downside risks to capital preservation .
Investment Perspectives
High Yield Debt and Private Market Liquidity Considerations
Indexed high yield represents the closest liquid proxy for private credit — the liquidity and volatility of high yield can offer opportunities to invest in dislocated markets.
Real Assets and Private Market Liquidity Considerations
Publicly listed real assets are increasingly being used in conjunction with private assets, providing key exposure-management benefits.
How Bank Loan ETFs Can Complement Private Market Allocations
Bank loan ETFs are a useful component in institutional portfolios and can provide key exposure management benefits.
Managing Private Market Asset Allocations
Private Market assets provide investors with additional sources of potential return, but how the journey is managed from commitment of capital to the implementation of the allocation is critical.
Liquidity Solutions
U.S. High Yield BB-B Constrained Index Strategy
The Strategy uses an indexing investment approach that seeks to replicate the performance of the benchmark index over the long term through investments in cash bond markets.
State Street Real Asset Strategy
The Strategy seeks to offer diversification and a disciplined rebalancing process that can help deliver a performance that, as closely as practicable, replicates that of its custom benchmark index over the long term.
SPDR Blackstone Senior Loan ETF
The ETF seeks to provide current income consistent with the preservation of capital, while also seeking to outperform its primary and secondary benchmarks.
Private Market Investments
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