Plain-English guide
What does “illiquid investment” mean?
An illiquid investment may have a stated value without offering a reliable way to turn that value into cash when you choose.
Value and cash availability are different
A statement can show an appraisal, model estimate, or manager valuation. That number is not necessarily a price a buyer will pay today. Liquidity depends on actual redemption rights, available buyers, notice periods, gates, transfer restrictions, and transaction costs.
Questions that reveal the constraint
- Can you request redemption, and can the issuer suspend or limit it?
- How much notice is required?
- Is there a functioning secondary market with recent transactions?
- Who sets the stated value, and how often?
- What fees or discounts apply at exit?