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By Dr. Marcel BARTNIK, Partner Vandenbulke*
Setting the scene
The risks attached to the liquidity profile of alternative investment funds (“AIFs”) – and how to mitigate them – have been in the focus of discussions on an international level over the last few years. In its yearly market reports, the European supervisor ESMA regularly mentioned these; the Financial Stability Board, the European Systemic Risk Board and IOSCO have also made it a topic in their own reporting.
The main concern is that certain AIFs are open-ended and therefore give investors the possibility to redeem their units at a certain frequency, while the portfolio they invest in is fairly illiquid and cannot be sold in that timeframe. This...
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