Definitions

from The American Heritage® Dictionary of the English Language, 4th Edition

  • adj. Not readily converted into cash: illiquid assets.
  • adj. Lacking cash or liquid assets.

from Wiktionary, Creative Commons Attribution/Share-Alike License

  • adj. lacking liquidity

from The Century Dictionary and Cyclopedia

  • In civil and Scots law, not liquid, clear, or manifest; not ascertained and constituted either by a written obligation or by the decree of a court: said of a debt or a claim.

Etymologies

From il- +‎ liquid. (Wiktionary)

Examples

  • "Instead, a substantial portion of the bank's portfolio was placed in illiquid investments such as real estate and private equity," the SEC alleged.

    Selling a 'Fraud' Portfolio

  • [The] increase in illiquid investments raises concerns.

    Archive 2007-06-01

  • Some market experts worry that investing in illiquid assets, despite their inherent risks, has become almost mainstream.

    Archive 2007-06-01

  • As prices went against them, the hedge funds continued to add to concentrated positions in illiquid securities, making their exposure worse!

    Important Research: Skill; Investing Without Market Risk

  • The film adapts "Atlas Shrugged," a steamy libertarian novel featuring the ultimate corporate long-term illiquid investment, railroads.

    BusinessWeek.com -- Top News

  • A bank makes its money by "borrowing short" (deposits or repo) to "go long". (putting money in long-term illiquid assets) That means that a bank is required to hold liquid reserves and enough capital to meet its needs even in a crisis.

    CounterPunch

  • Not only did financial institutions increase their risk exposure by loading up on long-term illiquid assets, (MBS, CDOs, CDSs) they also borrowed heavily on those dodgy assets so they could skim the cream off the top and add to their seven-digit incomes and lavish bonuses.

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  • I call the illiquid securities "cash for trash" because the Fed has given treasury bills or cash in exchange for these distressed mortgage backed securities.

    US Market Commentary from Seeking Alpha

  • But while numerous efforts to create new types of investment classes aimed at removing this imbalance (for examples, see the Founders Fund, Adeo Ressi’s The Funded and the newly launched SharesPost) have recently emerged, they fail to address the root cause, that of founders and investors being trapped in illiquid investments.

    Class R (Revenue) Stock: A New Class of Investment?

  • According to the people and documents reviewed by The Wall Street Journal, Mr. Huttenlocher's team segregated equities and other liquid assets from most of the convertibles, which were harder to sell and therefore classified as illiquid, and instituted a plan to pay out investors over the course of several months.

    Hong Kong Regulators Delay Launch of Huttenlocher Hedge Fund

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Comments

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  • In fact, trading in pennies is highly illiquid, and prices are often manipulated by forces not at all related to the business. —Fool.com: The Motley Fool

    April 8, 2010

  • Slightly adapted: 'The illiquid, also called the bond flayer, is an evil and expensive being, humanoid in appearance, but with a four-tentacled octopus-like wallet. These beings are feared throughout the City for their speculative abilities and usually are not without two or more debtors, financially bound, to each individual bond flayer.'

    September 22, 2008

  • As intoned by Treasury Secretary Henry Paulson Jr.: "And we talked about a comprehensive approach to deal with the illiquid assets on financial institutions' balance sheets." (NY Times, front page, 9/19/08)

    September 22, 2008