Only accredited investors can buy hedge funds, and many such funds contain illiquid assets.
For illiquid assets, Enron had considerable discretion in deciding what constituted a fair price.
It all sounds suspiciously like the subprime mortgage boom, when banks parked illiquid assets in off-balance-sheet vehicles.
Many hedge funds also have strategies that make them long illiquid assets, because such assets offer higher returns.
He will also have to deal with subprime-linked lawsuits and a regulatory investigation of Merrill's accounting for illiquid assets.
Vincent Molinari is CEO, Gate Technologies, LLC, an electronic transaction platform for global private, restricted, alternative and illiquid assets.
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That is an advantage especially in tracking indexes that include relatively illiquid assets.
Holding a lot of long-term, illiquid assets and using very short-term markets for funding seemed fine when times were good.
It has created many lending programmes since August 2007 to help banks finance holdings of illiquid assets and so avoid fire sales.
Letting banks revalue illiquid assets might also take some of the pressure off the 'bad bank' idea that Treasury Secretary Timothy Geithner has championed.
Our approach shares risk with the private sector, efficiently leverages taxpayer dollars, and deploys private-sector competition to determine market prices for currently illiquid assets.
It is this short-term financing share that creates the potential for systemic spillovers in the form of deleveraging and marketwide fire sales of illiquid assets.
The plan would allow the Treasury to buy up mortgage-related assets from American-based companies and foreign firms with a big exposure to these illiquid assets.
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The issue of valuing hard-to-value assets has hovered over all sorts of investment funds holding illiquid assets ever since the credit crisis hit financial markets.
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In some sectors, like emerging markets, it is easier for investors to buy and sell an ETF than to trade in the underlying illiquid assets.
These gave banks more freedom to use models to value illiquid assets and more flexibility in recognising losses on long-term assets in their income statements.
The less charitable interpretation is that the central bank has softened the penalty for banks that have funded purchases of very illiquid assets with short-term paper.
The company caters to fund managers and institutional investors trading in illiquid assets like private company stock, bankruptcy claims, loans, mortgage-backed securities and collateralized debt obligations.
As well as being coaxed into reducing leverage, the banks may face pressure to ditch some of their illiquid assets, such as mortgage-linked securities and private-equity stakes.
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It might be that the manager is buying illiquid assets.
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For investors, there can be concern that an investment manager is making overly optimistic assumption about illiquid assets in order to boost management fees that are calculated as a percentage of assets under management.
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It is weakly overseen without an independent audit and thus is able to intermediate the transformation of bad, illiquid assets into money (and near money) and then back again into valuable financial assets, all done secretly and anonymously.
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For example, a company with illiquid assets, under a heavy debt burden facing upcoming debt maturities and finding itself unable to refinance, may have to sell off assets at a bad time for less money than it thought those assets were worth.
It acquires equity in startups often on the cheap via a hodgepodge of sources: venture funds in wind down mode, pension funds and endowments looking to purge long-term illiquid assets from their portfolios, or just founders, VCs and angels starved for a little liquidity.
And mark-to-market accounting meant that banks were valuing illiquid assets at prices which reflected a lack of buyers as much as underlying credit quality (accounting-standards bodies have since been bullied into allowing bankers to exercise more judgment in how they classify and value such assets).
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They had also argued that borrowing the money to pay the tax bill was the best option for Harbinger's investors because most of Mr. Falcone's assets were illiquid, and because Mr. Falcone believed there were a lack of financing alternatives.
And attempts by Merrill Lynch, one of the prime brokers to the Bear Stearns funds, to sell some of their assets showed how illiquid the market for such securities had become.
Legacy assets are things like illiquid real estate, rare artwork or family business interests that may not provide current earnings.
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Slow to sniff trouble at Enron, retail investors suffered when fund managers sold liquid assets to finance withdrawals from better-informed institutional investors, leaving individuals stuck with mostly illiquid paper.
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