In 2022, we wrote about a feature of the pensions risk transfer market we termed ‘the liquidity kink’. A year on, many pension schemes can now afford to buy-out with an insurer, yet schemes still hold illiquid assets.
Are pension schemes missing out on the illiquidity premium? Investing in secure income illiquid assets can bring more certainty to a scheme’s journey plan. The ‘liquidity kink’ means schemes targeting buy-out believe they can’t exploit the illiquidity premium.