OECD says pension funds must take ‘extreme care’ with liquidity risks
Pension funds should be “extremely careful” when investing in illiquid assets, as rising interest rates and falling stock markets increase the likelihood of their having to access cash quickly, the OECD has warned. In the recent era of low interest rates, pension funds poured money into alternative investments, such as infrastructure projects and private equity, in an effort to escape the low yields available on government bonds. But such investments are typically illiquid, meaning the funds cannot quickly convert them...
