Liquidity Mismatch Calculator
Compares portfolio liquidity against investor redemption terms.
Liquidity Mismatch Estimator
Liquidity Adequately Covered
Available liquidity in 30 days: 80.0% of AUM.
Requested under stress: 25% of AUM.
Liquidity Coverage Analysis
Understanding Liquidity Mismatch
The Liquidity Mismatch Estimator helps identify potential risks when a fund's redemption terms are shorter than the time it would take to liquidate its underlying assets. This is a critical risk metric in asset management, designed to prevent situations where a fund is forced to sell illiquid assets at fire-sale prices to meet investor redemptions.
The mathematical approach compares the percentage of assets that can be liquidated within the fund's redemption notice period against a hypothetical stress scenario of mass redemptions.
Liquidity Coverage Ratio (LCR) = (Available Liquid Assets within Term / Stressed Redemptions) × 100
If the LCR falls below 100%, the fund exhibits a liquidity mismatch. This means in the specified stress scenario, the fund would not have enough liquid cash to meet obligations and might need to implement gates, suspend redemptions, or suffer significant market impact costs.
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Frequently Asked Questions
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