It appears investors have failed to realise or even ignore the price discovery mechanism, namely public market liquidity, as a gauge of measuring the fair price of an asset.
In the pursuit of higher yields, investors have had to contend with an era of taking on risk and reducing liquidity. Nominal bond yields were low, and the alternatives pushed investors up the risk curve.
Private market opportunities, targeting “wholesale” investors, proliferated in the form of non-bank lending in private credit, real estate and private equity. The allure of higher relative income and growth knew no bounds.
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Arian Neiron is managing director and head of Asia-Pacific at VanEck.
