"Many wealthy people may want to maintain their liquidity rather than just applying it to the real estate assets, as liquidity allows them to take advantage of investment or business opportunities that may arise," said Michelle Tan, head of real estate product management at Bank of Singapore.
Early liquidity allows startups and investors to avoid worrying about money or having to look for an exit prematurely during the ever-extending "private" life of the company.
Fannie Mae created liquidity, allowing banks to lend, sell the debt and lend again.
In 2013 that float topped $77 billion.Berkshire Hathaway's abundant liquidity allowed it to act as a sort of financier of last resort during the financial crisis.
More important, for many kinds of investment, FDI is no substitute.By bringing more investors into local markets, portfolio flows help to boost liquidity, allowing local investors to get better prices.
Investors are told that nontraded securities, which have limited liquidity, allow ordinary people to participate in real estate investment while earning a higher dividend than what the traded ones offer, free from the volatility of the stock market.
Co-founder and chief executive officer Gareth Williams told the Financial Times that the new capital will give some of its shareholders more liquidity, allowing them to sell some of their shares without fully exiting.
The liquidity effect allows the recipient to choose a level of effort compatible with complete markets (that is, allows liquidity constrained individuals to search for a job longer), the effect that is efficiency enhancing; the moral hazard effect reflects reduced incentives due to the price subsidy of leisure introduced by unemployment benefits, the effect that is efficiency distorting.
She added: "It is sensible deployment of some of our excess liquidity and allows us to grow our mortgage book with high quality mortgages".
Later on Wednesday, the European Central Bank must decide whether to keep providing the emergency liquidity that allows Greek banks to keep operating.
"They can't create the kind of liquidity that allows them to invest in other things where they won't make good choices".
