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Private-credit funds face scrutiny over how they define liquidity
The lack of a standardized liquidity metric means investors may interpret reported liquidity strength very differently across managers.
WSJ Markets reports that private-credit fund managers do not use a consistent definition of liquidity when reporting how easily investors can access capital.
The outlet notes that some firms use more aggressive calculation methods to estimate liquidity strength, which can make reported measures look more robust than others that use different assumptions.
As a result, the article argues that “liquidity” in private credit can mean different things depending on the manager and the methodology behind the metric, complicating comparisons for investors.