Matt Levine’s Money Stuff: Be Liquid When Others Are Illiquid (Correct)

The illiquidity premium

Money Stuff this week has mostly been about capturing the illiquidity premium. On Tuesday, I argued that pooled retirement savings vehicles like pension funds and annuity companies have predictable cash needs and can lock up a lot of their money for the long term to earn high returns, while individual retirement savers can never be sure they won’t need their money back tomorrow and so demand more liquid investments.

On Wednesday, we discussed how those individual savers withdrew a lot of money from a Blackstone Group Inc. private credit business development company called BCRED, in part because ...