Illiquidity premium

Illiquidity premium — the extra return illiquid assets allegedly pay investors who can afford not to need their money back for years. The honest evidence: it exists for top-decile private-market access, while median private equity roughly matches public markets after fees — so most buyers of illiquidity collect the lockup without the premium. Retail “endowment-style” products are the cautionary case: the illiquidity is real, the premium was never in the box.

First used in: 5.4 · The endowment model, honestly