Meaning & use
illiquid asset
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Meaning
nouncountablefinance
Something valuable that you own, such as property or art, which cannot be turned into cash quickly without losing some of its value.
Grammar: Regular plural: illiquid assets.
Patterns
- an illiquid asset such as something
A rural farm is an illiquid asset because buyers are hard to find.
Many investors avoid illiquid assets when they may need cash soon.
The fund holds several illiquid assets, including private company shares.
Word forms
| plural | illiquid assets |
|---|
Common combinations
- hold illiquid assets
- The pension fund holds illiquid assets such as forests.
- sell an illiquid asset
- It took a year to sell the illiquid asset.
- mostly illiquid assets
- Her wealth is mostly illiquid assets, so she has little cash.
- value an illiquid asset
- It is hard to value an illiquid asset without recent sales.
- illiquid asset class
- Private equity is an illiquid asset class.
Synonyms and how they differ
- hard-to-sell asset
- Hard-to-sell asset is a plain-language version that lacks the technical tone of illiquid.
- fixed asset
- Fixed asset is an accounting term for long-term items like buildings, which are often illiquid but defined by use, not saleability.
- frozen asset
- Frozen asset suggests it is blocked from sale by legal action, rather than simply slow to sell.
- non-liquid asset
- Non-liquid asset is a less common wording with the same meaning.
Opposites
Word family
Commonly confused: illiquid asset or insolvent?
illiquid asset vs insolvent
Insolvent means unable to pay debts, while an illiquid asset is only slow to sell and may still be very valuable.
Practice
Which of these is the best example of an illiquid asset?
Choose one answer.
A rare painting takes time to sell at a fair price. The other options can be turned into cash almost immediately.
Make it your own
Write a sentence using “illiquid asset”, then check it and compare it with the examples above.