BOSTON – With the topic of liquidity weaving its way into nearly every session this year at this “unnamed hedge fund event” in Boston, you’d think that the institutional investors assembled here would want to be as liquid as possible right now.  After all, wasn’t the recent market sell-off a result of forced selling of illiquid positions?

But not so fast…An informal poll of about 200 attendees revealed this morning that fully half of them believe that “investors should increase their allocations to highly illiquid investment strategies“.   The poll was taken after a panel of pensions and endowments debated whether markets were “currently offering excessively high illiquidity premiums.”

Many hypothesize that the outperformance of university endowments (and some pensions) has largely been a result of their long time horizon and their resulting ability to lock-up their capital for eons to come.   If the poll was any indication of broader sentiment, then it appears these investors haven’t been that phased by the recent flight to liquidity.

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