Too much short-term debt backing long-term assets fueled the last credit bubble a decade ago. This time round, investors are hunting for yield in hard-to-trade, often private assets. As a Goldman Sachs economist put it recently: “illiquidity is the new leverage.”The natural buyers of illiquid assets are in many ways insurers and pension funds. With rates low, they have moved further into assets with a limited market, which includes private bonds or loans, private equity, large real-estate assets, or even lightly-traded,...

Source: Wall Street Journal November 24, 2017 10:07 UTC