PT - JOURNAL ARTICLE AU - Vineet Budhraja AU - Rui J.P.. de Figueiredo, Jr TI - How Risky Are Illiquid Investments? AID - 10.3905/jpm.2005.470581 DP - 2005 Jan 31 TA - The Journal of Portfolio Management PG - 83--93 VI - 31 IP - 2 4099 - https://pm-research.com/content/31/2/83.short 4100 - https://pm-research.com/content/31/2/83.full AB - Highly illiquid and non–traded investments?such as private real estate, leveraged buyouts, and venture capital?have historically been very hard to compare to traditional investments. This is particularly problematical when one considers how to include these assets in a traditional portfolio of assets. For the purposes of asset allocation, it is critical that illiquid asset classes are made comparable to liquid asset classes. An estimation procedure here may help to assess the true risks and diversification benefits presented by illiquid asset classes more accurately. Even though the approach involves some assumptions, it should provide a better picture of the variations in illiquid returns.