Model liquidity-adjusted VaR, simulate gates and lock-ups, and stress-test your portfolio's ability to meet redemptions and spending policies. The liquidity risk platform that handles the realities of alternative investments.
Liquidity Risk Management
What you can actually access in a crisis
The problem
Hedge funds are "monthly liquidity" - until 2008 hits and gates fire. PE has 10-year lock-ups. Endowment spending doesn’t pause.
Model gates & lock-ups
Investor-level · fund-level · side-pockets
Liquidity-adjusted VaR
Spreads · market impact · gate exits
Cash flow ladder
Capital calls · distributions · redemptions
Modelling liquidity properly requires combining position-level liquidity, fund structure constraints and stress-conditional behaviour.
Extend traditional VaR with bid-ask spread widening, market impact of large trades and gate-adjusted exit timelines. The "real" risk number for alternatives.
Model investor-level gates, fund-level gates, lock-ups, side-pockets and notice periods. See your actually-accessible liquidity in any market regime.
Generate the cash-flow ladder of your portfolio - when can which dollars realistically be accessed? Includes PE capital calls and distribution forecasts.
Liability-driven investment tooling for pension funds. Match liability cash flows against expected liquidity from each manager and asset class.
Can your alternatives portfolio support 4-5% annual spending in a 2008-style drawdown without forced sales? Model the answer before the crisis.
Stress-test your fund of funds against a 30% redemption request in three months. How much of the portfolio can you actually liquidate?
Real-world reasons every institutional risk team treats liquidity risk as separate from market risk.
Liquidity-adjusted VaR (LVaR) extends traditional Value-at-Risk by accounting for the cost and time required to exit positions. Standard VaR assumes you can always sell at the closing price; LVaR adjusts for bid-ask spread widening in stress, market impact of large trades, and the gates / lock-ups embedded in alternative fund structures.
Hedge funds typically have quarterly liquidity with 60-90 day notice and frequent investor-level gates. Private equity has 10+ year lock-ups with capital-call obligations. Real assets are even less liquid. An apparently well-diversified portfolio of alternatives can become illiquid simultaneously in a crisis - exactly when you need cash for spending policy, regulatory capital or rebalancing.
Yes. AlternativeSoft models investor-level gates (e.g. 25% per quarter), fund-level gates, lock-ups, side-pockets and notice periods. Combined with stress scenarios, you can simulate "what is my actually-accessible liquidity in a crisis?"
Yes. Pension funds need to meet known liabilities at known dates. Modelling the liquidity ladder of an alternatives portfolio - when can which dollars realistically be accessed - is essential for LDI. AlternativeSoft generates the cash-flow ladder, including capital calls for private investments.
Endowments need to meet 4-5% annual spending across market regimes. Liquidity modelling shows whether the alternatives portfolio can support spending in a 2008-style drawdown without forced sales of long-term investments.
Join 150+ institutional investors who rely on AlternativeSoft. Book a personalised 30-minute demo tailored to your workflow.
Complete the form and we’ll respond within one business day.