Definition · Private Markets
Illiquidity Premium
The extra return investors may seek for committing capital they cannot easily sell.
Nashional Investments · Updated October 2026
Educational definition only, not investment, tax or legal advice.
In practice
Private investments trade daily liquidity for access to strategies that public markets do not offer, and most are limited to accredited investors. The term Illiquidity Premium is one of the concepts we explain when reviewing a private credit, private equity or interval fund, along with fees, lockups and how much of a portfolio belongs in investments you cannot easily sell.
Questions
Common questions.
What does the term Illiquidity Premium mean?
The extra return investors may seek for committing capital they cannot easily sell.
Why does Illiquidity Premium matter for investors?
Private investments trade daily liquidity for access to strategies that public markets do not offer, and most are limited to accredited investors. The term Illiquidity Premium is one of the concepts we explain when reviewing a private credit, private equity or interval fund, along with fees, lockups and how much of a portfolio belongs in investments you cannot easily sell..
Where it applies
See how this fits into a real plan on our Private markets page.
Have a question about this?
Ask us how it applies to your situation. Your first conversation is complimentary.