Low liquidity is the new norm for portfolio managers: Caveat Emptor column

Portfolio managers accustomed to building books in neat blocks of $50 million may struggle to unwind such positions in the new liquidity-starved secondary markets.

You don’t have to be Einstein to realise that credit markets are fundamentally different from how they were three or four years ago. But seeing markets change is not enough; portfolio strategies need to be adjusted to the new situation. In reality, however, little adjustment has been made so far.

Remember when “bids wanted in competition” or “offers wanted in competition” lists could be sent out to half a dozen houses for a dozen or more issues in clips of $50 million, who would then come back