Secondary Market Update: Liquidity Provider Diversity

Advisors and investors who are interested in rebalancing their illiquid positions must make an important decision.

Should sellers:

• Use an exchange or Alternative Trading System (ATS)?

• Pursue a negotiated transaction with one or more buyers?;

• Attempt to leverage both ATS and privately negotiated options?

Sellers who understand all available options, including the increasingly competitive ATS market, are best equipped to make decisions that suit their specific needs.

Recent FINRA data suggests that Central Trade & Transfer remains the market leader by dollar volume. However, LODAS Markets has taken meaningful ground from 1st Trade in terms of dollar volume and shares transacted, the latter being heavily skewed toward Highlands REIT volume.

In particular, sellers interested in rebalancing multi-asset portfolios should take note of the single asset dynamics developing between the Alternative Trading Systems.

While Franklin BSP Lending Corp. volume is about equal between platforms, other names such as Mobile Infrastructure Corp (MICNTR), Blackstone Real Estate Income Trust (BREIT), and SmartStop Self Storage (STSFF) tend to occur on one exchange more often than the others.

Accordingly, it is increasingly important for sellers to cross reference bids across all available options to ensure asset pricing and operational process meet their unique needs.

As a trading venue and process agnostic liquidity provider, Cox Capital can work with exchanges and/or sellers to develop custom liquidity solutions for sellers’ nontraded BDCs, REITs, CEFs, interval funds, feeder funds, and LP interests.

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