Illiquid Assets Examples: Complete Guide for Single Family Offices

Introduction

For most family offices, liquid assets function as follows: custodians feed in stocks, bonds, and money market accounts, with prices refreshing daily, and positions can be unwound quickly when required.

Illiquid assets behave differently.

Private equity commitments are made in the form of capital calls, which typically arrive with two weeks’ notice. Real estate appraisals are typically conducted on an annual basis. The venture capital portfolio includes convertible notes that don’t have a fair market price until the next funding round. And all of this generates documents (LPAs, K-1s, distribution notices, board materials) that reside in email threads or shared drives, rather than alongside the actual records, posing various risks.

Understanding illiquid assets and how to track them properly separates family offices that spend days consolidating spreadsheets from those that generate audit-ready reports in minutes. Ultimately, asset categories should support financial goals and the overall wealth plan.

This guide explains the concept of illiquid assets, provides practical examples of both liquid assets and illiquid assets, and demonstrates how to consolidate all information into a single platform where documents, ownership structures, and performance metrics related to investing are stored together.

What Are Illiquid Assets for a Family Office?

The illiquid asset definition is straightforward: An illiquid asset cannot be easily converted into cash without incurring significant losses, facing wide bid-ask spreads, or waiting through long exit horizons.

Most liquid assets, such as stocks, can be sold quickly on public markets with minimal impact on price. An order is submitted, executed within seconds, and cash settles in two days.

Illiquid assets do not follow that pattern.

Private equity funds lock up capital for 7–10 years. Real estate sales take months and involve transfer taxes. Hedge fund side-pockets may gate redemptions indefinitely. Fine art requires finding the right buyer at auction, and even then, selling illiquid assets like this may result in a price that is 20% below fair market value after fees, due to market fluctuations.

For family offices, the operational reality of illiquid financial assets and the fact that these assets are illiquid involves managing capital call notices, tracking quarterly NAV updates, handling tax liabilities from K-1s, and storing documents such as LPAs, appraisals, and board materials in a manner that connects to the actual investment record.

Deciding how much to allocate to illiquid assets is also a decision about operational complexity: more alternatives mean more documents, more entity structures, and when spreadsheets are the backbone, more manual work is required.

10 Illiquid Assets Every Family Office Should Track (and How)

1. Private Equity Funds (Buyout/Growth)

Private equity funds are a typical example of illiquid assets for family offices. Capital is committed upfront, then the fund calls it over 3–5 years as deals close. Distributions come back later as portfolio companies exit.

• What to track: Commitment amount, unfunded balance, capital calls (with notice dates), distributions (return of capital vs. gain), management fees, carried interest, and quarterly NAV.
• Documents: Limited Partnership Agreement (LPA), capital call notices, distribution notices, quarterly capital statements, and annual K-1s.
• Valuation and metrics: Use the manager-reported NAV from quarterly statements. Calculate IRR and MOIC (multiple on invested capital). Tag by vintage year if you’re tracking performance across multiple fund generations.

Private equity investments generate cash flow in both directions, so your platform needs to handle the whole lifecycle without rebuilding spreadsheets every quarter.

Asora visualises IRR, MOIC, and allocations across private equity and venture capital.

2. Venture Capital Funds

Venture capital funds operate similarly to private equity but with higher risk factors and longer time horizons. Early-stage funds may take 10–12 years to fully return capital, and interim valuations swing dramatically as portfolio companies raise new rounds or fail.

• What to track: Commitments, capital calls, follow-on reserves, write-ups and write-downs, distributions, and details of convertible notes or Simple Agreements for Future Equity (SAFEs) if the fund structure includes these instruments.
• Documents: LPA, quarterly letters from GPs, SAFE or convertible note agreements, and capital statements.
• Valuation and metrics: Use comparables, discounted cash flow models, or last-round pricing for portfolio companies. IRR and MOIC remain the standard metrics for evaluating investment returns. Note that many venture funds show negative IRR in early years before exits materialize.

Venture capital valuations can fluctuate more sharply between quarters, so your tracking system should accommodate frequent valuation changes without requiring manual adjustments.

3. Co-Investments & Direct Minority Stakes

When you invest directly alongside a fund or take a minority position in a private company, you’re holding an illiquid asset with even less liquidity than a fund. There’s no secondary market, and exits depend entirely on the company’s performance and the sponsor’s decisions.

• What to track: Ownership percentage, cap table changes, funding rounds, board meeting updates, impairments, and any drag-along or tag-along rights.
• Documents: Stock Purchase Agreement (SPA), Shareholders Agreement (SSA), board materials, and annual financial statements.
• Valuation and metrics: Use comparable company analysis, discounted cash flow models, or last-round pricing. Calculate IRR and MOIC from initial investment to current valuation. Update marks when new funding rounds close or when annual financial statements indicate material changes.

Direct stakes require more hands-on governance than fund investments, so you’ll need to focus on task management and document storage.

4. Private Credit (Funds & Direct Loans)

Private credit includes both funds that invest in loans and direct lending, where your family office acts as a lender. These are considered illiquid because loans cannot be sold quickly without a discount, and funds often have lock-up periods or gates that restrict redemptions.

• What to track: Coupon rates; amortization schedules; covenant compliance (via tasks and workflows); prepayment activity; defaults; and recoveries on defaulted loans.
• Documents: Credit agreements, facility documents, agent notices, and loan tape summaries for fund investments.
• Valuation and metrics: Use manager-reported NAV for funds. For direct loans, model expected cash flows and adjust for risk if the borrower’s situation deteriorates. Track yield to long maturity dates and calculate realized IRR once loans are paid off or sold.

Credit investments generate regular income, so your accounting system needs to capture interest accruals and principal amortization separately.

5. Real Estate (Direct & Funds)

Real estate investments include direct property ownership and real estate funds, which often have fewer buyers. Both are illiquid because property sales take months, and funds typically have long lock-ups or limited redemption windows.

• What to track: Property addresses, acquisition dates, periodic appraisals, rental income and operating expenses, financing terms (loan-to-value, interest rates), and capital expenditures for improvements.
• Documents: Deeds, title insurance, appraisals, lease agreements, loan documents, and property management reports.
• Valuation and metrics: Use professional appraisals or capitalization rate approaches based on net operating income. Calculate property-level IRR and cash yield. For funds, rely on the manager’s NAV, but request underlying property details when available.

Real estate appraisals are typically conducted once or twice a year. The system should store the appraisal date alongside the value to avoid confusion about the timing of the mark.

Asora stores and organises property documents for secure, structured access.

6. Operating Companies (Majority-Owned / Family Business)

When a family holds a controlling stake in an operating business, that equity is illiquid. It cannot be sold on a public market, and finding a buyer requires time and due diligence.

• What to track: Financial statements (revenue, EBITDA, net income), distributions or dividends to owners, governance approvals for significant decisions, and changes in equity structure.
• Documents: Shareholder agreements, operating agreements (for LLCs), annual audited financials, and board resolutions.
• Valuation and metrics: Use income-based methods (discounted cash flow, EBITDA multiples) or market comparables. Revalue annually or when business performance shifts materially. Track dividends and owner draws as distributions that reduce the company’s net equity.

Operating companies often sit in holding structures (LLCs or trusts). Entity look-through is necessary to avoid double-counting when consolidating family wealth.

7. Infrastructure & Real Assets (Timber, Farmland, Concessions)

Infrastructure and tangible assets include timberland, farmland, toll roads, and other long-duration physical assets. These investments provide a steady cash flow but have limited liquidity due to the scarcity of buyers and the complexity of transactions.

• What to track: Yield or throughput (acres harvested, tons produced), concession terms and expiration dates, offtake contracts with pricing, and periodic appraisals.
• Documents: Title documents, concession agreements, operator reports, and environmental compliance records.
• Valuation and metrics: Use appraisal or discounted cash flow models based on expected harvest yields or toll revenues. Calculate cash yield and IRR. Update valuations when commodity prices experience significant shifts or when contracts are renewed.

These assets often have environmental or regulatory considerations, so associated documents should include permits and compliance filings.

8. Hedge Fund Side-Pockets / Locked Share Classes

These funds sometimes gate redemptions or move illiquid positions into side-pockets, creating an illiquid asset within what was originally a liquid investment. You can’t access that capital until the manager sells the underlying holdings or lifts the gate.

• What to track: Liquidity terms (lock-up periods, gates, redemption calendars), side-pocket balances separately from liquid share classes, and estimated time to liquidity.
• Documents: Offering documents, subscription agreements, capital statements showing side-pocket allocations, and manager notices about gate lifts or extensions.
• Valuation: Use manager-reported NAV, but note the liquidity schedule. Most investors discount side-pocket values to reflect the lack of near-term access.

Locked hedge fund positions require careful tracking to avoid mistaking them for liquid holdings when planning cash needs.

9. Collectibles (Art, Wine, Cars)

Collectibles such as fine art, wine, classic cars, and watches are illiquid because they require specialist buyers and authentication, and often involve auction fees. The selling price can vary widely based on market conditions and timing, and selling illiquid assets is never guaranteed; in fact, you may be forced to sell at a fire sale price if circumstances dictate.

• What to track: Provenance (ownership history), periodic appraisals, storage location and insurance coverage, and condition notes.
• Documents: Certificates of authenticity, appraisal reports, bills of sale, and insurance policies.
• Valuation and metrics: Use specialist appraisals, updated every 2–5 years depending on the asset. Note that collectibles do not generate cash flow, so performance is measured purely by appreciation. Liquidity remains low, and selling at auction incurs fees of 10–25%.

Governance controls matter. Insurance, custody arrangements, and authenticity verification prevent losses from theft, damage, or fraud.

Asora collectibles dashboard tracks art, wine, cars, jewellery, watches, and other illiquid assets.

10. Secondaries (LP Stakes / Direct Interests Purchased)

Secondary purchases involve buying an existing LP stake in a private equity fund or acquiring a direct private company interest from another investor. These are illiquid because the original liquidity constraints still apply, and you’re entering mid-stream.

• What to track: Purchase price relative to NAV (discount or premium), consent requirements from GPs or other investors, revised capital call pacing, and updated distribution schedules.
• Documents: Transfer agreements, novation letters, revised capital statements showing your new position, and any side letters with modified terms.
• Valuation and metrics: Use post-trade NAV as the starting point, then update as the fund distributes. Calculate the IRR from your purchase date and track the DPI (distributions to paid-in) pacing to estimate when you’ll see a return on your investment.

Secondaries require extra diligence on historical performance and remaining fund life to avoid buying into tail-end positions with limited upside.

How Asora Tracks Illiquid Assets Day-to-Day

Family offices need a platform that handles illiquid assets alongside liquid ones and can provide tax benefits without forcing you to maintain parallel spreadsheets. Here’s how Asora consolidates everything:

• Connect and Ingest: Asora manages data aggregation via direct connections to bank and custodian feeds for liquid positions. For illiquid holdings, teams upload fund documents, capital statements, and appraisals. Asora offers an integration with Canoe Intelligence to help extract key fields from PDFs for review and reduce manual re-entry. 
• Model Ownership Once: Capture trusts, SPVs, and holding companies in an ownership chart. The Wealth Map is an ownership chart with look-through views to family members or principals. Build the structure once, reuse it across all assets.
• Record the Private Lifecycle: Track commitments, log capital calls as they arrive, record distributions, and maintain capital accounts that reflect fees and carried interest. The platform supports co-investments, direct stakes, private credit, and real estate alongside traditional PE and VC funds.
• Valuations and Performance: Performance Monitoring updates IRR and TWR when quarterly NAVs or appraisals are entered. Track MOIC, TVPI, and DPI for private investments alongside benchmarks for liquid holdings. Multi-currency support handles cross-border assets. 
• Reconciliation: Accounting checks positions against transactions, maintains tranche-level cost basis, and can surface mismatches for review. Resolution follows the team’s process; the platform reflects the final entries.
• Documents in Context: Documents live next to the assets they support. Bind Limited Partnership Agreements (LPAs) to fund records, link capital call notices to transactions, attach appraisals to real estate holdings, and store K-1s with the entity that received them. Permissions reduce the need for email attachments and speed up reviews. Because everything is stored in one place and tagged (including custom tags), it’s easy to quickly locate exactly what you need.
• Report From the Record: Generate executive packs in minutes from timely (COB) updates. Financial advisors drill into details without waiting for rebuilds. Mobile apps for iOS and Android provide principals with on-the-go access through biometric login.
• Security Baseline: Roles and permissions determine who can view what. Data is encrypted in transit and at rest. Two-factor authentication and biometric access protect mobile use. Asora maintains ISO 27001 posture and GDPR alignment.

Asora’s security dashboard ensures data integrity through role-based access, encryption in transit and at rest, two-factor authentication, and GDPR-aligned controls.

Conclusion

Illiquid assets comprise a significant portion of a family office’s balance sheet, and the associated work that follows is substantial. Capital calls arrive on short notice, valuations fluctuate on quarterly cycles, and documents are stored in various locations. Bringing these pieces into a single, timely record shortens the close, makes results easier to explain, and builds confidence going into audits.

Request a demo to see how illiquid assets and liquid positions sit together in Asora’s unified view.

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