World’s Largest Fund Manager Blocks Withdrawals
The world’s largest asset manager appears to be in financial trouble after blocking client requests to access their funds.
Could this be the beginning of a new liquidity crunch? How fast might it flow over to other institutions? What can you do as an individual investor to protect your finances and grow them in the coming turbulent times?
Is A New Liquidity Crisis Already In The Works?
Blackrock recently announced that it will not be honoring its clients requests to withdraw funds that they’ve made since September last year. At least for one of their $3.5B property funds. This is the world's largest asset manager, which boasts $10 Trillion dollars under management.
That is around 20x bigger than the FTX debacle. Which should be a major red flag for everyone.
Then we also saw Goldman Sachs ring in the new year with the announcement it will be laying off close to 10% of its workforce, across all banking departments.
What Does It Mean For Investors?
Big brand names seem to mean nothing. The bigger they are, the harder they seem to fall. Remember Lehman Brothers. They were far, far smaller than Blackrock.
Invest directly for yourself. Individual investors should be very wary about having too much of their money tied up in any one fund, bank, or entity. Invest in a way that you can control your own assets. Keep your money diversified.
Stay liquid. Having more cash on hand seems essential for making it through what’s next. Executed well, some of this cash can be used to capitalize on discounted deals and investment opportunities. Cash is king in a financial crunch.
One great way to balance continuing to grow and do more deals is to maximize financial leverage. Check out transactional funding for 100% financing for your real estate deals.
Get in, and get out fast. This is certainly shaping up to be a very volatile year. Wholesaling properties, especially when you are pre-selling them seems to be one of the best ways to create more cash fast, and to avoid getting stuck. Or having your money tied up in anything too long.
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