The inspiration for the Liquidité name has been derived from the French term for liquidity. In managing a growing business one of the most challenging variables to manage is liquidity. Liquidité Capital Partners recognize this and as such have created two funds that will supply liquidity to growing businesses, or businesses with strategic advantages in return for a share in the success of the business.
Liquidity is often described in two forms, namely: accounting liquidity and financial or market liquidity. Accounting liquidity is the ability of a debtor to pay its debts as they fall due. It is usually expressed as a percentage of current liabilities. Growing businesses often face this challenge as their cash flows are absorbed in financing operational capacity (usually characterized through an increasing fixed asset base), increased overheads and increasing working capital. This liquidity is usually sought from banks and traditional financing institutions as well as from founding shareholders. Liquidité Capital Partners has set itself up to provide this liquidity to companies through the funds it manages. Liquidité Private Equity Partners is a fund that is set up to fund liquidity needs through taking equity stakes while Liquidité Income Partners is a fund set up to fund these liquidity needs through providing debt type finance where it is appropriate.
Recently this need for liquidity has become more pronounced as a result of the diminished capacity of the traditional financial institutions. This has been a general discussion topic as financial institutions are unable to finance the needs of companies needing finance from areas such as trade finance to growth finance. This lack of financing ability is due in part to a recent dramatic reduction in financial or market liquidity. Financial or market liquidity is described as the ability to easily buy or sell an asset without causing a significant movement in its price and with minimum loss of value. Typically the most liquid form of asset is cash. Recently banks have had problems with the liquidity of their assets. As a result, they have been constrained from being able to provide liquidity to mainstream companies due to this lack of liquidity on their own balance sheets. This lack of liquidity within the traditional financial institutions is what is driving the opportunity for the two Liquidité funds to achieve superior risk adjusted returns.
Liquidité Capital Partners is domiciled in Switzerland and managed out of Mauritius while its primary funds (Liquidité Private Equity Partners and Liquidité Income Partners) are domiciled in Mauritius.