Selling the Asset Is the Most Expensive Way to Raise Cash
For owners and principals holding illiquid wealth, a sale is usually the costliest route to liquidity, and the one structured alternative most never price out.
When an owner or principal needs cash and most of their wealth sits in assets that cannot be sold quickly, the reflex is to sell the most saleable illiquid position they hold. That reflex is often the single most expensive financial decision they will make that year. The sale clears the near-term need, but it pays twice: once in the discount a seller accepts to exit, and again in every dollar of future appreciation the position would have produced. In most cases the liquidity was available without the sale. Owners rarely learn that until after the wire has cleared.
The illiquid share of private wealth is now the majority of the story
The 2026 UBS Global Family Office Report, which surveyed 307 family offices with an average net worth of 2.7 billion dollars, found that these families now hold about 42 percent of their portfolios in alternatives: private equity, private credit, real estate, direct operating stakes, and other assets that do not trade on a public market. Roughly two of every five dollars of the wealthiest families' capital sits outside anything that can be sold in a day. For owners and principals below that tier the concentration is often higher, because a single operating business or a handful of properties can be most of the balance sheet. When a liquidity need arrives, a tax bill, a capital call, a partner buyout, a time-sensitive opportunity, the cash has to come from somewhere, and the somewhere is usually one of those illiquid positions.
Illiquidity is not a theoretical problem right now
The pressure is current. Across private equity, 2024 distributions to investors fell to an 11-year low: for every dollar committed, investors received back roughly eleven cents. Capital that owners expected to recycle did not come back on schedule. The response has been a scramble for liquidity through the side door: secondary market transaction volume, where holders sell existing fund stakes rather than wait for an exit, reached 229 billion dollars in 2025, a 48 percent jump in a single year. Family offices are reshaping around the same constraint, trimming private equity from about 22 percent of portfolios in 2023 toward a planned 17 percent, not because the assets are weak but because the cash is stuck. The demand for liquidity is real and rising. What it costs to get it is the part most owners underestimate.
A sale pays for liquidity in two directions at once
First, the discount. Even prime buyout fund stakes cleared around 90 cents on the dollar in 2025. Diversified portfolios commonly changed hands 10 to 30 percent below net asset value, venture positions traded near 77 cents, and the oldest or most specialized funds went lower still. The same logic applies to a property or an operating stake sold into a soft window: the price reflects the seller's urgency, not the asset's worth. Second, and larger, the forfeited upside. Whatever the position would have compounded to over its remaining life now belongs to the buyer. An owner who sells a stake to raise 20 percent of its value can surrender 100 percent of its future appreciation. That is not a liquidity event. It is a permanent transfer of the best part of the return to someone else.
How Thalos Capital Approaches This
Thalos Capital works only on the borrower's side, and the starting question is never which asset to sell. It is which asset can be borrowed against, and on what terms. Special Situations at Thalos Capital is the origination and structuring of debt secured by non-standard collateral: real estate, private holdings, fund interests, trophy and other illiquid assets that conventional lenders set aside because the collateral does not fit a standard box. The work is to read the specific asset, establish its realistic borrowing capacity, structure a facility shaped to the owner's timeline and objective, and match it to the capital sources that underwrite complexity rather than screen it out. The owner keeps the position, retains the future upside, and takes liquidity now. Larger tickets, longer structuring cycles, and terms built to the situation are the norm here, and Thalos Capital manages the process through to close.
The test an owner can run before defaulting to a sale is short. Is the asset genuinely impaired, or merely illiquid? Does the need justify a permanent exit, or only temporary cash? Is the collateral being valued by a source that understands it, or dismissed by one that does not? When the asset is sound, the need is temporary, and the only obstacle is that a conventional lender cannot underwrite the collateral, a sale is almost always the wrong tool.
The cost of reaching for a sale is not the paperwork or the timeline. It is the gap between the discounted price a forced seller accepts and the full value a structured facility would have preserved, plus every dollar the asset would have earned after it left the balance sheet. That gap is rarely visible until the position is already gone. Most financing situations have more options than the borrower initially sees. A conversation is enough to map them. Submit your financing request at https://thaloscapital.com/contact.
