Illiquid asset workout in mutual funds

Tue, 12 May 2026 00:00:00 +0000

Illiquid asset workout in the context of Indian mutual funds refers to the process through which an AMC manages, restructures, and attempts to recover value from debt securities in a scheme’s portfolio that have become illiquid, defaulted, or severely distressed. Unlike equity holdings, which can be sold on an exchange even under stress (at a price), debt securities that are in default or have a credit event may have no willing buyers in the secondary market, requiring the AMC to engage directly with the issuer, work through resolution or insolvency proceedings, or accept partial recovery over an extended period.

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Illiquid asset workout in mutual funds