A word on the side (pockets)

tete à tete: side pockets

Legal practitioners note the managers of up to 30% of new funds coming to them are enquiring about side pockets for illiquid investments, presumably to get involved in areas such as private equity. Side pockets' use immediately raises questions of a liquidity mismatch in a portfolio, and what happens when investors who entered a fund of liquid instruments are left, after sell-off, with a larger portion of assets stuck in a side pocket? While all lawyers counsel putting the ability to have si