Is the Illiquidity There as a Rope to Prevent Investors From Making a Foolish Mistake?

There's an idea in finance of the liquidity premium which is the extra return a rational investor should demand. Cliff Astness refers to the way private equity firms provide this service as volatility laundering. Are investment committees being told we like these investments even with lower overall returns because we'll all be better off in the long term if we just have less information? A new paper from the University of Florida analyzed nearly 20 years worth of private equity real estate fund data and concludes that PE managers don't appear to manipulate interim reports to fool their investors but rather do so because their investors want them to.