Hedge funds with infrequetly traded assets

How do hedge funds with infrequently traded assets have less volality in comparison with conventional equity instruments? You would expect that assets than are traded less frequently, have more voliatility than more frequently traded assets (due to their higher illiquidity).

Their price is more stable, their standard deviation is lower, they are not traded often, remember?

Then why do we (in finance) often associate low liquidity with high volatility for different assets?

Have you seen the VIX lately? Surely you can see that illiquid assets are exhibiting much less volatility than listed investments.

It depends on your measure of volatility.

Measures of dispersion, like the standard deviation, understates risk based on price charts for infrequently traded assets.