A redemption gate is the upper limit, set in the prospectus, on how many shares a semi-liquid fund will redeem at any one redemption date — usually as a percentage of fund assets (NAV) or of liquid assets; the most common in our database is 5% per date (75 of 140 funds, as at Oct 2026). Once redemption requests exceed the limit, the fund is “in gating”: orders are almost always cut back pro rata, and the remainder either rolls into the next date or lapses, depending on the prospectus. The gate is not a malfunction but a contractual safeguard that protects the remaining investors from forced sales — for the investor who is redeeming, it still means months of delay, in extreme cases years.
The most common rule: a maximum of 5% of fund assets per redemption date — it applies to 75 of the 140 funds recorded.
n = 140 · calculated from the mechanics matrix of our fund database (same count as in the liquidity report) · as at Oct 2026
“Gating” means: more investors want out at the same time than the fund redeems per date. The cap of usually 2–5% of fund assets bites, and redemption orders are executed only in part.
Three patterns that keep repeating:
The gate is the best-known valve, but not the only one. With AIFMD II (Directive (EU) 2024/927, to be transposed by 16 April 2026), the EU has for the first time written down a harmonised toolkit: every open-ended alternative fund has to select at least two liquidity management tools (LMTs) from it and anchor them in its documents — tools ranging from suspension and notice periods through redemption fees and swing pricing to side pockets. ESMA recommends combining a quantity-based tool with a price-based one (ESMA, Final Report Guidelines on LMTs, 2025); what each tool means for you is set out in the chapter on liquidity management tools.
For ELTIFs, the technical standards to the ELTIF 2.0 Regulation (Del. Reg. (EU) 2024/2759, in force since 26 October 2024) also tie freedom to redeem to precautionary safeguards. The manager chooses between two models (Annex I/II): either it calibrates the redemption ratio through the notice period (the longer the notice period, the more may be redeemed per date), or it holds a fixed liquidity buffer and accepts a hard-wired gate in return. The percentages are likewise in the chapter on liquidity management tools; if you read prospectuses, this tells you straight away where the brake sits under stress: at the front, in the waiting time, or at the back, in the volume.
Two funds with a “5% gate” can behave differently when it matters. Five levers decide the outcome, and every prospectus contains them — usually in the section headed “Redemption of Shares” or “Share Repurchase Plan”.
The Blackstone Real Estate Income Trust (BREIT), unlisted and around US$70 billion in size at the time, is the best-documented gating case of recent history — and a lesson in slow motion. As late as October 2022, BREIT met every redemption in full (2.7% of NAV, around US$1.8 billion). In November 2022 the orders exceeded both limits for the first time: around US$1.3 billion was served — the 2% monthly limit — equivalent to 43% of the shares submitted. In December the 5% quarterly limit was almost used up, and only a fraction of the orders was executed. In January 2023 redemption requests peaked at US$5.3 billion; US$1.3 billion was paid out — 25%. In March 2023, US$4.5 billion of orders met an execution rate of around 15%. In parallel, UC Investments subscribed US$4.5 billion in two tranches in January 2023 — on preferential terms: a target return of 11.25% p.a., secured by Blackstone with just over US$1 billion of its own shares (UC Investments, Jan 2023). An ordinary retail investor did not get those terms.
For 15 months in a row, from November 2022 to January 2024, every redemption date was cut back pro rata. Only in February 2024 did BREIT again serve 100% of orders (US$961 million) — demand had fallen below the monthly limit. Over that period the fund paid out more than US$15 billion to investors in total; assets fell from over US$70 billion to around US$61 billion (Commercial Observer, March 2024). Three lessons: the mechanism worked exactly as described in the prospectus — orderly, pro rata, without forced sales. Anyone who wanted to exit fully still needed many months despite resubmitting every month, each time at the NAV then prevailing. And the gating ended not through the manager but because the redemption pressure eased: a gate does not end an outflow — it stretches it.
Read gates as a vector, not as a single number — all five levers, plus the RTS choice for ELTIFs. One useful summary measure is the theoretical worst-case exit period: the number of redemption dates it takes for a position to be served in full pro rata if the gate is applied to the limit every time. It makes a 5% quarterly gate directly comparable with a 2% monthly gate.
Early indicators before a gating. No gate is applied without a prior history. What you can observe: sustained net outflows over several periods and a rising redemption ratio relative to the limit — BREIT was already running at 2.7% of NAV in October 2022, above the 2% monthly threshold. Then a rising number of partially executed dates — some vehicles publish the execution ratio for each date, one of the most revealing numbers of all. Next, a falling liquidity buffer or rising drawings on credit lines. And finally, widening discounts: on the secondary market for comparable vehicles, and on listed sister vehicles as a discount to NAV — when UK property funds froze in 2016, the funds that did not suspend charged exit discounts of up to 17% (FCA, DP17/1; figures in the property chapter).
Secondary market and NAV discount. If you cannot wait during a gating, you can sometimes find buyers on the secondary market — usually at a clear discount to NAV. The discount is the market price of illiquidity and a more realistic stress indicator than the smoothed NAV.
Why a gate, once applied, is economic protection. The IMF describes the mechanism: open-ended funds holding illiquid assets (around US$41 trillion worldwide, Q1 2022) create a first-mover advantage — whoever leaves first passes the liquidation costs on to those who stay, and outflows reinforce themselves (IMF GFSR, Oct 2022, ch. 3). Without a gate the fund would have to sell its most liquid and best assets first into falling markets; what would be left for those who stay is a worse portfolio. This dilution spiral forced German open-ended property funds into wind-down in 2008/09: 18 funds with around €26 billion (Scope, 2018; investor outcomes in the property chapter). The gate neutralises the first-mover advantage by stretching the cost of exit over time. Regulators have learned from it, each jurisdiction in its own way: after 2008/09 Germany opted for holding and notice periods (§ 255(3) and (4) KAGB, in force since 22 July 2013), the UK after 2016/2019 for suspension and valuation rules (FCA PS19/24), and the EU, with the ELTIF RTS and AIFMD II, for calibrated toolkits.
For advisers: the ability to sit through gating is a suitability criterion. A gate protects the collective — the individual client has to be able to bear the waiting time, and the MiFID suitability assessment should record exactly that: a payout deferred by several months, not just the recommended holding period.
Funds in this database with a redemption restriction in force · as at 16 Oct 2026
All cases with fulfilment rates and timeline: gating monitor
Complete lists: Quarterly redemption
An upper limit set in the prospectus on how many shares a fund will redeem at each redemption date — typically as a percentage of fund assets, and in our database most commonly 5% per date (75 of 140 funds, as at Oct 2026). If the limit is exceeded, all orders are cut back pro rata.
During a minimum holding period (lock-up), as a rule not; after that, only at the scheduled redemption dates, subject to the notice period and within the gate. There is no statutory right to redeem at any time as there is with ETFs — some funds additionally offer matching mechanisms under which shares are transferred to incoming investors.
No prospectus says, because it depends on the redemption pressure: BREIT cut back for 15 months in a row (Nov 2022 to Jan 2024), UK property funds suspended for a few months in 2016, the M&G Property Portfolio for a full 17 months in 2019–2021 — and some German funds were wound down over more than a decade after 2008. A gating ends when redemption requests fall below the limit, or when the fund has built up enough liquidity.
As a rule yes, only later and in instalments — at the NAV of the date on which payment is made, not at the NAV on the day you first submitted. Only where a fund can no longer reopen at all and is wound down do the sale proceeds determine how much comes back.
The prospectus decides, and both versions occur: automatic roll-forward (a queue), or lapse with an obligation to resubmit — BREIT, for instance, required a fresh submission every month. This clause is one of the most important in the entire document.
Yes — the management fee and, where applicable, the performance fee continue to run on all of the assets, including the portion you have asked to redeem. Only actual execution of the redemption ends the fee burden on that portion.
No — the gate is a contractual mechanism, not an insolvency event; the portfolio can be intact, as the BREIT case shows. What it does show reliably is that considerably more investors want out than the fund can absorb — and there are reasons for that, which are worth understanding.
Last reviewed: 16 Oct 2026 · Methodology · Not investment advice.