Hedge Funds

Hedge fund exit terms


Exit terms from hedge funds are an increasingly touchy issue for investors - and not least the so-called 'gate' system applied by some managers to limit assets they allow to depart on any one dealing date.

The problem with this for investors is simple but awkward: as more of the best brand names impose gate provisions, it makes an increasing proportion of their portfolio illiquid. For this reason, an ever growing number of investors say they are being forced to limit the number of funds with gates in their portfolios - to ensure that they retain sufficient liquidity overall.