What is ‘Gate Provision’
A restriction placed on a hedge fund limiting the amount of withdrawals from the fund during a redemption period. The implementation of a gate on a hedge fund is up to the hedge fund manager. The purpose of the provision is to prevent a run on the fund, which could cripple its operations, as a large number of withdrawals from the fund would force the manager to sell off a large number of positions.
Explaining ‘Gate Provision’
This is a very common provision on a hedge fund and the exact percent of restriction can be found in the hedge fund prospectus. This is a less severe withdrawal restriction than an all out redemption suspension, which doesn’t allow for withdrawals at all. But a gate provision is still seen generally as a negative event.
Further Reading
- Rediscovering the 'gate'under market transition: from work-unit compounds to commodity housing enclaves – www.tandfonline.com [PDF]
- The Economics of a Sports Industry: Scottish Gate‐Money Football, 1890–1914 – onlinelibrary.wiley.com [PDF]
- Small States and the Creation of EMU: Belgium and the Netherlands, Pace‐setters and Gate‐keepers – onlinelibrary.wiley.com [PDF]
- The normative economics of health care finance and provision – www.jstor.org [PDF]
- New barbarians at the gate: losing the liberal peace in Africa – www.tandfonline.com [PDF]
- Inelastic sports pricing at the gate? A survey – ideas.repec.org [PDF]
- Do lenders favor politically connected firms? Rent provision in an emerging financial market – academic.oup.com [PDF]
- Barbarians at the gate of the middle Kingdom: The International mobility of financing contract and governance – journals.sagepub.com [PDF]
- From futures markets to the farm gate: a study of price formation along Tanzania's coffee commodity chain – www.tandfonline.com [PDF]
