BROWSE

Gate Provision

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]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

The Economics of a Sports Industry: Scottish Gate‐Money Football, 1890–1914The Economics of a Sports Industry: Scottish Gate‐Money Football, 1890–1914
onlinelibrary.wiley.com [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

Small States and the Creation of EMU: Belgium and the Netherlands, Pace‐setters and Gate‐keepersSmall States and the Creation of EMU: Belgium and the Netherlands, Pace‐setters and Gate‐keepers
onlinelibrary.wiley.com [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

The normative economics of health care finance and provisionThe normative economics of health care finance and provision
www.jstor.org [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

New barbarians at the gate: losing the liberal peace in AfricaNew barbarians at the gate: losing the liberal peace in Africa
www.tandfonline.com [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

Inelastic sports pricing at the gate? A surveyInelastic sports pricing at the gate? A survey
ideas.repec.org [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

Do lenders favor politically connected firms? Rent provision in an emerging financial marketDo lenders favor politically connected firms? Rent provision in an emerging financial market
academic.oup.com [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

Barbarians at the gate of the middle Kingdom: The International mobility of financing contract and governanceBarbarians at the gate of the middle Kingdom: The International mobility of financing contract and governance
journals.sagepub.com [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …

From futures markets to the farm gate: a study of price formation along Tanzania's coffee commodity chainFrom futures markets to the farm gate: a study of price formation along Tanzania's coffee commodity chain
www.tandfonline.com [PDF]
… In Lakeside of Nanjing, double gates erected by the developer not only ensure security but also exclusiveness. Inside the first gate are amenities including a club restaurant, shops and a bowling alley … Housing provision is only one of such bundled rights …



Q&A About Gate Provision


Is this common for all hedge funds?

Yes, it is very common and can be found in the prospectus.

What does a gate provision do?

A gate provision limits the amount of withdrawals from a hedge fund during a redemption period.

What does this mean for investors who have invested in their funds?

It means that they will not be able to withdraw as much money as they would like during certain periods of time. This could potentially hurt their returns on investment because they are unable to get out when they need or want to sell off positions.

What is a hedge fund?

A hedge fund is an investment vehicle that allows investors to invest in the market without having to worry about the risks associated with investing.