To Gate Or Not To Gate

Over the past year, several high-profile private retail funds (most notably in the United States) have faced large redemption requests, drawing significant media attention. This trend has been particularly pronounced in the private credit sector, where concerns have emerged that software companies—major recipients of private credit financing—may be vulnerable to disruption from artificial intelligence. Managers have responded to these pressures in different ways: some have suspended redemptions entirely, others have applied gating restrictions, and some have continued to honour requests in full, including those exceeding the thresholds set out in their governing documents. This article examines the key considerations underlying these differing approaches to gating.