Gate
Private Equity glossary · Private Equity Fundamentals
Definition
A provision limiting the rate of LP redemptions from a fund.
Gate in plain English
A 'gate' is an emergency brake on how fast investors can pull their money out of a fund. Imagine everyone at a concert rushing for one exit at the same time — people get crushed. A fund's money is often tied up in things it can't sell instantly (companies, real estate), so if every investor demanded cash at once, the manager would be forced to dump assets at fire-sale prices, hurting everyone. A gate caps withdrawals to, say, a set fraction per quarter, spreading the exit out so the fund can sell things in an orderly way.
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