Lockup
A contractual period during which investors cannot redeem their capital from a fund.
Hedge funds use lockups (often 1 year) plus redemption notice periods and gates (caps on the percentage redeemable at once). Private-equity ‘lockups’ effectively last the fund’s 10-year life. The 2008 crisis showed how gates and side-pockets can leave investors unable to exit when they most want to.
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