March 25, 2026: Don’t Hate the Gate

Recent headlines have drawn attention to rising redemption requests from evergreen private credit funds, leading some managers to gate withdrawals. Although redemption limits differ by fund structure, many evergreen vehicles allow investors to redeem up to 5% of net asset value (NAV) per quarter. Requests beyond that threshold are typically fulfilled on a pro rata basis, meaning investors may receive less than they seek. For those expecting full liquidity, this can be an unwelcome surprise.

Gates exist for good reasons. Evergreen funds typically maintain several quarters’ worth of liquidity, but once that liquidity is exhausted, they may be forced to sell assets to meet additional redemptions. In a distressed market, selling could lock in losses and harm investors who remain in the fund. It also reduces capital available for new investment opportunities. By gating redemptions, funds aim to protect investors from unnecessary losses and missed opportunities.

Negative sentiment, often driven by headlines rather than disciplined analysis, does not necessarily indicate losses in private credit. Most investors are choosing to stay invested in evergreen private credit funds, and the presence of gates should offer some reassurance that the structure is designed to protect them.

Investors considering evergreen private asset funds should remember that these vehicles are still long‑term, illiquid investments. Liquidity can be limited, and redemptions are not guaranteed.

Weekly Market Update: March 25, 2026