The answer is often a 20% gate, since it can take 800+ days to get all of your money back, as you'll see in the example below. Read on. There is also an additional hidden surprise that gets uncovered in the LiquidityCalendar.com reports. Combine that gate with a common holdback, and liquidity gets worse depending on the month in which you redeem. Explaining this to a client or the board is not easy, especially when they're already upset about how long it takes to get all of their money back.
The example of the 800+ day surprise
It's not something you can easily map in Excel, so I created a visual on a sample calendar seen below. It models the 20% gate, quarterly redemptions and a 10% holdback payable after the audit is due. A larger image is visible by clicking on the calendar.
Investor are surprised when they find that the same liquidity provision takes 806 days to get all of their money back, but 305 “fewer” days if the redemption request is made during a different time of year?
LiquidityCalendar.com allows family offices and wealth managers to show clients their true liquidity, without any surprises.
These insights and more are in the Liquidity Calendar app. Contact us today if you'd like to have your gates, lockups, holdbacks and withdraw schedules translated to uncover your true liquidity.