A few very crucial points here. In the Big Short they effectively use the big red “GP discretion” that is written into more contemporary LPAs (but maybe they didn’t have this in theirs being mid-2000s). The gating provisions are vital in preventing a run on the fund, particularly when investing in less liquid markets (but not necessarily illiquid). The gates should be both LP and GP friendly terms however and shouldn’t detriment either. So long as the LP understands the gating, you can have committed to the fund for a number of years, say 3+. Also love the reference to side pockets. These are complex beasts - maybe a future topic!
Yes, there's usually a lockup period (24-36 months often). A hard lockup doesn't permit any withdrawal, but a "soft" one does with a penalty fee. Gates as you know are investor level and fund level, though suspensions of withdrawals can occur upon some trigger event (like the suspension in the Big Short). I have thought at length about side pockets, and the topic definitely deserve a discussion of its own.
A few very crucial points here. In the Big Short they effectively use the big red “GP discretion” that is written into more contemporary LPAs (but maybe they didn’t have this in theirs being mid-2000s). The gating provisions are vital in preventing a run on the fund, particularly when investing in less liquid markets (but not necessarily illiquid). The gates should be both LP and GP friendly terms however and shouldn’t detriment either. So long as the LP understands the gating, you can have committed to the fund for a number of years, say 3+. Also love the reference to side pockets. These are complex beasts - maybe a future topic!
Yes, there's usually a lockup period (24-36 months often). A hard lockup doesn't permit any withdrawal, but a "soft" one does with a penalty fee. Gates as you know are investor level and fund level, though suspensions of withdrawals can occur upon some trigger event (like the suspension in the Big Short). I have thought at length about side pockets, and the topic definitely deserve a discussion of its own.