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Liquidity management tools

Liquidity management tools are measures a fund manager can use to manage redemptions and protect remaining investors, such as caps on redemptions, notice periods and pro rata reductions.

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Short answerLiquidity management tools are measures a fund manager can use to manage redemptions and protect remaining investors, such as caps on redemptions, notice periods and pro rata reductions.

Liquidity management tools are measures a fund manager can use to manage redemptions and protect the remaining investors, such as caps on redemptions, notice periods or pro rata reductions of requests.

Why it matters

Under ELTIF 2.0, an ELTIF may offer redemptions during its life only if the manager can demonstrate to the competent authority that it has an appropriate redemption policy and liquidity management tools compatible with the long-term strategy. Redemptions are limited to a percentage of the fund's liquid assets, and requests above that limit are reduced pro rata.

What to watch for

These tools exist to protect the fund as a whole, so they can delay or reduce your exit. Read which tools the fund may use, when they apply and who decides. See pro rata redemption and ELTIF liquidity.

Primary sources

General information. Not investment advice or a suitability assessment.

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