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Glossary

Pro rata redemption

Pro rata redemption means that when redemption requests exceed what a fund can pay out, every request is reduced by the same proportion and all investors are treated equally.

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Short answerPro rata redemption means that when redemption requests exceed what a fund can pay out, every request is reduced by the same proportion and all investors are treated equally.

Pro rata redemption means that when redemption requests exceed the amount a fund can pay out, every request is reduced by the same proportion instead of being served in order of arrival.

Why it matters

Under ELTIF 2.0, redemptions during the life of the fund are limited to a percentage of its liquid assets. If total requests exceed that percentage, they must be reduced pro rata and investors must be treated equally. This protects both the investors who stay in the fund and those who apply at the same time.

What to watch for

A pro rata reduction means you may receive only part of the amount you asked for, and the rest may have to wait for a later redemption date. Read how often redemption windows open and how unfilled requests are handled. See liquidity management tools and redemption.

Primary sources

General information. Not investment advice or a suitability assessment.

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