---
title: "Redemption | Altss Glossary"
description: "Redemption is an investor’s request to withdraw capital from a fund or vehicle according to its liquidity terms."
canonical: "https://altss.com/glossary/redemption"
---

Fund Terms

# Redemption

Publisher: Altss LLCPublished 2025-12-29Content modified 2026-01-06

Redemption is an investor’s request to withdraw capital from a fund or vehicle according to its liquidity terms.

**Allocator relevance:** **Defines when capital can come back—redemption terms can become binding in stress and drive liquidity mismatch.**

### Expanded Definition

Redemptions are common in open-end or semi-liquid vehicles (not typical in closed-end PE/VC funds). Terms include notice periods, redemption windows, gates, fees, and potential suspension rights. Redemptions are not guaranteed liquidity if the underlying assets are illiquid; in stress, vehicles may gate or queue redemptions.

Allocators treat redemption features as contractual liquidity, not “cash on demand.”

### How It Works in Practice

Investors submit redemption notices, and the fund processes them on scheduled dates subject to gates and available liquidity. If demand exceeds limits, redemptions are prorated and moved into a queue.

### Decision Authority and Governance

Governance includes liquidity budgeting and monitoring redemption queue risk. For vehicles, governance determines when gates are triggered and how fair treatment is enforced.

### Common Misconceptions

- Redemption features eliminate liquidity risk.

- Redemptions happen instantly.

- Redemption terms are comparable without reading the gate/queue mechanics.

### Key Takeaways

- Redemption is structured liquidity with constraints.

- Gates and queues matter most during stress.

- Match redemption terms to underlying asset liquidity.

## Related terms

[Lockup](https://altss.com/glossary/lockup)[Gates](https://altss.com/glossary/gates)[Redemption Queue](https://altss.com/glossary/redemption-queue)[Liquidity Mismatch](https://altss.com/glossary/liquidity-mismatch)

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## Canonical URL

https://altss.com/glossary/redemption