Most investors are accustomed to having close to instant access to their money. If you hold shares in a stock or exchange-traded fund, you can trade shares any time during the day. Open-end funds can easily be bought and sold based on the net asset value at the end of the day.

But some funds have additional restrictions on how much investors can withdraw. Also known as semiliquid funds, these investments can take a variety of forms, including interval funds, tender offer funds, nontraded business development companies and nontraded real estate investment trusts (REITs). Most of these funds allow investors to redeem up to 5 percent to 10 percent of their shares each quarter, although the timing and specific limits on redemptions can vary.

The advantage of these redemption gates is they make it easier for managers to invest in asset classes that aren’t frequently traded, such as private credit, private equity and private real estate. Semiliquid fund offerings