Glossary

Redemption Queue

Also known as: Redemption Backlog

The ordered list of investor requests to withdraw capital from an open-end fund that exceed the fund's available liquidity in a given redemption period, processed pro rata or in the order received once cash becomes available from asset sales, financing proceeds, or new subscriptions.

Open-end core funds typically fund redemptions primarily from incoming new subscriptions and available cash rather than by selling assets under pressure, which means redemption queues lengthen sharply during periods when new subscription demand dries up at the same time redemption requests rise — a dynamic that is frequently correlated with the denominator effect and broader public market drawdowns, since both are triggered by the same macro conditions. Prolonged, multi-quarter redemption queues at several large diversified core funds during periods of rapid interest rate repricing have illustrated, in practice, that the liquidity an open-end vehicle offers is conditional on market conditions rather than guaranteed on demand, a distinction institutional investors now underwrite explicitly when sizing allocations to open-end vehicles.