When the gate opens | Wealth Professional
Over the past several years, a number of Canadian mortgage and real estate investment funds have restricted investor withdrawals. After remaining gated for extended periods, these funds are now approaching the moment that will ultimately determine whether investor capital can be returned smoothly—or whether losses that were deferred by the gate will finally be recognized.
Romspen Investment Corp. provides an important case study.
In November 2022, Romspen suspended redemptions from its flagship Mortgage Investment Fund, stating that withdrawals would be temporarily deferred until borrower repayments and asset sales restored liquidity. More than three years later, approximately $2.7 billion of investor capital remains locked.
The fund, which historically invested across Canadian and U.S. construction and pre-development loans, created a run-off pool intended to provide liquidity for investors seeking to exit. However, demand from redeeming investors remained high. Distributions were reduced, and by 2025 a significant portion of the loan portfolio required additional review.
The key question facing investors is not simply when the fund will reopen. The more important question is what happens when it does.
