and multiple funds were forced to erect gates. These gates were designed to buy time— but it remains to be seen whether they will succeed. History offers some clues as to how they will perform, and it hints at consequences that are unlikely to comfort fund managers and investors.
Mark J. Higgins, CFA, CFP ® is a financial historian, experienced institutional investment advisor and author. His book, Investing in US Financial History( Greenleaf Book Group, 2024), recounts the full financial history of the United States from 1790 to 2023. He is a member of the Financial History editorial board and a guest curator of three of the Museum’ s exhibits in Boston.
Sources
Adams, John Quincy.“ Diary Entry, May 1819, Entry 27.” The John Quincy Adams Digital Diary. Primary Source Cooperative at the Massachusetts Historical Society. Accessed May 25, 2026.
Binnie, Isla.“ Blue Owl Halts Redemptions at One of Its Funds, Deepening Selloff in Private Equity Shares.” Reuters. February 18, 2026. Updated February 19, 2026.
Galbraith, John Kenneth. A Short History of Financial Euphoria. New York: Viking. 1990.
Geithner, Timothy F. Stress Test: Reflections on Financial Crises. New York: Crown Publishers. 2014.
Hamilton, Floyd. Bonnie & Clyde and Me! Audio recorded by Floyd Hamilton. 1938.
Higgins, Mark J. Investing in US Financial History: Understanding the Past to Forecast the Future. Austin, TX: Greenleaf Book Group Press. 2024.
Larson, Henrietta M. Jay Cooke, Private Banker. Cambridge, MA: Harvard University Press. 1936.
Nelson, Daniel. Corsair: The Life of J. Pierpont Morgan. New York: Harper & Row. 1981.
An Old Species with a New Name
On February 18, 2026, Blue Owl Capital ended quarterly redemptions on a semiliquid private credit fund known as OBDC II. Consistent with the dynamics of past financial runs, the decision triggered a sharp deterioration in investor confidence, which, in turn, prompted a cascade of withdrawal requests across multiple competing funds. Fund managers responded by imposing gates on redemptions and rationing liquidity. Many people argued that these mechanisms were functioning as intended and represented a meaningful innovation to short circuit runs. History suggests otherwise.
From the mid-1830s through the mid-1860s, many American banks operated under a remarkably similar framework. At the time, most banks issued bank notes to depositors which were redeemable for gold or silver— collectively referred to as specie. During financial panics, banks frequently suspended specie redemption. Bank note holders were then forced either to wait for redemption to resume, accept losses if the institution failed or sell their bank notes at a discount in secondary markets.
In the 2020s, the terminology may have changed, but the underlying mechanism differs little from this earlier practice. In both cases, financial institutions promised liquidity during normal conditions but restricted it during periods of stress. Whether modern gates will function as intended remains uncertain. But as of June 5, 2026, the test still appeared to be in its early stages.
Bloomberg
24 FINANCIAL HISTORY | Fall 2026 | www. MoAF. org