AIFs are designed as closed-ended funds, meaning you generally cannot exit before the term ends. However, some Category III (Hedge Funds) are open-ended but charge an Exit Load if you withdraw within a certain period (e.g., 1-3 years).
This fee protects remaining investors. If you leave, the fund might have to sell assets to pay you, potentially hurting performance. The exit load discourages short-term trading and compensates the fund for the liquidity cost. Always check the exit load structure before entering an open-ended AIF.
