Private Equity & VCIntermediate

General Partner & Limited Partner

GP / LP

The GP manages a fund; LPs are the investors who provide most of the money.

Detailed explanation

LPs include pension funds, insurers, endowments and family offices. GPs earn a management fee and carried interest.

Why it matters

Understanding this split explains how PE and VC firms make money.

Key points

  • GP makes investment decisions.
  • LPs have limited liability.
  • Fees: management fee + carry.

Related terms

Carried InterestPrivate Equity

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Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.