Private Funds Glossary

Limited Partner (LP)

Definition: A limited partner (LP) refers to an investor in a private fund who contributes capital but has limited liability and control over the fund’s operations. LPs typically invest in private equity, private credit, or real estate funds. Unlike general partners (GPs), who manage the fund’s day-to-day operations, LPs have a passive role and entrust the GPs with investment decisions and fund management responsibilities.

Example: In a real estate fund, an LP might contribute a substantial amount of capital to the fund but will have limited involvement in selecting and managing individual properties. LPs primarily seek attractive risk-adjusted returns while relying on the expertise of the GPs to execute investment strategies.

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