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What is the meaning of inferior limited partner in private equity fund? Ask God to give a specific explanation.
According to the priority order of product income distribution, partners can be divided into priority partners and inferior partners.

Priority partners get the priority of income distribution according to the partnership agreement, and generally can get relatively fixed income.

After the inferior partner first distributes the income to the priority partner, he obtains the residual income or bears the loss.

Therefore, the income of the priority partner is relatively fixed, and the possibility of loss is very small, but it is impossible to obtain high income.

Poor partners must bear the risk of product losses, but they may also get high returns.

Especially in the case of large leverage ratio, poor partners may lose money or make money.