LP is the abbreviation of limited partner, that is, institutional investors and individual investors of enterprises or financial and insurance institutions participating in investment, or limited partners added according to law with the consent of other partners.
In terms of responsibilities, general partners bear more responsibilities than limited partners. The general partner is jointly and severally liable. Limited partners only undertake the responsibilities within their investment scope and do not participate in management.
What is the relationship between LP and double GP in fund operation?
Usually, limited partners and general partners are the sources of fund funds and the core of fund management in fund investment. However, private equity funds are limited liability partnerships, so the responsibilities of GP and LP are different. As a fund manager, GP is responsible for internal management and investment decisions. In addition to collecting management fees, GP also received an excess performance reward. As an investor, LP does not participate in the operation and management of the company, but only participates in capital contribution and income. Judging from their rights, LP does not participate in the management of the fund and should not have an impact on the operation of the fund. But this is not the case in the actual operation of the fund, and the relationship between GP and LP is often very complicated.