GP/LP Structure
GP/LP structure is a limited partnership where the general partner manages the fund and unlimited liability, while limited partners provide capital with liability limited to their investment.
| Party | Role and Rights |
| General Partner (GP) | Manages fund, makes decisions, unlimited liability |
| Limited Partners (LPs) | Provide capital, passive investors, limited liability |
| GP capital commitment | 1% to 3% of total fund |
| LP voting rights | Limited to major decisions (removals, amendments) |
| GP fiduciary duty | Owes loyalty and care to LPs |
| LP inspection rights | Access to financial records and reports |
| Economic Split | Distribution |
| Management fee | GP receives 1.5% to 2% annually |
| Return of capital | LPs receive 100% of capital back first |
| Preferred return | LPs receive 8% on capital |
| Catch-up | GP receives next distributions to reach 20% overall |
| Carry split | 80% to LPs, 20% to GP on excess profits |
| GP promote | Carried interest is the GP's main compensation |
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