General Commitment
Fundamental Concepts
In Short
The General Commitment is the capital that the General Partner personally invests into their own fund, demonstrating they have "skin in the game." This aligns the GP's financial interests with those of the Limited Partners who provide the majority of the capital.
detailed Definition
A General Commitment (or general partner commitment) refers to the capital that the General Partner (GP) contributes to the investment fund.
In a private equity or venture capital structure, Limited Partners (LPs) provide the vast majority of the fund’s capital. That is, it’s primarily their money being invested. To align interests between LPs and GPs, the General Partner will also commit a portion of their own capital to the fund.
This contribution typically represents only a small fraction of the fund’s total size. It serves to demonstrate that the GP has “skin in the game”, reinforcing incentive alignment between GP and LP. The size and structure of the GP’s commitment may vary across fund types, strategies, and geographies, but the principle remains the same: ensuring the GP shares in both the upside and downside of investment performance.
Important Information
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