GP stands for General Partner, which refers to the manager (or managers) of the investment fund. In the context of asset management—particularly private equity or venture capital—the framework within which Limited Partners (LPs) and General Partners (GPs) operate is structured around a limited partnership model. This model defines the roles, responsibilities, and risks for each party involved.

The General Partner is the entity or individual responsible for managing the investment fund. On the other side are the Limited Partners (LPs), typically institutional investors, high-net-worth individuals, or other entities that invest capital. LPs contribute the majority of the fund’s capital and are essentially passive investors, relying on the GP to actively manage that capital.

Although most of the capital comes from LPs, GPs usually contribute a small capital commitment, known as the general partner commitment. This ensures alignment of interest between GPs and LPs—often referred to as GPs having “skin in the game.”

The GP is responsible for:

• Running the day-to-day operations of the fund

• Making key investment decisions: which companies to acquire, on what terms, and how and when to exit investments

In return for their efforts, GPs are typically compensated through:

• A management fee, calculated as a percentage of committed or invested capital

• A performance-based share of profits, known as carried interest or “carry”

As a key distinction, the GP holds unlimited liability for the debts and obligations of the fund. To mitigate personal risk, the GP is usually structured as a limited liability entity.

Depending on the context, “GP” may refer to either the legal entity or the individual fund managers themselves.

Note: An individual or group can be both a General Partner and a Limited Partner, provided these roles are held through separate legal entities.