PEINVEST
The capital contributed by the general partner to their own fund, typically 1-5% of total fund size. GP commitment aligns the fund manager's interests with those of limited partners by ensuring the GP has meaningful capital at risk.
The entity responsible for managing a PE fund, making investment decisions, and overseeing portfolio companies. The GP typically contributes 1-5% of total fund capital and receives management fees and carried interest as compensation.
An investor in a PE fund who provides capital but has limited involvement in fund management and investment decisions. LPs include pension funds, sovereign wealth funds, endowments, insurance companies, family offices, and high-net-worth individuals.
The share of profits that the general partner receives as compensation, typically 20% of fund profits above a specified hurdle rate. Carry aligns the GP's interests with those of the LPs and is the primary performance-based incentive for fund managers.