A Limited Partner (LP) is an investor who commits capital to an investment fund and is often simply referred to as an “investor.” LPs typically include:

• Institutional investors (e.g. pension funds, endowments)

• Family offices

• High-net-worth individuals (HNWIs)

• Other capital-allocating entities

In private equity and venture capital, LPs form a limited partnership with the General Partners (GPs), who manage the fund. This legal framework is central to the fund structure, as it clearly defines the roles, responsibilities, and liabilities of each party.

LPs provide the majority of the fund’s capital. Unlike the GPs, they are passive investors, with no role in active management or day-to-day operations. Instead, they entrust the GP to manage their capital and generate returns on their behalf.

This separation of duties ensures LPs are not held accountable for fund-level decisions, debts, or operations—hence the term “limited” partner.

While GPs and LPs are typically distinct entities, it’s possible (though uncommon) for the same individual or organization to act in both roles, provided they do so through separate legal entities.

This structure allows LPs to gain exposure to private equity or venture strategies without assuming the operational complexity or fiduciary responsibility of managing the fund directly.