Limited Partner (LP)

Limited partners (LPs) are investors in private equity and venture capital funds. They provide most of the capital for funds managed by general partners. LPs are typically large institutions such as pension funds, endowments, foundations, insurance companies, and high net worth individuals. LPs have limited liability and limited control over the fund's operations. They receive income, capital gains, and tax benefits in return for their investments into funds typically structured as limited partnerships. LPs can invest in multiple funds to diversify their portfolios. Their capital is tied up for years until the fund matures.

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