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What is the difference between the General Partners and the Limited Partners?
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What is the difference between the General Partners and the Limited Partners?

Published on 18/08/2022
Contributor(s): Harold Grosfils

In a fund, a distinction is made between general partners (or GPs) and limited partners (or LPs). GPs are the fund managers who handle the day-to-day management and the entire investment process. LPs are the ones who invest in the fund, and do not have to manage all investment decisions, which they delegate to the GP. The GPs are therefore also the ones who call the capital pledged by the LPs and redistribute the profits. In practice, the PMs also invest in the fund alongside the LPs. This is good for the alignment of interests and for them to have what is called “skin in the game”.

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