Market Participants
General Partner
GP
The manager of a private equity fund responsible for investment decisions and fund operations.
The General Partner (GP) is the investment manager responsible for operating a private equity fund. GPs make investment decisions, manage portfolio companies, and ultimately determine fund performance.
GP responsibilities
- Fundraising and investor relations
- Sourcing and evaluating investment opportunities
- Due diligence and deal execution
- Portfolio company oversight and value creation
- Exit planning and execution
- Reporting to LPs
GP economics
- Management fee: Typically 1.5-2% of committed capital
- Carried interest: Typically 20% of profits above hurdle rate
- GP commitment: Usually 1-5% of fund size
GP vs GP firm
- "GP" can refer to both the legal entity managing the fund and the broader firm (e.g., "Blackstone" as the GP firm managing multiple funds).
Example
KKR serves as the GP for KKR North America Fund XIII, making investment decisions and managing the portfolio.