What is a limited partner (LP)?
A limited partner (LP) is an investor that contributes capital to a managed fund, like a private equity or venture capital fund—or a similar investment vehicle. An LP may be an institutional investor, a high-net-worth individual, a family office, or an accredited investor in a fund.
The LP provides part of the capital for the fund, but they have limited liability and don’t manage it. Instead, they play a passive role in the fund, leaving the day-to-day operations and decision-making processes up to the expertise of the general partners (GPs) who manage the investments for them.