GP/LP – What Does That Mean? Understanding the Heart of Investment Partnerships
In the world of private equity, real estate, and investment funds, you’ve likely heard the terms GP (General Partner) and LP (Limited Partner). But what do they really mean — and why should you care if you’re considering investing or raising capital?
The Basics of GP/LP Structures
A GP/LP model is one of the most common ways to organize investment partnerships, especially in large projects.
- General Partner (GP): This is the manager of the fund or project. The GP is responsible for identifying opportunities, making day-to-day decisions, overseeing operations, and driving the strategy forward. They also typically contribute some capital themselves, ensuring they have “skin in the game.”
- Limited Partner (LP): These are the investors — individuals, institutions, or family offices who provide most of the capital. LPs have limited liability, meaning they are only at risk for the money they invest, and they do not take part in daily management or decisions.
How the GP/LP Relationship Works
The GP and LPs enter into a formal agreement that defines:
- How much each party is investing
- How profits (and losses) are shared
- What fees the GP earns for managing the project (often called a management fee)
- What success-based incentives (like “carried interest”) the GP earns if the project performs well
This structure aligns incentives: the GP wants to deliver strong returns to LPs, and LPs trust the GP’s expertise to maximize the project’s success.
How The Coterie Group Helps
At The Coterie Group, we work with both sides of the table. We help:
- GPs structure deals, secure funding, and present compelling opportunities to investors
- LPs identify high-quality, well-managed projects, conduct due diligence, and understand the real risks and rewards
Whether you’re looking to launch a fund, invest in a specific development, or join a larger project, we help navigate the complexities of GP/LP arrangements — ensuring transparency, fairness, and aligned interests.
Why It Matters in Today’s Market
Especially in 2025’s fast-moving commercial market, institutional investors and private capital increasingly rely on the GP/LP model to unlock large, complex projects — from multifamily developments in Canada to cross-border investments in Europe.
If you want to succeed in this space, you need a trusted partner who understands both sides. That’s where The Coterie Group comes in.
Let’s make your next partnership a success.
