General Partner (GP)
The entity or individual that manages a private equity, venture capital, or real assets fund — making all investment decisions, managing portfolio companies, and carrying unlimited liability for the fund's obligations.
The GP earns a management fee (typically 1.5-2% of committed capital) and carried interest (typically 20% of profits above a preferred return). The GP is the active decision-maker; limited partners are passive capital providers.
GP economics are driven by two revenue streams: management fees provide stable income to cover operating costs, while carried interest represents the performance-based upside that aligns GP and LP interests. The preferred return hurdle (typically 8%) ensures the GP only participates in profits after LPs have received a minimum return on their capital.
How Octum helps
GPs are core Octum users — leveraging Investor Discovery for LP matching, the Deal Workspace for due diligence, and Ora for fund manager and investor analysis.
Frequently Asked Questions
What is a general partner (GP)?
A GP is the entity that manages a private equity, venture capital, or real assets fund — making investment decisions, managing portfolio companies, and earning management fees and carried interest.
How do GPs make money?
GPs earn management fees (typically 1.5-2% of committed capital annually) for operations, and carried interest (typically 20% of profits above a preferred return hurdle) as performance-based compensation.
What is the preferred return hurdle?
The preferred return (typically 8%) is the minimum annual return LPs must receive before the GP participates in profit sharing through carried interest — ensuring LP interests are prioritized.
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