What is Gp,LP,PE

(copied from https://www.financialpoise.com/accreditedinvestormarkets/90-second-lesson-what-is-a-gp-lp-and-sponsor/)

Many articles about private equity funds focus on the exploits of firms like Blackstone, KKR, Apollo Management, and other large mega-private equity firms: the Media likes to report about the acquisitions and exits by PE. Many of these articles are written in a way that can lead the uninitiated to believe that these firms operate using their own money. They don’t.

PE firms are operated by a general partner (“GP”) operate by aggregating investments by limited partners (“LP”s). Blackstone, KKR, and Apollo are examples of GPs. That is, they are PE firmsbut they are not PE funds. A PE firm (the GP) raises money from investors (LPs) for a specific PE fund and then that PE firm manages the fund for the benefit of that fund’s LPs. PE firms can manage more than one fund at a time, each with different LPs (though it is common for LPs to invest in multiple funds managed (or “sponsored”) by the same PE firm (manager, also referred to as a “sponsor”).

Who are LPs? LPs consist of a broad array of entities and people. For a long time, LPs consisted mostly of large institutions (like pension funds, labor unions, insurance companies, and universities) and very wealthy families (meaning the sorts of family names that appear each year on the Forbes 400). Over time, things evolved. Today, there are hundreds of thousands of people who, while accredited investors, do not have the massive wealth that was standard is days gone by. We believe this trend will accelerate. Click here for more on this.