1. 📌 Essentials

• Private equity funds operate within Limited Partnerships (LP), with GPs managing and LPs providing capital.
• GPs manage daily operations; LPs have liability equal to their contributed capital.
• Typical fund investment split: GPs 1%, LPs 99%.
• Profits are returned after LPs recover their capital; remaining profits split (commonly80% to LPs, 20% carry for GPs).
• Disbursement schedule: 10-30% at closing, the rest over 3-5 years.
• Fund size constraints: minimum size to avoid adverse selection; maximum to prevent GP overload.
• GPs face restrictions: reinvestment limits, outside activities, and restrictions on external involvements.
• Partnership agreements specify vesting, profit sharing, and restrictions.
• Reinvestment, outside activities, and addition of new GPs are typically restricted early on.
• Penalties apply for LPs failing to fulfill funding commitments.