Find out more about Limited Partners (LP's) in the Private Equity sector

Limited partners (LP's) are institutional investors or other high net worth individuals who invest in private equity funds (/en/blog/quest-ce-que-le-private-equity-pe). These investors are not actively involved in the management of the company, nor can they participate in the fund's decision-making. Despite this, they can expect an attractive return on their investment.

LP's provide the money needed to acquire companies, and then share the risk and profitability with sponsorship and operations management. They may invest through one or more funds managed by the member ([General Partner](/blog/decouvrez-ce-qu'est-a-general-partner-gp-dans-le-secteur-de-la-private-equity)). This capital is often borrowed or invested by high-net-worth individuals, public funds or pension funds.

LP's are attractive because returns are generally higher than traditional investments. In addition, LP's benefit from increased protection, as their investments are shielded from decisions that might be made by sponsoring and operations management, and are subject to specific contracts that are designed to offer them additional protection.

Finally, LP's can benefit from an attractive exit plan if the investments are successful. A long-term exit can be achieved through the sale of shareholdings to third parties, the company's IPO, the sale of the entire company or its merger with another company.