On the big stage of China's private equity investment market, the relationship between LPs and GPs has attracted much attention, just like a husband and wife, relying on each other and growing together. First, let's understand the meaning of LP and GP. LP, the full name of limited partner, is the investor, providing funds, and GP is the abbreviation of general partner, they are the investor and unlimited liability partner. In practice, investing by absorbing LP funds while ensuring that LPs do not intervene too much in their management is a major advantage over the corporate system.
The relationship between GPLP and from love to mutual understanding is because they have a common goal. For example, LPs are rich and wealthy people who can provide you with the most basic material life and guarantees, and are known as LP dads by the outside world. In China, the relationship between GPs and LPs seems to be incompatible - many GP friends complain that it is too difficult to raise funds, LPs have various requirements, and at the same time, friends from LPs are also discussing which GPs are unethical and what problems exist. Although the relationship between GP and LP is often contradictory and incomprehensible, it is not without a perfect marriage.
If GP and LP don't just aim for money, but keep the same beliefs, things will change. Whether it is a "golden father" or a "wife", the stability and harmony between LP and GP is the premise of win-win cooperation. In the increasingly regulated and mature equity investment market, a trend in the future is that LPs and GPs who are suitable for each other should establish long-term cooperative relations. GP continues to improve its professional ability, with excellent performance and returns to attract LP investment, while focusing on maintaining the long-term participation of some core LPs and key LPs, not only to invest in GP's individual **, but through each other's running-in to make LP become the GP's loyal "fan users", in the long-term cooperation to seek long-term development, become the envy of everyone "good couple".