March 5, 2022

Components of a Private Equity Fund

Private equity funds are a collective investment vehicle that operates similarly to mutual funds and hedge funds. They pool investors together to manage private investments that meet the fund’s specific criteria. A private equity fund is typically invested in one or more companies to return capital to investors and increase their assets over time.

Below are the components of a private equity fund.

General Partners (GPs)

The general partners are typically the investors who control the private equity fund. They are also in charge of allocating capital to projects within the fund. Within these projects, a selected management team will have complete control over day-to-day decisions within that specific project. The general partner will oversee day-to-day operations, including decision-making by the management team. According to capital partners like Peter Comisar, a private equity firm must maintain strong business ethics because of the relationship between general partners and management teams.…