Fund economics

GP Commit (GP Commitment)

A GP commitment is the capital the GP or its principals commit to their own fund. Look at the amount, whether it’s cash or a fee waiver, and how meaningful it is relative to the principals’ resources; a percentage alone doesn’t show alignment.

Example: A 2% GP commitment to a $50 million fund is $1 million in total.

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Knowing the language helps you follow the conversation. Knowing what to ask is how you participate in it.

Understanding the terms is a first step. The Aligned Capital Program uses them to teach you how to evaluate a fund and prepare the questions to ask its manager.

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