Limited Partner

In many foreign fund markets, a fund is set up as a limited liability partnership, and the two sides of that partnership have specific names.

The manager of the fund is the General Partner, or GP. The investors who put money into the fund are the Limited Partners, or LPs.

The workbook is explicit that this is how it works "in most of the foreign jurisdictions" — it is the vocabulary you will meet describing offshore fund structures, even though an Indian Category III AIF structured as an LLP uses slightly different terms for its own parties.

In an LLP fund structure, the sponsor of a Category III AIF is called the Designated Partner, responsible for all statutory compliances the LLP form requires. This is the Indian LLP-law term.

The workbook then draws the parallel to how the same roles are described abroad: in most foreign jurisdictions, the fund manager is the General Partner (GP), while the investors subscribing to fund units are the Limited Partners (LPs).

The key legal feature the name signals: a Limited Partner's liability is limited to what they have committed to the fund. They do not take part in managing the fund — that is the General Partner's job — and in exchange for staying out of management, an LP is shielded from the fund's liabilities beyond its own commitment.

A Category III AIF is structured as a Cayman Islands limited partnership to raise capital from global institutional investors.

Meridian Capital Advisors is the fund's manager. In this structure it is called the General Partner.

Pemberton Pension Fund, a UK pension scheme, commits USD 20 million to the fund. It plays no role in choosing investments or running the fund day to day — it is a Limited Partner, and its exposure to the fund's liabilities is capped at the USD 20 million it committed.

If the equivalent fund were instead set up as an Indian LLP, Meridian's role would be labelled Designated Partner rather than General Partner — the substance is the same management role, but the label changes with the jurisdiction and the law under which the vehicle is formed.

Chapter 4, section 4.1 (Fund structures of a Category III AIF), introduces General Partner and Limited Partner as the foreign-jurisdiction names for the manager and the investors in an LLP fund structure, directly alongside the Indian LLP's own Designated Partner terminology. Expect a matching question pairing GP with Manager and LP with Investor, or a question on which term applies to a foreign LLP fund as against an Indian one.

• Limited Partner is a foreign-jurisdiction term for the investor, not a distinct legal structure available under Indian AIF regulations by that name.
• Do not confuse Limited Partner with Designated Partner. A Designated Partner is the Indian LLP-law term for the sponsor's compliance role — closer to the General Partner's function than to the Limited Partner's.
• A Limited Partner's liability is limited to its committed capital — this is the substantive point behind the label, not just a naming convention.