Limited Partner (LP)

Limited Partner (LP) — In a limited partnership, the LP provides funding while the general partner (GP) handles acquisitions, servicing oversight, workouts, and dispositions. This structure lets capital-rich but time-constrained investors participate in mortgage note deals without needing to source tapes, negotiate purchases, or manage borrower resolutions themselves.

LP interests are common in note funds and joint ventures where a sponsor with workout expertise raises outside capital. The partnership agreement spells out profit splits, preferred returns, reporting obligations, and the timeline for distributions. Because LPs surrender management control, they typically rely on the GP's track record, transparency, and alignment of incentives when deciding where to place their capital.