Private Equity — GP & LP Accounting 📌 Complete Guide to Private Equity 1. What is Private Equity ? Private Equity (PE) refers to investments made in private companies (not listed on stock exchanges) or in public companies taken private . The goal is to restructure, grow, and eventually exit these companies at higher valuations. Involves active management by professional fund managers. Usually has long investment horizons (7–10 years). Returns mainly through capital gains (sale of portfolio companies). 2. Who is a GP? What are his Roles? GP (General Partner) is the manager of the private equity fund. Roles of GP: Fundraising: Attracting investors (Limited Partners). Deal Sourcing: Identifying companies worth investing in. Due Diligence: Analyzing financial, legal, and operational aspects before investing. Portfolio Management: Guiding companies with strategy, governance, and op...
Private Equity — GP & LP Accounting (Blog-ready) Private Equity — Accounting: GP & LP Perspectives A blog-ready, color-styled, copy-paste HTML on how capital activity is recorded and reported by General Partners (GPs) and Limited Partners (LPs). Includes journal entries, eFront notes and management reporting tips. Overview — quick pills Private Equity GP Accounting LP Accounting This article focuses on accounting flows between the fund (managed by GP), investors (LPs) and portfolio companies. It also shows sample journal entries and explains how these are typically configured in fund accounting systems such as eFront. 1. Key concepts (reminder) Commitment : The total amount an LP agrees to provide to a fund. Capital Call (Drawdown) : A request by GP to LPs to fund part of their commitment. Distribution : Cash or stock returned to LPs from exits or returns. Management Fee : Fee charged by ...