Full Definition
A Limited Partner (LP) is a passive investor in a real estate syndication or fund. LPs provide capital, receive their pro-rata share of distributions (typically after a preferred return), and face limited liability (maximum loss = invested capital). LPs have no operational role or management responsibility.
Related Terms
Sponsor / Syndicator / General Partner
The principal who organizes a real estate deal, raises capital, and manages the investment on behalf of passive investors.
Promote / Carried Interest
The sponsor's share of profits above a preferred return threshold. Aligns sponsor incentives with investor returns.