The Evolving Relationship Between LP & GPs

Relationships between limited partners and general partners in the private equity industry have changed more over the past five years than over the prior 50, which is roughly the age of the industry. This paper draws from interviews with more than 50 participants in the private equity world in emerging and developed markets playing different roles in the industry. It also refers to a number of cases, white papers, and other studies. We are deeply grateful to those experts who shared their insights with us. The paper is organized as follows. First, we briefly set out the current fund-raising environment. We then consider the dynamics of the LP-GP relationship over time and explore current trends in developed and emerging markets (mostly LAC). Finally, we conclude with guidelines for effective LP-GP relationships in emerging markets and our reflections on what may happen in the future.