Side Letter

A Fund of Funds is a pooled investment vehicle that allocates capital to a portfolio of underlying private equity, venture capital, or other alternative investment funds rather than investing directly in companies. FOFs provide diversification across GPs, strategies, vintages, and geographies, and are commonly used by institutional investors and family offices seeking managed access to the PE/VC asset class.

The General Partner is the entity (typically the fund management firm or its affiliate) responsible for managing a private equity or venture capital fund, making investment decisions, and handling day-to-day operations. The GP bears unlimited liability for the fund’s obligations and earns management fees and carried interest in exchange for managing LP capital.

A Limited Partner is an investor in a private equity or venture capital fund who contributes capital but does not participate in the fund’s management or investment decisions. LPs enjoy limited liability (their exposure is capped at their capital commitment) and include pension funds, sovereign wealth funds, endowments, insurance companies, family offices, and high-net-worth individuals.

GP Commitment is the capital that the General Partner (or its principals) commits to the fund alongside LPs, typically ranging from 1% to 5% of total fund size. This “skin in the game” aligns the GP’s economic interests with those of the LPs and is a standard term evaluated by institutional investors during fund due diligence.