GP Commitment

The amount of their own money a fund's managers invest in the fund alongside LPs.

Example

Managers of a 75,000,000 fund commit 3,000,000, or 4%.

What matters is how significant it is for the individuals, not only the percentage of the fund.

Management fee — A recurring charge for running an investment, usually quoted as a percentage of the assets held and taken every year regardless of the result.
Carried interest — The share of a fund's profit that the manager keeps, conventionally around twenty percent, usually payable only above a defined return to investors.

Ask how the manager gets rich, and whether it requires you to — Fund economics shape manager behaviour. Alignment is strongest when managers commit meaningful personal capital, depend on carry rather than fees, and keep fund sizes suited to their strategy. (10 min)
The clauses that decide what happens when something goes wrong — Beyond fees and carry, a fund's agreement governs who must stay, how capital can be reused, what happens if LPs lose confidence, and what you are entitled to know. (12 min)