Definition

LP Interest (Limited Partner Interest)

A proportional ownership stake in a limited partnership fund, entitling the holder to a share of the fund's assets and returns without direct management authority over the underlying investments. In Collective Liquidity's exchange fund, contributors receive LP interests representing their proportional share of the diversified pool of private company shares. Unlike direct stock ownership, LP interests in a diversified fund provide quarterly liquidity (the fund provides a mechanism to borrow against or exit LP interest), can be used as collateral for lower-cost loans than single-stock concentration would allow, and enable access to wealth management strategies like donor-advised fund contributions that are impractical with illiquid single-company shares. The LP interest is the instrument that converts illiquid, concentrated private company equity into a more flexible, manageable financial asset.

From the episode “Turn Illiquid Equity Into Real Wealth”

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Turn Illiquid Equity Into Real Wealth

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