Why would an LP invest their money in a fund?

Been researching more about PE and keep seeing posts about fund returns that barely benchmark the S&P500. Given this + the liquidity issue, what incentive is there for an LP to give money to a fund?

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Class of '23 Oct 2026 Cohort

5.00/5

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“Very good planning prior to the meeting and effective notes that allowed the session to go quickly and effectively. We covered a lot of topics on the resume and I recieved a good amount of notes that I can correct my resume in order to make it more specific for the PE companies I will work with. Was very helpful in the way of bringing out niche skills I have in order to maximise my chances at differentiating myself from more typical IB candidates. Also provided good insights on the MBA process, what is valuable and the WHY side of P.E. which I will go into depth with in my WHY statements that I am going to do. ”

Class of '27 Sep 2026 Cohort

5.00/5

Private Equity Mock Interview

“Andre was amazing to work with. He brought real energy and clarity to every conversation, explained complex ideas simply, and always made time to help. His attention to detail and calm under pressure lifted the whole team, and his feedback was honest, specific and genuinely useful. Beyond the work, he was approachable, generous with his knowledge and made everyone around him better. Every session with him felt insightful and inspiring. I'd love to work with Andre again and would recommend him without hesitation. ”

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Associate 1 in PE - LBOs

6mo

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Authored by: Certified Private Equity Professional - Vice PresidentCertified Private Equity Pro

PeRmAnEnTiNtErN

IB

6mo

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Authored by: Certified Investment Banking Professional - 2nd Year AssociateCertified Investment Banking Pro

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Why would an LP invest their money in a fund?

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Why would an LP invest their money in a fund?

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