Private equity (PE) refers to illiquid investments or securities that are not publicly traded on an exchange, such as venture capital, mezzanine or distressed debt, leveraged buyouts, timber, oil and gas properties, and real estate. A limited partnership agreement (LPA) defines the terms of the relationship between the general partners (GPs) and the limited partners (LPs). The structure and compensation arrangements used by PE firms are highly standardized and a working knowledge of frequently employed terms and arrangements of LPAs is important to understanding the division of the profits and the drivers of returns in the industry. This note describes some of the basic features of LPAs with a particular focus on the basic terminology and compensation practices that relate to GPs and LPs.