Glossary
J-Curve
J-Curve describes the typical return profile of a Private Markets fund, where costs and capital outflows in the early years lead to a negative performance before realisations and value increases in portfolio companies turn the trajectory positive.
At a glance
01
The negative phase of the J-Curve arises from management fees, set-up costs, and investments not yet realised.
02
The duration and depth of the negative phase vary depending on the fund strategy and market conditions.
03
Investors must account for the J-Curve phase in their liquidity planning.
Frequently asked questions
For classic buyout or venture capital funds, the negative phase often lasts three to five years, but can vary depending on strategy and market conditions. There is no fixed rule for when positive performance will emerge. Investors should plan accordingly with a long-term perspective.
