Investor Presentaiton
16
CONFIDENTIAL
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Secondary Strategy | J-Curve Mitigation
Private Equity Funds typically experience negative returns during the first
years of operation due to upfront investment costs and fees. The secondary
strategy may help reduce or eliminate this J-curve effect.
IRR
+
Secondary Purchase
Date
Secondary Investment
Harvest Phase
Primary Fund Investment
Mitigation or elimination of the J-Curve effect
Purchase discount to Net Asset Value and/or intrinsic value
Assets acquired are mature and at or near the Harvest Phase
At the time of acquisition, underperforming assets have often already been written down/off
Avoid paying the first few years of management fees while capital is deployed
Not all private equity funds will be profitable given the inherent risks in investing in private equity, including macroeconomic
factors and the performance of underlying companies.
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