The J-curve in Private Equity is a graphical representation of Private Equity Returns over time
The shape of J-Curve
- At time 0: receives initial commitments
- Early stage: pays management fees and invests in companies
- Late stage: exits investments, returns > management fees
Mitigate the J-Curve by
- joining a private equity fund a few years into its operation
- through the secondary market (video #3)