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  • The J-Curve is the name that describes the return profile for investors in traditional private-market funds that are closed-end and fixed term.
  • If returns are flat or slightly negative at the beginning, this shouldn’t be mistaken for underperformance.
  • Understanding the J-Curve and key performance metrics can empower investors to make informed decisions and set appropriate overall expectations.

 

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Important Risks: Investing involves risk, including the possible loss of principal. • Private equity investments involve a high degree of business and financial risk that can result in substantial losses. The valuation of private equity investments is complex and is typically based on fair value. • Illiquid and restricted securities may be difficult to dispose of at a fair price. A particular investment may become illiquid, making it difficult to sell that investment at an advantageous time or price. • Foreign investments may be more volatile and less liquid than US investments and are subject to the risk of currency fluctuations and adverse political, economic, and regulatory developments. 

The views expressed here are those of the author and should not be construed as investment advice. They are based on available information and are subject to change without notice. This material and/or its contents are current as of the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Hartford Funds.

 

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Insight from sub-adviser Schroders Investment Management
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