Why 2023 may still be good for private markets
As market volatility pushes down valuations, now may be the time to think about investingLEARN MORE
At J.P. Morgan Private Bank, we specialize in alternative investments, and we believe they can be essential building blocks in your portfolio. But navigating this universe of complex investments can be challenging, and requires in-depth understanding to gauge the risks and identify high-return potential opportunities.
You may need to look beyond the traditional 60:40 equity/bond portfolio to help manage volatility and achieve real diversification. Adding diversifiers, such as hedge funds or real assets to your portfolio could help. Over the long term, through diverse market conditions, alternative investing has historically demonstrated the ability to improve risk/return versus traditional equity/bond portfolios.1
Finding the right alternative strategy depends on your goals. Our platform provides access to a wide variety of investment opportunities to support your needs.
We harness the knowledge and experience of our global team to bring you a carefully curated set of long-term growth opportunities, with broad implementation possibilities to help ensure you realize your goals.
The scale and specialty of our team paired with our deep history in alternative investing have helped us develop a unique network of relationships with extensive reach.
We conduct thousands of manager and client meetings every year to keep our fingers on the pulse of the market. With these key insights, our access and scale, we create proprietary funds around market themes where we have conviction, and we deliver them exclusively to you.
We offer a long-term, strategic point of view, as well as nimble, opportunistic ideas in seeking to meet your needs.
We build innovative access points to premier funds across the industry, and offer you exclusive access at more attractive minimum investments. Our heritage and connections across J.P. Morgan give us access to partners and opportunities not widely available.
Alternative investments have been a key focus of J.P. Morgan Private Bank for over two decades.
The appropriate amount to allocate will depend on several factors, including your investment objectives, the size of any existing allocation to alternatives, your time horizon, and your tolerance for the lower liquidity of alternatives relative to traditional assets.
We offer a long-term, strategic point of view, as well as nimble, opportunistic ideas to meet your needs.
1J.P. Morgan Asset Management 4Q 2022 Guide to Alternatives, data as of November 30, 2022.
2There can be no assurance that any or all of the members of the Alternative Investments Group will remain with the firm or that past performance or success of any such professional serves as an indicator of the Fund’s success. Members of certain teams noted above provide services to multiple teams, including the Alternative Investments group. The organizational construct above is for illustrative purposes and is subject to change. Organization depicted is as of December 2022.
3Based upon assets under supervision as of October 2022. Includes non-discretionary investments administered by J.P. Morgan Private Investments Inc.
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Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments involve greater risks than traditional investments and should not be deemed a complete investment program. They are not tax-efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain. The value of the investment may fall as well as rise, and investors may get back less than they invested. Diversification and asset allocation does not ensure a profit or protect against loss.
Private investments are subject to special risks. Individuals must meet specific suitability standards before investing.
Hedge funds (or funds of hedge funds) often engage in leveraging and other speculative investment practices that may increase the risk of investment loss; can be highly illiquid; are not required to provide periodic pricing or valuation information to investors; may involve complex tax structures and delays in distributing important tax information; are not subject to the same regulatory requirements as mutual funds; and often charge high fees. Further, any number of conflicts of interest may exist in the context of the management and/or operation of any hedge fund. While investments in private equity funds provide potential for attractive returns, access to opportunities not available in the public markets and diversification, they also present significant risks including illiquidity, long-term time horizons, loss of capital and significant execution and operating risks that are not typically present in public equity markets. Private equity funds typically have a 10-15 year term and will begin to monetize investments after holding them for 4-5 years.
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Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.
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As a general matter, we prefer J.P. Morgan managed strategies. We expect the proportion of J.P. Morgan managed strategies will be high (in fact, up to 100 percent) in strategies such as, for example, cash and high-quality fixed income, subject to applicable law and any account-specific considerations.
While our internally managed strategies generally align well with our forward-looking views, and we are familiar with the investment processes as well as the risk and compliance philosophy of the firm, it is important to note that J.P. Morgan receives more overall fees when internally managed strategies are included. We offer the option of choosing to exclude J.P. Morgan managed strategies (other than cash and liquidity products) in certain portfolios.
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