Alternative Investing Insights

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Logo: JP Morgan. Disclaimer. Text: PLEASE NOTE: This session is closed to the press. 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. The views and strategies described herein may not be suitable for all clients and are subject to investment risks. Certain opinions, estimates, investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice. This material should not be regarded as research or as a J.P. Morgan research report. The information contained herein should not be relied upon in isolation for the purpose of making an investment decision. More complete information is available, including product profiles, which discuss risks, benefits, liquidity and other matters of interest. For more information on any of the investment ideas and products illustrated herein, please contact your J.P. Morgan representative. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. This information is provided for informational purposes only. We believe the information contained in this video to be reliable; however we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of the use of any information in this video. The views expressed herein are those of the speakers and may differ from those of other J.P. Morgan employees and are subject to change without notice. Nothing in this video is intended to constitute a representation that any product or strategy is suitable for you. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice, whether financial, accounting, legal, tax or other, given by J.P. Morgan and/or its officers or employees to you. You should consult your independent professional advisors concerning accounting, legal or tax matters. Contact your J.P. Morgan representative for additional information and guidance concerning your personal investment goals. INVESTMENT AND INSURANCE PRODUCTS: NOT A DEPOSIT, NOT FDIC INSURED, NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY, NO BANK GUARANTEE, MAY LOSE VALUE

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This session is close to the press.

Welcome to the JP Morgan webcast. This is intended for informational purposes only. Opinions expressed herein are those of the speakers and may differ from those of other JP Morgan employees and affiliates. Historical information and outlooks are not guarantees of future results. Any views and strategies described may not be appropriate for all participants and should not be intended as personal investment, financial, or other advice. As a reminder, investment products are not FDIC insured, do not have bank guarantee, and they may lose value. The webcast may now begin.

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A shimmering strip of gold-plated handwriting swirls elegantly across a dark surface. It spells JP Morgan.

A woman with long dark hair and small hoop earrings wears a short sleeve black dress and smiles at the camera. She sits at a table with a glass in front of her and wears a ring and a watch. Large windows behind her reveal a city skyline with tall buildings. Text: Jasmine Green-Hogan, ALTERNATIVE INVESTMENTS SPECIALIST, J.P. MORGAN PRIVATE BANK.

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Hello, everyone, and thank you for joining. My name is Jasmine Green, and I'm an alternative investment specialist here at JP Morgan's Private Bank, and I'm excited to be back for another five ideas in 25 minutes. For those of you who have joined us for the past few episodes, we're thrilled that you're back. And for anyone who's here for the first time, we hope that we give you some insights, some things that will resonate, and ultimately, some things that are just interesting for you to take away and spend time with your JP Morgan team on.

With that being said, I'm really excited about my guest today, Viral Patel, who's the CEO of Blackstone Private Equity Strategies, a longtime investor, operator, and value creator alongside strategies at Blackstone. Really, really deep history in the space and is going to give us some insights on private markets today.

There is the potential for opportunities not only from a volume perspective, from a diversification perspective, but also to complement portfolios that already exist today. So I'm excited to dive in. We're going to keep it short and sweet. Like I said, five ideas in 25 minutes is our goal. But with that, Viral, thank you so much for joining me. I'm really excited.

Yeah, I'm so happy to be here. Thank you.

You

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Viral sits beside Jasmine at the same table. He has slicked back gray hair and wears a dark suit, a light blue shirt and a navy tie with small light dots. Text: Viral Patel, CEO, BLACKSTONE PRIVATE EQUITY STRATEGIES, BXPE.

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bet. So with that, let's just dive in to idea one. What has been the biggest shock to me is just over the past 20 years, you've seen less publicly traded companies than you did the 20 years prior. And I think what that inherently sort of means is more opportunity in the private market space. Will you bring that to life?

Yeah, of course. So it's interesting. When you think about what you see in the private markets versus the public markets, most people tend to think the opportunity set of companies is public, but it's actually the opposite. So

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Slide: Investment opportunities in private markets far exceed those in the public markets. A two panel chart highlights trends in private and public companies. On the left, a donut chart titled Companies with More than $250M of Revenue Globally shows Private Companies at 86 percent and Public Companies at 14 percent. On the right, a bar chart titled Number of U.S.-Listed Public Companies shows a decline from about 8,000 in 1996 to about 4,000 in 2024, with a -50% label. Fine print: Note: There can be no assurances that any of the trends described herein will continue or will not reverse. Private equity assets are expected to face risks different than those faced by Public Equities, including significantly less liquidity, as Private Equity assets generally do not have liquid markets and greater risk of default and related risk of loss of principal. Represents Blackstone’s view of the current market environment as of the date appearing on this material only. Additionally, investments in private equity are speculative and often include a higher degree of risk.

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if you look at companies that are, say, 250 million more in revenues globally-- so sizable, sizable businesses-- nearly 90% of those companies are actually in the private markets. And it's interesting, as individuals, as investors, we try to diversify our exposure and build diversified portfolios and equities, but we're really only using a portion of the opportunity set if we use public markets.

And that trend has, to your point, really been changing over time. And if you look back in the '90s, you might have had 8,000 public companies, today, 4,000. And you see that for a few reasons. One, I just-- I remember when I was an analyst in banking and I'd go on a road show with a management team or a CEO, and they would talk about wanting to go public. That was like-- that was the thing. In the '90s, you get to ring that bell. That was a wonderful experience.

But today when we are meeting with CEOs and management teams, we don't hear about people saying, I want to go public. What you actually hear about is management teams wanting to build great businesses. And sometimes that's wonderful in the public markets, and sometimes that's wonderful in the private markets. And what we found is that the amount of capital formation that's happened in the private markets is actually allowing these companies to stay private for much, much longer. So that opportunity set, that potential to invest in the broader economy is really there if you're accessing private markets.

And I think too something that you highlighted by bringing to life the numbers is I think oftentimes when people think of private companies, they think mom and pop shops. When you're talking about companies with $100 million, $250 million of EBITDA or more, to your point, these are sizable companies. These are large, really, booming businesses, if you will, that we're frequenting and using every day. One of the things that you said that sort of brings me to idea two, if you will, for today, is just the different types of strategies that may exist.

I think oftentimes with just headlines out there about private markets, I really do think most times people are thinking about growth equity companies. They're thinking about technology. But really, it sort spans the gamut when it comes to sector exposure, geography, exposure, et cetera. I'd love for you to spend a moment on the strategies that exist in private markets, particularly on the equity side.

Yeah.

From a stage perspective, so we can set the stage for everyone.

Yeah.

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Slide: Private equity strategies in focus. A three column comparison chart contrasts Venture Capital, Growth, and Buyout across company stages. A rising line labeled Early stage, Inflection point, and Established moves from Venture Capital to Buyout, increasing in maturity. Rows below show Total Enterprise Value progressing from less than $50M to $50M through $500M to $500M through $1.5B plus, Main Use of Capital shifting from product or service development to go-to-market expansion to ownership and operational improvements, Use of Leverage increasing from none to moderate or high, and Ownership moving from minority to control. Fine print: Note: Not a complete list of attributes. Presented for informational purposes only. The information presented represents what is typically seen for these fund types but variations and/or exceptions do exist. Private equity strategies may materially vary from the characteristics described above. There can be no assurance that any private equity fund will have any or all of the above characteristics.

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So look, I think maybe even starting with what private equity is maybe more broadly. If you think about private equity, what we're doing in private equity is instead of buying stocks on an exchange like the NASDAQ or the New York Stock Exchange, what we're actually doing is taking ownership stakes, sometimes meaningful ownership stakes in companies that are private, that aren't traded. And sometimes that can be in earlier stage companies, like venture backed companies, mid-stage companies like growth, or even late stage companies like buyout.

And so when you think about the opportunity set in private markets, it is really broad. And the three pieces that I just talked about, venture, growth, and buyout, have different characteristics associated with each one of them. So the venture community, think about that typically as being startups. That's Silicon Valley, that's San Francisco based businesses.

Typically those companies are much earlier stage. They tend to have a little bit more risk associated with them, more variability in the outcomes that might come out. And I think about them as really being companies that are taking innovation risk. And you get paid for that risk, potentially, by having potential outsized returns.

When you move to growth companies, growth companies tend to be companies that have moved past that venture stage. You're not taking innovation and technology risk anymore. Now you're really taking scaling risk. Can you take an idea that's gotten into product market fit, that works. And now you say, can I put capital behind this to now scale that business.

And then you move to buyout, which has really gotten to the point where now you're looking at more mature businesses. To your point, $100, $200 million of EBITDA type companies, large businesses, important businesses that have proven their place in the global economy. Those businesses. And what you tend to find is you have a little bit less risk on the right side of the page and more risk on the left side of it.

Sure. And I think, too, when you think about the spectrum of stages and capital formation for these companies, to your point from a risk perspective, with venture capital earlier in formation from a business perspective, sometimes they're sort of getting their footing for their first sort of round of institutional capital, to your point, the risk profile can be asymmetric. And so that might be a smaller piece of a client's portfolio if they're thinking about building private markets.

When you go to the other side of the spectrum and you think about true large cap or middle market buyout strategies, where value creation from an earnings perspective, operations perspective, you're maybe taking on slightly less risk because there are value creation levers you can pull. You're not reliant, I think, on just more market beta, to your point.

Absolutely.

That being said, idea three. I'd love for you to bring to life value creation in particular. You have

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Slide: Private equity firms look to transform businesses by creating value throughout the investment process. Private equity firms look to transform businesses by creating value throughout the investment process. A four column chart titled Managers Seek to outlines stages labeled Acquire, Grow, Enhance, and Exit. Under Acquire, bullet points list identifying a target company, developing an investment thesis, conducting due diligence, creating a value creation plan, and purchasing at an attractive price. Grow includes using proprietary data to enter new markets, develop new products, create portfolio synergies, and optimize pricing, while Enhance covers board and management improvements, product and brand strategy, technology, operations, customer loyalty, and risk controls. Exit lists IPO, sale to a strategic or financial buyer, recapitalization, and engagement in public affairs and government relations. Fine print: There can be no assurance that any fund or investment will achieve its objectives or avoid substantial losses. Not a complete list of factors. Not all factors and strategies will be considered for each investment and other strategies and factors may be considered.

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a long history of investing and seeing the private market space really in depth. I'd love for you to bring to life, what are the actual levers you can pull in private markets that even open up the door for potential outperformance above that of public markets?

Yeah. It's a great question, and it gets to the core of what private equity is actually doing. When you compare it to public markets where you might buy a stock, it's a really passive investment. You buy a stock, you watch what happens. A management team is executing. There is some independent board that is responsible for overseeing that management team, but you really are a passive participant in that company's journey. Private equity is the opposite of that. What we look to do is to be very active participants in our company.

So let's take the buyout side of the equation that you talked about. A little bit more stable where you can actually drive more on the value creation side. So private equity investors, more broadly, take that active role by a few things. One, for the most part, we're taking majority control of our businesses. So we actually get to populate the board with our individuals and advisors. And that board can then set the strategy for the company. So when you think about the value creation that happens, it happens in three areas.

It happens in buying well, building well, and then actually being able to sell well. And you get different components in those areas. So on the buying well side of things, it's really starting with what sectors of the economy do we want to spend time in, sourcing deals on a proprietary basis, like working with founders, working with family-led businesses, where we can find unique opportunities to express a view that we have on the economy. And so we can tend to find a way to buy assets and buy companies in sectors that we think are going to be long term growing.

So there's a sector selection component to the value creation. Then when we actually get in there and start investing in the businesses, what you find is most private equity firms have built out extensive operating teams that provide resources to our companies. And so you'll see things like talent management, organizational design, helping companies with their supply chains, helping companies expand strategically into new markets, helping companies with capital to make strategic acquisitions to drive the value of their businesses.

And these aren't always the most exciting things to talk about or to actually drive change, but they are very meaningful from an earnings perspective, from expanding margins, et cetera, in companies. And I think too-- and sorry to interrupt you, but I think what you're describing is really interesting in that oftentimes, if it's a privately held business, they don't necessarily always have the institutional resources that a private manager or sponsor can bring to the table.

So I'd love for you to even just spend another moment on-- you said talent management, or from a management perspective or helping achieve geographic growth, so on and so forth. What are some of those things that translate to an earnings perspective in the buyout space, particularly of a larger company? I would think it would be more difficult to drive value in a company that's already at scale that is driving earnings.

It's interesting. What we actually find is that by bringing a more rigorous, institutional, ROI focused approach to investing, you can drive meaningful value and margin improvement across businesses in a variety of different areas. So we'll bring scale benefits to health care costs to help our companies actually plan better on the health care side of things. We will bring esourcing opportunities to company supply chains so we can run the supply chain much, much more easily and more efficiently, frankly, than they had historically.

So bringing best practices from other sectors, from areas of the economy that we have seen work to a company, and putting that all together in a very compressed time frame allows us to drive a significant amount of value. One of the things that we're seeing that's really interesting right now is just the ability to implement AI initiatives, frankly, into a lot of our companies, and we're seeing that drive both value on the revenue side and frankly, on the margin side. So bringing these sorts of resources are the sorts of things that we can do.

As an example, you'll have private equity firms like ourselves that have data scientists at our firms. We will bring those data scientists and offer them up as resources to our companies. Many times, those companies can't hire software engineers and data scientists themselves, but we can bring those resources to them. Even large companies, frankly, have a hard time getting those scarce resources, right?

Well, it's funny. I was wondering how long we were going to get into the conversation before one of us said AI. But you can't have a conversation today. I think about private market investing without talking about AI, and definitely not a conversation about public markets without AI. It's just transforming our workplace, our home lives, our personal lives, so on and so forth. It's sort of touching every spectrum of our economy.

What I think is interesting, to your point, is you're sort of describing this idea that we can unlock growth, unlock value through operational improvements. I think oftentimes clients have asked, how is the outperformance or potential for outperformance possible in private markets versus that of public equities? You've described a lot of the value creation that takes place as the hand to hand combat, if you will, but also hand to hand combat at scale. If we press forward to idea four, I think what's really exciting to get to talk about is while in private markets you inherently have the illiquidity-- albeit we have semi-liquid structures today that didn't exist 20 years ago.

You, again, are relying on active management. You're handing over capital and hoping that the sponsor is doing all the things that they say they're going to do. But there is structural things at play, all of the value creation you just described, that help drive the historical outperformance that you've seen in markets. I'd love for you to spend a moment on just how investors should think about, One, Again, some of the risks we've laid out. But then two, outlaying the historical outperformance that we've seen in private markets more specifically.

Yeah.

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Slide: Private equity has returned 13%+ historically, outperforming public equities over long-term trailing periods. A grouped bar chart compares Cambridge Private Equity labeled Private Equity with MSCI World labeled Public Equity across 5 year, 10 year, 15 year, 20 year, and 25 year periods. The dark blue private equity bars range from 13 to 14 percent across all periods, while the teal public equity bars range from 7 to 10 percent and decline over longer horizons. A box at right reads +400bps average PE outperformance over long term trailing periods. Fine print: Note: Past performance does not predict future returns. These returns do not reflect the actual or expected returns of any Blackstone portfolio strategy and are not a guarantee of future results. Nothing herein is intended as a prediction of how any financial markets, fund, or underlying manager will perform in the future. The information herein is provided for educational purposes only and should not be construed as financial or investment advice, nor should any information in this document be relied upon when making an investment decision. There can be no assurance that any private equity fund will achieve its objectives or avoid substantial losses. See “Important Disclosure Information,” including “Index Comparison,” “Index Definitions,” and “Opinions.” “Private Equity” is represented by the pooled returns of the Cambridge Private Equity Index, which includes growth equity and buyout funds. “Public Equity” is represented by the Cambridge Modified Public Market Equivalent (“PME”) analysis and the MSCI World Index. Comparisons of private equity performance to public equity performance is therefore based on the difference in performance between Cambridge Global Private Equity Index IRR and a hypothetical PME return on the MSCI World Index. Returns shown above have been compounded quarterly based on performance data provided by Cambridge Associates as of March 31, 2025, and provided net of management fees, expenses, and performance fees that take the form of carried interest, annualized by Blackstone. The Cambridge Private Equity Index is not representative of all Blackstone strategies, some of which may have different return and volatility profiles historically than those presented above. Blackstone funds are not in any way managed by reference to the Cambridge Private Equity Index. Blackstone’s investments and private equity assets are expected to face risks different than those faced by Public Equities, including significantly less liquidity, as private equity assets generally do not have liquid markets and have greater risk of default and related risk of loss of principal. See Endnotes for further information.

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So I think one of the things that we find more broadly, is the idea of active management in that value creation can drive outperformance. And if you look historically over long period of times, 5 years, 10 years, 15, 20, even 25 years, what you found is that the asset class in private equity has historically delivered outsized returns relative to public markets. So on average, call it 400 basis points of outperformance.

And a lot of that outperformance is coming from the points that we talked about. Really maniacally focusing on ROI decisions at every single step of the way, not thinking necessarily about the next quarter's earnings, but about thinking about building long term value. And that by having that mindset, you do deliver this excess return over time, at least historically.

The other thing that you find is that the asset class has tended to be able to deliver strong returns in a variety of different market environments. So if you look at low interest rate environments or high interest rate environments, you see the asset class continuing to perform. Frankly, one of the things that we've found, if you look at historical data, is that in periods of slightly higher interest rates, you actually see a little bit more outperformance.

And part of the reason for that is if you think about a low interest rate environment-- take the pre-COVID years where we were-- or post-COVID where we were 0% rates for a little bit of time. 0% rates have this impact of reducing the impact of a capital allocation decision. Because in theory, capital is free, and so the decision making actually matters a little bit less. But when you get into an environment where you have higher rates, all of a sudden, you move to a world where that decision is going to have a meaningful impact on the performance of the company.

So what matters in terms of driving alpha is managers' boards that are very, very focused on that capital allocation. And private equity as an industry has built a lot of success in being very, very focused on that decision. That's what's driving the return over time.

And that's actually where I was going to have you go next. Because while historical performance is great to look at, and it's nice that we all have the context in which we're working with, it's not always a prediction of what's to come. Manager selection is incredibly important in private markets, where there are elevated risk because you don't have the day to day liquidity of public equities.

Talk to us a little bit about when you think about stepping into private markets, working with a sponsor, again, on the active management side, the pivotal points around manager selection and just how you think about the private equity space from what's actually driving operational improvement.

Yeah. So it's a really good point, because I mentioned average outperformance. If you actually look at the dispersion--

Average meaning sort of median historical.

Median historical returns. And if you look at the dispersion of those returns, to your point, in private equity, they actually can be pretty meaningful, to your point about the risks both on the downside and the upside. And so the manager selection, to your point, is a critical component of being able to generate the returns that you are looking for. So when folks are looking at managers, what we tend to think about are the history of those managers, how--

Strong track record?

Strong track record to actually prove a repeatable ability to do things. Two, breadth of strategies and approach that they've taken. Tenure of the individuals that are doing the investing and making the capital allocation decisions. All of those things become very critical. But then importantly, how are they actually providing the value add resources? Are they relying on third party consultants, which is one approach to take? Do they have in-house experts that they can go drive performance around?

Really looking at historical examples of companies that they've done. What transformation have they gotten out of, and then how have they exited. That's another really big piece. Managers that-- there are certain managers that exit into-- are over-reliant on just one area. That can be more risky. Managers that think about buying companies that have the ability to go public or get acquired by a strategic or get the ability to get acquired by another--

Multiple avenues to create liquidity.

Exactly. If you're not single threaded to that exit, right? So what is the strategy that the actual manager has? And all of these things are things that you have to evaluate. But ultimately, it comes down to the people in the seats and the processes that they have put into place for long periods of time to make sure that they're repeatable.

You bet. And I think we have spent a lot of time at JP Morgan, again, on manager selection, due diligence, and research across the space, just given some of the embedded risk in private equity just given, again, sort of illiquidity, type of structure, et cetera. But I think ultimately what you're describing is you want to be focused on working with partners and managers where they're not overly reliant on leverage, not overly reliant on the capital market experience, and are really focused on growing earnings and driving value. All of what you described, so that was super helpful.

If

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Slide: Less than 3% of individual portfolios are allocated to PE. Individual investor access to private equity has historically been limited. A bar chart titled Representative Private Equity Allocations compares allocations across investor types. U.S. Family Offices show the highest allocation at 27 percent, followed by U.S. Endowments at 21 percent and U.S. Pensions at 14 percent, while Individual Investors allocate less than 3 percent. Fine print: Note: There can be no assurance that any fund or investment will achieve its objectives or avoid substantial losses, or that alternative investments will generate higher yields than other investments. Past performance does not predict future returns.

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we press forward to idea five, I think one of the things that increasingly we see across the marketplace is just product development and innovation in private markets today. Historically, there's only been the drawdown structure, if you will, the traditional private equity structure of a five year investment period, a five year harvest, typically one, two, or three year extensions. And we've always said, if you're investing in private equity, you're sort of getting married to that manager, if you will. Decade long sort of exposure.

And while I think in private markets, as an investor you benefit from staying invested over cycles, today we have semi-liquid vehicles. We have these perpetual or evergreen access points. And it's really changed the marketplace for private wealth and families who want to get invested in the space. I'd love for you to talk about historically institutions and what they've done in private markets, and then how you seen the industry evolve.

Yeah. So if you think about a lot of the things that we talked about today, in terms of some of the benefits and risks that you can have from adding private equity into your portfolio, we talked a little bit about the diversification benefits that it can provide to the portfolio by diversifying out of public markets and into private. We talked about the potential for outperformance on returns, at least based on historical numbers. We talked about the value creation levers that will come around.

And when you look at the large institutional investors, they have looked at those benefits and historically decided that they want to allocate a portion of their portfolios into the private markets. And when you look at US pension plans, when you look at sovereign wealth funds, when you look at family offices, they can all be 20% plus allocated into the asset class. And it's for the reasons that we all just talked about.

Now, what's interesting is when you look at individual investors, individual investors have a fraction of that invested into the asset class for really the reason that you said. These drawdown structures historically were created for our institutions, right? Not too many of us can have money locked up necessarily for 10 years. We have bills to pay, tuition to pay for, kids, cars, whatever.

Yeah. The needs and priorities of two-legged individuals can look very different than that of institutions. They often do.

100%. And so it makes it challenging then to sit there and say, hey, I'm going to lock my money up for the 10 years, plus a couple of extensions that you said, because you don't know how much liquidity that you're going to need in life. And so what we have found is the institutions, because of the benefits that we talked about, or at least the potential benefits, have allocated more, and individuals have held back a little bit. And what has changed, I'd say, in the past few years, this innovation in structures, are these semiliquid structures that have entered into the market.

So those structures are now giving individual investors the ability to access the same deal flow and asset class risk, but access it in a way that's more suitable for-- potentially more suitable for an individual investor. Immediate access through monthly subscriptions, periodic liquidity, depending on how the structures are set up with caps. But that simple change is allowing individual investors to now make a decision to say, hey, if I want more access to this asset class, how much more can I take?

Because sure, it's not liquid the way public stocks are, but it's not as illiquid as drawdown structures. So you're somewhere in between on that, and certainly more close to the liquid side than the illiquid side. So it's allowing people to have this conversation of, OK, well, how much equity exposure would I like in my portfolio? And then, how much of that do I want public and how much of that do I want private? That's a fundamentally different conversation than any of us could have had maybe five years ago.

You bet. And while it's definitely an individual or personal sort of allocation and decisions to be making, I think one of the things that's helpful, again, is just the access, to be able to have the choice. One of the things that I always find interesting is-- and we talked about this in a prior episode, is just if you were to walk down the street and ask someone, is SpaceX private or public? They'd very likely say public. It's a company that's reached scale and size, a household name at this point, but it's still, at this moment, sort of a privately held company.

When we talk about getting access to private markets, oftentimes it's companies today, to your earlier point, that have stayed private longer. We know them. These are household names, a lot of whom you've worked with and on from an investing perspective historically. I think this is an opportunity to just explore what private markets offer from volume, potential for diversification, and again, some of that outperformance.

Institutions have already done so, but to your point, structurally, we have a new access point. So I think this is pretty compelling. The thing that I would love for us to end on today is just, in a world where there's a new headline every day and things are changing, what are the things that you're getting excited about? What's ahead?

Well, look, I think you're making a really good point because it is a little bit volatile. There are new headlines every day. And one of the things that I love about what we get to do as an industry, or what I get to do in terms of my job, is really spending time thinking about how we're going to manage through and navigate that volatility?

Which sectors do we want to pick times in? Which management teams do we think we can really execute in these sorts of environments? And frankly, which actions do we want to take in our businesses to help them continue to drive growth and continue to drive value? Those are fun times to actually be sitting on companies and driving value. So that gets me very excited.

And then the other thing that really gets me excited is how early we are in the democratization of this asset class. We talked about the benefits that our institutional investors have had from investing in this asset class. And now with this advent of these new perpetual structures, there's potential for individual investors to get more exposure and potentially the benefit of this as well, so it's an exciting time. It's an early time, but an exciting time for our industry.

You bet. I think you just made the case for active management. I want to thank everyone for hopping on. This was another great, I think, episode just around private markets in general. We want to bring you the latest insights across the asset class. We'd love for you to spend time with your JP Morgan team to the extent this was interesting, or again, we said something that hopefully resonated. But we'll catch you guys next month for another episode of Alternatives Access. Thank you for spending your time with us this morning.

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Logo: J.P. Moran. IMPORTANT INFORMATION. An investment in alternative investment strategies involves substantial risks, and potential investors should clearly understand the risks involved. Investing in alternative investment strategies is speculative, not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment, which can include: loss of all or a substantial portion of the investment due to leveraging, short selling or other speculative investment practices; lack of liquidity in that there may be no secondary market for the fund and none expected to develop; volatility of returns; restrictions on transferring interests in the fund; absence of information regarding valuations and pricing; delays in tax reporting; less regulation and higher fees than mutual funds; and advisor risk. This communication is provided for information purposes only and therefore does not constitute an offer or a solicitation of an offer of shares or investment services. Certain investment opportunities may not be available in all jurisdictions, may not be suitable for all investors and may require the signature of certain additional documentation before they may be offered. Certain opinions, estimates, investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice. This material should not be regarded as research or as a J.P. Morgan research report. Investors may get back less than they invested. Past performance is not a reliable indicator of future results. Please read all Important Information. To the extent that this material relates to investment activities, it is directed solely at persons to whom it may be lawfully directed, as provided for under section 238 of the FSMA, the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemption) Order 2001, as amended from time to time, and Chapter 4 of the Financial Conduct Authority’s Conduct of Business Sourcebook. Any investment services and products will only be available to, or engaged in with, such persons, and no other person should rely or act upon information contained in this communication. Some of the products and/or services mentioned may not be available in all jurisdictions.

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Thank you for joining us. Prior to making financial or investment decisions, you should speak with a qualified professional in your JP Morgan team. This

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KEY RISKS OF INVESTING IN ALTERNATIVES. Additional risks. There may be additional risks inherent in the underlying investments within funds. Currency risks and non United States investments. Investments may be denominated in non U.S. currencies. Accordingly, changes in currency exchange rates costs of conversion and exchange control regulations may adversely affect the dollar value of investments. Dependence on manager. Performance is more dependent on manager specific skills rather than broad exposure to a particular market. Event risk. Given certain funds’ niche specialization for example in an industry or a region market dislocations can affect some strategies more adversely than others. Financial services industry risk factors. Financial services institutions have asset and liability structures that are essentially monetary in nature and are directly affected by many factors including domestic and international economic and political conditions broad trends in business and finance legislation and regulation affecting the national and international business and financial communities monetary and fiscal policies interest rates inflation currency values market conditions the availability and cost of short term or long term funding and capital the credit capacity or perceived creditworthiness of customers and counterparties and the volatility of trading markets. Financial services institutions operate in a highly regulated environment and are subject to extensive legal and regulatory restrictions and limitations and to supervision examination and enforcement by regulatory authorities. Failure to comply with any of these laws rules or regulations some of which are subject to interpretation and may be subject to change could result in a variety of adverse consequences including civil penalties fines suspension or expulsion and termination of deposit insurance which may have material adverse effects.

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General / Loss of capital. An investment in private equity funds involves a high degree of risk. There can be no assurance that (i) a private equity fund will be able to choose make and realize investments in any particular company or portfolio of companies (ii) the private equity fund will be able to generate returns for its investors or that the returns will be commensurate with the risks of investing in the type of companies and transactions that constitute the fund’s investment strategy or (iii) an investor will receive any distributions from the private equity fund. Accordingly an investment in a private equity fund should only be considered by persons who can afford a loss of their entire investment due to its high degree of risk. Investors in the private equity fund could lose up to the full amount of their invested capital. The private equity fund’s fees and expenses may offset the private equity fund’s profits. Past performance is not indicative of future results. J.P. Morgan’s role. J.P. Morgan generally acts as a placement agent to the funds. The investment managers or general partners (or the equivalent) may pay or cause the funds to pay J.P. Morgan an initial fee and or an ongoing servicing fee in connection with its services. In addition where J.P. Morgan acts as placement agent an origination fee of up to 2 percent will be paid by investors in the funds including those investing through a conduit vehicle and in the Vintage Funds to J.P. Morgan at the closing and will be in addition to and not in reduction of capital commitments to the applicable fund. The origination fee is in addition to fees charged by a fund. J.P. Morgan also provides investment advice and or administrative functions for certain private investment funds including the Vintage funds and funds serving as conduit vehicles investing in the funds. J.P. Morgan receives a fee for providing these services in some cases including with respect to the Vintage Funds. Lack of information. The industry is largely unregistered and loosely regulated with little or no public market coverage. Investors are reliant on the manager for the availability quality and quantity of information. Information regarding investment strategies and performance may not be readily available to investors. Leverage. The capital structures of many portfolio companies typically include substantial leverage. In addition investments may be consummated through the use of significant leverage. Leveraged capital structures and the use of leverage in financing investments increase the exposure of a company to adverse economic factors such as rising interest rates downturns in the economy or deteriorations in the condition of the company or its industry and make the company more sensitive to declines in revenues and to increases in expenses.

Limited liquidity for private equity. Investments in private equity funds are intended for long term investors who have the financial ability and willingness to accept the risks associated with making speculative and primarily illiquid investments. Interests in the private equity funds are generally not redeemable. An investor in such a fund may not freely transfer assign or sell any interest without the prior written consent of the fund manager. An investor may not save in particular circumstances withdraw from a private equity fund. Interests in private equity funds will not be registered under the U.S. Securities Act of 1933 as amended or any other securities laws in any jurisdiction. There is no liquid market for such interests and none is expected to develop. Consequently a commitment may be difficult to sell or realize. Limited liquidity generally. Interests are not publicly listed or traded on an exchange or automated quotation system. There is not a secondary market for interests and as a result invested capital is less accessible than that of traditional asset classes. Also withdrawals and transfers are generally restricted. Potential conflicts of interest. Investors should be aware that there will be occasions when a private equity fund’s general partner and its officers and affiliates may encounter potential conflicts of interest in connection with the fund. Fund professionals may work on other matters and therefore conflicts may arise in the allocation of management resources. The payment of carried interest to the general partner may create an incentive for the general partner to cause the private equity fund to make riskier or more speculative investments than it would in the absence of such incentive.

Risks associated with infrastructure investments generally. An infrastructure investment is subject to certain risks associated with the ownership of infrastructure and infrastructure related assets in general including the burdens of ownership of infrastructure assets local national and international economic conditions the supply and demand for services from and access to infrastructure the financial condition of users and suppliers of infrastructure assets changes in interest rates and the availability of funds which may render the purchase sale or refinancing of infrastructure assets difficult or impracticable changes in environmental laws and regulations and planning laws and other governmental rules environmental claims arising in respect of infrastructure assets acquired with undisclosed or unknown environmental problems or as to which adequate reserves have been established changes in the price of energy raw materials and labor changes in fiscal and monetary policies negative developments in the economy that depress travel uninsured casualties force majeure acts terrorist events underinsured or uninsurable losses sovereign and sub sovereign risks contract counterparty default risk. Risks of certain investments. The securities of portfolio companies and the ability of such companies to pay debts could be adversely affected by interest rate movements changes in the general economic or political climate or the economic factors affecting a particular industry changes in tax law or specific developments within such companies. The securities in which a private equity fund will invest generally will be among the most junior in the portfolio company’s capital structure and thus may be subject to the greatest risk of loss. Most of a private equity fund’s investments will not have a readily available public market and disposition of such investments may require a lengthy time period or may result in distributions in kind to investors. A private equity fund’s manager generally has a limited ability to extend the term of the fund therefore the fund may have to sell distribute or otherwise dispose of investments at a disadvantageous time as a result of dissolution. Speculation. Alternative investments often employ leverage sometimes at significant levels to enhance potential returns. Investment techniques may include the use of derivative instruments such as futures options and short sales which amplify the possibilities for both profits and losses and may add volatility to the alternative investment fund’s performance. Taxation considerations. An investment in a private equity fund or hedge fund may involve complex tax considerations which may differ for each investor. Each investor is advised to consult its own tax advisers. Changes in applicable tax laws could affect perhaps adversely the tax consequences of an investment.

Valuation. Because of overall size or concentration in particular markets of positions held by the alternative investment fund or other reasons, the value at which its investments can be liquidated may differ sometimes significantly from the interim valuations arrived at by the alternative investment fund. Private investments are subject to special risks. Investors must meet specific suitability standards before investing. This information does not constitute an offer to sell or a solicitation of an offer to buy. As a reminder, hedge funds or funds of hedge funds, private equity funds, and real estate funds often engage in leveraging and other speculative investment practices that may increase the risk of investment loss. These investments can be highly illiquid, and are not required to provide periodic pricing or valuation information to investors, and may involve complex tax structures and delays in distributing important tax information. These investments 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 such fund. For complete information, please refer to the applicable offering memorandum. Securities are made available through J.P. Morgan Securities LLC, Member FINRA, and SIPC, and its broker dealer affiliates. Hedge funds or funds of hedge funds often engage in leveraging and other speculative investment practices that may increase the risk of investment loss. These investments can be highly illiquid, and are not required to provide periodic pricing or valuation information to investors, and may involve complex tax structures and delays in distributing important tax information.

These investments 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 such fund. For complete information, please refer to the applicable offering memorandum. Liquid alternative funds are registered funds that seek to accomplish the fund’s objectives through non traditional investments and trading strategies. They differ significantly from both hedge funds and traditional mutual funds because they can be redeemed on a daily business day, they are said to be “liquid.” Such funds do not follow the typical buy and hold strategy of a traditional mutual fund and generally hold more nontraditional investments and use more complex trading strategies than a traditional mutual fund, which may make an investment in a liquid alternative fund riskier. Non traditional investments may include but are not limited to private equity, derivatives, commodities, real estate, distressed debt and hedge funds. 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 to 15 year term and will begin to monetize investments after holding them for 4–5 years.

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. Economy, currency, tax and market conditions, including market liquidity, may increase the risks of these investments and may impact performance of the funds. The views and strategies described herein may not be suitable for all investors, and more complete information is available which discusses risks, liquidity, and other matters of interest. 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. Any investment associated with leverage will include additional risks such as implied volatility, exposure to rising interest rates (borrowing costs) and margin calls, which may occur if the underlying investment declines below its minimum lending values. Leverage will have the effect of magnifying losses or gains. Please note that lines of credit are extended at the discretion of J.P. Morgan, and J.P. Morgan has no commitment to extend a line of credit or make loans available under the line of credit. Margin calls may include sale of the asset serving as collateral if the collateral value declines below the amount required to secure the line of credit. In exercising its remedies, J.P. Morgan will not be required to marshal assets or act in accordance with any fiduciary duty it otherwise might have.

Key risks. This material is for information purposes only, and may inform you of certain products and services offered by private banking businesses, part of JPMorgan Chase & Co. ("JPM"). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information. GENERAL RISKS & CONSIDERATIONS 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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Your investments and potential conflicts of interest. Conflicts of interest will arise whenever JPMorgan Chase Bank, N.A. or any of its affiliates (together, "J.P. Morgan") have an actual or perceived economic or other incentive in its management of our clients' portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMorgan Chase Bank, N.A. or an affiliate, such as J.P. Morgan Investment Management Inc.; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client's account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client's portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account. Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward-looking views in order to meet the portfolio's investment objective. 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. The Six Circles Funds are U.S.-registered mutual funds managed by J.P. Morgan and sub-advised by third parties. Although considered internally managed strategies, JPMC does not retain a fee for fund management or other fund services. Legal entity brand and regulatory information. In the United States, bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC. JPMorgan Chase Bank, N.A. and its affiliates (collectively "JPMCB*) offer investment products, which may include bank managed investment accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC ("JPMS"), a member of FINRA and SIPC, Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPM. Products not available in all states.

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Text: PLEASE NOTE: This session is closed to the press. 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. The views and strategies described herein may not be suitable for all clients and are subject to investment risks. Certain opinions, estimates, investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice. This material should not be regarded as research or as a J.P. Morgan research report. The information contained herein should not be relied upon in isolation for the purpose if making an investment decision. More complete information is available, including product profiles, which discuss risks, benefits, liquidity and other matters of interest. For more information on any of the investment ideas and products illustrated herein, please contact your J.P. Morgan representative. Investors may get back less than they invested, and past performance is not a reliable indicator of future results.

This information is provided for informational purposes only. We believe the information contained in this video to be reliable; however we do not represent or warrant its accuracy, reliability, or completeness, or accept any liability for any loss or damage arising out of the ne of any information in this video. The views expressed herein are those of the speakers and may differ from those of other J.P. Morgan employees and are subject to change without notice. Nothing in this video is intended to constitute a representation that any product or strategy is suitable for you. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting legal, tax or other) given by J.P. Morgan and/or its officers or employees to you. You should consult your independent professional advisors concerning accounting legal or tax matters. Contact your J.P. Morgan representative for additional information and guidance concerning your personal investment goals. Investment and Insurance Products: Not a deposit, not FDIC insured, not insured by any federal government agency, no bank guarantee, may lose value.

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Welcome to the JP Morgan webcast. This is intended for informational purposes only. Opinions expressed herein are those of the speakers and may differ from those of other JP Morgan employees and affiliates. Historical information and outlooks are not guarantees of future results.

Any views and strategies described may not be appropriate for all participants and should not be intended as personal investment, financial, or other advice. As a reminder, investment products are not FDIC insured, do not have bank guarantee, and they may lose value. The webcast may now begin.

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An animation shows the JP Morgan signature logo being written in gold.

The speakers sit behind a desk in a studio with a view of New York City out of the large window behind them. Text: Jasmine Green-Hogan, Alternative Investments Specialist, J.P. Morgan Private Bank. Jasmine speaks to us.

(SPEECH)

Hello, everyone, and thank you for joining us. We are back for another iteration of alternatives access, where we're going to give you the latest ideas and insights from JP Morgan's Private Bank but also from some of our favorite partners across the industry. Today, I am joined by Ashley McNeill, head of equity capital markets for Vista Equity, and also co-president of Vista One. Ashley, I'm thrilled to have you today. I think it's going to be a great conversation.

Yeah.

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Text: Ashley MacNeil, Head of Equity Capital Markets and Co-President of VistaOne, Vista Equity Partners.

(SPEECH)

Thank you so much for having me. I'm really looking forward to it.

You bet. So one of the things that we spend a ton of time with our clients on is just the opportunity set in private markets. Companies are staying private longer, and there's a tremendous opportunity set when we think about just accessibility. We talked about it a couple of weeks ago, but almost 90% of companies with $100 million of revenue or more are privately held companies.

So just volume alone makes the private markets interesting. One of the things we wanted to spend today on is just software in particular. We have this conversation around technology more broadly, but software is a really compelling part of the market today, even just from an economy perspective. So in the spirit of five ideas, five charts in 25 minutes with this webcast today, I'd love for you to take us into chart one.

Sure.

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Logo: J.P. Morgan Private Bank. Text: Confidential and Proprietary. Software is one of the largest and fastest growing sectors. A bar graph, titled 2028 Market Cap Estimate (dollar sign T N), has a bar for each of several industries and 0 to 35 dollar sign T N along the y axis. The bars get taller from left to right: Education 0.1, Legal 0.2, Sports 0.8, Agriculture 1.0, Media 1.5, Real Estate 2.3, Hospitality 2.8, Telecom 3.2, Transportation 4.0, Automotive 4.6, Insurance 5.3, Energy 11.2, Retail 12.5, Healthcare 21.5, Financial Services 27.6, Software 33.8. Text: Top Industry Growth Rates (2024 to 2028 CAGR): Retail 11%, Education 12%, Transportation 12%, Legal 12%, Software 13%, Energy 14%, Healthcare 16%.

(SPEECH)

So chart one is software. And why? Why do we care about software? It is one of the fastest and largest growing subsectors of the market, both private and public, that one can invest in. And the rationale for why software, what's so exciting and compelling about software is three things. First and foremost, it's the predictability of the business model.

If you think about the revenue, it's subscription or contractual based. In the public market, over 80% of revenue for top line for software is contractual or reoccurring. And so therefore, it's a very predictable business model. The second reason is it's mission criticality. So enterprise software functions as the backbone of enterprise for corporate America, and it provides mission critical functionality.

So it is something that helps with your taxes, your payroll, getting your product out, your marketing. Basically, it facilitates all sorts of different mission critical aspects of a business. And the final one, which I'm sure we'll touch on later, is it is the nexus for data collection and workflow data, and that's pretty critical as we think about technology and where we're going. You need data, and you need information on those workflows, and software provides that.

And it's interesting too that you bring it up. Obviously, I work at JP Morgan, and I know for a fact that we take, one, our software providers incredibly seriously, but also just our tech spend year over year, getting it right with the partners because they're typically long-term partnerships when we talk about bringing in enterprise software into the company, so I think it's an interesting point.

The second thing I'd say too is oftentimes our clients have thought about software similar to that of infrastructure. And I think in a modern world, software is part of our infrastructure in a more digital world versus that of 20 or even 30 years ago, so I think super interesting. If we press forward one chart, I'd love to take us to idea number two.

And

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Enterprise software is predominately accessible via private markets. 96% of software companies occupying the private markets vs. public markets. A graph, titled Public vs. Private Technology Investment (% of total value) has two bars, one for Public and one for Private, each broken into three sections, IT Services, Software, and Hardware. The public bar is labeled at the bottom, Market Capitalization of IT Constituents. The IT Services section appears between 0 and about 5%, Software is between about 5% and about 37%, and Hardware is between about 37% and 100%. The Software section is labeled, about 4,000 public software companies. The Private bar is labeled at the bottom, P.E. Technology Buyouts. The IT Services bar appears between 0% and about 3%, Software is between about 3% and 60%, and Hardware is between 60% and 100%. The Software section is labeled, about 92,000 Private Software Companies.

(SPEECH)

I think this is super interesting when I think about the accessibility of private markets. One of the things that you and I have talked about over time in a number of our conversations is just that a number of software companies-- 90-plus percent are actually privately held. Talk to us about why that is and then just the opportunity set more broadly.

No. That's right. I mean, it's over 95% of software companies are private. Meaning when you look at the public markets, and you see brand name software companies, that's a very small representation of the actual broader market. And a lot of that comes down to the functionality of the life cycle of software and the ability to deploy software at early, early stages of a company all the way to very, very mature companies.

And so when you think about enterprise software and how much is in the private realm, a lot of that has to do with the fact that this is technology that's up and coming, that's changing quite a bit. And so you are getting access to different life cycle points of that software. And it's really critical as you think about the world we're in, and how fast things are moving and technology is moving that a lot of these companies stay in that private realm because they're in the growth phase of their development, and they're learning how to provide that solution set to their customers.

And so they're likely going to remain in that stage of life in the private market. And we'll only become public when they've reached a certain maturity, which as this slide highlights only a handful do.

And I think too, what's interesting about that is, one, today there are less publicly traded companies than there were 20 years ago. We see that decline. Of course, there are regulatory reasons for that in a number of different things. The growth of private markets, companies being able to continue to be financed in private markets. So talk us through just before we move forward why is that software companies more deeply focused on growth are less likely to go public earlier stage maybe relative to a health care company, where we see companies going public sooner in their life cycle.

I think it's for a variety of reasons. First and foremost is that capital markets are creative, and there is readily accessible capital available in the private markets that at one other point in time couldn't access. And so there the need, the desire to go public is diminished if you're going to raise capital because you can raise capital in the private markets.

The second is because of the pace of change of technology and because of the solutions that you're providing-- you hear a lot of information around CapEx deployment, and the need to pivot the solution set. A lot of that requires being in the private market, being able to deal with your private customers, your private clients, to adapt this technology and change in a readily fashion. That, frankly, being in the public market with the quarterly reporting just does not facilitate.

Implementing some strategies, some go to market things, some new product-- that all takes time. And it's stuff that can be done much more readily in the private market. And then the final thing is I think a lot of the success of software comes down to those three things I talked about. But being mission critical to a company also means the ability to, one, protect that information, collect that information, and report that information. And oftentimes, having exposure to the public markets doesn't necessarily facilitate that relative to remaining private.

That's an interesting point, too. I think we've heard Robert Smith of Vista Equity Partners talk about being able to have the sovereignty and dominion over your data set and that being core to who you're choosing as software partners and what you're embedding into your company infrastructure. And so I think that sort of speaks to that more broadly. You have a long history and background in equity capital markets.

And so I'd love for you to spend a moment on chart three. So if we move forward, I think this is pretty compelling.

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Text: We believe enterprise software companies have seen a valuation reset as growth normalizes and margins expand. A line graph, titled Normalization of public software valuations, has years from 2014 to 2025 along the x axis and numbers from 0 to 20 along the y axis. It has a jagged line, representing All S.a.a.S, beginning at about 6.5 in 2014, peaking at 17.3x in 2021, then ending at 7.0x today. Text: 2014 to 2018, average 6.1x. 2022 to 2025, average 7.2x.

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When we think about the valuation environment, we are coming off of really a dramatic five-year cycle-- 2020 and 2021 we saw, I think, valuations that in a lot of times you could on one end absolutely underwrite from a fundamentals perspective and on the other end not do that.

And we saw a lot of shifts and change over the last-- call it three to five years. Walk us through the valuation environment today for software and why it could be potentially a compelling entry point for clients, who are looking to invest today.

Absolutely. And I think it's actually fascinating to me where software is trading today. Now, I would keep in mind this chart is emblematic of public names. We obviously don't have all of the data for private, but I do think it's a great proxy for software, broadly speaking. And to me, what's so fascinating is we are in this world of complete and utter change in technology.

We are starting to see some leaps and bounds that we had not seen for a 20, 30, 40-year cycle. And software continued to persist along at this very steady, I'd argue, 10-year average valuation. So you're right. We did have this five-year explosion that was a pull through of valuation. It was a lot of things that were meant to take phase in over time that got pulled through.

And we've now returned to a much more normalized valuation pace. And this normalized valuation pace, I think, is pretty phenomenal, given the positioning that software is going to have as this technology gets deployed and the necessity of this application layer, this software layer, to really bring this technology to you, and to me, and to everyone else. And so it's a great place from an entry point, as you think about valuations, because you've got the history of where the valuations have been. And this is very much in line with where software historically traded.

And I think to one of the things that we talk about as a firm and really just thinking about accessibility of private markets has been a change in structure. So historically in private markets, if you wanted to get access to software or any other technology or asset class, your only options were a traditional tenure drawdown strategy, where you're investing over a three to five-year period and then harvesting it over a next three to five-year period.

And so from an entry point standpoint, you could be captive in what vintage year you get trapped in, if you will, from an investing period. I think today our clients have the optionality with semi-liquid and evergreen vehicles, where over time, over a 10-year cycle you have the optionality of just more diversification vintage year, over vintage year, over vintage year.

And so I think for our clients who are thinking about software, who are thinking about AI, who are thinking about infrastructure and the likes, you have two ways to play. And software, I think, is one of those interesting places today. Again, from a valuation standpoint, what we should be thinking about is this a durable or defensive part of the portfolio that we could potentially be adding.

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Text: Modern AI opportunity for enterprise software. Modern AI can accelerate revenue growth and reduce operating costs. Two bar graphs appear, one titled Revenue Impact and one titled Cost impact. The Revenue Impact graph shows Illustrative Revenue at $100, Improved GTM Productivity and plus $5 to 15 above the $100. New Agentic Offerings is above the $5 to 15 above $100, but labeled not sized. And the AI Enabled Revenue is the $100 plus the 5 to 15 dollars. An ascending arrow across the top of the bars is labeled, 5 to 15% plus. The Cost Impact graph shows Illustrative Op Ex at $100, Go to Market 5 to 10 dollars below the $100, Customer support 1 to 5 dollars below the 5 to 10, Research and Development 4 to 10 dollars below the 1 to 5. And AI-enabled Op Ex is a full 75 to 90 dollars. A descending arrow appears above the bars labeled negative 10 to 25%.

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In the spirit of that, chart four-- and this is one of my favorites just in the conversation today. That I'd love for clients to spend a little bit of time on. But it's this idea in a modern world, where we've seen cost come down somewhat materially, and we have a broader outlook on what CapEx spending from the Mag Seven will be for software.

We're seeing AI hit the application layer. And what that means is it's not just the enterprise or corporations who will benefit but also you and I. This world of agentic or assistant outside of just generative AI. So I'd love for you to spend a moment on the modern opportunity set with AI specifically, and then we can't have a conversation without I A is a bubble or not. That was coming. So I'd love for you to spend a moment on is AI going to eat software, or is it going to feed it? And so what the modern opportunity set looks like.

Yeah. No, I agree with you. This is my favorite slide as well. And I think it's predicated on just taking a giant step back. In that we believe that this is a general technology that is going to be used ubiquitously, and you and I are going to get to benefit from it. And the person down the street will get to benefit from it, and corporate America will get to benefit from it. Corporate America to truly benefit from it needs to have a partner, a long-term partner, that they have already embedded within their system help them access this technology.

And that's going to be done through enterprise software, through the application layer. So as you think about the build out and all the hype you've seen around AI, we believe that it's going to happen in phases. Phase one is this semi hardware build out phase. Phase two is this hyperscaler enabler, AI enabler phase, and the final phase, which is where software is the crux of, is this application layer, this AI adopter.

And as you think about software starting to really deploy AI within their ecosystem to then help corporate America, you see cost savings both on the top line growth line, which is outlined on the chart here, as well as the margin efficiency line.

Sure. And just to give everyone an example, top line growth, meaning enhanced productivity, growth of the overall company, and then bottom line truly meaning-- sort of cost efficiencies and savings in dollars.

Yeah. A lot of the rhetoric we've heard has been really focused on that cost impact. It'll make us more efficient. I can use-- why write the paper? You can use ChatGPT to write the paper-- that kind of stuff. We're going to start seeing new products come about. Hey, you were solving this problem using this solution. Now, let me give you this solution and then some. And all of a sudden--

I will say on the cost saving, it's one of those things where sometimes you just want to call a restaurant and have a person pick up the phone when you're trying to make a reservation, instead of it being an AI bot but noted.

But I think this is a great example. So we believe that software is going to start falling into one of, basically, two buckets. It's going to become a tier two economy for software. Tier one will be you have an agent. You're right. You go to make a reservation and an agent. A non-human being takes your order. And guess what? That agent can work 24/7, and it never goes online.

And that's where you get that cost-savings because you're no longer now paying for someone to answer the phone. You've got an agent doing. But then there's also tier two of software, which is the actual solution set they're providing corporate America doesn't need to be agentified. I don't need an actual agent to get smarter each time they do the task. I just need the task completed, and I don't need to use all that GPU and all that CapEx to build that out. I just need that.

But I can use AI to handle my payroll, or I can use AI to do customer service, or I can use AI to make my engineers more efficient so that they're coding faster, and better, and quicker. And so when software starts to really break off into those two things, that's when I think you'll start really seeing, at least in both in the public-- and we're already seeing it in the private-- this additive to both the top line revenue growth. So you're starting to either offer new products because you've become agentified, or you're offering the same product, but you can offer it faster, better, quicker, because you've become more efficient.

And you've talked about a life cycle-- three-pronged life cycle and where we are. What's interesting is where you see dollars going today and where you see investment today. It really is still across all three of those, whether it's the hardware spend down to the application layer. It's fluid, if you will-- not necessarily year by year by year. Talk about what's interesting from an investment perspective of whether it's CapEx. Maybe that's more infrastructure in data centers and power generation to the application layer, where you start to see it hit software.

One of the things we've been talking to our clients about is now a time to do early stage investing, now that it is starting to hit the application layer, or does buyout in being with a core of solution where you can influence management team, influence board decisions. What are your thoughts there more broadly around the stage of investing?

So I really do think you want to be as diversified across all the different life cycles and ecosystems as you can. However, if past technology expansions show us anything, past revolutions show us anything, in order to introduce general technology to the broader population as well as corporate America, it requires some economies of scale.

That's right.

And to get that economies of scale, you're looking for people, companies, investment opportunities that have ecosystems that can leverage off each other. So I think it's less about CapEx spend. I look at CapEx spend, but I also look, like, do they have partnerships? Is there an alignment with people?

Do they have a group of technologists that they are affiliated with that they can leverage that? So I think there's a little bit of that. I also think everything, it's not going to be a straight line up. This is going to have fits and starts and maneuverability, so you want to be within an ecosystem that can help capture some of that fits and starts.

So oh, they learned a lesson in contracting for AI for their agent here. So now, they're going to make sure that that's enforced across the broader organization or the broader investment community. And so making sure that there's a big ecosystem to provide you with that scale so that there is lessons being learned and implementation happening more ubiquitously.

And just your thoughts more broadly. If we Zoom out and look at capital markets more broadly into 2026, what is your take on a reopening? We, obviously, have a changing interest rate environment that makes movement of companies into public markets potentially more interesting at this juncture, but we've also talked about companies staying private longer. What your thoughts more broadly just on the market into 2026?

So statistically, I'm supported in my thesis that I'm fairly bullish for 2026. I know that sounds bizarre after three years of what will likely be record returns. Statistically, it's still supported that the fourth year is actually OK, although we'll see. But there's three things that I'm really excited about for 26. First is profits and profitability. If you look at both public and private companies, and you look at their earnings capabilities and their earning power for 26, it is quite substantial.

You're starting to see expectations being met with actual real profits. So I'm very excited about the health of corporate America going into 2026. I also think that from-- you mentioned the Fed, but from a policy standpoint, things are setting up to be more tailwinds than headwinds. And so again, I feel like that is setting up for a very positive market.

And then final is positioning. If you look at the markets, and you see how active retail investors have been as well as institutional investors-- you've seen how much money has flown into the equity markets. I feel like we are in a great position for both new issues-- so the health of IPOs and follow-ons for those to be quite successful in '26, as well as the positioning of both institutional and retail accounts. And so it feels like I don't want to say the stars are aligning because that may be too optimistic, but it feels like '26 could be a really good year.

So if we pull that thesis and we move it back into private markets-- because again, my compliance partners will be upset if I don't guide to past performance is not always a future indicator on a go forward. But I think what's interesting is we're also of, I think, primed for an interesting opportunity in private markets. If you pull that thesis through of more favorable environment in public markets, what does that mean for private market investing? And then maybe we pull in software very specifically right around what the entry point might look like.

So from a private positioning standpoint, I think all three of those characteristics play in. I think it's very similar. I think that you're in an environment where it feels like deals are going to get done and people want to do deals, and that's very healthy. You're also at a time period, where people want to deploy capital for innovation and for these modern AI opportunities, for this margin efficiency.

So from a private perspective, I think all three of those still apply. And I think, again, to your point, past performance doesn't necessarily present future performance. But all of those themes in years where we've had all of those themes at play, they've been very good years, both for the public and private markets.

And then for software in particular-- I mean, we've talked about the waves. We've talked about money being deployed. We saw the valuations of public markets. I think that this is just such a unique moment in time for software and for the application layer.

I think we are at the early phases of application valuation, creation, really being deployed. And as I mentioned earlier, it's not going to be a straight line. It's going to be fits and starts, but I do think '26 is going to be the year that you start seeing real proof points. You start seeing real data. You start seeing metrics. Maybe it'll be revenue per head, or maybe it will be retention rates. But you're going to see real metrics show you how AI is positively impacting these corporations.

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Text: Agentic AI presents massive opportunity to accelerate growth by shifting mix of labor and IT expense. Agents address larger markets than traditional software. A bar graph shows two bars. The first bar, the large bottom section is labeled, US Enterprise Spend, % of GDP about 20%. The thin section at the top is labeled, about 300 to 350 billion dollars. The second bar has a bottom section of the same height as the first, but labeled US White Collar Payroll, % of GDP about 20%. The second bar has a tall top section, taller than the two bottom sections, labeled about 6,000 billion dollars.

(SPEECH)

And I think even more so that takes us perfectly to chart five, where I'd love for everyone to just spend a moment to absorb this. And maybe you talk us through it. But when we think about the shift, the mix, whether it's labor costs, whether it's IT expense-- bringing it into, again, a healthy corporate America but also having this interesting opportunity to invest on the private side, you just see an acceleration of growth that again, I think, presents a really compelling opportunity.

Completely. Spot on. When you talk to enterprise software CEOs and CFOs, and you ask them what are you most focused on bringing to your clients in 2026? It's really predicated around this efficiency layer. That I am the mission. I provide a mission critical service to my customers.

Is there a way I can do it in a gentrified fashion, where I have instead of a human being, who can be unreliable, who needs to sleep, who needs to eat, who needs to just not be there 24/7 for you actually be there for you 24/7? And can I then redeploy that human to create another solution set, or another product, or another something that then further services whatever the mission critical problem is that I'm addressing? So I think that you're going to start seeing this play out. I mentioned revenue per head. It's not because corporations want to run with less people employed, but they want the employees they have to be more efficient.

And happier. I think there's this idea that if I can remove-- to your earlier point-- just some of the business as usual, that BAU work, where I'm not actually being that productive, or using my brain, or my strategic, or creative skills that I think I may have, we can identify and bring in agents or assistants, if you will, through this software. And again, just all have happier Monday through Fridays, which I think is a pretty compelling point.

The last thing I would love for you to touch on is, what are you most excited about? Is there a vertical within software? Because now we think about software as a horizontal, right, not a vertical. It's not just one sector. It spans everything from insurance and financial services and beyond. I think one of the things we've seen most predominantly is accounting has been transformed by software over the past decade-- more to come. Enterprise software more broadly touches every aspect-- automation, manufacturing, everything. So talk to us a little bit about what you might be most excited about.

Well, I mean, I love all my children equally. So to be clear, I think every sector has really exciting aspects to it. I think for 2026 what I'm most excited about, both on the private and the public side for software, is this layer, which we call the infrastructure layer, but it's the layer that is helping bring all these workflows and this data to the cloud, which is what you need if you're going to deploy AI or create an agent.

You need all of that information readily accessible for your large language model to actually deploy. So it's an area that I'm watching acutely because I think it's going to be the first mover advantage or first leader advantage as far as showing how adaptable this technology is for broad spectrums across all the different sectors.

And then, obviously, cybersecurity is a really easy one because as you think about AI and tech becoming more pervasive in our everyday lives, the surface area that you need to defend against or prevent attacks from, obviously, grows. And so that's an area that's going to need to evolve faster and quicker and will continue to always be in high demand. So those two sectors are definitely sectors that I am watching as the leading indicators of adaptable-- of this technology being adopted but also the success of that adoption.

Awesome. Well, we heard it here first. Ashley, thank you so much for your time today. This was great.

Great. Thank you.

For everyone who joined us, we appreciate your time. Hopefully, we left you all a little bit smarter, or at least with something interesting to talk about in your next conversation. We're excited about the opportunity set in private markets on a go forward, and we're wishing everyone a happy New Year. We'll be back next month with more conversation, just more broadly, across the private equity spectrum, compelling sector exposure across health care, industrials, manufacturing, technology, so on and so forth. So more to come, but thanks to all for joining us.

Thank you for joining us. Prior to making financial or investment decisions, you should speak with a qualified professional in your JP Morgan team. This concludes today's webcast. You may now disconnect.

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Logo: JP Morgan. Text: PLEASE NOTE: This session is closed to the press. 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. The views and strategies described herein may not be suitable for all clients and are subject to investment risks. Certain opinions, estimates, investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice. This material should not be regarded as research or as a J.P. Morgan research report. The information contained herein should not be relied upon in isolation for the purpose of making an investment decision. More complete information is available, including product profiles, which discuss risks, benefits, liquidity and other matters of interest. For more information on any of the investment ideas and products illustrated herein, please contact your J.P. Morgan representative. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. This information is provided for informational purposes only. We believe the information contained in this video to be reliable; however we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of the use of any information in this video. The views expressed herein are those of the speakers and may differ from those of other J.P. Morgan employees and are subject to change without notice. Nothing in this video is intended to constitute a representation that any product or strategy is suitable for you. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees to you. You should consult your independent professional advisors concerning accounting, legal or tax matters. Contact your J.P. Morgan representative for additional information and guidance concerning your personal investment goals. INVESTMENT AND INSURANCE PRODUCTS, NOT A DEPOSIT, NOT FDIC INSURED, NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY, NO BANK GUARANTEE, MAY LOSE VALUE.

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This session is closed to the press. Welcome to the JPMorgan webcast. This is intended for informational purposes only. Opinions expressed herein are those of the speakers and may differ from those of other JPMorgan employees and affiliates. Historical information and outlooks are not guarantees of future results. Any views and strategies described may not be appropriate for all participants and should not be intended as personal, investment, financial, or other advice. As a reminder, investment products are not FDIC insured, do not have bank guarantee, and they may lose value. The webcast may now begin.

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A shimmering strip of gold-plated handwriting swirls elegantly across a dark surface. It spells JP Morgan. Text: Ideas and insights.

A woman with long dark hair wears a white turtleneck and a textured light jacket, and she sits at a table with a glass of water. A city skyline fills the background. Text: Jasmine Green-Hogan, ALTERNATIVE INVESTMENTS SPECIALIST, J.P. MORGAN PRIVATE BANK.

(SPEECH)

Hello, everyone. And thank you for joining us today. We're here for alternatives access, where we're going to spend some time on themes across private markets and investable opportunities that we think are interesting. My goal is to give you five charts, five ideas, and to do it in 25 minutes. And I have the pleasure of being joined by Kristin Kallergis Rowland, who is the global head of alternatives for asset and wealth management here at JPMorgan, one of my favorite people to work with, but also someone who's going to leave us all smarter when we wrap today. So, Kristin, thanks for joining us.

Thanks for having me.

I

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Kristin has long dark brown hair and wears a black outfit while sitting at a desk with Jasmine. The city skyline stretches across the windows behind them and the desk displays the J.P. Morgan logo.

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think it's going to be a lot of fun.

Let's see.

OK. So the goal really is just that we take clients through private markets today. The entire industry has evolved. Private markets looks a lot different than it did a decade ago or even five years ago because of accessibility. And as clients think about their evolving portfolios, we want private markets to be part of the conversation. When we just think about the world today as it is, why private markets?

It's

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Text: Kristin Kallergis Rowland, GLOBAL HEAD OF ALTERNATIVE INVESTMENTS, J.P. MORGAN PRIVATE BANK.

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a good question. We get it often from our clients. Because when we think about investing in portfolios, we debate. Should we access something in the private versus the public markets? The reality is-- and you'll see some of the numbers just right in front of us-- 87% of companies that have more than $100 million of revenue are only accessible via the private markets. When

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Slide: Private markets: the opportunity set beyond public markets. Text: Private equity provides access to high growth sectors and innovative companies offering clients unique opportunities that are increasingly absent from public markets. A tall stacked bar chart compares public and private U.S. companies with more than 100M dollars in revenue, and an orange block states that 87 percent of these companies are private while green orange and blue blocks label revenue ranges for public and private firms. A donut chart labeled Magnificent 7 as share of S&P 500 highlights a 37 percent slice next to logos for Apple Meta Tesla Amazon Google Nvidia and Microsoft, and below it a declining bar chart tracks the number of U.S. listed companies from 1993 to 2021 with a downward arrow labeled 43 percent. Text: Source S&P Capital IQ Note For companies with last 12 month revenue greater than 100M by count. Source KKR Pathstone World Bank Wolfe Research FactSet Bloomberg As of September 15 2025.

(SPEECH)

you think about the shift that's happening within artificial intelligence, and now that we've built a lot of these large language models and a lot of the infrastructure behind it that I know we'll talk about, accessing software as this next leg of agentic AI-- 97% of software companies are private.

So part of it is definitely access. The other part that's super interesting is that we always say, an alternative is something alternative to what? And if the S&P 500 is a core part of a lot of clients' portfolios and there's concern about the concentration the S&P now has between things like the Mag Seven and other assets, looking alternatively somewhere else, like the private markets, has been interesting to a lot of our clients, both institutionally and individually.

And then I also just think there's a lot of reasons why private companies choose to stay private longer and make a lot of those strategic changes before they become a public company that has to meet quarterly earnings and so forth. So I think it's just that there's this huge opportunity set beyond just public markets that we want to have access to. And we do think that if you are going to access this market, you need to be mindful of which managers you're partnering with, which themes and diversification you're providing that portfolio. I know we'll get into that today. But it's really just the overall market opportunity is just so much bigger in the private markets that we can't not think about accessing it.

That's right. And I think part of the conversation over the past-- call it half a decade-- has been about the evolving opportunity set. And to your point around volume-- the volume of opportunity is tremendous. I think, really, that takes us into chart one or idea one that I want everyone to spend time on today. And

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Slide: Private equity: Companies are staying private longer. A horizontal bar chart displays last round valuations in billions of dollars for large private companies, beginning with a tall dark blue bar for SpaceX near 420 billion dollars, followed by shorter bars for ByteDance and OpenAI near the high 200s. Anthropic sits near the mid 100s with a label reading 62 and Stripe Revolut Databricks and XAI line up next with valuation labels 120 162 and 166. Additional narrower bars extend across the chart for Shein Waymo Copart Checkout.com Figure AI Safe Superintelligence Epic Games Anduril Industries Genesys Canva Ramp and Citadel Securities, each with small boxed numbers above them that indicate a comparative S&P 500 company ranking. A note in orange text states the three largest private companies would be in the Top 30 companies of the S&P 500. Text: Source Pitchbook as of August 4 2025 Excludes select companies which have not had a financing in the last 3 years This comparison is for illustrative purposes only Private companies may not have the same stability or risk profile as companies in the S&P 500 Privately held companies may be intrinsically riskier than publicly listed companies as the unquoted companies may be smaller more vulnerable to changes in markets and technology and dependent on the skills and commitment of a small management team Past performance is no guarantee of future results It is not possible to invest directly in an index See Definition of indices in the Appendix for more information.

(SPEECH)

that's this idea that innovation, typically, its starting point is found in private markets. And I think what's interesting-- and you and I have had conversations about it before-- is, if you're walking down the street and you tap a random person on the shoulder and you ask them, is SpaceX, for example, private or public? They actually may say public because of the size and the scale and the way you hear about it in headlines. It's actually a private company.

And so if we think about the opportunity set in private markets and just innovation at large, how do you think about the access and the stage in which you access, whether it's technology or health care or next-gen trends? And what part of the market do you see that most accessible?

Yeah. I do think the SpaceX is interesting, or the OpenAIs, or the ByteDances, a lot of the top names that you see on this chart. And the reality is, some of those top private companies folks have been accessing in private markets for 5, 10, 15-plus years. And so I do think when it comes to innovation cycles, there's a lot of talk right now about some of these and the leg of AI that's taking place and accessing those things in the private markets. I do think-- we've talked a lot about the merging of public and private opportunity sets in for portfolio construction reasons. And the reality is, if you look at the top 20 private companies, they're all at the level size that would make it into the S&P 500.

And so the question is, what are you accessing, and how are you accessing it? But there is risk in a lot of these companies still in the private markets. A lot of them are raising capital. They're having these big funding rounds. And the public markets does give you the discipline to sort of what's next for your company. And so understanding, What are those strategic changes that you want to make in the private markets? before you come public I think is super interesting.

But there's also a reason why they're staying private longer. And I do think in any innovation cycle, like the one we've been talking about within AI, I think it is important to make sure that-- as you see, every day, news comes out about one leapfrogging the others. And understanding what risk remains I think is really important. And the funding around these companies I think is super important. So I do think we're going to see a lot of that continue over the coming years. But I don't think you could think about one without the other.

Sure. And I think too-- you briefly mentioned this, but it was sort of the theme of your response just now is just around discipline. I think one of the things that I want clients to walk away with today is also just that private markets don't come without their own set of risks. There are day-to-day volatility in public markets, which we're all familiar with. But in private markets, you do inherently have the illiquidity that exists. And part of the innovation or the premium that you can achieve in private markets, whether it be early stage or growth equity, is that there's illiquidity there.

And then I think also, you're sort of trusting the managers that you're handing over capital to. And so that's why, ultimately, operational due diligence and investment due diligence is so important, particularly in this part of the market for us.

And by the way, our view is that if you don't believe that you can achieve a premium to liquid markets, you shouldn't consider illiquid markets, right? And there is that illiquidity premium, that we can talk about how it ebbs and flows in various time periods. But that's one of the more important things to lock up your capital, to invest in private credit. You're taking additional risk, not having that liquidity. And so there does need to be that premium that's available. We just have to figure out, as you move through cycles of innovation, how you're adjusting the premium to the risks associated with it.

That's right. And I think too, it's not just on the equity side, the private equity side or the growth equity side. It's also in the diversifiers for portfolios, like private credit, like real assets, like infrastructure. And so if we press forward and we think about private credit, also a part of the market that's dominating headlines today-- for both good and bad reasons when we think about the evolving marketplace-- private credit's sort of that next idea.

So

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Slide: Private credit: Opportunity for higher yields. A series of dark blue rectangles represent 10 year yield ranges for U.S. Treasuries IG Corps AAA CLOs U.S. High Yield Leveraged Loans and U.S. Direct Lending, each topped with a lighter blue band for the 10 year median and an orange diamond marking Q1 2025 yields. The U.S. Treasuries block reaches a Q1 2025 point of 4.1 percent, IG Corps reaches 5.2 percent, AAA CLOs show 5.1 percent, U.S. High Yield extends higher with a 7.7 percent point, and Leveraged Loans show 8.1 percent. A shaded gray panel highlights U.S. Direct Lending with the highest marked yield of 10.1 percent. Text: Past performance is not indicative of future results It is not possible to invest directly in an index Estimates forecasts and comparisons are as of the dates stated in the material Source Bloomberg Cliffwater FactSet J.P. Morgan Credit Research KBRA DLD J.P. Morgan Asset Management U.S. Treasuries IG corporates and U.S. High Yield categories use the yield to worst of their respective Bloomberg indices AAA CLOs use the quarterly yield to worst of AAA rated debt tranches as tracked by the J.P. Morgan Collateralized Loan Obligation Index CLOIE Leveraged Loans are represented by the yield to maturity from the J.P. Morgan Leveraged Loan Index Direct lending uses the annualized quarterly income return from the Cliffwater Direct Lending Index from the start of the period to 12 31 2021 and the quarterly yield to maturity from the KBRA DLD Index thereafter Data are based on availability as of May 31 2025.

(SPEECH)

when I think about idea two, private credit has increasingly become a part of the market where clients are looking for income or what they see as durable return streams in a portfolio or can be. Talk to us about, one, the headline perspective around private credit. But also, just at its baseline, why would a client want to add private credit to their portfolio?

Yeah. I think part of it, you see on this chart. And the private credit industry, I should say, there's the private credit industry that's about to surpass $2 trillion. That's in an alternatives ecosystem of $20 trillion. So it's becoming big. What's fascinating to me, if you look from 2009 'til today, the private credit industry post the Great Financial Crisis has gone from about $1.3 trillion to $2 trillion. The corporate public market has gone from about $3 trillion to $11 trillion. So the size doesn't concern me, which-- I know there are a lot of headlines about that.

I do think it's, again, understanding the underlying things that are taking place within these markets. Because a lot of the whole private credit ecosystem came about because if you were a company that had an EBITDA of less than $300 million, it was tougher for you to access capital via the high-yield market post the Great Financial Crisis. And so there was part of just size of companies and what it meant for regulations when a bank wanted to go lend money to those small- and medium-sized businesses. So that was initially part of it.

I do think, as you think about some of the volatility in public markets and what comes about, a lot of companies turn towards private credit lenders to get certainty of capital-- and certainty of capital to grow their business, certainty of capital to think about what it means in those times of volatility to shift things around and do it outside of the public markets. And so there's a huge need for private credit from a lot of businesses. That's what the data would tell you.

I think from an investor perspective, again, I think most investors continue to access it and continue to have demand for it because it is an opportunity for higher yields. That's been on this chart. You'll see it's been about 200 basis points. We do believe that that premium can continue, has the potential to continue on a go-forward basis, even though we do think, with base rates coming down and with spreads tightening a little bit, that it's probably a slightly lower return overall on a go-forward basis. This is corporate direct lending.

Now, there's other parts of private credit markets that are completely opening up in our opinion, things like asset-backed lending, things like stress or distress capital. The specialists in some of these spaces, there's a few of them left. But in a market of $2-trillion private credit market-- and when you think of the 1,400 managers that exist, we partner with about a dozen of them.

So, again, we work to make sure that there's a premium that you can get versus public markets. We think that premium has the potential to persist. And we think that there is a need, from a company perspective, as to why they continue to borrow from private lenders.

And I think even if we just zoom out, part of why you've seen private credit continue to come up in conversations when people are building portfolios is, a decade ago, if you talked about private credit, it signaled distress to the marketplace, from a company perspective, if you were pursuing this avenue. Today, to your point, it's an alternative part of the market to pursue security of financing for a lot of these companies.

So for our clients, I think what we want to stress is the idea that this is not a replacement for fixed income. The risk looks very different here. Again, to your comments around corporate credit, these are unrated companies, if you will, across private markets. But you have the ability to potentially see some of that premium from a return perspective. If you're thinking about adding additional sources of income to your portfolio, private credit is where you can explore.

And by the way, some of the recent headlines around some of these names that were out there that had to do with fraud and so forth, the interesting part was that those were broadly syndicated loans. But there was questions on the market about, what does it mean for private credit lenders? Because it is outside the public eye, in terms of what's being done and the risk that these managers have underwritten and how they think about those companies on an ongoing basis. And so it's something that we look at very closely. But it is why manager selection continues to matter outside of just equity, especially in things like credit, as we're going to expect to go through continued times of volatility in broader markets.

Also why, when you're sort of adding alternatives to a portfolio, working with a partner who has the diligence capability is so important-- even if it's just from a transparency perspective, I think that's super important. Awesome. OK. We're going to press forward to chart three. This

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Slide: Private infrastructure: Powering artificial intelligence. A rising series of dark blue vertical bars on the left charts U.S. data center power demand from 2015 through 2035, increasing steadily from about 25 TWh to more than 400 TWh, and the title states U.S. data center power demand is expected to continue to rise. On the right a waterfall style chart titled Demand is increasingly running the risk of outpacing supply begins with a dark blue bar marked 69 for total U.S. data center power demand then drops with a teal bar labeled minus 10 for data centers under construction and another teal bar labeled minus 15 for available U.S. grid capacity before ending with an orange bar labeled 44 to indicate a potential shortfall. Text: Source LHS BloombergNEF New Energy Outlook 2025 As of May 2025 RHS Morgan Stanley Research As of November 11 2025.

(SPEECH)

is one of my favorite parts of the market-- one, because it's tangible. You see it. You feel it. You turn on your light switch every day. I'm sure you know where I'm headed. And that's infrastructure.

This has been a part of institutional portfolios for decades. Large public pensions, endowments, foundations have always had structural allocations to infrastructure. And we know that most of our clients have institutional-like balance sheets. That's why adding infrastructure to a portfolio can make a lot of sense for our clients.

When you think about the world of infrastructure today, whether it's old-world infrastructure, like bridges, toll roads, airports, et cetera, and you also think about digital infrastructure, like fiber to the home, syndication of cell towers, so on and so forth, what are the, A, characteristics that make this compelling in a portfolio, but then some of just your favorite themes that are taking place where we can get excited?

Well, you mentioned the turning on the light switch, which your point is, many of us will pay whatever we need to for power in our home or for the water bill or whatever it might be. And so a lot of these, your choices are very limited. So it's a very monopolistic business. They tend to be very monopolistic. They tend to be very cash-flow heavy. A lot of them are adjusted to rates that are tied to CPI as sort of the base floor, which is the Consumer Price Index.

So as you think about rising inflation, the ability to pass through those expenses-- because, again, I will continue to pay whatever I need to pay to keep my lights on, to keep the water going. So you're right, that is a little bit of what has been old-world infrastructure. But there are a lot of interesting opportunities that take place because there's a lot of utilities that might have had a power asset, that power wasn't in that high of demand for the last decade. Now we'll talk about how power is in-- we talk about power powering artificial intelligence on a go-forward basis.

And even a change from a 2% power demand to 2 and 1/2% power demand and what it means to work with these assets that have been underinvested in to get more power out is really interesting. So having operators in these assets I think is really interesting. That's part one. Part two is that-- and, again, it's on this page. When we're talking about the biggest holdback, in terms of where AI can go next, it is that understanding of the power dynamics. And a lot of that came from powering things like data centers, which-- everyone assumes that data centers just has to do with a lot of what's going on in AI. It doesn't. There's still the move to the cloud that needs to happen for a lot of these businesses.

And so when I think about infrastructure, it is all the things that allow us to sort of live. It's all the things that are powering the innovation side. I do also think there's things in the world of global fragmentation and the need for infrastructure security, energy security, how all of that fits together. Infrastructure has been one of the core pieces of our portfolio, in terms of what we're offering our clients. Because we just see a high demand for it, a limited supply of specialists in this area that actually know how to work and operate these assets. And the demand we just think continues from here.

So we really like the supply-demand dynamics. And we also-- the last thing I'll say on this topic-- is, I mentioned the point where it's tied to inflation, but it's also pretty uncorrelated to broader markets. Because what happens in revenues of a company versus the need for how we're living, how we're moving, how we're doing all those things is pretty uncorrelated. And we've seen that in portfolios, which is why it's becoming an increasing part of conversations but also allocations in our client portfolios.

Sure. And I think even as we see just broader volatility in public markets, which we expect to persist to some degree, thinking about ways that you can add, to your point, lower-correlated return streams to a portfolio can be interesting. I think infrastructure is one where clients tend to be underallocated, even just from a real assets perspective in general. So there are multiple reasons why you would think about adding infrastructure. But I think you called out a lot of them.

It's also just really interesting to talk about investing in the communities around us. A lot of these are critical supply-chain and industrial hard assets that are quite literally powering and running our world. And to be able to say you're contributing in that way is a really interesting thing. OK. Another fan favorite on your end--

Uh oh. Where are we going?

--is real estate. You always bring up real estate in conversations with clients. Whether

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Slide: Private real estate: Diversification, inflation hedge & yield. A long sequence of vertical bars combines dark blue income returns with light blue capital appreciation to illustrate rolling 4 quarter global private real estate returns from 2009 to 2025, beginning with deep negative capital appreciation in 2009 near minus 25 percent and gradually rising into positive territory by 2011. Through the mid 2010s the stacked bars fluctuate around combined mid single digit to low teen returns as income remains steady while capital appreciation cycles. In 2022 the light blue bars peak sharply near the mid teens before falling into negative levels again in 2023, and by 2025 both components settle near modest positive values. Text: Sources MSCI J.P. Morgan Asset Management Guide to Alternatives Note Real Estate returns represented by the MSCI Global Property Fund Index Data show rolling four quarter returns from income and capital appreciation The chart shows the full index history beginning in 1Q09 and ending in 1Q25 Data are based on availability as of August 31 2025 Outlooks and past performance are no guarantee of future results It is not possible to invest directly in an index Please refer to Definition of Indices and Terms for important information.

(SPEECH)

they're holders of personal real estate on their balance sheets or whether they're underallocated, it continues to be a place where clients can think about the potential for, again, lower correlation, inflation protection. You have really nice appreciation over time to the extent you're investing in the right geographic locations with the right partners and the right types of assets. When you think about just through any investment cycle, through a full cycle, the power of adding private real estate to a portfolio is what in your eyes?

Well, I think it provides a couple of things. And on this chart, the thing I love most about this chart is-- and I've always used this example, where I say, even in the Great Financial Crisis, the value of this building, the mark to market of this building may have gone down. It did go down, actually, if you were to have to sell it at that moment in time. But it depends on the tenants inside and their ability to continue to pay their rents, which is why you see you could have great assets that have mark-to-market volatility from an appreciation perspective, from a NAV perspective. But the income is a lot of the reasons why our clients continue to allocate in their portfolios in real estate.

And when you actually look-- we did a client survey, where we asked 200 of our families, what are their suballocations across liquid, illiquid markets? It was just over 45% that was allocated to alternatives. Private equity and private equity funds was about 17%. Real estate was the next at 15%. And a lot of clients do allocate to real estate to have a combination of both yields as well as the potential for capital appreciation.

And so those are some of the reasons why we like real estate. And then as inflation rises, so hard assets-- the value of those assets also goes up. And so we've gone through a really interesting period most recently that you see on this chart from a real-estate return perspective that we think we're just getting out of. And so we are more bullish on real estate today than we were the last couple of years. But I would say it really depends on the underlying asset.

The other component of real estate is that our clients can invest through equity or through credit. And so when you think about the amount of issuance that was done in things like the multifamily space between 2019 and 2021, it was a 52% increase versus the last 10 years. A lot of those loans are coming due where now base rates are obviously much higher. And so we do think about the dynamics of like, now, when we think about real-estate opportunities-- it could be both on the equity side but even on the credit side-- you can have great assets with the wrong balance sheet as base rates have come up.

And so we are thinking through opportunities as well that we're talking to a lot of our clients about. Because you could access several of these in one allocation to real estate.

You bet. And you mentioned two ways to play in real estate-- equity or debt. I think one of the things that's also interesting about the platform that we've built here on the JPMorgan alternatives platform is just there are also two ways to play structurally. For clients who are just looking for the potential to add income into a portfolio, you can think about accessing it through evergreen or semiliquid vehicles, which are a new and evolving part of the market, but we continue to see opportunities there, you can also do it through drawdown capabilities.

And sometimes, whether it's equity or it's credit, it varies what access point we have. But there are two ways to play structurally also that I think make a difference, whether capital appreciation is your goal or if just the potential for income's your goal.

Yeah. And even on the income side, to put some of these assets in a REIT-type structure-- and when you think about a tax-paying individual in the US and what that means to earn that income in a REIT structure. There's other benefits too that we love talking to clients about, in terms of how to access this.

Sure. So last but not least, number five-- and I think this is one that historically maybe has been slightly controversial, but I'd say hedge funds are back. And

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Slide: Hedge funds: Potential diversification & capitalization on volatility. Three sets of vertical bars compare returns during major market sell offs across the years 2000, 2001, 2002, 2008, 2022, and March 2025 using dark blue for a 50 50 HFRI RV Macro Blend teal for MSCI World and orange for the S and P 500. In each downturn the dark blue hedge fund bars sit noticeably higher than the deeper losses in the equity indices such as steep teal and orange drops in 2008 near minus 40 to minus 45 percent and double digit declines in 2000, 2001, 2002, and 2022. By March 2025 the dark blue bar sits near zero at 0.1 percent while the teal and orange bars show small negative returns. Text: Past performance is no guarantee of future results It is not possible to invest directly in an index Sources Bloomberg Public Equities S and P 500 Public Fixed Income Bloomberg US Agg April 2025 Hedge Fund HFRI Macro Total Index Bloomberg HFRI 2025.

(SPEECH)

I was being a little cute there. But I think what's just interesting is, we continue to have this conversation around diversification. And when we think about clients building really well-diversified and balanced portfolios over time, I think there's space in them for hedge funds.

And I think when we think about the due diligence and underwriting we're doing here, it's very particular around the asset classes that we're picking and choosing from and whether you want to be a thematic investor or whether you want to invest truly to build in the ability for hedges in a portfolio. You would think about hedge funds in a number of different ways. I think what we think about is on the macro or relative value or just simply a multistrategy portfolio that's sort of investing across asset classes. Hedge funds can be an interesting allocation to the portfolio.

Talk to me about, one, how you think about hedge funds in the portfolio, from whether a sizing perspective or an allocation perspective, and then why you've always thought hedge funds were sort of here to stay.

Yeah. We just celebrated 30 years of allocating to hedge funds at JPMorgan, which we're really proud about because there's so much data that's given us over time. And you're right, we did go through what I call an alpha winter in the hedge fund sort of ecosystem. And I say, it's not an asset class, it's an industry. There's over 9,000 hedge funds. We invest in less than a hundred of them. There's a wide dispersion of both strategies and then managers, in terms of their ability to outperform why we invest in them.

And so, again, it's an alternative to something. And so for a lot of our clients, hedge funds have served as an alternative to a diversifier like fixed income. Because as stock bond correlations have risen, we're looking again for less-correlated return streams. And what you'll see is that if you think about a 50/50 blend of the HF relative value macro index, it has outperformed, from a diversification perspective, even what you see on the 60/40.

And so it does have a purpose in portfolios. Now the question is, why do we believe that hedge funds can play an important role on a go-forward basis? Part of it is what I just mentioned. Stock bond correlations are increasing and so the need and the want for uncorrelated returns streams. The other thing-- and why they had this alpha winter-- was because base rates were zero for so long that if you were to hedge the market or go short something, you weren't earning anything while you waited to-- whatever investment you were going to make.

So the concept of a short rebate didn't exist on the market for almost a decade. And so that's something that-- the base rates don't have to be high for that, but they just have to be somewhat normalized. Also, the volatility and the dispersion of markets matters for someone that is trying to hedge, whether it's within a single-company cap table or when you think about across an industry. And so there was a decade where it made more sense to be long the beta of markets than to think about hedge funds. Because a lot of hedge funds are macro managers. Many of them do not take beta risk in their portfolios. So they're really trying to take advantage and capitalize on volatility in the markets.

And so for the last five years, it has served our portfolios well to have an allocation to hedge funds. But again, in the world of 9,000, there's only less than 1% of that we invest in. But we continue to find really unique, uncorrelated return streams of specialists that can target inefficiencies in the markets to generate alpha for our clients.

Sure. And I think the punchline of everything there truly is just, when you find the right manager and you underwrite a track record and an expertise and, to your point, a specialist, you have the opportunity for some of this premium of return, which, again, is why we're having the conversation today. For those of you who are in the place, from an investing perspective, where you can take a little bit of illiquidity risk, you can step into private markets, whether it's a 5%, 10%, or 15% allocation, there are ways that you can achieve both diversification and also the potential for a premium return.

And by the way-- you and I have talked about this for a long time. I always say, if you start at $100 and you're down 50% and up 50%, you're not back at $100. You're at $75. And if you could take that same $100 and instead try to have a buffer on the downside-- so maybe you're down, let's say, half the market. And again, I'm not saying all hedge funds can achieve this. But if you could be down 25% and up 25%, you end up at 93.75. And so the point is that if you can make the roller coasters of market this baby roller coasters, over time, you can compound at a higher rate and a higher overall level. And so that is the goal of what hedge funds are.

Now, the question is, who can deliver it? And for the public markets and the S&P, when you look over the last decade and you think about the next decade of what it's going to bring, the question is whether you want to be long the beta of the markets or you want to actually think about folks that can capitalize on that volatility.

That's right. And as we always tell our clients, there's room in the portfolio for both. And most clients are anchored in public equities, as we are. And so there's a place for this in the portfolio. And so working with your JPMorgan advisor, it's really important to carve out, what is the percentage that potentially makes sense for this part of the market? But we wanted to arm everyone with the five ideas we thought were compelling today.

So thank you so much for your time today, Kristin. I hope that we said something interesting or something that resonated in some capacity for you all today. It was a blast to get to spend some time. To that point, if anything was interesting, feel free to reach out to your JPMorgan team. We will be around to continue to have conversations, and we will be back next month with alternatives access. We're going to spend some time diving into agentic AI and how to access that across private markets. But thanks so much, Kristen.

Thank you.

See you guys next time.

Thank you for joining us. Prior to making financial or investment decisions, you should speak with a qualified professional in your JPMorgan team. This concludes today's webcast. You may now disconnect.

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Logo: J.P. Moran. IMPORTANT INFORMATION. An investment in alternative investment strategies involves substantial risks, and potential investors should clearly understand the risks involved. Investing in alternative investment strategies is speculative, not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment, which can include: loss of all or a substantial portion of the investment due to leveraging, short selling or other speculative investment practices; lack of liquidity in that there may be no secondary market for the fund and none expected to develop; volatility of returns; restrictions on transferring interests in the fund; absence of information regarding valuations and pricing; delays in tax reporting; less regulation and higher fees than mutual funds; and advisor risk. This communication is provided for information purposes only and therefore does not constitute an offer or a solicitation of an offer of shares or investment services. Certain investment opportunities may not be available in all jurisdictions, may not be suitable for all investors and may require the signature of certain additional documentation before they may be offered. Certain opinions, estimates, investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice. This material should not be regarded as research or as a J.P. Morgan research report. Investors may get back less than they invested. Past performance is not a reliable indicator of future results. Please read all Important Information. To the extent that this material relates to investment activities, it is directed solely at persons to whom it may be lawfully directed, as provided for under section 238 of the FSMA, the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemption) Order 2001, as amended from time to time, and Chapter 4 of the Financial Conduct Authority’s Conduct of Business Sourcebook. Any investment services and products will only be available to, or engaged in with, such persons, and no other person should rely or act upon information contained in this communication. Some of the products and/or services mentioned may not be available in all jurisdictions.

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 generally 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. Real estate, hedge funds, and other private investments may not be suitable for all individual investors, may present significant risks, and may be sold or redeemed at more or less than the original amount invested. Private investments are offered only by offering memoranda, which more fully describe the possible risks. There are no assurances that the stated investment objectives of any investment product will be met. 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. Alternative investments are not available to the general public and may be promoted in Hong Kong to Professional Investors and in Singapore to Accredited Investors only. With respect to countries in Latin America, the distribution of this material may be restricted in certain jurisdictions. Receipt of this material does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. To the extent this content makes reference to a fund, the Fund may not be publicly offered in any Latin American country, without previous registration of such fund’s securities in compliance with the laws of the corresponding jurisdiction. Presentation produced by the Alternative Investments Team. Please read important disclosures at the end.

KEY RISKS OF INVESTING IN ALTERNATIVES. Limited liquidity for private equity. Investments in private equity funds are intended for long term investors who have the financial ability and willingness to accept the risks associated with making speculative and primarily illiquid investments. Interests in private equity funds are generally not redeemable. An investor in such a fund may not freely transfer assign or sell any interest without the prior written consent of the fund manager. An investor may not save in particular circumstances withdraw from a private equity fund. Interests in private equity funds will not be registered under the U.S. Securities Act of 1933 as amended or any other securities laws in any jurisdiction. There is no liquid market for such interests and none is expected to develop. Consequently a commitment may be difficult to sell or realize. Limited liquidity generally. Interests are not publicly listed or traded on an exchange or automated quotation system. There is not a secondary market for interests and as a result invested capital is less accessible than that of traditional asset classes. Also withdrawals and transfers are generally restricted. Potential conflicts of interest. Investors should be aware that there will be occasions when a private equity fund’s general partner and its officers and affiliates may encounter potential conflicts of interest in connection with the fund. Fund professionals may work on other matters and therefore conflicts may arise in the allocation of management resources. The payment of carried interest to the general partner may create an incentive for the general partner to cause the private equity fund to make riskier or more speculative investments than it would in the absence of such incentive.

KEY RISKS OF INVESTING IN ALTERNATIVES. Additional risks. There may be additional risks inherent in the underlying investments within funds. Currency risks and non United States investments. Investments may be denominated in non U.S. currencies. Accordingly, changes in currency exchange rates costs of conversion and exchange control regulations may adversely affect the dollar value of investments. Dependence on manager. Performance is more dependent on manager specific skills rather than broad exposure to a particular market. Event risk. Given certain funds’ niche specialization for example in an industry or a region market dislocations can affect some strategies more adversely than others. Financial services industry risk factors. Financial services institutions have asset and liability structures that are essentially monetary in nature and are directly affected by many factors including domestic and international economic and political conditions broad trends in business and finance legislation and regulation affecting the national and international business and financial communities monetary and fiscal policies interest rates inflation currency values market conditions the availability and cost of short term or long term funding and capital the credit capacity or perceived creditworthiness of customers and counterparties and the volatility of trading markets. Financial services institutions operate in a highly regulated environment and are subject to extensive legal and regulatory restrictions and limitations and to supervision examination and enforcement by regulatory authorities. Failure to comply with any of these laws rules or regulations some of which are subject to interpretation and may be subject to change could result in a variety of adverse consequences including civil penalties fines suspension or expulsion and termination of deposit insurance which may have material adverse effects.

General / Loss of capital. An investment in private equity funds involves a high degree of risk. There can be no assurance that (i) a private equity fund will be able to choose make and realize investments in any particular company or portfolio of companies (ii) the private equity fund will be able to generate returns for its investors or that the returns will be commensurate with the risks of investing in the type of companies and transactions that constitute the fund’s investment strategy or (iii) an investor will receive any distributions from the private equity fund. Accordingly an investment in a private equity fund should only be considered by persons who can afford a loss of their entire investment due to its high degree of risk. Investors in the private equity fund could lose up to the full amount of their invested capital. The private equity fund’s fees and expenses may offset the private equity fund’s profits. Past performance is not indicative of future results. J.P. Morgan’s role. J.P. Morgan generally acts as a placement agent to the funds. The investment managers or general partners (or the equivalent) may pay or cause the funds to pay J.P. Morgan an initial fee and or an ongoing servicing fee in connection with its services. In addition where J.P. Morgan acts as placement agent an origination fee of up to 2 percent will be paid by investors in the funds including those investing through a conduit vehicle and in the Vintage Funds to J.P. Morgan at the closing and will be in addition to and not in reduction of capital commitments to the applicable fund. The origination fee is in addition to fees charged by a fund. J.P. Morgan also provides investment advice and or administrative functions for certain private investment funds including the Vintage funds and funds serving as conduit vehicles investing in the funds. J.P. Morgan receives a fee for providing these services in some cases including with respect to the Vintage Funds. Lack of information. The industry is largely unregistered and loosely regulated with little or no public market coverage. Investors are reliant on the manager for the availability quality and quantity of information. Information regarding investment strategies and performance may not be readily available to investors. Leverage. The capital structures of many portfolio companies typically include substantial leverage. In addition investments may be consummated through the use of significant leverage. Leveraged capital structures and the use of leverage in financing investments increase the exposure of a company to adverse economic factors such as rising interest rates downturns in the economy or deteriorations in the condition of the company or its industry and make the company more sensitive to declines in revenues and to increases in expenses.

Limited liquidity for private equity. Investments in private equity funds are intended for long term investors who have the financial ability and willingness to accept the risks associated with making speculative and primarily illiquid investments. Interests in the private equity funds are generally not redeemable. An investor in such a fund may not freely transfer assign or sell any interest without the prior written consent of the fund manager. An investor may not save in particular circumstances withdraw from a private equity fund. Interests in private equity funds will not be registered under the U.S. Securities Act of 1933 as amended or any other securities laws in any jurisdiction. There is no liquid market for such interests and none is expected to develop. Consequently a commitment may be difficult to sell or realize. Limited liquidity generally. Interests are not publicly listed or traded on an exchange or automated quotation system. There is not a secondary market for interests and as a result invested capital is less accessible than that of traditional asset classes. Also withdrawals and transfers are generally restricted. Potential conflicts of interest. Investors should be aware that there will be occasions when a private equity fund’s general partner and its officers and affiliates may encounter potential conflicts of interest in connection with the fund. Fund professionals may work on other matters and therefore conflicts may arise in the allocation of management resources. The payment of carried interest to the general partner may create an incentive for the general partner to cause the private equity fund to make riskier or more speculative investments than it would in the absence of such incentive.

Risks associated with infrastructure investments generally. An infrastructure investment is subject to certain risks associated with the ownership of infrastructure and infrastructure related assets in general including the burdens of ownership of infrastructure assets local national and international economic conditions the supply and demand for services from and access to infrastructure the financial condition of users and suppliers of infrastructure assets changes in interest rates and the availability of funds which may render the purchase sale or refinancing of infrastructure assets difficult or impracticable changes in environmental laws and regulations and planning laws and other governmental rules environmental claims arising in respect of infrastructure assets acquired with undisclosed or unknown environmental problems or as to which adequate reserves have been established changes in the price of energy raw materials and labor changes in fiscal and monetary policies negative developments in the economy that depress travel uninsured casualties force majeure acts terrorist events underinsured or uninsurable losses sovereign and sub sovereign risks contract counterparty default risk. Risks of certain investments. The securities of portfolio companies and the ability of such companies to pay debts could be adversely affected by interest rate movements changes in the general economic or political climate or the economic factors affecting a particular industry changes in tax law or specific developments within such companies. The securities in which a private equity fund will invest generally will be among the most junior in the portfolio company’s capital structure and thus may be subject to the greatest risk of loss. Most of a private equity fund’s investments will not have a readily available public market and disposition of such investments may require a lengthy time period or may result in distributions in kind to investors. A private equity fund’s manager generally has a limited ability to extend the term of the fund therefore the fund may have to sell distribute or otherwise dispose of investments at a disadvantageous time as a result of dissolution. Speculation. Alternative investments often employ leverage sometimes at significant levels to enhance potential returns. Investment techniques may include the use of derivative instruments such as futures options and short sales which amplify the possibilities for both profits and losses and may add volatility to the alternative investment fund’s performance. Taxation considerations. An investment in a private equity fund or hedge fund may involve complex tax considerations which may differ for each investor. Each investor is advised to consult its own tax advisers. Changes in applicable tax laws could affect perhaps adversely the tax consequences of an investment.

Valuation. Because of overall size or concentration in particular markets of positions held by the alternative investment fund or other reasons, the value at which its investments can be liquidated may differ sometimes significantly from the interim valuations arrived at by the alternative investment fund. Private investments are subject to special risks. Investors must meet specific suitability standards before investing. This information does not constitute an offer to sell or a solicitation of an offer to buy. As a reminder, hedge funds or funds of hedge funds, private equity funds, and real estate funds often engage in leveraging and other speculative investment practices that may increase the risk of investment loss. These investments can be highly illiquid, and are not required to provide periodic pricing or valuation information to investors, and may involve complex tax structures and delays in distributing important tax information. These investments 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 such fund. For complete information, please refer to the applicable offering memorandum. Securities are made available through J.P. Morgan Securities LLC, Member FINRA, and SIPC, and its broker dealer affiliates. Hedge funds or funds of hedge funds often engage in leveraging and other speculative investment practices that may increase the risk of investment loss. These investments can be highly illiquid, and are not required to provide periodic pricing or valuation information to investors, and may involve complex tax structures and delays in distributing important tax information.

These investments 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 such fund. For complete information, please refer to the applicable offering memorandum. Liquid alternative funds are registered funds that seek to accomplish the fund’s objectives through non traditional investments and trading strategies. They differ significantly from both hedge funds and traditional mutual funds because they can be redeemed on a daily business day, they are said to be “liquid.” Such funds do not follow the typical buy and hold strategy of a traditional mutual fund and generally hold more nontraditional investments and use more complex trading strategies than a traditional mutual fund, which may make an investment in a liquid alternative fund riskier. Non traditional investments may include but are not limited to private equity, derivatives, commodities, real estate, distressed debt and hedge funds. 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 to 15 year term and will begin to monetize investments after holding them for 4–5 years.

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. Economy, currency, tax and market conditions, including market liquidity, may increase the risks of these investments and may impact performance of the funds. The views and strategies described herein may not be suitable for all investors, and more complete information is available which discusses risks, liquidity, and other matters of interest. 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. Any investment associated with leverage will include additional risks such as implied volatility, exposure to rising interest rates (borrowing costs) and margin calls, which may occur if the underlying investment declines below its minimum lending values. Leverage will have the effect of magnifying losses or gains. Please note that lines of credit are extended at the discretion of J.P. Morgan, and J.P. Morgan has no commitment to extend a line of credit or make loans available under the line of credit. Margin calls may include sale of the asset serving as collateral if the collateral value declines below the amount required to secure the line of credit. In exercising its remedies, J.P. Morgan will not be required to marshal assets or act in accordance with any fiduciary duty it otherwise might have.

Key risks. This material is for information purposes only, and may inform you of certain products and services offered by private banking businesses, part of JPMorgan Chase & Co. ("JPM"). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information. GENERAL RISKS & CONSIDERATIONS 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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Your investments and potential conflicts of interest. Conflicts of interest will arise whenever JPMorgan Chase Bank, N.A. or any of its affiliates (together, "J.P. Morgan") have an actual or perceived economic or other incentive in its management of our clients' portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMorgan Chase Bank, N.A. or an affiliate, such as J.P. Morgan Investment Management Inc.; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client's account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client's portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account. Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward-looking views in order to meet the portfolio's investment objective. 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. The Six Circles Funds are U.S.-registered mutual funds managed by J.P. Morgan and sub-advised by third parties. Although considered internally managed strategies, JPMC does not retain a fee for fund management or other fund services. Legal entity brand and regulatory information. In the United States, bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC. JPMorgan Chase Bank, N.A. and its affiliates (collectively "JPMCB*) offer investment products, which may include bank managed investment accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC ("JPMS"), a member of FINRA and SIPC, Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPM. Products not available in all states.

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