Alternatives Access: Investing Beyond the Public Markets

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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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