Performance Metrics
What is J-Curve?
The J-curve describes the typical return path of a private fund: negative early on (as fees and early markdowns hit) before turning positive as investments mature and distributions begin.
The J-curve is the shape traced by a fund’s net returns over time. In the early years, capital calls fund investments and pay fees while portfolio companies are still immature, so net asset value dips below cost. As the portfolio matures and the fund begins distributing gains, returns climb — forming the "J".
Secondary purchases and co-investments are sometimes used by LPs to mitigate the J-curve.