FOR QUALIFIED INVESTORS ONLY – NOT FOR DISTRIBUTION TO RETAIL INVESTORS                      Opportunities in Today’s     ...
J.P. Morgan sJ P Morgan’s Private Equity Advisors Team (PEA)Unique secondary approach to private equity                   ...
Investment Strategy                      2
Investment StrategyPurchase all forms of private assets on a global basis       Broad definition of private equity second...
Unique Market Position                                                 Traditional PE Interests                           ...
Market Opportunity                     5
Capital Flow towards Illiquid AssetsPrior to 2008, significant capital was invested in illiquid assets     Over $2 trilli...
Market Dynamics Have Changed: Macro Event Occurring    Multi-year migration out of illiquid assets is underway            ...
Current Market Demands a Non-Standard Investment ApproachTraditional illiquid investment funds face difficult market condi...
How can Investors Benefit from the Current Market Opportunity?Identify “gaps” in the illiquid markets not addressed by oth...
Investment Example: Secondary Direct (Equity)Direct investment in a European cyclical business         Investment opportu...
Investment Example: Traditional Secondary LP Purchase“Hidden jewel” in an auction of portfolio of Asian focused private eq...
J.P. Morgan Special Opportunities Fund (JSOF)                                 12
J.P.J P Morgan Special Opportunities Fund (JSOF)“Open ended” fund specifically designed for European clients, offered as a...
JSOF: Summary of Key Fund TermsDesigned to provide exposure to private assets with better liquidity than traditional LP st...
JSOF: Strong Performance Since InceptionEuro Class A shares have increased 28.7% since inception                          ...
JSOF: Portfolio DiversificationJSOF has exposure to 25 underlying company positions                 Portfolio Summary    ...
J.P. Morgan Private Equity Limited (JPEL)                                   17
J.P.J P Morgan Private Equity Limited ( JPEL )                                  (“JPEL”)JPEL is the only listed private eq...
JPEL: Summary of Key Fund TermsDesigned to provide exposure to private assets with better liquidity than traditional LP st...
JPEL: PerformanceJPEL’s stock price and NAV have consistently outperformed relevant listed private equity benchmarks      ...
JPEL: Portfolio DiversificationDefensive portfolio built primarily through secondary transactions      Exposure to 167 di...
J.P. Morgan’s Private Equity Advisors Team                                  22
J.P.J P Morgan Asset ManagementOver $95bn in alternative assets under management globally*                                ...
J.P.J P Morgan Asset Management: Private Equity CapabilitiesJPEL and JSOF are managed by J.P. Morgan’s Private Equity Advi...
J.P. Morgan sJ P Morgan’s Private Equity Advisors Team                              Troy Duncan                           ...
Potential Risks and Other ConsiderationsInvestments in private equity are speculative and involve significant risks. The e...
Citywire conferencev final
Citywire conferencev final
Citywire conferencev final
Citywire conferencev final
Citywire conferencev final
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Citywire conferencev final

  1. 1. FOR QUALIFIED INVESTORS ONLY – NOT FOR DISTRIBUTION TO RETAIL INVESTORS Opportunities in Today’s Today s Private Equity Market Troy Duncan, Managing Director Citywire Fund Selector Conference Montreux, Switzerland 11 – 13 May, 2011
  2. 2. J.P. Morgan sJ P Morgan’s Private Equity Advisors Team (PEA)Unique secondary approach to private equity J.P. Morgan Special Opportunities Fund (JSOF) 14 person team focused on illiquid private assets – Launched February 2010 – Part of $20+ billion global private equity platform – Luxembourg SICAV-SIF – Manage $1.6 billion in a separate, specialized private equity strategy1 – Quarterly subscriptions and – Portfolio managers Troy Duncan and Greg Getschow have worked together for 10+ y g y g g years redemptions2 – EUR, GBP, USD share classes Global secondary investment strategy – Approximately $60 mm in AUM1 – Seek to invest in existing private equity deals, with visibility to exit in 1-3 years – Focus on small, complex and non-standard transactions , p J.P. Morgan Private Create non-traditional private equity funds Equity Limited (JPEL) – Provide funds with more flexible structures, features include: – Launched June 2005  No limited partnership structures ( capital calls or distributions) p p (no p ) – LSE listed: JPEL  Liquidity through trading or redemptions – Guernsey registered closed-ended investment company  Offer equity and debt-like share classes  Offer multi-currency share classes (EUR, GBP, USD) – Semi-annual tender facility at NAV3 – Equity and debt-like share classes – Approximately $700 mm in AUM4Source: J.P. Morgan Asset Management1. As of 31 March 2011.2. Subscriptions – quarterly at NAV. Redemptions – 5% of Fund’s NAV quarterly (at discretion of Board of Directors)3. Ability to tender up to 15% of total shares each year, at Directors discretion. In the event greater than 15% of shares are tendered, tenders will be reduced on a pro-rata basis. Shares tendered may be held in Treasury for further issuance. JPEL’s tender facility was notoperated during the 2009 calendar year. On 29 September 2010, JPEL announced a 3% tender offer based on the prevailing net asset value as at 31 December 2010.4. As of 28 February 2011 f 2011. 1
  3. 3. Investment Strategy 2
  4. 4. Investment StrategyPurchase all forms of private assets on a global basis Broad definition of private equity secondary transactions – Limited partnership interests – Debt or equity positions – Listed private equity – Multi-strategy: buyout, venture capital, PE real estate, infrastructure, mezzanine, etc. Core philosophy: Purchase assets with underlying private equity sponsor managing for exit Private Asset Liquidity Spectrum LIQUID SEMI-LIQUID ILLIQUID Listed Syndicated Mezzanine Pre-IPO direct Later stage Limited Private 1st and 2nd Lien Debt equity stake secondary Partnership Equity Debt direct interests interests1. Source: J.P. Morgan Asset Management. 3
  5. 5. Unique Market Position Traditional PE Interests Non-Traditional Secondary Liquid Private Equity Buyout and Venture Capital Li it d P t B t dV t C it l Limited Partnerships hi Secondary Directs, Single Assets Directs Assets, Listed Private Equity, Li t d P i t E it HF Side Pockets, etc. Traded Debt Goldman Sachs AXA Partners Coller Capital Lexington Partners HarbourVest Pantheon Ventures Partners Group LandmarkDeal Size LGT Paul Capital Credit Suisse Morgan Stanley Pomona Capital Green Park Barwon SEB Industry Ventures Headway Partners Mantra Red Rocks J.P. Morgan’ s Private Equity Advisors Team Triguard Complexity of Transactions Source: J.P. Morgan Asset Management Complexity is determined by the length of time to close and nature of transaction. The names are given above for illustrative purposes only. The list of such names is not exhaustive. Offering documentation of each of the above managers should be consulted in order to assess precisely th strategy used b each of th i l the t t d by h f them. 4
  6. 6. Market Opportunity 5
  7. 7. Capital Flow towards Illiquid AssetsPrior to 2008, significant capital was invested in illiquid assets Over $2 trillion allocated to private equity funds from 2005-20081 – Significantly more when including direct deals by banks, family offices, hedge funds and sovereign wealth funds Over $2.5 trillion of leveraged loans issued from 2005-20072 Hedge funds had over $4 trillion in AUM at 2008 peak3 – Trend to invest in more illiquid investments, including private equity (side-pockets) Billions of additional capital allocated to other illiquid investments4 – Real estate, infrastructure, mezzanine, distressed debt, structured products, CLOs, etc. Illiquid Assets: Private Equity Hedge Fund Side Equity, Pockets, real estate, etc.1. ThomsonReuters / VentureXpert, as at 30 September 2010. Reflects All Private Equity category, US and European funds raised. Includes amount of capital raised to date.2. Wall Street Journal, 16 September 2010, “A Risky Loan Market Is Back in Gear”3. Hedge Fund Industry Asset Report – Q3 2010. HedgeFund.net Hedge Fund of Funds and Single Manager Hedge Funds.4. The Buyout of America by J h K4 Th B t f A i b Josh Kosman, Fi Financiall Ti i Times, P i t equity f d f Private it funds focus on di t distressed d bt b A d debt, by Anousha Sakoui, Fi h S k i Financiall N i News, US mezzanine f d b ff private equity f d i i slump, b C diff d Al j G i i funds buffer i t it fundraising l by Cardiff de Alejo Garcia 6
  8. 8. Market Dynamics Have Changed: Macro Event Occurring Multi-year migration out of illiquid assets is underway Various In estor Vario s Investor Segments Affected by Market Events Aff t d b M k t E t Selling Illiquid Investments Insurance companies, banks, HNW PE limited partnerships, PE debt, Investor sentiment, regulatory direct deals in HF side pockets, individuals, sovereign wealth funds, pressures, structural changes, etc. structured products, non-core real hedge funds and proprietary trading desks, etc. estate, etc. Investor sentiment shifting Migration Towards Liquid Assets – General aversion to illiquid p q positions – Shift in allocation towards more liquid structures (UCITS, mutual funds, etc.) Regulatory pressures causing sales of assets – Volcker rule, Basel III, Solvency II – Prop desks being forced out of market Private equity funds launched in early 2000s near end of life – Required to dispose of assets Credit crisis issues remain as many investors still have substantial Liquid Assets debt outstanding and liquidity issues Source: J.P. Morgan A S JP M Asset M Management 7
  9. 9. Current Market Demands a Non-Standard Investment ApproachTraditional illiquid investment funds face difficult market conditions Private equity funds : Currently paying 2006-2007 prices for assets despite limited leverage – Current period unlike post-recession periods in1992/93 or 2002/03 post recession Traditional secondary funds: Significant capital chasing LP stakes in buyout and venture funds – Many traditional PE fund of funds expanded mandate to include secondary LP purchases Distressed debt funds: Many banks will “amend and extend” rather than force disruptive events amend extend – Private equity funds with significant undrawn capital to support portfolio companies Hedge funds / bank prop desks: Former buyers of illiquid assets (side pockets) are now some of the largest sellers – Many hedge funds move towards more liquid structures and must sell illiquid assets Average LBO Purchase Price Multiples1 Change in High-Yield and Leveraged Loan Maturities 12.0x since December 20082 $275 $245 10.0x 9.7x 9.1x $225 8.4x 8.4x 8.5x Purchase Price / EBITDA Multiple 8.3x 7.6x 7.8x $175 8.0x 7.3x 7.7x 7.1x 7 1x 7.1x 7.1x 7 1x $127 M Billions of US$ $ 6.7x $125 $116 6.6x 6.4x 6.0x $394 billion $71 6.0x $75 $25 4.0x ($25) 2.0x ($75) ($57) ($64) ($56) ($90) ($125) ($127) 0.0x 1994/5 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 4Q10 ($175) (34) (31) (71) (90) (133) (116) (51) (40) (66) (127) (134) (178) (207) (69) (23) (78) (24) 2010 2011 2012 2013 2014 2015 2016 2017 2018 or later Purchase Price Fees/Expenses1. Source: Standard & Poor’s LCD Group; LCD’s Leveraged Buyout Review – 4Q10. Total Sources/Pro Forma Trailing EBITDA . Prior to 2003, Media, Telecom, Energy and Utilities deals excluded. Since 2003, all outliers excluded. 2. J.P. Morgan. 2011 High-Yield And Leveraged Loan Outlook and Strategy Note: Maturity schedule as of 9 November 2010, while change is measured between 31 December 2008 and 9 November 2010,. Includes approximately $1,800 billion of high yield and leveragedlloans at 9 N November 2010 R b 2010. Represents the change iin maturities at 31 D h h ii December 2010 and may not b representative of the change iin maturities on a going f b d be i f h h ii i forward b i d basis. 8
  10. 10. How can Investors Benefit from the Current Market Opportunity?Identify “gaps” in the illiquid markets not addressed by other investors Current Market Opportunity pp y Illiquid investors “Gap” Investors with a flexible mandate Restricted by investment policies Non-traditional Identify and pursue unique assets for sale opportunities Majority of investors are constrained by: – Investment restrictions – Size f investments Si of i t t – Investment decision process – Complexity of transactions Key to success in the current market will be influenced by: y y – Flexible, non-standard approach – Aggressive sourcing and due diligence efforts – Nimble investment team – Name brand recognitionSource: J.P. Morgan A t MS JP M Asset Management t 9
  11. 11. Investment Example: Secondary Direct (Equity)Direct investment in a European cyclical business Investment opportunity: acquire a €10 million stake in a global market leader for industrial flooring solutions – Sourced through existing J.P. Morgan PEA network (hedge fund) with significant insight into asset “Gap” in Illiquid Markets: sellers comprised of non-traditional PE investors with a multitude of liquidity issues – Hedge fund in liquidation – Bank proprietary trading desk seeking to exit last illiquid position – Distressed European construction company seeking liquidity Limited competition: small, complex transaction involving multiple sellers and out of favor sector – Investment does not fit with mandate of most secondary or primary private equity funds:  Not part of a traditional private equity LP structure  Complex ownership structure with significant restructuring required  Follow-on capital required to capitalize on current market opportunities  Quick investor decision required to ensure cohesion within seller group Compelling entry valuation with significant upside potential: entry price of under 2x EV/ 2011E EBITDA – Company has a strong balance sheet: no debt, net cash positive with unencumbered real estate – Pre-identified accretive acquisitions will immediately add value – Rebounding order b k provides i i h i R b di d book id insight into turnaround scenario i 2011 d i inSource: J.P. Morgan Asset Management. Past performance is not indicative of future results. This information above is given for illustrative purposes. It is considered to be accurate at the time of writing, but no warranty ofaccuracy is given and no liability in respect of any error or omission is accepted. These investment examples are included solely to illustrate the investment process and strategies which may be utilized by the Fund. Please note thatthese investments are not necessarily representative of future investments that the Fund will make. 10
  12. 12. Investment Example: Traditional Secondary LP Purchase“Hidden jewel” in an auction of portfolio of Asian focused private equity funds Investment opportunity: purchase US$8 million LP interest in an India focused private equity fund India-focused – Transaction sourced through an auction that included several Asian private equity funds “Gap” in Illiquid Markets: seller was European family office seeking to shift out of private equity Limited Li it d competition: Alth titi Although part of a b d auction, majority of buyers were uninterested in this fund h t f broader ti j it f b i t t d i thi f d – Small interest in a relatively unknown fund manager with a complicated history – Portfolio is heavily weighted toward one asset with several publicly traded positions – Few buyers willing to carry out due diligence for such small deal. – J.P. Morgan’s J P Morgan s PEA team undertook multi city trip in India to conduct due diligence multi-city – J.P. Morgan’s PEA team leveraged relationship with local Indian fund of funds group  Compelling entry valuation with significant upside potential: purchase price of ~30% discount to NAV – J.P. Morgan’s PEA team believes that there is considerable embedded value with high quality assets  Macro-level interest in Asia based growth at discounted valuation  Macro-level interest in infrastructure services in India  Continued positive performance of the fund’s largest asset and public positions  Recent infrastructure investment into largest asset establishes significantly higher valuation  A Approximately 35% of portfolio is public and not subject to a lockup (free to exit these positions) i t l f tf li i bli d t bj t t l k (f t it th iti ) – Fund is beginning to exit positions, resulting in an early return of capitalSource: J.P. Morgan Asset Management. Past performance is not indicative of future results. This information above is given for illustrative purposes. It is considered to be accurate at the time of writing, but no warranty ofaccuracy is given and no liability in respect of any error or omission is accepted. These investment examples are included solely to illustrate the investment process and strategies which may be utilized by the Fund. Please note thatthese investments are not necessarily representative of future investments that the Fund will make. 11
  13. 13. J.P. Morgan Special Opportunities Fund (JSOF) 12
  14. 14. J.P.J P Morgan Special Opportunities Fund (JSOF)“Open ended” fund specifically designed for European clients, offered as a Luxembourg SICAV-SIF  Launched in February 2010 – Designed to appeal to small institutions, family offices, multi-asset managers and private banks – Open ended features tailored for distribution platforms – Innovative structure (Luxembourg SICAV-SIF) with attractive potential liquidity profile  Subscriptions and redemptions on quarterly basis2  Multi-currency share classes (EUR, GBP, USD)  Strong 13 month performance 1 – NAV growth of 28.7%, Euro Class A 28 7% – NAV growth of 28.5%, GBP Class A – NAV growth of 34.9%, USD Class A1. Source: J.P. Morgan Asset Management. As of 31 March Past performance is not indicative of future results.2. Subscriptions – quarterly at NAV. Redemptions – 5% of F d’ NAV quarterly (at discretion of B d of Directors)2 S b i ti t l t NAV R d ti f Fund’s t l ( t di ti f Board f Di t ) 13
  15. 15. JSOF: Summary of Key Fund TermsDesigned to provide exposure to private assets with better liquidity than traditional LP structures Structure:  Specialised Investment Fund (SIF) organized as a SICAV in Luxembourg  Subscriptions – quarterly at NAV Liquidity:  Redemptions – 5% of JSOF s NAV quarterly (at discretion of Board of Directors) JSOF’s  Institutional – 1.00% Net Management Fee:  Other Informed Investors – 1.75% Performance Fee:  15% over a 7% preferred return (full catch-up) Target net returns:  15% - 20%* Currencies Offered:  EUR, GBP, USD NAV calculation:  Monthly based on IFRS and IPEV guidelines  Institutional – €10,000,000 (may be waived at management company’s discretion) Minimum subscription:  Other Informed Investors – €250,000* For more detailed information regarding JSOF, please refer to JSOF’s prospectus. An investor should not expect to achieve actual returns equal to the target return. The target return is the Fund’s investment manager’s goal based on the Management Company’scalculations using data available to it, the assumptions set forth within this presentation, past and current market conditions, and available investment opportunities, each of which is subject to change. Because of the inherent limitations of the target return, potentialinvestors should not rely on it when making an investment decision. The target return cannot account for the impact that economic, market, and other factors may have on the implementation of an actual investment program. Unlike actual performance, the target returndoes not reflect actual trading, liquidity constraints, fees, expenses, taxes and other factors that could impact the future returns of the Fund. The investment manager’s ability to achieve the target return is subject to risk factors over which the investment manager will haveno or limited control. Please see “Potential Risks and Other Considerations” for a more detailed explanation of the risks associated with investing in this Fund. No representation is made that the Fund will achieve the target return or its investment objective. Actual returnscould be higher or lower than the target return. 14
  16. 16. JSOF: Strong Performance Since InceptionEuro Class A shares have increased 28.7% since inception Performance Since Inception1 140.0% 135.0% Outperformed 130.0% MSCI World 125.0% 125 0% Index by over 1,000 basis 120.0% points1 115.0% 110.0% 105.0% 100.0% 95.0% 90.0% Feb-10 F b 10 Mar-10 M 10 Apr-10 A 10 May-10 M 10 Jun-10 J 10 Jul-10 J l 10 Aug-10 A 10 Sep-10 S 10 Oct-10 O t 10 Nov-10 N 10 Dec-10 D 10 Jan-11 J 11 Feb-11 F b 11 Mar-11 M 11 Euro, Class A GBP, Class A USD, Class A MSCI World Index USD 2010 / 2011 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Euro, Class A , 0.15 12.25 3.28 ( (0.05) ) 3.77 2.71 ( (3.61) ) 0.96 4.90 ( (1.93) ) ( (1.40) ) 6.06 ( (0.65) ) 28.65 GBP, Class A (0.19) 10.17 1.10 (2.35) 5.11 2.24 0.54 1.04 1.33 0.33 (1.61) 5.41 2.83 28.47 USD, Class A (0.63) 10.94 (3.25) 0.54 9.62 0.26 2.65 2.77 (1.29) 0.61 0.64 6.84 1.59 34.89 MSCI World (USD) 5.93 (0.16) (9.91) (3.56) 8.02 (3.92) 9.11 3.65 (2.35) 7.25 2.19 3.33 (1.24) 17.791. Source: J P M1 S J.P. Morgan A t M Asset Management. A of 31 M h 2011 P f t As f March 2011. Performance numbers shown are net of fees and expenses. Past performance is not indicative of future results. b h t ff d P t f i t i di ti ff t lt 15
  17. 17. JSOF: Portfolio DiversificationJSOF has exposure to 25 underlying company positions  Portfolio Summary  Current Focus – Number of companies: 25 – Growth equity in Asia  Direct: 8 – Debt in smaller US companies  Listed 3 – Special situations in Europe  LP 2 – Selective Selecti e listed pri ate eq it (global) private equity Investment Strategy1 Geography1 “Liquidity” Exposure2 Liquidity Europe 11% Longer North Special Term America Situations Second- 32% 33% aries 36% Liquid Assets 47% Buyout 58% Asia 57% Shorter Term Real Estate Second- 5% Listed PE aries 4% 16%1. Source: J.P. Morgan Asset Management. JSOF investment portfolio., does not include cash or liquidity funds . At 31 March 2011. Past performance not indicative of future results. 2. At 31 March 2011. Liquid assets includes listed private equity investments and cash. Shorter term secondaries includes first and second lien debt investments. Longer-term secondaries includes traditional private equity limited partnerships and other longer durationiinvestments. t t 16
  18. 18. J.P. Morgan Private Equity Limited (JPEL) 17
  19. 19. J.P.J P Morgan Private Equity Limited ( JPEL ) (“JPEL”)JPEL is the only listed private equity fund focused on the secondary private equity market Listed on London Stock Exchange in 2005 – Three share classes:  1 class of Equity Shares - $US  2 classes of Zero Dividend Preference (“ZDP”) Shares due 2013 and 2015, respectively - £ Sterling  1 class of Warrants - $US – Periodic redemptions at Net Asset Value1 Dedicated global secondary fund g y – Core strategy is to acquire private equity interests in the secondary market – Target motivated or distressed sellers to buy non-distressed assets Diversified portfolio and shareholder base – ~$700 million invested in 167 funds2 – Differentiated investor base consisting of HNW individuals and institutions in Europe and Asia Distributed h ld i inception3 Di t ib t d over $127 million t shareholders since i illi to h ti1 Ability to tender up to 15% of total shares each year, at Directors discretion. In the event greater than 15% of shares are tendered, tenders will be reduced on a pro-rata basis. Shares tendered may be held in Treasury for further issuance. JPEL’s tender facility was notoperated during the 2009 calendar year. On 29 September 2010, JPEL announced a 3% tender offer based on the prevailing net asset value as at 31 December 2010.2. As at 28 February 2011..3. Since inception. Includes tender at 31 December 2010 NAV.Past performance is not indicative of future performance. Performance returns shown can increase or decrease due to currency fluctuations performance fluctuations. 18
  20. 20. JPEL: Summary of Key Fund TermsDesigned to provide exposure to private assets with better liquidity than traditional LP structures Structure:  Guernsey registered closed-ended investment company  Daily, via London Stock Exchange (LSE: JPEL) Liquidity:  Semi-annual tender1 Management Fee:  1.00% of total assets Performance Fee:  7% over a 8% preferred return  Equity Shares - US$ Share classes available:  Zero Dividend Preference Shares (2 classes) – GBP  Warrants – US$ Currencies Offered:  USD, GBP NAV calculation:  MonthlySource: J.P. Morgan Asset ManagementFor more detailed information regarding JPEL, please refer to JPEL’s prospectus.1. Ability to tender up to 15% of total shares each year, at Directors discretion. In the event greater than 15% of shares are tendered, tenders will be reduced on a pro-rata basis. Shares tendered may be held in Treasury for further issuance. JPEL’s tender facility was notoperated during the 2009 calendar year. On 29 September 2010 JPEL announced a 3% tender offer based on the prevailing net asset value as at 31 December 2010 year 2010, 2010. 19
  21. 21. JPEL: PerformanceJPEL’s stock price and NAV have consistently outperformed relevant listed private equity benchmarks JPEL Performance of US$ Equity Shares Since Inception at 30 June 20051 200%  JPEL’s US$$ 180% Equity Share 160% price has outperformed the 140% JPEL NAV per LPX Index by 29 Equity Share q y 120% percentage S&P 500 Index 100% JPEL Equity points1 Share Price 80%  JPEL’s NAV has LPX Index increased 31.4% 60% since inception1 40% 20% Oct-05 Feb-06 Apr-06 Oct-06 Feb-07 Apr-07 Oct-07 Feb-08 Apr-08 Oct-08 Feb-09 Apr-09 Oct-09 Feb-10 Apr-10 Oct-10 Feb-11 Apr-11 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Aug-05 Dec-05 Aug-06 Dec-06 Aug-07 Dec-07 Aug-08 Dec-08 Aug-09 Dec-09 Aug-10 Dec-101 Source: J.P. Morgan Asset Management, Bloomberg as at 10 May 2011. Performance data shown is net of fees and expenses. JPEL NAV data as at 31 March 2011 released via the London Stock Exchange on 10 May 2011. LPX ® Composite performance shown is indexedto JPEL’s initial trade price of $1.07 on 30 June 2005. The index is well diversified across regions and LPE investment styles and represents the development of all LPE companies covered by LPX® that fulfill certain liquidity constraints. The LPX® Composite is a global ListedPrivate Equity (“LPE”) index with a broad number of constituents.PastP t performance is not indicative of f t performance. Performance returns shown can increase or decrease due to currency fl t ti f i t i di ti f future f P f t h i d d t fluctuations. 20
  22. 22. JPEL: Portfolio DiversificationDefensive portfolio built primarily through secondary transactions Exposure to 167 distinct funds 47% of portfolio invested in small to mid-market buyout funds Investment Type1 Geography2 Buyout Strateg B o t Strategy3 Investment Strategy1 I t t St t Funded North Infrastruct Primary Primary America ure 8% 6% 34% 3% Co- Asia Special Investment 20% Situations 15% 1 % 23% Small Other 44% 5% Venture Capital Buyout 12% 53%Secondary 71% Real Estate Medium Mega Large 3% Europe 9% 3% 3% 41% 1. Source: J.P. Morgan Asset Management. At 28 February 2011. The diversification charts above are based on Net Asset Value as at 28 February 2011 and use underlying fund-level values. 2. Source: J.P. Morgan Asset Management. At 31 December 2010. Geographic diversification reflects underlying company level values. 3. Source: J.P. Morgan Asset Management. At 28 February 2011. Fund classifications for buyout strategy is based on total fund commitments: Small: $0 - $500 million; Medium: $500 - $2,000 million; Large: $2,000 million - $5,000 million; Mega: over $5,000 million. Includes buyout- related co-investments only. Past performance is not indicative of future performance. Performance returns shown can increase or decrease due to currency fluctuations. Asset allocation may vary from time to time. 21
  23. 23. J.P. Morgan’s Private Equity Advisors Team 22
  24. 24. J.P.J P Morgan Asset ManagementOver $95bn in alternative assets under management globally* Hedge Fund Global Real Private Fixed Income Equity Highbridge of Funds Assets Equity and Alternatives and AlternativesHistory 17+ yr track record 15+ yr track record 39+ yrs experience 30 yrs experience1 35+ yrs experience 37+ yrs experience (17 yrs shorting)Staff 350 67 366 64 233 352AssetsA t $20.0bn $20 0b $8.0bn $8 0b $46.9bn $46 9b $20.6bn $20 6b $798 5b 2 $798.5bn $315 6b 2 $315.6bn  Multi-strategy  Core fund of  Private core, value  Venture capital  Local currency  130/30Alternative hedge funds added and emerging marketsStrategies  Statistical opportunistic  US corporate  Market neutral arbitrage  Niche products finance  High Yield  REITS: U S U.S.,  Jardine Fleming  Asia-focused  Customized International  European  Levered loans Absolute solutions and Global corporate finance Return: Asia, best ideas  Long/short equity  Traditional Fixed Greater China, GARS -  Hedge fund  Blended public and  Asia Income: Treasuries, Korea, Japan  Senior loans advisory services private Agencies, Credit,  Secondaries and Mortgages, g g  Global EM s  Fixed income  Commodities  OECD and Asia direct di t co- Securitized Discovery Infrastructure investments products, Global  Convertible  Secondaries and  Traditional Equities: arbitrage direct co-  Maritime  Emerging managers US, Int’l, Global, investments Regional/Country  Mezz debt  PE distribution focus management  Listed PEData as of 30 September 2010.*Data may differ from J.P. Morgan’s official financial reports due to the following: Real Estate AUM is shown on a gross asset value basis; Private Equity AUM includes unfunded commitments and uncommitted capital; US Equity includes Other; Currency is not included inAlternatives. Hedge fund of funds includes JPMAAM hedge fund of funds and single strategy hedge funds invested in equities and fixed income.1. Established at AT&T in 1980. Moved to J.P. Morgan in 1997.2. Assets d2 A t under management f fi d iincome and equities reflect b th t diti l llong only strategies and alternative strategies. t for fixed d iti fl t both traditional l t t i d lt ti t t i 23
  25. 25. J.P.J P Morgan Asset Management: Private Equity CapabilitiesJPEL and JSOF are managed by J.P. Morgan’s Private Equity Advisors TeamJ.P. Morgan Investment Management Inc.’s Private Equity Group J.P. Morgan’s Private Equity Advisors Team2 Significant private equity knowledge and insight  Significant experience managing liquid private equity – $19 billion and 100+ partnerships under management products – $34 billion and 300+ partnerships under administration – Core strategy is to acquire illiquid assets in the secondary market – Obtain information on behalf of 675+ partnerships – Private equity fund structuring expertise – J.P. Morgan Special Opportunities Fund (Luxembourg SICAV) Overall compensation aligned with and driven by business – J.P. Morgan Private Equity Limited (LSE:JPEL) results – Team professionals p p personally invest along side all investments and y g  Added to J.P. Morgan Asset Management through JP share any incentive fees earned acquisition of Bear Stearns in 2008 – More than $250 million committed to date by and on behalf of firm employees – 8 investment professionals based in New York and London – 6 operational and administrative professionals Experienced, cohesive team of 45 investment professionals  Strong fund management and administration capabilities – 20 year average tenure of the team’s founding members1 – $1.6 billion under management3 – Offices in Hong Kong, London, and New York  Portfolio managers have worked together for 10+ years Proven investment strategy and process developed and refined over th past 29 years fi d the t 1. Includes tenure at both PEG and AT&T Investment Management Corporation (“ATTIMCO”) 2 J.P. Morgan’s Private Equity Advisors team manages J.P. Morgan Special Opportunities Fund. J.P. Morgan’s Private Equity Advisors team was added to J.P. Morgan Asset Management through the acquisition of Bear Stearns in 2008 and consists of a separate team and exists as a separate legal entity from J.P. Morgan Investment Management Inc.’s Private Equity Group. 3. As t February 2011 3 A at 28 F b 2011. 24
  26. 26. J.P. Morgan sJ P Morgan’s Private Equity Advisors Team Troy Duncan Gregory Getschow Troy Duncan is a portfolio manager responsible for J.P. Morgan Private Gregory Getschow is a portfolio manager responsible for J.P. Morgan Equity Limited and is based in London. Prior to J.P. Morgan / Bear Private Equity Limited and is based in New York. Prior to J.P. Morgan / Stearns, he previously was a Senior Vice President at BDC Financial. Bear Stearns, he previously was a co-founder of BDC Financial. Prior to Prior to BDC Financial Mr Duncan held senior financial and operation Financial, Mr. BDC Financial Mr Getschow began his career practicing law at Bingham Financial, positions in venture-backed and middle-market companies. Mr. Duncan Dana LLP and Sullivan & Worcester LLP. Mr. Getschow received a JD from received a JD from Fordham University School of Law and an AB from Villanova Law School, where he was a member of the Law Review, and an the University of Notre Dame. AB from Colby College. Investment Professional Title JPM Office Years of Experience Selected Experience Education Troy Duncan Managing Director London 22 JPMAM, JPMAM Bear Stearns, BDC Financial Stearns AB, AB Notre Dame; JD Fordham Law School JD, Gregory Getschow Managing Director New York 25 JPMAM, Bear Stearns, BDC Financial AB, Colby College; JD, Villanova Law School Rosemary DeRise Executive Director New York 11 JPMAM, Bear Stearns, Capital Z, Salomon Smith Barney BA, Barnard College; MBA, Columbia University Roger Lengyel Vice President New York 11 JPMAM, Bear Stearns, Deutsche Bank BA, Colgate University, MBA, Columbia University Irina Mikheeva Vice President New York 20 JPMAM, Bear Stearns, BDC Financial Moscow State University Michael Henderson-Cohen Vice President London 7 JPMAM, Bear Stearns BA, Colby College Marc Allum Associate New York 6 JPMAM, Bear Stearns BA, Yale University Samantha Ladd Associate New York 6 JPMAM, Bear Stearns BA, University of St. Andrews, Scotland Operations P f i l O ti Professional Title Titl JPM Offi Office Years of Experience Y fE i Selected E S l t d Experience i Education Ed ti Todd Hesse Managing Director New York 25 JPMAM, Bear Stearns, James J. Lowrey & Company AB, Delaware Valley College Luis Espinal Executive Director New York 11 JPMAM, Bear Stearns, Promethean Investments BBA, Pace University Yafa Davydov Associate New York 7 JPMAM, Bear Stearns, PricewaterhouseCoopers LLP BBA, Bernard Baruch College Yocati Lantigua Associate New York 10 JPMAM, Bear Stearns, Bisys Private Equity BS, Hunter College Julie Li Associate New York 3 JPMAM, J.P. Morgan BS, Syracuse University Cornell McIntosh Analyst New York 5 JPMAM, Bear Stearns, Hereford Insurance BA, UW-Madison, WisconsinIndividuals are currently working with J.P. Morgan Asset Management. J.P. Morgan Asset Management can not guarantee that the existing investment team will always have the same composition in the future. There can be no assurance that the professionals currentlyemployed b J Pemplo ed by J.P. Morgan Asset Management will contin e to be emplo ed by J.P. Morgan Asset Management or that the past performance or s ccess of an s ch professional ser es as an indicator of s ch professional’s f t re performance or s ccess ill continue employed b J P success any such serves such future success. 25
  27. 27. Potential Risks and Other ConsiderationsInvestments in private equity are speculative and involve significant risks. The environment for private equity investments is volatile, and an investor shouldonly invest if the investor can withstand a total loss of its investment. Some or all alternative investment programs may not be suitable for certain investors.No assurance can be given that the investment objectives of JPEL and / or JSOF will be achieved and no assurance can be made that the underlying fundswill achieve results comparable to prior funds. Neither JPEL nor JSOF will be subject to the same regulatory oversight as regulated mutual funds. The risksthat J.P. Morgan Asset Management (UK) Limited and Bear Stearns Asset Management Inc., the “Managers” for JSOF and JPEL (collectively the g g ( ) g , g ( y“Managers”) wished to call to the particular attention of prospective investors include, but are not limited to, the following:  Illiquidity. Potential investments in portfolios of JPEL and JSOF are likely to be illiquid.  Leverage. The potential use of leverage by companies in JPEL and JSOF’s respective portfolios could expose JPEL and JSOF to additional levels of risks.  Market Volatility. Economic recessions and downturns and adverse market conditions could impair the profitability of the Fund and the value of the investments in the respective portfolios of JPEL and JSOF or prevent JPEL or JSOF from increasing its investment base. As such, the value of an investment in JPEL or JSOF could fall to zero.  Global Macroeconomic Environment. Recent developments in the global financial markets have created a great deal of uncertainty for the asset management industry, and these developments may adversely affect the investments of JPEL and JSOF, access to financing and overall performance. Specific Risks R l t d to the Manager and Investment Strategy S ifi Ri k Related t th M dI t t St t  The success of the investments of JPEL and JSOF are subject to numerous risks and the past performance of any other private equity funds should not be taken as an indication of the future performance of JPEL or JSOF.  Investors will not know in advance which investments will be chosen, and must rely on the relevant Manager to make appropriate investment decisions.  The relevant Manager may follow an over-commitment strategy when making investments in private equity funds, which may result in contingent over commitment funds commitments exceeding its available capital for JPEL or JSOF, as applicable.  Valuation methodologies for the investments in JPEL and JSOF can be subject to significant subjectivity and there can be no assurance that the values of investments reported by JPEL or JSOF from time to time will in fact be realised.  JPEL and JSOF may invest in private equity funds, directly in private equity investments and other similar illiquid investments with no or limited operating history.  Changes in laws or regulations governing the operations of JPEL or JSOF may adversely affect its business. The information above is prepared as at May 2011, is subject to the latest version of the relevant prospectus or other offering documents. This information is provided by way of summary only and is subject to change, verification and updating. 26

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