J-curve

A trendline of returns reflecting an initial loss followed by sharp upward gain (forming a shape like a capital J) to above the original investment. The J-curve reflects the typical investor's experience in a private market fund, where it can often take several years for an investor to recoup their initial investment and benefit from any investment gains. The expected negative return profile of early years does not reflect negative performance of the fund, it reflects the operating expenses incurred during the first few years as the fund seeks to deploy capital.