Investment Strategies
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PrintThe Private Equity Distribution Management ("PEDM") program was developed to manage distributions from private equity partnerships. It is a "sell only" product, with a process built to maximize the cash-to-cash returns on private equity investments in a short period of time. Effective management of these distributed securities in this final stage of the private equity cycle may significantly enhance actual returns realized from private equity investments.
As a private equity fund of funds manager, J.P. Morgan Asset Management has conducted extensive research to understand how distributions impact returns and how these distributions can be managed to help maximize cash-to-cash returns for our clients.
The PEDM program incorporates the results of this analysis and our own experience and expertise in the public and private markets. PEDM was developed to provide other institutional investors with an effective approach to enhancing their private equity returns and overall plan performance, while minimizing trading costs and the administrative burdens associated with private equity distributions.
Our investment process utilizes industry-specific quantitative "checklists" of fundamental factors to separate the strong performers from the rest of the distributions. Each distribution received is evaluated immediately using a proprietary checklist developed for its industry. In this sell-biased process, only stocks scoring above a predetermined threshold are held.
Once a sell decision is made, our trading capabilities are leveraged to maximize returns. In the case of a decision to hold, stocks are carefully monitored for changes in the fundamental checklist factors, and sold if they fall below the threshold score. In addition, we believe that returning cash as quickly as possible is in the best interest of LP's and our average holding period is very low.
Read more about our capabilities by clicking on the links below.
The managers seek to achieve the stated objectives. There can be no guarantee the objectives will be met.
Investing in private equity involves specific risk. They include but are limited to the following: Companies are typically in the developmental stage. Success is highly dependent on a few key individuals. Barriers to entry can be difficult. Securities are illiquid.