JPMAM, iCapital launch new private market fund for wholesale investors

J.P. Morgan Asset Management (JPMAM) and iCapital have launched a new Australian domiciled fund designed to afford wholesale investors access to small to mid-market private equity opportunities.

The fund, managed by iCapital, and will invest in an underlying solution by JPMAM's Private Equity Group (PEG), which manages US$30 billion in assets under management. PEG boasts a seasoned team with an average tenure of 23 years and over four decades of private equity experience.

JPMAM chief executive for Australia and New Zealand Andrew Creber said providing access to private equity and alternative solutions to wholesale investors has been a key strategic initiative.

"As a global asset manager, we have the depth and breadth of investment expertise and capability to provide wholesale investors with access to these more niche parts of the market," he said.

He added that with the growing appetite for "more innovative and diverse investment opportunities," JPMAM is well-positioned to deliver these solutions to Australia.

JPMAM head of wholesale for Australia Mark Carlile said the solution was developed in response to market feedback that wholesale investors were demanding access to private equity with lower investment minimums, without capital calls or commitments, and with regular liquidity.

He said the new fund "meets these features at a competitive fee," and provides wholesale investors access to a sector traditionally reserved for institutional investors.

However, PEG co-head Ashmi Mehrotra noted that active management is crucial for private equity, given the asset class's propensity for a wide dispersion of returns.

"When looking at the range of opportunities in the small to mid-market space, we deploy a strict set of criteria to determine if an investment is viable. For example, what is the opportunity set? Is there operational value-add? Are there attractive entry multiples? Is there a reliance on leverage? And importantly, what are the exit opportunities?" she said.

She added that private equity plays an important role within a wholesale investor's portfolio.

PEG analysis showed that private equity has outperformed public markets across different market conditions. It also provides diversification from traditional core investments and can help lower a portfolio's volatility.

The underlying solution has returned 46.17% since inception in July 2023. However, the Australian fund's performance will differ from the underlying solution due to factors such as fees, taxes, and currency fluctuations specific to the local market.