Economics · Financial Markets
The 'J-Curve effect' in private equity refers to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Consistent positive returns from Day 1
- 2Initial negative cash flows and returns due to management fees and capital deployment, followed by positive returns from exits✓
- 3A J-shaped cost structure in leveraged buyouts
- 4Exponential revenue growth in early-stage investments
Correct answer
Initial negative cash flows and returns due to management fees and capital deployment, followed by positive returns from exits
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