infrastructure investment opportunities for public safety ... docs/public... · 1yr yield less yoy...

STRICTLY PRIVATE | CONFIDENTIAL

FOR INSTITUTIONAL/WHOLESALE OR PROFESSIONAL CLIENT

USE ONLY | NOT FOR RETAIL DISTRIBUTION

October 28, 2014

This Information Booklet summarizes and is qualified in its entirety by information contained in the Confidential Private Placement Memorandum (the "Memorandum") for the JPMorgan Infrastructure Investments Fund (the "Fund"), and in the event

of a conflict between this Booklet and such information, the information contained in the Memorandum shall supersede this Booklet. Investors should have the financial ability and willingness to accept the risk characteristics of the Fund's

investments. Performance or estimated performance shown does not represent the Fund's investments and should not be used to predict the Fund's return. The Fund's performance may be volatile. Investors may lose all or a substantial amount of

their investment in the Fund. J.P. Morgan's fees and organizational and other Fund expenses will offset the Fund's returns. The Fund may engage in leverage and other speculative investment practices that involve a substantial degree of risk. The

Fund is subject to various other risk factors and conflicts of interest. For further information regarding risk factors and potential conflicts of interest, please refer to the "Risks and Disclosures" Appendix in this Booklet. This Booklet is for informational

purposes only and is intended solely for the person to whom it is delivered by J.P. Morgan. This Booklet is confidential and may not be reproduced or distributed in any jurisdiction without the express prior written consent of J.P. Morgan. This

document does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product. Any such offer or solicitation may only be made by means of delivery of the Memorandum.

Infrastructure Investment Opportunities

for Public Safety Plans

Bob Pease, Executive Director, JPMorgan Infrastructure Investment Group

1-212-648-1931, [email protected]

mailto:[email protected]

FOR INSTITUTIONAL/WHOLESALE OR PROFESSIONAL

CLIENT USE ONLY | NOT FOR RETAIL DISTRIBUTION


Infrastructure includes a broad range of assets

2

Water distribution/wastewater treatment

Regulated electricity transmission

Power generation - Wind

Power generation - Natural gas

Tollroads

Airports




What impacts the risk/return profile of an infrastructure asset?

3

Economic sensitivity

Demand drivers Sub-sector

Regulated utilities

GDP sensitive

(i.e. Transport)

Regulatory

Political

Legal

Geography Developed

markets Emerging markets

Demand risk

Construction risks

Usage history

Stage of Development

Existing (Brownfield)

New build (Greenfield)

Lower Higher

Relative Risk / Return

Debt vs. Equity

% of equity ownership

Governance/management

Capital Structure

Senior Secured

Debt

Minority equity

ownership




Relative Economic Sensitivity

Not all sub-sectors are created equal

Source: Energy Information Administration (Electricity and Natural Gas consumption), Federal Highway Administration (VMT), Bureau of Transportation Statistics (Passenger enplanements), Ports of LA, Long Beach, NY-NJ, Oakland, Savannah, Seattle, Tacoma (collectively handling more than 70% of the container traffic in the U.S.), and J.P. Morgan Asset Management. Natural gas and electricity consumption by residential and commercial consumers only.

0%

-1%

-4% -5%

-17%

0%

2% 2% 2%

17%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Natural GasConsumption

ElectricityConsumption

Vehicle MilesTraveled

PassengerEnplanements

Port ContainerVolumes

2009 vs 2007-2008 2010 vs 2009

Infrastructure usage in the U.S. during and after “The Great Recession”

4

Sub-sector

Geography


Capital Structure




Usage risk related to development projects

5

Sub-sector

Geography


Capital Structure

Greenfield – development projects Brownfield – existing or operating businesses




Source: J.P. Morgan Asset Management as of January 2014.

JPMAM long-term capital market return assumptions

(Basic risk and return expectations for various asset classes)

Geography and seniority impact risk

6

Sub-sector

Geography


Capital Structure

US inflation

US Cash

US Long Treasury

US TIPS US Aggregate

US High Yield

WGBI unhedged

Emerging Market Debt

US Municipal

US Large Cap

US Small Cap Europe Large Cap

Japan Large Cap

UK Large Cap

Emerging Market Equity Asia ex-Japan Equity

US Private Equity

US Direct Real Estate

US Value Added RE

US REITs

OECD Infrastructure

Hedge Fund - Fund of Funds Commodities

Asian Infrastructure

0%

2%

4%

6%

8%

10%

12%

0% 5% 10% 15% 20% 25% 30% 35%

Ex

pe

cte

d r

etu

rn

Infrastructure Debt

Expected volatility




What is core infrastructure?

7

Opportunistic

Value-Added

Core

Cap

ital g

ain

s

RE

TU

RN

RISK

Cash

flo

w

Source: J.P. Morgan Asset Management

E.g. Long-Term Contracted Power

E.g. Short-Term Contracted Power

E.g. Un-contracted / Merchant Power

Core assets provide essential services and have monopolistic characteristics




What characteristics are investors seeking from core infrastructure?

Major component of total return is yield due to the typically stable

and mature nature of infrastructure assetsIncome

Monopolistic profile of many infrastructure assets can reduce the

volatility of cashflows and returnsLow Volatility of Returns

Drivers of return and value for core infrastructure are often different

than other asset classesDiversification

Many contracts and regulatory structures provide for the pass

through of inflationInflation Protection

Long-lived nature of infrastructure assets can match the long-term

liability of many investors wellLong-term Liability Matching

8















9















10















11















12




Accessing yield in a low rate environment

-2

-1

0

1

2

3

4

5

6

88 92 96 00 04 08 12 16

Pe

rce

nt

1yr yield less YoY core inflation 5yr average

1yr real rates, averaged for G4

Source: J.P. Morgan Asset Management, J.P. Morgan Investment Bank, Bloomberg Note: Returns and Risk metrics for highlighted investment strategies are for illustrative purposes only Data as of 6/30/14




Inflation? Infrastructure proved itself last time, whereas 60-40* didn’t

*Represents a portfolio allocated 60% to equities and 40% to bonds Sources: Bloomberg and J.P. Morgan Asset Management GRA Research

14

0

1

2

3

4

5

6

1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Nominal return and inflation indices in the US, 1970 to 1985

Regulated Utilities

US Real Estate

Corporate Debt

US CPI

60-40 Portfolio

S&P 500

Commodities

FOR PROFESSIONAL/INSTITUTIONAL INVESTOR USE ONLY |

NOT FOR RETAIL USE OR DISTRIBUTION


Allowed Return on Equity (RoE) relative to the Cost of Debt

Data as of March 2014. Sources: Regulatory Research Associates, Barclays Capital and J.P. Morgan Asset Management

Average Allowed Return on Equity for Electric and Natural Gas Utilities and Interest Rates in the US, 1970 – 2013

0%

2%

4%

6%

8%

10%

12%

14%

16%

1970 1975 1980 1985 1990 1995 2000 2005 2010

Electric allowed RoE Natural Gas allowed RoE 10-year Treasury rate Utility bond yields (Credit grade, long-term)

15




Stable cash flow profile can result in attractive portfolio impacts

16

-

50

100

150

200

250

300

Source: J.P. Morgan Asset Management GRA Research

Indices of annual cash flows for US and EU-15 infrastructure against average high income OECD CPI, 1986 – 2012

Recession year Infrastructure average CPI




20 year correlation matrix, USD denominated returns

Portfolio diversification — Infrastructure is generally uncorrelated with other

asset classes

Source: Bloomberg, MSCI, Barclays Capital, HFRI, Cambridge, DJ UBS, NCREIF Timberland, NCREIF Farmland, NCREIF ODCE, INREV, CBRE, Jones Lang LaSalle, FTSE/EPRA NAREIT, UBS, Clarkson Research, JPMAM-Global Real Assets. Annual data as of December 2013. Note: Unlevered series were levered to reflect how institutional investors typically access the representative asset classes. Past performance is not indicative of future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. The above table is for illustrative and discussion purposes only.

17

1994 - 2013 Global Equities Global Bonds Hedge Funds Private Equity Commodities Global REITs US

Core RE

Europe

Core RE

OECD

Infra

Global Equities 1.0

Global Bonds 0.0 1.0

Hedge Funds 0.7 -0.2 1.0

Private Equity 0.8 -0.2 0.8 1.0

Commodities 0.3 0.0 0.6 0.4 1.0

Global REITs 0.6 0.2 0.6 0.5 0.6 1.0

US Core Real Estate 0.1 -0.1 0.2 0.4 0.1 0.0 1.0

Europe Core Real Estate 0.4 -0.3 0.5 0.6 0.3 0.4 0.7 1.0

OECD Infrastructure 0.1 0.6 0.1 0.0 0.0 0.2 0.2 0.1 1.0

High (+1.0) Low (Negative)



Adding OECD core/core-plus infrastructure to a traditional institutional portfolio

can increase diversification, and potentially deliver higher risk-adjusted returns

+ 5% to OECD

Infrastructure

Sample

Portfolio Allocation

+ 10% to OECD

Infrastructure

Global Equities

56%

Global Bonds

27%

Private Equity

9%

Real Estate

8%

Notes: (1) The allocation to infrastructure is assumed to be taken pro-rata from equities and fixed income. (2) The returns are derived from J.P. Morgan internal estimates of respective asset class returns. (3) Sharpe ratio assumes a risk free rate of 2.00% and is estimated based on asset class target return assumptions and historical (annual) modeled 20 year (1994-2013) volatility (standard deviation of historical annual returns). (4) The risk-return characteristics are calculated in USD terms. (5) The portfolio attributes stated in the above table are for illustration purpose only. (6) The portfolios assume annual rebalancing. (7) Max annual drawdown represents the minimum annual return over the 20 year period. Sources: Bloomberg, MSCI, Barclays, Cambridge, NCREIF, and JPMAM GRA Research. DISCLAIMER: Past performance is not indicative of future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. J.P. Morgan seeks to achieve the stated objectives, but there can be no guarantee the objectives will be met. For discussion purposes only. *The expected returns are for illustrative purposes only and are subject to significant limitations. An investor should not expect to achieve actual returns similar to the expected returns shown above. Because of the inherent limitations of the expected returns, potential investors should not rely on them when making a decision on whether or not to invest in the strategy.

Illustrative 20-year analysis using asset class data

OECD Infra

5%

OECD Infra

10%

18

Risk/Return Characteristics

Historical Return 8.4% 8.5% 8.7%

Historical Volatility 12.3% 11.8% 11.2%

Return per unit of Risk 0.42 0.45 0.49

Max Annual Drawdown -24.3% -23.2% -22.2%





+ 5% to OECD

Infrastructure

Sample


+ 10% to OECD

Infrastructure

Global Equities

56%

Global Bonds

27%

Private Equity

9%

Real Estate

8%



OECD Infra

5%

OECD Infra

10%

19










+ 5% to OECD

Infrastructure

Sample


+ 10% to OECD

Infrastructure






Global Equities

56%

Global Bonds

27%

Private Equity

9%

Real Estate

8%



OECD Infra

5%

OECD Infra

10%

20




Institutional investors in infrastructure

21

Currently, the 100 largest institutional investors

in infrastructure have a total of $272 billion

committed to the asset class through a

combination of unlisted, listed, and direct

investments.

Public pension plans are the largest investor

type accounting for 30%

68% of the top 100 institutional investors

operate a separate infrastructure allocation with

the remaining investors investing through

allocations to alternatives, real assets or private

equity

1 As of June 30, 2014

30%

20%

11%

9%

8%

7%

5%

5% 6%

Top 100 Institutional Investors in Infrastructure by Type

Public Pension Fund

Asset Manager

Superannuation Scheme

Insurance Company

Government Agency

Bank

Sovereign Wealth Fund

Private Sector PensionFund

Other




Appendix – Investment opportunities




$1.4 trillion new capital is required in the U.S. alone

30 deals discussed; 5 under further review:

Industry specialized import/export port facilities

Educational and private parking systems

International toll roads

Domestic transit program funding strategy

Transportation ($500-600 billion of capex) Midstream ($300-400 billion of capex)

Power Generation/Renewables

($150-300 billion of capex) Utilities ($300-500 billion of capex)

Investment backlog: $60 billion Investment backlog: $50 billion

Investment backlog: $40 billion Investment backlog: $150 billion


Distributed refined products terminals

US commodities export terminals

Demand integrated gas and products storage

Pipeline partnership stakes


Transmission platform investment

High regional growth gas distribution utility

Water and wastewater regional consolidation

Summit Maine expansion in addition to above

70 deals discussed (30GW); 9 under further review:

Large scale cogeneration facility

Wind partnership with strategic operator

Solar partnership with strategic developer

Partnering for thermal generation portfolio

23

Source: J.P. Morgan Asset Management – Global Real Assets. As of August 2014.

Significant infrastructure backlog drives investment opportunities




Deal Summary – Global Solar Joint Venture*

24

Summit Maine – Phase 2 Recently executed Letter of Intent and Term Sheet with global solar power

developer and operator with a focus on OECD countries:

Europe

North America

South America

Asia

Over 100MW of operating projects with over 500MW of mature projects in late-

stage development or under construction

Currently executing over 250MW of projects in an OECD country in Asia

€135-140 million initial equity investment for 50% of operating projects as well

as joint ownership of mature projects in development or under construction

Contributing at least 50% of additional equity capital needs to execute 500MW+

of development projects during the first 18-24 months of the investment

Inclusive of the initial investment, the total capital investment over the next 24

months could exceed €300 million

Additional upside opportunity to grow the global platform further with over

700MW of additional projects in various stages of early development

Experienced management team focused on execution and operations

Longer term opportunity to acquire the additional 50% of the company

*Represents an investment opportunity under consideration.

This example of a proposed investment made by the Fund is included solely to illustrate the investment process and strategies that may be utilized by JPMIM. There can be no guarantee that the expected acquisition listed above will be

concluded within a specified time line. This example is not intended to indicate overall performance that may be expected to be achieved by the Fund. There can be no guarantee or assurance that the Fund will be able to make similar

investments on similar terms in the future. 1 Engineering, Procurement and Construction Signed

Operational Projects - Capacity (MW)

Europe

Southeast Asia

North America

Asia

Project Status (MW)

Operational

Under Construction

EPC Signed

Development

Documentation

**

**Currently under construction. Commercial Operation Date by

December 2014

**

Source: J.P. Morgan Asset Management, as of July 2014

1

25




Is The Global Solar Joint Venture Anticipated to Deliver the Benefits of

Core Infrastructure?

Purchase of existing operating projects that are

projected to meet yield targetsIncome

Long-term contracts provide revenue certaintyLow Volatility of Returns

Sectors and geographies that are traditionally

harder for core infrastructure investors to access

Diverse regulatory environments and off-takers

Diversification

Long-term contracts provide protection against

cost inflationInflation Protection

Long-term nature of contracts matches long-term

liabilities of many investorsLong-term Liability

Matching




Risks and disclosures

26

SUPPLEMENTARY INFORMATION

Infrastructure investments are subject to significant risks. While J.P. Morgan believes that infrastructure investments have compelling risk and return characteristics, past performance is no guarantee of future results, and any risk or return analyses should not be relied upon. Risk/return continuums and other relative comparisons are based on J.P. Morgan's analysis of information available to it on project developments in the referenced asset classes, and such information may not be accurate or complete. Specific investments shown are for illustrative purposes only, and you should not assume that similar investments will be available to or, if available, will be selected for investment by the Fund.

Information contained in this Booklet, except where otherwise indicated, solely represents J.P. Morgan's views based on available information and current market conditions. The views expressed herein may change at any time based on new information, changing conditions or revised analyses.

The deduction of an advisory fee reduces an investor’s return. Actual account performance will vary on individual portfolio security selection and the applicable fee schedule. Fees are available upon request.

The following is an example of the effect of compounded advisory fees over a period of time on the value of a client’s portfolio: A portfolio with a beginning value of $100 million, gaining an annual return of 10% per annum would grow to $259 million

after 10 years, assuming no fees have been paid out. Conversely, a portfolio with a beginning value of $100 million, gaining an annual return of 10% per annum, but paying a fee of 1% per annum, would only grow to $235 million after 10 years. The

annualized returns over the 10 year time period are 10.00% (gross of fees) and 8.91% (net of fees). If the fee in the above example was 0.25% per annum, the portfolio would grow to $253 million after 10 years and return 9.73% net of fees. The

fees were calculated on a monthly basis, which shows the maximum effect of compounding.

ADDITIONAL INFORMATION ON SPECIFIC PRESENTATIONS

KEY RISK FACTORS FROM THE MEMORANDUM AND OTHER DISCLOSURES

The following summarizes certain key risk factors that are fully set out, along with other risk factors, in the Memorandum. Defined terms used herein shall have the meanings ascribed thereto in the Memorandum. Prospective investors should carefully consider the summaries below in conjunction with the risk factors section of the Memorandum and should consult with their own financial, legal and tax advisors with respect thereto. The different organizational structures of the Fund Investor Vehicles are likely to result in different actual returns to Investors investing in different Fund Investor Vehicles. In certain circumstances, the variation in returns between Fund Investor Vehicles may be material. Before deciding to invest in the Fund or any Fund Investor Vehicle, all prospective investors are strongly urged to seek independent advice as to the most appropriate Fund Investor Vehicle through which to invest in the Fund. J.P. Morgan does not provide tax or regulatory advice. It is the sole responsibility of each prospective investor to ensure that it invests in a Fund Investor Vehicle that suits its personal circumstances and status.

General risk: There can be no assurance that the Fund will succeed in meeting its investment objective or Portfolio Target Return, or that there will be any return on capital or of the original capital invested. Investors will only have recourse to the assets of their particular Fund Investor Vehicle for any losses suffered.

Risks associated with infrastructure investments generally: Investing in infrastructure assets involves a variety of risks, not all of which can be foreseen or quantified, and which include, among others: the burdens of ownership of infrastructure; local, national and international economic conditions; the supply and demand for services from and access to infrastructure; the financial condition of users and suppliers of infrastructure assets; risks related to construction, regulatory requirements, labor actions, health and safety matters, government contracts, operating and technical needs, capital expenditures, demand and user conflicts, bypass attempts, strategic assets, changes in interest rates and the availability of funds which may render the purchase, sale or refinancing of infrastructure assets difficult or impracticable; changes in environmental laws and regulations, investments in other funds, troubled infrastructure assets and planning laws and other governmental rules; changes in energy prices; negative developments in the economy that may depress travel activity; force majeure acts, terrorist events, under-insured or uninsurable losses; and other factors which are beyond the reasonable control of the Fund or the Investment Adviser. Many of these factors could cause fluctuations in usage, expenses and revenues, causing the value of the Investments to decline and negatively affecting the Fund’s returns.

Lack of liquidity of interests: The Interests are subject to restrictions on transferability and resale under various securities laws and may not be Transferred or resold except in compliance with those laws and with the prior written approval of the applicable General Partner or Board of Directors (which generally may be withheld or conditioned in its absolute discretion). There will be no public market for the Interests.

The portfolio target return is subject to market conditions: The Portfolio Target Return is based on current available investment opportunities and predictions of the infrastructure market and economic conditions generally. Because the Fund has an indefinite term and current estimates of market conditions are likely to change over time, prospective investors should note that the actual realized return over the term of the Fund may vary materially from the Portfolio Target Return. The Investment Adviser reserves the right to amend the Portfolio Target Return without the consent of Investors in the event the Investment Adviser determines, in its absolute discretion, that such amendment is warranted by a material change in circumstances.

Appraisals and valuations: Most of the Fund’s Investments will be highly illiquid, and will most likely not be publicly traded or readily marketable. The Investment Adviser, therefore, will not have access to readily-ascertainable market prices when

establishing valuations for the Investments, and the Investment Adviser and the Fund can provide no assurance that any given Investment will be valued or sold at a price equal to the value ascribed by the Investment Adviser to such Investment.

Regulatory and tax risks: The operation of the Fund and the tax consequences of an investment in the Fund are substantially affected by legal requirements, including those imposed by ERISA, the Code and regulations promulgated under these

and other applicable U.S. laws, and by the laws, including tax laws, of the Cayman Islands, Canada, Germany and any other jurisdiction in which an Entity may be organized, formed or incorporated or in which an Investment may be made. To

ensure compliance with such regulations and laws that may affect a group of Investors, the Investment Adviser may, acting reasonably and in good faith, take actions to ensure compliance with such regulations and laws. Such actions or omissions

may have an adverse effect on certain Investors. J.P. Morgan does not provide tax or regulatory advice.

Distributions: Unless an Investor has elected to receive cash distributions of Distributable Cash, all Distributable Cash will be reinvested on that Investor’s behalf to purchase additional Interests in the Fund Investor Vehicle in which that Investor is

invested at the most recent NAV per Interest for that Fund Investor Vehicle. As a result, Investors may incur tax liabilities arising from the activities of the Fund without necessarily receiving cash distributions from the Fund to meet such tax liabilities




Risks and disclosures (cont’d)

27

.

Environmental risks: The Fund may become liable for substantial costs from remedying environmental problems associated with the properties it holds. The costs of any such remediation may exceed the value of the relevant property and/or the

aggregate assets of the Fund. Environmental problems may also affect the use and operation of such properties.

Future investments; inability to invest committed capital: Investments that will be acquired by the Fund have not yet been identified. The activity of identifying, completing and realizing attractive Investments is highly competitive and involves a

high degree of uncertainty. The Fund will be competing for investments with other infrastructure investment vehicles, as well as financial institutions and other institutional investors. No assurance can be given that the Fund will be successful in

obtaining suitable investments.

Risks associated with Non-U.S. investments: The Fund expects to invest a substantial portion of the Fund’s assets outside of the U.S. Such investments involve certain risk factors not typically associated with investing in infrastructure in the

U.S. including, but not limited to, risks relating to (i) currency exchange matters, (ii) differences between U.S. and non-U.S. infrastructure markets, the absence of uniform accounting, auditing and financial reporting standards, practices and

disclosure requirements, and differences in government supervision and regulation, (iii) certain economic and political risks, including potential exchange-control regulations and potential restrictions on non-U.S. investments, (iv) changes in tax

legislation, treaties, administrative practices or understandings, and (v) certain geographically specific risks (such as weather).

Hedging: While under no obligation to do so, the Fund may enter into transactions or investments in relation to any or all of currency exchange, interest rate, inflation rate, commodity or other risks in connection with Investments. It may not be

practical or cost-effective to hedge such risks precisely, especially where the magnitude and timing of future cash flows are not known with certainty. Accordingly, there can be no assurance, in such cases, that (a) such hedges will (i) be available,

(ii) be available at a reasonable cost, (iii) be sufficient to mitigate the relevant risk or (iv) actually eliminate the risk of fluctuation in rates being hedged or (b) counterparties to any hedging transaction would perform as expected. There is also no

certainty that any hedging transaction will prove beneficial to the Fund.

Leverage: The Fund intends to leverage its investments with recourse and non-recourse debt and may also obtain credit facilities or subscription lines. Although the use of leverage can enhance returns and increase the number of Investments that

can be made, it can also substantially increase the risk of loss for such leveraged investments.

Diversification: Given the concentration of the Fund’s assets in the infrastructure industry, the Fund will be more susceptible to adverse economic or regulatory occurrences affecting that industry than a fund that is not concentrated in a single

industry. Such possibly limited degree of diversification means the performance of the Fund may be more susceptible to a single economic, political or social event.

Conflicts of interest: J.P. Morgan engages in activities in the normal course of its investment banking, asset management and other businesses that may conflict with the interests of the Fund and/or its Investors.

No offer: This presentation is being communicated solely for the purposes of ascertaining levels of interest in the Fund. Accordingly, this presentation is not, and should not be construed as, an offer to invest in the Fund.

Basis for any investment in the fund: Any investment in the Fund will be accepted solely on the basis of the Memorandum and the applicable Charter Documents for the Fund. Accordingly, this presentation, in whole or in part, will not form the basis of, and should not be relied upon in connection with, any subsequent investment in the Fund (when established and offered). To the extent that any statements are made in this presentation, they are qualified in their entirety by the terms of the Memorandum and other Fund documents. A copy of the Memorandum and Charter Documents must be reviewed prior to making a decision to invest in the Fund.

Confidentiality: This presentation is being made and communicated by J.P. Morgan Institutional Investments Inc., member FINRA & SIPC to selected Eligible Investors on a confidential basis exclusively for the benefit and internal use of the recipient in order to indicate, on a preliminary basis, the feasibility of a possible transaction or transactions. By accepting delivery of this presentation, each recipient undertakes not to reproduce or distribute this presentation in whole or in part, nor to disclose any of its contents (except to its professional advisors), without the prior written consent of the Placement Agent, who the recipient agrees has the benefit of this undertaking. The recipient and its professional advisors will keep permanently confidential information contained herein and not already in the public domain. Notwithstanding anything herein to the contrary, each recipient of this presentation, and each employee, representative or other agent of such recipient may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions discussed in the Memorandum and all materials of any kind (including opinions or other tax analyses) that are provided to such recipient relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to such recipient by J.P. Morgan and its subsidiaries.

Eligible investors: Only “Eligible Investors” as defined in the Memorandum may invest in the Fund. Accordingly, each Investor must accept and be able to bear the risks attaching to an investment in the Fund, and acknowledges that any recourse it may have is limited, in substance, to the assets of the Fund.

No reliance: No reliance may be placed for any purpose whatsoever on the information contained in this presentation or on its completeness. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. No person has been authorized by J.P. Morgan or the Placement Agent to give any information or to make any statement or representation concerning the Fund other than as set forth in this presentation and the Memorandum. This presentation should not be considered as a recommendation by J.P. Morgan or the Placement Agent or any of their affiliates that the Fund is a suitable investment for any recipient of this presentation.

Forward-looking statements: The statements herein containing words such as "may," "will," "should," "expect," "anticipate," "estimate," "intend," "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology are forward-looking statements and not historical facts. For example, the Portfolio Target Return noted herein is a forward-looking statement. Due to various risks, uncertainties and assumptions, including, without limitation, those set forth herein and in the Memorandum, actual events or results or the actual performance of the Fund may differ materially from those reflected in or contemplated by such forward-looking statements. Among the factors that could cause actual results to differ materially are: the general economic climate, inflationary trends, competition and the supply of, and demand for, property investments in the target markets, interest rate levels, the availability of financing, potential environmental liability and other risks associated with the ownership, development and acquisition of infrastructure assets, changes in the legal or regulatory environment, and greater than anticipated construction or management costs.





28

Own Investigation: This presentation is provided for information only and is not intended to be and must not alone be taken as the basis for an investment decision. Prospective investors should conduct their own investigation and analysis of an investment in the Fund (including, without limitation, their consideration and review of the documents referred to herein) and make an assessment of the offering independently and without reliance on J.P. Morgan, the Fund, the Investment Adviser, any Placement Agent or their respective employees, agents and affiliates. In addition, prospective investors are strongly urged to consult their own legal counsel and financial, accounting, regulatory and tax advisers regarding the implications for them of investing in the Fund.

Interests in the Fund: None of the Fund's Interests (i) constitute a deposit or an obligation, (ii) are in any way guaranteed by J.P. Morgan or any other bank, or (iii) have been approved or disapproved by the SEC, by the securities regulatory authority of any U.S. state or by any similar authority of any other country or jurisdiction, and neither the SEC nor any such authority has passed upon the accuracy or adequacy of this presentation or the Memorandum, nor is it intended that the SEC or any such authority will do so. None of the Interests will be registered under the Securities Act or the securities laws of any other country or jurisdiction. It is anticipated that the offering and sale of the Interests pursuant to the Memorandum will be exempt from registration pursuant to Regulation D. There will be no public market for any of the Interests.

J.P. Morgan Group: J.P. Morgan members or representatives may act as Placement Agent for the Interests and may be employees of J.P. Morgan Asset Management or any other J.P. Morgan affiliate that is providing services to the Fund.

U.S. Recipients: This presentation has been prepared for prospective Investors who qualify to invest in the types of investments described in this presentation. Generally they would include individuals or entities that are both “Accredited Investors”

for purposes of the U.S. Securities Act of 1933 and are “Qualified Purchasers” for purposes of the U.S. Investment Company Act of 1940. This presentation may not be reproduced or used as sales literature with members of the general public.

Please note that this document is for institutional investors' use only. It is not for public distribution and the information contained herein must not be distributed to, or used by the public.

The Target Return has been established by J.P. Morgan Investment Management Inc. “J.P. Morgan” based on its assumptions and calculations using data available to it and in light of current market conditions and available investment opportunities

and is subject to the risks set forth herein and to be set forth more fully in the Memorandum. The target returns are for illustrative purposes only and are subject to significant limitations. An investor should not expect to achieve actual returns similar

to the target returns shown above. Because of the inherent limitations of the target returns, potential investors should not rely on them when making a decision on whether or not to invest in the strategy. The target returns 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 returns do not reflect actual trading, liquidity constraints, fees, expenses, and other factors that

could impact the future returns of the strategy. The manager’s ability to achieve the target returns is subject to risk factors over which the manager may have no or limited control. There can be no assurance that the Fund will achieve its investment

objective, the Target Return or any other objectives. The return achieved may be more or less than the Target Return. The data supporting the Target Return is on file with J.P. Morgan and is available for inspection upon request.

J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by the following entities: in the United Kingdom by JPMorgan Asset Management

(UK) Limited, which is regulated by the Financial Conduct Authority; in other EU jurisdictions by JPMorgan Asset Management (Europe) S.à r.l.; in Switzerland by J.P. Morgan (Suisse) SA, which is regulated by the Swiss Financial Market

Supervisory Authority FINMA; in Hong Kong by JF Asset Management Limited, or JPMorgan Funds (Asia) Limited, or JPMorgan Asset Management Real Assets (Asia) Limited, all of which are regulated by the Securities and Futures Commission;

in India by JPMorgan Asset Management India Private Limited which is regulated by the Securities & Exchange Board of India; in Singapore by JPMorgan Asset Management (Singapore) Limited, which is regulated by the Monetary Authority of

Singapore; in Japan by JPMorgan Securities Japan Limited, which is regulated by the Financial Services Agency; in Australia by JPMorgan Asset Management (Australia) Limited, which is regulated by the Australian Securities and Investments

Commission; in Brazil by Banco J.P. Morgan S.A., which is regulated by The Brazilian Securities and Exchange Commission (CVM) and Brazilian Central Bank (Bacen); and in Canada by JPMorgan Asset Management (Canada) Inc., which is a

registered Portfolio Manager and Exempt Market Dealer in Canada (including Ontario) and in addition, is registered as an Investment Fund Manager in British Columbia. This communication is issued in the United States by J.P. Morgan Investment

Management Inc., which is regulated by the Securities and Exchange Commission. Accordingly this document should not be circulated or presented to persons other than to professional, institutional or wholesale investors as defined in the relevant

local regulations. The value of investments and the income from them may fall as well as rise and investors may not get back the full amount invested.

The material is provided to you at your request. Neither the JPMorgan Infrastructure Investments Fund nor J.P. Morgan Investment Management, Inc. is making any representation with respect to the eligibility of any recipients of this prospectus to

acquire the Shares therein under the laws of Korea, including but without limitation the Foreign Exchange Transaction Act and Regulations thereunder. The Shares may only be offered to Qualified Professional Investors, as such term is defined

under the Financial Investment Services and Capital Markets Act, and none of the Shares may be offered, sold or delivered, or offered or sold to any person for re-offering or resale, directly or indirectly, in Korea or to any resident of Korea except

pursuant to applicable laws and regulations of Korea.

Notice to UK residents: In the UK, this Fund is termed as Unregulated Collective Investment Scheme. The Fund is not available to the general public and may only be promoted in the UK to limited categories of persons pursuant to the exemption to

Section 238 of the Financial Services and Markets Act 2000 (FSMA 2000). This information is only directed to persons believed by JPMorgan Asset Management (UK) Limited to be investment professionals as defined in Article 19 of the Financial

Services and Markets Act 2000 (Financial Promotion) Order 2005, high net worth companies, unincorporated associations and other persons as defined in Article 49 of that Order and to others to whom it can lawfully be distributed or given, inside

the United Kingdom. Persons who do not have professional experience in matters relating to investments should not rely on it and any other person should not act on such information. This document is issued in the UK by JPMorgan Asset

Management (UK) Limited and has been approved solely for the purposes of section 21(2)(b) of the FSMA 2000 by JPMorgan Asset Management (UK) Limited which is authorised and regulated in the UK by the Financial Conduct Authority.

Registered in England No. 01161446. Registered Address: 25 Bank Street E14 5JP.

For Institutional/Professional Clients only – not for retail use or distribution. This document is confidential and intended only for the person or entity to which it has been provided. Any reproduction, retransmission, dissemination or other unauthorised

use of this document or the information contained herein by any person or entity without the express prior written consent of J.P. Morgan Asset Management is strictly prohibited. It is being provided solely for information and discussion purposes

and is subject to any updating, completion, modification and amendment without reference or notification to you.





29

This document is intended to report solely on investment strategies and opportunities identified by J.P. Morgan Asset Management. Additional information is available upon request. Information herein is believed to be reliable but J.P. Morgan Asset

Management does not warrant its completeness or accuracy. Opinions and estimates constitute our judgment and are subject to change without notice. It is not intended and should not to be taken as an offer or solicitation to buy or sell any security

or interest to anyone in any jurisdiction or to acquire any security or interest. Furthermore, nothing in this document constitutes or should be taken as an advice or recommendation to buy or sell any investment and the material should not be relied

upon as containing sufficient information to support an investment decision. Any investment decision should be based solely upon the information contained in the product’s offering materials. J.P. Morgan Asset Management and/or its affiliates and

employees may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as underwriter, placement agent, advisor or lender to such issuer. The investments and strategies discussed herein may not be

suitable for all investors; if you have any doubts you should consult your J.P. Morgan Asset Management Client Adviser, Broker or Portfolio Manager. You should consult your tax or legal adviser about the issues discussed herein. The investments

discussed may fluctuate in price or value. Investors may get back less than they invested. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. Any forecasts, figures, opinions, views and

investment techniques, unless otherwise stated, are those of the investment manager/adviser at the time of this document. They are considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect of

any error or omission is accepted. They may be subject to change.

Any investment in the Fund will be accepted solely on the basis of the Memorandum and any applicable Charter Documents for the Fund. Accordingly, this presentation, in whole or in part, will not form the basis of, and should not be relied upon in

connection with, any subsequent investment in the Fund (when established and offered). To the extent that any statements are made in this presentation, they are qualified in their entirety by the terms of the Memorandum and other Fund

documents. A copy of the Memorandum and any Charter Documents must be reviewed prior to making a decision to invest in the Fund. You are urged to read all of the offering materials prior to any application to subscribe into the product.

Furthermore you should note that the Fund may not be authorised or its offering may be restricted in your jurisdiction; it is the responsibility of every person reading this document to satisfy himself as to the full observance of the laws of the relevant

jurisdiction. You are also advised to take all necessary legal, regulatory and tax advice on the consequences of an investment in the Fund.

Investments in alternative investments, such as those described herein, may not be suitable for certain investors and should not constitute a complete investment programme. Any investments should only be made by those who fully understand and

are willing to accept and assume the risks involved with alternative investments. Alternative investments often engage in leverage and other investment practices that can be extremely speculative and involve a high degree of risk. Such practices

may increase the volatility of performance and the risk of investment loss, including the loss of the entire amount that is invested. Moreover, there can be no assurance that the investment strategy of the product will be achieved.

The Portfolio Target Return is based on current available investment opportunities and predictions of the real asset market and economic conditions generally. Because the Fund has an indefinite term and current estimates of market conditions are

likely to change over time, prospective investors should note that the actual realized return over the term of the Fund may vary materially from the Portfolio Target Return. The Investment Adviser reserves the right to amend the Portfolio Target

Return without the consent of Investors in the event the Investment Adviser determines, in its absolute discretion, that such amendment is warranted by a material change in circumstances. While under no obligation to do so, the Fund may enter

into transactions or investments in relation to any or all of currency exchange, interest rate, inflation rate, commodity or other risks in connection with investments. There can be no assurance, in such cases, that (a) such hedges will (i) be available,

(ii) be available at a reasonable cost, (iii) be sufficient to mitigate the relevant risk or (iv) actually eliminate the risk of fluctuation in rates being hedged or (b) counterparties to any hedging transaction would perform as expected. There is also no

certainty that any hedging transaction will prove beneficial to the Fund. The Fund may become liable for substantial costs from remedying environmental problems associated with the properties it holds. The costs of any such remediation may

exceed the value of the relevant property and/or the aggregate assets of the Fund. Environmental problems may also affect the use and operation of such properties.

The statements herein containing words such as "may," "will," "should," "expect," "anticipate," "estimate," "intend," "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology are forward-looking statements

and not historical facts. For example, the Portfolio Target Return noted herein is a forward-looking statement. Due to various risks, uncertainties and assumptions, including, without limitation, those set forth herein and in the Memorandum, actual

events or results or the actual performance of the Fund may differ materially from those reflected in or contemplated by such forward-looking statements. Among the factors that could cause actual results to differ materially are: the general

economic climate, inflationary trends, competition and the supply of, and demand for, property investments in the target markets, interest rate levels, the availability of financing, potential environmental liability and other risks associated with the

ownership, development and acquisition of real assets, changes in the legal or regulatory environment, and greater than anticipated construction or management costs. For further information, any questions and for copies of the offering material you

can contact your usual J.P. Morgan Asset Management representative.

NOT FOR RETAIL DISTRIBUTION: This communication has been prepared exclusively for Institutional/Wholesale Investors as well as Professional Clients as defined by local laws and regulation.

The opinions, estimates, forecasts, and statements of financial markets expressed are those held by J.P. Morgan Asset Management at the time of going to print and are subject to change. Reliance upon information in this material is at the sole

discretion of the recipient. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. References to specific securities, asset classes and financial markets are for

illustrative purposes only and are not intended to be, and should not be interpreted as advice or a recommendation relating to the buying or selling of investments. Furthermore, this material does not contain sufficient information to support an

investment decision and the recipient should ensure that all relevant information is obtained before making any investment. Forecasts contained herein are for illustrative purposes, may be based upon proprietary research and are developed

through analysis of historical public data.

J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication may be issued by the following entities: in the United Kingdom by JPMorgan Asset

Management (UK) Limited; in other EU jurisdictions by JPMorgan Asset Management (Europe) S.à r.l.; in Switzerland by J.P. Morgan (Suisse) SA; in Hong Kong by JF Asset Management Limited, or JPMorgan Funds (Asia) Limited, or JPMorgan

Asset Management Real Assets (Asia) Limited; in India by JPMorgan Asset Management India Private Limited; in Singapore by JPMorgan Asset Management (Singapore) Limited, or JPMorgan Asset Management Real Assets (Singapore) Pte

Ltd; in Australia by JPMorgan Asset Management (Australia) Limited ; in Taiwan by JPMorgan Asset Management (Taiwan) Limited and JPMorgan Funds (Taiwan) Limited; in Brazil by Banco J.P. Morgan S.A.; in Canada by JPMorgan Asset

Management (Canada) Inc., and in the United States by J.P. Morgan Investment Management Inc., JPMorgan Distribution Services Inc., and J.P. Morgan Institutional Investments, Inc. member FINRA/SIPC.