Private equity

MOIC (Multiple on Invested Capital)

Definition

MOIC is the total money returned by an investment divided by the money put in. A 2.5x MOIC means every dollar invested came back as two dollars fifty. Unlike IRR, it ignores time entirely.

In practice

MOIC and IRR answer different questions: how much, and how fast. A 2x in two years and a 2x in eight years are the same MOIC and wildly different IRRs. Fund investors increasingly insist on both, precisely because sponsors optimize whichever one you measure.

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