Resources / Glossary / MOIC

MOIC.

Aka. Multiple on invested capital · Multiple of money · MoM

What is MOIC?

MOIC — multiple on invested capital — is the ratio of the total value an investment has generated to the capital that was put in. A 3.0x MOIC means every dollar invested turned into three dollars of value. It is the simplest, most intuitive measure of how much an investment made.

Total value here includes both realized proceeds (cash already returned) and unrealized value (the current marked value of what is still held). Because of this, MOIC is sometimes called the multiple of money, or MoM.

MOIC's defining limitation is that it ignores time. A 3.0x earned in three years and a 3.0x earned in twelve years report the same multiple, even though the first is a vastly better outcome. For the time dimension you need IRR.

How MOIC is calculated

At the level of a single deal, the formula is straightforward:

Numerator — total value. Realized proceeds plus the current fair value of any remaining stake.
Denominator — invested capital. The capital actually deployed into the investment.
Divide. Total value ÷ invested capital = MOIC.

At the fund level, the same idea appears as TVPI (total value to paid-in), which is effectively MOIC measured across the whole portfolio. Gross MOIC is measured before fees and carry; net MOIC is what the LP keeps after them — always confirm which one a number refers to.

MOIC versus IRR

MOIC and IRR answer different questions and should be read together. MOIC tells you how much you made; IRR tells you how fast. A quick flip can post a spectacular IRR on a modest MOIC, while a long, patient compounder can show a strong MOIC but an unremarkable IRR.

Practitioners treat MOIC as harder to manipulate than IRR. IRR is sensitive to timing tricks — early distributions, subscription-line financing that delays capital calls — whereas MOIC simply asks whether the money multiplied. Reporting both is standard precisely because each one's blind spot is the other's strength.

Frequently asked.

5 questions

01 How is MOIC different from IRR?

MOIC measures magnitude — how many times your capital came back — and ignores how long it took. IRR measures the annualized rate of return and is highly sensitive to timing.

You can have a high MOIC with a low IRR (a slow compounder) or a high IRR with a low MOIC (a fast flip). Sophisticated investors always look at both.

02 What's the difference between gross and net MOIC?

Gross MOIC is measured before management fees, fund expenses, and carried interest — it reflects the raw deal performance. Net MOIC is after all of those, reflecting what the limited partner actually keeps.

The gap between gross and net is the cost of the fund. Always confirm which one a track record is quoting, because the difference can be substantial.

03 Does MOIC include unrealized value?

Usually yes. Total value in the numerator combines cash already distributed with the current marked fair value of holdings still in the portfolio. For a fully exited deal, MOIC is entirely realized and no longer depends on a mark. For an active portfolio, a chunk of the MOIC is still an estimate.

04 What is considered a good MOIC?

It depends on strategy and hold period, so there is no single benchmark. A buyout fund targeting a 2.0x–3.0x net over roughly five years is a common reference point, while early-stage venture aims for far higher multiples on a smaller share of winners. The honest answer is that a MOIC is only meaningful next to its time horizon and its IRR.

05 How do firms keep MOIC current across a live portfolio?

Because part of MOIC depends on unrealized marks, the number moves every time a company is revalued, takes on debt, or returns cash. Keeping it accurate means tying the multiple to the underlying deal and valuation records rather than recomputing it in a standalone spreadsheet each quarter.

When the numerator is linked to live position data, MOIC can be queried at any point in the hold instead of reconstructed at reporting time.

Related terms

Sfund economics

Secondaries

The market for buying and selling existing private-fund interests, letting an LP exit a commitment early or a GP <em>restructure</em> a fund before its natural end.

Hfund economics

Hurdle rate

The minimum annual return a fund must deliver to investors before the GP earns any carried interest — conventionally around 8%, compounding on contributed capital.

Cfund economics

Committed capital

The total amount investors have legally pledged to a fund — its size and fee base — drawn down over time through <em>capital calls</em>, not paid up front.

Cfund economics

Continuation fund

A new fund a GP raises to buy assets out of one of its own older funds — holding winners longer while letting existing LPs <em>cash out</em> or roll over.

Pfund economics

Preferred return

The return LPs are entitled to receive first — conventionally about 8% compounding — before the GP earns any carried interest on the fund's <em>profits</em>.

Dfund economics

Dry powder

The committed capital a fund has raised but not yet invested — the <em>uncalled</em> commitments it can deploy when the right opportunity appears.

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