MoIC
Multiple on Invested Capital. The ratio of money returned to money invested (for example, 3.0x means you tripled your investment). A core PE returns metric alongside IRR.
Why MoIC matters in interviews
MoIC is the plain-English counterpart to IRR — how many times you got your money back — and interviewers pair the two to check that you understand what each one hides. Limited partners care about MoIC because it is the number that funds their own obligations; IRR is what makes a track record look good.
How it works in practice
MoIC (multiple on invested capital) = total value returned / total capital invested. Return $450m on a $150m equity cheque and the MoIC is 3.0x. It says nothing about how long that took.
Gross MoIC is measured at the deal level before fund fees and carried interest; net MoIC is what limited partners actually receive. The gap is material — roughly 2.0x gross can net down to around 1.7x after a 2-and-20 structure.
MoIC and IRR diverge over time. A 2.5x over three years is roughly a 36% IRR; the identical 2.5x over seven years is roughly 14%.
What candidates get wrong
- Quoting MoIC without a hold period. The two numbers are only meaningful together.
- Confusing MoIC with TVPI or DPI at fund level. DPI counts only realised distributions; TVPI includes unrealised marks on portfolio companies still held.
- Forgetting that MoIC is unaffected by early distributions, which is exactly why a dividend recap can transform IRR while leaving MoIC unchanged.
MoIC: frequently asked questions
What is a good MoIC?
At the deal level, sponsors generally underwrite to 2.5x-3.0x gross over a five-year hold. Anything above 3.0x is a strong outcome, and below 2.0x typically means the thesis did not play out. The figure only means something alongside the hold period.
Can a deal have a high MoIC and a poor IRR?
Yes, and it is common in long-hold situations. A 3.0x return earned over ten years is only about a 12% IRR, which would sit below many funds' target return despite tripling the money.
Go deeper
This term comes up constantly in private equity interviews and on the desk.
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