MOIC (Multiple on Invested Capital)

MOIC — multiple on invested capital, also called multiple of money (MoM) or cash-on-cash multiple — is total value received (realized proceeds plus remaining/unrealized value) divided by equity invested. A 3.0x MOIC means every dollar of equity turned into three dollars.

Unlike IRR, MOIC ignores time: a 2.0x in three years and a 2.0x in eight years are the same MOIC but very different IRRs (roughly 26% versus about 9%). Sponsors typically underwrite buyouts to targets on the order of 2.0–3.0x MOIC and roughly 20%+ gross IRR, though targets vary by strategy and market.

Handy conversions at a 5-year hold: 2.0x ≈ 15% IRR, 2.5x ≈ 20% IRR, 3.0x ≈ 25% IRR. Gross versus net matters too: LPs receive returns net of fees and carry, which are meaningfully below the fund's gross deal-level numbers.