Private Equity & Exit Opps
Without a calculator, how do you approximate the IRR for an arbitrary MOIC and hold period — say 4.0x over 6 years?
Model answer
Two techniques. (1) Doubling decomposition: 4.0x = doubling TWICE. Twice in 6 years = one doubling every 3 years, and 2x in 3 years ≈ 26% — so 4.0x/6yr ≈ 26% (exact: 4^(1/6) = 2^(1/3) ≈ 1.26 — spot…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 2,000+ — or go Pro for unlimited reps.
More from Private Equity & Exit Opps
- At a high level, how does private equity recruiting differ from investment banking recruiting?
- What's the difference between on-cycle and off-cycle PE recruiting?
- Should an IB analyst go on-cycle or wait for off-cycle? What are the real trade-offs?
- What role do headhunters actually play in PE recruiting, and why are they called gatekeepers?
- How should you prepare for and handle the headhunter intro call?
- What should you tell headhunters about your fund preferences — and why does consistency matter so much?