What Is MOIC?
Multiple of invested capital (MOIC) — also called multiple on invested capital, total value to paid-in (TVPI), or simply “the multiple” — is a fundamental investment performance measure. As Investopedia describes, it measures how many times an investor gets their money back from an investment. A MOIC of 2.5x means the investor received $2.50 for every $1.00 invested.
MOIC is one of the two primary return metrics in private equity, alongside IRR. While IRR captures the time-weighted return, MOIC captures the absolute magnitude of value creation.
How MOIC Is Calculated
MOIC = (Total Distributions + Residual Value) ÷ Total Invested Capital
For a realised (exited) investment:
MOIC = Total Proceeds ÷ Total Invested Capital
For a partially realised investment, the residual value is based on the current fair market value of the remaining position.
Example
A PE firm invests $50M in a company and, over five years, receives $25M in dividends and sells the company for $100M:
MOIC = ($25M + $100M) ÷ $50M = 2.5x
MOIC Benchmarks
| Performance | MOIC | Interpretation |
|---|---|---|
| Below expectations | < 1.5x | Marginal return, may not justify illiquidity |
| Acceptable | 1.5–2.0x | Satisfactory but unremarkable |
| Strong | 2.0–3.0x | Good value creation |
| Exceptional | 3.0–5.0x | Outstanding performance |
| Home run | > 5.0x | Extraordinary, fund-defining investment |
Top-quartile buyout funds typically deliver net MOIC of 1.8–2.5x, while top-decile funds may exceed 3.0x.
Related Multiples
DPI (Distributions to Paid-In)
DPI = Total Distributions ÷ Total Invested Capital
Measures only cash actually returned to investors — excludes unrealised residual value. DPI is the most conservative return metric because it counts only money in the investor’s pocket (Corporate Finance Institute).
RVPI (Residual Value to Paid-In)
RVPI = Residual Value ÷ Total Invested Capital
Measures the unrealised portion of the fund’s value. RVPI depends on fair value estimates, which are inherently subjective.
Relationship
TVPI (MOIC) = DPI + RVPI
As a fund matures and exits investments, RVPI converts to DPI. A fully liquidated fund has RVPI of zero and TVPI equals DPI.
MOIC vs. IRR
The two metrics capture different dimensions of performance:
| MOIC | IRR | |
|---|---|---|
| What it measures | Absolute value creation | Annualised rate of return |
| Time sensitivity | No — does not penalise holding period | Yes — rewards faster returns |
| Intuitive? | Very — “how many times did I get my money back?” | Moderately — requires financial literacy |
| Manipulation risk | Low — based on actual cash flows | Higher — sensitive to timing of capital calls and distributions |
| When it matters most | Evaluating total wealth creation | Comparing across strategies and time periods |
Smart investors consider both metrics together — a principle central to sound M&A valuation methods. A 3.0x MOIC over ten years (roughly 12% IRR) tells a different story than 3.0x over three years (roughly 44% IRR).
MOIC in Fund Reporting
Fund managers report MOIC at multiple levels:
- Deal-level MOIC — return on each individual portfolio company
- Fund-level MOIC — aggregate return across all investments in a fund
- Gross vs. net — before and after management fees and carried interest
- Vintage year comparison — benchmarking against peer funds of the same vintage
MOIC in Asia Pacific
MOIC achievement in Asia Pacific PE investments is influenced by several regional factors, many of which are explored in our analysis of APAC private equity trends. Longer hold periods are common in some markets (particularly Japan and South Korea), where exit processes may take more time. Currency translation effects can enhance or erode MOIC when converting local currency returns to a fund’s base currency. The growing maturity of exit markets across the region — including a deepening pool of secondary buyers and increasing IPO activity — is supporting stronger MOICs for well-managed portfolio companies. Lyndon Advisory uses structured market research and senior transaction judgment to support this work across Asia Pacific.
Related Terms
Carried Interest
The share of investment profits — typically 20% — that a private equity fund's general partner receives as performance-based compensation, payable only after limited partners have received their contributed capital plus a preferred return.
IRR (Internal Rate of Return)
The annualised rate of return that makes the net present value of all cash flows from an investment equal to zero — the primary performance metric used by private equity firms to measure and compare investment returns.
Irrevocable Undertaking
A binding commitment from a shareholder to vote in favour of or accept an M&A offer, providing deal certainty before the transaction is publicly announced.
LBO (Leveraged Buyout)
An acquisition strategy where a financial sponsor uses a significant proportion of borrowed funds — typically 50–70% of the purchase price — to acquire a company, using the target's own cash flows to service the debt.