Glossary · Fund life

What is MOIC?

MOIC, multiple on invested capital, is the total value an investment has returned or still holds, divided by the money put into it. It ignores how long that took.

In practice

MOIC can be measured per deal or across a whole fund, and it counts unrealized value as well as cash returned, so a figure for an active investment depends on the current valuation. It is often confused with TVPI, which is the fund-level version net of fees and carry. Gross MOIC is usually quoted before fees and carry. Pairing it with IRR covers the timing it leaves out.

An example

Round numbers, not a real fund

Say a firm invests $100 million in a company and sells it for $250 million. The MOIC is 2.5x, whether that took three years or nine.

Why it matters

It is the simplest way to compare returns, and its blind spot is time.

A definition, not advice; where usage varies the entry says so. Something wrong? Tell the desk.

Related terms

TVPITVPI, total value to paid-in capital, adds the cash a fund has already returned to the value it still holds, then divides by the money investors paid in.
IRRIRR, internal rate of return, is the yearly return that accounts for when money goes into and comes out of a fund, so earlier payouts raise it.
DPIDPI, distributions to paid-in capital, divides the cash a fund has returned to investors by the cash they paid in. A DPI of 1.0x means they have their money back.
RVPIRVPI, residual value to paid-in capital, divides the value of what a fund still holds by the money investors paid in. It is the unrealized part of the return.
J-curveThe J-curve is the usual pattern where a fund’s reported returns dip below zero in its early years, because of fees and costs before investments mature, and then climb.

The terms, in the news each morning.

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