MOIC (multiple on invested capital) measures how many times over an investment has returned its capital: total value — cash distributed plus remaining holdings — divided by capital invested. A 2.0x MOIC means every dollar in became two dollars of value. It is private markets’ headline performance multiple, reported at fund level as TVPI.
The multiple family
The math is deliberately simple: MOIC = (distributions + residual value) ÷ invested capital. Its power is in the decomposition used across fund reporting, where the same idea appears as TVPI (total value to paid-in) and splits into realized and unrealized halves:
- DPI (distributions to paid-in capital) — cash actually returned per dollar contributed. Realized. The number that can’t be argued with.
- RVPI (residual value to paid-in) — the remaining portfolio’s marked value per dollar contributed. Unrealized, and only as reliable as the marks behind it.
- TVPI = DPI + RVPI — the total multiple.
Reading a fund through this split is a core diligence habit. A young fund showing 1.6x TVPI composed of 0.1x DPI and 1.5x RVPI is a claim, not a result — nearly all its “performance” is valuation judgment on unsold assets. The same 1.6x at 1.4x DPI is mostly banked. As funds age, performance migrates from RVPI to DPI; funds whose multiples don’t migrate are telling you something. Gross-versus-net matters equally: gross MOIC ignores fees and carried interest; net is what LPs keep, and marketing materials don’t always lead with it.
MOIC and IRR: two lenses, both required
MOIC ignores time — a 2.0x in four years and a 2.0x in twelve years are identical multiples and radically different investments. IRR adds the time dimension but brings its own manipulability: subscription lines that delay capital calls inflate IRR without changing the multiple, and early small distributions can lock in high IRRs on modest dollars. The pairing is the defense: strong IRR on a thin MOIC suggests engineered timing; strong MOIC with weak IRR means money sat. Rules of thumb linking them (a 2.0x over five years ≈ mid-teens IRR; over ten years ≈ 7%) help clients feel the difference between multiple and rate.
MOIC’s real estate cousin is the equity multiple — same arithmetic, deal-level convention — and its performance-comparison complement is PME, which asks whether the multiple beat what public markets would have delivered on the same cash flows. Context completes the picture: multiples are compared within strategy and vintage year, since a 1.8x from a 2019 buyout fund and a 1.8x from a 2021 venture fund sit in entirely different peer distributions.
FAQ
What is MOIC in simple terms?
Total value per dollar invested. Put in $100,000, receive $150,000 in distributions with $75,000 still marked in the fund: MOIC is 2.25x.
What's the difference between MOIC and TVPI?
Substantively none — TVPI is the fund-level reporting name for the same multiple, and it decomposes into DPI (realized) plus RVPI (unrealized).
What's the difference between MOIC and IRR?
MOIC measures how much, ignoring time; IRR measures the annualized rate, sensitive to timing. Each can flatter what the other exposes, which is why both belong in any evaluation.
What is a good MOIC?
Strategy- and vintage-dependent. Buyout funds have historically targeted ~2.0x net over a fund life; venture distributions are wider in both directions; credit funds run lower multiples with faster DPI. Compare within cohort, net of fees.
Related terms
DPI · RVPI · Paid-In Capital · J-Curve · Equity Multiple · Vintage Year
Educational content only; not investment, tax, or legal advice. Consult qualified professionals regarding your specific circumstances.
