MOIC: The Private Equity Performance Metric That Tells You Magnitude Without Time

TL;DR: MOIC (Multiple on Invested Capital) measures how many times a fund returned your original investment. Formula: MOIC = Total Value (Realized + Unrealized) / Total Invested Capital. It tells you the magnitude of a return but says nothing about how long it took.

According to Moonfare's private equity glossary, MOIC is one of the two primary return metrics every LP should understand before committing capital to a private fund, the other being Internal Rate of Return (IRR). Cambridge Associates tracks MOIC across thousands of funds globally and publishes benchmark quartile data each quarter. Their Q4 2025 data sets the global buyout average at 1.7x net MOIC. That number is your baseline. Everything you read in a fund pitch deck should be measured against it.

The Formula, With a Real Example

MOIC is straightforward arithmetic. You add up everything the investment has returned, cash distributions, proceeds from partial sales, and the current marked value of anything still held, then divide by what you originally put in.

MOIC = (Realized Value + Unrealized Value) / Total Invested Capital

Here is a concrete example. You invest $100,000 into a fund. Over several years, you receive $200,000 in dividends, $150,000 from a partial sale of one portfolio company, and your remaining stake is currently marked at $180,000. Your total value is $530,000. Divide by the $100,000 invested and you get a 5.3x MOIC. That is a strong number by any measure. But notice that $180,000 of that $530,000 is still sitting as an unrealized mark, a valuation on paper, not cash in your account. That distinction matters enormously.

Gross vs. Net MOIC: Where Managers Hide Performance

Every fund pitch deck will show you a MOIC. What most pitches bury in footnotes is whether that number is gross or net.

Gross MOIC is calculated before management fees and carried interest. It reflects the fund manager's raw investment performance. It is the number GPs prefer to lead with. Net MOIC is what limited partners actually receive after the manager takes their cut. Management fees typically run 1.5% to 2.0% per year. Carry is usually 20% of profits above the hurdle rate. The result: net MOIC runs 10% to 20% below gross MOIC in most funds.

A fund advertising a 3.0x gross MOIC might deliver 2.4x to 2.7x net to LPs. Always ask for net MOIC. If a GP will not give it to you, that tells you something. For a full breakdown of how carry structures affect LP returns, see our guide on the role of the general partner and carry compensation.

The SEC's 2023 Private Fund Quarterly Statement Rule now requires illiquid funds to report both gross and net IRR and MOIC since inception, reported separately for realized and unrealized portions. This is a meaningful disclosure improvement.

MOIC vs. IRR vs. DPI vs. TVPI

MOIC does not exist in isolation. Private equity uses four primary return metrics, and each tells a different part of the story.

Metric	What It Measures	Time-Adjusted?	Cash vs. Paper?
MOIC	Total return multiple on deployed capital	No	Both (realized + unrealized)
IRR	Annualized return, time-weighted	Yes	Both
DPI	Cash actually distributed to LPs / paid-in capital	No	Cash only
TVPI	Total value (realized + unrealized) / paid-in capital	No	Both

One important technical note: MOIC divides by invested capital, the dollars actually deployed into portfolio companies. TVPI divides by paid-in capital, the total dollars LPs have sent to the fund including management fees. TVPI is typically the fund-level equivalent of MOIC and will often be slightly lower because the denominator is larger.

The MOIC Trap: Time Destroys Value That Multiples Ignore

Here is the most important concept in this entire article: MOIC ignores time. A 3x MOIC achieved in 4 years is approximately a 31% IRR. That is an exceptional result. The same 3x MOIC achieved over 8 years is approximately a 15% IRR. Stretched to 10 or 12 years, a 3x MOIC starts to look ordinary.

According to Wall Street Prep's MOIC framework, this is why GPs reporting MOIC on funds still in their holding period are showing you an incomplete picture. The final MOIC will depend heavily on exit timing and whether unrealized marks hold up.

The second trap is the gap between MOIC and DPI (Distributed to Paid-In Capital). A fund can report a 3.0x MOIC while returning only 0.8x DPI if most of the value is still sitting as unrealized marks in portfolio companies that have not been sold. You have paper gains. You do not have cash. In a down market, those marks can be revised downward quickly. Always check both numbers side by side. Also be aware of how the J-curve effect shapes MOIC in the early years of a fund's life.

Industry Benchmarks: What Good Actually Looks Like

Cambridge Associates Q4 2025 numbers for global buyout funds:

• Top quartile: 2.3x net MOIC or higher
• Median: 1.8x to 2.2x net MOIC
• Average: 1.7x net MOIC
• Bottom quartile: Below 1.5x net MOIC

Bottom quartile performance is not just disappointing. Preqin's benchmark data shows that 55% of bottom-quartile fund investments return less than 1.0x, meaning LPs lose money in absolute terms. 12% are complete write-offs.

What Accredited Investors Should Actually Do

Four specific actions make MOIC a useful number instead of a marketing figure. First, always request net MOIC, not gross. Second, ask for DPI alongside MOIC. A fund showing 2.5x MOIC with 0.4x DPI is mostly paper. A fund showing 2.0x MOIC with 1.8x DPI has returned most of your money in cash. Third, compare MOIC to IRR together. Fourth, check the vintage year and benchmark appropriately using Cambridge Associates or Preqin benchmarks from the same vintage year as the fund you are evaluating.

MOIC is a necessary metric. It is not a sufficient one. Use it as the starting point of your diligence conversation, not the end of it.

Author Disclosure: Jeff Barnes, MBA has no personal position in any company, fund, or platform named in this article. Angel Investors Network has no current commercial relationship with any party mentioned. AIN provides marketing and education services, not investment advice. Past performance does not guarantee future results. All investments involve risk, including loss of principal.