What is multiple on invested capital (MOIC)? Definition, how it works and examples
How many times your money came back — the simplest return metric in private markets, what it leaves out, and why it is always read next to IRR.
The short answer
What is MOIC? Multiple on invested capital is what one investment is worth — cash already received plus the current value of what is still held — divided by the capital put into it. A MOIC of 2.5x means every dollar invested is now worth two and a half. It says how much, never how fast. Two conditions change how to read it. First, a MOIC is usually gross — before the fees and carry of the fund or SPV that made the investment — so what reaches you is lower. Second, part of it may be a valuation rather than cash.
What is MOIC and how is it calculated?
The MOIC formula has one line: MOIC = (realised value + unrealised value) ÷ invested capital. Realised value is the cash, or listed shares, the investment has already returned — sale proceeds, dividends, interest. Unrealised value is the current fair value of what is still held. Invested capital is what was paid for the investment, including follow-on rounds. Realised MOIC Cash returned ÷ invested capital. Only what has actually come back. Unrealised MOIC Current fair value of what is held ÷ the capital still in it. A valuation, not a price you can sell at.
What is MOIC in private equity and venture capital?
What is MOIC in finance generally? A plain ratio, used anywhere money goes in once and comes back later. In private equity it has a narrower job: it is the multiple a manager reports on each portfolio company — the cash flows between the fund and its investments. The fund-level multiple, measured on the cash flows between the fund and its investors after fees, is a different number with a different name, TVPI. What is MOIC in PE, then, for a reader of a manager’s deck? Usually a gross figure per deal: what that company returned, or is marked at, against what the fund paid.
Gross vs net MOIC, on an illustrative SPV position
Gross MOIC measures the investment. Net MOIC measures what you received after every fee, expense and carry between you and it. An investor subscribes $100,000 to a single-deal SPV on hypothetical terms: a 2% setup fee, a 1% annual management fee on the subscribed amount settled at exit, 20% carry, a six-year hold, and a company that is sold at four times the SPV’s entry price. A 4.0x deal became 3.29x in the investor’s hands. Neither number is wrong: they answer different questions.
Why MOIC is always read next to IRR
MOIC ignores time. A 3.0x over three years and a 3.0x over seven are the same multiple and very different investments. The internal rate of return (IRR) is the annual rate that makes the cash flows add up, so it falls as the same multiple takes longer to arrive. The last row shows the opposite trap: a high IRR on a small multiple, earned over a short period, returns little money. Read the pair together. A high MOIC with a low IRR is a lot of money that took a long time; a high IRR with a low MOIC is a fast, small result.
MOIC reporting standards, as of October 2026
Common mistakes when reading a MOIC
Treating a gross MOIC as yours Fees and carry sit between the deal and you. Ask for the net figure. Counting a mark as cash Unrealised MOIC is a valuation. Ask what share of the multiple is realised. Ignoring time The same multiple over twice the years is roughly half the annual return. Comparing a deal MOIC with a fund TVPI One is one investment before fees; the other is the whole fund after them. Reading a best deal as a track record A single extracted result says nothing about the deals around it.
The terms this page uses
MOIC Multiple on invested capital: realised plus unrealised value of an investment, divided by the capital invested in it. Realised value What an investment has already returned in cash or freely tradable shares. Unrealised value The current fair value of what is still held — a valuation, not a sale price. Gross Before the fees, expenses and carry charged by the fund or SPV that holds the investment. Net After all fees and expenses an investor paid — what actually reaches the investor. IRR Internal rate of return: the annualised rate implied by the timing and size of the cash flows.
Questions about MOIC
What is a good MOIC? There is no universal threshold: it depends on the strategy, the holding period and whether the figure is gross or net. A multiple is only meaningful next to the years it took and the IRR that implies. Compare like with like — same strategy, same stage, net against net. What is the difference between MOIC and TVPI? MOIC measures one investment, or a portfolio of them, against the capital invested, usually before fees. TVPI measures a whole fund against the capital investors paid in, after fees, and splits into cash returned (DPI) and value still held (RVPI).
What is a good MOIC?
There is no universal threshold: it depends on the strategy, the holding period and whether the figure is gross or net. A multiple is only meaningful next to the years it took and the IRR that implies. Compare like with like — same strategy, same stage, net against net.
What is the difference between MOIC and TVPI?
MOIC measures one investment, or a portfolio of them, against the capital invested, usually before fees. TVPI measures a whole fund against the capital investors paid in, after fees, and splits into cash returned (DPI) and value still held (RVPI).
Can MOIC be below 1?
Yes. A MOIC of 0.6x means the investment is worth 60 cents per dollar invested, realised and unrealised combined. A written-off position has a MOIC of zero.
Is MOIC the same as ROI?
They carry the same information in different forms. ROI expresses the gain as a percentage of cost; MOIC expresses the total value as a multiple of it. A 2.5x MOIC is a 150% ROI.
How is MOIC calculated for an SPV?
The same way, on one position: what the SPV’s shares are worth or returned, over what it paid. Your own net multiple is what you were distributed, or are allocated, over what you subscribed, after the SPV’s fees and carry.
Where the standards on this page come from
Standards and rules were last verified on 1 October 2026. The worked examples are illustrative, not market data. The SEC Marketing Rule is a US rule for investment advisers; other jurisdictions set their own performance-presentation rules.