IRR & MOIC Calculator
Calculate Internal Rate of Return and Multiple of Invested Capital for PE investments
Performance Interpretation
Internal Rate of Return (IRR) and Multiple of Invested Capital (MOIC) are the two most important metrics for measuring private equity investment performance. IRR measures the annualized return rate, while MOIC measures the total cash returned relative to cash invested. Together, they provide a complete picture of investment performance - IRR shows velocity of returns while MOIC shows magnitude.
Formula:
MOIC = Total Value / Total Invested | IRR = Rate where NPV of cash flows = 0MOIC is simply distributed + residual value divided by invested capital. IRR is the discount rate that makes the net present value of all cash flows equal to zero.
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Enter your initial investment amount
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Add any additional capital contributions over time
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Input distributions received from the investment
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Set the current or exit value of your remaining investment
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View your IRR, MOIC, DPI, RVPI, and TVPI metrics
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Compare against fund benchmarks and targets
- IRR and MOIC together tell the complete performance story
- High MOIC with low IRR means returns took too long (opportunity cost)
- High IRR with low MOIC might mean too short holding period or too small investment
- Top-quartile PE funds target 20%+ IRR and 2.5x+ MOIC
- LPs evaluate GPs primarily on net IRR to limited partners
- Evaluating fund performance for investor reporting
- Comparing multiple investment opportunities
- Calculating returns on exited investments
- Modeling pro forma returns on potential deals
- Understanding the impact of timing on IRR
- Preparing quarterly LP reports
- •TVPI (Total Value to Paid-In) = DPI + RVPI shows total value creation
- •IRR is very sensitive to timing - distribute capital early when possible
- •Most GPs focus on gross IRR, but LPs care about net IRR after fees
- •Use multiple scenarios - base, upside, downside - not single point estimates
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Frequently Asked Questions
What is IRR in private equity?
Internal Rate of Return (IRR) is the discount rate that makes the net present value of all cash flows equal to zero. It represents the annualized return on an investment, accounting for the timing and size of all capital contributions and distributions. PE firms target 20-30% IRR.
What is MOIC (Multiple of Invested Capital)?
MOIC measures total value generated divided by total capital invested. A 3.0x MOIC means you received $3 for every $1 invested. Unlike IRR, MOIC doesn't account for timing - a 3x return in 3 years is better than 3x in 10 years, but MOIC shows the same multiple.
What is a good IRR for private equity?
Top-quartile PE funds typically achieve 20-30%+ IRR. Average funds return 15-20% IRR. Returns below 15% are considered below par. However, IRR should be evaluated alongside MOIC, as a high IRR on a small multiple may be less attractive than moderate IRR on a large multiple.
What is DPI, RVPI, and TVPI?
DPI (Distributed to Paid-In) measures cash returned to investors. RVPI (Residual Value to Paid-In) measures unrealized value remaining. TVPI (Total Value to Paid-In) is DPI + RVPI, representing total value created. A mature fund should have high DPI and low RVPI.
How is IRR different from ROI?
IRR accounts for the time value of money and timing of cash flows, expressed as an annualized percentage. ROI simply measures total return without considering timing. A 100% ROI could represent a 10% IRR over 7 years or 25% IRR over 3 years.