Multiple on Invested Capital (MOIC)

MOIC is a simple measure of how many times an investment has returned its cost. It is usually calculated at deal or portfolio level on a gross basis, before fund-level fees, expenses and carried interest. At the investor level, the comparable net measure is TVPI.

MOIC ignores time, so it is always read alongside IRR. A 2.0x MOIC over three years is a very different outcome from 2.0x over ten years.

Pitfalls include mixing gross MOIC with net fund metrics, omitting follow-on investments from the cost basis, and relying on unrealized values that have not been updated in line with the fund’s valuation policy. Reporting both realized and unrealized components separately makes MOIC easier to interpret. A high MOIC built mostly on unrealized value carries more uncertainty than the same multiple achieved through exits, so the split is normally disclosed.

Example

A fund invests $20M in a company. It later realizes $35M from a partial sale and holds the remaining stake at a fair value of $15M. MOIC = ($35M + $15M) ÷ $20M = 2.5x.