What is MOIC? The multiple on invested capital: what a holding or a portfolio is worth, realised and unrealised, divided by what was invested in it. The MOIC meaning is that simple, and what MOIC stands for is exactly those four words; what is MOIC in finance more broadly is the same ratio applied to any investment, and MOIC private equity teams read it as the deal-level multiple, worked on cost before fees, as against the fund-level multiples the LPs are sent. This page is private equity MOIC as the portfolio lead works it, on one holding and across the book, on this site's worked example, and what the figure leaves out.
MOIC on one holding
A $4,000,000 position at 12% ownership of a company marked at $60,000,000 is worth $7,200,000; $7,200,000 over $4,000,000 is a MOIC of 1.8x. Until the holding is sold that is a paper multiple on the fund's own mark, and it moves when the mark does, which is why the portfolio monitoring worksheet works it from the mark as an input rather than asserting a valuation. Sell the position for $7,200,000 and the same 1.8x becomes a realised multiple.
MOIC on the whole portfolio
$30,000,000 realised on $12,000,000 of cost is 2.5x; $66,000,000 of marks on $42,000,000 is 1.57x; together $96,000,000 on $54,000,000 is 1.78x gross. The private equity portfolio analytics worksheet works all three from the fund's own realised and unrealised figures, and shows them apart, because a 1.78x that is two thirds paper reads differently from one that is two thirds cash.
What MOIC leaves out
Time and fees. A 1.8x in two years and a 1.8x in nine years are the same MOIC and very different outcomes, which is what IRR exists to say; and MOIC is worked on invested cost, before management fees, expenses and carry, so it reads higher than the multiples the LPs are sent on paid-in capital. Those fund-level figures, TVPI and DPI as reported, are the relationship venture's subject at rapportvo.com; this hub works the holdings' multiple.
What MOIC private equity teams actually use it for
Ranking the holdings, sizing the follow-on, and telling the partners which positions carry the fund. A portfolio where two holdings at 4x sit beside ten at 0.6x has the same gross MOIC as a flat 1.5x book and a completely different story, and the loss ratio and concentration figures on the analytics worksheet are the two numbers that tell it. Every figure on this page is the worked example's, from inputs the fund owns.
Questions people ask about what is moic
What does MOIC stand for?
Multiple on invested capital: the value of a holding or a portfolio, realised and unrealised, divided by the capital invested in it. 1.8x on the worked example's holding, 1.78x on its portfolio.
What is a good MOIC in private equity?
The worksheets publish no benchmark. The useful reading is the pair: the realised multiple is cash and the unrealised multiple is the fund's marks, and the gross figure hides the difference. The analytics worksheet shows all three.
Is MOIC the same as TVPI?
No. MOIC is worked on invested cost, before fees, at the holding or portfolio level. TVPI is total value over paid-in capital, the LP's view including fees and expenses, and it is the relationship venture's subject at rapportvo.com.