Glossarytaught in PW1.02, M3.09
MOIC
Also called multiple on invested capital, money multiple, multiple of money.
Multiple on invested capital: the total value an investment returned or still holds, divided by the money put in. Private equity quotes it beside the internal rate of return because the two answer different questions.
A fund that invests ₹400 crore and gets back ₹800 crore has a MOIC of 2.0 times. If that took three years, the internal rate of return is 26.0% a year. If it took seven, it's 10.4%. Same multiple, very different investments.
MOIC ignores time. The internal rate of return ignores scale, and it can be lifted by returning money early or by borrowing at fund level before calling capital from investors. Read both. And for a fund still holding assets, ask how much of the multiple is cash already returned and how much is the manager's own valuation of what's left.
Multiple and rate, always together.
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