Multiple on Invested Capital

MOIC answers a simple question: for every dollar put in, how many dollars came back? A MOIC of 2.0x means an investment returned twice the original capital. Families and fund managers use it as a quick snapshot of raw magnitude — did this bet double, triple, or lose money — before layering in more nuanced analysis. It is one of the most common metrics in private equity and direct investing.

The critical limitation is that MOIC ignores time entirely. A 3.0x return over three years and a 3.0x return over twelve years look identical by this measure, even though the annualized performance is radically different. That is why families and their advisors typically pair MOIC with a time-weighted metric such as Internal Rate of Return (IRR) to get a complete picture. Neither number alone tells the whole story.

Consider a hypothetical: a family office invested an illustrative $5 million in a private company and ultimately received $12 million back, producing a 2.4x MOIC. That figure says nothing about whether it took two years or ten. A related metric, TVPI, extends this logic to fund-level accounting by combining cash already distributed with the estimated value still held.

A common confusion is treating MOIC and DPI as interchangeable. MOIC can include paper gains — value that exists on a spreadsheet but has not yet been paid out. DPI counts only cash actually received, making it a stricter, more conservative measure of realized success.