MOIC to IRR Reference Table
Annualized IRR for common MOIC and hold period combinations
| MOIC | 3 Years | 5 Years | 7 Years | 10 Years |
|---|
Methodology
This calculator converts a Multiple on Invested Capital (MOIC) to an equivalent annualized Internal Rate of Return (IRR) using the following formula:
Where n is the hold period in years.
For example, a 2.0x MOIC over 5 years yields an IRR of (2.00.2 − 1) = 14.9%.
This formula assumes a single cash flow at entry (the initial investment) and a single cash flow at exit (the return). There are no interim distributions, management fees, or capital calls modeled.
For investments with multiple cash flows across the hold period, MOIC and IRR will diverge. A fund that returns capital early will show a higher IRR relative to its MOIC than one that returns capital at the end. Use an multi-cash-flow IRR calculator for those scenarios.
This calculator is for illustrative purposes only. Actual fund returns are subject to fees, carry, timing of cash flows, and other factors not captured here.
