A fund invests $5 million in a company and receives $20 million at exit eight years later. Roughly what are the MOIC and IRR?
- A. 4.0x MOIC and roughly 50% IRR
- B. 3.0x MOIC and roughly 25% IRR
- C. 4.0x MOIC and roughly 41% IRR
- D. 4.0x MOIC and roughly 19% IRRCorrect
Takeaway. A multiple is silent about time, so annualize before you judge it: the same 4x is a strong result over four years and an ordinary one over eight.
