Common performance measures in Private Equity

  • Internal Rate of Return (IRR)
  • Multiple on Invested Capital (MOIC)

Less common measures

  • Distributed to Paid-In Capital (DPI)
  • Public Market Equivalent (PME)

Example 1

Invest $100M, receive $200M in one year

  • IRR = 100%, where $100M * (1+100%) = $200M
  • MOIC = $200M/$100M = 2x

Example 2

Invest $100M, receive $200M in two years

  • IRR = 41%, where $100M * (1+100%)^2 = $200M
  • MOIC = $200M/$100M = 2x

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