Updated · Part of the CRE investment glossary
How MOIC works
MOIC comes from private equity and is now common in real estate fund reporting. It answers one question: for every dollar invested, how many dollars of value exist today? Realized value is cash already distributed or received from sales. Unrealized value is the current estimated value of what is still held, usually the latest mark or net asset value.
Because unrealized value is an estimate, MOIC before exit moves with valuations. It becomes a hard number only when every asset has been sold and the cash paid out.
Real estate funds commonly report MOIC per asset or per deal in investor updates, next to IRR. At the fund level, limited partners usually see TVPI and DPI instead, because those are measured on what investors paid in and what they received after fees.
The formula
At any reporting date:
MOIC = (realized value + unrealized value) ÷ capital invested
- Realized value: cash returned from the investment to date.
- Unrealized value: the current estimated value of the remaining position.
- Capital invested: the amount put into the investment, usually before fund-level fees.
MOIC vs equity multiple vs TVPI
The three overlap, and firms define them differently, so always read the footnote. In common usage:
- Equity multiple: the real estate syndication term. Usually total cash distributed divided by equity invested, quoted as a projection or once the deal is sold.
- MOIC: total value, realized plus unrealized, over capital invested. Usually gross, at the deal or asset level, before fees and carried interest.
- TVPI: total value to paid-in capital. The same idea at the limited partner level, net of fees, expenses and carried interest, with paid-in capital as the denominator. TVPI = DPI + RVPI.
- At final exit, when nothing is left unrealized, a deal’s MOIC and its cash equity multiple measure the same thing; the LPs’ TVPI equals their DPI.
Worked example: gross MOIC vs net TVPI
A fund calls $10,500,000 from its limited partners. $500,000 pays fees and expenses and $10,000,000 is invested in deals. The deals have returned $6,000,000 in cash and the remaining assets are marked at $9,000,000.
Carried interest of 20% on profit after fees is ($15,000,000 − $10,500,000) × 20% = $900,000: $500,000 already withheld from distributions and $400,000 accrued against the remaining value. LPs have received $5,500,000 and their share of the remaining value is $8,600,000.
| Metric | Calculation | Result |
|---|---|---|
| Gross MOIC | ($6,000,000 + $9,000,000) ÷ $10,000,000 | 1.50x |
| Net TVPI | ($5,500,000 + $8,600,000) ÷ $10,500,000 | 1.34x |
| Net DPI | $5,500,000 ÷ $10,500,000 | 0.52x |
What to watch for
MOIC is easy to quote favorably. Check these before comparing two numbers:
- Gross or net: a gross MOIC can be well above what limited partners receive.
- How unrealized value is marked: appraisal, broker opinion, cap-rate mark or cost.
- Which capital is in the denominator: capital invested in deals or capital paid in by investors.
- Time: a 1.5x over three years and over ten are very different results. Read MOIC with IRR.
General information, not legal, tax or investment advice. Your operating agreement, offering documents, counsel and CPA govern your deal.