IRR vs MOIC: What's the Difference in PE & VC Returns?

Q: What is a good IRR for private equity?

It varies by strategy and vintage, so compare with peers of the same vintage and strategy rather than a fixed number.

Q: Is MOIC the same as TVPI?

Not exactly. MOIC is usually a gross multiple, often at deal level. TVPI is net to LPs, after fees and carry, at fund level.

Q: Why can IRR and MOIC disagree?

Because IRR depends on timing and MOIC does not. A quick 1.5x can beat a slow 2.0x on IRR.

By aama.io Fund Operations Team · Last reviewed 2 October 2026

MOIC, the multiple on invested capital, is total value divided by capital invested, showing how many times money was returned. IRR, the internal rate of return, is the annualised return that accounts for when cash flows occurred. Two investments with the same MOIC can have very different IRRs if one took longer.

Sourced information — it can change

This page is compiled from public sources (listed at the bottom) and last reviewed on 2 October 2026. Regulations, thresholds, fees and market practice change, so it may not reflect the latest position. Check with your fund documents and the ILPA reporting guidance before acting.

Key facts

MOIC	Total value ÷ invested capital
IRR	Discount rate at which the net present value of all cash flows is zero
Timing	MOIC ignores timing; IRR is driven by it
Basis	MOIC is often gross (deal level); fund-level TVPI is net to LPs
Weakness of IRR	Can be inflated by early distributions or subscription-line financing
Weakness of MOIC	Says nothing about how long it took

How it works

Calculate MOIC. Add up all value received (realised plus unrealised) and divide by total capital invested.
Calculate IRR. List every cash flow with its date, then find the annual rate that makes their present value net to zero. Spreadsheets use XIRR for dated flows.
Read them together. MOIC shows the size of the outcome, IRR shows the speed. A good result usually needs both to be strong.

Worked example: Same 2.0x, different speed

Two investments each put in $10M and return $20M in one lump sum. One returns the cash after 3 years, the other after 7. IRR below uses the single-cash-flow formula (MOIC^(1/years) − 1).

Investment A: MOIC	2.0x
Investment A: IRR over 3 years	26.0%
Investment B: MOIC	2.0x
Investment B: IRR over 7 years	10.4%

Both doubled the money, but A's annualised return is more than double B's. MOIC alone would hide that.

Common mistakes

Comparing a gross deal MOIC with a net fund TVPI.
Reporting IRR without the MOIC, or the reverse.
Ignoring that subscription credit lines can lift IRR by delaying capital calls.
Comparing IRRs of funds with very different holding periods.

The Singapore and APAC angle

There is no Singapore-specific definition, but IRR depends on dated cash flows, so multi-currency funds should state the currency and FX basis. For a VCC, compute returns per sub-fund, with its own investors and cash flow dates.

Frequently asked questions

What is a good IRR for private equity?

Is MOIC the same as TVPI?

Why can IRR and MOIC disagree?

Free tools

IRR, TVPI, DPI & RVPI Calculator Fund Vintage Benchmarker (Quartile Ranking)

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Go deeper

TVPI, DPI, RVPI and IRR: The Four Numbers Every LP Uses to Judge a Fund

Related terms

TVPI, DPI and RVPI

DPI, RVPI and TVPI are fund performance multiples measured against paid-in capital. DPI is distributions divided by paid-in capital, the cash actually returned. RVPI is remaining net asset value divided by paid-in capital, the value still held. TVPI is DPI plus RVPI, the total value created so far.

Carried Interest

Carried interest, or carry, is the share of a fund's profits paid to the general partner as performance compensation, typically 20%. It is earned only after limited partners have received their capital back and, in most funds, a preferred return, and it is paid through the fund's distribution waterfall.

Sources

ILPA Reporting Template

General information, not tax, legal, accounting or investment advice. This content is sourced from the references above and from public regulatory material, and it can become outdated. Always confirm the current position with your fund documents and the ILPA reporting guidance, and take professional advice for your specific situation, before relying on it.