Moic To Irr Calculator
A 2x return sounds great until you learn it took ten years. MOIC tells you how much you made; IRR tells you how fast. Enter the multiple and the holding period and this calculator converts one into the other, in both directions, so a private equity, venture or real estate deal can be compared honestly against deals held for different lengths of time.
Holding period: 0.0 years
Simplified estimate. This assumes one lump-sum investment and one lump-sum exit. A true IRR with multiple cash flows at different dates needs a full cash-flow model.
Quick Answer
A 2.5x MOIC over 5 years is a 20.11% IRR: the multiple annualizes to about twenty percent a year. Run the same 2.5x in 3 years and the IRR jumps to 35.72%; stretch it to 7 years and it falls to 13.99%. The calculator above is pre-filled with the 2.5x, 5-year case, and it also runs backwards: a 25% IRR target over 3 years requires a 1.95x MOIC.
Key takeaways
- MOIC has no clock in it. Two deals can both return 2.0x while one earns 25.99% a year (3-year hold) and the other 7.18% (10-year hold).
- The conversion is exact for one lump sum in and one lump sum out: IRR = MOIC^(1/years) - 1. Funds with calls and distributions spread over years need a cash-flow IRR, not this shortcut.
- A MOIC below 1.0x is a loss and the IRR goes negative: 0.8x over 5 years is -4.36% a year.
- Reverse mode is the planning tool: set the IRR you need, read off the multiple you have to deliver, and judge whether that multiple is realistic for the hold.
- Quick Answer
- How to use the MOIC to IRR calculator
- The MOIC to IRR formula, and the assumption inside it
- Worked example: 2.5x over 5 years, step by step
- MOIC to IRR quick reference: the interview table, exact
- What competing calculators miss
- Frequently asked questions
- Add This Calculator to Your Website
- References
How to use the MOIC to IRR calculator
Pick a direction, enter two numbers, and click Calculate. The results stay hidden until you calculate.
- MOIC to IRR (default): enter the multiple (2.5 is pre-filled) and the holding period in years (5 is pre-filled). Decimals work for both, so a 42-month hold is 3.5 years.
- Read the headline rate with its inputs: the result panel repeats the MOIC and the hold it used, then adds a sensitivity table showing the same multiple at two years shorter and two years longer.
- IRR to MOIC (reverse): switch the direction, enter a target IRR such as 25 and the same holding period, and the tool returns the required multiple (1.95x over 3 years). One preserved quirk: an IRR entry of exactly 0 is treated as blank and rejected; the correct figure for 0% is 1.00x over any hold.
- Losses work too: any MOIC between 0 and 1.0 converts to a negative IRR, and in reverse mode any IRR above -100% converts, so a -50% rate over 2 years correctly returns 0.25x.
The MOIC to IRR formula, and the assumption inside it
IRR = (MOIC^(1/years) - 1) × 100, and in reverse, MOIC = (1 + IRR)^years. The formula finds the one constant annual growth rate that turns $1 into the MOIC multiple over the holding period.
The assumption to keep in view: one lump sum goes in, one lump sum comes out. Real funds call capital and pay distributions on many dates, and a true IRR is the discount rate that sets the net present value of all those dated cash flows to zero, the definition FINRA uses in its Regulatory Notice 20-21 guidance on IRR in private placement communications. That is also why professional reporting frameworks treat the two numbers as a pair: the ILPA Reporting Template asks funds to report IRR alongside multiples and paid-in capital, and the since-inception IRR approach in the GIPS standards for private equity rests on the full cash-flow history. Use this page for the fast, honest approximation: screening deals, checking a pitch deck claim, interview preparation. Use a dated cash-flow model for fund accounting. The same annualizing math, run on a beginning and ending value with no multiple in between, is what a CAGR return calculator does, and the multiple itself, before any annualizing, is the holding period return in ratio form.
Worked example: 2.5x over 5 years, step by step
2.5x over 5 years gives a 20.11% IRR. The steps: take the fifth root of 2.5, subtract 1, and read the result as a percent.
Check it by compounding forwards: $1 growing at 20.11% a year for 5 years reaches $2.50. The sensitivity table the tool prints for this run makes the time effect concrete:
| Hold for a 2.5x MOIC | Implied IRR | What it shows |
|---|---|---|
| 3.0 years | 35.72% | Two years faster, 15.6 points higher |
| 4.0 years | 25.74% | One year faster |
| 5.0 years (the worked hold) | 20.11% | The entered case |
| 6.0 years | 16.50% | One year slower |
| 7.0 years | 13.99% | Two years slower, 6.1 points lower |
That asymmetry is the exit-timing tension in private equity: holding two more years to squeeze another half-turn of multiple out of a company can still lower the IRR, because the denominator, time, grew faster than the multiple did. When money moves in and out on several dates instead of once, the right tool is a cash-flow return such as the money weighted return calculator, and when the manager's timing should be stripped out instead, a time weighted return calculator is the fairer comparison.
MOIC to IRR quick reference: the interview table, exact
Six combinations cover most screening and interview questions. Every figure below is the calculator's own output, rounded the way the tool prints it, not the rough approximations often quoted from memory.
| Multiple and hold | Implied IRR | Commonly quoted as |
|---|---|---|
| 2.0x in 3 years | 25.99% | ~26% |
| 2.5x in 3 years | 35.72% | ~35-36% |
| 3.0x in 3 years | 44.22% | ~44-45% |
| 2.0x in 5 years | 14.87% | ~15% |
| 2.5x in 5 years | 20.11% | ~20% |
| 3.0x in 5 years | 24.57% | ~25% |
Same 2.0x, three different deals:
One caution on quoting these numbers: a MOIC is usually struck gross, before fund fees and carried interest, while the multiple an LP actually banks is closer to TVPI net of fees. Benchmark datasets such as the Cambridge Associates private investment benchmarks rank funds by both IRR and multiples for exactly this reason: comparing one manager's gross MOIC against another's net multiple is the most common way this conversion gets misused. The compounding underneath all of it is the same growth the SEC Investor.gov compound interest calculator demonstrates on savings balances.
What competing calculators miss
Nearly every rival implements the same single formula and stops. The gaps are consistent:
- Forward only (CalculatorUltra, Brave Calculator, Savvy Calculator): MOIC and years in, IRR out. Checking what multiple a target IRR requires means redoing the algebra by hand, and none of them shows how the answer moves with the hold.
- Approximation tables presented as answers (interview-prep guides): the familiar table quotes 2.5x in 3 years as ~35% and 3.0x in 3 years as ~45%. The exact figures are 35.72% and 44.22%; fine for a whiteboard, wrong enough to matter in a model.
- Sloppy examples (Savvy Calculator): its worked example starts from an initial investment and exit value, computes the MOIC as an intermediate step, then reports the IRR: the page is really an investment-to-IRR tool wearing a MOIC title. Here the multiple is the input, as the search intent asks.
- Definition pages with no tool (HardGamma, Altss, Wall Street Prep): strong on gross-versus-net and TVPI distinctions, and this page borrows that discipline in its FAQ, but none of them converts anything.
- The gap this page fills: both directions in one tool, fractional years, loss multiples with negative IRRs, and a five-point hold-period sensitivity table attached to every forward result, so the time effect is shown rather than asserted.
Frequently asked questions
Multiple on Invested Capital: total value returned divided by total capital invested. A 2.5x MOIC means every dollar invested came back as $2.50.
Internal Rate of Return: the annualized growth rate of the investment, accounting for the time value of money. It lets you compare investments held for different lengths of time.
Yes. Enter 3.5 for three years and six months; the tool handles fractional holding periods.
True IRR accounts for every cash flow and its exact date. This calculator compresses all of that into one multiple and one time period, which is accurate for a single lump-sum investment and exit.
That means you lost money, and the IRR will be negative. For example, 0.8x over 5 years gives -4.36%, the annualized rate of loss.
Use the reverse mode. MOIC = (1 + IRR)^years: a 25% IRR over 3 years requires a 1.95x multiple.
IRR annualizes the return, so spreading the same gain over more years dilutes the yearly rate.
No. MOIC is usually a gross, deal-level multiple: total value returned divided by capital invested in that deal, before fund-level fees and carried interest. TVPI is the fund-level multiple limited partners see, struck on paid-in capital and usually net of fees, while equity multiple is the real estate name for the same total-value-over-capital idea. The three can sit side by side in a report and still not be comparable.
Because of how the reverse-mode check is written, an IRR entry of exactly 0 is treated as an empty field, and the tool asks for valid values instead of returning a multiple. The mathematically correct answer for 0% over any holding period is a 1.00x MOIC: no gain, no loss. Every other IRR value converts normally, including negative rates down to just above -100%.
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References
- FINRA. Regulatory Notice 20-21: Private Placement Retail Communications, including the Internal Rate of Return section. Accessed October 22, 2026.
- Institutional Limited Partners Association (ILPA). ILPA Reporting Template: standardized fund reporting of IRR, multiples and paid-in capital. Accessed October 22, 2026.
- Cambridge Associates. Private Investment Benchmarks: fund rankings by IRR and multiples. Accessed October 22, 2026.
- U.S. Securities and Exchange Commission, Investor.gov. Compound Interest Calculator. Accessed October 22, 2026.
- Kaplan, S. N. and Schoar, A. Private Equity Performance: Returns, Persistence, and Capital Flows, NBER Working Paper 11043. Accessed October 22, 2026.
- Harris, R. S., Jenkinson, T. and Kaplan, S. N. Private Equity Performance: What Do We Know?, Journal of Finance. Accessed October 22, 2026.
- Metrick, A. and Yasuda, A. The Economics of Private Equity Funds, Review of Financial Studies. Accessed October 22, 2026.
- CFA Institute. Global Investment Performance Standards (GIPS): since-inception IRR for private equity. Accessed October 22, 2026.
- Institutional Limited Partners Association (ILPA). ILPA Principles 3.0: performance reporting and fee transparency guidance. Accessed October 22, 2026.
- Damodaran, A., New York University Stern School of Business. Historical Returns on Stocks, Bonds and Bills. Accessed October 22, 2026.