Money in, money out
MOIC (multiple on invested capital) is the most basic way to state a return: total money received back, divided by total money put in. No time dimension yet, that's Lesson 21.
Invest £100m → receive £220m → 2.2× MOIC
- Meridian, using Lesson 15's structure: £64m of equity invested at entry.
- If the deal returns £150m of equity value at exit (combining EBITDA growth, the debt paydown from Lesson 16, and a flat exit multiple), MOIC = £150m ÷ £64m ≈ 2.3×.
MOIC alone can't tell you whether a deal was actually good, though, 2.3× over three years is a very different investment from 2.3× over nine, which is precisely the gap the next lesson closes.
| Exit equity value | MOIC on £64m invested |
|---|---|
| £64m (breakeven) | 1.0× |
| £96m | 1.5× |
| £128m | 2.0× |
| £150m (base case) | 2.3× |
| £192m | 3.0× |
Checkpoint
- MOIC: total equity returned divided by total equity invested.
- No time dimension: the same MOIC can represent very different quality investments depending on how long it took.
If anything here still feels unclear, ask before moving to Lesson 21.