Net Multiple
How many times over a fund has returned distributions to LPs relative to the capital they've paid in, after management fees and carried interest.
◆ Multiple
Cumulative cash and stock returned to LPs, net of fees and carry
Capital LPs have actually paid into the fund to date
Computed — updates as you type
Net multiple — LP ladder
1.00× break-even sits at the paid-in-capital line above
Formula
What it measures
The return LPs have actually received (or would receive if everything were liquidated today) per dollar they've contributed — the number that matters most to a limited partner, since it's net of everything the GP charges.
Why it matters
This is the metric LPs care about above all others: it's what actually lands in their pocket. Every other multiple (gross, MOIC) is a diagnostic on the way to this number. LPs use it to evaluate a GP's realized track record and to benchmark against other funds they're invested in.
How to read it
A net multiple of 1.8x means LPs have received $1.80 back for every $1.00 they paid in. Because it's realized-cash-only in this formulation, a fund can have a strong net multiple while still holding significant unrealized value — check TVPI for the fuller picture. Below 1.00x simply means paid-in capital hasn't yet been returned; that's normal early in a fund's life and a real problem late in one.
What good looks like
Good
Net multiple tracks close to gross multiple (modest fee drag) and is trending toward or above 2.0x for a maturing fund.
Watch
A wide, growing gap between gross and net multiple, or net multiple stalled near 1.00x well past the investment period.
Bad
Net multiple below 1.00x with little unrealized value left to bridge the gap — LPs are underwater on a realized basis.
Watch-outs
- Using gross proceeds instead of net-of-fee distributions overstates the multiple LPs are actually receiving.
- Comparing net multiple across funds without normalizing for vintage — a 5-year-old fund's net multiple isn't comparable to a 10-year-old fund's.
- Treating net multiple as the full performance picture — pair it with TVPI to see unrealized value still in the portfolio.
Worked example
Hypothetical
LPs have paid in $20M and received $36M in distributions, net of fees and carry. Net multiple = $36M ÷ $20M = 1.8x.
FAQ
What's the difference between net multiple and TVPI?
Net multiple here reflects realized distributions only. TVPI adds unrealized residual value (RPI) on top, giving the total value — realized plus unrealized — per dollar paid in.
Why is my net multiple lower than the gross multiple I've seen reported?
The gap is fee drag: management fees and carried interest are deducted before cash reaches LPs. A wider gap means the fund's economics are consuming more of the gross return.
Is a 1.0x net multiple bad?
Not necessarily — it means LPs have gotten their paid-in capital back but no profit yet. Whether that's a concern depends entirely on where the fund is in its lifecycle and how much unrealized value remains.
Related
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