MOIC vs IRR?
Fund A has 1.5x Gross MOIC but 30% IRR.
Fund B has 2.0 Gross MOIC but 20% IRR.
Fund B will have a higher carried interest pool. But, I would assume the 30% IRR is due to faster realizations (leading to higher IRR) -- does this potentially lead to faster carry payments under the European waterfall style?
Assuming the same fund size, obviously the fund with a higher MOIC will have a larger carry pool…
yeah, I just rephrased the question. but the higher IRR likely means faster realizations. So would carry be paid out faster in this case?
bump
Always focus on MOIC
Higher IRR doesn't mean quicker distributions, it can mean a number of things IRR is easily manipulated. Some GP's have left things on a subscription line for 2-3 years, with current rates it kills net returns but the last few years it was free money. It could also just mean the GP writes things up immediately/aggressively.
If you want to evaluate distributions look at DPI
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