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Also known as Multiple on Invested Capital (MOIC), is a straightforward measure of an investment’s total return on a cash-on-cash basis. It is calculated as the total cash distributions received from the investment (including returns of capital and profits) divided by the total equity invested. For example, if an investor puts in $100,000 and eventually receives $200,000 back in total (initial capital plus profit), the equity multiple is 2.0×. An equity multiple above 1.0× indicates a profit (2.5× would mean $250k returned on $100k invested), while an equity multiple below 1.0× indicates a loss. Importantly, equity multiple does not account for time – it treats a dollar returned after one year the same as a dollar returned after five years, unlike the Internal Rate of Return (IRR) which factors in the time value of money. High-net-worth investors use equity multiple alongside IRR to get a full picture: the equity multiple tells them “How much overall do I get out relative to what I put in?” in absolute terms, which resonates with the goal of wealth building. Lightstone presents equity multiple in its deal summaries for clarity, helping investors easily see the potential total payout. For instance, an offering might target an equity multiple of 1.8× over 5 years. This transparent metric, paired with Lightstone’s careful underwriting, gives investors’ confidence in the upside potential of each deal while understanding the hold period that comes with it.
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