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✨ EY Prep 🩷
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Private Equity
🎲 Mixed
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Why can a fund have an excellent MOIC but a disappointing IRR?
A.
This is impossible — MOIC and IRR always move in the same direction
B.
If exits were delayed, the same total return over a longer period produces a lower annualised IRR
C.
If management fees were too high, reducing the net MOIC to LPs
D.
If the fund used too much leverage, IRR is mechanically lower despite high MOIC