PE Fund Mechanics

Core

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Returns attribution for a deal bought at 10.0x EBITDA of 100 (enterprise value 1,000, net debt 600, equity 400) and sold at 11.0x EBITDA of 150 (enterprise value 1,650, net debt 300, equity 1,350). The equity gain of 950, about a 3.4x MOIC, splits into EBITDA growth of 500 (50 of new EBITDA at the entry multiple), multiple expansion of 150 (1.0x on exit EBITDA of 150) and deleveraging of 300 (net debt falling from 600 to 300).

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