Equity Multiple

Equity multiple measures the total cash returned to an investor relative to the cash invested, without accounting for how long it took to earn it. A 2.0x equity multiple means the investment returned twice what was put in.

Example

An investor puts in $200,000 and receives $150,000 in distributions over a 5 year hold, then $250,000 from the sale at exit. Total cash returned is $400,000, for a 2.0x equity multiple.