PE net returns.

Private equity (PE) returns calculator factors in the notorious 2-and-20 fee structure: 2% annual management fee + 20% carry on profits. 1M invested at 2.5x exit multiple over 5 years = 2.5M gross. After 10% management fees and 16% carry: net 1.94x = 14% net IRR. Headline gross IRR often misleads.

Example: 100k LP investment in PE fund. Fund returns 2.5x gross MOIC over 5 years. Gross profit 150k. Management fees: 100k × 2% × 5 years = 10k. Profit after fees: 140k. Carry: 140k × 20% = 28k. Net profit: 112k. Net MOIC: 2.12x. Net IRR: 16.2% (vs gross IRR 20%). Fees consume ~25% of returns.

PE returns reality: median net IRR ~10-12% (not 20%+ marketing claims). Top quartile funds: 15-20%+ net IRR. Bottom half: 5-10% net IRR (often worse than public markets after fees). Concentration matters - good funds beat indices, mediocre funds underperform massively. Access: typically 1-10M minimum, accredited only, 10+ year lockups, J-curve (negative early years), IRR can be misleading vs MOIC. Use both metrics for proper evaluation.

Quick example

With initial investment of 100,000 and gross exit multiple of 2.5 (plus hold period of 5 years and annual management fee of 2%), the result is 16.22%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Initial Investment, Gross Exit Multiple (MOIC), Hold Period (years), Annual Management Fee %, and Carry %. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

What's happening under the hood

Gross profit minus management fees minus carry on net profit. Net IRR from net MOIC. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.