Reference

PE Glossary

Key Private Equity terms defined. From SPV to carry, from MOIC to all-in PPS.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

All-in PPS

The total price per share including the base PPS plus all fees (entry fee, SPV costs) allocated per share. This represents the true cost to the investor for each share acquired.

PPS Entry Fee SPV

AUM

Assets Under Management. The total market value of investments managed by a fund, firm, or individual on behalf of investors.

NAV LP

C

Carry (Carried Interest)

The share of profits (typically 15-20%) earned by the fund manager or deal sponsor on investment gains. Carry aligns the sponsor's incentives with investor returns — the sponsor earns more only when investors profit.

GP MOIC IRR

Capital Call

A demand by the fund or SPV for investors to transfer committed capital. Capital calls are issued when the fund is ready to deploy capital for an investment or to cover expenses.

Commitment LP

Commitment

The total amount an investor agrees to invest in a deal or fund. Not all committed capital is called at once — it may be drawn down over time through capital calls.

Capital Call Net Invested

Co-Investment

A direct investment alongside a PE fund in a specific deal. Co-investments typically offer lower fees than fund investments and provide investors with more control and transparency.

SPV LP

E

Entry Fee

A one-time fee charged to investors at the time of commitment, typically 1-5% of the commitment amount. Entry fees compensate the deal sponsor for origination, due diligence, and structuring costs.

All-in PPS Commitment

G

GP (General Partner)

The entity responsible for managing a PE fund or SPV. The GP makes investment decisions, manages portfolio companies, and earns management fees and carried interest.

LP Carry

I

IRR (Internal Rate of Return)

The annualized rate of return that makes the net present value of all cash flows (investments and distributions) equal to zero. IRR accounts for the timing of cash flows, making it the standard PE performance metric alongside MOIC.

MOIC NAV

L

LP (Limited Partner)

An investor in a PE fund or SPV who provides capital but has limited liability and no management control. LPs include institutional investors, family offices, HNWIs, and pension funds.

GP Commitment

M

MOIC (Multiple on Invested Capital)

The ratio of the current or realized value of an investment to the total capital invested. A MOIC of 2.5x means the investment has returned 2.5 times the original capital. MOIC does not account for the time dimension — use IRR for time-adjusted returns.

IRR NAV

N

NAV (Net Asset Value)

The total value of an investment portfolio minus liabilities. In PE, NAV represents the current estimated value of all portfolio companies, calculated using the latest available valuations.

MOIC AUM

Net Invested

The amount of capital actually deployed into the investment, net of fees and costs. Net invested = Commitment - Entry Fee - SPV Cost Allocation.

Commitment Entry Fee

P

PPS (Price Per Share)

The price at which shares in an SPV or company are offered to investors. The base PPS reflects the underlying company valuation, while the all-in PPS includes all fees.

All-in PPS SPV

Pro-Rata

Proportional allocation based on each investor's share of the total. In PE, pro-rata is commonly used for cost allocation (SPV costs), fee distribution, and follow-on investment rights.

SPV Commitment

R

Retrocession

A commission paid by the deal sponsor to an introducing partner or placement agent for bringing investors. Retrocessions can apply to entry fees (one-time) and carry (performance-based).

Entry Fee Carry

S

SPV (Special Purpose Vehicle)

A legal entity created specifically to hold a single investment or a group of related investments. SPVs provide liability isolation, tax structuring flexibility, and a clean ownership structure for investors.

LP GP PPS