A deal returns 2x MOIC. How does the IRR change at a 3-year vs a 7-year hold?

How to answer

Same MOIC, shorter hold means higher IRR because returns compound. 2x over 3 years is ~26%, over 5 years ~15%, over 7 years ~10%. Time is the enemy of IRR for a fixed multiple, which is why sponsors like early exits and dividend recaps that pull cash forward.

Key idea: Assuming MOIC and IRR move together. A 2x in 3 years (26%) crushes a 2x in 7 years (10%). Quick flips can show great IRR but mediocre MOIC, and vice versa.