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Investment returns benchmark

Choose what you are investing in and enter the IRR you expect, to see how it compares with typical returns.

Asset class

Type

Country

%

2,5 points above the median

Your 12,0 % beats about 75 % of comparable investments.

Mean

9,8 %

Estimated

Median

9,5 %

Mode

8,9 %

Estimated

How your return compares

Your IRR 12,0 %0,6 %9,5 %20,6 %

Dashed lines, left to right: mode, median and mean.

All strategies, by median IRR

  • Early stage28,5 %
  • Growth equity23,5 %
  • Late stage21,5 %
  • Mid-market buyout20,5 %
  • Large buyout18,5 %
  • Residential development17,5 %
  • Value-add infrastructure14,0 %
  • Hotels13,5 %
  • Mezzanine13,5 %
  • Retail11,5 %
  • Logistics11,0 %
  • Offices10,5 %
  • Renewables10,5 %
  • Residential9,5 %
  • Core infrastructure9,5 %
  • Senior direct lending9,5 %

Dark line: your IRR, 12,0 %

Indicative gross target IRRs built by Dealith from published targets, not realised returns from a fund database. Mean and mode are estimated from the range, because they are rarely published. Adjustments by country are Dealith assumptions.

Public references: Dakota (how private equity performance is benchmarked), PitchBook Benchmarks, Global Property Guide (Spain gross rental yields).

What is a good IRR?

It depends on the risk: the riskier the investment, the more it should pay. Published targets are roughly 25–35 % for venture capital, 20–25 % for growth and buyouts, 18–25 % for opportunistic real estate, and 8–12 % for core real estate and infrastructure. So a 12 % IRR can be strong in one asset class and weak in another.

What is IRR?

Sum of (Cash flow in year t / (1 + IRR)^t) = 0

The internal rate of return is the annual return of an investment, taking into account when each payment happens. It is the rate at which the money going in and the money coming out are worth the same today.

How to compare your IRR: an example

Take residential real estate in Spain. On this page the median is 9,5 %, with quartiles at 7,5 % and 12,0 %. An expected IRR of 12 % is 2,5 points above the median and beats about 75 % of comparable investments.

Target returns and real returns

The figures here are gross targets: what managers aim for before fees and carried interest. What investors receive after those costs is lower, and actual returns can end up far from the target. Compare your figure with one measured the same way.

Median, mean and mode

The median is the investment in the middle of the group. The mean and the mode are rarely published for these assets, so this page estimates them from the range and marks them as estimated. The curve shows how likely each return is around the median.

Why IRR is not enough

IRR rewards speed. A deal returning 1,5x in one year has an IRR of 50 %, and one returning 3,0x in seven years has an IRR of 17,0 %, yet the second makes far more money. Read IRR alongside MOIC, the multiple of money you get back.