Sample Deal Terms for LP Equity?

October 15, 2025

by a searcher from University of South Carolina in Greenville, SC, USA

Given my real estate background, interested in seeing what types of equity returns pique investor's interest in the PE world. Equity Multiples, IRR, Cash on Cash, etc. For most of my projects (development - high risk), a 3-4x multiple over a 5-7 year hold is considered a home run (most of these deals are in the mid-20s to low 30s IRR - though I don't put much weight on IRR given our long term hold strategy). For reference - I'm look to acquire / roll-up a lot of service providers (engineering, environmental, niche consulting firms, etc.) & subcontractors (also a fully licensed General Contractor) we work with on a daily basis. Most of these owners are nearing retirement age, and are looking for possible exit strategies.

Reply by a searcher
from Princeton University in Annandale, Clinton Township, NJ, USA

1000 different ways to present returns, but like those above, there needs to be a clear path to 25%+ in a reasonable projection scenario. Reasonable means growth in line with or slightly below past, similar entry exit multiples, and holding margin profile. In SBA sized deals, usually can get there if your purchase price is right since your using outsized debt/equity

Reply by an investor
from London Business School in London, UK

Hi Camron, investors in the search fund asset class would typically consider successful returns north of 3-4x MOIC and 35% IRR. However, consider many deals have lower returns.

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