Key takeaways
- 100% recovery is rare in 2026 markets.
- 85–95% recovery is realistic and excellent.
- Infinite return is denominator math, not strategy.
- Capital left in is opportunity-cost not loss.
- Focus on portfolio ROE, not single-deal IRR.
Core concepts
Math
Cash recovered / cash invested. 100% = infinite return on remaining cash flow.
Realistic outcomes
85–95% recovery is excellent; treat 100% as bonus.
Portfolio lens
Sum cash invested vs cash recovered across cohort.
Step-by-step framework
- 1Compute capital left in per deal.
- 2Compute cohort recovery rate.
- 3Reinvest recovered capital immediately.
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Common mistakes to avoid
- Forcing 100% recovery via over-leverage.
- Treating capital left in as failure.
- Ignoring time-weighted return.
Frequently asked questions
Is infinite return realistic?
Increasingly rare. 85–95% is the modern target.
How to think about capital left in?
Opportunity cost vs your next deal IRR.
Does refi rate matter for infinite return?
Yes — higher rate = less refi proceeds.
Portfolio vs deal view?
Portfolio always — compounds capital.
Action checklist
- ☐Capital left in tracked.
- ☐Cohort recovery rate computed.
- ☐Recovered capital reinvested.
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