Navigating financial services (FS) jargon is crucial for professionals. Here are 5 key slang terms decoded:
Alpha
A measure of investment performance against a benchmark. Positive alpha indicates outperformance due to manager skill or strategy, not just market movement.
Whale
Refers to an extremely large investor (institutional or individual) whose trades can significantly impact market prices due to the sheer volume of capital involved.
Unicorn
A privately held startup company valued at over $1 billion. The term signifies rarity and high investor expectations for disruptive potential.
MOIC (Multiple on Invested Capital)
A core metric in private equity and VC, calculated as:
MOIC = Total Value of Investment / Total Capital Invested
A MOIC of 2.5x means an investment returned 2.5 times the original capital.
Dry Powder
Refers to committed but unallocated capital available to investors (like PE firms or VCs) for deployment into new deals or opportunities.
