How to Read an Investment Deck: What to Look for Beyond the IRR

The IRR Obsession: Why It's Not Enough

IRR (Internal Rate of Return) is often treated as the headline number in any investment opportunity. It's what catches attention in a pitch deck and often what investors ask about first. But IRR, while useful, is only a projection. It’s built on a foundation of assumptions—and those assumptions matter more than the number itself.

Think of IRR like the cover of a book. It tells you something, but not nearly enough. If you're investing in a real estate deal, a private credit vehicle, or a mixed-use development, what you really want is insight into the full narrative behind the number.

What the IRR Doesn’t Tell You

Here’s what IRR won’t tell you:

• How realistic the business plan is
• What happens if the market underperforms
• How fees and promote structures affect your net return
• How long your capital is actually tied up
• What assumptions went into the exit strategy

You need to peel back the layers. If the IRR is 18%, is that based on a smooth exit in year five? What if the market stalls in year four? Who takes the hit first—you or the sponsor?

The Sponsor: Who’s Really Running the Show?

A good deck doesn’t just pitch the project—it explains who is executing it. Look closely at the sponsor’s background:

• Track record: Not just in good markets, but during downturns
• Skin in the game: Are they investing their own capital?
• Transparency: Are risks addressed openly, or glossed over?
• Alignment of interests: How are they incentivized to protect your capital?

At Infinity⁹, we often say: There are no bad markets, just bad strategies. The right operator can navigate volatility. The wrong one can sink a deal in perfect conditions.

Market Assumptions: Grounded or Guesswork?

A projection is only as strong as the assumptions behind it. Review the deck’s assumptions with a skeptical eye:

• Rent growth and occupancy: Are they assuming double-digit increases in a flat market?
• Exit cap rates: Are they assuming cap rate compression that might not be realistic?
• Construction timelines and costs: Are they building in enough contingency?

If the model needs everything to go right for it to work, it’s not a model—it’s a wish.

Deal Structure: Who Gets Paid, When, and How?

Always read the fine print of the deal structure:

• Preferred return: Is there a hurdle before the sponsor shares in the profits?
• Promote structure: How is profit split after certain benchmarks are hit?
• Fees: Are asset management or acquisition fees excessive?

These elements can dramatically change your actual return—even if the projected IRR looks strong.

Time Horizon and Liquidity: Can You Wait That Long?

An 18% IRR might sound great—until you realize your capital is locked up for 10 years with no interim cash flow. Make sure you understand:

• Hold period
• Distribution schedule
• Liquidity options (if any)

If your needs change, can your capital adapt—or is it stuck?

Exit Risk: The Least Talked-About Variable

Every investment deck ends with a clean exit slide—but exits rarely go according to plan. Ask:

• Is the exit based on refinancing, a sale, or IPO?
• What happens if cap rates rise?
• Is there a backup plan?

Private investments often shine because they don’t depend on market timing like public assets. But that only holds if the exit strategy is realistic.

The Infinity⁹ Lens: How We Evaluate Deals

At Infinity⁹, we focus on private real estate and credit opportunities that offer:

• Institutional-quality underwriting
• Deep sponsor alignment
• Risk-adjusted strategies that hold up under pressure

We don't chase high IRRs. We chase resilient returns based on real fundamentals. If a deal can’t make sense with a conservative exit and real-world stress tests, it doesn’t belong in our Capital Framework.

A Better Way to Read a Deck

Next time you open an investment deck, don’t flip straight to the IRR. Ask better questions:

• Who’s running this deal, and what’s their track record?
• What are the core assumptions, and are they realistic?
• How am I getting paid, and when?
• What happens if things don’t go according to plan?

Your money doesn’t need a visa. But it does need a strategy.

‍