Larger PE funds and / or PE firms executing LBOs in non-cyclical industries with recurring cash flows aim for 20% IRR, which is a 2.5x multiple of capital over 5 years.
25% IRR is the threshold for LBOs in more cyclical industries with higher growth rates, such as growth equity investments. This is a 3x multiple of capital over 5 years.
Infrastructure is a unique sector in that it provides an unusual amount of revenue visibility and cash flow stability given that its revenues are often contracted for 20 years or more. As a result of this stability and predictability, the required IRR threshold for infrastructure is much lower at 9-12% IRR.