When LPs evaluate fund performance, they rely on three key metrics — DPI, RVPI, and TVPI — to track returns throughout a fund’s lifecycle. These multiples offer a snapshot of what’s been realized, what’s left, and what it all adds up to.
The Three Multiples That Matter
DPI (Distributions to Paid-In Capital):
- How much has been returned to LPs, net of fees and carry.
- Example: A DPI of 1.0x means LPs have received back exactly what they invested. 2.0x means they’ve doubled their money.
RVPI (Residual Value to Paid-In Capital)
- What’s still left in the fund — the unrealized portion of the portfolio.
- It fluctuates over time based on investment performance, valuation shifts, and exits.
TVPI (Total Value to Paid-In Capital)
- The sum of DPI and RVPI — i.e., all value created to date.
- TVPI = DPI + RVPI.
Quick Terminology
- Paid-In Capital (PIC): The actual dollars LPs have wired to the fund. Not to be confused with committed capital.
- Distributions: Cash or stock returned to LPs.
- Residual Value: What’s still in the fund — unrealized holdings, cash, and receivables.
- Total Value: Distributions + Residual Value.
Why Multiples Matter
Multiples are easy to calculate and widely used in performance reporting. But they have limitations.
Pros:
- Simple and intuitive
- Standardized across the industry
Cons:
- No time factor: A 2.0x return in 5 years is very different from 2.0x in 15 years.
- Estimates matter: RVPI depends on valuation assumptions, which can swing widely.
- Interim vs. final: Multiples evolve. Final results aren’t known until liquidation.
A Simple Example
- Paid-In Capital: $100M
- Distributions: $50M
- Residual Value: $150M
- TVPI = $50M + $150M = $200M
Multiples:
- DPI = 0.5x
- RVPI = 1.5x
- TVPI = 2.0x
DPI above 1.0x? LPs have made back their capital.
RVPI > 1.0x? There’s still unrealized value in play.
A Note on Net Returns
These metrics reflect net performance — after fees, carry, and fund expenses. They represent the LP’s perspective, which is ultimately what matters.
PE2 Insight 