Key Metrics

Question 1

DPI (Distributions to Paid-in-Capital)

Answer 1

Distributions to Paid-in-Capital is the ratio of Distributions to Paid-in-Capital, and that value is expressed as a multiple.

The higher DPI, the better. A DPI of 1.0x means that the fund has returned to LPs an amount equal to their Paid-in-Capital. A DPI of 3.0x means the fund has returned to LPs an amount equal to 3.0x their Paid-in-Capital. A 3.0x DPI for a fund is a good result

DPI = Distrobutions / Paid In Capital

Question 2

RVPI (Residual Value to Paid-in-Capital)

Answer 2

The ratio of Residual Value (the remaining value of the fund) to Paid-in-Capital, which is also expressed as a multiple, such as 1.0 or 1.0x.

Residual Value to Paid in Capital = Residual Value / Paid in Capital

Question 3

TVPI (Total Value to Paid-in-Capital)

Answer 3

The ratio of Total Value to Paid-in-Capital, also expressed as a multiple, such as 1.0x or 2.0x.

TVPI = Total Value / Paid in Capital

Measures the total value of investments and distributions received by limited partners relative to the amount of capital they have contributed to the fund.

Question 4

MOIC (Multiple of Invested Capital)

Answer 4

Used to measure the return generated by an investment relative to the amount of capital initially invested.

Calculated by dividing the total distributions (profits, dividends, or other returns) received from investments by the total amount of capital invested. It represents how many times the initial capital has been multiplied through the investment.

Question 5

Net IRR (Net Internal Rate of Return)

Answer 5

Metric used to measure the profitability and performance of an investment fund.

takes into account both the timing and magnitude of cash flows generated by the investments within the fund, including both the contributions made by investors and the distributions or returns received by them.

To calculate: the cash flows from the fund’s investments, including capital contributions and distributions, are discounted back to their present value using the internal rate of return method. The Net IRR is the rate that sets the net present value of these cash flows to zero.