TVPI measures a fund's distributions plus the value it still holds, relative to paid-in capital. DPI measures distributions alone. Read together, they show how much of a reported return has been distributed and how much still depends on the residual portfolio.
A fund with high TVPI and low DPI may have valuable holdings that need time to mature. It may also have optimistic valuations. The two ratios identify the question; they do not answer it without more information.
The formulas
| Measure | Calculation | What it describes |
|---|---|---|
| DPI: distributions to paid-in capital | Cumulative distributions ÷ paid-in capital | Value distributed relative to contributions |
| RVPI: residual value to paid-in capital | Residual net asset value ÷ paid-in capital | Value still held relative to contributions |
| TVPI: total value to paid-in capital | (Distributions + residual NAV) ÷ paid-in capital | Distributed and remaining value together |
Using the same reporting basis and date, TVPI = DPI + RVPI. Paid-in capital is what investors have contributed, not simply the amount they initially committed.
For fund-level reporting, be clear whether figures are net of fees, expenses and carried interest, and how those items enter the calculations. Do not compare a gross investment multiple with a net LP multiple as though they measure the same result.
A worked example
Assume LPs have contributed £10m. The fund has distributed £4m and reports £8m of residual NAV on a consistent net basis.
- DPI is £4m ÷ £10m = 0.4x.
- RVPI is £8m ÷ £10m = 0.8x.
- TVPI is (£4m + £8m) ÷ £10m = 1.2x.
Now suppose the remaining portfolio is marked down to £3m without any new contribution or distribution. DPI stays at 0.4x. RVPI falls to 0.3x and TVPI falls to 0.7x.
The earlier 1.2x was a valuation at a date, not a promise that investors would eventually receive £12m. A later result depends on what the remaining assets produce and what further costs arise.
DPI is not the same as cash profit
Distributions can include a return of contributed capital. They can also include securities delivered in kind, where investors receive shares rather than cash. The source of a distribution matters too: selling an investment is different from borrowing against a portfolio to fund a payment.
ILPA's performance definitions distinguish these forms of proceeds and explain that an IPO does not itself constitute a sale or distribution of the fund's holding. ILPA performance definitions.
Ask for the distribution breakdown. An investor receiving listed shares may still face market risk, transfer restrictions and a decision about when to sell. A headline DPI should not be read as the amount of spendable cash generated by profitable exits.
TVPI needs a valuation explanation
Residual NAV may include private securities, listed holdings, cash, liabilities and accrued costs. Establish the basis used for the relevant fund.
For the important private holdings, ask what changed since the last external transaction, how security rights affect value, and whether the valuation reflects a recent financing, a model or another method. A company's headline valuation does not necessarily represent the value of every share class.
Concentration matters. If most of RVPI comes from one company, the fund's eventual outcome depends heavily on that holding. A useful report shows that exposure rather than hiding it inside a portfolio average.
Compare funds at comparable ages
A two-year-old venture fund and a twelve-year-old fund have had very different opportunities to distribute proceeds. A lower DPI in the younger vehicle is not, by itself, evidence of weaker selection.
Compare vintage, strategy, geography, valuation date and the reporting basis. Then examine the path: what has been distributed, what remains, how much capital can still be called and what the manager expects to spend to realise the portfolio.
TVPI equalling DPI means residual NAV is zero on that basis. It does not establish that every investment succeeded; some holdings may have been written off.
Add timing before judging performance
A 2x multiple achieved in three years and the same multiple achieved in twelve years have different annualised returns. With one contribution and one terminal payment, they imply approximately 26% and 6% annual growth respectively, before changing any other assumptions.
IRR incorporates the timing of the specified cash flows. Public-market-equivalent methods compare them with a selected public benchmark. Neither replaces the information in DPI and TVPI; each answers another part of the question. Our venture capital returns guide explains how to combine them.
Request the multiples, their definitions, the cash flows and the valuation basis together. That provides a much firmer assessment than choosing one ratio as the only measure that matters.
FAQ
What is a good DPI for a fund?
Compare it with funds of similar age, strategy and reporting basis, then examine where the distributions came from. A young venture portfolio has had less time to realise holdings. DPI also needs the remaining NAV, undrawn commitments and cash-versus-securities breakdown to support a useful assessment.
Is TVPI the same as MOIC?
They are sometimes used interchangeably, but MOIC can also refer to a gross investment-level multiple with a different cost base. TVPI here is a fund measure using distributions, residual NAV and paid-in capital. Check the report's definitions before comparing the numbers.
Can DPI exceed TVPI?
With a positive paid-in denominator and non-negative residual NAV, it cannot: TVPI equals DPI plus RVPI. If residual NAV is negative because liabilities exceed remaining assets, the arithmetic can produce a lower TVPI. Reconcile the balance sheet, dates and definitions before assuming the figures are wrong.
How does DPI work for a single-deal SPV?
Use the vehicle's distributions and paid-in capital on a consistent basis. Distributions might arise from a partial sale, dividends or other permitted sources; a full exit is not required. Keep the underlying company's value separate from the amount distributed after vehicle-level costs and terms.
Does a DPI of 1x mean the investment is finished?
It means cumulative distributions equal paid-in capital on the stated basis. The fund can still hold investments, have liabilities or call further capital. It also does not prove that all distributions were cash generated by profitable exits. Read the remaining balance sheet and commitments alongside it.
