DPI and TVPI

DPI and TVPI are multiples used to describe private fund performance. Distributed to paid-in capital, or DPI, divides cumulative distributions by the capital investors have paid in. Total value to paid-in capital, or TVPI, adds the remaining value of the investor's fund interest to cumulative distributions, then divides that total by paid-in capital.

DPI therefore reflects value already returned, while TVPI combines returned value with the manager's estimate of what remains. A TVPI above DPI is normal for an active fund. The gap is unrealised value, not cash, and may rise or fall as portfolio companies are fair-valued periodically and ultimately sold.

Why it matters for family offices

The two measures prevent a family from treating a strong paper valuation as if it were a realised outcome. A mature fund with high DPI has returned more of its value to investors. A young fund may have low DPI and a promising TVPI, but the result depends heavily on estimates and future exits. Fund age, strategy, currency, use of subscription facilities, and valuation practice all affect comparisons.

Neither multiple captures timing. Returning the same amount in three years or ten years can produce the same DPI, so internal rate of return adds a time-sensitive view. Family offices typically read DPI, TVPI, IRR, cash flows, and the underlying portfolio together rather than ranking managers by one number.

How it shows up in practice

Suppose a family has paid $8 million into a fund. It has received $6 million of cumulative distributions, and the latest statement reports a remaining value of $5 million. DPI is $6 million divided by $8 million, or 0.75x. TVPI is $11 million, the $6 million distributed plus $5 million remaining, divided by $8 million, or 1.375x, commonly shown as 1.38x.

The fund has created reported total value above paid-in capital, but less than half of that $11 million remains unrealised. The office reconciles the inputs to the capital account and labels the valuation date. If the remaining portfolio is later written down to $3 million, DPI stays at 0.75x while TVPI falls to 1.125x. That distinction shows exactly which part of performance is banked and which part still depends on future outcomes.