Definition
What is DPI (Distributions to Paid-In)?
Realised cash returns from a fund — distributions actually paid divided by paid-in capital — the hardest metric of fund success.
Distributions to Paid-In (DPI) measures the realised cash returns a fund has produced — distributions actually paid to LPs divided by total paid-in capital. It is the most reliable single number for fund performance because it cannot be manipulated by NAV-marking assumptions.
Calculation: - DPI = Total Distributions / Paid-In Capital.
Why DPI matters more than TVPI in mid-life funds: A fund at year 5 with TVPI 1.8x but DPI 0.3x is showing strong NAV marks but minimal actual cash returns. The unrealised value depends on the manager's valuation; if exits come in lower than NAV, the realised return will be lower than TVPI suggests.
A fund at year 5 with TVPI 1.8x and DPI 1.4x is much closer to "done" — most of the value has been realised in cash. The remaining unrealised tail is small.
Time-related expectations: - Years 1-3: DPI is typically 0.0x (no exits yet). - Years 4-6: DPI begins building as early exits happen. - Years 7-10: DPI builds toward TVPI as the portfolio matures. - Years 10-12: DPI typically converges to TVPI at fund wind-up.
Industry benchmark: top-quartile mid-market PE funds typically reach DPI 1.5-2.0x by year 8 and 2.5-3.5x by year 12. Top-quartile VC funds typically reach DPI 1.0-1.5x by year 8 (because VC exits take longer) and 3.0-5.0x by year 12 if the portfolio has hits.
Implications for LP selection: when evaluating a GP's track record, focus on DPI from previous funds, particularly those at year 8+ where the realisation cycle is mostly complete. Recent funds (years 1-5) cannot yet show meaningful DPI.
vs IRR: DPI and IRR are related but distinct. A fund with high DPI and low IRR was slow but realised gains. A fund with low DPI and high IRR (so far) realised early gains rapidly but is now coasting. Look at both metrics together.
Related Terms
TVPI (Total Value to Paid-In)
Identical conceptually to MOIC — total fund value (distributions + residual NAV) divided by paid-in capital.
RVPI (Residual Value to Paid-In)
Unrealised fund value — the manager's NAV mark on remaining holdings divided by paid-in capital. Complement to DPI.
MOIC (Multiple on Invested Capital)
The total cash returned to an investor divided by the cash they invested — a simple money-multiple measure of investment success.
IRR (Internal Rate of Return)
The annualized return on an investment accounting for the timing of cash flows.
Educational Content Disclaimer
This glossary provides general educational information only and does not constitute financial, legal, or tax advice. Definitions and explanations are simplified for educational purposes and may not cover all aspects or nuances of each term.
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