Distributions to Paid-In (DPI)

A private equity and venture capital performance metric combining both realised returns (distributions) and unrealised value (remaining portfolio value) relative to total capital contributed. TVPI equals DPI plus RVPI and provides the most complete picture of a fund's overall performance.

The ratio of total value returned (realised plus unrealised) to total capital invested. A MOIC of 3.0x means the investment has generated three times the original capital.

The annualised rate of return at which the net present value of all cash flows from an investment equals zero. IRR is the standard performance metric for private equity and venture capital funds, allowing comparison across investments with different holding periods and cash flow profiles.

A formal demand made by a private equity or venture capital fund's general partner requiring limited partners to transfer a portion of their committed capital to fund investments, management fees, or fund expenses. Capital calls are issued as investment opportunities arise rather than collecting all committed capital upfront, and the pace of capital calls relative to distributions is a key measure of fund performance.

A clause in a private equity or venture capital fund agreement that adjusts the distribution of carried interest at the end of the fund's life to ensure the general partner has not received more carry than entitled based on overall fund performance. Lookback provisions protect limited partners against early distributions that overstate returns.

The year in which a private equity or venture capital fund makes its first investment or its final close. Vintage year is used to group and compare fund performance because macroeconomic conditions at the time of investment significantly influence returns.

The managing entity of a private equity or venture capital fund, responsible for making investment decisions, managing portfolio companies, and generating returns for investors. GPs typically earn management fees and carried interest.

A Latin term meaning 'on equal footing,' used in finance to indicate that two or more parties, instruments, or claims have equal rights to payment or assets. In venture capital, pari passu clauses ensure that investors in the same class receive proportional treatment during distributions or liquidation events.

What is a private equity fund and how do they use valuations?

PE funds buy companies at entry multiples, operate them to improve cash flows and competitive position, then exit at higher multiples — valuations are critical for entry/exit decisions.

What is pari passu and how does it affect investor rights?

Pari passu means investors hold equal ranking in liquidation or dividend priorities — no investor class has preference over another, protecting minority investors from founder dilution.

What are protective provisions and what power do they give investors?

Protective provisions grant preferred shareholders approval rights over major corporate actions (salary changes, major acquisitions, debt issuance) to prevent founders from taking actions against investor interests.

How are intangible assets treated in insolvency and restructuring?

In insolvency, intangible assets are realised at forced-sale values (typically 10-40% of going-concern fair value), with IP, brands, and customer lists potentially sold separately to maximise creditor recovery.