Distributions to Paid-In (DPI)
Definition
A private equity and venture capital performance metric measuring the ratio of cumulative cash distributions returned to investors relative to the capital they have contributed. A DPI of 1.0x means investors have received back their original investment. DPI is a critical metric for evaluating private equity fund performance, as it measures the actual cash returned to investors relative to their paid-in capital, independent of unrealised portfolio valuations.
Complementary Terms
Concepts that frequently appear alongside Distributions to Paid-In (DPI) in practice.
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 term in a venture capital or private equity investment that determines the order and amount in which investors are paid before other shareholders in a liquidation event (sale, wind-down, or IPO). Common structures include 1x non-participating and 1x participating preferences.
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