Reference · Funds & LP terms
DPI
"Distributions to paid-in": cash actually returned ÷ cash invested.
Worked example
A worked example of DPI vs. paper returns (illustrative figures):
- A fund has called $100 million from its LPs and, to date, has distributed $60 million back in cash from realized exits.
- DPI = $60M ÷ $100M = 0.6x. LPs have gotten back 60 cents in cash for every dollar they put in — the fund hasn't yet returned their full capital, let alone a profit, in cash terms.
- The fund's GP also reports $50 million of remaining unrealized NAV in the portfolio. Including that, TVPI (total value to paid-in) is ($60M + $50M) ÷ $100M = 1.10x — a healthier-looking number, but 1.10x TVPI against 0.6x DPI means most of the "return" so far exists only on paper.
- This gap is exactly what pushes LPs toward the secondary market: an LP who needs cash today can't spend a 1.10x TVPI mark, but they can sell their stake to a secondary buyer for cash now, at whatever discount to that NAV the market will bear.
Where this trips people up
DPI is often quoted without its companion, time. A fund with 1.0x DPI after four years and one that reached the same figure after ten are not comparable, and neither number tells you anything about what remains unrealised in the portfolio. Reading DPI alongside TVPI and fund age is the minimum honest treatment.
Frequently asked
What is a good DPI?
It depends entirely on vintage and age. Early in a fund's life a low DPI is expected; late in life a low DPI alongside a high TVPI means the value is still on paper, which is exactly the situation the secondary market exists to resolve.
Why do LPs care so much about DPI now?
Because distributions slowed materially when exit markets cooled. When cash is not coming back, allocators cannot fund new commitments, which is a direct driver of LP-led secondary supply.
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