Sign inWhat is DPI in private equity?
DPI is distributions to paid-in capital: realised cash returned to limited partners divided by capital they have contributed. It measures money actually banked.
DPI = cumulative distributions / paid-in capital
How practitioners use it
DPI is the metric limited partners trust most because it cannot be marked. Either the cash was wired or it was not.
Early in a fund's life DPI is close to zero even for strong portfolios, because exits have not happened yet. Late in a fund's life a low DPI alongside a high paper value is a warning sign that value is trapped in unrealised positions.
Read DPI next to TVPI to see how much of the reported value has actually been converted into cash.
Worked example with round numbers
01
Limited partners have paid in 100 and received 60 of distributions.
02
DPI is 0.6x, so 60% of contributed capital has come back in cash.
03
If remaining holdings are marked at 90, TVPI is 1.5x and half of it is still unrealised.
Where people get it wrong
- Treating DPI as a performance measure early in a fund's life.
- Confusing DPI with RVPI, which covers only unrealised value.
- Ignoring recycling, where distributions are reinvested rather than paid out.
Learn it by using it
Definitions stick once you have run the numbers yourself. The desk below is free and needs no signup.
Open the fund metrics desk