Formula
How to Calculate DPI
DPI is distributions to paid-in capital: cash actually returned to investors divided by capital actually called. It counts realized money only.
Distributions to Paid-In Capital
DPI = Cumulative Distributions / Paid-In Capital
Where
- Distributions
- = Total cash returned to LPs
- Paid-In Capital
- = Total capital called from LPs
What Is DPI?
DPI stands for distributions to paid-in capital and measures how much cash a fund has actually returned relative to the capital investors have actually funded. Invest Europe's reporting guidelines define it, on a net basis, as the cumulative realized proceeds returned by a fund to its investors relative to its paid-in capital, where paid-in capital means committed capital that has been called, not total commitments. Because it excludes unrealized value entirely, DPI is the only headline multiple that cannot be improved by a valuation mark. A DPI of 1.0x means investors have their money back.
Worked Example
Suppose a fund has $200,000,000 of commitments and has called $150,000,000 to date, so paid-in capital is $150,000,000, not $200,000,000. It has distributed $90,000,000 in cash from four exits. DPI is $90,000,000 divided by $150,000,000, or 0.60x. If the remaining portfolio is carried at $210,000,000, RVPI is $210,000,000 divided by $150,000,000, or 1.40x, and TVPI is 0.60 plus 1.40, which is 2.00x. Investors are still $60,000,000 short of getting their called capital back in cash, even though the fund reports a 2.0x total value. All figures are hypothetical.
Why DPI Matters
Unrealized marks are estimates; DPI is bank transfers. Investors use it to decide whether a manager can actually convert positions into cash, to plan their own liquidity, and to judge whether to back a successor fund. A manager with a strong TVPI and a weak DPI at year eight is carrying the burden of proof, because the gap between the two numbers is entirely valuation judgment.
Related Terms
Frequently Asked Questions
How do you calculate DPI?
DPI is calculated using the formula: DPI = Cumulative Distributions / Paid-In Capital. DPI is distributions to paid-in capital: cash actually returned to investors divided by capital actually called. It counts realized money only.
What is a good DPI?
What constitutes a "good" DPI depends on context — the fund's stage, vintage year, and strategy. Check our benchmarks and calculators for specific ranges.