Formula
How to Calculate RVPI
Residual value to paid-in capital: the share of a fund's reported performance that still sits in unsold assets rather than in cash already distributed.
Residual Value to Paid-In Capital
RVPI = Residual Value / Paid-In Capital
Where
- Residual Value
- = Current estimated fair market value of unrealized portfolio holdings
- Paid-In Capital
- = Total capital contributed by LPs to date
What Is RVPI?
RVPI is residual value to paid-in capital. Invest Europe defines it as the ratio of the residual value attributable to limited partners, net of carried interest, to paid-in capital, and the GIPS standards call the same measure the unrealized multiple, residual value divided by since-inception paid-in capital. Residual value is the remaining undistributed net asset value of the fund after carried interest has been allocated. Paid-in capital is cumulative capital actually called, which Invest Europe notes can exceed commitment. Invest Europe states the identity outright as TVPI = DPI + RVPI, and notes that RVPI becomes lower as investments are realized and ultimately goes to zero at the end of a fund's life.
Worked Example
Hypothetical figures, sourced definitions. A fund has called $80,000,000, distributed $40,000,000 and carries residual value net of carried interest of $100,000,000. DPI is $40,000,000 / $80,000,000 = 0.5 and RVPI is $100,000,000 / $80,000,000 = 1.25, so TVPI is 0.5 + 1.25 = 1.75. Check it the other way, since total value is residual value plus distributions: $40,000,000 + $100,000,000 = $140,000,000, and $140,000,000 / $80,000,000 = 1.75. Now sell a position carried at $60,000,000 and distribute it: DPI becomes $100,000,000 / $80,000,000 = 1.25, RVPI becomes $40,000,000 / $80,000,000 = 0.5, and TVPI stays at 1.25 + 0.5 = 1.75.
Why RVPI Matters
RVPI tells a limited partner how much of a reported multiple is still a judgment rather than a receipt. It is the portion of performance that depends entirely on fair value measurement, which the IPEV guidelines define by reference to IFRS 13 and ASC Topic 820. That is why discounting a manager's RVPI is in substance disagreeing with its valuations, and why two funds at the same TVPI with very different DPI are making very different claims.
Related Terms
Frequently Asked Questions
How do you calculate RVPI?
RVPI is calculated using the formula: RVPI = Residual Value / Paid-In Capital. Residual value to paid-in capital: the share of a fund's reported performance that still sits in unsold assets rather than in cash already distributed.
What is a good RVPI?
What constitutes a "good" RVPI depends on context — the fund's stage, vintage year, and strategy. Check our benchmarks and calculators for specific ranges.