Ask any limited partner how a fund is doing and you will hear four acronyms: IRR, TVPI, DPI and RVPI. Together they answer two different questions — how much value has the fund created? and how fast? — and you need both to judge performance fairly. Here is what each metric means and how they fit together.
The multiples: TVPI, DPI and RVPI
All three multiples are measured against paid-in capital — the cash LPs have actually contributed via capital calls.
- DPI (Distributions to Paid-In) — realised cash returned to LPs divided by paid-in capital. A DPI of 1.0x means the fund has returned everything LPs put in; above 1.0x is pure realised profit. DPI is the "money in the bank" number.
- RVPI (Residual Value to Paid-In) — the fund's remaining net asset value (unrealised holdings) divided by paid-in capital. This is value still on paper.
- TVPI (Total Value to Paid-In) — total value, realised plus unrealised, divided by paid-in. It is simply TVPI = DPI + RVPI.
So a fund at 2.4x TVPI made up of 1.5x DPI and 0.9x RVPI has returned 1.5x in cash and is holding another 0.9x in unrealised NAV.
The rate of return: IRR
Multiples ignore time — a 2.0x in three years is far better than a 2.0x in ten. IRR (internal rate of return) fixes that. It is the money-weighted annual return that accounts for exactly when each capital call and distribution happened, with the current NAV treated as a final inflow. Because fund cash flows are irregular, it is calculated as an XIRR over dated flows.
Why you need both
IRR and TVPI can tell different stories. A fund can post a high IRR by returning capital quickly yet end with a modest TVPI; another can grind out a high TVPI over a decade with an unremarkable IRR. Sophisticated LPs read them together — and watch DPI especially closely, because unrealised RVPI is only an estimate until it is sold. In a slow exit environment, "TVPI is fine but where is the DPI?" becomes the question that matters.
What does "good" look like?
It depends on strategy and vintage, but as a rough guide, mature buyout funds often show median net IRRs in the mid-teens, with top-quartile funds well above 20% and TVPIs north of 2.0x. Venture has far wider dispersion. The only fair comparison is against funds of the same vintage year and strategy — which is why benchmarks report quartiles rather than a single average.
Calculate and benchmark your own
You can compute all four metrics from your fund's cash flows — with a full XIRR and a J-curve — using our free IRR, TVPI, DPI & RVPI Calculator. To see which quartile your net IRR lands in versus vintage peers, use the Fund Vintage Benchmarker, and to understand how fees and carry erode the gross-to-net gap, the Administration Fee & Carry Modeler.
Get comfortable with these four numbers and you can read any fund's performance in seconds — and spot the difference between a fund that has truly delivered and one that is still hoping its NAV holds up.
Run your own cash flows through the IRR / TVPI / DPI calculator, or book a demo to see live fund performance reporting in aama.io.
