DPI, or distributions to paid-in capital, is a ratio that measures how much cash a private equity fund has actually returned to its limited partners relative to the capital those investors have contributed. A DPI of 1.0x means investors have received distributions equal to the money they paid in, while a DPI above 1.0x means the fund has returned more than was invested.
Because DPI counts only realized cash distributions, it is considered a more conservative measure of performance than metrics that include the unrealized value of assets still held by the fund. Sponsors and investors often review DPI alongside RVPI and TVPI to understand both what has been returned and what remains in the portfolio.
Related questions
What does DPI stand for in private equity? DPI stands for distributions to paid-in capital. It expresses, as a multiple, the total cash and stock a fund has distributed to limited partners divided by the total capital those partners have paid into the fund.
How is DPI calculated? DPI is calculated by dividing cumulative distributions to limited partners by cumulative paid-in capital. For example, a fund that has paid out $80 million on $100 million of called capital has a DPI of 0.8x.
What is a good DPI ratio? A DPI above 1.0x means a fund has returned more than investors contributed, which is generally viewed positively. Expectations depend heavily on the fund vintage and strategy, since early-stage funds typically show low DPI for several years before realizations begin.
What is the difference between DPI and TVPI? DPI measures only realized distributions, while TVPI, or total value to paid-in capital, adds the remaining unrealized value of portfolio holdings. TVPI is therefore always equal to or greater than DPI, and the gap between them reflects value the fund has created but not yet returned in cash.
What does DPI mean in finance more broadly? Outside private equity, DPI is most often used by venture capital and other closed-end fund investors in the same way, as a realized cash-return multiple. It is a fund-performance metric rather than a corporate accounting term.
