TVPI: total value to paid-in
TVPI compares everything the investment is worth today with what was paid in. It adds the money already distributed back to the investor to the current value of what is still held, then divides by the capital paid in.
A TVPI of 1.5x means every dollar paid in is now worth a dollar fifty, counting both cash returned and value still on paper.
DPI: distributions to paid-in
DPI counts only the cash actually returned. A DPI of 0.6x means sixty cents of every dollar paid in has come back as distributions.
DPI is the “money in hand” number. Early in a fund’s life it is usually low, because investments take years to be sold.
IRR: internal rate of return
IRR is an annual rate of return that takes timing into account. Getting money back sooner raises IRR, even if the total gain is the same.
That is why IRR and TVPI can tell different stories: a quick small gain can show a high IRR with a modest TVPI.
Reading them together
Look at TVPI for how much value has been created, DPI for how much of it is real cash, and IRR for how fast it happened. For a young fund, a high TVPI with a low DPI is normal, but the paper value has yet to be turned into cash.
Educational content only, not investment advice. Examples use sample figures.