How to calculate fund performance metrics

Fund performance metrics help general partners and limited partners evaluate how well a fund is performing relative to the capital invested. The four most commonly reported metrics are TVPI, DPI, RVPI, and IRR.

Understanding these metrics — and how they relate to each other — is essential for quarterly reporting, investor communications, and fundraising for subsequent funds.

TVPI — Total Value to Paid-In

TVPI measures the total value created by the fund relative to the capital that has been called (paid in). It is the most comprehensive multiple because it includes both realised returns (distributions) and unrealised value (current portfolio value).

TVPI = (Distributions + Net Asset Value) ÷ Paid-In Capital

Example: A fund has called USD 87.5M, distributed USD 42.2M, and the remaining portfolio is valued at USD 91.0M.

TVPI = (42.2M + 91.0M) ÷ 87.5M = 1.52x

This means for every dollar paid in, the fund has created USD 1.52 in total value. A TVPI above 1.0x means the fund is in positive territory.

DPI — Distributions to Paid-In

DPI measures how much cash has actually been returned to investors relative to what they paid in. Unlike TVPI, DPI only counts realised returns — money the LP has received back.

DPI = Cumulative Distributions ÷ Paid-In Capital

Example: Using the same fund — DPI = 42.2M ÷ 87.5M = 0.48x

Investors have received back 48 cents for every dollar called. The remaining value is still in the portfolio (unrealised). DPI is sometimes called the "cash-on-cash" multiple.

RVPI — Residual Value to Paid-In

RVPI measures the unrealised value still held in the fund's portfolio relative to paid-in capital. It represents how much value is yet to be distributed.

RVPI = Net Asset Value ÷ Paid-In Capital

Example: RVPI = 91.0M ÷ 87.5M = 1.04x

Note that TVPI = DPI + RVPI (0.48x + 1.04x = 1.52x). This relationship always holds true and is a useful sanity check.

IRR — Internal Rate of Return

IRR is the annualised rate of return that makes the net present value of all cash flows (capital calls and distributions) equal to zero. Unlike multiples, IRR accounts for the timing of cash flows — an early return is worth more than a late one.

IRR is the rate (r) where: Σ [Cash Flow ÷ (1 + r)^t] = 0

IRR is typically reported in two forms:

• Gross IRR — Returns before management fees and carried interest are deducted. This reflects the investment team's performance.
• Net IRR — Returns after all fees and carry. This is what the LP actually earns.

IRR cannot be solved algebraically — it requires iterative calculation. Fund accounting systems compute it automatically from the cash flow history.

MOIC — Multiple on Invested Capital

MOIC is similar to TVPI but is typically used at the deal level rather than the fund level. It measures the total value of an individual investment relative to its cost.

MOIC = (Distributions from Deal + Current Fair Value) ÷ Cost

For example, if a fund invested USD 8M in NVIDIA and the position is now worth USD 19.6M, the MOIC is 19.6 ÷ 8 = 2.45x.

Summary table

Tracking performance metrics automatically

Rather than calculating these metrics manually in spreadsheets, fund accounting platforms like Portled compute TVPI, DPI, RVPI, and IRR automatically from your journal entries and capital activity records — updated in real time as you post entries, with historical quarter-end snapshots for trend analysis.