DPI, TVPI, and RVPI Explained for PE Interviews

DPI, TVPI, and RVPI show up in PE coffee chats, second rounds, and random "do you know fund metrics" pings. Students Google them because CIMs and podcasts drop the acronyms without a clean map. Interviewers want fund-level literacy next to deal MoIC, not a memorized acronym soup.

The 30-second answer

"DPI is distributions to paid-in capital: cash returned to LPs divided by capital called. TVPI is total value to paid-in: distributions plus remaining NAV, over paid-in. RVPI is residual value to paid-in: unrealized NAV over paid-in. DPI is cash back. TVPI is total wealth including paper. RVPI is what is still in the portfolio. Roughly, TVPI equals DPI plus RVPI."

Stop. Let them dig into vintage, marks, or deal versus fund.

Formulas you must say cleanly

DPI = Cumulative Distributions ÷ Paid-In Capital
RVPI = Residual NAV ÷ Paid-In Capital
TVPI = (Distributions + Residual NAV) ÷ Paid-In Capital
TVPI ≈ DPI + RVPI

Paid-in is capital called from LPs. Some LPAs treat fee treatment, recallable distributions, or recycling differently. In interviews, state your definition and stay consistent.

What each metric answers

LPs care about all three, but they weight them differently by fund age. Early life is mostly RVPI and TVPI. Mature life is judged on DPI and realized performance.

Worked example (do this on a whiteboard)

Paid-in capital called: $100.
Cumulative distributions: $40.
Remaining fund NAV: $90.

DPI  = 40 / 100 = 0.40x
RVPI = 90 / 100 = 0.90x
TVPI = (40 + 90) / 100 = 1.30x
Check: 0.40 + 0.90 = 1.30

Now change the story. Same paid-in, but the GP marks NAV down to $70 after a soft year, with distributions still $40:

DPI  = 0.40x (unchanged)
RVPI = 0.70x
TVPI = 1.10x

Cash already paid to LPs did not reverse. Paper did. That is why DPI is the hard metric.

Why LPs obsess over DPI

Unrealized marks can be optimistic, slow to mark down, or methodology-dependent. DPI is cash in LP bank accounts. A fund can print strong TVPI with soft DPI early, then fail to convert marks into exits. Mature funds get asked: when do we get paid?

Dividend recaps, partial exits, and refinancings can accelerate DPI without a full sale. That is useful context when someone asks how sponsors return capital mid-hold. See dividend recaps.

Deal MoIC vs fund TVPI

Do not say your paper LBO MoIC is the fund's DPI. Different denominator, different timing, different fees and reserves.

Follow-ups you should expect

Common traps

1. Treating TVPI as an IRR. TVPI is a multiple. Fund IRR is a rate.
2. Comparing a year-2 fund's DPI to a year-10 fund's DPI.
3. Confusing committed capital with paid-in. DPI uses paid-in (called), not the full commitment undrawn.
4. Saying RVPI "does not matter." It matters a lot mid-life; it just is not cash yet.
5. Mixing GP marks with public comps without saying so.

Practice drills

Drill 1: Memorize the three formulas and the identity until boring.
Drill 2: Invent three mini cases (early fund, mid fund, late fund) and narrate what "good" looks like.
Drill 3: Explain in 45 seconds why LPs might distrust a 2.0x TVPI with 0.2x DPI in year 8.
Drill 4: Bridge one deal MoIC into fund TVPI language without equating them.
Drill 5: Link MoIC vs IRR to why timing still matters at fund level.

30-second verbal (alternate)

"DPI is cash distributed over capital called. RVPI is remaining NAV over capital called. TVPI is the sum: total value over paid-in. LPs care about DPI because it is realized cash, while TVPI includes marks that still have to clear the exit market."

Practice on SheetRank

Deal models teach MoIC and IRR muscle. Fund metrics sit one level up. When you walk Apollo-style LBOs, keep asking: if this exited tomorrow, how would cash hit LP DPI versus stuck in RVPI?