IRR vs TVPI, DPI and RVPI

Ask "how has this private equity fund performed?" and you'll get four different numbers back, each answering a genuinely different question, and a fund can look excellent on one and mediocre on another at the same moment.

The four metrics

IRR (internal rate of return) answers "what annualized rate of return has my money earned, accounting for exactly when I put it in and when I got it back?" It's the metric most sensitive to timing: cash returned early boosts IRR far more than the same cash returned five years later, because IRR is fundamentally about the speed of money, not just the amount.

TVPI (total value to paid-in) answers "for every dollar I've handed over, how much total value do I have now?" It adds up cash already distributed back to investors plus the current estimated value of investments still held, divided by total capital called. A TVPI of 1.8x means $1.80 of value for every $1 paid in — but says nothing about timing.

DPI (distributions to paid-in) answers a stricter question: "for every dollar I've handed over, how much actual cash have I gotten back?" This ignores unrealized, on-paper value entirely — DPI only counts money that's actually left the fund and landed in an investor's account.

RVPI (residual value to paid-in) is what's left: the current estimated value of investments the fund still holds, divided by paid-in capital. TVPI is simply DPI plus RVPI — realized cash plus remaining on-paper value.

Metric	Answers	Counts unrealized value?
IRR	Annualized return, timing-sensitive	Yes, as an estimate
TVPI	Total value multiple	Yes
DPI	Cash actually returned	No
RVPI	Value still unrealized	Only unrealized

Why the gap matters

A young fund, five years into a ten-year life, might show a strong TVPI of 1.6x built almost entirely from RVPI — meaning very little of that value has actually been converted to cash yet, and the manager's own marks (see Valuation Marks and Fair Value Policy) are doing most of the work in that number. A DPI still near zero at that stage is a completely normal feature of the private equity return curve (see Capital Calls, Distributions and the J-Curve), not necessarily a red flag — but it's a very different claim than "the fund has already delivered 1.6x in cash."