Distributed to paid-in capital
What is Distributed to paid-in capital?
Distributed to paid-in capital, or DPI, is cumulative value distributed to investors divided by cumulative contributed capital.
DPI interfaces should separate gross cash, net investor distribution, recallable amount, and distributions in kind. A large DPI can include rapid return of contributed capital rather than high profit. Users need timing, remaining NAV, and total commitment context before interpreting realization quality.
The ratio ignores how long capital was outstanding and should be paired with dates and IRR.
Liquidity planning should use actual distribution dates and currencies, not the ratio alone. A fund can have strong cumulative DPI but provide no near-term cash if its realizations occurred years earlier.
Formula and meaning
DPI measures cash and, under the reporting method, in-kind value returned relative to paid-in capital. A 1.0x DPI indicates distributions equal contributions, not necessarily that every investor has broken even after tax, fees outside the fund, timing, or recall obligations. Definitions should identify net or gross and recallable treatment.
Realization indicator
Unlike residual NAV, distributions have left the fund, so DPI provides evidence of realization. However, cash can come from refinancing, return of unused capital, or rapid turnover, not only operating profit. In-kind distributions retain market and liquidity risk. Source and sustainability matter alongside cumulative amount.
Timing and maturity
Young funds normally have low DPI while building assets. Mature funds should distribute as exits occur, but strategy and market conditions differ. Comparing DPI without vintage and term can penalize patient strategies or conceal delayed exits. IRR responds to distribution timing, while DPI gives the same ratio regardless of when cash arrived.
Interaction with other metrics
TVPI equals DPI plus RVPI under aligned definitions. A high DPI with low RVPI can indicate a largely realized fund; low DPI with high RVPI means value remains dependent on marks and exits. Pair with commitment, paid-in, unfunded, IRR, and public-market comparison to understand scale and opportunity cost.
Practical reporting
Reconcile gross proceeds, investor cash, in-kind securities, withholding, recallability, escrow, and dates. State valuation of in-kind assets and whether later sale differs. Avoid describing distributions as profits without basis analysis or averaging DPI across funds. Show net cash received and outstanding potential calls for liquidity planning.
Also known as: DPI
Sources and further reading
- ILPA Reporting Template, Institutional Limited Partners Association
- Investments in Private Capital: Equity and Debt, CFA Institute