Residual value to paid-in capital
What is Residual value to paid-in capital?
Residual value to paid-in capital, or RVPI, is the remaining net asset value of a private fund divided by cumulative paid-in capital.
RVPI should be accompanied by valuation methodology, age, audit status, concentration, leverage, and subsequent realizations. A declining ratio can reflect successful distributions or deteriorating marks. It is not a stand-alone measure of performance or proof that the residual value can be sold near NAV.
Late-life high RVPI can indicate valuable remaining assets, delayed exits, or optimistic stale marks.
Portfolio systems should look through residual NAV by company, sector, geography, currency, stage, and expected exit where data permit. This reveals hidden overlap across funds and shows whether the apparent remaining diversification is real.
Formula and meaning
RVPI shows how much reported value remains in the fund relative to contributed capital. An RVPI of 0.8x means residual NAV equals 80% of paid-in capital, not that investors will receive that amount. NAV can include cash, companies, debt, escrow, and other assets after liabilities under the valuation policy.
Life-cycle behavior
RVPI often rises as investments are made and marked, then falls as assets are distributed or written off. The direction alone is ambiguous. A fall can reflect successful exits moving value into DPI or deterioration reducing TVPI. Review changes in DPI, NAV, calls, and distributions together.
Valuation risk
Residual holdings can be concentrated, leveraged, illiquid, and based on models or stale comparable prices. Audit provides process assurance but not guaranteed sale value. Continuation vehicles, extensions, and restructurings can prolong marks. Compare valuation multiples, operating performance, financing, subsequent events, and realized proceeds with prior NAV.
Relationship to total value
TVPI equals DPI plus RVPI under consistent definitions. A high TVPI dominated by RVPI is less realized than the same TVPI dominated by DPI. IRR also uses terminal NAV and inherits its uncertainty. Mature-fund evaluation should ask why substantial RVPI remains and what timing and cost are expected for exit.
Practical reporting
State as-of date, currency, gross or net, valuation policy, audit status, concentration, and age. Reconcile NAV to capital account and underlying holdings. Do not discount or accept RVPI mechanically without asset-level evidence. Scenario-test exit timing, valuation, leverage, fees, carry, currency, and secondary-market discounts.
Also known as: RVPI
Sources and further reading
- ILPA Reporting Template, Institutional Limited Partners Association
- Investments in Private Capital: Equity and Debt, CFA Institute