DPI

Distributions to Paid-In (DPI) is the ratio of cumulative cash and securities distributed to LPs divided by the cumulative capital paid in by LPs. It is the cleanest measure of realized fund performance.

`DPI = Total Distributions / Total Paid-In Capital`

Reading DPI:

• DPI < 1.0 — LPs have not yet recovered their invested capital. Normal in years 1–5 of a fund's life.
• DPI = 1.0 — LPs have got their money back. Often called 'crossing 1x DPI' — a major milestone.
• DPI > 1.0 — fund has returned realized profit. Top-quartile Indian VC funds aim for DPI ≥ 2.0 by year 10.

Why DPI matters more than IRR or TVPI:

• DPI counts only cash actually distributed — no paper marks, no held positions. This makes it manipulation-proof.
• IRR can be inflated by early small distributions and slow drawdowns. DPI cannot.
• TVPI = DPI + RVPI where RVPI is residual value to paid-in (unrealized). LPs increasingly underwrite DPI separately from TVPI.

Indian AIF context:

• Indian VC and PE funds report DPI, RVPI, TVPI, and net IRR quarterly in Investor Reports under SEBI's PPM disclosure regime.
• For Cat I and Cat II AIFs with pass-through, distributions are reported to LPs along with Form 64C specifying the income character (capital gains, business income, dividend) and the LP's share.
• Recycling of distributions back into the fund (re-callable distributions) within the recycling period is deducted from DPI calculations as commonly reported, though fund documents define the convention.

Common pitfall: Reporting DPI gross of carry / management fees overstates LP returns. Always report net DPI (after carry, fees, expenses) when communicating to LPs.

Kapitalyze's Fund OS calculates DPI per LP and per fund vintage, with full audit trail of every contribution and distribution.