Updated · Part of the CRE investment glossary
How DPI works
DPI is a cumulative ratio. The numerator is every distribution paid to investors to date: operating cash, refinance proceeds and sale proceeds. The denominator is the capital investors have actually paid in through capital calls — not their total commitment.
Because it counts cash only, DPI is the hardest of the fund multiples to flatter. Valuations do not move it. It starts at zero, rises as deals pay out and sell, and at the end of the fund’s life it equals the final net multiple to investors.
The formula
At any reporting date:
DPI = cumulative distributions ÷ paid-in capital
- Cumulative distributions: all cash paid to investors to date, net of fees and carried interest.
- Paid-in capital: capital contributed to date, including amounts called for fees and expenses.
- RVPI = remaining value ÷ paid-in capital, and TVPI = DPI + RVPI.
Realized vs unrealized
Fund multiples split value into two parts. Realized value is cash in investors’ hands, measured by DPI. Unrealized value is the estimated worth of what the fund still holds, measured by RVPI. Their sum is TVPI.
A fund can show a strong TVPI with a low DPI if most of its value is still unsold. That value depends on marks that may or may not hold at sale. Investors who want to know what has actually come back look at DPI.
Why DPI matters
For limited partners, DPI is the answer to “how much of my money have I actually received?” It is the figure many investors check first in a quarterly report, because it cannot rise on a revaluation. A DPI above 1.0x means the investment is already in profit on a cash basis, whatever happens to the assets still held.
For a sponsor, DPI is a record of cash delivered. It depends on the distribution history being complete: every operating distribution, refinance return of capital and sale payout posted against the right investor and the right paid-in balance. If distributions are tracked in one spreadsheet and capital calls in another, DPI is where the two disagree first.
DPI also says nothing about time. A 1.2x DPI reached in year 4 and one reached in year 9 are very different outcomes, so it is read with IRR.
Worked example: DPI over a fund’s life
Investors commit $10,000,000 to a fund. Capital is called over three years, and the fund sells its last asset in year 7.
| Year | Paid-in | Distributions | Remaining value | DPI | RVPI | TVPI |
|---|---|---|---|---|---|---|
| 1 | $4,000,000 | $0 | $3,900,000 | 0.00x | 0.98x | 0.98x |
| 2 | $8,000,000 | $300,000 | $8,400,000 | 0.04x | 1.05x | 1.09x |
| 3 | $10,000,000 | $1,000,000 | $11,200,000 | 0.10x | 1.12x | 1.22x |
| 5 | $10,000,000 | $6,500,000 | $7,000,000 | 0.65x | 0.70x | 1.35x |
| 7 | $10,000,000 | $15,000,000 | $0 | 1.50x | 0.00x | 1.50x |
What to watch for
DPI is simple, but it is easy to compute on different bases:
- Paid-in vs committed: dividing by commitments understates DPI while capital is still being called.
- Gross vs net: DPI to limited partners is normally net of fees and carried interest. Check what the numerator includes.
- Recallable distributions: if the agreement lets the fund recall distributed capital, a recalled amount raises paid-in again.
- Early years: a low DPI in years 1 to 3 is normal for a fund still buying and improving assets.
General information, not legal, tax or investment advice. Your operating agreement, offering documents, counsel and CPA govern your deal.