Updated · Part of the CRE investment glossary
How RVPI works
Fund multiples split investors’ value into two parts. DPI counts cash already distributed. RVPI counts what is still held, valued at the latest marks — usually the net asset value (NAV) of the investors’ interests after the fund’s debt, liabilities and, in a net figure, accrued promote.
RVPI starts near 1.0x when capital goes in, before any value is created or lost. It rises or falls as properties are revalued, and it shrinks as assets sell and the proceeds move into DPI. When the last asset is sold and paid out, RVPI is zero and the final multiple is all DPI.
Because it rests on estimates, RVPI is the part of a fund’s performance that can still change before investors see cash. ILPA’s Performance Template, recommended for funds that start operations on or after January 1, 2026, aims to standardize how funds calculate and report performance, so metrics like these can be compared on the same basis.
The formula
At any reporting date:
RVPI = residual value ÷ paid-in capital; TVPI = DPI + RVPI
- Residual value: the current NAV of investors’ remaining interests, net of fees and accrued promote for a net RVPI.
- Paid-in capital: capital actually contributed to date, not total commitments.
- DPI: cumulative distributions ÷ paid-in capital.
Worked example: marks, a sale at the mark, and exit
Investors have paid in $25,000,000. In year 5 the fund cuts its marks by 10%. In year 6 it sells an asset at exactly its $9,750,000 mark. In year 8 it sells the rest for $16,250,000, which is $1,250,000 above the $15,000,000 mark.
Watch the columns. The markdown lowers RVPI and TVPI but not DPI. The sale at the mark moves value from RVPI to DPI and leaves TVPI unchanged. The final sale above the mark lifts TVPI from 1.19x to 1.24x.
| Point | Distributions to date | Residual value | DPI | RVPI | TVPI |
|---|---|---|---|---|---|
| Year 4 | $5,000,000 | $27,500,000 | 0.20x | 1.10x | 1.30x |
| Year 5, marks −10% | $5,000,000 | $24,750,000 | 0.20x | 0.99x | 1.19x |
| Year 6, sale at mark | $14,750,000 | $15,000,000 | 0.59x | 0.60x | 1.19x |
| Year 8, final exit | $31,000,000 | $0 | 1.24x | 0.00x | 1.24x |
Reading RVPI next to DPI
The mix of RVPI and DPI says more than TVPI alone. Two funds at 1.5x TVPI are in different places if one is 1.2x DPI and 0.3x RVPI and the other is 0.2x DPI and 1.3x RVPI: the first has returned most of its value in cash, the second is still mostly marks.
- Young fund, high RVPI: normal. Capital is invested and little has been sold.
- Old fund, high RVPI: results still depend on valuations and on selling in the market that follows. Ask how the remaining assets are marked and when they are planned to sell.
- RVPI below 1.0x early on: often fees, closing costs and the time before business plans add value.
- Falling RVPI with flat TVPI: assets are selling near their marks, the healthy way for RVPI to fall.
What to watch for
RVPI is a ratio of an estimate to a fact. Check the estimate:
- Valuation method and date: appraisal, cap-rate mark or cost, and how recent.
- Gross or net: a residual value before accrued promote overstates what investors would receive.
- Denominator: paid-in capital, not commitments; uncalled capital is not in the ratio.
- Leverage: in a levered deal, a small change in property value moves residual equity value by more.
Primary sources
General information, not legal, tax or investment advice. Your operating agreement, offering documents, counsel and CPA govern your deal.