PEINVEST
Calculate Multiple on Invested Capital including DPI (distributions to paid-in), RVPI (residual value to paid-in), and TVPI (total value to paid-in) ratios.
MOIC = Total Value / Invested Capital. DPI measures realized distributions, RVPI measures remaining unrealized value, and TVPI is the sum of both. Net MOIC deducts fees and carry.
Multiple on Invested Capital (MOIC) measures how many times an investor gets back their original investment. A 2.5x MOIC means $1 invested returned $2.50 total. Gross MOIC is before fees; Net MOIC is after management fees and carried interest are deducted.
Top-quartile buyout funds typically achieve 2.0-2.5x net MOIC. Growth equity and venture funds may target higher multiples (3-5x+) with more variability. A 1.5x net MOIC is generally considered adequate, while 3x+ is exceptional. Early-stage VC targets 10x+ on individual deals to offset losses.
DPI (Distributions to Paid-In) measures actual cash returned to investors — money in the bank. RVPI (Residual Value to Paid-In) measures the remaining unrealized portfolio value — still on paper. TVPI (Total Value to Paid-In) is DPI + RVPI, representing the total fund multiple including both realized and unrealized value.
DPI represents actual cash returned to LPs, while TVPI includes unrealized (estimated) value that may never materialize. Mature funds should have high DPI. A fund with 2.5x TVPI but only 0.5x DPI has mostly unrealized gains — the ultimate return depends on future exits. "DPI is the real score" is a common PE adage.
Management fees (typically 1.5-2% annually on committed capital) and carried interest (typically 20% of profits above a preferred return) reduce gross MOIC to net MOIC. A fund with 2.5x gross MOIC might deliver ~2.0x net MOIC after fees. The fee drag is proportionally larger on lower-returning funds.