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Evaluating private investment funds requires a different approach than analyzing public stocks or mutual funds. Because capital is called over time, investments are illiquid, and distributions can occur years after a fund is launched, institutional investors rely on specialized performance metrics to measure success.
Whether you’re a limited partner (LP), general partner (GP), investment consultant, family office, or fundraising professional, understanding these metrics is essential.
At Dakota Marketplace, we maintain performance data on more than 18,000 private investment funds spanning private equity, private credit, venture capital, private real estate, infrastructure, and hedge funds. These metrics help institutional investors compare managers, benchmark strategies, and evaluate historical performance.
Below are six of the most important private fund performance metrics every investor should understand.
What is TVPI?
TVPI (Total Value to Paid-In Capital) measures the total value created by a private fund relative to the capital investors contributed.
It combines:
- Cash already returned to investors
- The remaining value of investments still held by the fund
Formula
TVPI = (Distributions + Remaining Value) ÷ Paid-In Capital
Example
An LP invests $10 million.
The fund has:
- Distributed $12 million
- Remaining investments valued at $8 million
TVPI = ($12M + $8M) ÷ $10M = 2.0x
A 2.0x TVPI means the fund has generated total value equal to twice the capital invested.
Why it matters
TVPI measures the overall value creation of a private fund regardless of whether investments have been realized.
What is DPI?
DPI (Distributed to Paid-In Capital) measures how much cash investors have actually received.
Unlike TVPI, it ignores unrealized investments.
Formula
DPI = Distributions ÷ Paid-In Capital
Example
An investor contributes $10 million.
The fund has distributed $13 million.
DPI = 13 ÷ 10 = 1.3x
This means investors have already received 130% of their invested capital back in cash.
Why it matters
Many institutional investors place significant emphasis on DPI because it measures realized returns—not paper gains.
What is RVPI?
RVPI (Residual Value to Paid-In Capital) measures the value of investments that remain in the portfolio.
Formula
RVPI = Remaining Value ÷ Paid-In Capital
Example
Paid-In Capital:
$10 million
Remaining Portfolio Value:
$7 million
RVPI = 7 ÷ 10 = 0.7x
This indicates that 70% of invested capital remains invested in unrealized assets.
Why it matters
RVPI helps investors understand how much future upside—or downside—still exists within the fund.
What is Net IRR?
Net Internal Rate of Return (Net IRR) represents the annualized return earned by investors after all fees and carried interest have been deducted.
It reflects the actual experience of limited partners.
Net IRR includes:
- Management fees
- Carried interest
- Fund expenses
- Timing of capital calls
- Timing of distributions
Why it matters
Because it reflects investors’ actual returns, Net IRR remains one of the most widely reported performance metrics in private markets.
Gross IRR vs. Net IRR
Although both measure annualized returns, they answer different questions.
Gross IRR
Measures investment performance before fees and carried interest.
This reflects the investment team’s ability to generate returns.
Net IRR
Measures investor performance after fees and expenses.
This reflects what limited partners actually earned.
Example
Gross IRR: 24%
Management fees and carry reduce investor returns.
Net IRR: 18%
While the portfolio generated a 24% gross return, investors ultimately realized an 18% annualized return.
For LPs, Net IRR is generally the more meaningful metric because it reflects actual investor outcomes.
Which Metric Is Most Important?
The reality is that no single metric tells the full story.
Institutional investors typically evaluate multiple performance measures together.
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Metric
|
Measures
|
Best Used For
|
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TVPI
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Total value created
|
Overall fund performance
|
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DPI
|
Cash returned
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Realized performance
|
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RVPI
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Unrealized value
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Remaining upside
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Net IRR
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Investor annualized return
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Comparing managers
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Gross IRR
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Investment performance before fees
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GP investment skill
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PME
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Performance versus public markets
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Relative value creation
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Viewed together, these metrics provide a more complete picture of a fund’s historical performance, portfolio quality, and value creation.
How Dakota Marketplace Helps Investors Analyze Fund Performance
Dakota Marketplace maintains performance data on more than 18,000 private investment funds across:
- Private Equity
- Private Credit
- Venture Capital
- Private Real Estate
- Infrastructure
- Hedge Funds
The platform enables users to research and compare:
- Net IRR
- Gross IRR (where available)
- TVPI
- DPI
- RVPI
- Vintage year
- Fund size
- Strategy
- Geographic focus
- General partner track records
Because Dakota Marketplace combines performance data with institutional investor intelligence, fundraising workflows, GP profiles, and private markets research, users can move seamlessly from evaluating fund performance to identifying prospective investors, researching managers, and supporting fundraising efforts—all within a single platform.
Final Thoughts
Private markets have evolved into one of the world’s largest asset classes, making performance analysis more important than ever. Understanding metrics such as TVPI, DPI, RVPI, PME, Net IRR, and Gross IRR helps investors evaluate managers more effectively, benchmark historical results, and make better-informed allocation decisions.
Whether you’re screening new managers, benchmarking an existing portfolio, or preparing for an investment committee meeting, mastering these metrics is an essential part of private markets investing.
Interested in exploring performance data across more than 18,000 private funds? Book a Dakota Marketplace demo to see how institutional investors, consultants, placement agents, and asset managers use Dakota to benchmark funds, research managers, and uncover fundraising opportunities.
