Total Value to Paid-In Capital (TVPI)

Total Value to Paid-In Capital, or TVPI, compares the total value of a fund with the paid-in capital. The total value includes amounts already distributed and the value still held in the portfolio. The metric shows how much a fund has generated overall, whether already paid out or still tied up.

Arithmetically it is the sum of distributions to paid-in capital and residual value to paid-in capital, and that split is decisive for assessment. A figure of 1.8 says little on its own until it is clear whether 1.6 of it has already been paid or whether 1.7 rests on valuations the manager made itself and which must still be confirmed in a sale. In young funds the unrealised share is naturally high, which is part of the J-curve. In a mature fund a high residual share is by contrast a warning sign of ambitious valuations or sales that are not happening. Unlike the internal rate of return, the metric expresses a value multiple without accounting for the timing of returns. Credit facilities can nevertheless affect paid-in capital and, through their costs, the result. The metric alone says nothing about the period over which the gain was achieved. Both metrics are therefore always reported together and set against the fund's vintage.

A reading of 1.0 means the fund has notionally earned back the capital paid in, without accounting for the cost of time. In a fund's early years the valuation component dominates, which is why the measure only becomes reliable after several years.