DPI — distributions to paid-in capital — measures what a fund has actually returned: cumulative cash (and stock) distributed to LPs, divided by the capital LPs have paid in. A DPI of 1.0x means investors have gotten their money back; everything above is realised profit. Unlike IRR, DPI cannot be flattered by timing tricks, and unlike TVPI — which adds the unrealised residual value of the portfolio at the GP’s own marks — DPI counts only money that has crossed the table. The LP shorthand: TVPI is a promise, DPI is a fact.
DPI follows the J-curve: near zero for a fund’s first five to seven years while fees draw down capital and exits have not started, then climbing as the portfolio liquidates. That makes DPI comparisons meaningful only against funds of the same vintage year and strategy. The metric moved to the centre of LP analysis after 2022, when the exit drought left even strong paper portfolios undistributed — managers raising their next fund increasingly get asked one question first: what is your DPI?
Why founders and GCs should care
A fund’s DPI pressure is the founder’s context. A GP whose fund is past year seven with thin DPI needs realisations — that shows up as receptivity to secondaries, pressure to run a sale process, or willingness to sell in the next tender. For Turkish funds the same arithmetic applies, with the wrinkle that distributions to foreign LPs and the recycling of early exit proceeds are governed by the fund documentation (LPA) and, for domestically regulated GSYF vehicles, by the applicable SPK framework. Reading your investors’ fund age and DPI posture is part of exit-timing strategy, not just fund-industry trivia.
If this is on your desk
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