DPI: The Cash-Back Test
Distinguish realized cash-return metrics from paper-value and time-weighted performance claims.
Performance metrics are not interchangeable. PE returns are drawn, marked, distributed, and eventually realized over years. A single headline can hide where the value sits. IRR IRR is sensitive to timing. It is useful for understanding the annualized pace of cash flows, but it can over-reward quick early distributions and can be hard to compare across funds with different cash-flow patterns. TVPI and MOIC These multiples show total value relative to invested capital. They are intuitive, but when unrealized NAV is large, they depend on valuation marks rather than exited cash. DPI DPI strips the question down to realized distributions…
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