Residual Value to Paid-In Capital (RVPI)
Private Equity glossary · Private Equity Fundamentals
Definition
Ratio of current unrealized NAV to cumulative paid-in capital: RVPI = (Residual NAV)/(Paid-In Capital). Captures the unrealized portion of total value; complement to DPI such that TVPI = DPI + RVPI. As a fund matures, RVPI declines (assets monetize) and DPI rises; institutional LPs increasingly anchor on the DPI/RVPI mix rather than TVPI alone because RVPI is GP-estimated and subject to mark-up bias, especially in early fund years or in pre-fundraising windows.
Residual Value to Paid-In Capital (RVPI) in plain English
When investors put money into a private-equity fund, they want to know how they're doing before everything is sold. RVPI measures the value that's still "on paper" — the estimated worth of businesses the fund still owns — divided by all the money investors have handed over. It pairs with DPI (cash already returned) so that together they equal TVPI, the total value: TVPI = DPI + RVPI. The catch is that RVPI is the fund manager's own estimate of what unsold companies are worth, so smart investors treat it more skeptically than DPI — which is real cash in hand — because there's a temptation to mark those paper values optimistically, especially early on when the manager is trying to raise their next fund.
Also called: RVPI
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