medium · Private Credit fund-structures-returns-economics
A private equity fund has a DPI of 0.8x and an RVPI of 1.4x.
What is the fund's TVPI, and what does it indicate about the fund's lifecycle?
- TVPI is 2.2x; the fund has returned most of its original capital but still holds significant unrealized value.
- TVPI equals 1.4x since DPI reflects only realized cash and is therefore excluded from the total value calculation.
- TVPI is 1.12x because the fund is currently underperforming relative to its stated 8% preferred hurdle rate.
- TVPI is 0.6x; the fund sits in its early 'J-curve' phase, still absorbing fees with no exits yet realized.
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