PE/VC Fund Metrics: IRR, MOIC, TVPI, DPI and RVPI Explained

Alehar Team·Laatst bijgewerkt 31 mei 2026·6 min leestijd

Private equity and venture capital fund metrics dashboard showing IRR, MOIC, TVPI, DPI, RVPI, vintage year, fund age, and realization quality

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Short answer: PE and VC fund performance should not be judged from one metric. IRR shows time-weighted return, MOIC shows total multiple on invested capital, TVPI shows total fund value versus paid-in capital, DPI shows realized cash returned to LPs, and RVPI shows remaining unrealized value. The right conclusion depends on fund age, vintage year, fees, valuation policy, realization quality, and whether the metric is reported gross or net.

Private equity and venture capital performance looks simple when summarized in a single number. In reality, fund metrics answer different questions. A young venture fund may have attractive TVPI but little DPI because the value is still unrealized. A buyout fund may show strong early IRR because capital came back quickly, while the absolute multiple is still modest. A fund can also report strong gross performance that looks very different after fees, carry, expenses, and fund-level timing are included.

This guide is written for LPs, family offices, emerging managers, corporate investors, and finance teams that need to interpret fund performance without being misled by headline metrics. If you are building or reviewing an investment program, the goal is not to find the prettiest number. The goal is to understand what each metric proves, what it does not prove, and what questions should come next.

The core PE/VC fund metrics

Metric	What it measures	Best use	Common trap
IRR	Annualized return based on the timing and size of cash flows.	Comparing time efficiency and cash-flow timing.	Can look high after a quick small exit, even when total value creation is limited.
MOIC	Total value divided by invested capital, often used at investment or portfolio level.	Understanding absolute value creation.	Does not show how long the capital was invested.
TVPI	Total value to paid-in capital: DPI plus RVPI.	Assessing total fund value, including realized and unrealized value.	Can depend heavily on unrealized NAV in younger or illiquid funds.
DPI	Distributions to paid-in capital: realized cash returned to investors.	Testing actual cash returned to LPs.	Can look weak in early years even if the portfolio is developing well.
RVPI	Residual value to paid-in capital: remaining unrealized portfolio value.	Understanding how much reported value is still dependent on future exits.	Requires confidence in valuation policy and exit assumptions.

IRR: useful, but easy to overread

Internal Rate of Return is the discount rate that makes a fund's cash inflows and outflows equal in present value terms. In plain language, it answers: how efficiently did the fund turn contributed capital into returned or marked value over time?

IRR is useful because timing matters. Returning capital in year three is not the same as returning the same cash in year ten. But IRR can overstate the importance of early distributions, bridge financing effects, recycled capital, or one small successful investment. LPs should ask whether the reported IRR is gross or net, whether it includes unrealized NAV, how much capital has been called, and how mature the fund is.

MOIC: the simple multiple

Multiple on Invested Capital measures total value relative to invested capital. If an investment returns 3.0x, the investor has created three dollars of value for every dollar invested before considering timing and, depending on presentation, fees and expenses. MOIC is easy to understand and useful when comparing individual deals, portfolio-company outcomes, or realized exits.

The weakness is that MOIC ignores time. A 2.0x return in three years and a 2.0x return in twelve years are very different capital-allocation outcomes. That is why MOIC should usually be read alongside IRR, DPI, and fund age.

TVPI, DPI and RVPI: the LP view of fund value

For LPs and family offices, TVPI, DPI, and RVPI are often more useful than a headline IRR because they separate total reported value from realized cash and remaining unrealized value.

TVPI = DPI + RVPI. It shows total fund value relative to paid-in capital.
DPI shows how much capital has actually been distributed back to investors.
RVPI shows how much value remains in the portfolio and still depends on future exits or valuation changes.

A mature fund with strong TVPI but low DPI may have a realization issue. A young fund with low DPI is not necessarily weak, but the investor needs to understand mark quality, financing risk, reserve strategy, and exit timing. For a useful adjacent lens, see our guide to types of private equity funds and how strategy affects return patterns.

How LPs and GPs should interpret the numbers

Question	Metrics to check	What to ask next
Is the fund creating value?	TVPI, MOIC, net IRR	How much is realized, and how much depends on current NAV?
Is the fund returning cash?	DPI, distributions, fund age	Are exits delayed because of market timing, asset quality, valuation expectations, or strategy?
Is performance comparable?	Vintage year, strategy, geography, fund size	Is the benchmark relevant for this fund's stage and mandate?
Is the headline return durable?	Net IRR, TVPI, RVPI, valuation policy	Would the result survive lower exit multiples, longer holds, or weaker follow-on funding?
Is the GP repeatable?	Loss ratio, concentration, attribution, team continuity	Did returns come from a process, one outlier, leverage, timing, or manager skill?

Qualitative checks behind fund metrics

The best LP review combines metrics with qualitative diligence. Numbers say what has happened so far; diligence explains whether the result is repeatable. In practice, investors should review:

Portfolio construction, including concentration, reserves, follow-on discipline, and loss ratio.
Attribution by partner, sector, geography, vintage, and value-creation lever.
Valuation policy, including how unrealized positions are marked and reviewed.
Liquidity path, including expected exit windows, buyer universe, IPO sensitivity, and secondary options.
Operational capability, including sourcing, diligence, portfolio support, and reporting cadence.
Governance, conflicts, fees, expenses, carry mechanics, and LP reporting quality.

Institutional resources such as the ILPA Reporting Template and CFA Institute's private equity refresher are useful references for consistent reporting, valuation, strategy, and fund-performance discussion.

Fund metrics checklist

Separate gross and net performance before drawing conclusions.
Compare the fund against the right vintage, strategy, geography, and stage.
Read IRR beside MOIC, TVPI, DPI, and RVPI.
Check how much TVPI is realized cash versus unrealized NAV.
Ask whether reported value depends on one outlier investment.
Review valuation policy for unrealized positions.
Look at distributions, hold periods, reserves, and exit readiness.
Connect performance metrics to actual portfolio-company operating progress.

How Alehar can help

Alehar helps investors, family offices, and fund managers interpret PE/VC performance, build reporting cadence, review portfolio companies, and prepare decision materials. Our Investment Team as a Service work can support fund screening, diligence, portfolio monitoring, and investment memos. Our Investor Relations as a Service work helps companies and managers communicate metrics clearly, while Value Creation as a Service supports portfolio-company performance improvement. You may also find our articles on search funds and venture capital financing stages useful. To discuss fund reporting or portfolio review, contact Alehar.

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