Decoding Stocks DPI For Private Equity Investments


Everybody wants to know how their private equity funds are doing over a while. And to analyze the profits, losses, and market trends, it is obvious to need some measuring tools. There is not just one but plenty of stock evaluation methods used by wise investors. Some of the widely-accepted instruments are TVPI, IRR, DPI, TWR, MoM, PIC, and many more. Yes, it can be a perplexing task to look at this random order of letters. But it is vital to understand their meaning to monitor the state of the funds. Let’s catch up on the stocks dpi first.

What is DPI?

The acronym for Distributions to Paid-In capital is a popular tool to scrutinize the running private equity finances. It is a kind of multiple that helps the owner to check the relationship between the initial cost and the current value of their investment.The holder can know the value of funds realized or paid out in comparison to what was originally invested. In short, it helps to derive the rate of return on investment.

How is it calculated?

To make use of this tool, one must know which figures are needed and what is to be divided by what. The essence lies in its formula which is as below:-

stocks dpi

DPI= Cumulative Distributions

Paid In Capital

It is significant to know that people call stocks dpi by different names like Realization Multiple, Contributed Capital, and Drawn Capital. However, it should be kept in mind that Committed Capital is different from it.

Final words

DPI is a powerful meter to know the current worth of the private equity funds a person has. Its straightforward calculative method provides easy usage and precise numbers, unlike other complex formulas. One can even compare differently placed investments through this metric to derive have a well-weighed-up decision.