CFA Level I · CFA Level I Exam · Alternative Investment Performance and Returns
A private equity fund called 100 of committed capital, paid in 100 over time, and has made distributions of 60 while the remaining investments are valued at 90. The fund's TVPI is closest to:
TVPI is closest to 1.50. It equals distributions plus residual net asset value, 60 plus 90, divided by paid-in capital of 100. The 0.60 figure is DPI, which excludes unrealized holdings.
- A0.60
- B1.50Correct
- C1.60
Explanation
TVPI = (distributions + residual value) / paid-in capital = (60 + 90) / 100 = 1.50. DPI is 0.60, which ignores unrealized value; 1.60 wrongly adds the 100 differently or double counts.
Did you get it right without looking?
One question tells you little. A timed set on Alternative Investment Performance and Returns shows your real accuracy, how long you take and where you lose marks.
More Alternative Investment Performance and Returns questions
- An investor is comparing a direct investment in farmland with a portfolio of listed equities. Which characteristic of the farmland is most l…
- An analyst notes that a private equity fund's IRR is high, but most of its value came from an early large distribution after a quick exit. C…
- A private equity fund invests directly in the shares of established, mature private companies, often using substantial borrowed money to fin…
- Compared with traditional investments such as listed equities and government bonds, alternative investments are most likely to be characteri…
- A pension fund compares the reported returns of a private real estate fund that relies on periodic appraisals with those of a listed REIT in…
- A direct real estate investment was bought for 10.0 million. During the year it produced net operating income of 0.60 million, and the appra…