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FRM Part II · FRM Exam Part II · Private Markets Investing

A private equity fund has called USD 80 million of paid-in capital from its limited partners. To date it has distributed USD 50 million and its remaining net asset value is reported at USD 70 million. What are the fund's DPI and TVPI?

DPI is distributions divided by paid-in capital, 50/80 = 0.625. TVPI adds the remaining net asset value to distributions before dividing by paid-in capital, (50+70)/80 = 1.50. DPI shows only realized return, while TVPI includes unrealized value.

  1. ADPI 0.625; TVPI 1.500Correct
  2. BDPI 0.625; TVPI 0.875
  3. CDPI 0.714; TVPI 1.500
  4. DDPI 1.500; TVPI 0.625

Explanation

DPI = distributions / paid-in = 50/80 = 0.625. TVPI = (distributions + NAV) / paid-in = (50+70)/80 = 1.500. Option B omits the distributions from the numerator and uses NAV only, giving 0.875 for TVPI. Option C uses NAV as the DPI base, which is the wrong denominator.

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