CFA Level I · CFA Level I Exam · Investments in Private Capital: Equity and Debt
A private equity fund has paid-in capital of $50 million, cumulative distributions of $30 million, and a remaining net asset value of $45 million. The fund's TVPI is closest to:
TVPI equals cumulative distributions plus residual value, divided by paid-in capital: (30 + 45) / 50 = 1.50. The 0.60 figure is only DPI and the 0.90 figure is only RVPI, so each omits one component of total value.
- A0.60
- B0.90
- C1.50Correct
Explanation
DPI = 30/50 = 0.60. RVPI = 45/50 = 0.90. TVPI = DPI + RVPI = 1.50. The 0.60 option is DPI only and 0.90 is RVPI only.
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