RVPI Explained: The Key to Interim Fund Performance
RVPI explained: The key to interim fund performance
Author: The Carta Team
Read time: 9 minutes
Published date: 6 October 2025
Learn what RVPI (residual value to paid-in capital) is, how to calculate it, and why this key metric is crucial for measuring unrealized value and fund performance.
What is residual value to paid-in capital (RVPI)?
RVPI is a performance metric that measures the unrealized value of a fund's remaining investments against the total capital contributed by investors. It gives you a snapshot of how much of your limited partners' (LP) capital is still held in unsold portfolio companies. To truly understand this metric, you need to look at its two core components.
The first component is residual value. This is equivalent to the fund's net asset value (NAV). The primary component of this is the current, fair value of all the portfolio companies still held by the fund, a critical figure for ongoing portfolio management. A rigorous, periodic valuation process determines these figures. For private companies without a public stock price, this valuation often follows accounting standards like ASC 820, which provides a framework for measuring fair value.
The second component is paid-in capital. This is the cumulative amount of capital that LPs have been called upon to contribute to the fund to date. This amount includes both cash that LPs have physically paid and any amounts owed from capital calls that have been made. You should distinguish this from committed capital, which is the total amount an LP has agreed to invest over the fund's life.
How to calculate RVPI: The RVPI formula
Calculating RVPI is a core task for any fund controller or administrator. The formula for RVPI is straightforward:
RVPI = Residual value / Paid-in capital
The result is expressed as a multiple, not a currency amount. This multiple shows how much of the LPs' contributed capital is represented by the current value of the investments that have not yet been sold.
Why RVPI is a critical performance metric for GPs and LPs
Understanding RVPI is fundamental for both general partners (GPs) and the LPs who invest in them. Each party uses the metric to gauge performance and make strategic decisions, though from different perspectives.
For you as a GP, RVPI helps to:
- Inform strategy: A rising RVPI suggests your investment thesis is playing out.
- Guide capital allocation: It helps you decide whether to use reserve capital for follow-on investments or if it's time to start planning for an exit.
- Determine when you're raising your next fund: A strong track record of returning capital is a powerful signal to potential LPs.
For your LPs, RVPI provides a transparent view of the unrealized portion of their investment.
- Monitor progress: LPs use RVPI to track how their investment is performing between distributions.
- Assess GP performance: LPs compare a fund's RVPI to other funds in their portfolio and to industry benchmarks.
How RVPI fits into total fund performance
RVPI is just one component of fund performance. To get a complete view of a fund's health, you must look at RVPI alongside its counterparts: DPI and TVPI (total value to paid-in capital).
The relationship between RVPI, DPI, and TVPI
The connection between these three metrics is direct and defined by: TVPI = DPI + RVPI
| Metric | Definition | Focus | Formula |
|---|---|---|---|
| RVPI | Residual value to paid-in capital | Unrealized value | Residual value / Paid-in capital |
| DPI | Distributions to paid-in capital | Realized returns | Distributions / Paid-in capital |
| TVPI | Total value to paid-in capital | Total performance (realized + unrealized) | (Residual value + Distributions) / Paid-in capital |
How RVPI evolves during a fund's lifecycle
RVPI is not a static metric. It changes predictably over the lifecycle of a private equity or venture capital fund, often following what is known as the J-curve of returns.
Interpreting RVPI: What the numbers tell you
When you analyze an RVPI multiple, context is everything. Common red flags might indicate problems or weaknesses with the fund's performance or strategy:
- A stagnant RVPI signals that portfolio companies are not appreciating as expected.
- A high RVPI in a mature fund can be concerning if it isn't converting to actual cash distributions for investors.
- An RVPI below one signals that the current market value of the remaining investments is less than the capital paid in.
Frequently asked questions about RVPI
Is RVPI the same as MOIC?
No, they measure different things. RVPI compares a fund's total unrealized value to its total paid-in capital.
What is a good RVPI for a fund?
A good RVPI depends on the fund's strategy and age. Young funds are expected to have a high RVPI, while a mature fund nearing the end of its life should have an RVPI close to zero.
How do DPI, RVPI, and TVPI differ from IRR?
DPI, RVPI, and TVPI are capital multiples that show "how much" value was generated relative to the capital invested. IRR is a time-weighted metric that shows "how fast" that value was generated.