Glossary LP PM

The investment multiple is also known as the total value to paid-in (TVPI) multiple. It is calculated by dividing the fund's cumulative distributions and residual value by the paid-in capital. It provides insight into the fund's performance by showing the fund's aggregate returns as a multiple of its cost basis.

The realization multiple is found by dividing the cumulative distributions from a fund, company or project by the paid-in capital. The realization multiple is also referred to as distributed to paid-in capital (DPI).

RVPI is the current market value of unrealized investments as a percentage of called capital.

defined as the compounded rate of return on an investment or series of investments. It reflects the performance of a PE fund by taking into account the size and timing of its cash flows (capital calls and distributions) and its net asset value at the time of the calculation.

The application applies the money-weighted rate of return, identical to the XIRR calculation in MS Excel.

“Exposure” = the value at risk,

sum of open commitments + NAV (e.g. if the fund was to call up all remaining capital and pay out nothing)

Normalized Investment Performance (Wertzuwachs) =
(change in NAV + net cashflow) / NAV of reference period
net cashflow = distributions - contributions

Multiple on Invested Capital (“MOIC”) is a metric used to describe the value or performance of an investment relative to its initial cost. It is also often referred to as Equity Multiple.

The J curve is used to illustrate the historical tendency of private equity funds to deliver negative returns in early years and investment gains in the outlying years as the portfolios of companies mature.

In the early years of the fund, a number of factors contribute to negative returns including management fees, investment costs and under-performing investments that are identified early and written down. Over time the fund will begin to experience unrealized gains followed eventually by events in which gains are realized.

Foreign currency effects are gains or losses on foreign investments due to changes in the relative value of assets denominated in a foreign currency. A rising domestic currency means foreign investments will have lower returns when converted back to the local currency.

Carried interest is a share of profits earned by general partners of private equity, venture capital, and hedge funds. Carried interest is due to general partners based on their role rather than an initial investment in the fund. As a performance fee, carried interest aligns the general partner's compensation with the fund's returns. Carried interest is often only paid if the fund achieves a minimum return known as the hurdle rate.

SMA - Separately Managed Accounts

The year of fund formation and/or its first takedown of capital. By placing a fund into an particular vintage year, the Limited Partner can compare the performance of a given fund with all other similar types of funds form in that particular year.

Source: https://ilpa.org/glossary/vintage-year/

A snapshot is copy of all data in the application at a certain point in time, typically at as the last steps in the preparation of a quarterly reporting. A snapshot is read-only and can not be altered. Data in the current version can be changed, including for previous quarters. This could lead to different values comparing snapshots.

Net Invested Capital = Contributions - Distributions