Reconciling contributions, distributions, NAV, and performance multiples

Keep period movements distinct from cumulative inputs

Quarterly contributions and distributions explain activity during a period. Since-inception paid-in capital and distributions feed the simplified multiples used here. Closing NAV is a snapshot. Adding closing NAV across quarters double counts the residual value; dividing one quarter's distributions by lifetime paid-in capital answers a different question from lifetime DPI.

The public example uses one fictional fund, USD, and a simplified investor-level net basis after modeled fees and expenses. It excludes recallable distributions, subscription facilities, currency translation, and investor-specific allocations. Those conventions must be specified separately in real reporting. The example is a calculation reference, not an official ILPA template.

Worked example: reconcile three multiples

Suppose paid-in capital totals $100 million, cumulative distributions total $30 million, and approved closing NAV is $120 million. DPI is 0.30x, RVPI is 1.20x, and TVPI is 1.50x. All inputs share the same cutoff and reporting basis. TVPI equals DPI plus RVPI when calculated from the same inputs.

These multiples are not annualized returns and do not express the timing of cash flows. A time-weighted return or IRR requires a different calculation and appropriate dated inputs. The demo intentionally avoids implying an IRR from these three amounts.

Use a NAV bridge as a separate control

The multiple identity can pass even when the source data are wrong. A quarterly bridge adds another check: opening NAV plus contributions, less distributions, plus net investment and operating change should equal closing NAV under the simplified basis. Real bridges may need separately defined lines for fees, expenses, FX, and other changes.

For example, opening NAV of $105 million plus $10 million contributions minus $8 million distributions plus $5 million net change gives $112 million. Compare that expected amount to the approved closing NAV. A residual identifies an unexplained difference; it does not reveal the cause or authorize an adjustment.

Handle missing and undefined inputs explicitly

With zero paid-in capital, these multiples are undefined. Display an unavailable result and explain the denominator, rather than reporting zero or infinity. Distinguish a verified zero distribution from a missing distribution file. Both may appear blank in a spreadsheet, but they carry different meanings.

Keep source IDs, effective dates, and versions beside each input. Validate positive paid-in capital for the simplified calculation, finite numeric values, consistent units, and cumulative rollforwards. A corrected prior-period transaction requires recalculation and a documented revision; it should not silently overwrite a released pack.

• Confirm fund, basis, currency, and cutoff before calculation.
• Tie cumulative contributions and distributions to approved source schedules.
• Use one closing NAV snapshot for the selected period.
• Check the NAV bridge separately from the multiple identity.
• Route missing sources and denominator exceptions to fund finance.
• Retain an independently calculated example as a regression fixture.

Primary sources

• ILPA: official performance template and guidance

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