LP reporting is the quarterly letter a fund sends its limited partners, and it is judged on two things: whether its figures agree with last quarter's and with the administrator's statement, and whether it says plainly what happened. The first is arithmetic, and it is the part a record does well; the second is writing, and it is the part a general partner does. This page is about the arithmetic: the figures every LP letter carries, where each one comes from in the fund's record, and the one check an investor makes on receiving it, with every number worked on this site's own worksheet.
The figures every letter carries
Total commitments, paid-in capital to date, distributions to date, residual value at the quarter end, and the three multiples over paid-in: DPI for what has been returned, RVPI for what is still held, TVPI for the two together. Often the fund's IRR since inception and the investor's own share of each figure, computed from their commitment. On this site's worked example a fund with ten million dollars committed and six and a half million paid in reports sixty-five percent paid in, three and a half million uncalled, two million six hundred thousand distributed and nine million four hundred and twenty-five thousand of residual value.
Where each figure comes from
Commitments come from the subscription agreements and never change except at a close. Paid-in capital is the sum of every capital call, so it comes from the record of calls, not from a bank statement. Distributions are the sum of every distribution notice. Residual value is the one figure that comes from outside the record: the administrator's NAV, or the fund's own valuation under its policy before it has an administrator. The multiples are ratios over paid-in and come from nowhere but arithmetic: on the example, a DPI of zero point four zero, an RVPI of one point four five and a TVPI of one point eight five.
The check an investor makes, and why the record has to pass it
The first thing a limited partner does with a letter is add DPI to RVPI and see whether it equals TVPI, then compare paid-in to the sum of the notices they hold. A letter built from the same record that holds the calls and distributions passes both checks by construction. A letter built in a separate spreadsheet passes them after a reconciliation, and fails them the quarter the reconciliation is skipped. LP reporting software is worth paying for exactly to the extent it makes the second case impossible.
What the record keeps after the letter goes out
The letter as sent, dated, against the quarter, so that an investor's question in a year is answered from the document they hold rather than from a live figure that has since moved. Each investor's share of the quarter's figures, computed from their commitment, so the individual statement and the fund letter cannot disagree. And the inputs that produced the figures, so the next quarter starts from a known state rather than from whoever last opened the file.
Questions people ask about lp reporting
Is there a standard format for LP reporting?
The ILPA Reporting Template is the format most institutional investors ask for, and its definitions of paid-in, distributions, residual value and the multiples are the ones this site's worksheet uses.
Should the letter show gross or net multiples?
Net, because that is what the investor received and holds. Paid-in including fees and distributions net of carry give net multiples; the worksheet computes whichever figures are entered and the letter should say which.
Does Rapportvo write the letter?
It computes and keeps the figures and the update as sent. The narrative, what the fund did this quarter and why, is the general partner's to write.