Net TVPI is the total value to paid-in multiple computed the way a limited partner experiences it: the paid-in capital includes the management fees and expenses the investor was called for, and the distributions are what reached them after the general partner's carried interest was taken out. Gross TVPI leaves both out and is always higher. This page defines net TVPI against gross, works it on this site's own investor update worksheet, explains which figures go into each side of the ratio, and says why a quarterly letter should report the net figure and name it as such.
Net versus gross: two denominators and two numerators
The denominator of net TVPI is everything the investor paid in: capital for investments plus every call for fees and expenses. The numerator is what the investor received in distributions after carry, plus their share of residual value net of accrued carry. Gross TVPI uses only the capital invested in deals and the value those deals returned before any fee or carry. On this site's worked example six and a half million paid in, fees included, against twelve million twenty-five thousand of net total value gives a net TVPI of one point eight five times; the gross figure on the same fund would use a smaller denominator and a larger numerator and read higher.
Why the net figure is the one to report
Because it is the one an investor can check against their own bank account and their own capital account statement, and because the ILPA template asks for it. A letter reporting gross TVPI without saying so invites the comparison the investor will make anyway when they add up what they paid and what they received. The worksheet on this site computes whichever figures are entered; the honest entry is paid-in including fees and distributions net of carry, and the honest letter says net beside the number.
What moves net TVPI that does not move gross
Every management fee call raises the net denominator and leaves the gross one alone, so net TVPI drifts below gross by a little each period even when nothing happens to the holdings. Carried interest, once it accrues, reduces the net numerator on distributions and on residual value while leaving the gross figure untouched. Over a fund's life the gap between the two multiples is the whole cost of the fund to the investor, which is why an investor reads the net figure and a fund's marketing quotes the gross one.
Questions people ask about net tvpi
Does net TVPI include the GP's own commitment?
The general partner's commitment is paid in and receives distributions like any other; it is in the fund-level figure. Carry is separate from the GP commitment and is what the net figure removes.
Is net DPI also a thing?
Yes, and net RVPI, and they add to net TVPI just as the gross ones add to gross TVPI. The worksheet on this site gives all three from the four inputs entered.
Should a first fund report net multiples before any carry has accrued?
Yes, because the fees have already been called and the net denominator already differs from the gross one. Reporting net from the first letter avoids a jump in the reported figure the quarter carry first accrues.