Hi,
I am having trouble cimenting the hell out of those terms. Could someone please assists…
So far my understanding is that Committed Capital is the amount invested in the PE firm. The funds stay in the “pool” until the GPs find a company to invest a certain amount…at which point the GPs “drawdown” - take from the pool to invest…? What about the other bad boys - PIC, DPIC RV yati yati yada…
Sorry for being ruthless but you should read it once with clear mind. They are very easy terms.
Committed Capital - Commitment by LPs to Fund GP for investment (Ex - $150)
Paid In Capital (PIC)- Actual investment by LP to GP (example $80 out of $150, $70 still remains with LP)
DPI - Total Distribution of Profits actually paid out to LP out of Invested Capital (PIC) Example $50 Million paid out of $80 above). More than 1x means LP received thier original investment back.
RVPI - Unrealized profits in portfolio investments of Fund. Unrealized/PIC. Higher the RVP, higher the future profits would be distributed to LPs back, subject to higher risks as well.
TVPI = Realized (DPI) + Unrealized (RVPI).
Please do not ask what is carried interest and Management fees now?
HAHAHA! got it got it!! thx