In an investment committee, the same portfolio is sometimes presented with two different multiples without anyone noticing the gap. The cause is almost always identical: a table announces a MoIC where it actually computes an RVPI. At investment level, both ratios share the same denominator, invested cost, but one ignores everything the holding has already returned to the fund.
What each ratio measures
RVPI — Residual Value to Paid-In — is a fund-level metric: it divides the residual value attributable to investors, net of carried interest, by called capital. At investment level, its equivalent divides the fair value of the holding by invested cost; Invest Europe calls it unrealised MOIC, or gross RVPI. In both cases it measures what remains to be realised.
RVPI (fund) = net residual value / called capital
gross RVPI (investment) = fair value of the holding / invested cost
MoIC — Multiple on Invested Capital — compares total value — NAV plus distributions already realised — to invested capital:
MoIC = (residual value + distributions) / invested capital
For an investment, the entire difference therefore sits in the numerator. As long as nothing has been realised, the two ratios are equal, as are the RVPI and TVPI of a fund that has distributed nothing. That is exactly what makes the confusion invisible early in a vehicle's life, and expensive later.
The gap appears at the first exit
Take a deliberately simple worked example at investment level. A fund has invested €10m in one holding. It has sold part of it for €6m, and the remaining stake is valued at €8m.
| Ratio | Calculation | Result |
|---|---|---|
| Gross RVPI (investment) | 8 / 10 | 0.80× |
| MoIC | (8 + 6) / 10 | 1.40× |
The same investment reads as 0.80× or 1.40× depending on the ratio chosen. An RVPI below 1 on a performing fund is not an anomaly: it simply signals that part of the value has already left the portfolio. Reading it as underperformance is a methodological error, not a judgement call.
This is also why the RVPI of a fund late in its life mechanically trends towards zero. A fund that has distributed everything has an RVPI of zero and may show a TVPI of 2.50×, which then equals its DPI. Both figures are correct; they do not describe the same thing.
Three recurring traps
The multiple computed on NAV alone. The most common case. The column is labelled "multiple", the formula excludes distributions, and nobody notices until an exit occurs. The check is simple: if the ratio drops after a successful sale, it is not a MoIC.
Deferred consideration counted early. An earn-out or an escrowed amount is not a distribution until it is received. Counting it at nominal value among distributions displays performance that is still conditional. Invest Europe recommends including a fair value estimate of it at the reporting date; Jolv, as a prudent convention, excludes it from the multiple until it is collected and shows it separately.
Fully provisioned positions. A holding provisioned in full is worth zero, not its original cost. It must weigh 0× in the multiple — booking it at 1× artificially smooths portfolio performance.
Why the discipline matters
These definitions are not reporting subtleties. They determine what a committee sees, what an investor reads, and what an auditor can recompute. A multiple whose formula is not explicit is a multiple nobody can verify.
The underlying rule fits in one sentence: the denominator stays invested cost for an investment and called capital for a fund, and the numerator must state clearly whether it includes what has already been distributed. Everything else — treatment of earn-outs, provisions, debt repayments — follows from that discipline.
This is the principle Jolv applies by construction: the multiple is computed from residual value and realised distributions, and every component of the calculation remains traceable back to its source data. You can explore our valuation methods or see how an IPEV 2025 compliant valuation campaign is built. On capitalized interest, see also PIK interest, cash flow and IRR. The MoIC / TVPI / DPI trio is covered in MoIC, TVPI, DPI: three multiples, three questions and in the RVPI glossary entry.
Sources
- Invest Europe, Investor Reporting Guidelines, January 2024, §6.1 d.2 (p. 25), §6.2 b (p. 26) and §6.4 e (p. 27)
- CFA Institute, Global Investment Performance Standards (GIPS®) for Firms 2020, glossary (TVPI, DPI, RVPI, paid-in capital)
- ILPA, Performance Template Definitions – Granular Methodology, v1.1, January 2025