For years, private market investors in India have been obsessed with the wrong number. A fund’s Total Value to Paid-In (TVPI) ratio—the paper returns it promises—has long been a favorite metric for LPs and wealth managers selling the dream of private equity. The problem is, TVPI can look fantastic while the actual cash returns remain elusive. Investors can sit with a 3x TVPI, feeling rich on paper, yet see no real money in their bank accounts.
This is why Distributed to Paid-In (DPI) is finally getting its due. DPI measures how much of the investor’s capital has actually been returned. In a year where PE/VC exits hit $26.7 billion—a 7% year-over-year increase—India is proving that private markets are more than just long-hold, illiquid bets . A record $12.9 billion of these exits came from open market sales, showing that investors are finally converting paper gains into real money .
It’s a shift driven by necessity. Over the last few years, HNIs and family offices have grown wary of funds that boast high IRRs but lack real liquidity. With public markets delivering quicker exits and global uncertainty making cash king, LPs are no longer willing to wait indefinitely for returns. PE-backed IPOs, which grew by 130% in 2024, are part of this push. Investors want exit opportunities, and GPs are responding by structuring more public market liquidity events .
This trend isn’t just about exits. It’s about accountability. DPI forces fund managers to think differently. Instead of chasing sky-high valuations and aggressive markups, they focus on how and when capital will be returned. This has led to an increase in secondary transactions, structured exits, and earlier monetization strategies. Even in sectors like infrastructure and real estate—where liquidity has traditionally been slow—investors saw $20.9 billion in exits in 2024, proving that even long-term asset classes are adapting .
For LPs, this means a change in how funds are evaluated. No longer is a 3x TVPI enough to get excited. The real question is: how much of that value has been distributed? The funds that can return capital faster while maintaining strong multiples will dominate in the coming years. Private markets are no longer just about holding assets. They’re about monetizing them—at the right time, at the right price, and most importantly, in a way that actually puts cash back in investors’ hands.
Data Souce – EY-IVCA PE/VC Monthly trend analysis: December 2024
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