Michael and Amanda next discuss DEP’s investment in ALPHA Holdings, a private equity fund. Selected details on the ALPHA Holdings fund include the following:

Total committed capital: 133 Mio. €
Carried interest to GP: 0.2
Distribution = american waterfall
Profits of the first fund investment: 46.6 Mio. €
Most recent cumulative paid-in capital: 80 Mio. €
Most recent cumulative distributions paid out to LPs: 27 Mio. €
Most recent NAV before distributions: 152.3 Mio. €
Most recent NAV after distributions: 101.14 Mio. €
Estimated NAV before distribution at the end of next year: 244 Mio. €

What is the ratio of total value to paid-in capital (TVPI) for the ALPHA Holdings fund for the most recent year?
Question 59Answer

a.
1.60

b.
0.34

c.
None of the given options is correct.

d.
1.26

To determine the Total Value to Paid-In Capital (TVPI) ratio for the ALPHA Holdings fund for the most recent year, we need to use the following formula:

\[ \text{TVPI} = \frac{\text{Cumulative Distributions} + \text{NAV}}{\text{Paid-In Capital}} \]

Where:
- Cumulative Distributions = 27 Mio. €
- NAV (Net Asset Value) after distributions = 101.14 Mio. €
- Paid-In Capital = 80 Mio. €

Now, we can plug in the values into the formula:

\[ \text{TVPI} = \frac{27 \, \text{Mio. €} + 101.14 \, \text{Mio. €}}{80 \, \text{Mio. €}} \]

\[ \text{TVPI} = \frac{128.14 \, \text{Mio. €}}{80 \, \text{Mio. €}} \]

\[ \text{TVPI} = 1.60175 \]

When rounded to two decimal places, the TVPI is approximately 1.60.

Thus, the correct answer is:

a. 1.60

Would you like more details or have any questions?

Here are 5 questions you might want to ask next:
1. How is the internal rate of return (IRR) calculated for a private equity fund?
2. What is the difference between TVPI and DPI in private equity?
3. How does the American waterfall distribution model work in private equity?
4. What factors can affect the NAV of a private equity fund?
5. How are carried interest and management fees calculated in a private equity fund?

**Tip:** In private equity, TVPI (Total Value to Paid-In Capital) is a comprehensive measure that includes both realized returns (distributions to LPs) and unrealized returns (NAV), making it a valuable metric for assessing overall fund performance.

Learn how to calculate the Total Value to Paid-In Capital (TVPI) ratio for ALPHA Holdings fund, a key metric in private equity performance analysis. Get insights into the formula and its application with detailed examples.

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