A fund that has called $100 million, returned $70 million and holds assets appraised at $80 million shows DPI of 0.7x and TVPI of 1.5x. The gap between the two is the portion of the result that is still an estimate.
DPI is the honest number because it is cash. TVPI depends on marks the manager influences, so a high TVPI with low DPI late in a fund's life deserves scrutiny about how those residual assets are valued and whether buyers exist at those levels.
Multiples ignore time, while internal-rate-of-return over-weights it: an early exit can produce a spectacular IRR on a small multiple. Read both together, alongside the vintage-year and the fund's stage of life.
Related: internal-rate-of-return, vintage-year, j-curve, private-equity, venture-capital, performance-reporting