Chapter 7 · Running the Fund
LP Reporting & Fund Performance
LPs don't see your portfolio the way you do. They see a quarterly package: capital account statements, a schedule of investments, financial statements, a letter and a handful of performance numbers. Once a year they get audited financials and tax slips. That package is the product a fund ops team ships, and it's what LPs use to decide on the next fund. This module covers what goes in it, how IRR, TVPI, DPI and RVPI are calculated and why they disagree, what the ILPA templates standardise, and how to benchmark a fund against its vintage.
The reporting package
| Deliverable | Cadence | What's in it |
|---|---|---|
| Quarterly report | Quarterly, on a deadline set by the LPA (commonly 45-60 days after quarter end, longer at year end) | Letter, a capital account statement per LP, schedule of investments at fair value, fund financial statements, performance metrics, portfolio updates |
| Audited financial statements | Annually | Full financial statements with the auditor's opinion |
| Tax slips | Annually | Schedule K-1 (US) or T5013 (Canada) for each LP |
| Capital call and distribution notices | As needed | Amounts, dates and purpose (module 7.1) |
| Annual meeting | Annually | The partners present the portfolio to LPs |
Alongside the package sits the LP Advisory Committee (LPAC), a handful of the largest LPs. It has a role more than a report: approving conflicts of interest, sometimes reviewing valuations, and consenting to changes like extending the fund's term.
The four numbers
All four are ratios against paid-in capital: what LPs have actually contributed (module 7.1).
| Metric | Formula | Reads as |
|---|---|---|
| DPI (distributions to paid-in) | Distributions ÷ paid-in | Cash back so far |
| RVPI (residual value to paid-in) | NAV ÷ paid-in | What's still on paper |
| TVPI (total value to paid-in) | (Distributions + NAV) ÷ paid-in | DPI + RVPI |
| IRR | The discount rate that sets the fund's cash flows, with NAV as a final value, to zero | A time-weighted return |
Worked example — a fund in year seven
| Item | Amount |
|---|---|
| Paid-in capital | $80M |
| Distributions to date | $40M |
| Net asset value (current marks) | $120M |
| DPI | $40M ÷ $80M = 0.5x |
| RVPI | $120M ÷ $80M = 1.5x |
| TVPI | $160M ÷ $80M = 2.0x |
A 2.0x fund on paper, three-quarters of it marks (module 7.2). If the NAV proves 30% too optimistic, TVPI falls to 1.55x. DPI stays at 0.5x, because cash doesn't get re-marked.
Net vs. gross. Gross returns are before fees and carry; net is what LPs actually receive. LPs care about net. Always say which one you mean.
IRR is sensitive to timing. Returning money early flatters IRR, and so does a subscription credit line that delays capital calls, because the LP's money is "in" for less time. That's why LPs increasingly ask for IRR with and without the line's effect, and why DPI and TVPI sit next to IRR in every report.
Why DPI became the number that matters
Through the run-up in private valuations, plenty of funds reported strong TVPI while returning little cash. When exits slowed after 2021, LPs became DPI-focused: cash returned is the one figure that can't be re-marked. Expect every LP conversation about a fund to start there.
The ILPA templates
The Institutional Limited Partners Association publishes free, standard formats so LPs can compare funds like for like.
- The Reporting Template standardises how a fund reports fees, expenses and carried interest, the numbers most easily buried or netted away in a custom report. Version 2.0 was released in January 2025. It replaces the 2016 template for funds still in their investment period during Q1 2026, and for funds starting operations on or after 1 January 2026.
- The Performance Template, released alongside it, standardises how performance is calculated and presented.
- A Capital Call & Distribution Notice template standardises the notices from module 7.1.
Adoption is voluntary, but institutional LPs increasingly expect it, and moving to v2.0 is a live project for many ops teams right now.
Benchmarking against the vintage
A fund's performance only means something next to funds of the same vintage (the year it started investing) and strategy. A 2.0x TVPI can be top quartile in one vintage and middling in another. Cambridge Associates publishes the vintage-year benchmarks institutional LPs use; Carta publishes free quarterly fund performance data by vintage. "Top quartile" is only meaningful if you name the benchmark and the date.
Collecting the data
The unglamorous part. The LP report needs revenue, burn, runway and headcount for every portfolio company, and every company reports differently, late, in its own format. Most ops teams standardise a quarterly KPI request and use portfolio-monitoring software or a shared template. The portfolio support relationship (module 5.1) is what gets founders to answer.
What this means for you
For fund ops, the quarterly package is your product: accurate, on time, consistent and in the format your LPs expect. For investors, learn to read your own fund the way an LP will: DPI first, then how much of TVPI rests on marks you'd be comfortable defending.
Resources
ILPA Reporting Template ↗
The standard format for reporting fees, expenses and carried interest to LPs. Version 2.0 applies to funds starting in 2026.
Reporting Template v2.0 Suggested Guidance ↗
Line-by-line instructions for completing the template.
Private Investment Benchmarks ↗
The vintage-year benchmarks institutional LPs use to judge fund performance.
Visible ↗
For the other direction: collecting KPIs and updates from portfolio companies, which is what feeds the LP report.
Go Deeper
Templates, Standards & Model Documents ↗
The rest of the ILPA shelf, including the capital call and distribution notice template and the model LPA.