NISM Series XIX-D Formula Sheet
Ten formulas, what each one is for, and a worked example.
Category I and II AIFs are closed-ended private funds, and they measure performance differently from mutual funds. Series XIX-D tests the multiples, IRR and fee waterfall that investors and managers use.
These ten formulas cover them, with a worked TVPI and DPI example.
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The 10 Formulas
1
Formula
NAV of the fund
Expression
Fair value of investments + Cash − Liabilities
Use it for
Value of investors' unrealised interest.
2
Formula
TVPI
Expression
(Cumulative distributions + Residual NAV) ÷ Paid-in capital
Use it for
Total value created per rupee invested.
3
Formula
DPI
Expression
Cumulative distributions ÷ Paid-in capital
Use it for
Cash actually returned per rupee invested.
4
Formula
RVPI
Expression
Residual NAV ÷ Paid-in capital
Use it for
Value still held in the portfolio. TVPI = DPI + RVPI.
5
Formula
MOIC (per investment)
Expression
(Realised + Unrealised value) ÷ Amount invested
Use it for
Gross multiple on a single deal.
6
Formula
IRR
Expression
Rate r that makes Σ CFₜ ÷ (1 + r)ᵗ = 0
Use it for
Annualised, money-weighted return on the fund's uneven cash flows.
7
Formula
Management fee
Expression
Fee rate × Committed (or invested) capital
Use it for
Annual fee to the manager, on the base stated in the PPM.
8
Formula
Hurdle return
Expression
Contributed capital × (1 + Hurdle rate)ᵗ
Use it for
Amount investors must receive before carry is paid.
9
Formula
Carried interest
Expression
Carry rate × (Total distributions − Contributed capital)
Use it for
Manager's profit share, after the hurdle and any catch-up.
10
Formula
Undrawn commitment
Expression
Total commitment − Capital called
Use it for
Remaining capital the manager can still call.
| # | Formula | Expression | Use it for |
|---|---|---|---|
| 1 | NAV of the fund | Fair value of investments + Cash − Liabilities | Value of investors' unrealised interest. |
| 2 | TVPI | (Cumulative distributions + Residual NAV) ÷ Paid-in capital | Total value created per rupee invested. |
| 3 | DPI | Cumulative distributions ÷ Paid-in capital | Cash actually returned per rupee invested. |
| 4 | RVPI | Residual NAV ÷ Paid-in capital | Value still held in the portfolio. TVPI = DPI + RVPI. |
| 5 | MOIC (per investment) | (Realised + Unrealised value) ÷ Amount invested | Gross multiple on a single deal. |
| 6 | IRR | Rate r that makes Σ CFₜ ÷ (1 + r)ᵗ = 0 | Annualised, money-weighted return on the fund's uneven cash flows. |
| 7 | Management fee | Fee rate × Committed (or invested) capital | Annual fee to the manager, on the base stated in the PPM. |
| 8 | Hurdle return | Contributed capital × (1 + Hurdle rate)ᵗ | Amount investors must receive before carry is paid. |
| 9 | Carried interest | Carry rate × (Total distributions − Contributed capital) | Manager's profit share, after the hurdle and any catch-up. |
| 10 | Undrawn commitment | Total commitment − Capital called | Remaining capital the manager can still call. |
Worked Example: TVPI and DPI
Investors have paid in ₹100 crore. The fund has distributed ₹60 crore, and the remaining portfolio is valued at ₹90 crore.
- 1
DPI
60 ÷ 100 = 0.6x returned in cash.
- 2
RVPI
90 ÷ 100 = 0.9x still held.
- 3
TVPI
0.6 + 0.9 = 1.5x total value.
Free account, this exam preselected.
DPI Is Cash, TVPI Includes Estimates
TVPI includes the manager's valuation of unsold investments. DPI is cash already returned. Late in a fund's life, investors care most about DPI.
FAQs
Is IRR time-weighted or money-weighted?expand_more
Money-weighted. It depends on the timing and size of cash flows, which is why private funds use it.
What is a catch-up?expand_more
A clause that gives the manager a larger share of profits just above the hurdle, until it has received its agreed carry share of total profits.
Where are the fee terms set?expand_more
In the AIF's private placement memorandum and contribution agreement, within SEBI's AIF Regulations.
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