Definition
Paid-In Capital
Paid-in capital is the amount of committed capital that LPs have actually transferred to a fund through capital calls.
LPs commit capital to a fund but contribute it over time as the GP makes investments, through capital calls (drawdowns). Paid-in capital is the cumulative amount actually called and contributed, which is the denominator in performance ratios like DPI, TVPI and RVPI.
The difference between committed and paid-in capital is the dry powder still available to call. Tracking paid-in capital matters because fund returns are measured against money actually deployed, not just promised.
Related terms
- DPIDPI (Distributions to Paid-In) measures how much cash a fund has actually returned to its investors relative to the capital they paid in.
- Dry PowderDry powder is the committed but not-yet-invested capital available to a fund for new deals.
- Capital CallA capital call, or drawdown, is the fund manager's formal request that investors transfer a portion of their previously committed capital so the fund can make an investment or pay expenses.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.