Which metric quantifies the total cash flow received for each dollar invested?

The metric that quantifies the total cash flow received for each dollar invested is Distribution to Paid-In Capital (DPI). DPI is a key performance measure in private equity that indicates the amount of capital returned to investors relative to the total capital they have invested. It effectively reflects the cash distributions that an investor receives compared to their contributions, allowing for a straightforward understanding of how much cash is returned for each dollar put into the investment.

This focus on cash flow is crucial for investors, as it provides a tangible measure of success regarding liquid returns. DPI therefore effectively communicates the realized returns experienced by the investor, which is indispensable for assessing investment performance. In contrasts to metrics like Internal Rate of Return (IRR) that consider the timing of cash flows and Multiple on Invested Capital (MOIC) that measures total value created relative to capital invested over the life of the investment, DPI specifically quantifies realized cash returns directly linked to actual distributions.