We are pleased to see Multiplicity Partners and Andres Hefti featured in the latest WSJ Pro article by Luis Garcia on the growing importance of DPI over IRR in private markets.
The internal rate of return (IRR), long the dominant performance yardstick in private equity, is losing ground to cash-based measures as a prolonged exit drought reshapes how investors evaluate fund managers. With higher interest rates having slowed asset sales over the past four years, managers have struggled to return capital — prompting LPs to look past paper gains and focus on what they actually receive. Andres Hefti, Partner and Portfolio Manager at Multiplicity Partners in Zurich, told the Wall Street Journal that investors are increasingly questioning whether certain PE managers can genuinely return cash rather than simply report strong unrealised profits. As Hefti pointed out, a high IRR can be generated either by real distributions or by elevated paper valuations, which limits its usefulness as a standalone measure. The metric gaining favour instead is distributed to paid-in capital (DPI), which captures the actual liquidity a fund has returned relative to capital invested. The shift is visible even among industry leaders: KKR this year moved its since-inception IRR from the opening pages of its annual report to the back, and executives at both KKR and Apollo emphasised DPI on recent earnings calls. Long-standing critics such as Oxford’s Ludovic Phalippou have welcomed the change, arguing that since-inception IRRs can stay artificially elevated for decades due to the outsized weight given to early distributions.
Read the full article by Luis Garcia in WSJ Pro (19 May 2026): Private Equity’s Exit Drought Claims Its Latest Victim—the IRR Metric