Loan KPIs Calculations
Last updated June 26, 2025
Overview
Hypercore calculates three key performance indicators (KPIs) for loans to help lenders assess investment performance: IRR (Internal Rate of Return), TVPI (Total Value to Paid-In, also known as Investment Multiple), and DPI (Distributions to Paid-In, also called Realized Multiple). Each KPI is calculated in two variants: Current (based on actual transactions to date) and Expected (including future projected cash flows).
Key Concepts
Current (Realized) vs Expected Calculations
- Current KPIs: Based on actual transactions that have occurred up to today, plus current outstanding balances.
- Expected KPIs: Include both actual transactions and future expected cash flows based on the loan schedule.
Equity Integration
When equity investments are associated with a loan, Hypercore includes equity transactions and valuations in KPI calculations. This provides a comprehensive view of total investment performance.
IRR (Internal Rate of Return)
IRR measures the annualized rate of return on an investment, accounting for the timing of cash flows.
IRR Current (also called Realized IRR)
Formula: Calculated using the XIRR function on actual cash flows to date plus current outstanding balance.
Cash Flows Included:
- All actual disbursements (negative cash flows)
- All actual repayments (positive cash flows)
- Current outstanding balance as of today (positive cash flow)
- Equity transactions (buys as negative, sells/returns as positive)
- Current equity holdings value
Example:
Loan disbursement: -$100,000 (Jan 1)
Repayment: +$20,000 (Mar 1)
Repayment: +$25,000 (Jun 1)
Current outstanding: +$60,000 (today)
IRR Current = 12.5%
IRR Expected
Formula: Calculated using the XIRR function on actual cash flows plus future expected cash flows.
Cash Flows Included:
- All actual disbursements and repayments
- Future expected repayments from the loan schedule
- Future expected disbursements (if applicable)
- Equity transactions (actual and expected)
- Expected equity income/expenses
Example:
Actual disbursement: -$100,000 (Jan 1)
Actual repayments: +$45,000 (to date)
Expected repayments: +$65,000 (future)
IRR Expected = 15.2%
TVPI (Total Value to Paid-In, also called Gross Investment Multiple)
TVPI measures the total value returned relative to the total amount invested, including both realized and unrealized gains.
TVPI Current (also called Gross Realized Multiple)
Formula: (Total Payments + Outstanding Balance + Equity Values) ÷ Total Disbursements
Components:
- Total Payments: Principal, interest, and fees received to date
- Outstanding Balance: Current principal, interest, and fees outstanding
- Equity Values: Current market value of equity holdings
- Total Disbursements: Total amount disbursed to date
Example:
Total disbursed: $100,000
Total payments received: $45,000
Current outstanding: $60,000
Equity current value: $5,000
TVPI Current = ($45,000 + $60,000 + $5,000) ÷ $100,000 = 1.10x
TVPI Expected (also called Gross Expected Multiple)
Formula: (Total Expected Payments + Equity Expected Values) ÷ Total Expected Disbursements
Components:
- Total Expected Payments: All actual and future expected payments
- Equity Expected Values: Expected future equity income
- Total Expected Disbursements: All actual and future disbursements
Example:
Total disbursed: $100,000
Total payments (actual + expected): $110,000
Expected equity income: $10,000
TVPI Expected = ($110,000 + $10,000) ÷ $100,000 = 1.20x
DPI (Distributions to Paid-In, also called Realized Multiple)
DPI measures the ratio of total distributions received to the total amount invested, focusing on realized returns.
DPI
Formula: Total Payments ÷ Total Disbursements
Components:
- Total Payments: Principal, interest, and fees received to date
- Total Disbursements: Total amount disbursed to date
- Equity Income: Actual equity income received
Example:
Total disbursed: $100,000
Total payments received: $45,000
Equity income: $5,000
DPI Current = ($45,000 + $5,000) ÷ $100,000 = 0.50x
Important Notes
Currency Conversion
- All calculations are performed in the loan’s target currency
- Equity transactions are converted to the loan currency using exchange rates as of the transaction date
- Current equity values are converted using current exchange rates
Early Loan Termination
- If a loan is terminated early (early redemption or write-off), the system uses current calculations instead of expected calculations
- This ensures KPIs reflect actual performance rather than projections
Fee Inclusion
- IRR calculations include fees by default; this can be configured.
- Outstanding balance calculations include principal, interest, compounding interest, and fees
Data Sources
- Schedule Data: Based on loan schedule rows (disbursements, repayments, expected transactions)
- Equity Data: From equity transactions, valuations, and expected transactions
- Summary Data: Aggregated values from loan schedule summaries
Interpreting KPI Results
IRR Interpretation
- Positive IRR: Investment is generating returns
- Higher IRR: Better annualized returns
- IRR vs Cost of Capital: Compare to your funding costs
- Current vs Expected: Shows realized vs projected performance
TVPI Interpretation
- TVPI > 1.0x: Total value exceeds investment
- TVPI = 1.0x: Break-even point
- TVPI < 1.0x: Total value below investment
- Current vs Expected: Shows realized vs potential total returns
DPI Interpretation
- DPI > 1.0x: More cash returned than invested
- DPI = 1.0x: All capital returned
- DPI < 1.0x: Partial capital return
- Current vs Expected: Shows realized vs projected cash returns
Combined Analysis
- High IRR, Low DPI: High returns but mostly unrealized
- Low IRR, High DPI: Lower returns but good cash flow
- High TVPI: Strong total value creation
- Equity Impact: Equity can significantly boost total returns
Troubleshooting KPI Calculations
Below are common KPI issues, symptoms, causes, and solutions to help resolve inconsistencies in your metrics.
If your KPI values appear incorrect or inconsistent, here are some quick steps to help diagnose and resolve common issues:
- IRR issues: Download the amortization schedule and use Excel's XIRR function on disbursements and repayments to verify calculations. Ensure equity cashflows are included if applicable.
- TVPI/DPI issues: Manually sum repayments and equity cashflows. Use the formulas in this guide to confirm expected results.
- Equity discrepancies: Check that all equity transactions, valuations, and expected events are correctly recorded and in the correct currency.
- Still stuck? Contact Hypercore support for assistance—our team can help verify data integrity and ensure the calculation setup is correct.
Unexpected IRR Values
Symptoms: IRR appears unusually high (>9999%) or negative
Possible Causes:
- Insufficient cash flow data for XIRR calculation
- All cash flows in same direction (all positive or all negative)
- Missing or incorrect transaction dates
- Currency conversion issues
Solutions:
- Verify loan has both disbursements and repayments
- Check transaction dates are properly set
- Ensure currency conversion rates are available
- Review equity transaction data if applicable
TVPI vs DPI Discrepancies
Symptoms: TVPI significantly different from DPI
Possible Causes:
- Large outstanding balance (TVPI includes unrealized value)
- Significant equity holdings value
- Expected vs current calculation differences
Solutions:
- This is normal - TVPI includes unrealized gains while DPI only includes realized cash
- Review outstanding balance amounts
- Check equity valuations and expected income
Equity-Related Issues
Symptoms: KPIs don't reflect equity components
Possible Causes:
- Equity transactions not properly linked to loan
- Missing equity valuations
- Currency conversion failures
- Invalid equity transaction types
Solutions:
- Verify equity is properly associated with the loan
- Ensure equity valuations are current
- Check currency conversion rates for equity transactions
- Review equity transaction data for completeness
Currency Conversion Problems
Symptoms: KPIs seem incorrect for multi-currency loans
Possible Causes:
- Missing exchange rates for transaction dates
- Incorrect currency conversion calculations
- Outdated exchange rate data
Solutions:
- Verify exchange rates are available for all transaction dates
- Check currency conversion settings
- Update exchange rate data if needed
- Review target currency settings
Data Quality Issues
Symptoms: KPIs show null values or calculation errors
Possible Causes:
- Missing required loan data
- Invalid transaction amounts
- Missing equity information
Solutions:
- Verify all required loan fields are populated
- Check transaction amounts for validity
- Ensure equity data is properly configured
This guide provides the foundation for understanding how Hypercore calculates and presents loan performance metrics. For specific questions about your loan portfolio, consult with your Hypercore administrator or support team.