Why 2021 vintage funds shouldn't panic yet

Why 2021 vintage funds shouldn't panic yet

Kyle Stanford, CAIA

Sat, August 8, 2026 at 1:13 AM GMT+3 2 min read

Kyle Stanford is Director of US VC Research at PitchBook

Halfway through their standard 10-year fund term, 2021 vintage US VC funds are at the lowest DPI multiple of any vintage since at least 1997.

High valuations, an uncertain economy and a lack of liquidity have proven formidable obstacles to manufacturing distributions to paid-in capital, a metric measuring how much cash a fund has returned to investors relative to how much they put in.

And while such a low figure is likely a red flag to LPs evaluating funds in that vintage, year 5 DPI isn't a reliable predictor of future distributions, and that may be truer than ever, according to our new research.

Right now, distributions are king. In some cases, DPI has supplanted IRR as the return metric of choice in recent years. LPs now need distributions, not paper gains. GPs have used their own DPI multiple to showcase their ability to pick winners and garner new commitments.

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When looking at the data, though, total value to paid-in capital (TVPI), or the total value a fund has generated relative to what investors put in, is a better indicator at the fund's midway point of where the vintage is headed.

From that perspective, 2021 is still mediocre, but far from the lowest this century. It also has the next five years to lean on, including AI expansion and a liquidity market that remains just around the corner.

The beleaguered vintage also offers paid-in capital that is multiples larger than most of its kind this century. At $166 billion in commitments, 2021 had outpaced the prior high of 2020 by $70 billion. It also delivered a historic mix of funds, whereby more than 75% of commitments went to funds over $500 million in size.

What's most important for each vintage is always the next five years, and this is where GPs will tell you this time it's different.

This article originally appeared on PitchBook News