PIC Multiple
Paid-in capital divided by capital commitments — how invested a fund is. A PIC of 0.80 means 80% of commitments have been called; a high PIC means the drawdown phase is nearly over.
In plain language
Before asking how much a fund has returned, it helps to ask how much of the promised money it has actually taken. That is what the PIC multiple measures.
The workbook calls it the Paid-in Capital or PIC Multiple and says it measures how invested the fund is. It is simply paid-in capital divided by capital commitments.
It belongs to the family of multiples the workbook uses to compare distributions across funds with comparable terms — alongside DPI, RVPI and TVPI. It is the only one of the four whose denominator is commitments; the other three divide by paid-in capital, which is why PIC comes first.
How it works
Reading the number
| PIC | What it tells you |
|---|---|
| Low | Most commitments are still uncalled; the fund is early in its drawdown phase |
| High (near 1.0) | The fund is near the end of its drawdown phase and has invested most committed capital |
The workbook adds: the more the PIC percentage, the better are the prospects for the fund to get fully invested.
How it connects to the other multiples. DPI, RVPI and TVPI all use paid-in capital (total capital contributions) as the denominator. And when all capital calls have been met, total invested capital equals total paid-in capital, so TVPI equals MOIC.
The complement. Whatever share of commitments is not yet paid in is uncalled capital — what Chapter 3 calls dry powder.
The formula
PIC Multiple = Paid-in Capital ÷ Capital Commitments
Uncalled share = 1 − PIC Multiple
A worked example
The workbook's example. A fund has commitments of Rs 1,000 crore, of which Rs 800 crore has been paid in:
PIC = Rs 800 crore ÷ Rs 1,000 crore = 0.80, i.e. 80%
Applying the same formula to Chapter 3's drawdown illustration (Rs 650 crore drawn on Rs 1,000 crore committed) gives PIC = 0.65.
Illustrative figures — why the denominators matter. Sahyadri Multi-Strategy Fund has:
| Item | Rs crore |
|---|---|
| Commitments | 500 |
| Paid-in capital | 350 |
| Distributions to date | 105 |
PIC = 350 ÷ 500 = 0.70
DPI = 105 ÷ 350 = 0.30 ← distributions over PAID-IN, not commitments
Wrong: 105 ÷ 500 = 0.21 ← uses the PIC denominator by mistake
Uncalled = 500 − 350 = Rs 150 crore (30% of commitments)
An investor comparing Sahyadri with a fund showing PIC 0.95 learns that Sahyadri still has Rs 150 crore of calls to make — a cash-management fact, not a performance one.
Why NISM asks about it
Chapter 6 (Fees Structure, Fund Performance and Benchmarking) lists the PIC multiple first among the distribution measures in the Multiples Method (6.2.1.2), before DPI, RVPI and TVPI, with the Rs 800 crore / Rs 1,000 crore illustration. Expect a direct computation or a "what does a high PIC indicate" question, and distractors that swap PIC's denominator with DPI's.
Common exam traps
- PIC divides by commitments; DPI, RVPI and TVPI divide by paid-in capital. Mixing the denominators is the easiest way to lose the mark.
- A high PIC is not a performance signal. It says the fund has called most of its money, not that it has made any.
- High PIC = near the end of the drawdown phase, not near the end of the fund's life.
- TVPI equals MOIC only once all capital calls are met, because only then does invested capital equal paid-in capital.
Check yourself
1.A Category III AIF has capital commitments of ₹1,000 crore, of which investors have paid in ₹800 crore. What is its PIC multiple, and what does it indicate?
- a)1.25 — investors have paid in more than they committed
- b)0.80 — the fund has distributed 80 per cent of the capital it called
- c)0.80 — the fund is near the end of its drawdown phase and has invested most of its committed capital
- d)0.20 — only 20 per cent of the commitment remains at risk
Show the answer
Answer: (c) 0.80 — the fund is near the end of its drawdown phase and has invested most of its committed capital
The PIC multiple ‘measures how invested the fund is. It is calculated by dividing the PIC by the Capital Commitments’: ₹800 crore ÷ ₹1,000 crore = 0.80, which is the workbook's own example. ‘A high PIC means that the fund is near the end of its drawdown phase and has invested most of committed capital’.
- 1.25 divides commitments by paid-in capital — the ratio upside down.
- Measuring distributions is the job of DPI (total distributions ÷ total capital contributions), not PIC.
- 0.20 is the undrawn share of the commitment, not the PIC multiple.
Where this is taught
- Series XIX-B · Chapter 6: Fees Structure, Fund Performance and Benchmarkingintroduced here
- Series XIX-A · Chapter 6: Risk and Return - Investor and Fund Perspectiveintroduced here
- Series XIX-C · Chapter 9: Fee Structure and Fund Performanceintroduced here
- Series XIX-E · Chapter 7: Fee Structure and Fund Performanceintroduced here
- Series XIX-D · Chapter 7: Fund Performance and Benchmarking of AIFsintroduced here
Related terms
- Capital CommitmentThe total amount an investor promises to contribute to a Category III AIF over the life of the fund — at least Rs 1 crore, or Rs 25 lakh for employees and directors of the AIF or its Manager.
- DrawdownThe process by which the manager of a Category III AIF calls committed capital from investors as the fund needs it — also known as a capital call.
- Dry PowderThe part of a Category III AIF's capital commitments that investors have promised but the manager has not yet called — committed capital still waiting on the sidelines.
- Residual Value to Paid-in CapitalThe unrealised multiple: the estimated fair value of a fund's unsold investments divided by paid-in capital. It dominates early in a fund's life and falls to zero once every investment is exited.
- Total Value to Paid-in CapitalA fund's investment multiple: cumulative distributions plus the residual value of unsold investments, divided by paid-in capital — equivalently, DPI plus RVPI.
- Distributions to Paid-in CapitalCumulative cash actually distributed to investors divided by the capital they have paid in — the realisation multiple, and the one return measure a fund cannot flatter with its own valuations.
- Invested CapitalThe total amount a Category III AIF's manager has actually drawn down from investors to make investments, as against the larger capital they committed. The undrawn balance is dry powder.
- Multiple on Invested CapitalA private equity performance multiple: realised plus unrealised value divided by total invested capital. Once every capital call has been met, it equals the fund's TVPI.