What does the Look-Through Leverage Calculator measure?

It measures how much of a private equity fund's distributions were earned from operating cash and arm's-length exits, and how much debt ranks ahead of the LP across portfolio companies, holdcos and the fund. It also shows how a fall in portfolio value would affect reported NAV once every layer of debt is counted.

What is a good Cash Provenance?

There is no universal benchmark yet, because few GPs report distributions by source. A fund whose distributions come mostly from exits to unaffiliated buyers and covered dividends has earned its DPI. A large borrowed or related-party share is a reason to ask how each payment was decided, and on what terms.

Why is the subscription line not counted as debt?

It is secured on LP commitments, not on the companies, and LPs repay it through capital calls. It changes when LPs pay in, and so the reported IRR, without changing how many dollars an LP loses if company values fall. Reported NAV is stated after the line, so the calculator adds its balance back into the value base.

No. The calculator runs entirely in your browser. Nothing you type is sent to Arete Ventures or saved anywhere. We count only that the calculator was used, never what was entered.

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LP Diligence Tool

Look-Through Leverage Calculator

Enter a private equity fund's figures to see how much of its DPI was earned, how much debt ranks ahead of the LP at every layer, and what a fall in value would do to NAV. It is free, needs no sign-up, and saves a one-page PDF for an IC file.

By Gaurav Shah

Managing Partner, Arete Ventures · Former PE operating partner

Method v1.1
Updated November 2026

How Does the Calculator Work?

The calculator applies two measures from our article on look-through leverage: Cash Provenance and Look-Through LTV.

Cash Provenance sorts every distribution into earned, borrowed or related-party cash. Look-Through LTV adds the debt that ranks ahead of the LP at company, holdco and fund level and divides it by the look-through value base. The stress test lowers enterprise value evenly across the portfolio and holds every claim constant.

Cash Provenance = earned distributions ÷ total distributions

Look-Through LTV = (company net debt at fund share + holdco debt + NAV loan + NAV preferred equity) ÷ (that total + subscription line balance + reported NAV)

A company dividend counts as earned up to the free cash flow after debt service the company produced and kept since its last payout, less new borrowing.

What Does a Result Look Like?

The calculator opens with this illustrative fund, taken from our article on look-through leverage. It has called $1,000 million, distributed $600 million and reports NAV of $1,100 million.

DPI as reported: 0.6x

Cash Provenance (earned share of distributions): 55%

Borrowed share / related-party share: 28% / 17%

Look-Through LTV: 61%

Company-level LTV, the usual LP report view: 49%

Claims above the companies (holdco and NAV loan): $350 million

LP NAV after a 20% fall in enterprise value: down 52%, against 39% with company debt only

Where Do the Inputs Come From?

Every input sits in documents a GP already holds.

Distribution notices give the source of each payment. The NAV facility report gives the loan balance and draws. Holdco statements give holdco debt and accrued PIK. Company compliance certificates give net debt, the cash sweep and restricted payments capacity. Our free LP Look-Through Workbook lists the requests in full, with what a complete answer contains.

How Should You Read the Results?

Treat the results as the start of a conversation with the GP.

A high borrowed share can be sound when a company's free cash flow is strong and its leverage is falling. A large gap between the company view and Look-Through LTV says the claims above the companies deserve a closer look. The "What to ask next" panel turns each result into a question for the GP.

Frequently Asked Questions

It measures how much of a private equity fund's distributions were earned from operating cash and arm's-length exits, and how much debt ranks ahead of the LP across portfolio companies, holdcos and the fund. It also shows how a fall in portfolio value would affect reported NAV once every layer of debt is counted.
There is no universal benchmark yet, because few GPs report distributions by source. A fund whose distributions come mostly from exits to unaffiliated buyers and covered dividends has earned its DPI. A large borrowed or related-party share is a reason to ask how each payment was decided, and on what terms.
It is secured on LP commitments, not on the companies, and LPs repay it through capital calls. It changes when LPs pay in, and so the reported IRR, without changing how many dollars an LP loses if company values fall. Reported NAV is stated after the line, so the calculator adds its balance back into the value base.
No. The calculator runs entirely in your browser. Nothing you type is sent to Arete Ventures or saved anywhere. We count only that the calculator was used, never what was entered.

An LP owns the bottom of every layer in the stack, and usually receives a report on one of them.