MaximizingDPI:HowSMERoll-UpStrategiesCanOutperformTraditionalMid-MarketBuyouts
Maximizing
DPI:
How
SME
Roll-Up
Strategies
Can
Outperform
Traditional
Mid-Market
Buyouts
Distributions to Paid-In Capital (DPI) is a direct measure of what investors ultimately seek, liquidity through cash distributions. This paper examines how different private equity strategies generate DPI, contrasting the traditional mid-market buyout model with an SME-to-lower-mid-market roll-up approach in an open-ended structure. By targeting businesses at lower acquisition multiples, integrating them quickly, and sweeping cash flows to investors on a non-discretionary basis, the SME buyout model can deliver higher run-rate DPIs, shorter hold periods, and reduced reliance on leverage, positioning it as a potentially superior framework for consistent, realized returns.