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Guide: Calculate Fund‑Level IRRs and Deal‑Level Yields with Cashflows

A clear, concise guide to setting up cashflow tracking and building performance metrics across your funds and deals in Lumonic.

Updated over 2 months ago

At a glance

You’ll learn how to:

  • Configure ledgers and transaction types for clean cashflow data

  • Import and tag cashflows at fund and company levels

  • Build IRR, DPI, TVPI/MOIC formulas with a point‑and‑click builder

  • Visualize performance at the fund and deal level, compare scenarios, and track trends over time

Who this is for: Fund managers, operations, finance, and data teams responsible for portfolio performance reporting.

Time to complete: ~30–45 minutes for first‑time setup; ongoing use is minutes per update.

Prerequisites

  • You have a Lumonic workspace and Cashflows enabled.

  • You can create objects in your target namespace (Fund or Company).

  • Your team has agreed on naming conventions for transaction types and tags.

Tip: Decide on currency strategy up front. Mixing currencies without conversion will distort IRR/DPI.

Quick‑start

Fund‑level IRR

  • Create a Ledger for the fund

  • Add Capital Call, Distribution, Quarterly NAV transaction types

  • Import fund cashflows (contributions, distributions, NAV)

  • Create IRR metric using your transaction types

  • Add to a Dashboard (Fund namespace)

  • Set Period (M/Q/Y) and Scenario

Deal‑level IRR

  • Create a Ledger for the deal

  • Add Initial Investment/Funding, Interest Payment, Principal Payment, Payoff, Distribution, Exit Proceeds, Quarterly Valuation transaction types

  • Ensure every cashflow is linked to a Company entity

  • Create Company/Deal IRR metric (same formula)

  • Build a Dashboard (Company or security namespace)

  • Group/filter by attributes (exit type, value creation lever, etc.)

  • Sort by IRR to find top/bottom performers

Core concepts

Ledgers — your cashflow container

Create one ledger per fund, Security, or entity you want to report on (e.g., Fund III, Company A Mezzanine).

Transaction types — categories of money movement

Identify how cash moves:

  • Contributions (capital calls, new investments)

  • Distributions (dividends, exit proceeds)

  • NAV (point‑in‑time Net Asset Value snapshots)

Each type has a System Type of CONTRIBUTION, DISTRIBUTION, or NAV. The system type drives calculations; the display name is what you’ll see in reports.

Cashflows — the actual transactions

Each cashflow records: amount (sign matters), currency, date, entity (fund or company), and transaction type.

Scenarios — what‑if versions

Use scenarios to separate Actuals from projections like Conservative or Optimistic. Scenarios travel with your cashflows and formulas can target them.

Tags — dimensions for analysis (optional)

Tags let you categorize cashflows beyond basic transaction types, enabling sophisticated performance comparisons. Tag a distribution as Exit Type:"Strategic M&A" + Value Creation Lever: "Revenue Growth" + Investment Round: "Series B", then group your IRR dashboard by Exit Type to see: "Our strategic acquisitions generate 28% IRR vs. 22% for IPOs."

Get set up

1) Create a ledger

  1. Go to Cashflows → Ledgers.

  2. Select Create ledger.

  3. Name it (e.g., Company XYZ- Series A, Venture Fund III) and add a description.

  4. Choose the namespace (fund, security, or company level) and Save.

Your first ledger is set as the default. You can create more for other funds/securities.

2) Define transaction types

  1. Open Cashflows → Transaction types → Create.

  2. Add the essentials:

    • Capital Call — System Type: CONTRIBUTION

    • Distribution — System Type: DISTRIBUTION

    • Quarterly NAV — System Type: NAV

You can add icons and more specific subtypes later (e.g., Dividend, Exit Proceeds).

3) (Optional) Create tags

  1. Go to Cashflows → Tags → Create tag category.

  2. Examples: Geography (NA/EU/APAC), Sector (Tech/Health/FS), Stage (Seed/A/ B/Growth).

Use cases

Use case 1: Fund‑level IRR

A. Import cashflows

Bulk (recommended):

  1. Cashflows → Ledgers → your ledger → Bulk import.

  2. Prepare a CSV with these columns:

    • date (YYYY‑MM‑DD)

    • amount (negative = contribution, positive = distribution)

    • currency (e.g., USD)

    • entity_name (portfolio company)

    • category_name (e.g., Capital Call, Distribution)

    • description (optional)

    • scenario_name (e.g., Actuals; blank defaults to your base scenario)

  3. Upload, resolve validation messages, then Import.

Example CSV

date,amount,currency,entity_name,category_name,description 2023-01-15,-1000000,USD,TechCo Inc,Capital Call,Series A investment 2023-03-20,-500000,USD,HealthStart LLC,Capital Call,Follow-on investment 2024-06-30,250000,USD,TechCo Inc,Distribution,Q2 dividend payment

Manual (one‑offs): Select Add cashflow, fill Amount, Date, Entity, Transaction type, Scenario, then Save.

Common import pitfall: Entity and transaction type names must match existing objects exactly.

B. Create the IRR metric

  1. Open Performance metrics → Create metric.

  2. Name it Fund III IRR.

  3. In the formula builder, add cashflow properties that map to your transaction types and enter:

    IRR(@[Capital Call], @[Distribution], @[Quarterly NAV])

  4. Set Period to Monthly (M), Quarterly (Q), or Yearly (Y).

  5. Choose Scenario: Actuals (or your default) and Save.

How it works: IRR() annualizes returns using all contributions (outflows), distributions (inflows), and the latest NAV as unrealized value.

C. Add to a dashboard

  1. Create/open a Dashboard → Add widget → Grid or Chart.

  2. Select the Fund namespace.

  3. Add Fund III IRR as a column/series.

  4. Optional grouping:

    • Group by Fund to isolate funds

    • Leave ungrouped to see portfolio‑level IRR

  5. Save to view a time series and/or current IRR snapshot.

Use case 2: Deal‑level IRR and yields

A. Confirm company‑level cashflows

Ensure each imported cashflow is linked to a specific Entity (portfolio company). Edit in place or re‑import if needed.

B. Create the company‑level metric

  1. Performance metrics → Create metric → name Company IRR.

  2. Use the same formula:

    IRR(@[Capital Call], @[Distribution], @[Quarterly NAV])

  3. Set Period and Scenario, then Save.

Key point: The formula is identical. The namespace and view determine whether you see fund‑ or company‑level results.

C. Compare companies

  1. New Dashboard → Grid widget → Company namespace.

  2. Add columns: Company name, Company IRR, optional Total Distributions, Total Contributions, DPI.

  3. Add Group by (e.g., Sector or Portfolio) and Sort by IRR (desc).

You’ll see a ranked table of companies with IRR and supporting metrics.

D. Segment analysis (optional)

  • Filter: Sector = Technology; Investment date ≥ 2022‑01‑01

  • Group: by Sector or Vintage year

Lumonic aggregates underlying cashflows to produce IRR per segment.

Advanced workflows

Scenarios: Actuals vs projections

  1. Cashflows → Ledgers → your ledger → Create scenario (e.g., Conservative Projection).

  2. Import projected cashflows tagged to this scenario.

  3. Compare scenarios side‑by‑side with filters or duplicate metrics per scenario.

Common comparisons: Actuals vs Budget; Base vs Upside; Pre‑ vs Post‑adjustment.

Levered vs unlevered views

If you use credit lines or other leverage:

  1. When editing a cashflow, open Adjustments.

  2. Add a Leverage adjustment with:

    • Date adjustment (shift by days)

    • Amount adjustment (e.g., interest accrual)

    • Reason (for auditability)

  3. In dashboards, toggle between Levered and Unlevered views.

This lets you isolate performance with and without financing effects.

Tags for multi‑dimensional analysis

  1. During import, pass tag values:

    {"tag_values_by_category": {"Sector": ["Technology"], "Geography": ["North America"]}}

  2. In dashboards, Group by tag categories and Filter to focus.

Example questions:

  • What’s our IRR for Technology in North America?

  • How do Series A deals compare to Series B?

External IDs (integrations)

  1. Cashflows → External IDs → create an identifier type (e.g., QuickBooks Transaction ID, system name quickbooks).

  2. Include external IDs when importing cashflows.

  3. Use them to reconcile with accounting or source systems.

Reference formulas

Our dashboard widgets will automatically create these formulas for you via clicking on the desired metric type. These are provided for reference only:

IRR (Internal Rate of Return)

IRR(@[Capital Call], @[Distribution], @[Quarterly NAV])

What it shows: Annualized return using realized and unrealized value.

DPI (Distributions to Paid‑In)

SUM(@[Distribution]) / SUM(@[Capital Call])

What it shows: Cash returned vs cash invested.

TVPI (Total Value to Paid‑In) / MOIC

(SUM(@[Distribution]) + LATEST(@[Quarterly NAV])) / SUM(@[Capital Call])

What it shows: Total value multiple (realized + unrealized) vs invested capital.

Troubleshooting

“My IRR seems wrong”

  • Ensure contributions are negative and distributions positive

  • Confirm all cashflows are linked to the correct Entity

  • Verify NAV values and dates are current

  • Check the reporting date range and scenario filters

“Company‑level IRR isn’t showing”

  • Each cashflow must have an Entity (company)

  • Your dashboard must use the Company namespace

  • The metric scope should evaluate at the company level

“Scenarios aren’t separating”

  • Each cashflow must have the intended scenario

  • Use dashboard Filters to isolate scenarios

  • Consider separate metrics per scenario if views overlap

“Bulk import failed”

  • Date format must be YYYY‑MM‑DD

  • Entity names must exactly match existing records

  • Transaction type names must match exactly

  • Remove special characters or stray whitespace in CSV

You’re set. With clean cashflows and a few reusable metrics, you’ll have always‑current views of fund and deal performance—ready for investment committees, LP updates, and quarterly closes.

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