Distribution to paid-in capital a key metric for general partners as they lag in tech, risk-preparedness: MSCI

[SINGAPORE] General partners are now concentrating on the distribution to paid-in capital (DPI) metric, said index provider MSCI in a survey on 130 general partners across the world on Tuesday (Jul 14).

Limited partners (LP) are now demanding a more tangible proxy for value and 67 per cent of LPs surveyed named DPI as their top strategic proxy. DPI is drawing the second-most investor attention, according to 38 per cent of general partners, after internal rate of return.

Distributions have remained muted in 2025, reaching just 13 per cent – less than half the levels seen in the most active distribution years of 2017 to 2018. This has led general partners to pursue liquidity solutions to meet LP demand, said MSCI.

Asia-Pacific general partners are also diverging from those from North America and Europe, pursuing fund recapitalisation at significantly higher rates rather than leaning into secondaries for liquidity.

Tech is an area where general partners feel they are lagging, with 48 per cent of them citing advanced data, technology and artificial intelligence capabilities the biggest capability gap in the sector.

This number rises to 63 per cent at mid-size firms and 54 per cent at large firms, suggesting that as operational complexity and portfolio volume grow, the limitations of its tech become harder to ignore.

While 84 per cent of general partners have moved beyond exploring AI to targeted pilots (35 per cent), operation integration (25 per cent) and using it as a strategic driver for investment decisions (18 per cent), the foundations have not kept up.

Only 12 per cent of general partners said they have achieved centralised data flow, with the majority (42 per cent) operating on partially connected tech systems. Another 32 per cent have standardised systems but are manual, and 13 per cent have siloed systems.

General partners are also grappling with risks, and their preparedness for it worries them the most.

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Those from Asia cited macro and financial concern as the highest risk (72 per cent), compared to 61 per cent in North America and 40 per cent in Europe. But the level of preparedness for macro and financial risks had a -14 per cent gap.

Regulatory and legal risks were the next highest for Asian general partners at 66 per cent, but the level of preparedness had a -17 per cent gap.

These concerns reflect real structural pressures around cross-border capital, regulatory volatility and geopolitical proximity, said MSCI in the survey.

Ben Wyburd, head of Apac private assets products at MSCI, said: “The gap between awareness and readiness leaves firms exposed to risks already on their horizon, pointing to the need for connected infrastructure built on integrated and reliable data systems to navigate a world of compounding risks and evolving LP expectations.”