Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q4 2021 Earnings Presentation
49 slides from Vinci Compass Investments's earnings presentation, Feb 24, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Presentation
Fourth Quarter and Full Year 2021 Earnings Presentation February 24, 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward - looking statements that can be identified by the use of words such as “anticipate,” “believe, ” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. By their nature, forward - looking statements are necessarily subje
Slide 3: Presenters
3 Presenters Alessandro Horta Chief Executive Officer Bruno Zaremba Private Equity Chairman & Head of Investor Relations Sergio Passos Chief Operating Officer & Chief Financial Officer
Slide 4: Opening Remarks
Opening Remarks
Slide 5: Vinci Partners reports notable results in 2021, powered by growth across segments
5 Vinci Partners reports notable results in 2021, powered by growth across segments We continue to deliver strong results across the board backed by management and advisory fees FRE R$ 54 .0mm 4 Q ' 21 + 43 % YoY Which translates into substantial amounts of free cash flow After - tax DE R$68.5mm 4 Q
Slide 6: We are well positioned for continuous and solid growth
6 We are well positioned for continuous and solid growth Overview of our 2021 achievements New ESG committee 14 funds recognized as the best in the industry Women on Board Seal Our first marketing campaign: “Reputation is the best Investment ” + R$10 bn in Private Markets funds Target fundraising in
Slide 7: Financial Highlights
Financial Highlights
Slide 8: Financial results table 4Q'21 and FY'21
8 (R$ thousands, unless mentioned) 4Q'20 4Q'21 ∆ (%) FY'20 FY'21 ∆ (%) Net revenue from management fees 76,025 91,594 20% 271,266 361,070 33% Net revenue from advisory fees 6,061 20,148 232% 28,842 66,755 131% Total Fee Related Revenues 82,086 111,742 36% 300,108 427,825 43% Segment personnel expens
Slide 9: Fourth Quarter and Full Year 2021 Highlights
9 ▪ Total assets under management (“AUM”) of R$57.2 billion, up 15% year - over - year. ▪ Fee - Earning AUM (“FEAUM”) of R$55.0 billion, up 15% year - over - year. ▪ Performance fee - eligible AUM (“PEAUM”) of R$35.2 billion at the end of the quarter. ▪ Net inflows of negative R$393.1 million in the
Slide 10: Vinci raised R$7.8 billion in 2021
10 Vinci raised R$7.8 billion in 2021, a resilient and robust growth in AUM despite a volatile and challenging macro scenario ▪ Outflows of R$393 million in the quarter, representing less than 1% decrease in AUM, confirming the platform’s resilience when compared to the significant outflows seen in
Slide 11: We are starting in 2022 a strong cycle for fundraising in Private Markets
11 / We are starting in 2022 a strong cycle for fundraising in Private Markets Vinci Capital Partners IV (VCP IV) Vinci Impact Climate Change (VICC) Vinci Debêntures Infra - Credit We have a target fundraising of R$10 billion for our Private Markets’ closed - end funds… ▪ VCP IV is the fourth vintag
Slide 12: AUM is growing across the platform
12 AUM is growing across the platform… ▪ Total assets under management (AUM) of R$57.2 billion, up 15% year - over - year, driven by strong fundraising across Private Market strategies and exclusive mandates in IP&S. Liquid Strategies’ AUM was impacted by market depreciation, following losses in the
Slide 13: Diversified AUM and revenue mix
13 24% 10% 4% 6% 22% 15% 6% 13% Private Equity Real Estate Credit Infrastructure IP&S Public Equities Hedge Funds Advisory 36% 23% 22% 10% 9% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 20% 10% 5% 4% 41% 15% 5% Our AUM base favors alpha - driven s
Slide 14: Accrued performance fees in private market funds
14 Vinci holds a strong position for future realization of performance fees in private market funds Accrued Performance Fees – Private Market Funds ▪ Performance fee receivable increased to R$101.9 million in the 4Q’21, a 37% increase quarter - over - quarter, driven mostly by appr eciation in the V
Slide 15: Significant exposure to performance fee-eligible AUM
15 Significant exposure to performance fee - eligible AUM ▪ Total Performance fee eligible AUM (PEAUM) of R$35.2 billion. ▪ Hurdle rate funds charge performance based on the fund’s return over its benchmark, generally with a high - watermark clause, except for the SWF mandate in Public Equities. ▪ W
Slide 16: Fee related revenues are expanding alongside AUM growth
16 271 361 29 67 300 428 FY'20 FY'21 Management fees Advisory fees 76 92 6 20 82 112 4Q'20 4Q'21 Management fees Advisory fees Fee related revenues are expanding alongside AUM growth Management fees remain the main contributor to revenues, accounting for 78% of total revenues in the FY’21. ▪ Fee rel
Slide 17: Operating Expenses
17 59% 36% 5% Change in compensation structure Board and Support teams hirings Third-party services Operating Expenses ▪ Total operating expenses of R$58.8 million in the quarter, up 13% year - over - year. ▪ This increase was in part driven by new recurring costs related to becoming a public compan
Slide 18: Fee Related Earnings (FRE)
18 151 222 FY'20 FY'21 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$54.0 million (R$0.96/share) in the quarter, up 43% year - over - year, driven by the robust growth i n management fees across all segments and higher advisory fees in the quarter. FRE was R$222.5 million (R$3.93/shar
Slide 19: Performance Related Earnings (PRE)
19 21 29 6 (5) FY'20 FY'21 Realized Unrealized Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$2.4 million (R$0.04/share) in the quarter, down 84% year - over - year, due to local market’ s volatility in the second half of the year. ▪ Realized performance fees of R$13.6
Slide 20: Realized GP Investment and Financial income
20 1 10 12 1 22 4Q'20 4Q'21 Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$21.5 million in the 4Q ' 21, up 3,640% year - over - year, driven by realized gains in our liquid funds' portfolio and
Slide 21: Distributable Earnings (DE)
21 127 232 FY'20 FY'21 37 69 4Q'20 4Q'21 Distributable Earnings (DE) ▪ Distributable Earnings (DE) of R$68.5 million (R$1.22/share) in the quarter, up 86% year - over - year, driven by the notable growth in management and advisory fees, additional to the impact in performance fees and GP Investment
Slide 22: Balance Sheet Highlights
22 Balance Sheet Highlights ▪ As of December 31, 2021, Vinci Partners had R$1.5 billion (R$26.43/share) in total cash and net investments, that comprise ca sh, cash equivalents and net investments (liquid funds and GP fund investments at fair value). ▪ Vinci Partners repurchased 407,841 shares in th
Slide 23: Segment Highlights
Segment Highlights
Slide 24: Financials by segment
24 48% 18% 20% 14% Private Markets Liquid Strategies IP&S Financial Advisory 48% 19% 17% 16% Financials by segment ▪ Fee Related Earnings (FRE) were R$222.5 million in the FY’21, with 48% of FRE coming from Private Markets, followed by Liquid St rategies accounting for 19%, IP&S for 17% and Financia
Slide 25: Private Markets
25 Private Markets ▪ Fee related earnings (FRE) of R$26.9 million in the quarter, up 22% year - over - year. FRE was R$106.0 million in the FY’21, an inc rease of 24% when compared to the FY’20, driven by the strong fundraising in 2021, with the final closing of VIR IV, follow - on offerings in REIT
Slide 26: Liquid Strategies
26 Public Equities 73% Hedge Funds 27% Liquid Strategies' AUM (R$ thousands, unless mentioned) 4Q'20 4Q'21 ∆ (%) FY'20 FY'21 ∆ (%) Net revenue from management fees 15,372 20,510 33% 61,444 86,786 41% Net revenue from advisory fees - - N/A - - N/A Total Fee Related Revenues 15,372 20,510 33% 61,444 8
Slide 27: IP&S
27 Separate Mandates 64% International 14% Commingled Funds 13% Pension Plans 9% IP&S' AUM (R$ thousands, unless mentioned) 4Q'20 4Q'21 ∆ (%) FY'20 FY'21 ∆ (%) Net revenue from management fees 14,513 21,645 49% 46,140 79,799 73% Net revenue from advisory fees 28 7 - 75% 124 54 - 56% Total Fee Relate
Slide 28: Financial Advisory
28 Financial Advisory (R$ thousands, unless mentioned) 4Q'20 4Q'21 ∆ (%) FY'20 FY'21 ∆ (%) Net revenue from management fees - - N/A - - N/A Net revenue from advisory fees 5,940 18,457 211% 27,714 61,048 120% Total Fee Related Revenues 5,940 18,457 211% 27,714 61,048 120% Segment personnel expenses (
Slide 29: Supplement Details
Supplement Details
Slide 30: AUM and Fee-Earning AUM Rollforward
30 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ millions Fee - Earning Assets Under Management (FEAUM) – R$ millions For the Three Months Ended December 31, 2021 For the Three Months Ended December 31, 2021 For the Twelve Months Ended December 31, 2021 For the Twelve Mont
Slide 31: Investment records – IP&S, Liquid Strategies, Credit and Listed Funds
31 Investment records – IP&S, Liquid Strategies, Credit and Listed Funds Fund Segment NAV¹ (R$ millions) 4Q21 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 703.1 1.4% 2.7% 2.7% 6.3% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 557.8 0.0% - 4.0% - 4.0% 1.8% CDI 4 CDI 4 V
Slide 32: Investment records – Closed End Private Markets funds
32 Investment records – Closed End Private Markets funds Fund Segment Vintage year Committed Capital (R$mm) Invested Capital (R$mm) Realized or Partially Realized (R$mm) Unrealized (R$mm) Total Value (R$mm) Gross MOIC (BRL) Gross MOIC (USD) Gross IRR (BRL) Gross IRR (USD) Fund 1 Private Equity 2004
Slide 33: Shareholder Dividends
33 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 Distributable Earnings (R$) 101,976 61,743 68,515 Distributable Earnings (US$)³ 19,397 11,377 13,637 DE per Common Share (US$)¹ 0.34 0.20 0.24 Actual Dividend per Common Share² 0.30 0.16 0.20 Record Date September 01,2021 December 01,2021
Slide 34: Share Summary
34 Share Summary VINP Shares 4Q ' 20 (Pre IPO) 1Q ' 21 2Q ' 21 3Q ' 21 4Q'21 Class B 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 Class A – Partnership Units 27,175,861 27,175,861 27,175,861 27,175,861 27,175,861 Class A - Public Float N/A 15,271,488 15,094,833 14,921,318 14,513,477 Common
Slide 35: GP Commitment in Private Market funds
35 GP Commitment in Private Market funds (R$ millions, unless mentioned) Segment 4Q ' 21 Total Capital 4Q ' 21 Total Capital Capital Returned/ Accumulated Capital Fair value Fund Commitments Committed Dividends Payed Returned/ of investments Capital Called Called (4Q ' 21) Dividends Payed Nordeste I
Slide 36: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 37: Reconciliation of revenues and expenses
37 (R$ thousands, unless mentioned) 4Q'20 4Q'21 ∆ (%) FY’20 FY’21 ∆ (%) REVENUES Net revenue from management fees 76,025 91,594 20% 271,266 361,070 33% Net revenue from performance fees 22,526 3,448 - 85% 39,784 37,633 - 5% Realized performance fees 17,654 13,614 - 23% 29,866 45,348 52% Unrealized p
Slide 38: FRE and PRE reconciliation
38 (R$ thousands, unless mentioned) 4Q'20 4Q'21 FY'20 FY'21 OPERATING PROFIT 52,634 56,349 178,017 246,130 ( - ) Net revenue from realized performance fees (17,654) (13,614) (29,866) (45,348) ( - ) Net revenue from unrealized performance fees (4,872) 10,166 (9,918) 7,715 (+) Compensation allocated i
Slide 39: Effective tax rate reconciliation
39 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 4Q'20 4Q'21 FY'20 FY'21 Profit (loss) before income taxes, including Dividends to partners 53,335 66,516 174,970 257,842 (+) Dividends to Partners, related to management, advisory and p
Slide 40: General and Administrative Expenses
40 10.8 17.3 7.5 9.7 1.1 3.0 2.5 11.7 23.4 1.1 7.1 1.1 3.1 4.9 2.9 3.4 General and Administrative Expenses 4Q 2020 (R$mm) 4Q 2021 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$52.0 mm Personnel Bonus relate
Slide 41: Balance Sheet Results
41 Balance Sheet Results Assets 12/31/2020 12/31/2021 Current assets Cash and cash equivalents 83,449 102,569 Cash and bank deposits 13,096 21,679 Financial instruments at fair value through profit or loss 70,353 80,890 Financial instruments at fair value through profit or loss 8,253 1,372,926 Trade
Slide 42: Notes and Definitions
42 Notes and Definitions ▪ Notes to page 5 (1) AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding VIFI from Credit and Pension Products Co - managed with IP&S from Equities. (2) Source
Slide 43: Notes and Definitions (cont'd.)
43 Notes and Definitions (cont’d.) (3) Hurdle Rate is the minimum return the fund must achieve before it can charge performance fees. In most cases, funds with hur dle rate also are under a high - water mark clause . (4) Funds with preferred return must return 100% of invested capital corrected by t
Slide 44: Notes and Definitions (cont'd.)
44 Notes and Definitions (cont’d.) ▪ Notes to page 20 (1) GP investment income comes from proprietary investments made by Vinci Partners in its own Private Markets’ funds. (2) Financial income is income generated through investments made with our cash and cash equivalents in cash and bank deposit s,
Slide 45: Notes and Definitions (cont'd.)
45 Notes and Definitions (cont’d.) (2) Total commitments for VCP III include R$1.3 billion in co - investments . ▪ Notes to page 33 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 5.0243, as of February 23, 202 2, when dividends were approved by our Boa
Slide 46: Notes and Definitions (cont'd.)
46 Notes and Definitions (cont’d.) ▪ “Fee related earnings”, or “FRE”, is a metric to monitor the baseline performance of, and trends in, our business, in a manne r t hat does not include performance fees or investment income. We calculate FRE as operating profit less (a) net revenue from realized p
Slide 47: Notes and Definitions (cont'd.)
47 Notes and Definitions (cont’d.) ▪ “Net revenue from Fund Management and Advisory” is a performance measure that we use to assess our ability to generate profit s f rom our fund management and advisory business without measuring for the outcomes from funds above their respective benchmarks. We cal
Slide 48: Funds/strategies' descriptions
48 Funds/strategies’ descriptions ▪ Vinci Multiestratégia: The fund seeks to achieve long - term returns by investing in fixed income assets, through strategies that imply interest rates and currency risks. ▪ Vinci Atlas: The fund seeks to achieve long - term returns by investing across all strategi
Slide 49: Office locations
Rio de Janeiro 55 21 2159 6000 Av. Bartolomeu Mitre, 336 Leblon - 22431 - 002 São Paulo 55 11 3572 3700 Av. Brigadeiro Faria Lima, 2.277 14 o andar Jardim Paulistano - 01452 - 000 Recife 55 81 3204 6811 Av. República do Líbano, 251 - Sala 301 Torre A - Pina - 51110 - 160 Nova York 1 646 559 8000 780
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