Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q3 2022 Earnings Presentation
47 slides from Vinci Compass Investments's earnings presentation, Nov 9, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
Third Quarter 2022 Earnings Presentation November 09, 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 Sergio Passos Chief Operating Officer & Chief Financial Officer Bruno Zaremba Private Equity Chairman & Head of Investor Relations
Slide 4: Opening Remarks
Opening Remarks
Slide 5: Notable third quarter results with attractive dividend distribution
5 25 50 63 2018 2020 3Q'22 Vinci Partners reports notable results in the third quarter with attractive dividend distribution After - tax Adjusted DE 4 3Q22 R$73.2mm R$ 63 bn AUM¹ See notes and definitions at end of document Vinci Partners ended the third quarter of 2022 with R$63.4 bn in AUM¹ , push
Slide 6: Financial Highlights
Financial Highlights
Slide 7: Third Quarter 2022 Segment Earnings
7 Third Quarter 2022 Segment Earnings (Unaudited) See notes and definitions at end of document (R$ thousands, unless mentioned) 3Q'21 2Q'22 3Q'22 ∆ YoY(%) 3Q'21 YTD 3Q'22 YTD ∆ YoY(%) Net revenue from management fees 92,855 89,271 95,361 3% 269,476 271,861 1% Net revenue from advisory fees 25,163 6,
Slide 8: Third Quarter 2022 Highlights
8 ▪ Total assets under management (“AUM”) of R$63.4 billion, up 9% year - over - year. ▪ Fee - Earning AUM (“FEAUM”) of R$59.7 billion, up 7% year - over - year. ▪ New capital subscriptions of R$508 million in the quarter and R$4.2 billion over the 3Q ’22 LTM . ▪ Capital Return of R$161 million in t
Slide 9: AUM expansion across the platform, with highlight to long-term products
9 18 21 2 3 7 8 27 32 3Q'21 3Q'22 5-10 Years 10+ Years Perpetual or quasi-perpetual 20 24 12 11 24 25 56 60 3Q'21 3Q'22 Private Markets Liquid Strategies IP&S 22 28 13 11 24 25 58 63 3Q'21 3Q'22 Private Markets Liquid Strategies IP&S We continue to see AUM expansion across the platform, with highlig
Slide 10: Diversified platform across strategies and clients
10 33% 25% 22% 11% 9% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 25% 12% 6% 1% 4% 22% 15% 6% 9% Private Equity Real Estate Credit Vinci SPS Infrastructure IP&S Public Equities Hedge Funds Advisory 22% 9% 7% 3% 2% 40% 12% 5% Our AUM base favors al
Slide 11: Long-term upside from realization of performance fees
11 89% 11% Private Equity Infrastructure Vinci holds a strong long - term upside from realization of performance fees in private market funds Gross Accrued Performance Fees – Private Market Funds ▪ Performance fee receivable increased to R$154.8 million in the 3Q’22, a 6% increase quarter - over - q
Slide 12: Performance Fee Eligible AUM (PEAUM)
12 29% 22% 17% 10% 10% 7% 3% 2% Private Equity IP&S Public Equities Real Estate Credit Hedge Funds Vinci SPS Infrastructure PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Strategy/Fund AUM R$mm Index type Index Rate Status Offshore Vehicles 3,469 Preferred Return w/ Catch - Up² USD + 8% Within investment peri
Slide 13: Fee Related Revenues
13 93 95 25 7 118 103 3Q'21 3Q'22 Management fees Advisory fees 269 272 47 18 316 289 3Q'21 YTD 3Q'22 YTD Management fees Advisory fees 89 95 7 7 96 103 2Q'22 3Q'22 Management fees Advisory fees Fee Related Revenues 3Q ’ 22 vs. 3Q ’ 21 ( R$mm ) Fee Related Revenues Management fees remain the main co
Slide 14: Operating Expenses
14 75 57 57 62 16 19 13 13 160 152 3Q'21 YTD 3Q'22 YTD Bonus compensation Corporate center Segment Personnel expenses Other G&A 28 20 18 22 6 7 5 5 57 54 3Q'21 3Q'22 Bonus compensation Corporate center Segment Personnel expenses Other G&A Operating Expenses ▪ Total operating expenses of R$53.6 milli
Slide 15: Fee Related Earnings (FRE)
15 47 50 2Q'22 3Q'22 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE)¹ of R$49.5 million (R$0.89/share) in the quarter, up 6% quarter - over - quarter, driven by the strong fu ndraising across Private Markets, combined with the partial impact from the SPS acquisition², closed in mid - August.
Slide 16: Performance Related Earnings (PRE)
16 9 1 (5) (2) 4 (1) 3Q'21 3Q'22 Realized Unrealized 20 5 2 (1) 21 4 3Q'21 YTD 3Q'22 YTD Realized Unrealized Performance Related Earnings (PRE) ▪ Performance related earnings (PRE)¹ of negative R$0.5 million in the quarter. ▪ PRE¹ was R$4.0 million (R$0.07/share) over the 3Q’22 YTD , down 81% when c
Slide 17: Realized GP Investment and Financial income
17 19 77 2 13 21 89 3Q'21 YTD 3Q'22 YTD Realized Financial Income Realized GP Investment Income 32 1 6 2 37 3Q'21 3Q'22 Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$37.5 million in the 3Q ’ 22
Slide 18: Adjusted Distributable Earnings (DE)
18 62 73 3Q'21 3Q'22 164 192 3Q'21 YTD 3Q'22 YTD Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$73.2 million (R$1.32/share) in the quarter, up 19% year - over - year, driven by the incr ease in management fees and financial income in the quarter. ▪ Adjusted DE marg
Slide 19: Balance Sheet Highlights and Share Repurchase
19 24.37 25.38 2Q'22 3Q'22 Cash and Net Investments per share 4 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 2Q'22 3Q'22 Total Shares Repurchased (number of shares) 250,360 220,098 Total Capital Used for Share Repurchases 14.6 11.9 Remaining Share Repurchase Plan Authorizat
Slide 20: Segment Highlights
Segment Highlights
Slide 21: Financials by segment
21 55% 20% 20% 5% Private Markets Liquid Strategies IP&S Financial Advisory 53% 20% 22% 5% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$144.7 million over the 3Q’22 YTD, with 53% of FRE coming from Private Markets, followed by IP&S accoun
Slide 22: Private Markets
22 Private Equity 49% Real Estate 21% Credit 16% Vinci SPS 8% Infrastructure 6% Private Markets' AUM (R$ thousands, unless mentioned) 3Q'21 2Q'22 3Q'22 ∆ YoY (%) 3Q'21 YTD 3Q'22 YTD ∆ (%) Net revenue from management fees 49,057 47,654 52,949 8% 145,045 147,362 2% Net revenue from advisory fees 823 2
Slide 23: Liquid Strategies
23 (R$ thousands, unless mentioned) 3Q'21 2Q'22 3Q'22 ∆ YoY (%) 3Q'21 YTD 3Q'22 YTD ∆ (%) Net revenue from management fees 23,273 20,210 20,720 - 11% 66,276 61,502 - 7% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues 23,273 20,210 20,720 - 11% 66,276 61,502 - 7% Segment p
Slide 24: IP&S
24 Separate Mandates 63% Pension Plans 16% International 11% Commingled Funds 10% IP&S AUM (R$ thousands, unless mentioned) 3Q'21 2Q'22 3Q'22 ∆ YoY (%) 3Q'21 YTD 3Q'22 YTD ∆ (%) Net revenue from management fees 20,525 21,407 21,692 6% 58,154 62,995 8% Net revenue from advisory fees 8 7 7 - 11% 47 21
Slide 25: Financial Advisory
25 Financial Advisory ▪ Fee related earnings (FRE) of R$3.6 million in the quarter, down 76% year - over - year. ▪ FRE was R$7.6 million over the 3Q’22 YTD, a decrease of 70% when compared to the 3Q’21 YTD, due to a stronger deal environmen t i n 2021. ▪ Segment Distributable Earnings over the 3Q’22
Slide 26: Vinci Retirement Services
26 (R$ thousands, unless mentioned) 3Q'21 2Q'22 3Q'22 ∆ YoY (%) 3Q'21 YTD 3Q'22 YTD ∆ (%) Net revenue from management fees – – – – – – – Net revenue from advisory fees – – – – – – – Total Fee Related Revenues – – – – – – – Segment personnel expenses – (308) (386) N/A – (791) – Other G&A expenses – (
Slide 27: Supplement Details
Supplement Details
Slide 28: AUM and Fee-Earning AUM Rollforward
28 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 September 30, 2022 For the Three Months Ended September 30, 2022 For the Twelve Months Ended September 30, 2022 For the Twelve M
Slide 29: Fund performance for liquid strategies
29 Fund Segment NAV¹ (R$ millions) 3Q22 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 530.1 5.9% 9.1% 5.8% 10.6% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 465.2 5.4% 9.9% 5.5% 9.8% CDI 4 CDI 4 Vinci Total Return Hedge Funds 250.9 14.2% 9.1% 0.2% 10.2% IPCA 5 + Yield
Slide 30: Private markets funds track record
30 Fund Segment Vintage year Committed Capital Invested Capital Realized or Unrealized Total Value Gross MOIC Gross MOIC Gross IRR Gross IRR Partially Realized (R$mm) (R$mm) (R$mm) (R$mm) (R$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 211 5,276 4.4x 4.0x 71.5% 77.2% VCP
Slide 31: Shareholder Dividends
31 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 DE per Common Share (US$)² 0.34 0.20 0.24 0.19 0.21 0.26 Actual Dividend per C
Slide 32: Share Summary
32 Share Summary ▪ Common Shares Outstanding as of quarter end of 55,358,858 shares. x Repurchased 220,098 common shares in the quarter, with an average share price of US$10.3. x Repurchased 1,554,730 common shares since the announcement of the first share repurchase plan, with an average share pric
Slide 33: GP fund investments and capital commitments
33 (R$ millions, unless mentioned) Segment 3Q’22 Commitments Total Capital Committed 3Q’22 Capital Called Total Capital Called Capital Returned/ Dividends Payed (3Q'22) Accumulated Capital Returned/Dividends Payed Fair value of investments Nordeste III Private Equity – 5.0 – 3.1 0.3 1.6 3.2 VCP III
Slide 34: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 35: Income statement summary
35 (R$ thousands, unless mentioned) 3Q'21 2Q'22 3Q'22 ∆ YoY(%) 3Q'21 YTD 3Q'22 YTD ∆ YTD (%) REVENUES Net revenue from management fees 92,855 89,271 95,361 3% 269,476 271,861 1% Net revenue from performance fees 5,610 3,839 31 - 99% 34,185 7,042 - 79% Realized performance fees 12,646 3,839 2,602 - 7
Slide 36: FRE and DE reconciliation
36 (R$ thousands, unless mentioned) 3Q'21 2Q'22 3Q'22 3Q'21 YTD 3Q'22 YTD OPERATING PROFIT 66,924 49,314 49,023 189,781 144,296 ( - ) Net revenue from realized performance fees (12,646) (3,839) (2,602) (31,734) (8,977) ( - ) Net revenue from unrealized performance fees 7,036 – 2,571 (2,451) 1,935 (+
Slide 37: Effective tax rate reconciliation
37 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 3Q'21 3Q'22 3Q’21 YTD 3Q’22 YTD Profit (loss) before income taxes 63,004 80,279 191,326 195,433 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at
Slide 38: General and Administrative Expenses
38 13.8 26.0 1.8 9.0 0.9 2.5 2.6 General and Administrative Expenses 3 Q 2021 ( R$mm ) 3Q 2022 ( R$mm ) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$56.7 mm Personnel Bonus related to Mgmt. and Adv. fees Performa
Slide 39: Liabilities and equity
39 Liabilities and equity 6/30/2022 9/30/2022 Current liabilities Trade payables 313 768 Deferred Revenue – 16,713 Leases 23,218 22,293 Accounts payable 6,941 6,761 Labor and social security obligations 44,038 66,208 Loans and Financing – 10,171 Taxes and contributions payable 17,990 19,474 Total cu
Slide 40: Notes and Definitions
40 Notes and Definitions ▪ Notes to page 5 (1) AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding double counting from co - managed funds between our segments. (2) CAGR is calculated c
Slide 41: Notes and Definitions (cont'd.)
41 Notes and Definitions (cont’d.) (3) Hurdle Rate is the minimum return the fund must achieve before it can charge performance fees. In most cases, funds with hur dle rate also are under a high - water mark clause . (4) Funds with preferred return must return 100% of invested capital corrected by t
Slide 42: Notes and Definitions (cont'd.)
42 Notes and Definitions (cont’d.) ▪ Notes to page 19 (1) Cash and cash equivalents include certificate of deposits and federal bonds. Certificate of deposits are issued by Banco Bra desco (credit rating AAA evaluated by Fitch Ratings) with interest rates variable from 99.5% to 101% of CDI (interban
Slide 43: Notes and Definitions (cont'd.)
43 Notes and Definitions (cont’d.) (5) Track record for FIP Infra is presented as of 2Q’22. (6) Track record for VIAS is presented as of 3Q’22. (7) Track record for VFDL is presented as of 3Q’22. ▪ Notes to page 31 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD
Slide 44: Notes and Definitions (cont'd.)
44 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 45: Notes and Definitions (cont'd.)
45 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 46: Funds/strategies' descriptions
46 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 strateg
Slide 47: Rio de Janeiro 2159 6000 Av. Bartolomeu Mitre, Leblon - 22431 - 002 São
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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