Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — FY2022 Earnings Presentation
49 slides from Vinci Compass Investments's earnings presentation, Feb 14, 2023
Slide 1: Fourth Quarter and Full Year 2022 Earnings Presentation
Fourth Quarter and Full Year 2022 Earnings Presentation February 14, 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: Vinci Partners ends 2022 with solid growth against local markets
5 Vinci Partners ends 2022 with solid growth against local markets, pushed by fundraising across Private Market strategies DEPS² FY22 R$4.47 R$ 63 bn AUM¹ Vinci Partners ended the fourth quarter of 2022 with R$63 bn in AUM¹ , a 10% growth year - over - year. Our business has proven to be profitable
Slide 6: Why VRS? Increasing exposure to the growing Pension Plan industry
6 Why VRS? VRS launch to increase Vinci's exposure to the growing Pension Plan industry Brazilian complementary open - ended pension plan industry represents over R$1 trillion in total addressable market , growing at a double - digit rate in the last few years Secular trend of decentralization from
Slide 7: Vinci Retirement Services is expected to launch in early 2023
7 Vinci Retirement Services is expected to launch in early 2023 ▪ VRS will offer tailor made solutions designed to fit every investor profile and help individuals reach their retirement goals ▪ Costumers will have easy access to information to enhance the user experience and quick responses regardin
Slide 8: Financial Highlights
Financial Highlights
Slide 9: Financial results summary table
9 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY(%) FY’21 FY’22 ∆ YoY(%) Net revenue from management fees 91,594 95,361 99,640 9% 361,070 371,501 3% Net revenue from advisory fees 20,148 7,267 4,394 (78)% 66,755 21,994 (67)% Total Fee Related Revenues 111,742 102,628 104,034 (7)% 427,825 3
Slide 10: Fourth Quarter and Full Year 2022 Highlights
10 ▪ Total assets under management (“AUM”) of R$63.1 billion, up 10% year - over - year. ▪ Fee - Earning AUM (“FEAUM”) of R$59.4 billion, up 8% year - over - year. ▪ New capital subscriptions of R$ 1.7 billion in the quarter and R$5.8 billion over the FY’22 . ▪ Capital Return of R$ 338 million in th
Slide 11: AUM expansion across the platform, with highlight to long-term products
11 18 22 2 3 7 7 27 32 4Q'21 4Q'22 5-10 Years 10+ Years Perpetual or quasi-perpetual 20 25 11 10 24 24 55 59 4Q'21 4Q'22 Private Markets Liquid Strategies IP&S 22 29 12 10 24 24 57 63 4Q'21 4Q'22 Private Markets Liquid Strategies IP&S We continue to see AUM expansion across the platform, with highli
Slide 12: Diversified AUM base and management fee-centric revenue
12 34% 24% 23% 11% 8% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 27% 13% 7% 2% 4% 21% 15% 6% 5% Private Equity Real Estate Credit Vinci SPS Infrastructure IP&S Public Equities Hedge Funds Advisory 22% 9% 8% 3% 3% 38% 12% 5% Our AUM base favors al
Slide 13: Long-term upside from realization of performance fees
13 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$167.5 million in the 4Q'22, an 8% increase quarter - over -
Slide 14: Fee Related Revenues
14 361 372 67 22 428 393 FY'21 FY'22 Management fees Advisory fees 92 100 20 4 112 104 4Q'21 4Q'22 Management fees Advisory fees Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 91% of total revenues over the FY’22 ▪ Fee related revenues totaled R$104.0 mi
Slide 15: Operating Expenses
15 Operating Expenses ▪ Total operating expenses of R$56.3 million in the quarter, down 4% year - over - year. ▪ Total operating expenses of R$208.5 million during the FY'22, a decrease of 5% when compared to the FY’21. ▪ Disregarding bonus compensation, Personnel, Corporate center and G&A expenses
Slide 16: Fee Related Earnings (FRE)
16 43 52 11 1 (1) 54 51 4Q'21 4Q'22 FRE Asset Management FRE Advisory FRE VRS Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE)¹ of R$51.3 million (R$0.93/share) in the quarter, up 4% quarter - over - quarter, driven by fundraising a cross Private Markets in the quarter, combined with the full
Slide 17: Performance Related Earnings (PRE)
17 24 8 FY'21 FY'22 2 4 4Q'21 4Q'22 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE)¹ of R$4.0 million in the quarter, up 70% year - over - year. ▪ PRE¹ was R$8.0 million (R$0.07/share) over the FY’22, down 66% when compared to the FY’21, that posted higher contributions c omi
Slide 18: Realized GP Investment and Financial income
18 Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$17.7 million in the 4Q'22, down 18% year - over - year, driven by realizations in FIP Infra Transmissão, which occurred in the 4Q’21. ▪ Realized GP Investment income of R$7.5 million in the quarter, c
Slide 19: Adjusted Distributable Earnings (DE)
19 Adjusted Distributable Earnings (DE) ▪ Distributable Earnings (DE)¹ of R$55.8 million (R$1.01/share) in the quarter, down 19% year - over - year, due to higher advisory fe es and higher realized GP investment income in the fourth quarter of 2021. ▪ DE margin for the quarter was 43%, down 4.1 perc
Slide 20: Balance Sheet Highlights and Share Repurchase Activity
20 23.16 22.63 3Q'22 4Q'22 Net Cash and Net Investments per share 5 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 3Q'22 4Q'22 Total Shares Repurchased (number of shares) 220,098 278,122 Total Capital Used for Share Repurchases 11.9 14.7 Remaining Share Repurchase Plan Author
Slide 21: Segment Highlights
Segment Highlights
Slide 22: Financials by segment
22 59% 19% 19% 3% Private Markets Liquid Strategies IP&S Financial Advisory 56% 19% 21% 4% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$197.6 million over the FY'22, with 56% of FRE coming from Private Markets, followed by IP&S accounting
Slide 23: Private Markets
23 Private Equity 48% Real Estate 20% Credit 18% Vinci SPS 7% Infrastructure 7% Private Markets' AUM (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ YoY (%) Net revenue from management fees 49,439 52,949 59,699 21% 194,483 207,061 6% Net revenue from advisory fees 1,684 56
Slide 24: Liquid Strategies
24 Public Equities 72% Hedge Funds 28% Liquid Strategies' AUM (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ YoY (%) Net revenue from management fees 20,510 20,720 19,823 (3)% 86,786 81,325 (6)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues 2
Slide 25: IP&S
25 Separate Mandates 66% Pension Plans 14% International 11% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ YoY (%) Net revenue from management fees 21,645 21,692 20,119 (7)% 79,799 83,114 4% Net revenue from advisory fees 7 7 7 3% 54 28 (48)%
Slide 26: Financial Advisory
26 Financial Advisory ▪ Fee related earnings (FRE) of R$0.6 million in the quarter, down 94% year - over - year. ▪ FRE was R$8.2 million over the FY'22, a decrease of 77% when compared to the FY'21, due to a stronger deal environment in 202 1. ▪ Segment Distributable Earnings over the FY'22 were R$8
Slide 27: Vinci Retirement Services segment results
27 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) 4Q'21 YTD 4Q'22 YTD ∆ (%) Net revenue from management fees – – – – – – – Net revenue from advisory fees – – – – – – – Total Fee Related Revenues – – – – – – – Segment personnel expenses – (386) (334) N/A – (1,125) N/A Other G&A expenses
Slide 28: Supplement Details
Supplement Details
Slide 29: AUM and Fee-Earning AUM Rollforward
29 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 30, 2022 For the Three Months Ended December 30, 2022 For the Twelve Months Ended December 30, 2022 For the Twelve Mont
Slide 30: Fund performance by segment
30 Fund Segment NAV¹ (R$ millions) 4Q’22 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 468.5 2.5% 11.8% 11.8% 14.8% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 438.7 (1.5)% 8.2% 8.2% 3.9% CDI 4 CDI 4 Vinci Total Return Hedge Funds 218.0 (5.3)% 3.3% 3.3% 20.9% IPCA 6 +
Slide 31: Private markets fund track record
31 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 213 5,278 4.4x 4.0x 71.5% 77.2% VCP
Slide 32: Shareholder Dividends
32 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 DE per Common Share (US$)² 0.34 0.20 0.24 0.19 0.21 0.26 0
Slide 33: Share Summary
33 Share Summary ▪ Common Shares Outstanding as of quarter end of 55,080,736 shares. x Repurchased 278,122 common shares in the quarter, with an average share price of US$10.0. x Repurchased 1,832,852 common shares since the announcement of the first share repurchase plan, with an average share pric
Slide 34: Proprietary fund investments and commitments
34 (R$ millions, unless mentioned) Segment 4Q’22 Commitments Total Capital Committed 4Q’22 Capital Called Total Capital Called Capital Returned/Dividends Paid (4Q'22) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 0.0 3.1 – 1.6 2.4 VCP III Pri
Slide 35: Performance fee eligible AUM
35 30% 21% 16% 9% 10% 7% 4% 3% Private Equity IP&S Public Equities Real Estate Credit Hedge Funds Infrastructure Vinci SPS PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Strategy/Fund AUM R$mm Index type Index Rate Status Offshore Vehicles 3,737 Preferred Return w/ Catch - Up² USD + 8% Within investment perio
Slide 36: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 37: Income statement reconciliation
37 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ (%) REVENUES Net revenue from management fees 91,594 95,361 99,640 9% 361,070 371,501 3% Net revenue from performance fees 3,448 31 7,558 119% 37,633 14,600 (61)% Realized performance fees 13,614 2,602 9,241 (32)% 45,348 1
Slide 38: FRE and DE reconciliation
38 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 FY'21 FY'22 OPERATING PROFIT 56,349 49,023 55,321 246,130 199,616 ( - ) Net revenue from realized performance fees (13,614) (2,602) (9,241) (45,348) (18,218) ( - ) Net revenue from unrealized performance fees 10,166 2,571 1,683 7,715 3,618 (+) Co
Slide 39: Effective tax rate reconciliation
39 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 4Q'21 4Q'22 FY21 FY'22 Profit (loss) before income taxes 66,516 76,381 257,842 271,814 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at statutory
Slide 40: General and Administrative Expenses
40 General and Administrative Expenses 4Q 2021 (R$mm) 4Q 2022 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$58.8 mm Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party
Slide 41: Liabilities and equity
41 Liabilities and equity 9/30/2022 12/30/2022 Current liabilities Trade payables 768 1,247 Deferred Revenue 16,713 – Leases 22,293 24,147 Accounts payable 6,761 7,328 Labor and social security obligations 66,208 87,732 Loans and Obligations 10,171 13,168 Taxes and contributions payable 19,474 22,29
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 double counting from co - managed funds between our segments. (2) Adjusted Distributab
Slide 43: Notes and Definitions (cont'd.)
43 Notes and Definitions (cont’d.) ▪ Notes to page 18 (1) GP investment income comes from proprietary investments made by Vinci Partners in its own Private Markets’ funds and othe r c losed - end funds across Liquid Strategies and IP&S segments with long - term lockups. (2) Financial income is incom
Slide 44: Notes and Definitions (cont'd.)
44 Notes and Definitions (cont’d.) (8) IFIX is an index composed by listed REITs in the Brazilian stock Market. (9) If IMAB 5 Average is: i . less or equal to 2%, X=3% per year; ii. between 2% - 4%, X= Average IMAB 5+1% per year; iii. Between 4% - 5%, X=5% per year; IV. g reater or equal to 5%, X= I
Slide 45: Notes and Definitions (cont'd.)
45 Notes and Definitions (cont’d.) (5) IPCA is a broad consumer price index measured by the IBGE. (6) IMAB 5 is composed by government bonds indexed to IPCA with up to 5 years in duration. (7) IBOV is the Brazilian stock market's most relevant index; (8) FTSE is London's stock market most relevant i
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 strateg
Slide 49: Office addresses and contact details
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
Vinci Partners Investments — FY2022 Earnings Presentation on 6ix