Patria Investments Limited · NASDAQ:PAX
Patria Investments — Investor Presentation (February 2022)
37 slides from Patria Investments's investor presentation, February 2022
Slide 1: Patria Investments (Nasdaq:PAX) Investor Presentation
São Paulo Bogotá Montevideo Santiago Patria Investments (Nasdaq:PAX) Investor Presentation FEBRUARY 2022
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by the use of words such as “outlook,
Slide 3: Intro to Patria | History & Investment Platform
Intro to Patria | History & Investment Platform USD ~24 BN IN AUM BUILT OVER 30+ YEARS OF HISTORY IPO: PAX @Nasdaq 2021 Combination with CAGR 2.1 2014 Launch of LatAm 21% 0.4 Private Equity Organic CAGR focused strategies 2.2 16% Q4 2021 9.0 Infrastructure 2010 Partnership with Blackstone YE 2009 $2
Slide 4: Drawdown Flagship Products | Fundraising
Drawdown Flagship Products | Fundraising OUR PERFORMANCE HAS ALLOWED US TO SCALE OUR FLAGSHIP PRODUCTS… AND WE BELIEVE THIS CAN CONTINUE PE VI (2019) PE IV (2011) PE V (2015) • Patria has demonstrated PE III (2007) the ability to raise capital USD USD USD in many different 2.7 Bn USD 0.6 Bn 1.3 Bn 1
Slide 5: Drawdown Flagship Products | Returns
Drawdown Flagship Products | Returns ROBUST PERFORMANCE AT ATTRACTIVE PREMIUM TO LATAM & EMERGING MARKETS PUBLIC EQUITIES Private Equity Infrastructure Pooled Returns Pooled Returns Cash Weighted1 14% 21% Cash Weighted1 5% 18% Equal Weighted2 30% 31% Equal Weighted2 11% 24% USD Cash-weighted net IRR
Slide 6: Drawdown Flagship Products | Proven Investment Approach
Drawdown Flagship Products | Proven Investment Approach WE HAVE DEVELOPED A REPLICABLE “INVESTMENT TECHNOLOGY” USED ACROSS OUR PRODUCTS Sector Strategy: Rigorous & efficient Focus on operational Gradual and Associative Specialized in resilient framework for investing leverage & value disciplined por
Slide 7: Drawdown Flagship Products | Focus on Growing & Resilient Sectors
Drawdown Flagship Products | Focus on Growing & Resilient Sectors PATRIA PRIVATE EQUITY STRATEGY POSITIONED TO CAPTURE THE BEST PART OF LATAM GROWTH The Importance of Sector Selection in the Region Strong Alpha Generation vs Sector Benchmarks² Breakdown of Brazil’s GDP Growth in 20201 MSCI ACWI Russ
Slide 8: Platform Overview | Breakdown by Asset Class
Platform Overview | Breakdown by Asset Class Currency Exposure Effective Mgmt. Asset Class AUM FEAUM by Structure Fee Basis Duration Hard / Soft (%) Fee Rate Private Equity $9.0bn $4.9bn 100% Drawdown Funds Deployed Capital at Cost Long-dated & Illiquid 99% / 1% 1.9% Hybrid: Committed/ 97% Drawdown
Slide 9: Financials | Strong Financial Profile Based on Key Industry Metrics
Financials | Strong Financial Profile Based on Key Industry Metrics FAST GROWING & STICKY FEE EARNING AUM, ATTRACTIVE MARGIN & SUBSTANTIAL PERFORMANCE FEE CAPACITY Fee Earning AUM Fee Related Earnings & Margin Net Accrued Performance Fees Private Equity (US$ in billions) (US$ in millions) (US$ in mi
Slide 10: Client Base | Long-lasting Relationships with Investors
Client Base | Long-lasting Relationships with Investors OUR SOLID, DIVERSIFIED AND SOPHISTICATED GLOBAL CLIENT BASE IS A KEY DRIVER OF OUR GROWTH PLAN Large, Influential & Sophisticated Clients supporting us through vintages and across business units 500+ 1020 World’s largest 5 10 US’s largest 7 10
Slide 11: Growth Strategy | Three Pillars of Expansion
Growth Strategy | Three Pillars of Expansion OUR PLATFORM IS WELL-POSITIONED TO CONTINUE GROWING THROUGH ORGANIC AND INORGANIC OPPORTUNITIES 1. Scale existing 2. Product 3. Strategic M&A strategies development ▪ Continue to consistently ▪ Develop products to attract ▪ Platforms scale our flagship Pr
Slide 12: Team | Seasoned Leadership Team with Demonstrated Succession
Team | Seasoned Leadership Team with Demonstrated Succession DEEPLY INGRAINED CULTURE ATTRACTS AND RETAINS TOP INVESTMENT TALENT Board members Management Team Olimpio Matarazzo Experience (Yrs) Patria (Yrs) Partners highly devoted to Patria SMP & CEO Co-founder, SMP, Chairman of the Board and Chairm
Slide 13: 2021 Highlights
2021 Highlights PATRIA
Slide 14: Highlights
Highlights $1.02 per share of DE FEAUM up 132% YoY 28% Mgmt. Fee Growth FY21 vs FY20 in 2021, equivalent to a Total AUM up 52% FRE Growth1 FY21 vs FY20 5% yield at IPO price 65% YoY 59% FRE Margin in 2021 Completed combination with We expect FRE to increase by $348 mn Moneda Asset more than Net Accr
Slide 15: Fee Related Earnings ("FRE")
Fee Related Earnings (“FRE”) FY21 Fee Revenues1 Real Estate 1% Advisory & Distribution Public Equities 2% $86.0 million Credit 3% 5% ▪ FY21 FRE of $86.0 +52% US$ million was up 52% from $71.3 million 146 mn 57% Private Equity FY20 adjusted for Adjustment for Infrastructure 32% comparable compensatio
Slide 16: Net Accrued Performance Fees
Net Accrued Performance Fees • Net Accrued Performance Fees were $348 million on December 31, 2021, up 11% from $314 million on September 30, 2021, primarily driven by portfolio appreciation in our third Infrastructure Fund • On a full year basis, Net Accrued Performance Fees grew by 26%, or 47% whe
Slide 17: Total Assets Under Management
Total Assets Under Management ▪ Total AUM of $23.8 billion as of December 31, 2021, including the addition of Moneda’s platform, up 65% compared to $14.4 billion one year ago ▪ $1.3 billion of year-over-year AUM increase was driven by the appreciation of underlying portfolio investments ▪ 67% of Tot
Slide 18: Portfolio Activity - Drawdown Funds
Portfolio Activity - Drawdown Funds Total Deployment1 ($mn) ▪ Total Deployment of $733 million in 4Q21 and $2.5bn (Invested + Reserved) 4Q21 FY21 Total 733 2,545 for the FY21 Private Equity 391 1,644 o Private Equity deployed $391 million into its Infrastructure 305 755 agribusiness, cybersecurity a
Slide 19: Fee Earning Assets Under Management & Management Fees
Fee Earning Assets Under Management & Management Fees ▪ Fee Earning AUM (FEAUM) of $17.9 billion up 132% YoY including the combination with Moneda completed in December 2021, and up 20% YoY on an organic basis ▪ Management Fees of $145 million were up 28% YoY, driven by strong deployment in Private
Slide 20: Patria's Fourth Quarter 2021 Earnings
Patria’s Fourth Quarter 2021 Earnings ▪ Distributable Earnings (“DE”) of $27.7 million in 4Q21, and $141.3 million for the full year (US$ in millions) 4Q20 4Q21 %∆ FY20 FY21 %∆ Management Fees 29.7 42.1 42% 112.9 144.7 28% (+) Incentive Fees 3.3 4.9 3.5 4.9 (+) Advisory Fees and Other Revenues 0.2 0
Slide 21: Outlook
Outlook We expect 2022 Fee Related Earnings to increase by more than 50% relative to 2021 with an FRE margin in the low 50% range Our Net Accrued Performance Fees have grown to $348 million, up 26% YoY, and we aim to move earlier vintage funds, such as Private Equity Fund V, further into the harvest
Slide 22: Appendix
Appendix PATRIA 2
Slide 23: Patria & Kamaroopin | The Inception of Our Growth Equity Strategy
Patria & Kamaroopin | The Inception of Our Growth Equity Strategy On December 8, 2021 Patria announced the launch of its Growth Equity Strategy through the partnership with Kamaroopin and their talented investment team Why Add Growth Equity? Why Kamaroopin? Deal Structure & Timeline ▪ Complementary
Slide 24: Patria's Earnings – 5 Quarter View
Patria’s Earnings – 5 Quarter View (US$ in millions) 4Q20 1Q21 2Q21 3Q21 4Q21 FY20 FY21 Management Fees 29.7 31.3 33.0 38.2 42.1 112.9 144.7 (+) Incentive Fees 3.3 - - 0.0 4.9 3.5 4.9 (+) Advisory Fees and Other Revenues 0.2 - - - 0.7 2.5 0.7 (–) Taxes on Revenues (1) (1.4) (0.7) (0.8) (0.8) (1.5) (
Slide 25: Investment Performance - Drawdown Funds
Investment Performance - Drawdown Funds Committed Deployed Total Unrealized Realized Total Net Returns (i n Thous a nds , Except Where Noted) Capital + Reserved Invested Investments Investments Value Total Value Value Value Value Gross MOIC Net IRR Net IRR % Fund (Vintage) (USD) (USD) (USD) (USD) (U
Slide 26: Investment Performance - Credit & Public Equities
Investment Performance - Credit & Public Equities Compounded Annualized Net Returns Functional Strategy AUM Primary Fund Excess Return Asset Class Strategy Since Currency (USD Mn) AUM (USD Mn) 1yr 3yr 5yr Since Incep. Incep. Latam High Yield (2000) USD 3,325 2,294 10.5% 5.8% 6.6% 11.5% 388 bps Credi
Slide 27: Total AUM Roll Forward (unaudited)
Total AUM Roll Forward (unaudited) Twelve Months Ended Advisory & Private Equity Infrastructure Credit Public Equities Real Estate Total December 31, 2021 ($mn) Distribution AUM 4Q20 8,627 4,710 242 260 569 - 14,408 Acquisitions1 - - 4,733 2,088 - 2,146 8,967 Inflows2 15 139 - 22 - - 175 Outflows3 (
Slide 28: Total FEAUM Roll Forward (unaudited)
Total FEAUM Roll Forward (unaudited) Twelve Months Ended Advisory & Private Equity Infrastructure Credit Public Equities Real Estate Total December 31, 2021 ($mn) Distribution FEAUM 4Q20 3,347 3,318 116 256 676 - 7,713 Acquisitions1 - - 4,733 2,081 - 1,888 8,702 Inflows2 1,671 394 123 23 11 - 2,222
Slide 29: Patria's Fourth Quarter 2021 IFRS Results (unaudited)
Patria’s Fourth Quarter 2021 IFRS Results (unaudited) ▪ GAAP Net Income was US$13.3 million for 4Q21 and US$121.3 million for the full year (US$ in millions) 4Q20 4Q21 FY20 FY21 Revenue from management fees (1) 29.7 42.1 112.9 144.7 Revenue from incentive fees 3.3 4.9 3.5 4.9 Revenue from performanc
Slide 30: Reconciliation of IFRS to Non-GAAP Measures (unaudited)
Reconciliation of IFRS to Non-GAAP Measures (unaudited) (US$ in millions) 4Q20 1Q21 2Q21 3Q21 4Q21 FY20 FY21 Management Fees 29.7 31.3 33.0 38.2 42.1 112.9 144.7 (+) Incentive Fees 3.3 - - 0.0 4.9 3.5 4.9 (+) Advisory Fees and Other Revenues 0.2 - - - 0.7 2.5 0.7 (–) Taxes on Revenues (1.4) (0.7) (0
Slide 31: IFRS Balance Sheet Results (unaudited)
IFRS Balance Sheet Results (unaudited) (US$ in millions) 12/31/2020 12/31/2021 (US$ in millions) 12/31/2020 12/31/2021 Assets Liabilities and Equity Cash and cash equivalents 14.1 15.3 Client funds payable (1) - 78.2 Client funds on deposit (1) - 78.2 Consideration payable on acquisition (8) - 19.1
Slide 32: Understanding Patria's P&L
Understanding Patria’s P&L FEE RELATED EARNINGS & DISTRIBUTABLE EARNINGS ARE KEY PROFITABILITY MEASURES FOR THE INDUSTRY FY21 Management Fees 144.7 Primary operating revenue stream – Contractual recurring fees based on Fee Earning AUM Incentive Fees 4.9 Earned on certain perpetual capital vehicles –
Slide 33: Management Fee Revenue: Understanding the Mechanics
Management Fee Revenue: Understanding the Mechanics MANAGEMENT FEES FOR FLAGSHIP FUNDS ARE CHARGED SEMI-ANNUALLY & RECOGNIZED OVER NEXT TWO QUARTERS Illustrative example for a fund with management fees charged on invested capital… ($mm) Inflows to FEAUM (Capital Deployed or $500 $500 $500 $500 Reser
Slide 34: Notes
Notes Notes to page 16 – Net Accrued Performance Fees (1) Other includes Private Equity funds III and IV, and Infrastructure fund II Notes to page 18 – Portfolio Activity - Drawdown Funds (1) Total Deployment represents the incremental capital invested or reserved for investments in drawdown funds d
Slide 35: Notes
Notes Notes to page 29 – Patria’s Fourth Quarter 2021 IFRS Results (unaudited) (1) Increase in management fee revenues from prior year due to an increase in capital deployed by Private Equity Fund VI and management fees for December 2021 from Moneda acquisition (2) Increase in revenues due to perfor
Slide 36: Notes
Notes Notes to Page 31 – IFRS Balance Sheet Results (unaudited) (1) Receivables and payables from and to clients, related to Moneda brokerage activities (2) The December 31, 2021, balance includes IPO proceeds (3) The increase in current account receivable includes US$ 33.5 million of performance fe
Slide 37: Definitions
Definitions • Distributable Earnings (DE) is used to assess our performance and capabilities to distribute dividends to shareholders. DE is calculated as FRE deducted by current income tax expense, plus net realized performance fees, net financial income/(expenses), and other income/(expenses). DE i
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