Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Investor Presentation (November 2022)
55 slides from Vinci Compass Investments's investor presentation, Nov 22, 2022
Slide 1: Investor Presentation November 2022
Investor Presentation November 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: Business Overview
Business Overview
Slide 4: We are a leading, full-service alternative asset manager in Brazil
4 We are a leading, full - service alternative asset manager in Brazil R$ 63 bn AUM¹ See notes and definitions at end of document 10 Business Strategies 31 98 127 232 192 2018 2019 2020 2021 3Q'22 YTD Adjusted DE ( R$mm ) 7.4% LTM Dividend Yield 4 US$0.20 3Q’22 Dividend Per Share Our business is pro
Slide 5: We offer a complete portfolio of alternative investment products and solutions
5 We offer a complete portfolio of alternative investment products and solutions to both retail and institutional clients Research Risk Legal & Compliance Investor Relations Operations ESG Public Equities Long - term positions based on fundamental analysis of Brazilian publicly - traded companies Fi
Slide 6: Our AUM is highly diversified across different strategies
6 Our AUM is highly diversified across different strategies Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric 49 % of net revenues come from private market strategies ² 50 % of AUM is in long term products ¹ See notes and definitions at end of docum
Slide 7: Our AUM funding base is mostly built upon our proprietary distribution channels
7 36% 19% 20% 20% 5% 40% 47% 8% 6% 43% 38% 20% 33% 25% 22% 11% 9% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles Our AUM funding base is mostly built upon our proprietary distribution channels Private . Markets . ▪ Private Markets’ AUM base favors lo
Slide 8: Financial Highlights
Financial Highlights
Slide 9: We started a strong cycle for fundraising in Private Markets
9 We started a strong cycle for fundraising in Private Markets over the next 12 - 18 months R$10 bn Target Fundraising across Private Markets (2022 - 2023 Cycle) VICA Real Estate/Credit ▪ We announced a joint venture with Chrimata , for the development of a new agribusiness strategy focused on land
Slide 10: We have a resilient business model with high management fee centricity
10 93 95 25 7 118 103 3Q'21 3Q'22 147 224 271 361 20 11 29 67 166 235 300 428 2018 2019 2020 2021 Management Advisory 269 272 47 18 316 289 3Q'21 YTD 3Q'22 YTD 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 We have a resil
Slide 11: Vinci holds a strong position for future realization of performance fees
11 89% 11% Private Equity Infrastructure Vinci holds a strong position for future realization of performance fees in private market funds… ▪ Performance fee receivable increased to R$154.8 million in the 3Q’22, a 6% increase quarter - over - quarter. ▪ The VCP strategy¹ in Private Equity accounted f
Slide 12: Additional gains from GP Investments and financial income
12 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 …and additional gains from our GP Investments and financial income ▪ Realized GP Investment¹ and Financial income² of R$37.5
Slide 13: Highly visible growth and profitability profile
13 62 73 3Q'21 3Q'22 164 192 3Q'21 YTD 3Q'22 YTD 169 140 3Q'21 YTD 3Q'22 YTD 63 50 3Q'21 3Q'22 Which translates to a highly visible growth and profitability profile See notes and definitions at end of document 31 98 127 232 2018 2019 2020 2021 42% 50% 34% DE Margin 33% 18% ▪ Fee - Related Earnings (
Slide 14: Key Takeaways
14 Key Takeaways See notes and definitions at end of document 73 % FRE as % DE 3Q ’ 22YTD We operate a highly predictable business model with recurring revenues coming primarily from management fees 1 We see a relevant upside coming from potential future realization of performance fees R$154.8 m ill
Slide 15: Appendix – I Business Overview
Appendix – I Business Overview
Slide 16: We have scaled our platform significantly since our inception in 2009
16 2 6 11 15 17 18 20 19 21 24 35 47 54 60 50 58 63 0 10 20 30 40 50 60 70 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3Q22 AUM (R$bn) AUM DC¹ (R$bn) Brazil Interest Rates We have scaled our platform significantly since our inception in 2009… See notes and definitions at end of
Slide 17: We are pioneers among Brazilian firms in our commitment to ESG
17 We are pioneers among Brazilian firms in our commitment to ESG See notes and definitions at end of document Our ESG approach is a fundamental value that permeates throughout our investment strategies Vinci Energia Sustentavel (VES) - Credit Fund focused on private debt related to green energy fun
Slide 18: We place a strong emphasis on risk management
18 Risk management committee composed and supervised by senior executives including the addition of Julya Wellish as a partner and head of Legal & Compliance (Previously Chief Prosecutor at CVM 1 ) We place a strong emphasis on risk management, taking the utmost care of our clients ’ capital ▪ Manda
Slide 19: A leader in Brazilian alternative asset management with strong competitive advantages
19 We are a leader in Brazilian alternative asset management with strong competitive advantages AUM CAGR 2018 – 3Q22 ~30% 50% of Net Revenues come from Private Market Strategies 6 50% of AUM committed for over 5 years Diversified business model 10 business units Partnership model: 38 partners Vinci
Slide 20: Appendix – II Segment summaries
Appendix – II Segment summaries
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: Complete and diversified platform for alternative investments: Private Equity and Real Estate
22 We offer a complete and diversified platform for alternative investments Private Equity – R$13.7bn AUM (49%) Real Estate – R$5.9bn AUM (21%) PRIVATE MARKETS R$28 BILLION AUM The real estate strategy invests through two subs - strategies : REITs : The real estate strategy currently manages eight R
Slide 23: Complete and diversified platform: Infrastructure and Credit
23 We offer a complete and diversified platform for alternative investments PRIVATE MARKETS R$28 BILLION AUM The Infrastructure strategy invests across two core sub - strategies : Sector - focused funds : The Infrastructure team manages closed - end funds as its flagship strategy, seeking exposure t
Slide 24: Private Markets segment results
24 Private Equity 49% Real Estate 21% Credit 16% Vinci SPS 8% Infrastructure 6% Private Markets' AUM (R$ 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 25: Established liquid strategies platform
25 We have an established and widely recognized liquid strategies platform LIQUID STRATEGIES R$11 BILLION AUM Vinci Partners has a long track record and deep experience investing in public equities in Brazil . We focus on holding positions in companies for three to five years following deep analysis
Slide 26: Liquid Strategies segment results
26 Public Equities 73% Hedge Funds 27% Liquid Strategies' AUM (R$ 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 Reve
Slide 27: Investment Products & Solutions
27 Commingled Funds – R$2.4bn AUM (10%) Our focused commingled funds are owned by multiple clients, from retail to institutional investors, and deploy capital in specific asset classes within defined investment strategies . Our flagship strategies are Vinci Valorem, focusing on fixed income assets,
Slide 28: IP&S segment results
28 Separate Mandates 63% Pension Plans 16% International 11% Commingled Funds 10% IP&S AUM (R$ 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 2
Slide 29: We have a leading financial advisory business
29 We have a leading financial advisory business About our Financial Advisory team Our financial advisory services team provides financial and strategic services to business owners, senior corporate management teams and boards of directors, focusing mostly on pre - IPO and M&A advisory services for
Slide 30: Financial Advisory results
30 Financial Advisory ▪ Fee related earnings (FRE) of R$3.6 million in the quarter, down 76% year - over - year. ▪ FRE was R$7.6 million over the 3Q’22 YTD, a decrease of 70% when compared to the 3Q’21 YTD, due to a stronger deal environmen t i n 2021. ▪ Segment Distributable Earnings over the 3Q’22
Slide 31: Vinci Retirement Services segment results
31 (R$ 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 32: Appendix – III Financial statements
Appendix – III Financial statements
Slide 33: How to analyze Vinci Partners' financial model
33 How to analyze Vinci Partners’ financial model Fee Related Earnings (FRE) (+) Management fees: our main source of revenues, derived from fees charged over our Fee - Earning AUM (+) Advisory fees: fees charged over advisory services provided by our financial advisory and management teams ( - ) Ope
Slide 34: Third Quarter 2022 Segment Earnings
34 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 35: Income statement
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 (
Slide 36: FRE and Distributable Earnings 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$56.7 mm Personnel Bonus related to Mgmt. and Adv. fees Performa
Slide 39: Liabilities and equity
39 Liabilities and equity 6/30/2022 9/30/2022 Current liabilities Trade payables 313 768 Deferred Revenue – 16,713 Leases 23,218 22,293 Accounts payable 6,941 6,761 Labor and social security obligations 44,038 66,208 Loans and Financing – 10,171 Taxes and contributions payable 17,990 19,474 Total cu
Slide 40: Supplement Details
Supplement Details
Slide 41: AUM and Fee-Earning AUM Rollforward
41 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ 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 42: Fund NAV and performance
42 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 43: Private markets fund returns
43 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 211 5,276 4.4x 4.0x 71.5% 77.2% VCP
Slide 44: Shareholder Dividends
44 Shareholder Dividends ($ 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 45: Share Summary
45 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$10.3. x Repurchased 1,554,730 common shares since the announcement of the first share repurchase plan, with an average share pric
Slide 46: Proprietary capital commitments in funds
46 (R$ millions, unless mentioned) Segment 3Q’22 Commitments Total Capital Committed 3Q’22 Capital Called Total Capital Called Capital Returned/ Dividends Paid ( 3Q'22 ) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 – 3.1 0.3 1.6 3.2 VCP III
Slide 47: Performance fee eligible AUM
47 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$mm Index type Index Rate Status Offshore Vehicles 3,469 Preferred Return w/ Catch - Up² USD + 8% Within investment peri
Slide 48: Notes and Definitions
48 ▪ Notes to page 4 (1) AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding double counting from co - managed funds between our segments. (2) As of 3Q’22 LTM. (3) CAGR is calculated co
Slide 49: Notes and Definitions (cont'd)
49 Notes and Definitions (cont’d) ▪ Notes to page 17 (1) Fund commitment and related co - investments. ▪ Notes to page 1 8 (1) CVM ( Comissão de Valores Mobiliários ) is the Brazilian equivalent to the SEC. ▪ Notes to page 19 (1) Independent asset manager classification excludes any managers that ar
Slide 50: Notes and Definitions (cont'd)
50 Notes and Definitions (cont’d) ▪ Notes to page 37 (1) Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000.00 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's sub
Slide 51: Notes and Definitions (cont'd)
51 Notes and Definitions (cont’d) ▪ Notes to page 44 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 5.1006, as of November 7, 2022 , w hen dividends were approved by our Board of Directors. (2) Per Share calculations are based on end of period Particip
Slide 52: Notes and Definitions (cont'd.)
52 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 53: Notes and Definitions (cont'd.)
53 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 54: Funds/strategies' descriptions
54 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 55: 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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