Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q1 2022 Earnings Presentation
47 slides from Vinci Compass Investments's earnings presentation, May 10, 2022
Slide 1: First Quarter 2022 Earnings Presentation
First Quarter 2022 Earnings Presentation May 10, 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 reports solid results and announces launch of VRS
5 Vinci Partners reports solid results and announces the launch of VRS, our new Retirement Services segment After - tax Adjusted DE³ R$57.7 1Q’22 R$57 bn AUM¹ See notes and definitions at end of document R$1.1 bn Capital Return FIP Energia PCH Vinci Partners ended the first quarter of 2022 with R$57
Slide 6: Financial Highlights
Financial Highlights
Slide 7: Financial results table 1Q'22
7 (R$ thousands, unless mentioned) 1Q'21 1Q'22 ∆ (%) 1Q’21 LTM 1Q’22 LTM ∆ (%) Net revenue from management fees 81,843 87,229 7% 290,211 366,456 26% Net revenue from advisory fees 15,066 3,674 - 76% 27,936 55,363 98% Total Fee Related Revenues 96,909 90,903 - 6% 318,147 421,819 33% Segment personnel
Slide 8: First Quarter 2022 Highlights
8 ▪ Total assets under management (“AUM”) of R$56.7 billion, up 3 % year - over - year. ▪ Fee - Earning AUM (“FEAUM”) of R$54.6 billion, up 4 % year - over - year. ▪ Performance fee - eligible AUM (“PEAUM”) of R$34.9 billion at the end of the quarter. ▪ Net inflows of negative R$ 875 .4 million in t
Slide 9: Our AUM remains resilient throughout market cycles
9 Our AUM remains resilient throughout market cycles… ▪ Total assets under management (AUM) of R$56.7 billion, up 3% year - over - year, driven primarily by strong fundraising coming from exclusive mandates in IP&S. ▪ In the first quarter of 2022 the fund FIP Energia PCH, managed by the Infrastructu
Slide 10: AUM and revenue diversification
10 24% 11% 4% 6% 22% 15% 7% 11% Private Equity Real Estate Credit Infrastructure IP&S Public Equities Hedge Funds Advisory 19% 9% 6% 3% 41% 17% 5% 36% 23% 23% 9% 9% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles Our AUM base favors alpha - driven str
Slide 11: Accrued performance fees in private market funds
11 81% 19% Private Equity Infrastructure Vinci holds a strong position for future realization of performance fees in private market funds Gross Accrued Performance Fees – Private Market Funds ▪ Performance fee receivable increased to R$104.6 million in the 1Q’22, a 3% increase quarter - over - quart
Slide 12: Significant exposure to performance fee-eligible AUM
12 Significant exposure to performance fee - eligible AUM ▪ Total Performance fee eligible AUM (PEAUM) of R$34.9 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 13: Fee related revenues
13 Fee related revenues Management fees remain the main contributor to revenues, accounting for 81% of total revenues over the 1Q’22 LTM ▪ Fee related revenues, composed of management and advisory fees, totaled R$90.9 million in the quarter, down 6% year - over - year du e to a greater contribution
Slide 14: Operating Expenses
14 Operating Expenses ▪ Total operating expenses of R$48.1 million in the quarter, down 4% year - over - year. ▪ Total operating expenses of R$217.4 during the 1Q’22 LTM , an increase of 21% when compared to the 1Q’21 LTM . This increase was partially driven by new recurring costs related to becomin
Slide 15: Fee Related Earnings (FRE)
15 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$43.8 million (R$0.78/share) in the quarter, down 13% year - over - year, due to a greater contributi on from advisory fees in the 1Q’21 following the closing of the pre - IPO advisory for B3 listed company Espaço Laser. ▪ FRE was R$216.
Slide 16: Performance Related Earnings (PRE)
16 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$2.1 million (R$0.04/share) in the quarter, down 68% year - over - year, due to higher perfor mance contributions coming from international exclusive mandates in IP&S in 1Q’21. Most of our open - end funds charge performa
Slide 17: Realized GP Investment and Financial income
17 Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$27.0 million in the 1Q ’ 22, up 469% year - over - year, driven by realized gains in our liquid funds' portfolio. ▪ Realized GP Investment income of R$2.0 million in the quarter, coming primarily from
Slide 18: Adjusted Distributable Earnings (DE)
18 138 243 1Q'21 LTM 1Q'22 LTM Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$57.7 million (R$1.03/share) in the quarter, up 22% year - over - year. ▪ Adjusted DE margin for the quarter was 48%, up 5.4 percentage points when compared to the 1Q’21. Adjusted DE margi
Slide 19: Share Repurchase Activity and Balance Sheet Highlights
19 Share Repurchase Activity (in R$ million, unless mentioned) 4Q'21 1Q'22 Total Shares Repurchased (number of shares) 407,841 326,261 Total Capital Used for Share Repurchases 26.8 21.2 Remaining Share Repurchase Plan Authorization 32.4 11.2 Average Price Paid Per Share (US$) 11.4 12.3 (in R$ millio
Slide 20: Segment Highlights
Segment Highlights
Slide 21: Financials by segment
21 49% 20% 18% 13% Financials by segment ▪ Fee Related Earnings (FRE) were R$216.1 million over the 1Q’22 LTM, with 49% of FRE coming from Private Markets, followed by Liq uid Strategies accounting for 20%, IP&S for 18% and Financial Advisory for 13%. ▪ Segment Distributable Earnings were R$255.9 mi
Slide 22: Private Markets segment highlights
22 ▪ Fee related earnings (FRE) of R$24.9 million in the quarter, up 4% year - over - year. FRE was R$106.8 million over the 1Q’22 LTM, a n increase of 21% when compared to the 1Q’21 LTM, driven by the strong fundraising over the last twelve months. ▪ Segment Distributable Earnings of R$26.9 million
Slide 23: Private Markets financial table
23 (R$ thousands, unless mentioned) 1Q'21 1Q'22 ∆ (%) 1Q'21 LTM 1Q'22 LTM ∆ (%) Net revenue from management fees 19,983 20,573 3% 64,679 87,376 35% Net revenue from advisory fees - - N/A - - N/A Total Fee Related Revenues 19,983 20,573 3% 77,324 87,376 13% Segment personnel expenses (1,293) (1,384)
Slide 24: IP&S segment
24 Separate Mandates 66% Commingled Funds 12% International 12% Pension Plans 10% IP&S AUM (R$ thousands, unless mentioned) 1Q'21 1Q'22 ∆ (%) 1Q'21 LTM 1Q'22 LTM ∆ (%) Net revenue from management fees 15,280 19,897 30% 52,335 84,416 61% Net revenue from advisory fees 19 7 - 64% 96 42 - 56% Total Fee
Slide 25: Financial Advisory
25 Financial Advisory (R$ thousands, unless mentioned) 1Q'21 1Q'22 ∆ (%) 1Q'21 LTM 1Q'22 LTM ∆ (%) Net revenue from management fees - - N/A - - N/A Net revenue from advisory fees 14,541 3,201 - 78% 27,055 49,708 84% Total Fee Related Revenues 14,541 3,201 - 78% 27,055 49,708 84% Segment personnel ex
Slide 26: Retirement Services
26 Retirement Services (R$ thousands, unless mentioned)/ 1Q'21 1Q'22 ∆ (%) 1Q'21 LTM 1Q'22 LTM ∆ (%) Net revenue from management fees - - N/A - - N/A Net revenue from advisory fees - - N/A - - N/A Total Fee Related Revenues - - N/A - - N/A Segment personnel expenses - (97) N/A - (97) N/A Other G&A e
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 March 31, 2022 For the Three Months Ended March 31, 2022 For the Twelve Months Ended March 31, 2022 For the Twelve Months Ended
Slide 29: Investment records – IP&S, Liquid Strategies, Credit and Listed Funds
29 Investment records – IP&S, Liquid Strategies, Credit and Listed Funds Fund Segment NAV¹ (R$ millions) 1Q22 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 503.1 3.1% 3.1% 5.9% 8.1% CDI4 CDI4 Atlas Strategy² Hedge Funds 542.4 4.2% 4.2% 1.4% 3.2% CDI4 CDI4 Vinci Tot
Slide 30: Investment records – Closed End Private Markets funds
30 Pro Forma Historical Portfolio Performance - Excluding PIPE Investments¹ 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$mm) Gross MOIC (BRL) Gro
Slide 31: Shareholder Dividends
31 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 Distributable Earnings (US$)³ 19,397 11,377 13,637 10,615 DE per Common Share (US$)¹ 0.34 0.20 0.24 0.19 Actual Dividend per Common Share² 0.30 0.16 0.20 0.17 Record Date Septe
Slide 32: Share Summary
32 Share Summary ▪ Common Shares Outstanding as of quarter end of 55,829,316 shares. x Repurchased 326,261 common shares in the quarter, with an average share price of US$12.3. x Repurchased 1,084,272 common shares since the announcement of the share repurchase plan, with an average share price of U
Slide 33: GP Commitment in Private Market funds
33 GP Commitment in Private Market funds ▪ As of March 31, 2022, the company had R$451.4 million in capital commitments signed to proprietary Private Markets funds. ▪ During the first quarter of 2022, the company signed R$269.0 million in capital commitments to proprietary Private Markets fu nds . ▪
Slide 34: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 35: Revenues and expenses reconciliation
35 (R$ thousands, unless mentioned) 1Q'21 1Q'22 ∆ (%) 1Q’21 LTM 1Q’22 LTM ∆ (%) REVENUES Net revenue from management fees 81,843 87,229 7% 290,211 366,456 26% Net revenue from performance fees 9,951 3,172 - 68% 53,711 30,854 - 43% Realized performance fees 9,529 2,536 - 73% 38,301 38,355 0% Unrealiz
Slide 36: FRE and PRE reconciliation
36 (R$ thousands, unless mentioned) 1Q'21 1Q'22 1Q'21 LTM 1Q'22 LTM OPERATING PROFIT 56,858 45,959 192,841 235,231 ( - ) Net revenue from realized performance fees (9,529) (2,536) (38,301) (38,355) ( - ) Net revenue from unrealized performance fees (422) (636) (15,410) 7,501 (+) Compensation allocat
Slide 37: Effective tax rate reconciliation
37 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 1Q'21 1Q'22 1Q’21 LTM 1Q’22 LTM Profit (loss) before income taxes, not - including Dividends to partners 60,245 57,045 225,833 254,642 Combined statutory income taxes rate - % 34% 34% 3
Slide 38: General and Administrative Expenses
38 13.1 18.5 3.3 8.7 0.9 2.4 3.0 15.2 17.3 1.0 8.4 1.0 2.6 2.7 General and Administrative Expenses 1 Q 2021 (R$mm) 1 Q 2022 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$50.0 mm Personnel Bonus related to M
Slide 39: Balance Sheet Results
39 Balance Sheet Results Assets 12/31/2021 3/31/2022 Current assets Cash and cash equivalents 102,569 38,516 Cash and bank deposits 21,679 9,109 Financial instruments at fair value through profit or loss 80,890 29,407 Financial instruments at fair value through profit or loss 1,372,926 1,324,292 Tra
Slide 40: Notes and Definitions
40 Notes and Definitions ▪ Notes to page 5 (1) AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding VIFI from Credit and Pension Products Co - managed with IP&S from Equities. (2) Source
Slide 41: Notes and Definitions (cont'd.)
41 Notes and Definitions (cont’d.) (3) Hurdle Rate is the minimum return the fund must achieve before it can charge performance fees. In most cases, funds with hur dle rate also are under a high - water mark clause . (4) Funds with preferred return must return 100% of invested capital corrected by t
Slide 42: Notes and Definitions (cont'd.)
42 Notes and Definitions (cont’d.) ▪ Notes to page 19 (1) Cash and cash equivalents include certificate of deposits and federal bonds. Certificate of deposits are issued by Banco Bra desco (credit rating AAA evaluated by Fitch Ratings) with interest rates variable from 99.5% to 101% of CDI (interban
Slide 43: Notes and Definitions (cont'd.)
43 Notes and Definitions (cont’d.) ▪ Notes to page 31 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 5.0171, as of May 5, 2022, whe n d ividends were approved by our Board of Directors. (2) Per Share calculations are based on end of period Participatin
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 strategi
Slide 47: Office addresses
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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