Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Investor Presentation (August 2022)
58 slides from Vinci Compass Investments's investor presentation, Aug 17, 2022
Slide 1: Investor Presentation August 2022
Investor Presentation August 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 VINCI partners
Slide 4: Leading, full-service alternative asset manager in Brazil
4 We are a leading, full - service alternative asset manager in Brazil R$ 62 bn Proforma AUM¹ See notes and definitions at end of document 10 Business Strategies 31 98 127 232 119 2018 2019 2020 2021 2Q'22 YTD Adjusted DE ( R$mm ) 6 .5% LTM Dividend Yield 4 US$0.17 2Q’22 Dividend Per Share Our busin
Slide 5: Launch of Special Situations segment with acquisition of SPS Capital
5 Vinci Partners announced the launch of its new Special Situations segment with the acquisition of SPS Capital ▪ SPS Capital is led by a highly - experienced and top performing team with extensive experience in Special Situations investments in Brazil ▪ Transaction will increase Vinci's product off
Slide 6: Vinci & SPS pro forma AUM
6 13.0 5.2 4.3 1.5 2.0 25.7 7.1 2.8 Private Equity Real Estate Credit Infrastructure Vinci SPS IP&S Public Equities Hedge Funds 13.0 5.2 4.3 1.5 25.7 7.1 2.8 Vinci & SPS | AUM Proforma as of June 30, 2022 R$60 bn AUM 2Q’22 R$62 bn AUM 2Q’22 ProForma Vinci Partners Vinci Partners & SPS Proforma 28 30
Slide 7: Vinci Partners & SPS: Consolidating Private Markets
7 Vinci Partners & SPS | Consolidating Private Markets Transaction with SPS fills a strategic gap within our Private Markets product offering Vinci SPS SPS Capital will join Vinci Partners’ Private Markets as a new business line, with three vintages in its flagship strategy Equity Investments Closed
Slide 8: Complete portfolio of alternative investment products and solutions
8 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 9: AUM diversified across strategies
9 Our AUM is highly diversified across different strategies Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric 24% 12% 5% 5% 21% 15% 6% 12% Private Equity Real Estate Credit Infrastructure IP&S Public Equities Hedge Funds Advisory 46 % of net revenue
Slide 10: AUM funding base built on proprietary distribution channels
10 35% 22% 22% 13% 8% Local Institucional HNWI Institutional Offshore Allocators & Distributors Public market vehicles AUM 2Q ' 22 Our AUM funding base is mostly built upon our proprietary distribution channels Private . Markets . 38% 22% 21% 14% 5% ▪ Private Markets’ AUM base favors long - term to
Slide 11: Financial Highlights
Financial Highlights
Slide 12: Strong fundraising cycle in Private Markets
12 We started in the 2Q’22 a strong cycle for fundraising in Private Markets over the next 12 - 18 months R$10 bn Target Fundraising across Private Markets (2022 - 2023 Cycle) VICA Real Estate/Credit ▪ We announced a joint venture with Chrimata , for the development of a new listed agribusiness stra
Slide 13: Resilient business model with high management fee centricity
13 We have a resilient business model with high management fee centricity 147 224 271 361 6 62 40 38 20 11 29 67 172 297 340 465 2018 2019 2020 2021 Management Performance Advisory Vinci’s revenue is primarily derived from management fees (R$ mm) 85% % Mgmt. fees 75% 78% ▪ Management fee revenues re
Slide 14: Position for future realization of performance fees
14 Vinci holds a strong position for future realization of performance fees in private market funds… ▪ Performance fee receivable increased to R$146.1 million in the 2Q’22, a 40% increase quarter - over - quarter, driven mostly by appr eciation in the VCP III strategy. ▪ The VCP strategy¹ in Private
Slide 15: Realized GP investment and financial income
15 14 20 0.3 5 15 25 2Q'21 2Q'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$25.0 million in the 2Q ’ 22, up 71% year - over - year, driven by realized gains in our liq
Slide 16: Highly visible growth and profitability profile
16 55 61 2Q'21 2Q'22 Which translates to a highly visible growth and profitability profile See notes and definitions at end of document 102 119 2Q'21 YTD 2Q'22 YTD 31 98 127 232 2018 2019 2020 2021 42% 50% 34% DE Margin 33% 18% ▪ Fee - Related Earnings (FRE) has been growing at a 60% CAGR in the pas
Slide 17: Key Takeaways
17 Key Takeaways See notes and definitions at end of document 76 % FRE as % DE 2Q ’ 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$146.1 m ill
Slide 18: Appendix – I Business Overview
Appendix – I Business Overview
Slide 19: Platform scaled significantly since inception in 2009
19 2 6 11 15 17 18 20 19 21 24 35 47 54 56 50 58 60 39 61 76 88 76 95 142 121 145 137 196 221 221 238 - 50 100 150 200 250 0 10 20 30 40 50 60 70 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2Q22 AUM (R$bn) AUM DC¹ (R$bn) Brazil Interest Rates AUM/FTE We have scaled our platform
Slide 20: Pioneers among Brazilian firms in commitment to ESG
20 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 21: Strong emphasis on risk management
21 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 22: Leader in Brazilian alternative asset management with competitive advantages
22 We are a leader in Brazilian alternative asset management with strong competitive advantages AUM CAGR 2018 – 2Q22 ~30% 46% 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 23: Appendix – II Segment summaries
Appendix – II Segment summaries
Slide 24: Financials by segment
24 53% 21% 22% 4% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$93.8 million over the 2Q’22 YTD, with 53% of FRE coming from Private Markets, followed by IP&S accounting for 22%, Liquid Strategies for 21% and Financial Advisory for 4%. ▪ S
Slide 25: Complete and diversified platform for alternative investments
25 We offer a complete and diversified platform for alternative investments The private equity strategy invests through two sub - strategies : Vinci Capital Partners : VCP focuses on control and co - control investments, executing across growth equity transactions, greenfield investments, buyouts an
Slide 26: Private Markets segment earnings
26 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees 49,407 46,759 47,654 - 4% 95,988 94,413 - 2% Net revenue from advisory fees 2,641 467 275 - 90% 3,146 741 - 76% Total Fee Related Revenues 52,048 47,226 47,929 - 8% 99,134 9
Slide 27: Established liquid strategies platform
27 We have an established and widely recognized liquid strategies platform LIQUID STRATEGIES R$10 BILLION AUM Vinci Partners has a long track record and deep experience investing in public equities in Brazil . We focus on holding positions in companies for three to five years following deep analysis
Slide 28: Liquid Strategies segment earnings
28 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees 23,020 20,573 20,210 - 12% 43,003 40,783 - 5% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues 23,020 20,573 20,210 - 12% 43,003 40,783 - 5% Segme
Slide 29: Market leaders in providing investment solutions
29 We are market leaders in providing investment solutions to our clients In our separate exclusive mandates, we provide investment solutions to institutional investors, such as small to medium - sized foundations, pension funds and financial institutions in Brazil, and high net worth individuals .
Slide 30: IP&S segment earnings
30 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees 22,349 19,897 21,407 - 4% 37,629 41,304 10% Net revenue from advisory fees 20 7 7 - 65% 39 14 - 65% Total Fee Related Revenues 22,369 19,904 21,414 - 4% 37,668 41,317 10% Se
Slide 31: Leading financial advisory business
31 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 32: Financial Advisory
32 Financial Advisory ▪ Fee related earnings (FRE) of R$3.3 million in the quarter, up 525% year - over - year. ▪ FRE was R$4.0 million over the 2Q’22 YTD, a decrease of 60% when compared to the 2Q’21 YTD, due to a greater contribution fro m a dvisory fees in the 1Q’21, when the Advisory team closed
Slide 33: Retirement Services segment earnings
33 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees – – – – – – – Net revenue from advisory fees – – – – – – – Total Fee Related Revenues – – – – – – – Segment personnel expenses – (97) (308) N/A – (405) – Other G&A expenses
Slide 34: Appendix – III Financial statements
Appendix – III Financial statements
Slide 35: How to analyze Vinci Partners' financial model
35 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 36: Second Quarter 2022 Segment Earnings
36 Second Quarter 2022 Segment Earnings (Unaudited) See notes and definitions at end of document (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY(%) 2Q'21 YTD 2Q'22 YTD ∆ YoY(%) Net revenue from management fees 94,778 87,229 89,271 - 6% 176,621 176,500 0% Net revenue from advisory fees 6,378
Slide 37: Income statement
37 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY(%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) REVENUES Net revenue from management fees 94,778 87,229 89,271 - 6% 176,621 176,500 0% Net revenue from performance fees 18,624 3,172 3,839 - 79% 28,575 7,011 - 75% Realized performance fees 9,559 2,536 3,83
Slide 38: FRE and Distributable Earnings reconciliation
38 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 2Q'21 YTD 2Q'22 YTD OPERATING PROFIT 65,999 45,959 49,314 122,857 95,273 ( - ) Net revenue from realized performance fees (9,559) (2,536) (3,839) (19,088) (6,375) ( - ) Net revenue from unrealized performance fees (9,065) (636) – (9,487) (636) (+
Slide 39: Effective tax rate reconciliation
39 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 2Q'21 2Q'22 2Q’21 YTD 2Q’22 YTD Profit (loss) before income taxes, not - including Dividends to partners 68,077 58,109 128,322 115,154 Combined statutory income taxes rate - % 34% 34% 3
Slide 40: General and Administrative Expenses
40 13.7 17.1 7.8 8.9 0.9 2.4 3.0 General and Administrative Expenses 2Q 2021 (R$mm) 2Q 2022 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$53.8 mm Personnel Bonus related to Mgmt. and Adv. fees Performance b
Slide 41: Balance Sheet
41 Balance Sheet Assets 3/31/2022 6/30/2022 Current assets Cash and cash equivalents 38,516 57,780 Cash and bank deposits 9,109 10,532 Financial instruments at fair value through profit or loss 29,407 47,248 Financial instruments at fair value through profit or loss 1,324,292 1,290,972 Trade receiva
Slide 42: Supplement Details
Supplement Details
Slide 43: AUM and Fee-Earning AUM Rollforward
43 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ millions Fee - Earning Assets Under Management (FEAUM) – R$ millions For the Three Months Ended June 30, 2022 For the Three Months Ended June 30, 2022 For the Twelve Months Ended June 30, 2022 For the Twelve Months Ended Jun
Slide 44: Investment records – IP&S, Liquid Strategies, Credit and Listed Funds
44 Investment records – IP&S , Liquid Strategies, Credit and Listed Funds Fund Segment NAV¹ (R$ millions) 2Q22 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 490.5 2.2% 5.4% 7.7% 9.2% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 490.2 0.5% 4.8% 0.4% 0.9% CDI 4 CDI 4 Vinc
Slide 45: Historical Portfolio Performance – Closed End Private Markets funds
45 Pro Forma Historical Portfolio Performance - Excluding PIPE Investments¹ Investment records – Closed End Private Markets funds 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)
Slide 46: Shareholder Dividends
46 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 DE per Common Share (US$)² 0.34 0.20 0.24 0.19 0.21 Actual Dividend per Common Share³ 0.30 0.16 0.
Slide 47: Share Summary
47 Share Summary ▪ Common Shares Outstanding as of quarter end of 55,578,956 shares. x Repurchased 250,306 common shares in the quarter, with an average share price of US$11.7. x Repurchased 1,334,632 common shares since the announcement of the first share repurchase plan, with an average share pric
Slide 48: GP Commitment in Private Market funds
48 GP Commitment in Private Market funds ▪ As of June 30, 2022, the company had R$928.9 million in capital commitments signed to proprietary Private Markets funds. ▪ During the second quarter of 2022, the company signed R$ 537.4 million in capital commitments to proprietary Private Markets fun ds. ▪
Slide 49: Performance fee eligible AUM
49 30% 25% 16% 9% 10% 8% 2% Private Equity IP&S Public Equities Real Estate Credit Hedge Funds Infrastructure Significant exposure to performance fee - eligible AUM ▪ Total Performance fee eligible AUM (PEAUM) of R$33.5 billion. ▪ Hurdle rate funds charge performance based on the fund’s return over
Slide 50: Notes and Definitions
50 ▪ 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. Proforma AUM considers R$2.0 billion in AUM co
Slide 51: Notes and Definitions (cont'd)
51 Notes and Definitions (cont’d) ▪ Notes to page 20 (1) Previously managed by Rio Bravo. (2) Fund commitment and related co - investments. ▪ Notes to page 21 (1) CVM ( Comissão de Valores Mobiliários ) is the Brazilian equivalent to the SEC. ▪ Notes to page 22 (1) Independent asset manager classifi
Slide 52: Notes and Definitions (cont'd)
52 Notes and Definitions (cont’d) ▪ Notes to page 37 (1) Bonus compensation related to management and advisory includes Dividends to Partners related to management and advisory, dis tributed by the company to its original partners before the company turned public in 2021. (2) Performance based compe
Slide 53: Notes and Definitions (cont'd)
53 Notes and Definitions (cont’d) (6) IPCA is a broad consumer price index measured by the IBGE. (7) IMAB is composed by government bonds indexed to IPCA. IMAB 5 also includes government bonds indexed to IPCA with up to 5 Yea rs in duration. (8) IFIX is an index composed by listed REITs in the brazi
Slide 54: Notes and Definitions (cont'd)
54 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 the
Slide 55: Notes and Definitions (cont'd.)
55 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 56: Notes and Definitions (cont'd.)
56 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 57: Funds/strategies' descriptions
57 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 58: Office locations
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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