Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q2 2023 Earnings Presentation
47 slides from Vinci Compass Investments's earnings presentation, Aug 10, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
Second Quarter 2023 Earnings Presentation August 10, 2023
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 Second Quarter 2023 Highlights
5 Vinci Partners Second Quarter 2023 Highlights R$ 65 bn AUM¹ 2Q23 Vinci Partners ended the second quarter of 2023 with R$65 bn in AUM¹ , a 9% growth year - over - year. Our business has proven to be profitable even in tougher macro scenarios, with increasingly amounts of free cash flow driving attr
Slide 6: Financial Highlights
Financial Highlights
Slide 7: Financial results summary table
7 (R$ thousands, unless mentioned) 2Q'22 1Q'23 2Q'23 ∆ YoY(%) 2Q'22 YTD 2Q'23 YTD ∆ YoY(%) Net revenue from management fees 89,271 95,877 92,769 4% 176,500 188,646 7% Net revenue from advisory fees 6,659 4,468 14,050 111% 10,333 18,518 79% Total Fee Related Revenues 95,930 100,345 106,819 11% 186,83
Slide 8: Fee-related revenues, FRE and Adjusted DE highlights
8 ▪ Fee - related revenues of R$106.8 million in the second quarter, up 11% year - over - year. x Management fees were R$92.8 million in the second quarter, up 4% year - over - year driven by fundraising across Private Markets’ funds and the acquisition of Vinci SPS. Advisory fees totaled R$14.1 mil
Slide 9: AUM expansion across the platform, with highlight to long-term products
9 18 22 3 3 7 8 28 33 2Q'22 2Q'23 5-10 Years 10+ Years Perpetual or quasi-perpetual 21 26 26 24 10 11 56 61 2Q'22 2Q'23 Private Markets IP&S Liquid Strategies 24 29 26 24 10 11 60 65 2Q'22 2Q'23 Private Markets IP&S Liquid Strategies We continue to see AUM expansion across the platform, with highlig
Slide 10: AUM base favors alpha-driven strategies; revenue management fee-centric
10 Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric Our platform is highly diversified across different strategies and clients 54 % of net revenues come from private market strategies ² 51 % of AUM is in long term products ¹ AUM diversified across
Slide 11: Long-term upside from realization of performance fees
11 91% 9% 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 of R$180.6 million in the 2Q’23, up 16% quarter - over - quarter. ▪ The VCP
Slide 12: Fee Related Revenues
12 Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 86% of total revenues over the 2Q’23 YTD ▪ Fee related revenues totaled R$106.8 million in the quarter, up 11% year - over - year. This increase was attributed to a combinatio n of organic and inorganic g
Slide 13: Operating Expenses
13 19 26 21 22 6 8 4 5 50 61 2Q'22 2Q'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A 37 45 40 45 13 15 9 8 99 113 2Q'22 YTD 2Q'23 YTD Bonus compensation Corporate center Segment Personnel expenses Other G&A Operating Expenses ▪ Total operating expenses of R$61.4 million
Slide 14: Fee Related Earnings (FRE)
14 47 51 2Q'22 2Q'23 91 100 2Q'22 YTD 2Q'23 YTD Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$50.7 million (R$0.94/share) in the quarter, up 8% year - over - year on an absolute basis and 11% ye ar - over - year on an FRE per share¹ basis. This growth was primarily driven by a higher
Slide 15: Performance Related Earnings (PRE)
15 2 5 2Q'22 2Q'23 5 7 2Q'22 YTD 2Q'23 YTD Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$5.4 million in the quarter, up 124% year - over - year, driven by the favorable market condi tions experienced during the 2Q’23. ▪ PRE¹ was R$6.6 million (R$0.12/share) over the 2Q
Slide 16: Realized GP Investment and Financial income
16 45 50 7 10 52 60 2Q'22 YTD 2Q'23 YTD Realized Financial Income Realized GP Investment Income 20 30 5 4 25 34 2Q'22 2Q'23 Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$34.4 million in the 2Q’
Slide 17: Adjusted Distributable Earnings (DE)
17 119 130 2Q'22 YTD 2Q'23 YTD 61 70 2Q'22 2Q'23 Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$70.4 million (R$1.30/share) in the quarter, up 15% year - over - year on an absolute basi s and 18% year - over - year on an Adjusted DE per share² basis, boosted by a g
Slide 18: Balance Sheet Highlights and Share Repurchase Activity
18 21.20 22.41 1Q'23 2Q'23 Net Cash and Investments per share 4 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 1Q'23 2Q'23 Total Shares Repurchased (number of shares) 367,036 558,349 Total Capital Used for Share Repurchases 18.0 24.1 Remaining Share Repurchase Plan Authorizat
Slide 19: Segment Highlights
Segment Highlights
Slide 20: Financials by segment
20 61% 15% 17% 7% Private Markets IP&S Liquid Strategies Financial Advisory 59% 16% 16% 8% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$103.4 million over the 2Q’23 YTD, with 59% of FRE coming from Private Markets, followed by IP&S and Li
Slide 21: Private Markets
21 Private Equity 46% Real Estate 21% Credit 18% Infrastructure 8% Vinci SPS 7% Private Markets' AUM (R$ thousands, unless mentioned) 2Q'22 1Q'23 2Q'23 ∆ YoY (%) 2Q'22 YTD 2Q'23 YTD ∆ YoY (%) Net revenue from management fees 47,654 58,432 57,842 21% 94,413 116,274 23% Net revenue from advisory fees
Slide 22: IP&S
22 Separate Mandates 69% Pension Plans 13% International 9% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 2Q'22 1Q'23 2Q'23 ∆ YoY (%) 2Q'22 YTD 2Q'23 YTD ∆ YoY (%) Net revenue from management fees 21,407 19,152 17,426 (19)% 41,304 36,579 (11)% Net revenue from advisory fees 7 7 8 11%
Slide 23: Liquid Strategies
23 Public Equities 76% Hedge Funds 24% Liquid Strategies' AUM (R$ thousands, unless mentioned) 2Q'22 1Q'23 2Q'23 ∆ YoY (%) 2Q'22 YTD 2Q'23 YTD ∆ YoY (%) Net revenue from management fees 20,210 18,293 17,492 (13)% 40,783 35,784 (12)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related
Slide 24: Financial Advisory
24 Financial Advisory ▪ Fee related earnings (FRE) of R$7.1 million in the quarter, up 119% year - over - year. ▪ FRE was R$8.6 million over the 2Q’23 YTD, an increase of 118% when compared to the 2Q’22 YTD. ▪ Segment Distributable Earnings over the 2Q’23 YTD were R$8.6 million, an increase of 118%
Slide 25: Vinci Retirement Services segment results
25 (R$ thousands, unless mentioned) 2Q'22 1Q'23 2Q'23 ∆ YoY (%) 2Q'22 YTD 2Q'23 YTD ∆ YoY (%) Net revenue from management fees – 0 9 N/A – 9 N/A Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues – 0 9 N/A – 9 N/A Segment personnel expenses (308) (422) (429) 39% (405) (851)
Slide 26: Supplement Details
Supplement Details
Slide 27: AUM and Fee-Earning AUM Rollforward
27 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, 2023 For the Three Months Ended June 30 , 2023 For the Twelve Months Ended June 30, 2023 For the Twelve Months Ended Ju
Slide 28: Fund performance by segment
28 Fund Segment NAV¹ (R$ millions) 2Q’23 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 304.0 3.9% 7.3% 13.9% 22.8% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 384.8 3.9% 5.1% 8.5% 8.9% CDI 4 CDI 4 Vinci Total Return Hedge Funds 241.7 19.1% 16.0% 25.4% 12.3% IPCA 6 + Yi
Slide 29: Private markets fund track record
29 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 134 5,199 4.3x 4.0x 71.5% 77.2% VCP
Slide 30: Shareholder Dividends
30 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 1Q’23 2Q’23 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 60,006 70,369 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 11,994 14,290 DE per Common Shar
Slide 31: Share Summary
31 Share Summary ▪ Common Shares Outstanding as of quarter end of 54,196,959 shares. x Repurchased 558,349 common shares in the quarter, with an average share price of US$8.7. x Repurchased 2,758,237 common shares since the announcement of the first share repurchase plan, with an average share price
Slide 32: GP fund investments and commitments
32 (R$ millions, unless mentioned) Segment 2Q’23 Commitments Total Capital Committed 2Q’23 Capital Called Total Capital Called Capital Returned/Dividends Paid (2Q’23) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 0.0 3.1 – 1.6 2.6 VCP III Pri
Slide 33: Performance fee eligible AUM
33 28% 21% 18% 10% 9% 6% 5% 3% Private Equity IP&S Public Equities Credit Real Estate Hedge Funds Infrastructure Vinci SPS PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Strategy/Fund AUM R$mm Index type Index Rate Status Offshore Vehicles 3,692 Preferred Return w/ Catch - Up² USD + 8% Within investment perio
Slide 34: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 35: Income statement reconciliation
35 (R$ thousands, unless mentioned) 2Q'22 1Q'23 2Q'23 ∆ YoY(%) 2Q'22 YTD 2Q'23 YTD ∆ YoY (%) REVENUES Net revenue from management fees 89,271 95,877 92,769 4% 176,500 188,646 7% Net revenue from performance fees 3,839 1,963 10,765 180% 7,011 12,728 82% Realized performance fees 3,839 1,963 10,765 18
Slide 36: FRE and DE reconciliation
36 (R$ thousands, unless mentioned) 2Q'22 1Q'23 2Q'23 2Q'22 YTD 2Q'23 YTD OPERATING PROFIT 49,314 50,285 56,145 95,273 106,430 ( - ) Net revenue from realized performance fees (3,839) (1,963) (10,765) (6,375) (12,728) ( - ) Net revenue from unrealized performance fees – – – (636) – (+) Compensation
Slide 37: Effective tax rate reconciliation
37 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 2Q'22 2Q'23 2Q'22 YTD 2Q'23 YTD Profit (loss) before income taxes 58,109 103,396 115,154 148,983 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at
Slide 38: General and Administrative Expenses
38 17.8 21.1 5.4 8.7 2.0 3.2 3.2 16.0 17.3 1.4 8.9 1.0 3.6 2.3 General and Administrative Expenses 2Q 2022 (R$mm) 2Q 2023 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$50.5 mm Personnel Bonus related to Mgm
Slide 39: Liabilities and equity
39 Liabilities and equity 3/31/2023 6/30/2023 Current liabilities Trade payables 521 438 Deferred Revenue 17,219 – Leases 24,381 24,381 Accounts payable 6,201 7,338 Labor and social security obligations 25,228 52,689 Loans and Obligations 10,323 22,207 Taxes and contributions payable 16,110 19,292 T
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 double counting from co - managed funds between our segments. (2) FRE per share is cal
Slide 41: Notes and Definitions (cont'd.)
41 Notes and Definitions (cont’d.) ▪ Notes to page 16 (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 42: Notes and Definitions (cont'd.)
42 Notes and Definitions (cont’d.) (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. greater or equal to 5%, X= IMAB 5 Average ▪ Notes to page 29 (1) Track record information is presented thro
Slide 43: Notes and Definitions (cont'd.)
43 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 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: 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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