Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Investor Presentation (June 2023)
59 slides from Vinci Compass Investments's investor presentation, Jun 12, 2023
Slide 1: Investor Presentation June 2023
Investor Presentation June 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: Business Overview
Business Overview
Slide 4: Investment Products & Solutions
4 Investment Products & Solutions Financial products offering on open platform, providing portfolio and risk management services Vinci Partners is a leading, full - service alternative asset manager We provide a wide array of products and solutions tailored to meet the unique preferences of both ret
Slide 5: Our AUM is highly diversified across different segments
5 Our AUM is highly diversified across different segments Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric See notes and definitions at end of document 54% 21% 21% 5% 45% 39% 16% 54 % of net revenues come from private market strategies ² 50 % of AU
Slide 6: Our AUM funding base relies on proprietary distribution channels
6 48% 39% 8% 5% 35% 25% 23% 9% 8% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles Liquid . Strategies . ▪ 95% of Liquid Strategies’ AUM is distributed across proprietary relationships with institutional and HNWI clients 45% 39% 16% 37% 23% 17% 19% 4%
Slide 7: Vinci Partners is well positioned to take advantage of growth opportunities
7 Vinci Partners is well positioned to take advantage of growth opportunities in the market See notes and definitions at end of document 10 Business Strategies The company’s profitability has proven resilient even in tougher macro scenarios, with rising amounts of free cash flow resulting in attract
Slide 8: AUM growth across interest rate cycles
8 48% 18% 17% 5% 12% 2015 Fixed Income Hedge Funds Pension Funds Public Equities Others 39% 21% 16% 6% 18% 1Q’23 17 18 20 19 21 24 35 50 57 62 2013 2014 2015 2016 2017 2018 2019 2020 2021 1Q'23 AUM (R$bn) 6% 3% 4% 5% 6% 7% 8% Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-
Slide 9: Strong fundraising cycle for Private Markets
9 We started a strong cycle for fundraising in Private Markets in 2022, raising until the end of the 1Q'23 close to R$5 billion R$10 bn Target Fundraising across Private Markets (18 - 24 Months Cycle) VCP IV Private Equity Vinci Credit Infra Credit VICC Infrastructure Listed Perpetual Funds Real Est
Slide 10: Private Markets segment growth
10 ▪ Since Vinci's IPO in 2021, our Private Markets segment AUM has grown by over R$9 billion, representing a 48% overall growth. Thi s growth was achieved through organic fundraising across all strategies, totaling R$9.1 billion, with an additional R$2.1 billion coming from the acquisition of Vinci
Slide 11: GP Investments hold potential for future value creation
11 369 307 216 100 50 25 1,068 2,461 1Q'23 2028e Private Equity REITs Infrastructure Credit IP&S Public Equities GP Investments holds substantial potential for future value creation ▪ By the end of the first quarter, Vinci had committed approximately R$1.1 billion to Private Market funds. These comm
Slide 12: Key Takeaways
12 Key Takeaways See notes and definitions at end of document 79 % FRE as % DE 1Q23 LT M 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$155.2 m illi
Slide 13: Financial Highlights
Financial Highlights
Slide 14: Resilient business model with high management fee centricity
14 95 80 80 89 24 26 18 17 217 212 1Q'22 LTM 1Q'23 LTM Bonus compensation Corporate center Segment Personnel expenses Other G&A (2)% 366 380 55 23 422 403 1Q'22 LTM 1Q'23 LTM + 10% YoY + 22% YoY 87 96 4 4 91 100 1Q'22 1Q'23 Management fees Advisory fees We have a resilient business model with high m
Slide 15: Accrued performance fees
15 89% 11% Private Equity Infrastructure Vinci holds a strong position for future realization of performance fees in private market funds… ▪ Performance fee receivable of R$155.2 million in the 1Q’23, down 7% quarter - over - quarter. ▪ The VCP strategy¹ in Private Equity accounted for R$137.5 milli
Slide 16: GP Investment and financial income
16 49 82 24 65 106 1Q'22 LTM 1Q'23 LTM Realized Financial Income Realized GP Investment Income 25 20 2 6 27 26 1Q'22 1Q'23 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$2
Slide 17: Highly visible recurring and profitable business model
17 243 250 1Q'22 LTM 1Q'23 LTM 58 60 1Q'22 1Q'23 190 194 28 9 (1) (6) 216 197 1Q'22 LTM 1Q'23 LTM 44 49 1 1 (1) (2) 44 49 1Q'22 1Q'23 FRE Asset Management FRE Advisory FRE VRS Which translates to a highly visible recurring and profitable business model See notes and definitions at end of document DE
Slide 18: Fee Related Earnings table
18 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY(%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 87,229 99,640 95,877 10% 366,456 380,149 4% Net revenue from advisory fees 3,674 4,394 4,468 22% 55,363 22,788 (59)% Total Fee Related Revenues 90,903 104,034 100,345 10% 421
Slide 19: Appendix – I Business Overview
Appendix – I Business Overview
Slide 20: We have scaled our platform significantly since inception
20 2 6 11 15 17 18 20 19 21 24 35 48 54 60 59 50 57 63 62 0 10 20 30 40 50 60 70 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1Q'23 AUM (R$bn) AUM DC¹ (R$bn) Brazil Interest Rates We have scaled our platform significantly since our inception in 2009… See notes and definition
Slide 21: Pioneers among Brazilian firms in our commitment to ESG
21 We are pioneers among Brazilian firms in our commitment to ESG 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 funded by BNDES VIR IV – launched with dual mand
Slide 22: Risk management
22 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 23: Leader in Brazilian alternative asset management
23 We are a leader in Brazilian alternative asset management with strong competitive advantages 91% of AUM from Proprietary distribution channels¹ 54% of Net Revenues come from Private Market Strategies ² 50% of AUM committed for over 5 years Diversified business model 10 business units Partnership
Slide 24: Appendix – II Segment summaries
Appendix – II Segment summaries
Slide 25: Financials by segment
25 57% 18% 20% 4% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$202.9 million over the 1Q’23 LTM, with 57% of FRE coming from Private Markets, followed by IP&S accounting for 20%, Liquid Strategies for 18% and Financial Advisory for 4%. ▪
Slide 26: Platform for alternative investments
26 We offer a complete and diversified platform for alternative investments Private Equity – R$13.6bn AUM (48%) Real Estate – R$5.1bn AUM (18%) PRIVATE MARKETS R$28 BILLION AUM The real estate strategy invests through two subs - strategies : Listed Perpetual Funds : The real estate strategy currentl
Slide 27: Infrastructure and Vinci SPS
27 Infrastructure – R$2.4bn AUM (8%) Vinci SPS – R$2.1bn AUM (8%) The Vinci SPS strategy invests across five core sub - strategies : Primary Market Funding : New money provided through structured credit solutions . Downside protection through collateral and other mechanisms . Borrowers credit profil
Slide 28: Private Markets segment
28 Private Equity 48% Real Estate 18% Credit 18% Vinci SPS 8% Infrastructure 8% Private Markets' AUM (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 46,759 59,699 58,432 25% 194,661 218,734 12% Net revenue from advisory fees
Slide 29: Liquid strategies platform
29 We have an established and widely recognized liquid strategies platform LIQUID STRATEGIES R$10 BILLION AUM Vinci Partners has a long track record and deep experience investing in public equities in Brazil . We focus on holding positions in companies for three to five years following deep analysis
Slide 30: Liquid Strategies segment
30 Public Equities 72% Hedge Funds 28% Liquid Strategies' AUM (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 20,573 19,823 18,293 (11)% 87,376 79,045 (10)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related
Slide 31: Investment Products & Solutions
31 Commingled Funds – R$2.1bn AUM (9%) Our focused commingled funds are owned by multiple clients, from retail to institutional investors, and deploy capital in specific asset classes within defined investment strategies . Our flagship strategies are Vinci Valorem, focusing on fixed income assets, f
Slide 32: IP&S segment
32 Separate Mandates 67% Pension Plans 13% International 11% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 19,897 20,119 19,152 (4)% 84,416 82,370 (2)% Net revenue from advisory fees 7 7 7 7% 4
Slide 33: Leading financial advisory business
33 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 34: Financial Advisory
34 Financial Advisory ▪ Fee related earnings (FRE) of R$1.5 million in the quarter, up 115% year - over - year. ▪ FRE was R$9.0 million over the 1Q’23 LTM, a decrease of 67% when compared to the 1Q’22 LTM, due to a stronger deal environmen t i n 2021. ▪ Segment Distributable Earnings over the 1Q’23
Slide 35: Segment financial table
35 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees – – 0 N/A – 0 N/A Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues – – 0 N/A – 0 N/A Segment personnel expenses (97) (334) (422) 335% (97) (1,450)
Slide 36: Appendix – III Financial statements
Appendix – III Financial statements
Slide 37: How to analyze Vinci Partners' financial model
37 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 38: Income statement
38 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY(%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) REVENUES Net revenue from management fees 87,229 99,640 95,877 10% 366,456 380,149 4% Net revenue from performance fees 3,172 7,558 1,963 (38)% 30,854 13,391 (57)% Realized performance fees 2,536 9,241 1,963
Slide 39: FRE and Distributable Earnings reconciliation
39 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM OPERATING PROFIT 45,959 55,321 50,285 235,231 203,943 ( - ) Net revenue from realized performance fees (2,536) (9,241) (1,963) (38,355) (17,645) ( - ) Net revenue from unrealized performance fees (636) 1,683 – 7,501 4,254 (+)
Slide 40: Effective tax rate reconciliation
40 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 1Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM Profit (loss) before income taxes 57,045 45,587 254,642 260,356 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at
Slide 41: General and Administrative Expenses
41 17.7 18.1 0.7 6.6 1.8 3.8 3.4 15.2 17.3 1.0 8.4 1.0 3.0 2.3 General and Administrative Expenses 1Q 2022 (R$mm) 1 Q 2023 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$48.1 mm Personnel Bonus related to Mg
Slide 42: Liabilities and equity
42 Liabilities and equity 12/30/2022 3/31/2023 Current liabilities Trade payables 1,247 521 Deferred Revenue – 17,219 Leases 24,147 24,381 Accounts payable 7,328 6,201 Labor and social security obligations 87,732 25,228 Loans and Obligations 13,168 10,323 Taxes and contributions payable 22,291 16,11
Slide 43: Supplement Details
Supplement Details
Slide 44: AUM and Fee-Earning AUM Rollforward
44 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ millions Fee - Earning Assets Under Management (FEAUM) – R$ millions For the Three Months Ended March 31, 2023 For the Three Months Ended March 31, 2023 For the Twelve Months Ended March 31, 2023 For the Twelve Months Ended
Slide 45: Fund performance by segment
45 Fund Segment NAV¹ (R$ millions) 1Q’23 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 358.6 3.3% 3.3% 12.1% 18.7% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 389.6 1.1% 1.1% 5.0% 6.5% CDI 4 CDI 4 Vinci Total Return Hedge Funds 199.9 (2.6)% (2.6)% (7.6)% 10.3% IPCA 6 +
Slide 46: Private equity fund track record
46 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 215 5,279 4.4x 4.0x 71.5% 77.2% VCP
Slide 47: Shareholder Dividends
47 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 1Q’23 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 60,006 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 11,994 DE per Common Share (US$)² 0.34 0.20 0
Slide 48: Share Summary
48 Share Summary ▪ Common Shares Outstanding as of quarter end of 54,713,700 shares. x Repurchased 367,036 common shares in the quarter, with an average share price of US$9.4. x Repurchased 2,199,888 common shares since the announcement of the first share repurchase plan, with an average share price
Slide 49: Proprietary capital commitments and investments
49 (R$ millions, unless mentioned) Segment 1Q’23 Commitments Total Capital Committed 1Q’23 Capital Called Total Capital Called Capital Returned/Dividends Paid (1Q’23) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 – 3.1 – 1.6 2.6 VCP III Priva
Slide 50: Performance fee eligible AUM
50 30% 21% 16% 8% 10% 7% 5% 3% Private Equity IP&S Public Equities Real Estate Credit Hedge Funds Infrastructure Vinci SPS PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Strategy/Fund AUM R$mm Index type Index Rate Status Offshore Vehicles 3,572 Preferred Return w/ Catch - Up² USD + 8% Within investment perio
Slide 51: Notes and Definitions
51 Notes and Definitions ▪ Notes to page 4 (1) As of March 31, 2023. AUM is calculated as consolidated with double counting, due to funds from one segment investing in oth er segments and it ´ s eliminated on consolidation and excluding double counting from co - managed funds between our segments. ▪
Slide 52: Notes and Definitions (cont'd)
52 Notes and Definitions (cont’d) ▪ Notes to page 15 (1) Accrued performance fees for the VCP offshore are as of 4Q'22. This occurs due to the 60 days timeline of the quarterly m ark up to be disclosed by the fund’s administrator. ▪ Notes to page 16 (1) GP investment income comes from proprietary in
Slide 53: Notes and Definitions (cont'd)
53 Notes and Definitions (cont’d) (4) Other alternative local asset managers include Patria and Kinea . (5) Other independent asset managers include Gavea , SPX and Jive Investments. (6) Hedge funds include JPG, Bahia, Verde and others. (7) Incumbent banks include Banco do Brasil, ITAU Unibanco , Br
Slide 54: Notes and Definitions (cont'd)
54 Notes and Definitions (cont’d) (8) IFIX is an index composed by listed REITs in the Brazilian stock Market. (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. g reater or equal to 5%, X= IM
Slide 55: Notes and Definitions (cont'd)
55 Notes and Definitions (cont’d) ▪ Notes to page 50 (1) International mandates have several different benchmarks across its vehicles. (2) The preferred return w/ catch - up rule applies to funds for which the vehicle must pay back its limited partners 100% of the invested capital corrected by the p
Slide 56: Notes and Definitions (cont'd.)
56 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 57: Notes and Definitions (cont'd.)
57 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 58: Funds/strategies' descriptions
58 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 59: 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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