Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q2 2023 Earnings Presentation
57 slides from Vinci Compass Investments's earnings presentation, Aug 15, 2023
Slide 1: Investor Presentation August 2023
Investor Presentation August 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 % of net revenues come from private market strategies ² 51 % of AUM is in long term products
Slide 6: Our AUM funding base relies on proprietary distribution channels
6 48% 41% 6% 5% 46% 38% 16% 35% 22% 20% 18% 4% 36% 23% 23% 9% 9% 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
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 86 % Of net revenues come from mgmt. fees¹ We operate a highly visible and integrated recurring revenue business model, built upon diversifi
Slide 8: AUM growth across interest rate cycles
8 17 18 20 19 21 24 35 50 57 63 65 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q'23 AUM (R$bn) 5% 3% 4% 5% 6% 7% 8% Long-term Real Interest Rate (NTN-B 2045²) 48% 18% 17% 5% 12% 2015 Fixed Income Hedge Funds Pension Funds Public Equities Others 38% 20% 16% 7% 19% 2Q’23 ▪ Vinci grew at a 9% an
Slide 9: Strong fundraising cycle in Private Markets
9 We started a strong cycle for fundraising in Private Markets in 2022, raising until the end of the 2Q'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: Key Takeaways
10 Key Takeaways See notes and definitions at end of document 77 % FRE as % DE 2 Q23 YTD 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$180.6 m illi
Slide 11: Financial Highlights
Financial Highlights
Slide 12: Resilient business model with high management fee centricity
12 19 26 21 22 6 8 4 5 50 61 2Q'22 2Q'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A 177 189 10 19 187 207 2Q'22 YTD 2Q'23 YTD 89 93 7 14 96 107 2Q'22 2Q'23 Management fees Advisory fees + 22% We have a resilient business model with high management fee centricity Fee Rel
Slide 13: Future realization of performance fees
13 91% 9% Private Equity Infrastructure Vinci holds a strong position for future realization of performance fees in private market funds… ▪ Performance fee receivable of R$180.6 million in the 2Q’23, up 16% quarter - over - quarter. ▪ The VCP strategy¹ in Private Equity accounted for R$161.4 million
Slide 14: Realized GP Investment and Financial income
14 45 50 7 10 52 60 2Q'22 YTD 2Q'23 YTD Realized Financial Income Realized GP Investment Income 20 30 5 4 25 34 2Q'22 2Q'23 Realized Financial Income Realized GP Investment Income …and additional gains from our GP Investments and financial income ▪ Realized GP Investment¹ and Financial income² of R$
Slide 15: Highly visible recurring and profitable business model
15 119 130 2Q'22 YTD 2Q'23 YTD 91 100 2Q'22 YTD 2Q'23 YTD Which translates to a highly visible recurring and profitable business model See notes and definitions at end of document DE Margin ▪ Fee Related Earnings (FRE) of R$50.7 million (R$0.94/share) in the quarter, up 8% year - over - year on an a
Slide 16: Fee related earnings and distributable earnings table
16 (R$ 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% 186,8
Slide 17: Appendix – I Business Overview
Appendix – I Business Overview
Slide 18: We have scaled our platform significantly since inception
18 2 6 11 15 17 18 20 19 21 24 35 48 54 60 61 50 57 63 65 0 10 20 30 40 50 60 70 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q'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 19: Pioneers among Brazilian firms in our commitment to ESG
19 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 20: Risk management and compliance
20 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 21: Leader in Brazilian alternative asset management
21 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 51% of AUM committed for over 5 years Diversified business model 10 business units Partnership
Slide 22: Appendix – II Segment summaries
Appendix – II Segment summaries
Slide 23: Financials by segment
23 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 24: Complete and diversified platform for alternative investments
24 We offer a complete and diversified platform for alternative investments Private Equity – R$13.5bn AUM (46%) Real Estate – R$6.0bn AUM (20%) PRIVATE MARKETS R$29 BILLION AUM The real estate strategy invests through two subs - strategies : Listed Perpetual Funds : The real estate strategy currentl
Slide 25: Infrastructure and Vinci SPS
25 Infrastructure – R$2.4bn AUM (8%) Vinci SPS – R$2.1bn AUM (7%) The Vinci SPS strategy invests across five core sub - strategies : Primary Market Funding : New money provided through structured credit solutions . Downside protection through collateral and other mechanisms . Borrowers credit profil
Slide 26: Private Markets AUM and financials
26 Private Equity 46% Real Estate 21% Credit 18% Infrastructure 8% Vinci SPS 7% Private Markets' AUM (R$ 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 27: Investment Products & Solutions strategies
27 Commingled Funds – R$2.2bn AUM (9%) Our focused commingled funds are owned by multiple clients, from retail to institutional investors, and deploy capital in specific asset classes within defined investment strategies . Our flagship strategies are Vinci Valorem, focusing on fixed income assets, f
Slide 28: IP&S AUM and financials
28 Separate Mandates 69% Pension Plans 13% International 9% Commingled Funds 9% IP&S AUM (R$ 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 29: Liquid strategies platform
29 We have an established and widely recognized liquid strategies platform LIQUID STRATEGIES R$11 BILLION AUM Vinci Partners has a long track record and deep experience investing in public equities in Brazil . We focus on holding positions in companies for three to five years following deep analysis
Slide 30: Liquid Strategies AUM and financials
30 Public Equities 76% Hedge Funds 24% Liquid Strategies' AUM (R$ 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 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 results
32 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$8.6 million, an increase of 118%
Slide 33: Vinci Retirement Services results
33 (R$ 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 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: Income statement
36 (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 37: FRE and DE reconciliation
37 (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 38: Effective tax rate reconciliation
38 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 39: General and Administrative Expenses
39 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$50.5 mm Personnel Bonus related to Mgm
Slide 40: Liabilities and equity
40 Liabilities and equity 3/31/2023 6/30/2023 Current liabilities Trade payables 521 438 Deferred Revenue 17,219 – Leases 24,381 24,381 Accounts payable 6,201 7,338 Labor and social security obligations 25,228 52,689 Loans and Obligations 10,323 22,207 Taxes and contributions payable 16,110 19,292 T
Slide 41: Supplement Details
Supplement Details
Slide 42: AUM and Fee-Earning AUM Rollforward
42 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ 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 43: Fund NAV and returns
43 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 44: Private equity fund track record
44 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 134 5,199 4.3x 4.0x 71.5% 77.2% VCP
Slide 45: Shareholder Dividends
45 Shareholder Dividends ($ 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 46: Share Summary
46 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$8.7. x Repurchased 2,758,237 common shares since the announcement of the first share repurchase plan, with an average share price
Slide 47: Proprietary capital commitments in funds
47 (R$ 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 48: Performance fee eligible AUM
48 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 49: Notes and Definitions
49 Notes and Definitions ▪ Notes to page 4 (1) As of June 30, 2023. AUM is calculated as consolidated with double counting, due to funds from one segment investing in o the r segments and it ´ s eliminated on consolidation and excluding double counting from co - managed funds between our segments. ▪
Slide 50: Notes and Definitions (cont'd)
50 Notes and Definitions (cont’d) ▪ Notes to page 14 (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 income
Slide 51: Notes and Definitions (cont'd)
51 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 52: Notes and Definitions (cont'd)
52 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 53: Notes and Definitions (cont'd)
53 Notes and Definitions (cont’d) ▪ Notes to page 48 (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 54: Notes and Definitions (cont'd.)
54 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 55: Notes and Definitions (cont'd.)
55 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 56: Funds/strategies' descriptions
56 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 57: 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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