Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q3 2023 Earnings Presentation
48 slides from Vinci Compass Investments's earnings presentation, Nov 8, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Third Quarter 2023 Earnings Presentation November 08, 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 Third Quarter 2023 Highlights
5 Vinci Partners Third Quarter 2023 Highlights See notes and definitions at end of document R$ 65 bn AUM¹ 3Q23 Vinci Partners ended the third quarter of 2023 with R$65 bn in AUM¹ , a 3% growth year - over - year. R$ 1.3 bn 3Q23 Capital Subscriptions Distributable Earnings per share totaled R$0.96, t
Slide 6: Strategic Partnership and Investment with Ares
6 ▪ Forming strategic partnership to accelerate growth of Vinci’s platform in Latin America and collaborate on distribution, new pro ducts and other strategic areas. ▪ More than 10 year relationship among senior partners and strong investment, commercial and cultural fit between organizations . ▪ Re
Slide 7: Financial Highlights
Financial Highlights
Slide 8: Financial results summary table
8 (R$ thousands, unless mentioned) 3Q'22 2Q'23 3Q'23 ∆ YoY(%) 3Q'22 YTD 3Q'23 YTD ∆ YoY(%) Net revenue from management fees 95,361 92,769 104,745 10% 271,861 293,391 8% Net revenue from advisory fees 7,267 14,050 2,283 (69)% 17,600 20,801 18% Total Fee Related Revenues 102,628 106,819 107,028 4% 289
Slide 9: Third quarter financial highlights
9 ▪ Fee - related revenues of R$107.0 million in the third quarter, up 4% year - over - year. x Management fees were R$104.7 million in the third quarter, up 10% year - over - year driven by catch - up fees booked for VCP IV and VICC in the quarter and fundraising across Private Markets’ funds over
Slide 10: AUM expansion across the platform
10 21 23 3 3 8 8 32 34 3Q'22 3Q'23 5-10 Years 10+ Years Perpetual or quasi-perpetual 24 27 25 23 11 11 60 62 3Q'22 3Q'23 Private Markets IP&S Liquid Strategies 28 30 25 24 11 11 63 65 3Q'22 3Q'23 Private Markets IP&S Liquid Strategies We continue to see AUM expansion across the platform, with highli
Slide 11: Diversified platform by strategy and client
11 58% 18% 20% 5% 36% 22% 19% 12% 10% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 47% 36% 17% Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric Our platform is highly diversified across different
Slide 12: Accrued performance fees in private market funds
12 92% 8% 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 ▪ Accrued performance fees receivable of R$201.0 million in the 3Q’23, up 11% quarter - over - quarter. ▪
Slide 13: Fee related revenues
13 95 105 7 2 103 107 3Q'22 3Q'23 Management fees Advisory fees 272 293 18 21 289 314 3Q'22 YTD 3Q'23 YTD Management fees Advisory fees Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 89% of total revenues over the 3Q’23 YTD ▪ Fee related revenues totaled
Slide 14: Operating expenses
14 20 20 22 24 7 7 5 5 54 57 3Q'22 3Q'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A 57 65 62 69 19 22 13 14 152 170 3Q'22 YTD 3Q'23 YTD Bonus compensation Corporate center Segment Personnel expenses Other G&A Operating Expenses ▪ Total operating expenses of R$56.6 milli
Slide 15: Fee Related Earnings (FRE)
15 140 151 3Q'22 YTD 3Q'23 YTD 50 51 3Q'22 3Q'23 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$51.3 million (R$0.95/share) in the quarter, up 4% year - over - year on an absolute basis and 7% yea r - over - year on an FRE per share¹ basis. This growth was primarily driven by catch - u
Slide 16: Performance Related Earnings (PRE)
16 (1) 1 3Q'22 3Q'23 4 8 3Q'22 YTD 3Q'23 YTD Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$1.1 million in the quarter. Most of our open - end funds charge performance fees semiannua lly, recognizing revenues in June and December, thus first and third quarters usually a
Slide 17: Realized GP Investment and Financial income
17 32 12 6 5 37 17 3Q'22 3Q'23 Realized Financial Income Realized GP Investment Income 77 62 13 15 89 77 3Q'22 YTD 3Q'23 YTD Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$16.7 million in the 3Q
Slide 18: Adjusted Distributable Earnings (DE)
18 73 52 3Q'22 3Q'23 192 182 3Q'22 YTD 3Q'23 YTD Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$51.8 million (R$0.96/share) in the quarter, down 29% year - over - year on an absolute ba sis and 27% year - over - year on an Adjusted DE per share² basis. This downtur
Slide 19: Balance Sheet Highlights and share repurchase
19 22.41 22.36 2Q'23 3Q'23 Net Cash and Investments per share 4 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 2Q'23 3Q'23 Total Shares Repurchased (number of shares) 558,349 705,518 Total Capital Used for Share Repurchases 24.1 34.9 Remaining Share Repurchase Plan Authorizat
Slide 20: Segment Highlights
Segment Highlights
Slide 21: Financials by segment
21 63% 16% 16% 5% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$157.1 million over the 3Q’23 YTD, with 63% of FRE coming from Private Markets, followed by IP&S and Liquid Strategies both accounting for 16% and Corporate Advisory for 5%. ▪
Slide 22: Private Markets
22 Private Equity 46% Real Estate 20% Credit 18% Infrastructure 9% Vinci SPS 7% Private Markets' AUM (R$ thousands, unless mentioned) 3Q'22 2Q'23 3Q'23 ∆ YoY (%) 3Q'22 YTD 3Q'23 YTD ∆ YoY (%) Net revenue from management fees 52,949 57,842 68,323 29% 147,362 184,596 25% Net revenue from advisory fees
Slide 23: IP&S
23 Separate Mandates 70% Pension Plans 13% International 8% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 3Q'22 2Q'23 3Q'23 ∆ YoY (%) 3Q'22 YTD 3Q'23 YTD ∆ YoY (%) Net revenue from management fees 21,692 17,426 17,435 (20)% 62,995 54,014 (14)% Net revenue from advisory fees 7 8 8 11%
Slide 24: Liquid Strategies
24 Public Equities 75% Hedge Funds 25% Liquid Strategies' AUM (R$ thousands, unless mentioned) 3Q'22 2Q'23 3Q'23 ∆ YoY (%) 3Q'22 YTD 3Q'23 YTD ∆ YoY (%) Net revenue from management fees 20,720 17,492 18,950 (9)% 61,502 54,735 (11)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related R
Slide 25: Corporate Advisory
25 Corporate Advisory ▪ Fee related earnings (FRE) of negative R$0.5 million in the quarter. ▪ FRE was R$8.1 million over the 3Q’23 YTD, an increase of 7% when compared to the 3Q’22 YTD. ▪ Segment Distributable Earnings over the 3Q’23 YTD were R$8.1 million, an increase of 7% year - over - year when
Slide 26: Vinci Retirement Services
26 (R$ thousands, unless mentioned) 3Q'22 2Q'23 3Q'23 ∆ YoY (%) 3Q'22 YTD 3Q'23 YTD ∆ YoY (%) Net revenue from management fees – 9 38 N/A – 47 N/A Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues – 9 38 N/A – 47 N/A Segment personnel expenses (386) (429) (582) 51% (791) (1
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$ million Fee - Earning Assets Under Management (FEAUM) – R$ million For the Three Months Ended September 29, 2023 For the Three Months Ended September 29, 2023 For the Twelve Months Ended September 29 , 2023 For the Twelve Mo
Slide 29: Fund performance by segment
29 Fund Segment NAV¹ (R$ million) 3Q’23 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 357.5 2.0% 9.5% 12.3% 24.3% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 290.0 0.4% 5.6% 4.0% 14.2% CDI 4 CDI 4 Vinci Total Return Hedge Funds 227.2 (1.8)% 13.9% 7.9% 18.9% IPCA 6 + Yi
Slide 30: Private markets fund track record
30 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 136 5,200 4.3x 4.0x 71.5% 77.2% VCP
Slide 31: Shareholder Dividends
31 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 1Q’23 2Q’23 3Q'23 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 60,006 70,369 51,820 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 11,994 14,290 10,64
Slide 32: Share Summary
32 Share Summary ▪ Common Shares Outstanding as of quarter end of 53,872,066 shares. x Repurchased 705,518 common shares in the quarter, with an average share price of US$10.1. x Repurchased 3,463,755 common shares since the announcement of the first share repurchase plan, with an average share pric
Slide 33: GP fund investments and commitments
33 (R$ million, unless mentioned) Segment 3Q’23 Commitments Total Capital Committed 3Q’23 Capital Called Total Capital Called Capital Returned/Dividends Paid (3Q’23) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 – 3.1 – 1.6 2.8 VCP III Privat
Slide 34: Performance Fee Eligible AUM (PEAUM)
34 56% 20% 24% Private Markets IP&S Liquid Strategies PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Segment/Fund AUM R$mm Index type Index Rate Status VCP III - Onshore 1,274 Preferred Return w/ Catch - Up² IPCA 5 + 8% Currently generating performance VCP III - Offshore 3,456 Preferred Return w/ Catch - Up²
Slide 35: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 36: Revenues and expenses reconciliation
36 (R$ thousands, unless mentioned) 3Q'22 2Q'23 3Q'23 ∆ YoY (%) 3Q'22 YTD 3Q'23 YTD ∆ YoY (%) REVENUES Net revenue from management fees 95,361 92,769 104,745 10% 271,861 293,391 8% Net revenue from performance fees 31 10,765 2,058 6,539% 7,042 14,786 110% Realized performance fees 2,602 10,765 2,058
Slide 37: FRE and Distributable Earnings reconciliation
37 (R$ thousands, unless mentioned) 3Q'22 2Q'23 3Q'23 3Q'22 YTD 3Q'23 YTD OPERATING PROFIT 49,023 56,145 52,466 144,296 158,896 ( - ) Net revenue from realized performance fees (2,602) (10,765) (2,058) (8,977) (14,786) ( - ) Net revenue from unrealized performance fees 2,571 – – 1,935 – (+) Compensa
Slide 38: Effective tax rate reconciliation
38 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 3Q'22 3Q'23 3Q'22 YTD 3Q'23 YTD Profit (loss) before income taxes 80,279 42,192 195,433 191,175 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at
Slide 39: General and Administrative Expenses
39 17.7 18.7 0.9 8.0 3.5 2.9 4.9 16.4 19.8 0.5 8.3 1.2 3.7 3.7 General and Administrative Expenses 3Q 2022 (R$mm) 3 Q 2023 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$53.6 mm Personnel Bonus related to Mg
Slide 40: Liabilities and equity
40 Liabilities and equity 6/30/2023 9/29/2023 Current liabilities Trade payables 438 563 Deferred Revenue – 12,498 Leases 24,381 24,381 Accounts payable 7,338 7,601 Labor and social security obligations 52,689 73,763 Loans and Obligations 22,207 66,081 Taxes and contributions payable 19,292 18,880 T
Slide 41: Notes and Definitions
41 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) Adjusted Distributab
Slide 42: Notes and Definitions (cont'd.)
42 Notes and Definitions (cont’d.) ▪ Notes to page 17 (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 43: Notes and Definitions (cont'd.)
43 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. g reater or equal to 5%, X= IMAB 5 Average ▪ Notes to page 30 (1) Track record information is presented th
Slide 44: Notes and Definitions (cont'd.)
44 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 45: Notes and Definitions (cont'd.)
45 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 46: Notes and Definitions (cont'd.)
46 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 47: Funds/strategies' descriptions
47 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 48: 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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