Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q1 2024 Earnings Presentation
51 slides from Vinci Compass Investments's earnings presentation, May 9, 2024
Slide 1: First Quarter 2024 Earnings Presentation
First Quarter 2024 Earnings Presentation May 09, 2024
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: First Quarter 2024 Highlights
5 R$ 4.3 bn Capital Subscriptions 1Q’24 LTM 6 6 6 6 6 Vinci Partners First Quarter 2024 Highlights See notes and definitions at end of document Vinci Partners ended the first quarter with R$69 bn in AUM¹, a 11% growth year - over - year, led by R$4.3 billion in capital subscriptions over the last tw
Slide 6: Acquisition of MAV Capital
6 Vinci Partners to expand agribusiness footprint with the acquisition of MAV Capital See notes and definitions at end of document Vinci brand recognition MAV Capital Transaction Rationale ▪ MAV Capital is an alternative asset manager focused on agribusiness with approximately R $ 550 million in ass
Slide 7: Unlocking Growth through strategic partnerships and acquisitions
7 2024 Unlocking Growth: We are focused on delivering growth through strategic partnerships and acquisitions 2021 2022 Acquisition of SPS Capital A new chapter in our product offering capabilities with the expansion into Opportunistic Capital Solutions, a sizable addressable market in Brazil. 2024 +
Slide 8: Financial Highlights
Financial Highlights
Slide 9: First Quarter 2024 Segment Earnings
9 First Quarter 2024 Segment Earnings (Unaudited) See notes and definitions at end of document ∆ YoY(%) 1Q'24 LTM 1Q'23 LTM ∆ YoY(%) 1Q'24 4Q'23 1Q'23 (R$ thousands, unless mentioned) 4% 393,945 380,149 1% 96,455 99,976 95,877 Net revenue from management fees 101% 45,690 22,788 132% 10,359 18,998 4,
Slide 10: Financial highlights summary
10 ▪ Fee - related revenues of R$1 06 .8 million in the first quarter, up 6 % year - over - year, driven by stronger advisory fees in the quarter. x Fee - related revenues of R$439.6 million in the 1Q'24 LTM, up 9% year - over - year. Management fees were R$393.9 million in the 1Q'24 LTM, up 4% year
Slide 11: AUM expansion across the platform
11 25 30 26 26 7 10 58 65 1Q'23 1Q'24 Private Markets IP&S Public Equities 28 33 27 26 7 10 62 69 1Q'23 1Q'24 Private Markets IP&S Public Equities AUM 1Q’24 vs 1Q’23 ( R$bn ) Long - Term AUM¹ 1Q’24 vs 1Q’23 ( R$bn ) Fee - Earning AUM 1Q’24 vs 1Q’23 ( R$bn ) We continue to see AUM expansion across th
Slide 12: Our AUM base favors alpha-driven strategies
12 57% 18% 15% 9% 48% 38% 14% AUM 1Q’24 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 57 % of net revenues come from private market strategies ² 55 % of AUM is in long te
Slide 13: Accrued performance fees in private market funds
13 84% 7% 9% Private Equity Infrastructure Vinci SPS 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$294.4 million in the 1Q’24, up 6% quarter - over
Slide 14: GP Commitments
14 Our GP Commitments are a long - term strong value creator ▪ As of 1Q’24, Vinci Partners had R$1.1 billion in capital commitments signed to proprietary funds mostly across Private Equity , I nfrastructure, Credit and Real Estate. ▪ Realized investment gains are recognized quarterly as GP Investmen
Slide 15: Fee Related Revenues
15 Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 85% of total revenues over the 1Q'24 LTM. ▪ Fee related revenues totaled R$440 million in the 1Q'24 LTM, up 9% when compared to the 1Q'23 LTM, driven by strong fundraisi ng across Private Markets' product
Slide 16: Operating Expenses
16 Operating Expenses ▪ Total operating expenses of R$54.2 million in the quarter, up 4% year - over - year. ▪ Total operating expenses of R$237.5 million during the 1Q'24 LTM, an increase of 12% when compared to the 1Q’23 LTM. Disregar din g bonus compensation, total operating expenses summed R$141
Slide 17: Fee Related Earnings (FRE)
17 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$53.6 million (R$1.01/share) in the quarter, up 9% year - over - year on an absolute basis and 12% ye ar - over - year on an FRE per share¹ basis. This growth was propelled by a strong quarter for the Corporate Advisory segment. ▪ FRE of
Slide 18: Performance Related Earnings (PRE)
18 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$1.3 million in the quarter, up 3% year - over - year. ▪ PRE was R$10.6 million (R$0.20/share) over the 1Q'24 LTM, up 49% when compared to the 1Q'23 LTM . ▪ Most of our open - end funds charge performance fees semiannuall
Slide 19: Realized GP Investment and Financial income
19 Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$16.8 million in the 1Q'24, a 35% decrease compared to the previous year. T he global macroeconomic uncertainty adversely affected local markets during the quarter, consequently impacting the portfolio
Slide 20: Adjusted Distributable Earnings (DE)
20 Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$49.6 million (R$0.93/share) in the quarter, down 17% year - over - year on an absolute ba sis and 15% year - over - year on an Adjusted DE per share² basis, due to a weaker quarter for the Financial Income. ▪ Adjust
Slide 21: Share Repurchase Activity and Balance Sheet Highlights
21 1Q'24 4Q'23 Share Repurchase Activity (in R$ million, unless mentioned) 533,981 93,249 Total Shares Repurchased (number of shares) 28.0 5.0 Total Capital Used for Share Repurchases 32.0 0.0 Remaining Share Repurchase Plan Authorization 10.6 10.5 Average Price Paid Per Share (US$) 1Q'24 4Q'23 (in
Slide 22: Segment Highlights
Segment Highlights
Slide 23: Financials by segment
23 61% 14% 15% 9% R$224 mm 62% 14% 15% 8% Private Markets IP&S Public Equities Corporate Advisory Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$224.0 million in the 1Q'24 LTM, with 61% o f F RE coming from Private Markets, followed by Publ
Slide 24: Private Markets
24 Private Markets R$33 bn AUM ▪ Fee related earnings (FRE) of R$35.0 million in the quarter, up 9% year - over - year. This growth was driven by the strong fundrais ing in 2023 across Private Equity, Infrastructure and Real Estate. ▪ FRE was R$137.1 million in the 1Q'24 LTM, a 18% increase comparin
Slide 25: IP&S
25 See notes and definitions at end of document Separate Mandates 73% Pension Plans 11% International 6% Commingled Funds 11% IP&S' AUM ∆ YoY (%) 1Q'24 LTM PF¹ 1Q'23 LTM PF¹ ∆ YoY (%) 1Q'24 4Q'23 PF¹ 1Q'23 PF¹ (R$ thousands, unless mentioned) (18)% 80,451 98,635 (13)% 19,814 19,349 22,817 Net revenu
Slide 26: Public Equities
26 Mosaico Strategy 61% Dividends Strategy 33% Total Return 5% Others 1% Public Equities' AUM ∆ YoY (%) 1Q'24 LTM PF¹ 1Q'23 LTM PF¹ ∆ YoY (%) 1Q'24 4Q'23 PF¹ 1Q'23 PF¹ (R$ thousands, unless mentioned)¹ (7)% 58,124 62,780 (5)% 13,964 14,145 14,628 Net revenue from management fees N/A – – N/A – – – Ne
Slide 27: Corporate Advisory
27 ∆ YoY (%) 1Q'24 LTM 1Q'23 LTM ∆ YoY (%) 1Q'24 4Q'23 1Q'23 (R$ thousands, unless mentioned) N/A – – N/A – – – Net revenue from management fees 116% 42,907 19,894 134% 9,797 17,343 4,186 Net revenue from advisory fees 116% 42,907 19,894 134% 9,797 17,343 4,186 Total Fee Related Revenues 8% (2,143)
Slide 28: Vinci Retirement Services
28 ∆ YoY (%) 1Q'24 LTM 1Q'23 LTM ∆ YoY (%) 1Q'24 4Q'23 1Q'23 (R$ thousands, unless mentioned) N/A 324 – N/A 158 119 – Net revenue from management fees N/A – – N/A – – – Net revenue from advisory fees N/A 324 – N/A 158 119 – Total Fee Related Revenues 50% (2,168) (1,450) 33% (561) (596) (422) Segment
Slide 29: Supplement Details
Supplement Details
Slide 30: AUM roll-forward by segment
30 Total Vinci SPS Retirement Services Hedge Credit Real Estate Infrastructure IP&S Public Private Funds Equities Equity 58,487 2,149 – 2,574 4,964 5,137 2,313 24,048 7,040 10,262 Beginning balance – – – (2,574) – – – 2,235 339 – Managerial Adjustment 58,487 2,149 – – 4,964 5,137 2,313 26,283 7,379
Slide 31: Investment records – IP&S, Public Equities, Private Credit and Listed Funds
31 Investment records – IP&S, Public Equities, Private Credit and Listed Funds See notes and definitions at end of document Index Rate Market Comparison 24 M 12 M YTD 1Q'24 NAV¹ (R$ millions) Segment Fund CDI 7 CDI 7 24.6% 11.2% 2.0% 2.0% 257.1 IP&S Vinci Multiestratégia FIM CDI 7 CDI 7 14.7% 9.1% 1
Slide 32: Private Equity and Infrastructure fund returns
32 Gross IRR Gross IRR Gross MOIC Gross MOIC Total Value Unrealized Realized or Invested Capital Committed Capital Vintage year Segment Fund Partially Realized (USD) (BRL) (USD) (BRL) ( R$mm ) ( R$mm ) ( R$mm ) ( R$mm ) (R$mm) 77.2% 71.5% 4.0x 4.3x 5,202 137 5,065 1,206 1,415 2004 Private Equity Fun
Slide 33: Shareholder Dividends
33 Shareholder Dividends 1Q'24 4Q’23 3Q'23 2Q’23 1Q’23 4Q’22 3Q’22 2Q'22 1Q'22 ($ in thousands) 48,297 62,010 51,820 70,369 60,006 55,792 72,842 60,435 53,255 Distributable Earnings (R$) 9,543 12,500 10,647 14,290 11,994 10,618 14,281 11,795 10,615 Distributable Earnings (US$)¹ 0.18 0.23 0.20 0.26 0
Slide 34: Share Summary
34 Share Summary ▪ Common Shares Outstanding as of quarter end of 53,244,836 shares. x Repurchased 533,981 common shares in the quarter, with an average share price of US$10.6. x Repurchased 4,090,985 common shares since the announcement of the first share repurchase plan, with an average share pric
Slide 35: GP Commitment in Vinci Partners funds
35 GP Commitment in Vinci Partners funds ▪ As of March 28, 2024, the company had R$1.1 billion in capital commitments signed to proprietary funds. ▪ Total GP Investments marked at fair value of R$495.0 million as of March 28, 2024. See notes and definitions at end of document Fair value of investmen
Slide 36: Significant exposure to performance fee-eligible AUM
36 57% 23% 20% Private Markets IP&S Public Equities Significant exposure to performance fee - eligible AUM ▪ Total Performance fee eligible AUM (PEAUM) of R$39.3 billion. ▪ Hurdle rate funds charge performance based on the fund’s return over its benchmark, generally with a high - watermark clause, e
Slide 37: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 38: Financials - Income Statement
38 Financials - Income Statement See notes and definitions at end of document ∆ LTM (%) 1Q'24 LTM 1Q'23 LTM ∆ YoY (%) 1Q'24 4Q'23 1Q'23 (R$ thousands, unless mentioned) REVENUES 4% 393,945 380,149 1% 96,455 99,976 95,877 Net revenue from management fees 61% 21,564 13,391 16% 2,273 6,468 1,963 Net re
Slide 39: Financials - Non-GAAP Reconciliation
39 Financials - Non - GAAP Reconciliation 1Q'24 LTM 1Q'23 LTM 1Q'24 4Q'23 1Q'23 (R$ thousands, unless mentioned) 223,672 203,943 54,910 60,151 50,285 OPERATING PROFIT (22,606) (17,645) (2,273) (7,510) (1,963) ( - ) Net revenue from realized performance fees 1,042 4,254 – 1,042 – ( - ) Net revenue fr
Slide 40: Effective tax rate reconciliation
40 1Q'24 LTM 1Q'23 LTM 1Q'24 1Q'23 (R$ thousands, unless mentioned) 279,890 260,356 56,092 45,587 Profit (loss) before income taxes 34% 34% 34% 34% Combined statutory income taxes rate - % (95,162) (88,522) (19,071) (15,500) Income tax benefit (Expense) at statutory rates Reconciliation adjustments:
Slide 41: General and Administrative Expenses
41 General and Administrative Expenses 1 Q’24 ( R$mm ) 1 Q’23 ( R$mm ) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses
Slide 42: Balance Sheet
42 3/28/2024 12/29/2023 Assets Current assets 531,988 660,305 Cash and cash equivalents 45,738 15,896 Cash and bank deposits 85,649 173,300 Financial instruments at fair value through profit or loss 400,601 471,109 Financial instruments at amortized cost 1,221,642 1,168,355 Financial instruments at
Slide 43: Notes and Definitions
43 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 44: Notes and Definitions (cont'd.)
44 Notes and Definitions (cont’d.) ▪ Notes to page 18 (1) PRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Last twelve m ont hs values are calculated as the sum of the last four quarters. ▪ Notes to page 19 (1) GP investment income comes fro
Slide 45: Notes and Definitions (cont'd.)
45 Notes and Definitions (cont’d.) (2) Atlas strategy includes the funds Atlas FIC FIM, Atlas Institucional FIC FIM and Vinci Potenza. (3) Total Return Strategy includes the funds Total Return FIC FIM and Total Return Institucional FIA. (4) Mosaico Strategy includes the funds Mosaico, Mosaico Instit
Slide 46: Notes and Definitions (cont'd.)
46 Notes and Definitions (cont’d.) ▪ Notes to page 33 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 5.0610, as of May 07, 2024, wh en dividends were approved by our Board of Directors. (2) Per Share calculations are based on end of period Participatin
Slide 47: Notes and Definitions (cont'd.)
47 Notes and Definitions (cont’d.) ( 3) Income taxes are comprised of taxes calculated over our corporate income tax and social contribution taxes. We are taxed o n a n actual taxable profit regime, while part of our subsidiaries are taxed based on deemed profit. (4) Contingent consideration adjustm
Slide 48: Notes and Definitions (cont'd.)
48 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, investment income and expenses that do not arise from our normal course of operations. FRE is
Slide 49: Definitions of net revenue and compensation measures
49 ▪ “Net revenue from Fund Management and Advisory” is a measure that we use to assess our ability to generate profits from our f und management and advisory business without measuring for the outcomes from funds above their respective benchmarks. We calculate Net Revenue from Fund Management and A
Slide 50: Funds/strategies' descriptions
50 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 51: 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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