Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Investor Presentation (August 2021)
50 slides from Vinci Compass Investments's investor presentation, Aug 26, 2021
Slide 1: Investor Presentation August 2021
Investor Presentation August | 2021 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer 2 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 sub
Slide 3: Business Overview
Business Overview
Slide 4: Leading full-service alternative asset manager in Brazil
2018 2019 2020 2Q21 Our business is profitable and growing , with strong operating leverage After - tax DE CAGR 104% 2018 – 2020 ~50% Capital committed for 5+ years We are a leading, full - service alternative asset manager in Brazil 4 78% Of our net revenues come from mgmt. fees 4 Vinci Partners ha
Slide 5: We have scaled our platform significantly since our inception in 2009
2 6 11 15 17 18 20 19 21 24 35 48 52 50 57 39 61 76 88 76 95 142 121 145 137 196 221 225 - 50 100 150 200 250 0 10 20 30 40 50 60 70 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2Q21 AUM (R$bn) AUM DC¹ (R$bn) Brazil Interest Rates AUM/FTE We have scaled our platform significantly sinc
Slide 6: Complete portfolio of alternative investment products and solutions
We offer a complete portfolio of alternative investment products and solutions to both retail and institutional clients Proven ability to invest proprietary and third - party capital through different products yielding sustainable profitability acros s multiple verticals 6 Investor Relations, Suppor
Slide 7: Platform built on four key pillars
Our platform is built on four key pillars: people, diversification, performance and distribution 7 Strong “Partnership Culture” reinforcing our mission, vision, and values with partners having worked together for over 20 years People Well - established robust “One - stop Shop” AAM platform diversifi
Slide 8: Long-standing partnership model drives our success
Our long - standing partnership model drives our success First - class management team with proven execution capabilities and long - term alignment of interests 8 Strong Fundraising Capabilities Unique Expertise in Capital Allocation Solid Execution Translating into Returns + + 28 years experience 2
Slide 9: One of the most diversified investment platforms in the market
We believe to have built one of the most diversified investment platforms in the market across segments and commercial efforts Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric See notes and definitions at end of document 9 Private Equity Real Estat
Slide 10: ESG and impact products and policies
Vinci Energia Sustentavel (VES) - Credit Fund focused on private debt related to green energy funded by BNDES VIR IV - launched with dual mandate of targeting measurable ESG impact and achieving market returns Impact monitoring KPIs Innovative ESG related products Growth of Average Salary and Numb
Slide 11: Compliance and risk management
▪ Mandatory annual compliance training programs to all of Vinci Partners’ employees ▪ Mandatory annual information security policy awareness training to all employees ▪ Vinci Partners practices top - notch risk management strategies, including but not limited to restriction list systems, Chinese Wal
Slide 12: Leader in Brazilian alternative asset management with competitive advantages
AUM CAGR 2018 – June ‘21 ~36% ~50% of Net Revenues come from Private Market Strategies ~50% of AUM committed for over 5 years Diversified business model 8 business units Partnership model: 34 partners Vinci Partners differentiators Vinci Partners Competitive Advantage Product offering Capabilities C
Slide 13: Financial Highlights
Financial Highlights
Slide 14: Second Quarter and First Half of 2021 Highlights
Second Quarter and First Half of 2021 Highlights See notes and definitions at end of document 14 R$57bn AUM 2Q21 +31% YoY R$2.1bn Private Markets Fundraising YTD 2021 R$4.4bn IP&S Net inflows YTD 2021 R$55.2mm FRE 2Q21 +67% YoY 55% FRE Margin 2Q21 +550 bps YoY R$54.8mm DE 2Q21 +100% YoY 44% DE Margi
Slide 15: Continued strong fundraising in the first half of 2021
15 Continued strong fundraising in the first half of 2021, highlighted by Private Markets and IP&S strength Private Markets During the first half of 2021, we raised over R$2 billion in Private Market strategies, through six different vehicles : Final closing for VIR IV, the largest impact orient
Slide 16: Resilient business model with high management fee centricity
124 177 16 29 22 21 2Q'20 YTD 2Q'21 YTD 61 95 20 19 6 6 2Q'20 2Q'21 147 224 271 6 62 40 20 11 29 173 297 340 2018 2019 2020 Management Performance Advisory We have a resilient business model with high management fee centricity and embedded operating leverage… See notes and definitions at end of docu
Slide 17: Exposure to performance fee-eligible AUM
With significant exposure to performance fee - eligible AUM ... Vinci holds a strong position for future realization of performance fees with over R$7 billion in PEAUM coming from preferred re turn funds with carried interest 17 ▪ Total Performance fee eligible AUM (PEAUM) of R$36.8 billion. ▪ Hurdl
Slide 18: Realized GP Investment and financial income
Realized GP Investment¹ and Financial income² 2Q ' 21 vs 2Q ' 20 (R$mm) … and additional gains from our GP Investments and financial income 18 Quarter Return (+/ - ) CDI 1Q19 2.2% 0.7% 2Q19 3.3% 1.7% 3Q19 2.1% 0.6% 4Q19 3.3% 2.0% 1Q20 0.2% - 0.8% 2Q20 3.9% 3.1% 3Q20 0.4% - 0.1% 4Q20 1.9% 1.5% 1Q21 1
Slide 19: Highly visible growth and profitability profile
61 102 2Q'20 YTD 2Q'21 YTD 78 105 2Q'20 YTD 2Q'21 YTD 54 98 151 2018 2019 2020 Which translates to a highly visible growth and profitability profile 19 Fee - Related Earnings (FRE) – R$mm After - tax Distributable Earnings (DE) – R$mm 42% FRE Margin 50% 34% 38% DE Margin 33% 18% ▪ Fee - Related Earn
Slide 20: Valuation Framework – SOTP
Valuation Framework – SOTP (Sum - of - the - parts) 20 Vinci brand recognition The standard valuation framework for asset management firms is SOTP Fee - Related Earnings (“FRE”) Cash and Net Investments Performance - Related Earnings (“PRE”) Apply a Target Multiple to Earnings on FRE that represents
Slide 21: VINP Sum-of-the-Parts Valuation
VINP Sum - of - the - Parts Valuation 21 Current Valuation 2Q’21 @ August 18, 2021 Cash and Net Investments (R$ mm) 1,472.6 Cash and Net Investments/share (US$) 4.85 Consensus NPV Performance fees¹ (R$ mm) 373.8 Performance fees/share (US$) 1.23 VINP Stock Price (US$) 13.00 Implied FRE/share @ Curre
Slide 22: VINP vs. peer alternative asset managers
VINP 10x 20x 30x 40x 30% 40% 50% 60% P/DE 2021E¹ DE CAGR (20 - 22E) VINP vs. Peer alternative asset managers Market data as of August 18, 2021. Source: Goldman Sachs Research See notes and definitions at end of document 22 High P/DE Multiple High DE Growth Low P/DE Multiple High DE Growth Low P/DE M
Slide 23: Key Takeaways
Key Takeaways 23 81% FRE as % DE 2Q21 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$7 billion in PEAUM from Private Market funds still in inves
Slide 24: Appendix – I Segment summaries
Appendix – I Segment summaries
Slide 25: Financials by Segment
50% 22% 19% 9% Financials by Segment 25 R$105.4 mm R$117.0 mm Segment Distributable Earnings 2Q ' 21 YTD by Segment ▪ Fee Related Earnings (FRE) were R$105.4 million in the 2Q'21 YTD, with 50% of FRE coming from Private Markets, followed by Li qui d Strategies with 22%, IP&S with 19% and Financial A
Slide 26: Private Markets platform for alternative investments
The private equity strategy invests through two sub - strategies : Vinci Capital Partners : VCP focuses on control and co - control investments, executing across growth equity transactions, greenfield investments, buyouts and turnarounds . The VCP strategy is currently within investment period for i
Slide 27: Private Markets segment results
▪ Fee related earnings (FRE) of R$29.1 million in the quarter, up 63% year - over - year, driven by the growth in fee - earning AUM. FRE was R$53.1 million in the 2Q'21 YTD, an increase of 36% when compared to the 2Q'20 YTD. ▪ Segment Distributable Earnings of R$29.9 million, up 55% year - over - ye
Slide 28: Established liquid strategies platform
We have an established and widely recognized liquid strategies platform 28 LIQUID STRATEGIES R$14 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 29: Liquid Strategies segment results
Public Equities 77% Hedge Funds 23% ▪ Fee related earnings (FRE) of R$12.9 million in the quarter, up 85% year - over - year, driven by the end of the revenue sharing ag reement with GAS Investimentos in 2021 and net inflows in Hedge Funds which impacted positively our average management fee rate. F
Slide 30: Investment Products & Solutions
In our separate exclusive mandates, we provide investment solutions to institutional investors, such as small to medium - sized foundations , pension funds and financial institutions in Brazil, and high net worth individuals . Our asset allocation team seeks tailored made and distinctive portfolio c
Slide 31: IP&S segment results
Separate Mandates 63% Commingled Funds 16% International 12% Pension Plans 9% R$22 bn AUM ▪ Fee related earnings (FRE) of R$12.7 million in the quarter, up 180% year - over - year, due to the growth in management fees follow ing notable fundraising over the last twelve months. FRE was R$19.5 million
Slide 32: Leading financial advisory business
We have a leading financial advisory business 32 About our Financial Advisory team Our financial advisory services team provides financial and strategic services to business owners, senior corporate management teams and boards of directors, focusing mostly on pre - IPO and M&A advisory services for
Slide 33: Financial Advisory segment results
(R$ thousands, unless mentioned) 2Q'20 2Q'21 ∆ (%) 2Q’20 YTD 2Q’21 YTD ∆ (%) Net revenue from management fees 0 0 N/A 0 0 N/A Net revenue from advisory fees 6,364 3,717 - 42% 21,564 18,258 - 15% Total Fee Related Revenues 6,364 3,717 - 42% 21,564 18,258 - 15% Segment personnel expenses (225) (411) 8
Slide 34: Appendix – II Financial statements
Appendix – II Financial statements
Slide 35: How to analyze Vinci Partners' financial model
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 ( - ) Operat
Slide 36: Consolidated results: FRE and DE
(R$ thousands, unless mentioned) 2Q'20 2Q'21 ∆ (%) 2Q'20 YTD 2Q'21 YTD ∆ (%) Net revenue from management fees 60,826 94,778 56% 123,724 176,621 43% Net revenue from advisory fees 6,479 6,378 - 2% 22,451 21,444 - 4% Total Fee Related Revenues 67,305 101,156 50% 146,175 198,065 35% Segment personnel e
Slide 37: Income statement
(R$ thousands, unless mentioned) 2Q'20 2Q'21 ∆ (%) 2Q'20 YTD 2Q'21 YTD ∆ (%) REVENUES Net revenue from management fees 60,826 94,778 56% 123,724 176,621 43% Net revenue from performance fees 19,537 18,624 - 5% 15,561 28,575 84% Realized performance fees 7,743 9,559 23% 8,837 19,088 116% Unrealized p
Slide 38: FRE and PRE reconciliation
(R$ thousands, unless mentioned) 2Q'20 2Q'21 2Q ´ 20 YTD 2Q ´ 21 YTD OPERATING PROFIT 45,855 65,999 87,889 122,857 ( - ) Net revenue from realized performance fees (7,743) (9,559) (8,837) (19,088) ( - ) Net revenue from unrealized performance fees (11,794) (9,065) (6,724) (9,487) (+) Compensation al
Slide 39: Effective tax rate reconciliation
(R$ thousands, unless mentioned) 2Q'20 2Q'21 Profit (loss) before income taxes, including Dividends to partners 45,992 68,077 (+) Dividends to Partners, related to management, advisory and performance fees 11,463 - Profit (loss) before income taxes, not - including Dividends to partners 57,455 68,07
Slide 40: General and Administrative Expenses
9.1 13.6 6.7 5.8 1.1 3.0 1.5 General and Administrative Expenses 40 Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses Lease and condominium D&A Branding project Public company new costs Other R$53.8 mm Personnel Bonus related to Mgmt. and Adv. fees Pe
Slide 41: Balance Sheet Results
Balance Sheet Results In R$ thousands 41 Assets 12/31/2020 6/30/2021 Current assets Cash and cash equivalents 83,449 79,969 Cash and bank deposits 13,096 23,514 Financial instruments at fair value through profit or loss 70,353 56,455 Financial instruments at fair value through profit or loss 8,253 1
Slide 42: Notes and Definitions
Notes and Definitions 42 ▪ Notes to page 4 (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 VIFI from Credit and Pension Products Co - managed with IP&S from Equities. (2) CAGR i
Slide 43: Notes and Definitions (cont'd.)
▪ Notes to page 14 (1) Annualized dividend yield is calculated considering the company ´ s stock price on August 18, 2021 of US$13.00, and the annualized semi - annual dividend of US$0.30/share, announced on August 18, 2021. Notes to page 16 (1) Fixed costs are calculated as total G&A expenses less
Slide 44: Notes and Definitions (cont'd.)
▪ Notes to page 21 (1) Represents median of available research analysts’ reports that use sum - of - the - parts as its valuation methodology (JP Morgan, Goldman Sachs and Itaú BBA). (2) Represents median of available research analysts’ reports (JP Morgan, Goldman Sachs, Itaú BBA, UBS BB and BTG Pac
Slide 45: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 45 ▪ Notes to page 37 (1) Bonus compensation related to management and advisory includes Dividends to Partners related to management and advisory, dis tributed by the company to its original partners before the company turned public in 2021. (2) Performance based comp
Slide 46: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 46 ▪ “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 47: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 47 ▪ Net Cash and Investments include cash and cash equivalents and the fair value of investments in liquid funds and GP Fund Inve stm ents. Cash and cash equivalents include cash, certificate of deposits, which are issued by Banco Bradesco (credit rating AAA evaluate
Slide 48: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 48 ▪ “Capital Subscription / (capital return)” represents the net capital commitments and capital returns from our Private Markets ’ c losed end and listed funds. ▪ “Net Inflows / (outflows)” represent the net inflows and outflows from our liquid funds from our liquid
Slide 49: Funds/strategies' descriptions
Funds/strategies’ descriptions 49 ▪ 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 50: Office addresses
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 N ew York 1 646 559 8000 780 Third Avenue, 25 th Floor 10017 Recife 55 81 3204 6811 Av. República do Líbano, 251 - Sala
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