Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q3 2023 Earnings Presentation
70 slides from Vinci Compass Investments's earnings presentation, Nov 16, 2023
Slide 1: Investor Presentation November 2023
Investor Presentation November 2023
Slide 2: Disclaimer
2 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 sub
Slide 3: Business Overview
Business Overview VINCI partners VINP | Nasdaq Listed
Slide 4: Vinci Partners is a leading, full-service alternative asset manager
4 Notes: ¹As of 3Q’23; LTM Dividend Yield is calculated considering 0.70 dividend/share for LTM and US$10.04/share as of Novemb er 15th,2023. Vinci Partners is a leading, full - service alternative asset manager Business Strategies 10 Distribution Channels 5 Capital committed for 5+ years¹ 52% Vinci
Slide 5: We offer a complete portfolio of investment products and solutions
5 Notes: ¹AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding double counting from co - managed funds between our segments. The platform provides an extensive range of products and solu
Slide 6: Our AUM is highly diversified across different segments
6 Notes: ¹Long - term AUM includes funds with lockups for at least five years to quasi - perpetual capital commitments; Private market s strategies include Private Equity, Real Estate, Private Credit, Vinci SPS and Infrastructure. Our AUM base favors alpha - driven strategies, while our revenue prof
Slide 7: Our AUM funding base relies on proprietary distribution channels
7 Our AUM funding base primarily relies on our proprietary distribution channels 47% 36% 17% 26% 24% 21% 18% 12% 36% 22% 19% 12% 10% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 48% 41% 6% 5% Liquid . Strategies . ▪ 95% of Liquid Strategies’ AUM is
Slide 8: We stand at the beginning of an easing interest rate cycle
8 6 We stand at the beginning of an easing interest rate cycle, having doubled the number of existing strategies employed in the previous cycle. Nov’23 Tightening cycle Easing cycle Tightening cycle # strategies Vinci AUM Evolution¹ ( R$bn ) vs. Long - term Real Interest Rate Our proven resilient AU
Slide 9: Strategic Partnership Overview
9 Strategic Partnership Overview Vinci and Ares announced a Strategic Partnership and Investment ▪ Forming strategic partnership to accelerate growth of Vinci’s platform in Latin America and collaborate on distribution, new products and other strategic areas ▪ More than 10 year relationship among se
Slide 10: Strategic Rationale & Key Areas to Collaborate
10 Strategic Rationale & Key Areas to Collaborate Accelerate M&A in Latin America Put additional liquidity to use by further scaling existing investment platforms in Brazil and expanding into new strategies and geographies across Latin America Best Practices to Accelerate Growth Connectivity across
Slide 11: What is yet to come?
What is yet to come?
Slide 12: We have multiple growth drivers
12 We have multiple growth drivers Projections and forward - looking statements are not reliable indicators of future events and there is no guarantee that such acti vities will occur as expected or at all. Fore more information on forward - looking statements, please refer to the disclaimer on slid
Slide 13: Private Markets fundraising target rolled to year-end 2024
13 Projections and forward - looking statements are not reliable indicators of future events and there is no guarantee that such acti vities will occur as expected or at all. Fore more information on forward - looking statements, please refer to the disclaimer on slide 2. We are rolling our Private
Slide 14: Long-term growth opportunities in the market
14 Projections and forward - looking statements are not reliable indicators of future events and there is no guarantee that such acti vities will occur as expected or at all. Fore more information on forward - looking statements, please refer to the disclaimer on slide 2. … and in the long - term, w
Slide 15: Fee Related Earnings growth driven by AUM and margin expansion
15 Projections and forward - looking statements are not reliable indicators of future events and there is no guarantee that such acti vities will occur as expected or at all. Fore more information on forward - looking statements, please refer to the disclaimer on slide 2. Fee Related Earnings growth
Slide 16: Performance Fees as an additional value driver
16 6 6 Projections and forward - looking statements are not reliable indicators of future events and there is no guarantee that such acti vities will occur as expected or at all. Fore more information on forward - looking statements, please refer to the disclaimer on slide 2. Performance Fees as an
Slide 17: GP Investments should drive future value
17 Projections and forward - looking statements are not reliable indicators of future events and there is no guarantee that such acti vities will occur as expected or at all. Fore more information on forward - looking statements, please refer to the disclaimer on slide 2. GP Investments should drive
Slide 18: We expect acceleration of growth and quality of earnings
18 Projections and forward - looking statements are not reliable indicators of future events and there is no guarantee that such acti vities will occur as expected or at all. Fore more information on forward - looking statements, please refer to the disclaimer on slide 2 We expect acceleration of gr
Slide 19: Key takeaways
19 Key takeaways 6 Our business model is structured to drive strong growth during favorable market conditions and to remain resilient during tougher scenarios 6 Our partnership with Ares will accelerate our platform’s growth in Latin America and collaborate on distribution, new products and other st
Slide 20: Financial Highlights
Financial Highlights VINCI partners VINP | Nasdaq Listed
Slide 21: Fee Related Revenues and Total Expenses
21 Fee Related Revenues and Total Expenses 20 20 22 24 7 7 5 5 54 57 3Q'22 3Q'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A + 6% 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 Fee Related Revenues are primarily der
Slide 22: Accrued Performance Fees
22 Notes: Vinci Partners recognizes the performance revenue according to IFRS 15. Unrealized performance fees are recognized onl y w hen is highly probable that the revenue will not be reversed in the Income Statement. The fund FIP Infra Transmissão in Infrastructure had R$15.5 million as of the end
Slide 23: GP and Financial Income
23 Notes: ¹GP investment income comes from proprietary investments made by Vinci Partners in its own Private Markets’ funds and oth er closed - end funds across Liquid Strategies and IP&S segments with long - term lockups; Financial income is income generated through investments made with our cash a
Slide 24: Fee Related Earnings (FRE) and Distributable Earnings (DE)
24 Notes: Per share values are calculated considering the number of outstanding shares at the end of the current quarter. Year - to - d ate values are calculated as the sum of the last three quarters; ¹Adjusted after tax Distributable Earnings is calculated as Distributable Earnings excluding non -
Slide 25: Third Quarter 2023 Segment Earnings
25 Notes: Per share values are calculated considering the number of outstanding shares at the end of the current quarter. Year - to - d ate values are calculated as the sum of the last three quarters; ¹Other financial expenses include the interest related to Vinci SPS’ acquisition; ²Non - operationa
Slide 26: Appendix – I Business Overview
Appendix – I Business Overview
Slide 27: Building up Vinci Partners: a history of growth and diversification
27 Notes: Starting from 2020, our official AUM is calculated on a consolidated basis, accounting for double counting resulting from fun ds from one segment investing in other segments and excluding double counting from co - managed funds between our segments. Source : Vinci Partners Building up Vinc
Slide 28: Vinci's ecosystem sets us apart from competition
28 Vinci’s ecosystem sets us apart from competition Private Markets Liquid Strategies IP&S Retirement Services Corporate Advisory Asset Origination Leverage from a robust platform with a broad spectrum of strategies to maximize investment opportunities Networking With +40 partners and a number of se
Slide 29: We place a strong emphasis on risk management
29 Notes: ¹CVM ( Comissão de Valores Mobiliários ) is the Brazilian equivalent to the SEC. 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 CVM¹) We place a stron
Slide 30: Our ESG approach permeates throughout our investment strategies
30 Our ESG approach is a fundamental value that permeates throughout our investment strategies We are pioneers among Brazilian firms in our commitment to ESG… Vinci Energia Sustentavel (VES) Credit Fund focused on private debt related to green energy funded by BNDES Vinci Impact and Return (VIR IV)
Slide 31: Brazil is a perfect fit for advancing this agenda
31 And Brazil is a perfect fit for advancing this agenda As of September 29, 2023, unless otherwise stated. Source : ¹ Prequin ; ²PEI; ³Vinci Partners Internal Research … and stands as a leader for climate and impact - oriented investments in Brazil total capital raised ($bn) 2,500 2,000 1,500 1,000
Slide 32: Vinci is primed to capitalize on secular trends
Vinci is primed to capitalize on secular trends…
Slide 33: The alternative market continues to grow on a global scale
33 Global Share (%) Source: PWC, Asset and Wealth Management Revolution 2023 The alternative market continues to grow on a global scale A global shift towards private markets reflects investors' heightened pursuit of returns and hedging strategies amid market v ola tility Propelled by declining real
Slide 34: Substantial inflows from institutional investors into alternatives
34 As of December 30, 2022, unless otherwise stated Source : UBS Global, Public Pension Plans Tilt Toward Alternatives ; ¹Thinking Ahead Institute The alternative industry has experienced substantial inflows from institutional investors in recent years 57% 43% 34% 23% 9% 34% 2002 2003 2004 2005 2006
Slide 35: Brazilian investors shifting toward superior-return products
35 Source : ANBIMA See notes and definitions at end of document Brazilian investors are shifting focus toward products with superior returns, but still relatively under allocated The Brazilian Market AUM has almost tripled since 2015 AUM allocation mix gradually shifts away from fixed income Signifi
Slide 36: Brazilian pension industry allocation concentrated in fixed income
36 87% 13% Fixed Income Other asset classes 79% 21% Brazilian Complementary Pension Industry allocation is still heavily concentrated toward fixed income products As of June 30, 2023. Source: ¹Fenaprevi; ²Abrapp Sizeable opportunity for growth in alternatives coming from institutional investors, esp
Slide 37: Appendix – II Segment Summaries
Appendix – II Segment Summaries
Slide 38: Financials by segment
38 Financials by segment 63% 16% 16% 5% ▪ 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 39: Private Equity and Real Estate platform
39 We offer a complete and diversified platform for alternative investments Private Equity – R$14.0bn AUM (46%) Real Estate – R$6.2bn AUM (20%) PRIVATE MARKETS R$ 30 BILLION AUM The real estate strategy invests through two subs - strategies : Listed Perpetual Funds : The real estate strategy current
Slide 40: Infrastructure and Vinci SPS
40 We offer a complete and diversified platform for alternative investments Infrastructure – R$2.7bn AUM (9%) Vinci SPS – R$2.1bn AUM (7%) The Vinci SPS strategy invests across five core sub - strategies : Primary Market Funding : New money provided through structured credit solutions . Downside pro
Slide 41: Private Markets
41 Private Markets Private Equity 46% Real Estate 20% Credit 18% Infrastructure 9% Vinci SPS 7% Private Markets' AUM (R$ 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 fr
Slide 42: International, Commingled Funds and Pension Plans
42 International – R$1.9bn AUM (8%) Within our IP&S segment we have an offshore allocation service, or international exclusive mandates, managed by a team in our New York office . We provide tailored made investment solutions for local institutional investors and nigh net worth individuals that are
Slide 43: Investment Products & Solutions
43 Investment Products & Solutions Separate Mandates 70% Pension Plans 13% International 8% Commingled Funds 9% IP&S AUM (R$ 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 reve
Slide 44: Liquid strategies platform
44 We have an established and widely recognized liquid strategies platform LIQUID STRATEGIES R$11 BILLION AUM Vinci Partners has a long track record and deep experience investing in public equities in Brazil . We focus on holding positions in companies for three to five years following deep analysis
Slide 45: Liquid Strategies
45 Liquid Strategies Public Equities 75% Hedge Funds 25% Liquid Strategies' AUM (R$ 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 T
Slide 46: Leading corporate advisory business
46 We have a leading corporate advisory business About our Corporate Advisory team Our corporate 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 47: Corporate Advisory
47 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$8.1 million, an increase of 7% year - over - year when
Slide 48: Retirement Services
48 Retirement Services (R$ 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
Slide 49: Appendix – III Financial Statements
Appendix – III Financial Statements
Slide 50: How to analyze Vinci Partners' financial model
50 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 corporate advisory and management teams ( - ) Ope
Slide 51: Financials - Income Statement
51 See notes and definitions at end of document Financials - Income Statement (Unaudited) (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 fee
Slide 52: Financials - Non-GAAP Reconciliation
52 Financials - Non - GAAP Reconciliation (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 performa
Slide 53: Effective tax rate reconciliation
53 Notes: ¹Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000.00 in the prior fiscal y ear may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's subsidiaries adopted this tax regime and the eff
Slide 54: General and Administrative Expenses
54 General and Administrative Expenses 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 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$53.6 mm Personnel Bonus related to Mg
Slide 55: Balance Sheet
55 Balance Sheet Liabilities and equity 6/30/2023 9/29/2023 Current liabilities Trade payables 438 563 Deferred Revenue – 12,498 Leases 24,381 24,381 Accounts payable 7,338 7,601 Labor and social security obligations 52,689 73,763 Loans and Obligations 22,207 66,081 Taxes and contributions payable 1
Slide 56: Supplemental Details
Supplemental Details VINCI partners VINP | Nasdaq Listed
Slide 57: AUM and Fee-Earning AUM Rollforward
57 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ 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 58: Investment records – IP&S, Liquid Strategies, Private Credit and Listed Funds
58 See notes and definitions at end of document Investment records – IP&S, Liquid Strategies, Private Credit and Listed Funds 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
Slide 59: Investment records – Closed End Private Markets funds
59 See notes and definitions at end of document Pro Forma Historical Portfolio Performance - Excluding PIPE Investments¹ Investment records – Closed End Private Markets funds Fund Segment Vintage year Committed Capital Invested Capital Realized or Unrealized Total Value Gross MOIC Gross MOIC Gross I
Slide 60: Shareholder Dividends
60 Notes: ¹US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 4.8673, as of November 07, 20 23, when dividends were approved by our Board of Directors; ²Per Share calculations are based on end of period Participating Common Shares; ³Actual dividends per common
Slide 61: Share Summary
61 Notes: ¹As of September 29, 2023, Public Float was comprised of 12,487,696 Class A common shares. 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$10.1. x Repurchased 3,463,755 c
Slide 62: GP Commitment in Vinci Partners funds
62 Notes: ¹The remaining capital committed in FIP Infra Transmissão and FIP Infra Transmissão co - investment will not be called by the fund, which is already in divestment period. GP Commitment in Vinci Partners funds (R$ million, unless mentioned) Segment 3Q’23 Commitments Total Capital Committed
Slide 63: Significant exposure to performance fee-eligible AUM
63 See notes and definitions at end of document Significant exposure to performance fee - eligible AUM 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 IP
Slide 64: Notes and Definitions
64 Notes and Definitions Notes to page 22: (1) Accrued performance fees for the VCP offshore are as of 2Q’23. 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 35: (1) Liquid Strategies are comprised of Public Equities and He
Slide 65: Notes and Definitions
65 Notes and Definitions (7) IMAB is composed by government bonds indexed to IPCA. IMAB 5 also includes government bonds indexed to IPCA with up to 5 Yea rs in duration. (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=
Slide 66: Notes and Definitions
66 Notes and Definitions (5) IPCA is a broad consumer price index measured by the IBGE. (6) IMAB 5 is composed by government bonds indexed to IPCA with up to 5 years in duration. (7) IBOV is the Brazilian stock market's most relevant index; (8) FTSE is London's stock market most relevant index. (9)
Slide 67: Notes and Definitions
67 Notes and Definitions ▪ “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 performance
Slide 68: Notes and Definitions (cont'd.)
68 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 69: Funds/strategies' descriptions
69 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 70: 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 - 14º andar Jardim Paulistano – 01452 - 000 RIBEIRÃO PRETO 55 16 2101 4641 Av. Presidente Vargas, 2.121 – Sala 106 Jardim América - 14020 - 260 RECIFE 55 81 3204 6
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