Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — FY2023 Earnings Presentation
48 slides from Vinci Compass Investments's earnings presentation, Feb 7, 2024
Slide 1: Fourth Quarter & Full Year 2023 Earnings Presentation
Fourth Quarter & Full Year 2023 Earnings Presentation February 07, 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: Fourth Quarter & Full Year 2023 Highlights
5 6 6 6 6 6 Vinci Partners Fourth Quarter & Full Year 2023 Highlights See notes and definitions at end of document R$ 69 bn AUM¹ 4Q23 Vinci Partners ended 2023 with R$69 bn in AUM¹, a 9% growth year - over - year, pushed by R$4.2 billion in capital subscriptions in 2023 across Private Markets funds.
Slide 6: Private Markets' Fundraising Cycle
6 Private Markets’ Fundraising Cycle See notes and definitions at end of document 8.2 6.8 15 2022 - 2023 YE2024 Total Fundraising PM (2022 - YE24) Year - end 2024 Target 55% Raised until 4Q23 Vinci entered a new cycle for capital raising within Private Markets funds, ending 2023 with R$8.2 billion i
Slide 7: Financial Highlights
Financial Highlights
Slide 8: Consolidated financial results table
8 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY(%) FY'22 FY'23 ∆ YoY(%) Net revenue from management fees 99,640 104,745 99,976 0% 371,501 393,367 6% Net revenue from advisory fees 4,394 2,283 18,998 332% 21,994 39,799 81% Total Fee Related Revenues 104,034 107,028 118,974 14% 393,495 433,
Slide 9: Financial highlights summary
9 ▪ Fee - related revenues of R$119.0 million in the fourth quarter, up 14% year - over - year, driven by stronger advisory fees in the quarter. x Fee - related revenues of R$433.2 million in the FY’23, up 10% year - over - year. Management fees were R$393.4 million in the FY’23, up 6% year - over -
Slide 10: AUM expansion across the platform
10 22 25 3 3 7 9 32 37 4Q'22 4Q'23 5-10 Years 10+ Years Perpetual or quasi-perpetual 25 30 24 23 10 12 59 65 4Q'22 4Q'23 Private Markets IP&S Liquid Strategies 29 33 24 23 10 12 63 69 4Q'22 4Q'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 38% 20% 20% 11% 10% Local Institutional³ HNWI Institutional Offshore Allocators & Distributors Public market vehicles 57% 16% 18% 8% 48% 34% 18% 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$278.6 million in the 4Q’23, up 39% quarter - over - quarter, d
Slide 13: Fee Related Revenues
13 100 100 4 19 104 119 4Q'22 4Q'23 Management fees Advisory fees 372 393 22 40 393 433 FY'22 FY'23 Management fees Advisory fees Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 87% of total revenues in FY’23 ▪ Fee related revenues totaled R$119.0 million
Slide 14: Operating Expenses
14 23 30 23 21 6 7 5 7 56 65 4Q'22 4Q'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A 80 95 85 91 25 30 18 20 208 235 FY'22 FY'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A Operating Expenses ▪ Total operating expenses of R$65.3 million in th
Slide 15: Fee Related Earnings (FRE)
15 51 57 4Q'22 4Q'23 192 208 FY'22 FY'23 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$57.3 million (R$1.07/share) in the quarter, up 12% year - over - year on an absolute basis and 14% y ear - over - year on an FRE per share¹ basis. This growth was propelled by a strong quarter for t
Slide 16: Performance Related Earnings (PRE)
16 4 3 4Q'22 4Q'23 8 11 FY'22 FY'23 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$2.9 million in the quarter, down 29% year - over - year. ▪ PRE¹ was R$10.6 million (R$0.20/share) in the FY’23, up 32% when compared to the FY’22. ▪ Performance fees are still at a very m
Slide 17: Realized GP Investment and Financial income
17 10 22 7 4 18 26 4Q'22 4Q'23 Realized Financial Income Realized GP Investment Income 87 84 20 19 107 104 FY'22 FY'23 Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$26.5 million in the 4Q’23, u
Slide 18: Adjusted Distributable Earnings (DE)
18 56 64 4Q'22 4Q'23 248 246 FY'22 FY'23 Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$63.6 million (R$1.18/share) in the quarter, up 14% year - over - year on an absolute basi s and 17% year - over - year on an Adjusted DE per share² basis. This growth was driven
Slide 19: Balance Sheet Highlights and Share Repurchase
19 22.36 23.86 3Q'23 4Q'23 Net Cash and Investments per share 4 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 3Q'23 4Q'23 Total Shares Repurchased (number of shares) 705,518 93,249 Total Capital Used for Share Repurchases 34.9 5.0 Remaining Share Repurchase Plan Authorizatio
Slide 20: Segment Highlights
Segment Highlights
Slide 21: Financials by segment
21 63% 14% 16% 7% Private Markets IP&S Liquid Strategies Corporate Advisory 61% 15% 16% 8% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$218.1 million in the FY’23, with 61% of FR E c oming from Private Markets, followed by Liquid Strategi
Slide 22: Private Markets
22 Private Equity 44% Real Estate 21% Credit 17% Infrastructure 12% Vinci SPS 6% Private Markets' AUM (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees 59,699 68,323 66,363 11% 207,061 250,960 21% Net revenue from advisory fees 1,756
Slide 23: IP&S
23 Separate Mandates 72% Pension Plans 13% International 6% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees 20,119 17,435 16,448 (18)% 83,114 70,462 (15)% Net revenue from advisory fees 7 8 8 11% 28 31 1
Slide 24: Liquid Strategies
24 Public Equities 77% Hedge Funds 23% Liquid Strategies' AUM (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees 19,823 18,950 17,046 (14)% 81,325 71,780 (12)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues
Slide 25: Corporate Advisory
25 Corporate Advisory ▪ Fee related earnings (FRE) of R$9.4 million in the quarter. ▪ FRE was R$17.5 million in the FY’23, a 113% increase comparing to the FY’22. ▪ Segment Distributable Earnings in the FY’23 were R$17.5 million in the FY’23, a 113% increase comparing to the FY’22. ▪ Solid results p
Slide 26: Vinci Retirement Services
26 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees – 38 119 N/A – 166 N/A Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues – 38 119 N/A – 166 N/A Segment personnel expenses (334) (582) (596) 78% (1,125) (2
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 December 29, 2023 For the Three Months Ended December 29, 2023 For the Twelve Months Ended December 29 , 2023 For the Twelve Month
Slide 29: Fund performance by strategy
29 Fund Segment NAV¹ (R$ million) 4Q’23 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 290.3 2.8% 12.6% 12.6% 25.9% CDI 7 CDI 7 Atlas Strategy² Hedge Funds 383.5 3.4% 9.2% 9.2% 18.3% CDI 7 CDI 7 Total Return Strategy³ Hedge Funds 367.3 11.2% 26.7% 26.7% 30.6% IPCA 9
Slide 30: Private markets track record by fund
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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 137 5,202 4.3x 4.0x 71.5% 77.2% VCP
Slide 31: Shareholder Dividends
31 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 1Q’23 2Q’23 3Q'23 4Q’23 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 60,006 70,369 51,820 62,010 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 11,994
Slide 32: Share Summary
32 Share Summary ▪ Common Shares Outstanding as of quarter end of 53,778,817 shares. x Repurchased 93,249 common shares in the quarter, with an average share price of US$10.5. x Repurchased 3,557,004 common shares since the announcement of the first share repurchase plan, with an average share price
Slide 33: GP fund commitments and investments
33 (R$ million, unless mentioned) Segment 4Q’23 Commitments Total Capital Committed 4Q’23 Capital Called Total Capital Called Capital Returned/Dividends Paid (4Q’23) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 0.0 3.2 – 1.6 2.9 VCP III Priv
Slide 34: Performance Fee Eligible AUM
34 57% 18% 25% Private Markets IP&S Liquid Strategies PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Segment/Fund AUM R$mm Index type Index Rate Status VCP III - Onshore 1,349 Preferred Return w/ Catch - Up² IPCA 5 + 8% Currently generating performance VCP III - Offshore 3,720 Preferred Return w/ Catch - Up²
Slide 35: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 36: Income statement
36 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) REVENUES Net revenue from management fees 99,640 104,745 99,976 0% 371,501 393,367 6% Net revenue from performance fees 7,558 2,058 6,468 (14)% 14,600 21,254 46% Realized performance fees 9,241 2,058 7,510 (19)% 18
Slide 37: FRE and DE reconciliation
37 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 FY'22 FY'23 OPERATING PROFIT 55,321 52,466 60,151 199,616 219,047 ( - ) Net revenue from realized performance fees (9,241) (2,058) (7,510) (18,218) (22,296) ( - ) Net revenue from unrealized performance fees 1,683 – 1,042 3,618 1,042 (+) Compensa
Slide 38: Effective tax rate reconciliation
38 (R$ thousands, unless mentioned) 4Q'22 4Q'23 FY'22 FY'23 Profit (loss) before income taxes, not - including Dividends to partners 76,381 78,210 271,814 269,385 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at statutory rates (25,970) (26,591) (92,417) (91,5
Slide 39: General and Administrative Expenses
39 16.0 19.0 3.6 8.1 1.8 3.8 3.9 General and Administrative Expenses 4Q 2022 (R$mm) 4Q 2023 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$56.3 mm Personnel Bonus related to Mgmt. and Adv. fees Performance b
Slide 40: Balance sheet assets
40 Assets 9/29/2023 12/29/2023 Current assets Cash and cash equivalents 184,215 660,305 Cash and bank deposits 38,042 15,896 Financial instruments at fair value through profit or loss 146,173 173,300 Financial instruments at amortized cost - 471,109 Financial instruments at fair value through profit
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) FRE per share is cal
Slide 42: Notes and Definitions (cont'd.)
42 Notes and Definitions (cont’d.) ▪ Notes to page 16 (1) PRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full - year values are calculated as the sum of the last four quarters. ▪ Notes to page 17 (1) GP investment income comes from proprie
Slide 43: Notes and Definitions (cont'd.)
43 Notes and Definitions (cont’d.) (7) CDI is an average of interbank overnight rates in Brazil (daily average for the period). (8) Brazil stock market most relevant index. (9) IPCA is a broad consumer price index measured by the IBGE. (10) IMAB is composed by government bonds indexed to IPCA. IMAB
Slide 44: Notes and Definitions (cont'd.)
44 Notes and Definitions (cont’d.) ▪ Notes to page 34 (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
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 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 Re
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 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 Recife 55 81 3204 6811 Av. República do Líbano, 251 - Sala 301 Torre A - Pina - 51110 - 160 Nova York 1 646 559 8000 780
Vinci Partners Investments — FY2023 Earnings Presentation on 6ix