Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q2 2022 Earnings Presentation
49 slides from Vinci Compass Investments's earnings presentation, Aug 11, 2022
Slide 1: Second Quarter 2022 Earnings Presentation
Second Quarter 2022 Earnings Presentation August 11, 2022
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 reports solid quarter with strong fundraising across Private Markets and IP&S
5 Vinci Partners reports solid quarter with strong fundraising across Private Markets and IP&S After - tax Adjusted DE² 2Q22 R$61.1 (EPS R$1.10) R$ 60 bn AUM¹ See notes and definitions at end of document R$4.6 bn Total Fundraising 2Q22 Vinci Partners ended the second quarter of 2022 with R$60 bn in
Slide 6: Financial Highlights
Financial Highlights
Slide 7: Second Quarter 2022 Segment Earnings (Unaudited)
7 Second Quarter 2022 Segment Earnings (Unaudited) See notes and definitions at end of document (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY(%) 2Q'21 YTD 2Q'22 YTD ∆ YoY(%) Net revenue from management fees 94,778 87,229 89,271 - 6% 176,621 176,500 0% Net revenue from advisory fees 6,378
Slide 8: Second Quarter 2022 Highlights
8 ▪ Total assets under management (“AUM”) of R$59.5 billion, up 5% year - over - year. ▪ Fee - Earning AUM (“FEAUM”) of R$56.0 billion, up 3% year - over - year. ▪ Performance fee - eligible AUM (“PEAUM”) of R$33.5 billion at the end of the quarter. ▪ Net inflows of R$ 1.7 billion in the quarter and
Slide 9: Vinci raised R$4.6 billion in 2Q'22
9 Vinci raised R$4.6 billion in 2Q’22, a resilient and robust organic growth in AUM despite a volatile and challenging macro scenario ▪ Net Inflows accounted for R$1.7 billion in 2Q’22. ▪ R$2.4 billion raised in IP&S, coming primarily from our pension plan products. ▪ Our Liquid Strategies' AUM rema
Slide 10: AUM expansion through organic growth across the platform
10 19 18 2 3 7 7 27 28 2Q'21 2Q'22 Perpetual or quasi-perpetual 10+ Years 5-10 Years 19 21 14 10 22 26 55 56 2Q'21 2Q'22 Private Markets Liquid Strategies IP&S We continue to see AUM expansion through organic growth across the platform... ▪ Total assets under management (AUM) of R$59.5 billion, up 5
Slide 11: Vinci acquired SPS Capital in July 2022
11 Vinci acquired SPS Capital in July 2022, adding R$2.0 billion of long - term high - fee earning AUM to the platform 13.0 5.2 4.3 1.5 2.0 25.7 7.1 2.8 Private Equity Real Estate Credit Infrastructure Vinci SPS IP&S Public Equities Hedge Funds R$60 bn AUM 2Q’22 R$62 bn AUM 2Q’22 ProForma Vinci Part
Slide 12: Diversified platform with management fee-centric revenue
12 22% 9% 7% 2% 43% 12% 5% 35% 22% 22% 13% 8% Local Institucional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 24% 12% 5% 5% 21% 15% 6% 12% Private Equity Real Estate Credit Infrastructure IP&S Public Equities Hedge Funds Advisory Our AUM base favors alpha - driven st
Slide 13: Long-term upside from performance fees in private market funds
13 Vinci holds a strong long - term upside from realization of performance fees in private market funds Gross Accrued Performance Fees – Private Market Funds ▪ Performance fee receivable increased to R$146.1 million in the 2Q’22, a 40% increase quarter - over - quarter, driven mostly by appr eciatio
Slide 14: Significant exposure to performance fee-eligible AUM
14 30% 25% 16% 9% 10% 8% 2% Private Equity IP&S Public Equities Real Estate Credit Hedge Funds Infrastructure Significant exposure to performance fee - eligible AUM ▪ Total Performance fee eligible AUM (PEAUM) of R$33.5 billion. ▪ Hurdle rate funds charge performance based on the fund’s return over
Slide 15: Fee Related Revenues
15 95 89 6 7 101 96 2Q'21 2Q'22 Management fees Advisory fees Fee Related Revenues 2Q ’ 22 vs. 2Q ’ 21 (R$mm) - 5% YoY 177 177 21 10 198 187 2Q'21 YTD 2Q'22 YTD Management fees Advisory fees Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 91% of total rev
Slide 16: Operating Expenses
16 Operating Expenses ▪ Total operating expenses of R$50.5 million in the quarter, down 6% year - over - year. ▪ Disregarding bonus compensation, Personnel, Corporate center and G&A expenses were up 10% year - over - year due to higher inflation in the period and return of travel expenses to the sam
Slide 17: Fee Related Earnings (FRE)
17 105 91 2Q'21 YTD 2Q'22 YTD 55 47 2Q'21 2Q'22 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE)¹ of R$46.9 million (R$0.84/share) in the quarter, up 7% quarter - over - quarter, following strong fundra ising across Private market and IP&S strategies and a stronger contribution from advisory
Slide 18: Performance Related Earnings (PRE)
18 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE)¹ of R$2.4 million (R$0.04/share) in the quarter, down 78% year - over - year. ▪ PRE¹ was R$4.6 million (R$0.08/share) over the 2Q’22 YTD , down 74% when compared to the 2Q’21 YTD. ▪ In the 2Q'21 the platform was positively im
Slide 19: Realized GP Investment and Financial income
19 14 20 0.3 5 15 25 2Q'21 2Q'22 Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$25.0 million in the 2Q ’ 22, up 71% year - over - year, driven by realized gains in our liquid funds' portfolio. ▪
Slide 20: Adjusted Distributable Earnings (DE)
20 102 119 2Q'21 YTD 2Q'22 YTD 55 61 2Q'21 2Q'22 Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$61.1 million (R$1.10/share) in the quarter, up 11% year - over - year, boosted by a great er contribution from financial income. ▪ Adjusted DE margin for the quarter was
Slide 21: Balance Sheet Highlights and Share Repurchase Activity
21 24.58 24.37 1Q'22 2Q'22 Cash and Net Investments per share 4 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 1Q'22 2Q'22 Total Shares Repurchased (number of shares) 326,261 250,360 Total Capital Used for Share Repurchases 21.2 14.6 Remaining Share Repurchase Plan Authorizat
Slide 22: Segment Highlights
Segment Highlights
Slide 23: Financials by segment
23 53% 21% 22% 4% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$93.8 million over the 2Q’22 YTD, with 53% of FRE coming from Private Markets, followed by IP&S accounting for 22%, Liquid Strategies for 21% and Financial Advisory for 4%. ▪ S
Slide 24: Private Markets segment results
24 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees 49,407 46,759 47,654 - 4% 95,988 94,413 - 2% Net revenue from advisory fees 2,641 467 275 - 90% 3,146 741 - 76% Total Fee Related Revenues 52,048 47,226 47,929 - 8% 99,134 9
Slide 25: IP&S segment results
25 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees 23,020 20,573 20,210 - 12% 43,003 40,783 - 5% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues 23,020 20,573 20,210 - 12% 43,003 40,783 - 5% Segme
Slide 26: Liquid Strategies segment results
26 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees 22,349 19,897 21,407 - 4% 37,629 41,304 10% Net revenue from advisory fees 20 7 7 - 65% 39 14 - 65% Total Fee Related Revenues 22,369 19,904 21,414 - 4% 37,668 41,317 10% Se
Slide 27: Financial Advisory
27 Financial Advisory ▪ Fee related earnings (FRE) of R$3.3 million in the quarter, up 525% year - over - year. ▪ FRE was R$4.0 million over the 2Q’22 YTD, a decrease of 60% when compared to the 2Q’21 YTD, due to a greater contribution fro m a dvisory fees in the 1Q’21, when the Advisory team closed
Slide 28: Vinci Retirement Services segment results
28 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY (%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) Net revenue from management fees – – – – – – – Net revenue from advisory fees – – – – – – – Total Fee Related Revenues – – – – – – – Segment personnel expenses – (97) (308) N/A – (405) – Other G&A expenses
Slide 29: Supplement Details
Supplement Details
Slide 30: AUM and Fee-Earning AUM Rollforward
30 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ millions Fee - Earning Assets Under Management (FEAUM) – R$ millions For the Three Months Ended June 30, 2022 For the Three Months Ended June 30, 2022 For the Twelve Months Ended June 30, 2022 For the Twelve Months Ended Jun
Slide 31: Investment records – IP&S, Liquid Strategies, Credit and Listed Funds
31 Investment records – IP&S, Liquid Strategies, Credit and Listed Funds Fund Segment NAV¹ (R$ millions) 2Q22 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 490.5 2.2% 5.4% 7.7% 9.2% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 490.2 0.5% 4.8% 0.4% 0.9% CDI 4 CDI 4 Vinci
Slide 32: Investment records – Closed End Private Markets funds
32 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 IRR Gross IRR Partially Realized (R$mm) (R$mm)
Slide 33: Shareholder Dividends
33 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 DE per Common Share (US$)² 0.34 0.20 0.24 0.19 0.21 Actual Dividend per Common Share³ 0.30 0.16 0.
Slide 34: Share Summary
34 Share Summary ▪ Common Shares Outstanding as of quarter end of 55,578,956 shares. x Repurchased 250,306 common shares in the quarter, with an average share price of US$11.7. x Repurchased 1,334,632 common shares since the announcement of the first share repurchase plan, with an average share pric
Slide 35: GP Commitment in Private Market funds
35 GP Commitment in Private Market funds ▪ As of June 30, 2022, the company had R$928.9 million in capital commitments signed to proprietary Private Markets funds. ▪ During the second quarter of 2022, the company signed R$ 537.4 million in capital commitments to proprietary Private Markets fun ds. ▪
Slide 36: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 37: Revenues and expenses reconciliation
37 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 ∆ YoY(%) 2Q'21 YTD 2Q'22 YTD ∆ YTD (%) REVENUES Net revenue from management fees 94,778 87,229 89,271 - 6% 176,621 176,500 0% Net revenue from performance fees 18,624 3,172 3,839 - 79% 28,575 7,011 - 75% Realized performance fees 9,559 2,536 3,83
Slide 38: FRE and Distributable Earnings reconciliation
38 (R$ thousands, unless mentioned) 2Q'21 1Q'22 2Q'22 2Q'21 YTD 2Q'22 YTD OPERATING PROFIT 65,999 45,959 49,314 122,857 95,273 ( - ) Net revenue from realized performance fees (9,559) (2,536) (3,839) (19,088) (6,375) ( - ) Net revenue from unrealized performance fees (9,065) (636) – (9,487) (636) (+
Slide 39: Effective tax rate reconciliation
39 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 2Q'21 2Q'22 2Q’21 YTD 2Q’22 YTD Profit (loss) before income taxes, not - including Dividends to partners 68,077 58,109 128,322 115,154 Combined statutory income taxes rate - % 34% 34% 3
Slide 40: General and Administrative Expenses
40 13.7 17.1 7.8 8.9 0.9 2.4 3.0 General and Administrative Expenses 2Q 2021 (R$mm) 2Q 2022 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$53.8 mm Personnel Bonus related to Mgmt. and Adv. fees Performance b
Slide 41: Balance Sheet
41 Balance Sheet Assets 3/31/2022 6/30/2022 Current assets Cash and cash equivalents 38,516 57,780 Cash and bank deposits 9,109 10,532 Financial instruments at fair value through profit or loss 29,407 47,248 Financial instruments at fair value through profit or loss 1,324,292 1,290,972 Trade receiva
Slide 42: Notes and Definitions
42 Notes and Definitions ▪ Notes to page 5 (1) AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding double counting from co - managed funds between our segments. (2) Adjusted Distributab
Slide 43: Notes and Definitions (cont'd.)
43 Notes and Definitions (cont’d.) (3) Hurdle Rate is the minimum return the fund must achieve before it can charge performance fees. In most cases, funds with hur dle rate also are under a high - water mark clause . (4) Funds with preferred return must return 100% of invested capital corrected by t
Slide 44: Notes and Definitions (cont'd.)
44 Notes and Definitions (cont’d.) ▪ Notes to page 21 (1) Cash and cash equivalents include certificate of deposits and federal bonds. Certificate of deposits are issued by Banco Bra desco (credit rating AAA evaluated by Fitch Ratings) with interest rates variable from 99.5% to 101% of CDI (interban
Slide 45: Notes and Definitions (cont'd.)
45 Notes and Definitions (cont’d.) ▪ Notes to page 33 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 5.1239, as of August 9, 2022, whe n dividends were approved by our Board of Directors. (2) Per Share calculations are based on end of period Participat
Slide 46: Notes and Definitions (cont'd.)
46 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 47: Notes and Definitions (cont'd.)
47 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 48: Funds/strategies' descriptions
48 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 49: Rio de Janeiro 2159 6000 Av. Bartolomeu Mitre, Leblon - 22431 - 002 São
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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