Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q3 2021 Earnings Presentation
47 slides from Vinci Compass Investments's earnings presentation, Nov 17, 2021
Slide 1: Third Quarter 2021 Earnings Presentation
Third Quarter 2021 Earnings Presentation November 17, 2021
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
Presenters Alessandro Horta Chief Executive Officer Bruno Zaremba Head of Private Equity & Investor Relations Sergio Passos Chief Operating Officer & Chief Financial Officer 3
Slide 4: Opening Remarks
Opening Remarks
Slide 5: Resilient business model continues to deliver solid AUM growth and strong financial results
Vinci Partners’ resilient business model continues to deliver solid AUM growth and strong financial results We continue to deliver strong results across the board backed by management and advisory fees FRE R$63.1mm 3Q ' 21 +74% YoY Which translates into substantial amounts of free cash flow After -
Slide 6: Financial Highlights
Financial Highlights
Slide 7: Third Quarter 2021 Segment Earnings
Third Quarter 2021 Segment Earnings (Unaudited) (R$ thousands, unless mentioned) 3Q'20 3Q'21 ∆ (%) 3Q'20 YTD 3Q'21 YTD ∆ (%) Net revenue from management fees 71,517 92,855 30% 195,241 269,476 38% Net revenue from advisory fees 330 25,163 7,525% 22,781 46,607 105% Total Fee Related Revenues 71,847 11
Slide 8: Third quarter 2021 financial highlights
▪ Fee - related revenues (management and advisory fees) of R$118.0 million in the quarter, up 64 % year - over - year. x Fee - related revenues of R$ 316 .1 million in the 3Q'21 YTD, up 45 % year - over - year. ▪ Fee - Related Earnings (“FRE”) of R$ 63 .1 million (R$1.12/share) in the quarter, up 74
Slide 9: Net inflows and AUM rollforward
▪ Net Inflows of R$2.0 billion in the quarter , with highlights to our IP&S and Credit strategies. ▪ R$1.9 billion raised in IP&S, coming primarily from new exclusive mandates. ▪ R$223 million raised in Private Credit funds. ▪ Net Inflows accounted for R$5.7 billion in the year - to - date , with hi
Slide 10: AUM is growing across the platform
AUM is growing across the platform… ▪ Total assets under management (AUM) of R$58.0 billion, up 19% year - over - year, driven by strong fundraising across Private Market strategies and exclusive mandates in IP&S. Liquid Strategies’ AUM was impacted by market depreciation, following losses in the lo
Slide 11: AUM base and revenue diversified across strategies and clients
24% 10% 4% 6% 23% 16% 6% 12% Private Equity Real Estate Credit Infrastructure IP&S Public Equities Hedge Funds Advisory 19% 9% 5% 4% 41% 17% 5% AUM 3Q ' 21 Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric … and is highly diversified across differen
Slide 12: Performance fee eligible AUM
Vinci holds a strong position for future realization of performance fees with over R$7 billion in PEAUM coming from preferred return funds with carried interest Significant exposure to performance fee - eligible AUM PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Strategy/Fund AUM R$mm Index type Index Rate St
Slide 13: Management and advisory fees
Management fees remain the main contributor to revenues, accounting for 77% of total revenues in the 3Q'21 YTD. Fee related revenues are expanding alongside AUM growth ▪ Fee related revenues, composed of management and advisory fees, totaled R$118.0 million in the quarter, up 64% year - over - year,
Slide 14: Operating Expenses
Operating Expenses ▪ Total operating expenses of R$56.7 million in the quarter, up 57% year - over - year. ▪ This increase was in part driven by new recurring costs related to becoming a public company¹ in January 2021, which accounte d f or R$2.9 million of expenses in the quarter. On a comparable
Slide 15: Fee Related Earnings (FRE)
Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$63.1 million (R$1.12/share) in the quarter, up 74% year - over - year, driven by the robust growth i n management fees across all segments and higher advisory fees in the quarter. FRE was R$168.5 million (R$2.97/share) in the 3Q'21 YTD, up
Slide 16: Performance Related Earnings (PRE)
Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$3.8 million (R$0.07/share) in the quarter, up 192% year - over - year, primarily driven by h igher contributions coming from IP&S international exclusive mandates and the sovereign wealth mandate in Public Equities. ▪ PRE w
Slide 17: Realized GP Investment and Financial income
▪ Realized GP Investment¹ and Financial income² of R$1.7 million in the 3Q ' 21, up 3,443% year - over - year, driven by realized gains from our liquid funds’ portfolio. ▪ Our liquid funds' portfolio underperformed the CDI quarterly return by 1.1 percentage point, due to the significant market vo la
Slide 18: Distributable Earnings (DE)
26 62 3Q'20 3Q'21 Distributable Earnings (DE) ▪ Distributable Earnings (DE) of R$61.7 million (R$1.09/share) in the quarter, up 137% year - over - year, driven by the notable growt h in management and advisory fees in 2021, additional to the realization of performance fees from IP&S international ma
Slide 19: Balance Sheet Highlights
Balance Sheet Highlights ▪ As of September 30, 2021, Vinci Partners had R$1.5 billion (R$25.94/share) in total cash and net investments, that comprise c ash , cash equivalents and net investments (liquid funds and GP fund investments at fair value). ▪ Vinci Partners repurchased 173,515 shares in the
Slide 20: Segment Highlights
Segment Highlights
Slide 21: Financials by segment
▪ Fee Related Earnings (FRE) were R$168.5 million in the 3Q'21 YTD, with 47% of FRE coming from Private Markets, followed by Li qui d Strategies accounting for 21%, IP&S for 17% and Financial Advisory for 15%. ▪ Segment Distributable Earnings were R$190.1 million in the 3Q'21 YTD, with 43% coming fr
Slide 22: Private Markets segment results
(R$ thousands, unless mentioned) 3Q'20 3Q'21 ∆ (%) 3Q'20 YTD 3Q'21 YTD ∆ (%) Net revenue from management fees 43,339 49,057 13% 117,552 145,045 23% Net revenue from advisory fees 92 823 798% 909 3,969 337% Total Fee Related Revenues 43,431 49,880 15% 118,460 149,014 26% Segment personnel expenses (1
Slide 23: Liquid Strategies segment results
Public Equities 76% Hedge Funds 24% Liquid Strategies' AUM (R$ thousands, unless mentioned) 3Q'20 3Q'21 ∆ (%) 3Q’20 YTD 3Q’21 YTD ∆ (%) Net revenue from management fees 15,766 23,273 48% 46,072 66,276 44% Net revenue from advisory fees - - N/A - - N/A Total Fee Related Revenues 15,766 23,273 48% 46,
Slide 24: IP&S segment results
Separate Mandates 64% Commingled Funds 14% International 13% Pension Plans 9% IP&S' AUM (R$ thousands, unless mentioned) 3Q'20 3Q'21 ∆ (%) 3Q’20 YTD 3Q’21 YTD ∆ (%) Net revenue from management fees 12,422 20,525 65% 31,627 58,154 84% Net revenue from advisory fees 25 8 - 68% 96 47 - 51% Total Fee Re
Slide 25: Financial Advisory
Financial Advisory ▪ Fee related earnings (FRE) of R$15.2 million in the quarter, up R$16.5 million year - over - year. FRE was R$25.0 million in the 3Q ' 21 YTD, an increase of 95% when compared to the 3Q'20 YTD, a consequence of the stronger deal activity in 2021. ▪ Segment Distributable Earnings
Slide 26: Supplement Details
Supplement Details
Slide 27: AUM and Fee-Earning AUM Rollforward
AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ millions Fee - Earning Assets Under Management (FEAUM) – R$ millions Private Public IP&S Infrastructure Real Estate Credit Hedge Total Equity Equities Funds Beginning balance 10,851 10,861 21,966 2,363 5,087 2,461 3,263 56,852
Slide 28: Investment records – IP&S, Liquid Strategies, Credit and Listed Funds
Investment records – IP&S, Liquid Strategies, Credit and Listed Funds Fund Segment NAV¹ (R$ millions) 3Q21 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 928.7 0.8% 1.2% 1.9% 6.2% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 635.7 - 3.7% - 4.0% - 3.1% 7.5% CDI 4 CDI 4 Vi
Slide 29: Investment records – Closed End Private Markets funds
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) (R
Slide 30: Shareholder Dividends
Shareholder Dividends ▪ Vinci Partners’ generated R$1.09 or US$0.20¹ of Distributable Earnings per common share for the third quarter of 2021. ▪ The company declared a quarterly dividend of US$0.16² per common share to record holders as of December 01, 2021; payable on Dec ember 16 , 2021 . ($ in th
Slide 31: Share Summary
Share Summary VINP Shares 4Q ' 20 (Pre IPO) 1Q ' 21 2Q ' 21 3Q ' 21 Class B 14,466,239 14,466,239 14,466,239 14,466,239 Class A – Partnership Units 27,175,861 27,175,861 27,175,861 27,175,861 Class A - Public Float N/A 15,271,488 15,094,833 14,921,318 Common Shares 41,642,100 56,913,588 56,736,933 5
Slide 32: GP Commitment in Private Market funds
GP Commitment in Private Market funds (R$ millions, unless mentioned) Segment 3Q ' 21 Total Capital 3Q ’ 21 Total Capital Capital Returned/ Accumulated Capital Fair value Fund Commitments Committed Capital Called Called Dividends Payed Returned/ of investments (3Q ' 21) Dividends Payed Nordeste III
Slide 33: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 34: Financials - Income Statement
Financials - Income Statement (Unaudited) (R$ thousands, unless mentioned) 3Q'20 3Q'21 ∆ (%) 3Q'20 YTD 3Q'21 YTD ∆ (%) REVENUES Net revenue from management fees 71,517 92,855 30% 195,241 269,476 38% Net revenue from performance fees 1,697 5,610 231% 17,258 34,185 98% Realized performance fees 3,375
Slide 35: Financials - Non-GAAP Reconciliation
Financials - Non - GAAP Reconciliation (R$ thousands, unless mentioned) 3Q'20 3Q'21 3Q'20 YTD 3Q'21 YTD OPERATING PROFIT 37,494 66,924 125,383 189,781 ( - ) Net revenue from realized performance fees (3,375) (12,646) (12,212) (31,734) ( - ) Net revenue from unrealized performance fees 1,678 7,036 (5
Slide 36: Effective tax rate reconciliation
Effective tax rate reconciliation (R$ thousands, unless mentioned) 3Q'20 3Q'21 Profit (loss) before income taxes, including Dividends to partners 35,389 63,004 (+) Dividends to Partners, related to management, advisory and performance fees 7,301 - Profit (loss) before income taxes, not - including D
Slide 37: General and Administrative Expenses
General and Administrative Expenses 3 Q 2020 (R$mm) 3 Q 2021 (R$mm) 8.8 15.7 0.4 5.7 1.1 2.8 1.6 Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$36.1 mm 11.1 26.0 1.8 6.6 0.9 3.3 2.2 2.9 1.9 Personnel Bonus related
Slide 38: Balance Sheet Results
Balance Sheet Results Assets 12/31/2020 9/30/2021 Current assets Cash and cash equivalents 83,449 105,499 Cash and bank deposits 13,096 26,218 Financial instruments at fair value through profit or loss 70,353 79,281 Financial instruments at fair value through profit or loss 8,253 1,361,674 Trade rec
Slide 39: Notes and Definitions
Notes and Definitions ▪ Notes to page 5 (1) AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding VIFI from Credit and Pension Products Co - managed with IP&S from Equities. (2) CAGR is c
Slide 40: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) (5) IPCA is a broad consumer price index measured by the IBGE. (6) IMAB 5 is composed by government bonds indexed to IPCA with up to 5 years in duration. (7) IBOV is the Brazilian stock market's most relevant index; (8) FTSE is London's stock market most relevant inde
Slide 41: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) ▪ Notes to page 17 (1) GP investment income comes from proprietary investments made by Vinci Partners in its own Private Markets’ funds. (2) Financial income is income generated through investments made with our cash and cash equivalents in cash and bank deposit s, ce
Slide 42: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) ▪ Notes to page 29 (1) Track record information is presented throughout this presentation on a pro forma basis and in local currency, excluding PIP E investments, a strategy that will be discontinued in VCP III. Past performance of investments described herein is prov
Slide 43: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) ▪ Notes to page 36 (1) Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000 in the prior fiscal year may ca lculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's subsidi
Slide 44: Notes and Definitions (cont'd.)
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 perf
Slide 45: Notes and Definitions (cont'd.)
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 calcul
Slide 46: Funds/strategies' descriptions
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 strategies
Slide 47: 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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