Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q2 2021 Earnings Presentation
47 slides from Vinci Compass Investments's earnings presentation, Aug 18, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
Second Quarter 2021 Earnings Presentation August 18, 2021 1 Exhibit 99.2
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: Presenters
Presenters 3 Alessandro Horta Chief Executive Officer Bruno Zaremba Head of Private Equity & Investor Relations Sergio Passos Chief Operating Officer & Chief Financial Officer
Slide 4: Opening Remarks
Opening Remarks 4
Slide 5: Strong results, continuous growth in AUM and profitability in 2Q'21
2 6 11 15 17 18 20 19 21 24 35 48 52 50 57 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2Q'21 AUM (R$bn) AUM DC¹ (R$bn) We continue to deliver strong results across the board backed by management fees. AUM reached R$57bn in 2Q ' 21, a 31% increase year - over - year , and continues to
Slide 6: Financial Highlights
Financial Highlights 6
Slide 7: Financial results summary table
(R$ 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 8: Second Quarter 2021 Highlights
Second Quarter 2021 Highlights Financial Measures Capital Metrics Capital Returned to Shareholders ▪ Fee - related revenues (management and advisory fees) of R$101.2 million in the quarter, up 50% year - over - year. x Fee - related revenues was R$198.1 million in the 2Q'21 YTD, up 35% year - over -
Slide 9: Continued strong fundraising in the first half of 2021
9 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$2 billion in Private Market strategies, through six different vehicles : Final closing for VIR IV, the largest impact oriente
Slide 10: AUM is growing across the platform
AUM is growing across the platform… 10 Fee - Earning AUM 2Q ' 20 vs 2Q ' 21 (R$bn) Long - Term AUM 2Q ' 20 vs 2Q ' 21 (R$bn) AUM 2Q ' 20 vs 2Q ' 21 ( R$bn ) 17 21 14 14 12 22 44 57 2Q'20 2Q'21 Private Markets Liquid Strategies IP&S + 31% 15 19 14 14 12 22 41 55 2Q'20 2Q'21 Private Markets Liquid Str
Slide 11: Highly diversified across strategies and clients
19% 9% 4% 4% 39% 19% 6% 30% 11% 4% 6% 19% 16% 5% 9% 34% 23% 23% 10% 9% … and is highly diversified across different strategies and clients Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric 11 AUM 2Q ' 21 Net Revenues 2Q ' 21 YTD Private Equity Real
Slide 12: Significant exposure to performance fee-eligible AUM
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 12 ▪ Total Performance fee eligible AUM (PEAUM) of R$36.8 billion. ▪ Hurdle rate fu
Slide 13: Fee related revenues are expanding alongside AUM growth
Fee related revenues are expanding alongside AUM growth Management fees remain the main contributor to revenues, accounting for 78% of total revenues in the 2Q'21 YTD. 13 61 95 6 6 67 101 2Q'20 2Q'21 Management fees Advisory fees +50% Management and Advisory fees 2Q ' 21 vs. 2Q ' 2 0 (R$mm) Manageme
Slide 14: Operating Expenses
▪ Total operating expenses of R$53.8 million in the quarter, up 31% 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$3.2 million of expenses in the quarter. On a comparable basis, excluding co
Slide 15: Fee Related Earnings (FRE)
78 105 YTD 2Q'20 YTD 2Q'21 Fee Related Earnings (FRE) 15 Fee Related Earnings (FRE) 2Q ' 21 vs 2Q ' 20 (R$mm) FRE 2Q ' 21 YTD vs 2Q ' 20 YTD (R$mm) % FRE margin FRE per share 4 R$0.58 R$1.06 R$0.97 R$1.37 R$1.86 +36% ▪ Fee Related Earnings (FRE) of R$55.2 million (R$0.97/share) in the quarter, up 67
Slide 16: Performance Related Earnings (PRE)
▪ Performance related earnings (PRE) of R$10.8 million (R$0.19/share) in the quarter, down 16% year - over - year, due to higher perfo rmance compensation expenses in the 2Q ' 21, as a substantial benchmark outperformance from our Total Return strategy in Hedge Funds impacted performance compensatio
Slide 17: GP Investment and Financial income
Realized GP Investment¹ and Financial income² 2Q ' 21 vs 2Q ' 20 (R$mm) GP Investment and Financial income 17 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 1.0% 0.5% 2Q21 1.2% 0.4% ▪ Realize
Slide 18: Distributable Earnings (DE)
▪ Distributable Earnings (DE) of R$54.8 million (R$0.97/share) in the quarter, up 100% year - over - year, driven by the notable growt h in management fees and financial income in the quarter. ▪ DE margin for the quarter was 44%, up 8 percentage points when compared to the 2Q'20. DE margins are expa
Slide 19: Balance Sheet Highlights
(in R$ millions, unless mentioned) 1Q'21 2Q'21 Cash and cash equivalents¹ 854.0 80.0 Net Investments 595.9 1,392.6 Liquid funds² 556.0 1,271.4 GP Fund Investments³ 39.9 121.2 Cash and Net Investments 1,449.9 1,472.6 Cash and Net Investments per share 4 (R$/share) 25.48 25.96 Balance Sheet Highlights
Slide 20: Segment Highlights
Segment Highlights 20
Slide 21: Financials by Segment
50% 22% 19% 9% Financials by Segment 21 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 22: Private Markets segment
▪ 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 23: Liquid Strategies segment
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 24: IP&S segment
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$19.5 million
Slide 25: Financial Advisory segment
(R$ 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 26: Supplement Details
Supplement Details 26
Slide 27: AUM roll-forward by strategy
Private Public IP&S Infrastructure Real Estate Credit Hedge Total Equity Equities Funds Beginning balance 7,874 12,466 11,730 1,536 3,656 2,204 1,713 41,180 (+/ - ) Capital Subscription / (capital return) 855 – – 634 1,555 130 – 3,174 (+/ - ) Netflows – (4,951) 7,936 – 3 25 1,342 4,355 (+/ - ) Appre
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) 2Q21 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 1,209.7 0.5% 0.4% 1.3% 7.1% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 703.4 1.6% 0.2% 0.5% 15.5% CDI 4 CDI 4 Vinci
Slide 29: Investment records – Closed End Private Markets funds
Investment records – Closed End Private Markets funds Pro Forma Historical Portfolio Performance - Excluding PIPE Investments¹ 29 Fund Segment Vintage year Committed Capital Invested Capital Realized or Unrealized Total Value Gross MOIC Gross MOIC Gross IRR Gross IRR (R$mm) (R$mm) Partially Realized
Slide 30: Shareholder Dividends
Shareholder Dividends 30 ▪ Generated R$1.80 or US$0.34¹ of Distributable Earnings per common share for the first half of 2021. ▪ Vinci Partners declared a semi - annual dividend of US$0.30 per common share to record holders as of September 01, 2021; payable o n September 16, 2021 . ($ in thousands)
Slide 31: Share Summary
Share Summary 31 VINP Shares 4Q ' 20 (Pre IPO) 1Q ' 21 2Q ' 21 Class B 14,466,239 14,466,239 14,466,239 Class A – Partnership Units 27,175,861 27,175,861 27,175,861 Class A - Public Float n.a 15,271,488 15,094,833 Common Shares 41,642,100 56,913,588 56,736,933 ▪ Common Shares Outstanding as of quart
Slide 32: GP Commitment in Private Market funds
GP Commitment in Private Market funds 32 ▪ As of June 30, 2021, the company had R$266.1 million in capital commitments signed to proprietary Private Markets funds. ▪ Total GP Investments marked at fair value of R$121.2 million as of June 30,2021. (R$ millions, unless mentioned) Fund Segment 2Q ' 21
Slide 33: Reconciliations and Disclosures
Reconciliations and Disclosures 33
Slide 34: Income statement reconciliation
(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 35: FRE, PRE and DE 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 36: 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 37: General and Administrative Expenses
9.1 13.6 6.7 5.8 1.1 3.0 1.5 General and Administrative Expenses 37 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$53.8 mm Personnel Bonus related to Mgmt. and Adv. fees Pe
Slide 38: Balance Sheet Results
Balance Sheet Results In R$ thousands 38 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 39: Notes and Definitions
Notes and Definitions 39 ▪ 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 i
Slide 40: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 40 (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 41: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 41 ▪ 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,
Slide 42: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 42 (8) IFIX is an index composed by listed REITs in the brazilian stock Market. ▪ 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 d
Slide 43: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 43 ▪ “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 44: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 44 ▪ 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 45: Notes and Definitions (cont'd.)
Notes and Definitions (cont’d.) 45 ▪ “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 46: Funds/strategies' descriptions
Funds/strategies’ descriptions 46 ▪ 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 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 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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