Patria Investments Limited · NASDAQ:PAX
Patria Investments — Investor Presentation (December 2021)
37 slides from Patria Investments's investor presentation, December 2021
Slide 1: Patria Investments (Nasdaq:PAX) Investor Presentation
Patria Investments (Nasdaq:PAX) Investor Presentation DECEMBER 2021
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by the use of words such as “outlook,
Slide 3: Intro to Patria | History & Investment Platform
Intro to Patria | History & Investment Platform USD ~25 BN IN AUM BUILT OVER 30+ YEARS OF HISTORY Inorganic Growth 2021 IPO: PAX at + Credit ($5+ Bn) + Public Equities & Constructivist Equity ($2+ Bn) Organic + Advisory & Distribution (~$2 Bn) Launch of Country- CAGR 1.0 + Growth Capital & VC (~$0.2
Slide 4: Intro to Patria | Returns
Intro to Patria | Returns FLAGSHIP FUNDS - ROBUST PERFORMANCE AT ATTRACTIVE PREMIUM TO LATAM & EMERGING MARKETS PUBLIC EQUITIES Private Equity Infrastructure Pooled Net Returns (USD Cash-weighted net IRR1 vs public markets) (USD Cash-weighted net IRR1 vs public markets) 14.9% +15.3 p.p. +6.7 p.p. 5.
Slide 5: Intro to Patria | Flagship Products
Intro to Patria | Flagship Products OUR PERFORMANCE HAS ALLOWED US TO SCALE OUR FLAGSHIP PRODUCTS… AND WE BELIEVE THIS CAN CONTINUE PE VI (2019) PE V (2015) • Patria has demonstrated PE IV (2011) PE III (2007) the ability to raise capital USD USD USD in many different 2.7 Bn USD 0.6 Bn 1.3 Bn 1.8 Bn
Slide 6: Intro to Patria | Country-Specific Strategies
Intro to Patria | Country-Specific Strategies FINANCIAL DEEPENING IN LATIN AMERICA DRIVES INCREASING DEMAND FOR YIELD AUM BRL 1.1 Bn (USD 0.2 Bn) AUM BRL 2.2 Bn (USD 0.4 Bn) CEF Real ▪ 34% BRL 5-year net compounded ▪ 24% BRL net IRR in realized RE (Listed annualized return as of 3Q21 Estate developm
Slide 7: Intro to Patria | Proven Investment Approach
Intro to Patria | Proven Investment Approach WE HAVE DEVELOPED A REPLICABLE “INVESTMENT TECHNOLOGY” USED ACROSS ALL OUR PRODUCTS Sector Strategy – Rigorous & efficient framework for investing Specialized in resilient industries Top-down approach, driven by secular trends Healthcare Food & Beverage P
Slide 8: Intro to Patria | Focus on Growing & Resilient Sectors
Intro to Patria | Focus on Growing & Resilient Sectors PATRIA PRIVATE EQUITY STRATEGY POSITIONED TO CAPTURE THE BEST PART OF LATAM GROWTH The Importance of Sector Selection in the Region Strong Alpha Generation vs Sector Benchmarks² Breakdown of Brazil’s GDP Growth in 20201 MSCI ACWI Russell MSCI EM
Slide 9: Intro to Patria | Long-lasting Relationships with Investors
Intro to Patria | Long-lasting Relationships with Investors OUR SOLID, DIVERSIFIED AND SOPHISTICATED GLOBAL CLIENT BASE IS A KEY DRIVER OF OUR GROWTH PLAN Large, Influential & Sophisticated Clients supporting us through vintages and across business units 300+ 1020 World’s largest 6 10 US’s largest 6
Slide 10: Intro to Patria | Strong Financial Profile Based on Key Industry Metrics
Intro to Patria | Strong Financial Profile Based on Key Industry Metrics FAST GROWING & STICKY FEE EARNING AUM, ATTRACTIVE MARGIN & SUBSTANTIAL PERFORMANCE FEE CAPACITY Fee Earning AUM Fee Related Earnings & Margin Net Accrued Performance Fees Country-specific Strategies (US$ in billions) (US$ in mi
Slide 11: Intro to Patria | Growth Strategy
Intro to Patria | Growth Strategy OUR PLATFORM IS WELL-POSITIONED TO CONTINUE GROWING THROUGH ORGANIC AND INORGANIC OPPORTUNITIES 1. Scale flagship 2. Organic growth in Country-specific 3. Strategic M&A funds Strategies ▪ Platforms ▪ Listed Equities (CEF) Continue to consistently ▪ Portfolios ▪ Real
Slide 12: Seasoned Leadership Team with Demonstrated Succession
Seasoned Leadership Team with Demonstrated Succession DEEPLY INGRAINED CULTURE ATTRACTS AND RETAINS TOP INVESTMENT TALENT Board members Management Team Olimpio Matarazzo Years of Years at Partners highly devoted to Patria Experience Patria Co-founder, SMP, Chairman of the Board and Chairman of Real
Slide 13: Q3 2021 Highlights
Q3 2021 Highlights PATRIA
Slide 14: Highlights
Highlights We are on track to deliver ~$1.00 per share of DE 22% FEAUM Growth 3Q21 vs 3Q20 25% FRE Growth1 3Q21 vs 3Q20 in 2021, equivalent to a Management fee growth of 5% yield at IPO price 23% YTD compared to prior YTD period 58% FRE Margin in 3Q21 M&A Growth Strategy 3 $314 mn Closed combination
Slide 15: Total Assets Under Management
Total Assets Under Management ▪ Total AUM of $15.1 billion as of September 30, 2021, up 18% compared to $12.7 billion one year ago ▪ $2.7 billion of year-over-year AUM increase was driven by the appreciation of underlying portfolio investments ▪ 84% of Total AUM is eligible to earn performance reven
Slide 16: Fee Related Earnings (“FRE”)
Fee Related Earnings (“FRE”) 3Q21 Fee Revenues 1 Country-specific $21.8 7% $3.6 $21.0 million +25% million ▪ 3Q21 FRE of $21.8 Infrastructure 31% $38.2 million was up 25% from Adjustment for million comparable compensation 62% Private Equity 3Q20 adjusted for structure comparable $17.4 3Q21 Operatin
Slide 17: Fundraising & Portfolio Activity
Fundraising & Portfolio Activity Fundraising ($mn) ▪ 2021 has been a year dominated by capital deployment, and lighter on Total Platform 3Q21 YTD 3Q21 LTM 3Q21 fundraising (off cycle) and realizations Total 2 151 274 ▪ $1.8bn of total deployment YTD well exceeds our historical pace, and is Private E
Slide 18: Fee Earning Assets Under Management
Fee Earning Assets Under Management Fee earning AUM Management Fees ▪ FEAUM of $9.2 billion are up 22% YoY and generated management fees of $38 million in 3Q21 ▪ More than 80% of management fees are ▪ $1.4 billion of Pending FEAUM eligible to earn fees once invested/reserved denominated in US dollar
Slide 19: Net Accrued Performance Fees
Net Accrued Performance Fees • Net Accrued Performance Fees were $314 million at September 30, 2021, down slightly from $325 million at June 30, 2021, mainly driven by local currency fluctuation in the period • On a YTD basis the performance fee accrual grew by 14% net, and 35% when accounting for r
Slide 20: Patria’s Third Quarter 2021 Earnings
Patria’s Third Quarter 2021 Earnings ▪ Distributable Earnings (“DE”) of $22.5 million in 3Q21, and $113.7 million year to date YTD (US$ in millions) 3Q20 3Q21 3Q21 vs. 3Q20 YTD 3Q20 YTD 3Q21 3Q21 vs. 3Q20 Management Fees 33.9 38.2 4.2 83.1 102.5 19.4 (+) Incentive Fees - 0.0 0.0 0.1 0.0 (0.1) (+) Ad
Slide 21: Outlook
Outlook We are on track to generate more than $75 million of Fee Related Earnings and $1.00 per share of Distributable Earnings for the full year 2021 We are approaching a first closing for our next generation Private Equity fund and continue to see demand to scale the fund by up to 50% We are in th
Slide 22: M&A Growth Strategy
M&A Growth Strategy MONEDA & KAMAROOPIN HIGHLIGHTS 22
Slide 23: M&A Growth | Summary
M&A Growth | Summary Patria’s M&A strategy aims to enhance product offering, expand geographic reach & improve distribution capability The completed combination with Moneda and the announced partnership with Kamaroopin advance Patria’s efforts to serve global investors as a one-stop-shop for alterna
Slide 24: Patria & Moneda | A Compelling First Step In Our M&A Strategy
Patria & Moneda | A Compelling First Step In Our M&A Strategy Moneda’s Platform Strategic Rationale Transaction Overview ▪ Leading asset manager with a 25+ year track record of growth, profitability & performance ▪ Satisfies all three pillars of our ▪ Combination closed on ▪ Consistent strong invest
Slide 25: Patria & Kamaroopin | The Inception of Our Growth Equity Strategy
Patria & Kamaroopin | The Inception of Our Growth Equity Strategy On December 8, 2021 Patria announced the launch of its Growth Equity Strategy through the partnership with Kamaroopin and their talented investment team Why Add Growth Equity? Why Kamaroopin? Deal Structure & Timeline ▪ Complementary
Slide 26: Appendix
Appendix PATRIA 2s
Slide 27: Patria’s Earnings – 5 quarter view
Patria’s Earnings – 5 quarter view (US$ in millions) 3Q20 4Q20 1Q21 2Q21 3Q21 YTD 3Q20 YTD 3Q21 Management Fees 33.9 29.7 31.3 33.0 38.2 83.1 102.5 (+) Incentive Fees - 3.3 - - 0.0 0.1 0.0 (+) Advisory Fees and Other Revenues (0.1) 0.2 - - - 2.3 - (–) Taxes on Revenues (1) (0.7) (1.4) (0.7) (0.8) (0
Slide 28: Closed-End Funds Investment Record as of 3Q21
Closed-End Funds Investment Record as of 3Q21 Committed Deployed Total Unrealized Realized Total Net Returns Capital + Reserved Invested Investments Investments Value Total Value Value Value Value Gross MOIC Net IRR Net IRR % Fund (Vintage) (USD) (USD) (USD) (USD) (USD) (USD) (USD) (BRL) Private Equ
Slide 29: Total AUM & FEAUM Roll Forward (Unaudited)
Total AUM & FEAUM Roll Forward (Unaudited) Total Assets Under Management (“AUM”) (US$ in millions) Three Months Ended September 30, 2021 Twelve Months Ended September 30, 2021 Country-Specific Country-Specific PE Infra Total PE Infra Total (US$ in millions) Products (US$ in millions) Products AUM 2Q
Slide 30: Patria’s Third Quarter 2021 IFRS Results
Patria’s Third Quarter 2021 IFRS Results ▪ GAAP Net Income was US$21.5 million for 3Q21 and US$108.0 million year to date (“YTD”) (US$ in millions) 3Q20 3Q21 YTD 3Q20 YTD 3Q21 LTM 3Q20 LTM 3Q21 Revenue from management fees (1) 33.9 38.2 83.1 102.5 109.9 132.3 Revenue from incentive fees - - 0.1 0.0
Slide 31: Reconciliation of IFRS to Non-GAAP Measures
Reconciliation of IFRS to Non-GAAP Measures Quarter YTD LTM (US$ in millions) 3Q20 4Q20 1Q21 2Q21 3Q21 YTD 3Q20 YTD 3Q21 LTM 3Q20 LTM 3Q21 Management Fees 33.9 29.7 31.3 33.0 38.2 83.1 102.5 109.9 132.3 (+) Incentive Fees - 3.3 - - 0.0 0.1 0.0 5.3 3.3 (+) Advisory Fees and Other Revenues (0.1) 0.2 -
Slide 32: IFRS Balance Sheet Results
IFRS Balance Sheet Results (US$ in millions) 12/31/2020 9/30/2021 (US$ in millions) 12/31/2020 9/30/2021 Assets Liabilities and Equity Cash and cash equivalents (1) 14.1 44.3 Personnel and related taxes (4) 12.8 20.0 Short term investments (1) 9.9 250.8 Taxes payable 1.1 0.5 Accounts receivable (2)
Slide 33: Understanding Patria’s P&L
Understanding Patria’s P&L FEE RELATED EARNINGS & DISTRIBUTABLE EARNINGS ARE KEY PROFITABILITY MEASURES FOR THE INDUSTRY 3Q21 Management Fees 38.2 Primary operating revenue stream – Contractual recurring fees based on Fee Earning AUM Incentive Fees - Earned on certain perpetual capital vehicles – Me
Slide 34: Management Fee Revenue: Understanding the Mechanics
Management Fee Revenue: Understanding the Mechanics MANAGEMENT FEES FOR FLAGSHIP FUNDS ARE CHARGED SEMI-ANNUALLY & RECOGNIZED OVER NEXT TWO QUARTERS Illustrative example for a fund with management fees charged on invested capital… ($mm) Inflows to FEAUM (Capital Deployed or $500 $500 $500 $500 Reser
Slide 35: Notes
Notes Notes to page 17 – Fundraising & Portfolio Activity (1) Total Deployment represents the incremental capital invested or reserved for investments in closed-end funds during the period (2) Invested/Called represents the total capital called for investments and for fees & expenses (3) Reserved in
Slide 36: Notes
Notes Notes to page 30 – Patria’s Third Quarter 2021 IFRS Results (1) Increase in management fee revenues from prior year due to an increase in capital deployed by Private Equity Fund VI (2) Increase in revenues due to performance fees receivable determined in accordance with the funds offering docu
Slide 37: Definitions
Definitions • Distributable Earnings (DE) is used to assess our performance and capabilities to distribute dividends to shareholders. DE is calculated as FRE deducted by current income tax expense, plus net realized performance fees, net financial income/(expenses), and other income/(expenses). DE i
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