Vinci Compass Investments Ltd. · NASDAQ:VINP
Vinci Compass Investments — Vinci Partners Investments — Q1 2023 Earnings Presentation
49 slides from Vinci Compass Investments's earnings presentation, May 11, 2023
Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 Earnings Presentation May 11, 2023
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 results in the first quarter, with highlight to Private Markets
5 Vinci Partners reports results in the first quarter, with highlight to Private Markets’ segments which continue to drive growth R$1.10 DEPS³ 1Q23 R$ 62 bn AUM¹ 1Q23 Vinci Partners ended the first quarter of 2023 with R$62 bn in AUM¹ and posted an FRE of R$0.90/share , up 10% and 14% year - over -
Slide 6: Private Markets Highlights
6 ▪ Since Vinci's IPO in 2021, our Private Markets' segment AUM has grown by over R$9 billion, a 48% overall growth. This growth was achieved through organic fundraising across all strategies of R$9.1 billion and R$2.1 billion coming from the acquisition of Vinci SPS. ▪ Our Private Markets’ segment
Slide 7: Financial Highlights
Financial Highlights
Slide 8: Financial summary table
8 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY(%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 87,229 99,640 95,877 10% 366,456 380,149 4% Net revenue from advisory fees 3,674 4,394 4,468 22% 55,363 22,788 (59)% Total Fee Related Revenues 90,903 104,034 100,345 10% 421,
Slide 9: First quarter financial highlights
9 ▪ Fee - related revenues of R$100.3 million in the first quarter, up 10% year - over - year. x Management fees were R$95.9 million in the first quarter, up 10% year - over - year driven by fundraising across Private Markets’ funds and the acquisition of Vinci SPS. ▪ FRE was R$ 49 .1 (R$0.90/share)
Slide 10: AUM expansion across the platform, with highlight to long-term products
10 19 22 1 3 7 7 26 31 1Q'22 1Q'23 5-10 Years 10+ Years Perpetual or quasi-perpetual 19 25 12 10 23 24 55 58 1Q'22 1Q'23 Private Markets Liquid Strategies IP&S 21 28 12 10 23 24 57 62 1Q'22 1Q'23 Private Markets Liquid Strategies IP&S We continue to see AUM expansion across the platform, with highli
Slide 11: Our AUM base favors alpha-driven strategies, while revenue is management fee-centric
11 35% 25% 23% 9% 8% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 54% 21% 21% 5% 45% 39% 16% Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric Our platform is highly diversified across different st
Slide 12: Long-term upside from realization of performance fees in private market funds
12 89% 11% 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 ▪ Performance fee receivable of R$155.2 million in the 1Q’23, down 7% quarter - over - quarter. ▪ The VC
Slide 13: Fee Related Revenues
13 87 96 4 4 91 100 1Q'22 1Q'23 Management fees Advisory fees 366 380 55 23 422 403 1Q'22 LTM 1Q'23 LTM Management fees Advisory fees Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 91% of total revenues over the 1Q’23 LTM ▪ Fee related revenues totaled R
Slide 14: Operating Expenses
14 95 80 80 89 24 26 18 17 217 212 1Q'22 LTM 1Q'23 LTM Bonus compensation Corporate center Segment Personnel expenses Other G&A 18 19 19 23 7 7 5 3 48 52 1Q'22 1Q'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A Operating Expenses ▪ Total operating expenses of R$52.0 milli
Slide 15: Fee Related Earnings (FRE)
15 190 194 28 9 (1) (6) 216 197 1Q'22 LTM 1Q'23 LTM 44 49 1 1 (1) (2) 44 49 1Q'22 1Q'23 FRE Asset Management FRE Advisory FRE VRS Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE)¹ of R$49.1 million (R$0.90/share) in the quarter, up 12% year - over - year on an absolute basis and 14% year - ov
Slide 16: Performance Related Earnings (PRE)
16 19 7 1Q'22 LTM 1Q'23 LTM 2 1 1Q'22 1Q'23 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE)¹ of R$1.2 million in the quarter, down 43% year - over - year. ▪ PRE¹ was R$7.1 million (R$0.13/share) over the 1Q’23 LTM, down 63% when compared to the 1Q’22 LTM, that posted higher c
Slide 17: Realized GP Investment and Financial income
17 49 82 24 65 106 1Q'22 LTM 1Q'23 LTM Realized Financial Income Realized GP Investment Income 25 20 2 6 27 26 1Q'22 1Q'23 Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$26.0 million in the 1Q’2
Slide 18: Adjusted Distributable Earnings (DE)
18 243 250 1Q'22 LTM 1Q'23 LTM 58 60 1Q'22 1Q'23 Adjusted Distributable Earnings (DE) ▪ Distributable Earnings (DE)¹ of R$60.0 million (R$1.10/share) in the quarter, up 4% year - over - year on an absolute basis and 6% y ear - over - year on an Adjusted DE/share basis, pushed by Private Markets’ fun
Slide 19: Balance Sheet Highlights and Share Repurchase Activity
19 22.87 21.20 4Q'22 1Q'23 Net Cash and Investments per share 4 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 4Q'22 1Q'23 Total Shares Repurchased (number of shares) 278,122 367,036 Total Capital Used for Share Repurchases 14.7 18.0 Remaining Share Repurchase Plan Authorizat
Slide 20: GP Commitment Update
20 369 307 216 100 50 25 1,068 2,461 1Q'23 2028e Private Equity REITs Infrastructure Credit IP&S Public Equities GP Commitment Update ▪ By the end of the first quarter, Vinci had committed approximately R$1.1 billion to Private Market funds. These commitments w ork as seed investments in our new fun
Slide 21: Segment Highlights
Segment Highlights
Slide 22: Financials by segment
22 57% 18% 20% 4% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$202.9 million over the 1Q’23 LTM, with 57% of FRE coming from Private Markets, followed by IP&S accounting for 20%, Liquid Strategies for 18% and Financial Advisory for 4%. ▪
Slide 23: Private Markets
23 Private Equity 48% Real Estate 18% Credit 18% Vinci SPS 8% Infrastructure 8% Private Markets' AUM (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 46,759 59,699 58,432 25% 194,661 218,734 12% Net revenue from advisory fees
Slide 24: Liquid Strategies
24 Public Equities 72% Hedge Funds 28% Liquid Strategies' AUM (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 20,573 19,823 18,293 (11)% 87,376 79,045 (10)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related
Slide 25: IP&S
25 Separate Mandates 67% Pension Plans 13% International 11% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees 19,897 20,119 19,152 (4)% 84,416 82,370 (2)% Net revenue from advisory fees 7 7 7 7% 4
Slide 26: Financial Advisory
26 Financial Advisory ▪ Fee related earnings (FRE) of R$1.5 million in the quarter, up 115% year - over - year. ▪ FRE was R$9.0 million over the 1Q’23 LTM, a decrease of 67% when compared to the 1Q’22 LTM, due to a stronger deal environmen t i n 2021. ▪ Segment Distributable Earnings over the 1Q’23
Slide 27: Vinci Retirement Services segment
27 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY (%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) Net revenue from management fees – – 0 N/A – 0 N/A Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues – – 0 N/A – 0 N/A Segment personnel expenses (97) (334) (422) 335% (97) (1,450)
Slide 28: Supplement Details
Supplement Details
Slide 29: AUM and Fee-Earning AUM Rollforward
29 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 March 31, 2023 For the Three Months Ended March 31, 2023 For the Twelve Months Ended March 31, 2023 For the Twelve Months Ended
Slide 30: Fund performance by segment
30 Fund Segment NAV¹ (R$ millions) 1Q’23 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 358.6 3.3% 3.3% 12.1% 18.7% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 389.6 1.1% 1.1% 5.0% 6.5% CDI 4 CDI 4 Vinci Total Return Hedge Funds 199.9 (2.6)% (2.6)% (7.6)% 10.3% IPCA 6 +
Slide 31: Private Markets track record
31 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 215 5,279 4.4x 4.0x 71.5% 77.2% VCP
Slide 32: Shareholder Dividends
32 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 1Q’23 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 60,006 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 11,994 DE per Common Share (US$)² 0.34 0.20 0
Slide 33: Share Summary
33 Share Summary ▪ Common Shares Outstanding as of quarter end of 54,713,700 shares. x Repurchased 367,036 common shares in the quarter, with an average share price of US$9.4. x Repurchased 2,199,888 common shares since the announcement of the first share repurchase plan, with an average share price
Slide 34: GP fund commitments and investments
34 (R$ millions, unless mentioned) Segment 1Q’23 Commitments Total Capital Committed 1Q’23 Capital Called Total Capital Called Capital Returned/Dividends Paid (1Q’23) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 – 3.1 – 1.6 2.6 VCP III Priva
Slide 35: Performance fee eligible AUM
35 30% 21% 16% 8% 10% 7% 5% 3% Private Equity IP&S Public Equities Real Estate Credit Hedge Funds Infrastructure Vinci SPS PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Strategy/Fund AUM R$mm Index type Index Rate Status Offshore Vehicles 3,572 Preferred Return w/ Catch - Up² USD + 8% Within investment perio
Slide 36: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 37: Income statement reconciliation
37 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 ∆ YoY(%) 1Q'22 LTM 1Q'23 LTM ∆ LTM (%) REVENUES Net revenue from management fees 87,229 99,640 95,877 10% 366,456 380,149 4% Net revenue from performance fees 3,172 7,558 1,963 (38)% 30,854 13,391 (57)% Realized performance fees 2,536 9,241 1,963
Slide 38: FRE and DE reconciliation
38 (R$ thousands, unless mentioned) 1Q'22 4Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM OPERATING PROFIT 45,959 55,321 50,285 235,231 203,943 ( - ) Net revenue from realized performance fees (2,536) (9,241) (1,963) (38,355) (17,645) ( - ) Net revenue from unrealized performance fees (636) 1,683 – 7,501 4,254 (+)
Slide 39: Effective tax rate reconciliation
39 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 1Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM Profit (loss) before income taxes 57,045 45,587 254,642 260,356 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at
Slide 40: General and Administrative Expenses
40 17.7 18.1 0.7 6.6 1.8 3.8 3.4 15.2 17.3 1.0 8.4 1.0 3.0 2.3 General and Administrative Expenses 1Q 2022 (R$mm) 1 Q 2023 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$48.1 mm Personnel Bonus related to Mg
Slide 41: Liabilities and equity
41 Liabilities and equity 12/30/2022 3/31/2023 Current liabilities Trade payables 1,247 521 Deferred Revenue – 17,219 Leases 24,147 24,381 Accounts payable 7,328 6,201 Labor and social security obligations 87,732 25,228 Loans and Obligations 13,168 10,323 Taxes and contributions payable 22,291 16,11
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) FRE per share is cal
Slide 43: Notes and Definitions (cont'd.)
43 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 and othe r c losed - end funds across Liquid Strategies and IP&S segments with long - term lockups. (2) Financial income is incom
Slide 44: Notes and Definitions (cont'd.)
44 Notes and Definitions (cont’d.) (7) IMAB is composed by government bonds indexed to IPCA. IMAB 5 also includes government bonds indexed to IPCA with up to 5 Yea rs in duration. (8) IFIX is an index composed by listed REITs in the Brazilian stock Market. (9) If IMAB 5 Average is: i . less or equal
Slide 45: Notes and Definitions (cont'd.)
45 Notes and Definitions (cont’d.) (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 preferred return rate so it can charge performance fees. Once the preferred return rate is achieved,
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: 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
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