Patria Investments Limited · NASDAQ:PAX
Patria Investments — Investor Presentation (September 2021)
44 slides from Patria Investments's investor presentation, Sep 16, 2021
Slide 1: Patria Investments Investor Presentation September 2021
Patria Investments (Nasdaq:PAX) Investor Presentation SEPTEMBER 2021
Slide 2: Disclaimer
2 Disclaimer This presentation may contain forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . You can identify these forward - looking statements by the use of words such a
Slide 3: Intro to Patria | History & Investment Platform
3 9.7 5.0 1.1 Total AUM Q2 2021 $15.8 Bn Intro to Patria | History & Investment Platform USD 15.8 BN IN AUM BUILT OVER 30+ YEARS OF HISTORY Foundation and partnership with Salomon Brothers 50%/50% First Private Equity Fund raised Partnership with Launch of Country - specific strategies 1997 2010 201
Slide 4: Intro to Patria | Returns
4 Cash Weighted 1 6% 18% Equal Weighted 2 12% 25% Intro to Patria | Returns FLAGSHIP FUNDS - ROBUST PERFORMANCE AT ATTRACTIVE PREMIUM TO LATAM & EMERGING MARKETS PUBLIC EQUITIES Cash Weighted 1 16% 22% Equal Weighted 2 30% 31% Pooled Net Returns Data as of June 30, 2021 1) Cash Weighted returns: con
Slide 5: Intro to Patria | Flagship Products
5 Intro to Patria | Flagship Products OUR PERFORMANCE HAS ALLOWED US TO SCALE OUR FLAGSHIP PRODUCTS… AND WE BELIEVE THIS CAN CONTINUE PE III (2007) PE IV (2011) PE V (2015) PE VI (2019) USD 0.6 Bn USD 1.3 Bn USD 1.8 Bn USD 2.7 Bn Infra II (2010) Infra III (2014) Infra IV (2019) USD 1.2 Bn USD 1.7 Bn
Slide 6: Intro to Patria | Country-Specific Strategies
6 Intro to Patria | Country - Specific Strategies FINANCIAL DEEPENING IN LATIN AMERICA DRIVES INCREASING DEMAND FOR YIELD Data as of June 30 , 2021 Listed Equities (CEF) AUM BRL 1.3 Bn ( USD 0.3 Bn ) ▪ 44% BRL 5 - year net compounded annualized return as of 2Q21 ▪ Ability to leverage PE expertise in
Slide 7: Intro to Patria | Proven Investment Approach
7 Intro to Patria | Proven Investment Approach WE HAVE DEVELOPED A REPLICABLE “INVESTMENT TECHNOLOGY” USED ACROSS ALL OUR PRODUCTS Ability to develop long - term relationships and partnerships with strategic players, founders and key industry executives Majority of deals sourced independently and ou
Slide 8: Intro to Patria | Focus on Growing & Resilient Sectors
8 Intro to Patria | Focus on Growing & Resilient Sectors Note: As of June 30, 2021. Source: Capital IQ. Benchmarks: (1) Healthcare: MSCI ACWI/Health Care (Sector) Index (MXWD0HC); MS CI EM/Health Care (Sector) Index (MXEF0HC); RUSSELL 3000 Health Care Sector; (2) MSCIACWI Agriculture & Food Chain In
Slide 9: Intro to Patria | Long-lasting Relationships with Investors
9 OUR SOLID, DIVERSIFIED AND SOPHISTICATED GLOBAL CLIENT BASE IS A KEY DRIVER OF OUR GROWTH PLAN 300 + LPs 6 10 10 20 6 10 World’s largest sovereign wealth funds¹ World’s largest pension funds US’s largest pension funds Large, Influential & Sophisticated Clients supporting us through vintages and ac
Slide 10: Intro to Patria | Strong Financial Profile Based on Key Industry Metrics
10 Intro to Patria | Strong Financial Profile Based on Key Industry Metrics FAST GROWING & STICKY FEE EARNING AUM, ATTRACTIVE MARGIN & SUBSTANTIAL PERFORMANCE FEE CAPACITY 19% FRE growth 2Q21 vs. 2Q20 with an FRE margin among the best in the peer group 83% of Total AUM is eligible to performance fee
Slide 11: Intro to Patria | Growth Strategy
11 Intro to Patria | Growth Strategy OUR PLATFORM IS WELL - POSITIONED TO CONTINUE GROWING THROUGH ORGANIC AND INORGANIC OPPORTUNITIES Continue to consistently scale our Private Equity and Infrastructure funds Scale flagship funds Organic growth in Country - specific Strategies ▪ Platforms ▪ Portfol
Slide 12: Seasoned Leadership Team with Demonstrated Succession
12 Seasoned Leadership Team with Demonstrated Succession DEEPLY INGRAINED CULTURE ATTRACTS AND RETAINS TOP INVESTMENT TALENT Olimpio Matarazzo Co - founder, SMP, Chairman of the Board and Chairman of Real Estate and Credit Investment Committees Otavio Castello Branco SMP, Board Member and Chairman o
Slide 13: Q2 2021 Results & Outlook
Q2 2021 Results & Outlook PATRIA
Slide 14: 2Q21 | Second Quarter 2021 Highlights
14 2Q21 | Second Quarter 2021 Highlights PATRIA IS EXECUTING IN ALL AREAS OF THE BUSINESS, AND MARCHING FORWARD ON ALL OF ITS KEY DRIVERS FOR GROWTH 19% $325 mn Net Accrued Performance Fees up 29% from $253 million in 1Q21, after accounting for $56 million realized in 2Q21 Outstanding Investment Per
Slide 15: 2Q21 | Total Assets Under Management
15 7.7 2.4 US$ 11.0 bn ▪ Total AUM of $15.8 billion as of June 30, 2021, up approximately $3 billion or 24% compared to $12.8 billion one year ago ▪ $2.2 billion of year - over - year AUM increase was driven by the appreciation of underlying portfolio investments before accounting for the improvemen
Slide 16: 2Q21 | Fee Related Earnings (FRE)
16 2Q21 | Fee Related Earnings (“FRE”) See notes and definitions at end of document ( 1 ) Percentages apply to management fees only 60% $14.9 million $17.6 million +19% 2Q20 2Q21 55% FRE Margin Country - specific Infrastructure 57% 35% $32.2 million 8% 2Q21 Fee Revenues 1 70% 26% $14.5 million 4% 2Q
Slide 17: 2Q21 | Fundraising & Portfolio Activity
17 2Q21 | Fundraising & Portfolio Activity Fundraising ($mn) Total Platform 2Q21 YTD 2Q21 LTM 2Q21 Total 2 149 395 Private Equity - - - Infrastructure - - 102 Country - specific 2 149 293 ▪ $1.2 billion of Total Deployment in 2Q21, driven by Private Equity commitments in the areas of cybersecurity,
Slide 18: 2Q21 | Fee Earning Assets Under Management
18 2.9 3.8 3.5 3.3 0.7 1.2 7.1 8.3 2Q21 | Fee Earning Assets Under Management Fee earning AUM 2Q21 2Q20 Private Equity Country - specific Strategies Infrastructure (US$ in billions) ▪ FEAUM of $8.3 billion, up 17% year - over - year, drove management fees of $33 million in 2Q21 • $2.8 billion of Pen
Slide 19: 2Q21 | Net Accrued Performance Fees
19 244 31 48 2Q21 | Net Accrued Performance Fees • Net Realized Performance Fees were $56 million for the quarter, driven by the crystallization of performance fees in Private Equity Fund III • Net Accrued Performance Fees were $325 million at June 30, 2021, after accounting for the 2Q21 realization
Slide 20: 2Q21 | Second Quarter 2021 Earnings
20 2Q21 | Second Quarter 2021 Earnings DE per Share shown for 2 Q 20 and YTD 2020 for illustrative purposes only, using Patria’s post - IPO share count of 136 , 147 , 500 shares See notes and definitions at end of document ▪ Distributable Earnings (“DE”) of US$74.2 million for 2Q21, up from US$14.5
Slide 21: 2021 Outlook
21 2021 Outlook Note : Reflects management’s expectations as of September 15 , 2021 . Please see “Disclaimer” slide for information about the use of and reliance on projections . We feel confident that Fee Related Earnings will exceed $75 million for the full year 2021 with a margin in the mid - 50%
Slide 22: Patria & Moneda Transaction Overview
22 Patria & Moneda Transaction Overview
Slide 23: Patria & Moneda | A Compelling First Step In Our M&A Strategy
23 #1 Infrastructure & Patria & Moneda | A Compelling First Step In Our M&A Strategy Patria announces a combination with Moneda Asset Management, a leading diversified asset manager with over $10bn in AUM across credit & equities, and a 25+ year track record of growth, profitability and performance
Slide 24: Moneda Overview
24 Moneda Overview Platform Summary ▪ Leading asset manager with a sticky US$10+bn AuM base across credit & equities (13% CAGR since 2007), and consistent FRE generation ▪ Partnership led by a like - minded, entrepreneurial team , with well - established relationships and strong culture alignment ▪
Slide 25: Historical Fee Earning AUM (FEAUM) Growth
25 Historical Fee Earning AUM (FEAUM) Growth ▪ Fee Earning AUM at Moneda has grown at an attractive mid teens CAGR since the global financial crisis ▪ Net inflows to Fee Earning AUM have averaged USD ~$800 million per year for the periods since 2015 ▪ Fee Earning Assets Under Management have grown a
Slide 26: Strong Track Record of Investment Performance & Excess Return
26 Strong Track Record of Investment Performance & Excess Return Proprietary valuation and credit analysis models Deep knowledge in credit in both private and public markets Actively managed strategies with proven investment approach Deep bottom - up approach Asset Class Fund (as June - 21) Currency
Slide 27: Satisfies all three pillars of our M&A strategy
27 ▪ Enhances product offering by adding a credit vertical that starts as #1 in LatAm and consolidates as the #1 PIPE manager in t he region ▪ Adds geographical exposure within Latin America through client base and product offering ▪ Opens the opportunity for cross - selling leveraging complementary
Slide 28: Growth & Synergy Opportunity
28 Growth & Synergy Opportunity Private & Public Credit Constructivist & Public Equities strategies Source : ANBIMA, Preqin, Central Bank of Brazil This presentation contains forward - looking statements, which should not be relied upon . For more information, see slide 2 . 26% 20 - year AuM CAGR Di
Slide 29: Combined Platform Well-Positioned for Growth
29 Combined Platform Well - Positioned for Growth Pro - forma $15.8bn $10.0bn $25.9bn $8.3bn $9.7bn $18.0bn ~1.6% ~0.8% ~1.2% 75+mn 2 30+ mn 3 $105+mn 4 ~55% 2 40+% 3 50+% 4 Totals may not sum due to rounding . This presentation contains forward - looking statements, which should not be relied upon
Slide 30: Transaction Details
30 Transaction Details Management Timing ▪ Total upfront consideration of $315 million in a combination of $128 million in cash and $187 million in PAX Class B common stock ▪ Contingent additional consideration of up to $59 million payable in years 2 and 3 after closing, subject to certain retention
Slide 31: Moneda Team
31 Moneda Team Pablo Echeverría Founding Partner, Chairman and Portfolio Manager Portfolio Manager of the Chilean Equity Strategy since 1994 and Chairman since 2007 27+ years in Moneda (32+ years of experience) Alfonso Duval Partner and CEO Alfonso Duval is partner since 2011 and CEO of Moneda Asset
Slide 32: Chilean Pension (AFP) Assets Under Management
32 Chilean Pension (AFP) Assets Under Management ▪ Total pension fund AUM in Chile was USD $213 billion as of December 31, 2020 ▪ AFPs account for approximately 40% of Moneda’s current AUM, and are viewed as highly stable and “sticky” ▪ AUM from AFP’s is expected to grow at ~7.5% p.a. (2.5% from con
Slide 33: Insights on AFP Growth & Asset Allocation
33 Insights on AFP Growth & Asset Allocation Forward Looking Growth Stable Allocations Role of Active Management ▪ Based on analysis of economic consultants, we believe the base case growth of the total AFP AUM to be between 7 - 8% annually ▪ Growth in the AFP market is expected to come from contrib
Slide 34: Appendix
34 Appendix
Slide 35: Closed-End Funds Investment Record as of 2Q21
35 Closed - End Funds Investment Record as of 2Q21 Deployed + Reserved Total Invested Unrealized Investments Realized Investments Fund (Vintage) Total (USD) % Value (USD) Value (USD) Value (USD) Value (USD) Gross MOIC (USD) Net IRR (USD) Net IRR (BRL) Private Equity PE I (1997) 234,000 Divested 163,
Slide 36: Total AUM & FEAUM Roll Forward (Unaudited)
36 Total AUM & FEAUM Roll Forward (Unaudited) See notes and definitions at end of document Total Assets Under Management (“AUM”) (US$ in millions) Three Months Ended June 30, 2021 Twelve Months Ended June 30, 2021 Total Fee Earning AUM (“FEAUM”) (US$ in millions) Three Months Ended June 30, 2021 Twe
Slide 37: Patria's Second Quarter 2021 IFRS Results
37 Patria’s Second Quarter 2021 IFRS Results ▪ GAAP Net Income was US$73.4 million for 2Q21 and US$86.5 million year - to - date (“YTD”) Throughout this presentation all current period amounts are preliminary and unaudited . Totals may not add due to rounding . See notes and definitions at end of do
Slide 38: Reconciliation of IFRS to Non-GAAP Measures
38 Reconciliation of IFRS to Non - GAAP Measures See notes and definitions at end of document (US$ in millions) 2Q20 2Q21 YTD 2Q20 YTD 2Q21 LTM 2Q20 LTM 2Q21 Management Fees 25.4 33.0 49.2 64.4 102.4 128.0 (+) Incentive Fees 0.1 - 0.1 - 5.1 3.3 (+) Advisory Fees and Other Revenues (0.1) - 2.4 - 2.9
Slide 39: IFRS Balance Sheet Results
39 IFRS Balance Sheet Results See notes and definitions at end of document (US$ in millions) 12/31/2020 6/30/2021 (US$ in millions) 12/31/2020 6/30/2021 Assets Liabilities and Equity Cash and cash equivalents 14.1 25.2 Personnel and related taxes (4) 12.8 15.4 Short term investments (1) 9.9 286.3 Ta
Slide 40: Understanding Patria's P&L
40 Understanding Patria’s P&L FEE RELATED EARNINGS & DISTRIBUTABLE EARNINGS ARE KEY PROFITABILITY MEASURES FOR THE INDUSTRY 2Q21 Management Fees 33.0 Primary operating revenue stream – Contractual recurring fees based on Fee Earning AUM Incentive Fees - Earned on certain perpetual capital vehicles –
Slide 41: Management Fee Revenue: Understanding the Mechanics
41 Management Fee Revenue: Understanding the Mechanics MANAGEMENT FEES FOR FLAGSHIP FUNDS ARE CHARGED SEMI - ANNUALLY & RECOGNIZED OVER NEXT TWO QUARTERS ($mm) Inflows to FEAUM ( Capital Deployed or Reserved) $500 $500 $500 $500 Outflows to FEAUM (Divestments) $(250) $(250) $(250) $(250) Fee Earning
Slide 42: Notes
42 Notes Notes to page 17 – 2 Q 21 | 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 (
Slide 43: Notes to Page – Reconciliation of IFRS to Non-GAAP Measures
43 Notes Notes to Page 38 – Reconciliation of IFRS to Non - GAAP Measures (1) Income Taxes have been adjusted to remove Deferred Taxes which are excluded from Patria’s Distributable Earnings . Deferred Taxes arise from taxable temporary differences mostly derived from non - deductible employee profi
Slide 44: Definitions
44 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) .
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