Q3 2022 Vinci Partners Investments Ltd Earnings Call

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

[music].

Okay.

Good afternoon, and welcome to da Vinci partner.

2022 earnings conference call at this time, all participants are in a listen only mode.

Later, we will conduct a question and answer session and instructions will follow at that time.

As a reminder, this call will be recorded.

I would now like to turn the conference over to Ana Castro Investor Relations manager. Please go ahead.

Thank you and good afternoon, everyone joining today, Alessandra <unk>, Chief Executive Officer Bruno.

But equity chairman and head of Investor Relations and strategy.

Bus Chief Financial Officer.

Our year to date, we issued a press release slide presentation, and our financial statements for the quarter, which are available on our website at IR <unk> com.

Like to remind you that today's call may include forward looking statements, which are uncertain and outside of the firm's control and may differ from actual results materially.

We do not undertake any duty to update these statements for a discussion of some of the risks that could affect results. Please see the risk factors section of our 'twenty yet.

We will also refer to certain non-GAAP measures and you'll find reconciliations in the release also note that nothing on this call constitutes an offer to sell or at least to station of an offer to purchase an interest in it and you beat your pardon the pun.

With that I'll turn the call over to Alison.

Thank you and good afternoon, and thank you all for joining our call.

We are very pleased to join you all today as we announced results for the third quarter of 2022.

Adjusted distributable earnings totally $73 2 million Reais in the third quarter or $1 32, reais per common share an increase of 19% year over year.

Yes.

The earnings results are Beckett extra.

Extremely DFAST FRE bullshit by fundraising across our private market strategies.

Long term lockups, we saw considerable upside coming from our liquid investment portfolio.

Our business model has been able to guarantee an extremely healthy growth for our company in one of the most challenging scenarios. This past quarters in helping us navigate these times, while still delivering growth.

And attractive dividend distributions to our shareholders.

Vijay analysis, a quarter dividend of 20 cents on the dollar per common share totaling $1.20 in dividend distribution.

Our IPO.

Considering yesterdays closing share price.

<unk> stock currently trading north of 6% last 12 months dividend yields.

This yield is secured by a highly feasible.

And fee driven revenue stream.

Very conservative investment policy on our balance sheet cash position.

Vinci ended the third quarter with $63 4 billion Reais in assets under management.

9% year over year, driven by our fund raising across private market funds in the second and third quarters of 2022, and the recently closed acquisition of Sps.

Results for Vijay Sps will be included in our private market segments.

This quarter presented a partial impact from a revenue standpoint from Vinci Sps as we close the acquisition in the middle of the quarter.

You'll see revenues from this segment impacting the fourth quarter onwards.

On the fund raising side, we had some great news regarding our efforts in private markets this quarter.

The first one is the capital raised for our first fund we've seen our recent reform agribusiness strategy Zika a partnership between our credit and real estate segments, and a joint venture with Green Mountain.

<unk> raised $360 million in perpetual capital in just the first rather of investments we've configured the hard cap for this round.

Our team experienced great traction from me fasteners, we found the oversubscribed that offer and we should come back with a new round of investments as soon as the fund is fully invested which should take place in the first half of 2023.

The second one is the mandate won by our infrastructure segment to manage their sustainable regional development fund or FTE IRS.

We should see this fund be activated towards the end of the year with a ramp starting at 750 million Reais.

FTR S has significant potential to grow over the years, considering its grid determined hard capture invest up to 11 <unk> as the team originated investment opportunities alongside.

Capital commitments.

This fund presents a combined asset management advisory mandate as we aim to develop any vast and regional projects in coming years.

<unk> has been growing AUM and at 287% CAGR since 2018, while the Brazilian market as a whole has been growing at 14% CAGR in the same period.

We have been taking significant share of the Brazilian market Beckett by true secular growth trends.

First the shift in allocation to alternatives, mainly for institutional investors.

Extremely under allocated to alternative.

Total addressable market of about one trillion in assets.

Combined with GP consolidation trend of which Vinci has been successfully the partner of choice for local institutional investors with our diversified and growing product availability in all the main strategies of the alternative asset space.

The combination of our one stop shop business model with a robust proprietary distribution channel to local institutional investors have been responsible for important achievements in 2022.

Such a CD investments across our credit and infra funds new products anchored by local institutional investors and feather organizations.

Now, let me spend some time, providing an update on fund raising for the next few months.

The ICC, our climate change front <unk> should hold a first close in the fourth quarter backed by commitments from the Mds or the global and local Lp's NFC divestments from <unk> balance sheet.

<unk> credit if that held the first closing last quarter should come back in the fourth quarter with a second round of investments also backed by the NDS pre approve it investments.

Lastly, we have got very exciting pipeline of opportunities for deployment of capital within our recently activated flagship private equity fund DCP for it.

In Federal fund raising effort for the fund remains strong and we should see new commitments be activated over the next several quarters.

For the first round of investments in <unk>.

Before we have seen greater demand from local investors compared to what we experienced in previous vintages.

<unk>, what we have been discussing for quite some time.

Local institutions are increasing their efforts into analyzing alternative investments and we believe the current trends in this direction adjust the beginning.

For International piece, we are seeing here a phenomenon that has effect the U S and European listed alternative managers as well.

It has been a busy market for fund raising as there are several players coming back to market with new funds.

Has been perceived as a widely discussed by our peers in their earnings calls and especially true for private equity strategies.

Discuss your duration has led to delays and commitment in the calendar in general is being pushed back six to 12 months.

With that being said, we are expecting a greater contribution for internationally versus stored for the next quarters until the end of the fund raising process.

Our formation concentration of new fund launches had dissipated and weak Brazilian elections behind us, we expect to see a pickup in demand for our location in general.

We have a positive view for Brazil position in the global economic picture.

Brazil has been experiencing outstanding performance when compared to international peers recently.

Most of the world has been pointing to a declining growth mainly as a consequence of a late <unk>.

<unk> on global refresh on Eric Rashes.

Market expectations for Brazilian growth on the other hand has been revised upwards since early 2022.

Now pointing towards 3% GDP growth in the year.

There are a few reasons for this outstanding performance the Brazilian Central Bank was the first mover globally to fight inflation.

Interest rate hikes started in early 2021.

<unk> ended a couple of months ago.

Indeed, when we look at market Spectation for inflation in Brazil, They have been collapsing for 2022 and all for the coming years. After 2024. The market now believes that deflation will be very close to the center of the inflation target of 2%.

The magnitude of the hike in interest rates necessary to curb the inflationary process caused significant dislocation in both public and private capital markets in Brazil.

However, fast as harsh environment. There is a bright perspective ahead of Brazil in 2000 and 302.

Accelerating GDP growth expectation on a clear testimony of that.

What is the perspective of higher growth and also the proximity of an easing cycle should start for interest rates in 2023 capital markets will likely perform well in the years ahead.

Also as the opportunity cost stumbles demand for alternative assets as there was offered by Vinci will likely reaccelerate in the years ahead.

The reduction of political noise after 2022 presidential election, and the perspective of a moderate economic policy alongside a more retro Ms Congress will likely be a further tailwind to this scenario of growth and further reduction in the interim.

Rates.

Combining brazil's positive economic outlook in the short to medium term with the broadened funds.

Fund raising pipeline across all of our platform.

<unk> sits in a unique position to accelerate growth.

Why will prepare ourselves for these access road ahead of US we are rewarding our shareholders with a predictable stable and high quality dividend that at this share price represent outstanding dividend yields.

We at <unk>.

Extremely committed in generating that you our shareholders through every market cycle always leveraging our platform to generate exceeded returns with that ill turn it over to Bruno to go over our financial results.

Thank you Alessandro and good afternoon, everyone.

On slide nine we will cover AUM trends for the quarter.

<unk> ended the quarter with $63 4 billion Reais AUM up 9% year over year.

During the third quarter, we launched our first fund focus on the agribusiness strategy vehicles, raising 360 <unk> in a perpetual capital fund structure to become listed in the B III through a public follow on offering in up to five years.

Zika should come back to the market next year for a new round of financing due to the substantial demand we experienced from investors and the extensive pipeline of assets. We have identified for this strategy.

For the fourth quarter, we expect the first closing for our climate change fund within the infrastructure segment.

And a second round of investments Harvey to credit infrared.

As a reminder, each fund has a 500 Minerva is approved commitments from the NDS pharmacy ICC debt commitment should be partially activated at the first closing reaching the full commitment as the fund reaches its targeted fundraising in.

In the case of Zetia crediting for we expect the commitments to be fully activated in the fourth quarter.

Concluding our AUM update it's important to highlight that half of our AUM is comprised by long term products.

This results in a more predictable revenue stream for management fees, which translates the ability in our earnings and dividend distributions.

Bear in mind that could use a separate mandates from our Ics segment do not formally accounts within long term AUM as they don't have formal lockups.

However, this is an extremely sticky investor base with a long term view for its allocations.

We have proprietary relationship with your clients and generally their goal is to stay with us for the long term and as a consequence, we have very low churn in these funds.

My goal here is to bring awareness to the fact that our actual AUM with long term objective is considerably larger therefore, our management fees are well protected and this is exactly the stickiness that our AUM displayed over the entire interest rate hike cycle.

<unk> in fact drill AUM by approximately nine beaten while interest rates were going from 2% all the way up to 14%.

Moving on to Slide 11, we go over accrued performance fees in our private market funds.

Performance fee receivables increased to $154 eight meters.

In the third quarter, a 6% increase quarter over quarter.

<unk> strategy currently accounts for roughly 90% of accrued performance fees, representing unappealing upside for future performance seats.

At the end of the quarter <unk> performance eligible AUM coming from private markets funds still in investment period that can further contribute to our accrued performance fees as these fronts answered the divestment periods.

Turning to slide 13 will cover our fee related revenues.

Revenues from management and advisory fee started $102 6 million reais in the quarter up 7% quarter over quarter.

This increase was a result of the fund raising experienced in the latter part of the second quarter aligned with the partial impact from <unk> Sps management fees as we closed the acquisition in the middle of the third quarter.

We should see a continuing positive trend coming in the next quarter onwards.

Additionally to the full quarter impact of each Sps, which is the activation of fees following capital deployment as we currently have about one 7 billion in AUM coming primarily from the V chip crediting for funds.

<unk> third vintage vascular contributes with higher fees as these funds to deploy capital.

Total fee related revenues were down 13% year over year due to strong advisory fees realized in last year's quarter.

For management fees, they were up by 3% year over year.

The same trend can be observed in few related revenues on a year to year basis as the growth in management fees were up fast.

By lower levels of advisory fees due to record revenues experienced by our advisor business last year.

In slide 14, we present, our operating expenses for the quarter and year to date.

Total expenses accounts for <unk>.

<unk> 53, 6 million reais in the quarter down 5% year over year.

And their year to date <unk> expenses were $152 2 million reais down 5% year over year.

Excluding bonus compensation.

Some variable expenses increased 15% year over year due to inflationary pressures on fixed costs. The return of traveling expenses to pre pandemic levels and the investments currently being made in our Vitra retirement services vertical, which we expect to contribute to revenues early in 2023.

Moving on to Slide 15, we go over our fee related earnings for the quarter.

Okay.

Far east totaled $49 5 million reais or <unk> 89 per share in the quarter.

As previously mentioned, we had a positive impact from fund raising that occurred in the latter part of the second quarter as well as a partial contribution from Sps revenues.

These were a direct contribution to <unk>.

The 6% increase in FRE observed quarter over quarter.

On a year over year basis, FRE was down 22% a result of higher levels of advisory fees experienced in the same period last year as a consequence of this strong view activity observed in 2021.

Another contributor was the vast Mets made this year in our new retirement segments, Vrs, which should start to earn fees in 2023.

Please note that our core business. Thus far you remains healthy year over year and should continue to improve each quarter due to three main factors.

First the strong fund raising cycle that we have ahead of us across broad market products, which we have already started to realize.

Second this full contribution from each Sps revenues, which will happen in the fourth quarter onwards.

And third as already mentioned, we have funds that charge higher fees over invested capital as being as their capital locations such as Z to crediting you for an <unk> Sps vintages.

Both still have significant levels of dry powder that are expected to be invested over the next several quarters.

Moving onto margins FRE margin was 48% in the quarter down five percentage points when compared to the same period last year, mainly a result of higher advisory fees last year and the fixed cost de leverage we have for that vertical.

Addition to higher fixed costs following the ryzen inflation rates and previously mentioned investments behind Vita retirement services.

Disregarding our investments in Crs FRE margin would be 50% for the third quarter of 2022, approximately 380 basis points lower than the same year ago period, and that is mostly explained by fixed cost deleverage coming from the advisory vertical.

As we have been communicated over the last few quarters margins should improve in the coming years as we reap the benefits of the cycle for private market products that carry a higher fee rate than our current average.

Moving on to Slide 16, we go over performance related revenues.

It was negative 500000, reais in the quarter compared to a positive for <unk> in the third quarter of 2021, primarily due to a downward mark to market adjustments in CPU for the regimen itself, which has unrealized performance fees booked in the company's balance sheets.

Another significant impact came from the greater contribution from international exclusive mandates in <unk> in the third quarter of 2021.

This exclusive vehicles had a stellar 2021 and have not contributed at the same levels. This year as international markets are facing some volatility with the S&P, NASDAQ and major credit indexes posting significant losses in 2022.

Over the year to date.

Formulary is down 81% compared to the same period in the year before.

Since our IPO, we have been suffering with volatile markets, therefore facing challenging environments for charging performance fees.

In our liquid strategies. However, it's important to be mindful that we have over 16 billion Reais and performance <unk> illiquid products across liquid strategies in Ibs D.

These funds have been struggling to generate performance fees due to their high watermark clauses, which in practice do not allow us to charge fees in a downmarket.

With markets improve we expect this revenue stream to be more active and more material.

<unk> will materially contribute to our earnings at some point in the future.

Shifting to slide 17, we go over our realized GP investment in financial income.

We had 37 five <unk> realized GP in financial income this quarter up more than 2005% on a year over.

Are your basis coming from gains in our liquid funds portfolio and dividend distributions from the company's proprietary position in listed Reits.

As we've discussed in the past, we expect financial income to remain a relevant contributor to distributable earnings in the coming two quarters. As we are currently going through peak interest rates in Brazil.

However, please note that the low car markets gained some traction in the third quarter, which positively affected cash location gains in our liquid portfolio, allowing us to post a stronger than average quarterly results.

We continued swain so results of at least 80% of the CDI rates for the long term of the liquid portfolio as we want to keep a balance.

<unk> and conservative allocation.

In the medium to long term, we should see a financial income component in our <unk> is gradually migrating towards FRE as we deploy capital in our private market products and leverage fund raising for these products.

As of the third quarter VITAS reached a total GP commitments of roughly 1 billion reais across private markets and closed end products with a little more than one third already being called.

The remainder will be called overtime as funds deploy.

Capital into new investments.

Leveraging the launch of new and existing products and our ability to raise AUM from these products from third party investors continue to be the main strategic objective of our cash balance long term.

Turning to slide 18, we go through our adjusted distributable earnings.

Adjusted distributable earnings totaled $73 2 million Reais or run real and 32 cents up 19% on a year over year basis, both by growth in management fees and financial income in the quarter.

Adjusted distributable earnings totaled 192 million Reais or 345.

In their year to date up 17% when compared to the same period last year.

Adjusted the margins posted another quarter of expansion with 51% in the third quarter, an increase of four seven percentage points year over year.

We expect to continue to add shareholder value by expanding distributable earnings results over the quarters as a combination of organic growth through fund raises across our platform and inorganic AUM expansion through acquisitions, such as the transaction with Sps kick.

Finally in slide 19, we go over our cash and investment balance.

We ended the quarter with $1 4 billion Reais in cash and investments or 25, <unk> 38 per share or approximately $5 per share in cash position.

And with that I will turn it over to Sarah to go through our segments.

Thank you Bruno.

Turning to our segment highlights as you can see in slide 21.

Our platform remains highly diversified reached we believe to be main contributor to the resilience of our business.

Just regarding the investments made in the Vrs segment.

52% of our FY <unk> year to date.

<unk> from our private market strategies.

Followed by Ibms with 22%.

The strategies, we have 20%.

And financial advisory contributing with 5%.

The same level of diversification is expected in our segments and distributable earnings.

Moving on to each of the segments, starting with our private market strategies on slide 22.

This quarter, we are including our newest strategy Vinci space into the priority markets segment results.

FRE totaled $26 9 million man hours in the quarter up 3% over the prior period.

Driven by the strong fund raising over the last 12 months and the incorporation of SaaS capital.

As a reminder, the acquisition of Sps.

<unk> closed in the middle of the quarter. Thus, we are only be partially impacted by management fees.

In the next quarter One awards, we will have the full impact from the SBS business.

Yeah.

Democracy average management fee.

Rate was down year over year and quarter over quarter due to two main factors first due to the recent fund raising for Vinci, Greg Infra within our credit strategy, we have $900 million AI as the AUM.

Fees are charged on invested capital. So we should see an increase in management fees and in the average rate as deployment progresses.

Second in the last quarter, the private actually started had a significant inflow from.

<unk> owns Monday.

Due to the structuring offered in BCP, III, which also impacts our average fee rate.

Closing on average management fee rate as it put the vintage from Sps capital easy SKU investing its capital and Chargers high if he's on invested capital. So we should see a positive impact for the fee rate in the next quarter.

On wards.

Segment distributable earnings were $32 6 million on <unk> in the quarter.

An increase of 19% year over year boosted by higher contributions from dividend distribution in our appropriate dairy position across Lisa.

<unk>.

Total AUM.

Was 27 6 billion Reais for the end of the quarter up <unk>.

87% year over year.

Driven by strong fund raising private equity credit and real estate and the addition of AUM from the acquisition of Sps.

This quarter, we just closed a press release announcing the successful capital raise for vehicle Vinci partners first Agribusiness fund.

Sheep between our credit and real estate segments.

Ed.

$306 million.

In perpetual capital through our platform.

As previously mentioned by Alexandre and Bruno momentum is really high for private markets.

You should see some increasing any ramp over the next few quarters as we expect to hold the first closing for RV ICC.

The second close for Vinci corrected infra.

And new capital subscriptions for our fourth vintage in our flagship private equity strategies.

And as most of these funds charge higher than our average consolidate feet.

This should drive FRE results and margins in 2023.

Moving on to Slide 23, we go over our results for liquidity strategies.

Fee related earnings over the year to date totaled 290, <unk> down 17% when compared to the same period last year.

Total AUM with standpoint, <unk> at the end of the quarter up hopefully 10% quarter over quarter.

Following Mark's appreciation and.

No other stable quarter for net flows.

During the stickiness of our Investor base that remains resilient when facing.

More challenging market environment.

We expect that with interest rates start to its loosening cycle, we will observe a movement towards leak of this strategy is again and our platform, we will be well positioned to capture this shift.

And translate this strength into AUM and revenues.

Moving on to our.

Business on slide 24.

<unk> totaled $11 million <unk> in the quarter up 14% on a quarter over quarter basis, meaning due to our notable fund raising over the last 12 months.

Segment, EBITDA totaled $32 7 million highs over the year to date down 25% year over year, primarily due to higher levels of Prs <unk> in the same period last year.

Following the strong performance Utilizations coming from inter next international exclusive mandates.

Turning to slide 25, we cover our results for financial Advisory.

FY <unk> financial Advisory was $3 6 million hasn't deepwater in line quarter over quarter, and representing a decrease of 7% to 6% year over year.

Due to the stronger Directv encountered last year.

As discussed in previous quarters revenues for financial advisory carry a certain level of seasonality and.

Although uncertainty to predict.

Currently we do not expect a stronger level of revenue recognition prior to 2023.

Finally, moving on to slide 26.

<unk> results for the retirement services segment.

Related earnings for the quarter was negative one four immuno Harris and over the year to date FRE represented a negative $4 5 million highs.

As disclosed in previous earnings call. We added during the process of restructuring. This segment. Therefore, we are only incurring expenses for the time being.

We are very optimistic with the future of this segment and should see fund raising you starting at the first half of 2023 as the products are lounge at <unk>.

In the meantime, we will continue to provide updates on the development of the business.

And expect to be able to provide a more detailed review for Prs <unk> in our fourth quarter 2022 results as the major milestones in the project product.

That's it for today's presentation once again, we'd like to thank you for joining our call.

With that I'd now like to open the call for questions operator.

Or.

Thank you at this time, we will conduct the question and answer session.

As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced can you standby, while we compile the Q&A roster and I apologize for any named mispronunciation.

Our first question will come from William Blair.

Now EMEA William.

Please proceed with your question.

Hello, Thank you for the presentation.

My question here.

Regarding liquid strategies.

No.

The FRE levels this quarter was lower compared to last quarter and last year right. So.

I would like to understand these impacts from the mark to market.

Sure.

One Andy.

The levels, we should expect to level similar to this quarter or the last quarter going forward at least for the next few quarters.

And then looking at the total FRE.

I would like to understand how you expect it to evolve in the fourth quarter. This year and then next year also so and parts are clearly.

Take a look and how you'll look at that.

Advisory segments.

The mood is improving or not for the next quarters. Thank you.

Okay. This is this is bruno.

I'm going to cover your question so.

In regards to the liquids FRE margin what happened was a combination of some.

Some mark to market impact on some small redemptions that we had that accumulated over the past.

Few quarters, so revenues were a little bit down when you compare on a year over year basis.

And the other thing was that one.

Once we had the decline in the advisory revenue.

The cost of location for the corporate center it was rebalanced.

So that means that the other verticals had to cope with more of the corporate center costs. So it ended up affecting the margin of the liquid business.

A little bit more this quarter right.

Going forward I mean, if you look into the fourth quarter there wasn't appreciation.

AUM.

In the third quarter, so likely going to have a little bit more of a tailwind from revenues in liquid there.

But I wouldn't I wouldn't expect.

Margins from from liquid to change materially.

I mean from the levels that we had this quarter probably improve a little bit.

But not.

Substantially right.

In terms of advisory what we have been saying that last year was a very strong year. So we had.

Around 60 million in revenue.

This year, we already when we came into the year, we knew that the pipeline.

Looking a little bit slower for 'twenty two.

423 when.

When we look at the pipeline of deals Fortunately through the ones that are able to be closing 23.

I'd say, probably we are somewhere in the middle.

Between 2020 one.

Difficult to say, if it's exactly the EMEA, though if it's a little bit lower than they were higher but.

Todays from the vantage point that we have today.

The expectation is that we should have a year.

That should be between 'twenty, one and 'twenty two from a.

From a revenue standpoint.

The advisory business.

So I don't know if I covered all your questions with the dose.

Ones that I had here.

No that was great. Thank you for the answers thank.

Thank you.

Thank you William.

Next question.

From Pedro Thank you.

Well.

Pedro you have.

Mike.

Alright.

Hello can you hear me.

Yes, we can hear you.

Alright, great. Thank you so much.

So first on <unk> two questions. Please.

The more broader perspective.

Looking to the next year.

You mentioned the reduced uncertainty now with elections behind.

Not helping.

Products.

The certain agreed at the moment.

Opportune to invest in Brazil looks good.

Could you elaborate a little bit.

Which products, we believe will drive the most under this.

Business cycle Thats now unfolding for us that'd be the first question. Thank you.

Hi, Peter this is Alessandro speaking.

Rest of your questions.

Of course now as we have the elections behind us with the reduction of different certainty.

With interest rates, reaching a peak after this.

Tightening cycle.

We believe we have cope with the lower.

I'd say one of the lowest.

Ever allocations for the international Lps that we talk with.

We believe that private markets will benefit a lot with that.

We continue to be.

Very constructed zeal.

The private afterwards ECP for fund raising going forward to next year.

We also are highly optimistic about the prospects of our fund raising for our climate.

Change fund.

That's related to infrastructure, we are having a very good welcome to just product from the international base and also we have been discussing a lot of international mandates for equities.

That will be allocated in Brazil. So this tree.

Taking the point of view of the International LP community would be the ones.

Debt.

We are believing.

We'll see the most of the flows coming from next year talk a little bit about the local.

C L.

LP universe.

We are optimistic with the.

The I would say.

The recovery of the fund raising activity for the rights.

So the real estate listed funds.

You already saw that a bit with <unk>, that's our <unk>.

Agribusiness fund debt.

Ah.

Goes to the same type of markets and we saw a recovery in prices in the last quarter for our real estate investment Trust is released.

Sce's.

So we believe that.

Very soon we will have more robust fundraising activity for that.

So I would say that.

The local institutional clients will start also and we are already seeing does the interest coming back for more long term.

Yields related assets, especially in infrastructure. So we also believe that we will have some flows coming from local institutionalized asset for our infrastructure projects going forward to 2023.

Thank you.

I have a second question very clear by the way is very helpful.

On the second on all household on a more broader perspective.

We're seeing big banks get hurt retail credits.

In Brazil, but doing well and incorporate an inaugural.

So how are you seeing the broader capital market perspective.

Competitive environment.

And how could you shoot yourself potentially from the rollout of <unk>.

Public banks B Mds.

And the next administration.

Thank you.

Okay. That's a very good question.

<unk>.

For us as you know we have a.

More like correlated.

Say activity with this I would say what's driving the results of the banks that we have been seeing the last few days, especially.

But.

I would say, where we would see maybe some.

From a competition and from the different.

Our approach from the state owned banks will be more on the private credit side.

But we are in a very specific niche of more like a high grades.

Very very long term.

Type of credits, where we should see maybe be NDS actually a bit more but even be NDS.

Is not exactly in the same type of structure is that we are.

So we are a little bit.

<unk> related to be NDS.

But is still very long term with real assets as guarantee of our low and so I would say that there we could see some mutations but far Dell location, but we'll not see much since we ask for a higher speed.

Threads that normally BNS asks when they go more further on the I would say that the capital structure of the call. Please.

Talking about the auto verticals to be very honest with you would not see that affecting too much.

Coming back a little bit on the beginning of your question.

As you know on the especially on.

On the funding side, the liability side of our business, where the money come from we have a very very low.

No exposure relatively to the rest of the asset management industry economy from retail investors.

<unk> from distributors and are located is that this is.

A little bit more from 10% of our total AUM. So that's why.

We do not see this affecting much also deal or the overall activity in capital markets and the flows of money on through retail affecting much of our business. So I don't know if I answer your question, but that's how we see this developing going forward.

No that's very complete and I appreciate the thoughts. Thank you so much.

Thank you Pedro.

Minder, if you do have a question. Please press star 101 on your telephone and part of the problem our next.

Question is coming from Ricardo Mosquito.

BTT part as well.

Please proceed with your question.

Goodnight, everyone. Congrats on the good results I have two questions on my side.

First can you. Please comment why they are the next steps just sees all the synergies after the acquisition with <unk> capital.

And also is the Vinci steadying chubais, all their asset managers, given the high cash position and if so in what sort of segments should we expect.

Thank you.

Hey, Scott this is roanna. Thanks, so much for the questions.

In regards to Hfcs.

This stretch of Sps is already very lean so.

I wouldn't necessarily see any synergies from a from a.

Costs are integration standpoint, I think synergies there I would say most of it come from two sites.

One is on the on source and collaborating with the rest of the platform right. So.

As we said in the in the in the call.

Although we announced the acquisition.

This was a part of the abuses that was very a gap that was very clear.

And what happened was that we were generating a lot of deal flow and potentially have opportunities to deploy capital.

In a special situation structure.

But we didn't have the correct view core the correct capital pool to deploy those opportunities right forward. So.

One thing that we're noting is that.

<unk> and team there have been.

Able to work very closely with other verticals at the firm.

Already leveraging.

This partnership with Dan Shaw from it from a.

From.

Do flow standpoint, right deals that we've received over time and that we're not suitable for our traditional strategies.

And the other point I think we're going to start to see materializing in 'twenty three.

We are now starting to map out the 23 launches so products that are structured products that we should launch.

In 2023.

We have a couple of positive.

Developers on that front. So today, we are budgeting.

Potentially <unk> five.

Resuming coming back to market.

In the second half of 'twenty, three and also veatch Sps vintage for potentially coming to market in the second half of 'twenty three.

When that happens I think that theres going to be a lot of potential synergies because.

Did the potential addressable market for this strategy will be greatly enhanced.

Good to work with international Lps.

This strategy, which we didn't have obviously in the past.

We will be able to work with local distributors.

So you work on partnerships for potential.

Distribution locally.

Does it tap on our high net worth individual.

<unk> as well so I think there will be a lot of synergies.

Going forward on the fundraising side and put the sheer leverage.

Fund raising for part of that platform right.

In regards to M&A.

Continue to analyze.

Potential opportunities so.

We are looking into opportunities that.

The address.

A potential gap.

Gaps in the in the strategy that we see.

That could be addressed by by M&A. So eventually increase our funding capacity.

In the asset management side I think today.

Given the the the breadth of the platform and I don't see a lot of of additional M&A that we can do.

Brought in more of a mix, but we could increase the depth depending on the on the type of product.

So we do we do see continuing.

Continuing flow of M&A coming our way, we continue to analyze opportunities.

Can add value not only to be accretive for us in the short to medium term, but also to add value for.

For the platform on a strategic sense.

In the medium and long term as well.

Very clear thank you.

Operator, do we have any other questions.

Yes.

Plateau of UBS is online right now you have a question tayo.

Hey, yes.

So thank you very much for the opportunity for asking the question I have two quick on my side here.

First on the financial income.

We'd like to have a view about.

If we could consider that this level of financial income could be sustainable for the next quarters and and more.

Moreover, I would like to understand your views about the performance fees going forward.

<unk> any and performance theoretically for the fourth quarter and annual storage strategist and can we expect for the following quarters as well.

Sure.

Okay.

Thank you Kai further questions. This is Bruno again, so I think we tried to convey the message during the call but.

I would like to.

Take advantage of your question to reinforce its I think the <unk>.

Third quarter financial income, obviously, there is a benefit to us.

From the fact that interest rates are at the peak levels now right. So obviously that is a.

Unimportant part of the of the boost that we received in that.

That line in the third quarter.

However, we did have a.

Very good.

I would say drivers of performance within the liquid funds that we were all located.

In the quarter so.

We.

We would expect probably a partial.

The.

Sustainability to have the number right.

Part of it has to do with the higher rates part of it has to do with good performance in the funds.

I would say not likely that we're going to be able to sustain obviously it could happen.

But the target is not to have the therefore of returns that we did in the third quarter, probably a little bit lower perhaps.

I would say, probably 10%, 15% lower than we had.

In the quarter as we had guided to that at least 80% of CDI rates I think thats the level that we feel comfortable.

And delivery over the long term right.

So that's the first question the second question regarding performance fees.

We expect not in 2020 to any significant change I think what happened with the with the rebound new markets in Brazil is that we have gotten closer to the high watermarks.

Although we are not still above them, but I think the gap has reduced.

The past in the first quarter and a half I would say probably.

And then looking forward, we do expect.

Big realization of.

Of performance to happen in 2023 from the remaining assets in our infra funds.

So that is booked in the in our balance sheets, who have been working to get that.

Assets up and Ronnie Stu Stu.

And final pre operational.

Phase, but we are getting closer to have it up and running once it's up and running with you its a very liquid assets.

So we would expect it to be realized at some point hopefully in the first half of 2023 that we will have.

Potential.

Interest impact.

And the results.

North of $15 million in are the Super warranties number because we have a combination of performance and GP commitments in the funds. So the combination of the two should have.

And if youre seeing a bump in our in <unk> once that transaction closes and then thinking about the liquid side.

And I was talking with with <unk>.

The other day here.

This was a line that was.

Big contributor to us in 2019 and 2020.

We had the CRE is that we're very relevant.

Relevant and even more so at the time, because our FRE was not as big yesterday, so on a relative basis to our distributable earnings contribution was even.

More significance.

And this is something at some point, we will resume right. We are in a moment, where the markets are not allowing us to charge performance on this fee on these funds on a more significant way.

But one that once that happens.

It could be material contributors to Rd.

Fully that starts to happen again at some point in 2023.

Okay.

Okay. Thank you that's very clear thank you everyone.

Thank you Kay.

Thank you at this time I would like to hand, it back to Alessandro Volta for some closing remarks.

So I would like to thank you all for your continued support.

And we hope to talk to you again in the next quarter.

So have a good night and thank you again.

Okay. Thank you Alessandro Thank you for everyone's participation today.

The program and you may now disconnect.

[music].

[music].

Good afternoon, and welcome to da Vinci Partners third quarter 2022 earnings Conference call. At this time, all participants are in a listen only mode.

We will conduct a question and answer session and instructions will follow at that time.

Reminder, this call will be recorded.

Now I'd like to turn the conference over to Ana Castro Investor Relations manager. Please go ahead.

Thank you and good afternoon, everyone joining today, Alessandra <unk>, Chief Executive officer, but who knows that in both private equity chairman and head of Investor Relations and Treasurer Buss Chief Financial Officer.

Year to date, we should they press release slide presentation, and our financial statements for the quarter, which are available on our website at IR, that's parked and stock comp.

I'd like to remind you that today's call may include forward looking statements, which are uncertain and outside of the funds control and may differ from actual results materially we.

We do not undertake any duty to update these statements for a discussion of some of the risks that could affect results. Please see the risk factors section of our 'twenty, yes.

We will also refer to certain non-GAAP measures and you'll find reconciliations in the release also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in it and you beat your pardon the pun.

With that I'll turn the call over to Alison.

Thank you Anna good afternoon, and thank you all for joining our call.

We are very pleased to join you all today as we announced results for the third quarter of 2022.

Just well distributable earnings totally $73 2 million Reais in the third quarter or one point 32, reais per common share an increase of 19% year over year.

If you would.

The earnings results are Beckett.

Extremely DFAST that FRE bullshit by fundraising across our private market strategies and long term lock up we saw considerable upside coming from our liquid investment portfolio.

Our business model has been able to guarantee an extremely healthy growth for our company in one of the most challenging scenarios. This past quarters in helping us navigate these times, while still delivering growth and attractive dividend distributions to our shareholders.

Vijay analysis, a quarter dividend of 20 cents on the dollar per common share totaling $1.20 in dividend distribution since our IPO.

Considering yesterdays closing share price.

<unk> stock currently trading north of 6% last 12 months dividend yield.

This yield is secured by a highly feasible <unk>.

<unk> fee driven revenue stream and a very conservative investment policy on our balance sheet cash position.

Vinci ended the third quarter with $63 4 billion Reais in assets under management.

9% year over year, driven by our fund raising across private market funds in the second and third quarters of 2022, and the recently closed acquisition of Sps.

Results for Vijay Sps will be included in our private market segment.

This quarter presented a partial impact from a revenue standpoint from veatch Sps as we close the acquisition in the middle of the quarter, we will see revenues from this segment impacting the fourth quarter onwards.

On the fund raising side, we had some great news regarding our efforts in private markets this quarter.

The first one is the capital raised for our first fund we've seen our recently formed agribusiness strategy Zika a partnership between our credit and real estate segments, and a joint venture with Cree Martha <unk>.

<unk>.

<unk> $360 million in perpetual capital in just the first round of investments with configured the hard gap for this round.

Our team experienced great traction from investors, we found the oversubscribed that offer and we should come back with a new round of investments as soon as the fund is fully invested which should take place in the first half of 2023.

The second one is the mandate won by our infrastructure segment to manage their sustainable regional development fund or FTE IRS.

We should see this fund be activated towards the end of the year with a ramp starting at 750 million Reais.

<unk> has significant potential to grow over the years, considering it's determined hard capture invest up to 11.

As the team originates investment opportunities alongside <unk>.

Capital commitments.

This demand presents a combined it asset management advisory mandate as we aim to develop any vast in regional projects in coming years.

<unk> has been growing AUM and at 287% CAGR since 2018, while the Brazilian market as a whole has been growing at 14% CAGR in the same period.

We have been taking significant share of the Brazilian market beckoned by true secular growth trends.

First the shift in allocation to alternatives, mainly for institutional investors very few extremely under allocated to alternative and have a total addressable market of about one trillion in assets.

Combining with GP consolidation trend of which Vinci has been successfully the partner of choice for local institutional investors with our diversified and growing product availability in all the main strategies of the alternative asset space.

The combination of our one stop shop business model with a robust proprietary distribution channel should local institutional investors have been responsible.

Portland achievements in 2022.

Just CD investments across our credit and infra funds new products anchored by local institutional investors and feather organizations.

Now, let me spend some time, providing an update on fund raising for the next few months.

The ICC our climate change fund <unk> should hold a first close in the fourth quarter.

By commitments from the Mds or the global and local Lp's NFC divestments from <unk> balance sheet.

Vinci credit if that held the first closing last quarter should come back in the fourth quarter with a second round of investments also backed by the NDS Preapproved investment.

Lastly, we have a very exciting pipeline of opportunities for deployment of capital. We recently activated flagship private equity fund DCP for <unk>.

In Federal fund raising effort for the fund remains strong and we should see new commitments be activated over the next several quarters.

For the first round of investments in <unk>.

Before we are seeing greater demand from local investors compared to what we experienced in previous vintages.

<unk>, what we have been discussing for quite some time.

Local institutional are increasing their efforts into analyzing alternative investments and we believe the current trends in this direction adjust the beginning.

For International piece, we are seeing here a phenomenon that has effect the U S and European listed alternative managers as well.

It has been a busy market for fund raising as there are several players coming back to market with new funds.

Has been perceived as a widely discussed by our peers in their earnings calls and especially true for private equity strategies.

The operation has led to delays and commitment in the calendar in general is being pushed back six to 12 months.

With that being said, we are expecting a greater contribution for internationally versus stored for the next quarters until the end of the fund raising process.

Our formation concentration of new fund launches had dissipated and with Brazilian elections behind us, we expect to see a pickup in demand for our location in general.

We have a positive view for Brazil position in the global economic picture.

Brazil has been experiencing outstanding performance when compared to international peers recently.

Most of the world has been pointing to a declining growth mainly as a consequence of a late <unk>.

Slide on global refresh on Eric Rashes.

Market expectations for Brazilian growth on the other hand has been revised upwards. Since early 2022 and are now pointing towards 3% GDP growth in the year.

There are a few reasons for this outstanding performance the Brazilian Central Bank was the first mover globally to fight inflation.

Interest rate hikes started in early 2021.

<unk> ended a couple of months ago.

Indeed, when we look at market Spectation for inflation in Brazil.

Have been collapsing for 2022 and all for the coming years. After 2024. The market now believes that inflation will be very close to the center of the inflation target of 2%.

The magnitude of the hike in interest rates necessary to curb the inflationary process caused significant dislocation in both public and private capital markets in Brazil.

However, fast as harsh environment. There is a bright perspective ahead of Brazil in 2202.

Accelerating GDP growth expectation on a clear testimony of that.

What is the perspective of higher growth and also the proximity of an easing cycle should start for interest rates in 2023 capital markets will likely perform well in the years ahead.

Also as the opportunity cost stumbles demand for alternative assets as they're ones offered by Vinci will likely reaccelerate in the years ahead.

The reduction of political noise after 2022 presidential election, and the perspective of a moderate economic policy alongside a more references Congress will likely be a further tailwind to the scenario of growth and further reduction in the interim.

Rates.

Combining brazil's positive economic outlook in the short to medium term with the broadened funds.

Fund raising pipeline across all of our platforms.

<unk> sits in a unique position to accelerate growth.

Why will prepare ourselves for these access road ahead of US we are rewarding our shareholders with a predictable stable and high quality dividend that at this share price represent outstanding dividend yields.

We at <unk> are.

Extremely committed in generating that you our shareholders through every market side always leveraging our platform to generate exceeded returns with that ill turn it over to Bruno to go over our financial results.

Thank you Alessandro and good afternoon, everyone. Starting on slide nine we will cover AUM trends for the quarter.

<unk> ended the quarter with $63 4 billion Reais AUM up 9% year over year.

During the third quarter, we launched our first fund focus on the agribusiness strategy.

<unk> raised 360 <unk> in a perpetual capital fund structure to become listed in the <unk> III.

Public follow on offering in up to five years.

Zika should come back to the market next year for a new round of financing due to the substantial demand we experienced from investors and the extensive pipeline of assets. We have identified for this strategy.

For the fourth quarter, we expect a first closing for our climate change fund within the infrastructure segment, the ICC and a second round of investments Harvey to credit infra.

As a reminder, each fund has a 500 <unk> approved commitments from the NDS Forbes the ICC debt commitment should be partially activated at the first closing reaching the full commitment as the fund reaches its targeted fundraising in.

In the case of Zika crediting for we expect the commitments to be fully activated in the fourth quarter.

Concluding our AUM update it's important to highlight that half of our AUM is comprised by long term products.

This results in a more predictable revenue stream for management fees, which translates the ability in our earnings and dividend distributions.

Bear in mind that exclusive separate mandates from our Ics segment do not formally accounts within long term AUM as they don't have formal walk ups.

However, this is an extremely sticky investor base with a long term view for its allocations.

We have proprietary relationship with your clients and generally their goal is to stay with us for the long term and as a consequence, we have very low churn in these funds.

My goal here is to bring awareness to the fact that our actual AUM with long term objective is considerably larger therefore, our management fees are well protected and this is exactly the stickiness that our AUM displayed over the entire interest rate hike cycle.

<unk> in fact drill AUM by approximately 9 billion, while interest rates were going from 2% all the way up to 14%.

Moving on to Slide 11, we go over accrued performance fees in our private market funds.

Performance fee receivables increased to $154 eight <unk> in the third quarter, a 6% increase quarter over quarter.

The BCP strategy currently accounts for roughly 90% of accrued performance fees, representing unappealing upside for future performance fees.

At the end of the quarter <unk> performance eligible AUM coming from private markets funds still in investment period that can further contribute to our accrued performance fees as these funds answered your divestment periods.

Turning to slide 13, we will cover our fee related revenues.

Revenues from management and advisory fees totaled $102 6 million reais in the quarter up 7% quarter over quarter.

This increase was a result of the fund raising experienced in the latter part of the second quarter aligned with the partial impact from Vinci Sps management fees as we closed the acquisition in the middle of the third quarter.

We should see a continuous positive trend call me in the next quarter onwards.

Additionally to the full quarter impact of each Sps, which is the activation of fees. Following capital deployment as we currently have about $1 7 billion in AUM coming primarily from the vitro kept crediting for fun.

And as each SBS third advantage that will contribute with higher fees as these funds to deploy capital.

Total fee related revenues were down 13% year over year due to strong advisory fees realized in last year's quarter.

As for management fees, they were up by 3% year over year.

This same trend can be observed in few related revenues on a year to year basis as the growth in management fees were offset by.

By lower levels of advisory fees due to record revenues experienced by our adviser business last year.

In slide 14, we present, our operating expenses for the quarter and year to date.

Total expenses accounts for <unk>.

$53 6 million reais in the quarter down 5% year over year.

In their year to date <unk> expenses were $152 2 million reais down 5% year over year.

Excluding bonus compensation.

And variable expenses increased 15% year over year due to inflationary pressures on fixed costs. The return of traveling expenses to pre pandemic levels and the investments currently being made in our Vitra retirement services vertical, which we expect to contribute to revenues early in 2023.

Moving on to Slide 15, we go over our fee related earnings for the quarter.

Okay.

As far as <unk> totaled $49 5 million reais or <unk> 89 per share in the quarter.

As previously mentioned, we had a positive impact from fund raising that occurred in the latter part of the second quarter as well as a partial contribution from Sps revenues.

These were direct contribution to <unk>.

The 6% increase in FRE of third quarter over quarter.

On a year over year basis, FRE was down 22% a result of higher levels of advisory fees experienced in the same period last year as a consequence of the strong view activity observed in 2021.

Another contributor was the vast Mets made this year in our new retirement segments, Vrs, which should start to earn fees in 2023.

Please note that our core business that far Ya remains healthy year over year and should continue to improve each quarter due to three main factors.

First the strong fund raising cycle that we have ahead of us across broad market products, which we have already started to realize.

Second this full contribution from Veatch, Sps revenues, which will happen in the fourth quarter onwards.

And third as already mentioned, we have funds that charge higher fees over invested capital as being is there a capital allocation such as each of credit infra and Vg Sps vintages.

Both still have significant levels of dry powder that are expected to be invested over the next several quarters.

Moving onto margins FRE margin was 48% in the quarter down five percentage points when compared to the same period last year, mainly a result of higher advisory fees last year and the fixed cost de leverage we have for that vertical.

Vision, two higher fixed costs following the rise in inflation rates and previously mentioned investments behind Vita retirement services.

Disregarding our investments in Crs FRE margin would be 50% for the third quarter of 2022, approximately 380 basis points lower than the same year ago period, and that is mostly explained by fixed cost deleverage coming from the advisory vertical.

As we have been communicated over the last few quarters margins should improve in the coming years as we reap the benefits of the cycle for private market products that carry a higher fee rate than our current average.

Moving on to Slide 16, we go over performance related revenues.

It was negative 500000, reais in the quarter compared to a positive <unk> <unk> in the third quarter of 2021, primarily due to a downward mark to market adjustments in CPU for the regimen itself.

Which has unrealized performance fees booked in the company's balance sheets.

On the other significant impact came from the greater contribution from international exclusive mandates in Ips in the third quarter of 2021.

This exclusive vehicles had a stellar 2021 and have not contributed at the same levels.

International markets are facing some volatility with the S&P, NASDAQ and major credit indexes, both seeing significant losses in 2022.

Over the year to date.

Formulary is down 81% compared to the same period in the year before.

Since our IPO, we have been suffering with volatile markets, therefore facing challenging environments for charging performance fees, mostly in our liquid strategies.

However, it's important to be mindful that we have over 16 billion Reais and performance <unk> illiquid products across liquid strategies and IP NFS. These.

These funds have been struggling to generate performance fees due to their high watermark clauses, which in practice do not.

That allow us to charge fees in a down market.

With markets, improving we expect this revenue stream to be more active and more material.

<unk> will materially contribute to our earnings at some point in the future.

Shifting to slide 17, we go over our realized <unk> estimate and financial income.

We had 37 five <unk> realized GP in financial income this quarter up more than 2000, <unk> first Sam on that <unk>.

Are your basis coming from gains in our liquid funds portfolio and dividend distributions from the company's proprietary position in listed Reits.

As we've discussed in the past, we expect financial income to remain a relevant contributor to distributable earnings in the coming two quarters. As we are currently going through peak interest rates in Brazil.

However, please note that the low car markets gained some traction in the third quarter, which positively affected cash location gains in our liquid portfolio, allowing us to post a stronger than average quarterly results.

We continued swain so results of at least 80% of the CDI rates for the long term of the liquid portfolio as we want to keep a balanced and conservative allocation.

In the medium to long term, we should see a financial income component in our <unk> is gradually migrating towards FRE as we deploy capital in our private market products and leverage fund raising for these products.

As of the third quarter VITAS reached a total GP commitments of roughly 1 billion reais across private markets and closed end products with a little more than one third already being codes.

The remainder will be called overtime as funds.

<unk> capital into new investments.

Leveraging the launch of new and existing products and our ability to raise AUM from these products from third party investors continue to be the main strategic objective of our cash balance long term.

Turning to slide 18, we go through our adjusted distributable earnings.

Adjusted distributable earnings totaled $73 2 million Reais or run real and 32 cents up 19% on a year over year basis, both by growth in management fees and financial income in the quarter.

Adjusted distributable earnings totaled 192 million Reais or 345.

Their year to date up 17% when compared to the same period last year.

Adjusted the margins posted another quarter of expansion with 51% in the third quarter, an increase of four seven percentage points year over year.

We expect to continue to add shareholder value by expanding distributable earnings results over the quarters as a combination of organic growth through fund raises across our platform and inorganic AUM expansion through acquisitions, such as the transaction with <unk>.

Finally in slide 19, we go over our cash and investment balance.

We ended the quarter with $1 4 billion Reais in cash and investments or 25, <unk> 38 per share or approximately $5 per share and cash position.

And with that I will turn it over to Sarah to go through our segments.

Thank you Bruno.

Turning to our segment highlights as you can see in slide 21, our platform remains highly diversified reached we believe to be main contributory to the resilience of our business.

This is regarding the investments made in the Vrs segment, 52% of our FY <unk> year to date came from our private market strategies.

Solids by Ibms with 22% leak in the strategies, we have 20%.

And financial advisory contributing with 5%.

The same level of diversification is expected in our segments and distributable earnings.

Moving on to each of the segments, starting with our private market strategies on slide 22.

This quarter, we are including our newest strategy.

Jeff space into the private markets segment results.

FRE totaled $26 9 million man hours in the quarter up 3% over the prior period driven by the strong fund raising over the last drove the mouse and the incorporation of <unk> capital.

As a reminder, the acquisition of Sps.

<unk> closed in the middle of the quarter. Thus, we are only be partially impacted by management fees.

In the next quarter One awards, we will have the full impact from the SBS business.

Democracy average management fee.

<unk> was down year over year and quarter over quarter due to two main factors first due to the recent fund raising for Vinci <unk> infra within our credit strategy with 90 <unk> AUM.

Fees are charged on invested capital. So we should see an increase in management fees and in the average rate as deployment progresses.

Second in the last quarter, the private actually start had a significant inflow from.

<unk> three <unk>.

Sure the structuring offered in BCP, III, which also impacts our average fee rate.

Closing on average management fee rate as it but the vintage from Sps capital eases to investing its capital and Chargers.

If he's on invested capital so we should see a positive impact for the fee rate in the next quarter onwards.

Segment, the distributable earnings were $32 6 million.

In the quarter.

An increase of 19% year over year.

Boosted by higher contributions from dividend distribution in our appropriate dairy position across the regions.

Total AUM.

Was 27 6 billion here is for the end of the quarter up 27% year over year.

Driven by strong fund raising private equity credit and real estate and the addition of AUM from the acquisition of Sps.

This quarter, we just closed a press release announcing the successful capital raise for vehicle Vince partners first Agribusiness fund.

Partnership between our credit and real estate segments.

Adding $306 million in perpetual capital through our platform.

As previously mentioned by Alessandro and Bruno momentum is really high for private markets.

We should see some increasing any ramp over the next few quarters as we expect to hold the first closing for the ICC.

The second closed for Vinci granted infra.

And new capital subscriptions for our fourth vintage in our flagship private equity strategies.

And as most of these funds charge higher than our average consolidate feet.

This would drive FY <unk> results and margins in 2023.

Moving on to Slide 23, we go over our results for liquidity strategies.

The related earnings over the year to date totaled 24 million is down 17% when compared to the same period last year.

Total AUM with standpoint to <unk>.

At the end of the quarter up hopefully 10% quarter over quarter.

Following Mark's appreciation and.

No other stable quarter for net flows.

During the stickiness of our in vessel base that remains resilient when facing a more challenging market environment.

We expect that with interest rates is starting its loosening cycle, we will observe a movement towards leak of this strategy is again and our platform, we will be well positioned to capture this shift.

And translate this strength into AUM and revenues.

Moving on to our.

Business on slide 24.

<unk> totaled $11 million in their quarter up 14% on a quarter over quarter basis, meaning due to notable fund raising over the last 12 months.

Segment.

Totaled $32 7 million of your eyes over the year to date down 25% year over year, primarily due to higher levels of <unk> in the same period last year.

Following the strong performance Utilizations coming from inter next international exclusive mandates.

Turning to slide 25, we cover our results for financial Advisory.

FY <unk> financial Advisory was $3 6 million hasn't deepwater in line quarter over quarter, and representing a decrease of 7% to 6% year over year.

Due to the strong Directv encountered last year.

As discussed in previous quarters revenues for financial advisory carry a certain level of seasonality and.

Although uncertainty to predict.

Currently we do not expect a stronger level of revenue recognition prior to 2023.

Finally, moving on to slide 26.

<unk> results for the retirement services segment.

Related earnings for the quarter was negative $1 4 million Harris and over the year to date FY <unk> represented a negative $4 5 million highs.

As disclosed in previous earnings call. We always do you in the process of a structure in this segment. Therefore, we are only incurring expenses for the time being.

We are very optimistic with the future of this segment and should see fund raising you starting at the first half of 2023 as the products are lounge at.

In the meantime, we will continue to provide updates on the development of the business.

And expect to be able to provide a more detailed review for Prs <unk> in our fourth quarter 2022 results as the major milestones in the project at achievements.

That's it for today's presentation once again, we'd like to thank you for joining our call.

With that I'd like to open the call for questions operator.

Or.

Thank you at this time, we will conduct the question and answer session.

As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced please standby, while we compile the Q&A roster and I apologize for any named mispronunciation.

Our first question will come from William Blair.

Our BVA William.

Please proceed with your question.

Hello, Thank you for the presentation.

My question here.

Regarding liquid strategies.

The FY <unk> levels this quarter was lower compared to last quarter and last year right. So.

I would like to understand these impacts from the mark to market exposure.

Sure.

One on <unk>.

The levels, we should expect levels similar to this quarter or the last quarter going forward at least for the next few quarters.

And then looking at the total effort.

I would like to understand how you expect it to evolve in the fourth quarter. This year and then next year also so and parts are clearly.

Take a look and how you look at the debt.

Advisory segments.

The mood is improving or not for the next quarters. Thank you.

Okay. This is a this is bruno.

I'm going to cover your question so.

In regards to the liquids FRE margin what happened was a combination of some.

Some mark to market impact on some small redemptions that we had that accumulated over the past.

Few quarters, so revenues were a little bit down when you compare on a on a year over year basis.

And the other thing was that.

Once we had the decline in the advisory revenue.

The cost per location for the corporate center it was rebalanced.

So that means that the other verticals had to cope with more of the corporate center costs. So it ended up affecting the margin of the liquid business.

A little bit more this quarter right.

Going forward I mean, if you look into the fourth quarter there wasn't appreciation.

In a way.

In the third quarter, so we're likely going to have a little bit more of a tailwind from revenues in liquid there.

But I wouldn't I wouldn't expect.

Margins from from liquid to change materially.

Hum.

I mean from the levels that we had this quarter probably improve a little bit.

But not.

Substantially right.

In terms of advisory what we have been saying that last year was a very strong year. So we had around 60 million in revenue.

This year, we already when we came into the year, we knew that the pipeline.

It was looking a little bit slower for 'twenty two.

Fourth 23 when.

When we look at the pipeline of deals Fortunately through the ones that are able to be closing 23.

I'd say, probably we are somewhere in the middle.

Between 2020 one.

Difficult to say if it is exactly in the EMEA, though if it's a little bit lower than they were higher but.

Today from the vantage point that we have today.

The expectation is that we should have a year.

That should be between 'twenty, one and 'twenty two from a.

From a revenue standpoint and.

The advisory business.

So I don't know if I covered all your questions with the dose.

Ones that I had here.

No that was great. Thank you for the answers thank.

Thank you.

Thank you William.

Next question comes from Pedro Thank you.

That will be as well.

Pedro you happen.

Mike It's.

Mike.

Hello can you hear me.

Yes, we can hear you.

Alright, great. Thank you so much.

So first on <unk> two questions. Please.

The more broader perspective, as we look into the next year.

You mentioned the reduced uncertainty now with elections behind.

Not helping.

Products.

We certainly agree to the moment.

Opportune to invest.

So it looks good.

Could you elaborate a little bit on which products, we believe will drive the most under this.

This is a cycle that's now unfolding for us that'd be the first question. Thank you.

Hi, Peter this is Alessandro speaking.

Rest of your questions.

Of course now.

As we have the elections behind us with the reduction of this uncertainty.

With interest rates, reaching a peak after this.

Tightening cycle.

We believe with cope with the lower Oh, let's say one of the lowest.

Our locations for the international Lps that we talk with.

We believe that private markets will benefit a lot with that.

We continue to be that we have.

Very constructed deal.

The private afterwards ECP for fund raising going forward to next year.

We also are highly optimistic about the prospects of our fund raising of our climate.

I change fund.

Thats related to infrastructure, we are having a very good welcome to this product from the international base.

Also we have been discussing a lot of international mandates for equities.

That will be allocated in Brazil. So this tree.

Taking the point of view of the International LP community would be the ones.

Debt.

We are believing.

That will see the most of the flows coming from next year talk a little bit about the local.

C L.

LP universe.

We are optimistic with the in.

The I would say.

The recovery of the fund raising activity for the rights.

So the real estate listed funds, we already saw that albeit with a vehicle that's our.

Agribusiness fund debt.

No way.

It goes to the same type of markets and we saw a recovery in prices in the last quarter for our real estate investment Trust is released.

Sce's.

So we believe that.

Very soon we will have a more robust fundraising activity for that.

So I would say that.

The local institutional clients will start also and we are already seeing does the interest coming back for more long term.

<unk> related assets, especially in infrastructure. So we also believe that we will have some flows coming from local institutional investor for infrastructure products going forward to 2023.

Thank you.

I have a second question clear by the way is that helpful.

On the second on all household.

Broader perspective.

We're seeing big banks, who get hurt and retail credit.

In Brazil, but going well then incorporate an inaugural.

So how are you seeing the brother capital market perspective.

Competitive environment.

And how could you shoot yourself potentially from the rollout of <unk>.

Public banks B Mds.

And the next administration.

Sure.

Okay. That's a very good question.

<unk>.

For us as you know we have.

More like correlated.

Say activity with this I would say what's driving the results of the banks that we have been seeing the last few days, especially.

But.

I would say, where we would see maybe some competition and from the different.

<unk> approach from the state owned banks will be more on the private credit side, but.

But we are in a very specific niche of more like a high grades.

Very very long term.

Type of credit where.

We should see maybe be NDS actually a bit more but even the NDS.

Is not exactly in the same type of structure is that we are.

So we are a little bit.

<unk> related to be NDS.

But it's still very long term with real assets as guarantee of our low and so I would say that there we could see some additions, but far Dell location, but we'll not see much since we ask for a higher speed.

Threads that normally BNS guests when they go more further.

On the I would say that the capital structure of the call.

Talking about the auto verticals to be very honest with you would not see that affecting too much.

Coming back a little bit on the beginning of your question.

As you know on the especially on.

The funding side, the liability side of our business, where the money come from we have a very very low.

No exposure relatively to the rest of the asset management industry economy from retail investors.

Distributors and are located is that this is.

Little bit more from 10% of our total AUM.

So that's why we do not see this affecting much also deal or the overall activity in capital markets and the flows of money on food retail affecting much of our business. So I don't know if I answered your question, but that's how we see this developing going.

Forward.

No that's very complete and I appreciate the thoughts. Thank you so much.

Thank you Pedro.

A reminder, if you do have a question. Please press star one on one on the telephone and part of the problem.

Our next question is coming.

From the cargo which eagle.

OTT patois.

Cargo. Please proceed with your question.

Good night, everyone and congrats on the good results I have two questions on my side.

First can you. Please comment why they are the next steps.

He has all the synergies after the acquisition with <unk> capital.

And also is the Vinci steadying should buy all of their asset managers, given the high cash position and if solar wind and what's sort of segments should we expect.

Thank you.

Hey, Scott this is rhonda thanks, so much for the questions.

In regards to Hfcs.

This stretch of Sps is already very lean so.

I wouldn't necessarily see any synergies from a from a.

Costs are integration standpoint, I think synergies there I would say most of that has come from two sites.

One is on the on source and collaborating with the rest of the platform right. So.

As we said in the in the in the call.

Although we announced the acquisition.

This was a part of the business that was very a gap that was very clear.

And what happened was that we were generating a lot of deal flow and potentially have opportunities to deploy capital.

In a special situation structure, but we didn't have the correct view core the correct capital pool to deploy those opportunities right forward. So I think that one thing that we're noting is that.

Your funding and team there have been.

Able to work very closely with other verticals at the firm.

Already leveraging.

This partnership with <unk> from a from a.

From a.

Do flow standpoint, right deals that we've received over time and that we're not suitable for our traditional strategies.

And the other point that I think we're going to start to see materializing in 'twenty three.

We are now starting to map out the 23 launches.

Products that are structured products that we should launch.

In 2023.

We have a couple of positive.

Developers in that front. So today, we are budgeting.

Potentially <unk> five.

Resuming coming back to market.

In the second half of 'twenty, three and also veatch Sps vintage for potentially coming to market in the second half of 'twenty three.

When that happens I think that there's going to be a lot of potential synergies because.

Did the potential addressable market for this strategy will be greatly enhanced.

But to work with international Lp's.

In this strategy, which we didn't have obviously in the past.

We will be able to work with local distributors.

Four.

Work on partnerships or potential.

Distribution locally obviously tap on our high net worth individual.

Vertical as well so I think that there will be a lot of synergies.

Going forward on the fundraising side and put this your leverage.

Fund raising for part of that platform right.

In regards to M&A.

Continue to analyze.

Potential opportunities so.

We are lucky into opportunities that.

The address a.

What they show.

Gaps in the in the strategy that we see.

That could be addressed by by M&A. So eventually increase our funding capacity.

In the asset management side I think today.

Given the the the breadth of the platform and I don't see a lot of of additional M&A that we can do.

Brought in more of a mix, but we could increase the depth depending on the on the type of product.

So we do we do see continuing.

Continuing flow of M&A coming our way or we continue to analyze opportunities.

Can add value not only to be accretive for us in the short to medium term, but also to add value for.

For the platform on a strategic sense.

In the medium and long term as well.

That's very clear thank you.

Operator, do we have any other questions.

Yes, I just have us.

Plateau of UBS is online right now.

The question Tayo.

Yes.

So thank you very much for the opportunity for asking questions I have two quick on my side here.

First on the financial income.

I'd like to have a view about.

If we could consider that this level of financial income could be sustainable for the next quarters and and.

Moreover, I would like to understand your views about the performance fees going forward.

Is there any expectation of any and performance theorize it for the fourth quarter in annual storage strategist and can we expect for the following quarters as well.

Thank you.

Okay. Thank.

Thank you Kai further questions. This is Bruno again, so I think we tried to convey the message during the call but.

I would like to.

Take advantage of your question to reinforce it I think the third quarter financial income obviously, there is a benefit of the.

From the fact that interest rates are at the peak levels now right. So obviously that is a.

Unimportant part of the of the boost that we received in that.

That line in the third quarter.

However, we did have a very good.

I would say drivers of performance within the liquid funds that we were all located.

In the quarter so.

We.

We would expect probably a partial.

The.

Sustainability to have the number right.

A part of it has to do with the higher rates part of it has to do with good performance in the funds.

I would say not likely that we're going to be able to sustain obviously it could happen.

But the target is not to have the therefore of returns that we did in the third quarter, probably a little bit lower perhaps.

I would say, probably 10%, 15% lower than we had.

In the quarter as we had guided to that at least 80% of CDI rates I think thats the level that we feel comfortable in.

Delivery over the long term right.

So that's the first question the second question regarding performance fees.

We expect our not in 2020 to any significant change I think what happened with the with the rebound in markets in Brazil is that we have gotten closer to the high watermarks.

Although we are not still.

Above them, but I think the gap has reduced in.

In the past in the past quarter, and a half I would say probably.

And then looking forward, we do expect.

Big realization of.

Of performance to happen in 2023.

The remaining assets in our infra funds.

So that is booked in our balance sheets, we have been working to get that.

Debt assets.

And Ronnie Stu Stu.

And final pre operational.

Phase, but we are getting closer to have it up and running once it's up and running with you its a very liquid assets.

So we would expect it to be realized at some point hopefully in the first half of 2023 that we will have.

What they show.

Interest impact.

In the results.

North of $15 million in our the Sip the warranties number because we have a combination of performance and GP commitments in the funds. So the combination of the two should have.

And if youre seeing a bump in our in our <unk> once that transaction closed and then thinking about the liquid side.

And I was talking with with <unk>.

The other day here.

This was a line that was.

Big contributor to us in 2019 and 2020.

We had the PRA is that we're very relevant.

Relevant and even more so at the time, because our FRE was not as big yesterday, so on a relative basis to our distributable earnings contribution was even.

More significance.

And this is something at some point, we will resume right. We are in a moment, where the markets are not allowing us to charge performance on these on these funds on a more significant way.

But one that once that happens.

It could be material contributors to Rd.

Fully that starts to happen again at some point in 2023.

Okay.

Okay. Thank you that's very clear thinking of them.

Thank you Kay.

Thank you.

At this time I would like to hand, it back to Alessandro Volta for some closing remarks.

So.

I would like to thank you all for your continued support and we hope to talk to you again in the next quarter.

So have a good night and thank you again.

Okay. Thank you Alessandro Thank you for everyones participation today. This does conclude the program and you may now disconnect.