Q4 2023 Vinci Partners Investments Ltd Earnings Call

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Operator: Good afternoon, and welcome to the Vinci Partners fourth quarter and full year 2023 earnings conference call. At this time, all participants are in listen-only mode.

Good afternoon, and welcome to the venture partners fourth quarter and full year 2023 earnings conference call. At this time all participants are in listen only mode. Later, we will conduct a question and answer section and instructions will follow at that.

Operator: Later, we'll conduct the question and answer section, 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 Anna Castro, Investor Relations Manager. Please go ahead, Anna.

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 Anna.

Anna Castro: Thank you and good afternoon, everyone. Joining us today are Alessandro Horta, Chief Executive Officer, Bruno Zaremba, Private Equity Chairman and Head of Investor Relations, and Sergio Paz, to Froning Shore. Earlier today, we issued a press release, a slide presentation, and our financial statements for the quarter and full year, which are available on our website at ir.vincipartners.com. I'd 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. We do not undertake any duty to update this statement. For a discussion of some of the risks that could affect results, please see the risk factors section of R20F.

Thank you and good afternoon, everyone joining today, our other central after Chief Executive Officer.

The condos that amber private equity chairman and head of Investor Relations and says you pause.

Financial lobster are.

Earlier today, we issued a press release slide presentation, and our financial statements for the quarter and full year, which are available on our website at IR PR that mutual partners Dot coms.

I would 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.

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 20-F.

Anna Castro: We will also refer to certain non-GAAP measures, and you'll find more concessions 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 a Vinci Partners fund. On results, Vinci generated fee-related earnings of R$57.3 million, or R$1.07 per share, and adjusted distributable earnings of 63.6 million reais, or 1 real and 18 cents per share, for the fourth quarter of 2023. For full-year numbers, Vinci posted fee-related earnings of R$208.4 million and adjusted distributable earnings of R$245.8 million. We declare a quarterly dividend of $0.20 on the dollar per common share, payable on March 7 to shareholders as of record as of February 22. With that, I'll turn the call over to our. Thank you, Anna.

We will also refer to certain non-GAAP measures and you'll find reconciliations in the release also not enough here on this call constitutes an offer to sell or solicitation of an offer to purchase an interest and then thank you partner.

Our results moving to generate that fee related earnings.

To $7 3 million or <unk> <unk> per share.

And adjusted distributable earnings of $63 6 million highs are one how an <unk> <unk> per share for the fourth quarter 2023.

For full year numbers Vinci posted fee related earnings of $208 4 million highs and adjusted distributable earnings up to 145.8 Manhattan.

We declared a quarterly dividend of <unk> 20 cents on the dollar per common share payable on March 17th to shareholders at record as of February 20, <unk> with that I'll turn the call over to artisan.

Yeah.

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

Alessandro Horta: Good afternoon, and thank you all for joining our call. We are very pleased to join you today as we announce results for the fourth quarter and full year 2023. This year has truly etched its mark in the history of our company. We hosted our first Investor Day as a public company at NASDAQ headquarters.

We are very pleased to join you today as we announced results for the fourth quarter and full year, two and 'twenty three.

This year has truly etch it its mark in the history of our company.

We hosted our first Investor day, as a public company at NASDAQ headquarters.

Alessandro Horta: It was a fantastic opportunity to share with shareholders and investors our targets and goals for Vinci's future. Another milestone for us was the partnership with AERIS, a market leader in the alternative asset manager space worldwide. We believe this is just the beginning of a successful partnership, and I will provide some additional details in just a moment. In my opening remarks, I would like to cover some important topics before Bruno and Sergio go over the specifics.

It was a fantastic opportunity to share with shareholders and investors our targets and goals for Vinci future.

Another milestone for US was the partnership with Arris, a market leader in the alternative asset managers space worldwide.

We believe this is just the beginning of a successful partnership and I will provide some additional details in just a moment.

In my opening remarks, I would like to cover some important topics before Bruno said you go over the specifics.

Alessandro Horta: To start, I would like to be assertive with the following message: delivered strong results facing another year with a challenging environment worldwide. We are reaping the benefit of a well-developed platform with several business lines built to succeed across market sizes. We posted another quarter of solid growth, with FRE and DE increasing respectively 14 and 17 percent year-over-year on a per share basis. We ended the year with 69 billion reais in AUM, with more than 4 billion reais in capital subscriptions for our private market funds throughout the year.

Could we start I would like to be assertive with the falling message.

Vinci delivered strong results facing another year, we felt challenging environment, where the wild.

We are reaping the benefit of a well developed platform with several business lines built to succeed across market cycles.

We posted another quarter of solid growth with FRE and D, increasing respectively, 14, and 17% year over year on a per share basis.

We ended the year with 69 billion of AUM with more than 4 billion Reais and kept of subscriptions for our private markets funds frugality ear.

Fundraising remains on a growth trend going forward.

Alessandro Horta: Fundraising remains on a growth trend going forward. 2023 started at a slower pace, but we experienced a significant pickup towards the second half of the year with several strategies gaining traction. Our Shopping Mall Reads raised more than one billion reais in a three-month stand, a stellar fundraise to reopen primary instances for public REITs in the Brazilian stock market, as I've highlighted in the past earning calls. This should be an important growth driver for Vinci when facing favorable conditions. We have seven funds that can proceed with nuition. In infrastructure, we officially closed the mandate to manage the Sustainable Regional Development Fund, or SIDIRS, with an initial AUM of approximately R$1 billion.

'twenty two 'twenty three started at a slower pace than we experienced a significant pickup towards the second half of the year with beverage strategy is gaining traction.

Our shopping mall REIT <unk> raised more than one video re eyes in a three month span.

A stellar fund raise to reopen primary issuances for a public REIT in the Brazilian stock market.

As I've highlighted over the past, earning calls this should be an important growth driver for vinci when facing favorable conditions.

We have seven funds that can proceed with new issuance.

In infrastructure, we officially closed the mandate to manage this sustainable regional development fund or a few years.

Initially wham off approximately 1 billion reais.

Alessandro Horta: This was truly great news from our infrastructure segment, and Bruno will cover that in more detail in a moment. Overall, we had important commitments for VICC and VCP4 throughout the second half of the year while also benefiting from market appreciation across the board. The momentum is great as we enter 2024. Now, I would like to share our main areas of focus for this first. We are acutely focused on developing VRS, and we are starting to experience traction. Last week, VRS was officially presented to the general public with an article in a major newspaper in Brazil, featuring a detailed description of our product and the market opportunity ahead of us. The product is now fully accessible to the public through dedicated apps and websites and prepared to accept allocations from all investors through our new platform called Miu.

This was truly great news from our infrastructure segment and Bruno <unk>.

That in more detail in a moment.

Overall, we had important commitments for V ICC and VC before throughout the second half of the year, while also benefiting from market appreciation across the board.

Momentum is great as we enter 2024.

Now I would like to share our main areas of focus for this year.

First we are acutely focused on developing vrs.

And we are starting to experience traction.

Last week <unk>.

S was officially presented to the general public with an article in a major newspaper in Brazil.

Featuring a detailed description of our products and the market opportunity ahead of us.

The product is now fully accessible to the public through dedicated apps and website and prepared to accept allocations from all investors through our new lounge platform called <unk>.

Now, let me delve into a more comprehensive description of our vision for Vrs.

Alessandro Horta: Now, let me delve into a more comprehensive description of our vision for VRS. Over the past year, we launched the product to our high net worth investor base, and our team concentrated their efforts on beta testing and determining what would be our next steps as we start fundraising. During that period, we encountered several unsatisfied investors with products that were not suitable for their long-term goals and the overall inefficiency of the incumbent bank.

Over the past year, we launched the product to our high net worth investor base and our team concentrated their efforts into better testing and Tracy what would be our next steps and we started fundraising.

During that period, we encountered several unsatisfied investors with products. They are not suitable for the long term goals and the overall efficiency of the incumbent banks.

Alessandro Horta: With that in mind, we start 2024 tackling a few fronts. First, we will expand our capabilities to raise money with high-net-worth investors. Alongside their need to find a better fit for their retirement goals, there is also legislation approval to tax closed-end funds, which can boost this growth by redirecting part of these resources for patient products due to its tax and state planning benefits. The corporate market is a fraction of the individual market, but often it is the first contact that investors have with pension plans. Moreover, doing our research, we came across several instances that indicated the experience for corporate plans is even worse than the overall industry because the incumbent providers do not invest in this segment at all.

With that in mind, when we start to enter 24 Dec lean a few fronts.

First we will expand our capability to raise money with high net worth investors alongside their need to find a better fit for their retirement goals. There is also legislation approval to tax close it and funds.

Which can boost this growth by redirecting part of these resources for our pension products due to its stacks and state planning benefits.

Second we are aiming for corporate plans there.

The corporate market is a fraction of the individual market, but often it is the first contact that investors have with pension plans.

Moreover, doing our research we came across several instance that indicated the experience for corporate plants, even worse than the overall industry because the incumbent providers do not invest in this segment at all.

And third we will seek distribution partnerships with platforms and syntax to enhance our penetration we've seen retail investors.

Alessandro Horta: Thirdly, we will seek distribution partnerships with platforms and fintechs to enhance our penetration within retail investors. We are continuously exploring additional options, and we ensure investors stay informed as we develop them. Our second area of focus for this year is developing our private markets fundraising purpose. As we previously announced at our Investor Day in October, we updated our Private Markets Funds Raising Target to R$15 billion until the end of the year and end of 2024. As of the fourth quarter, we already have 8 billion reais raised, and we are working to reach the target with several initiatives.

We are continuously exploring additional options and we assure investors this thing for them as we develop them.

Our second area of focus for this year is developing our private markets fund raising bar plate.

As we previously announced it in our Investor Day in October we updated our private markets funds raising target to 15 beta reais on to Dan.

And the 2024.

As of the fourth quarter, we already have eight beta re is raised and we work to reach the targets with several initiatives.

First new closing.

Alessandro Horta: First, new clothes for our existing flagships that are ongoing fundraisers, such as the CP4 in private equity, the ICC in infrastructure, and Vinci Credit Infra in credit. Second, new vintages of existing strategies which we plan to raise this year, such as SPS-4 in special situations, VRI-5 in our impact and return strategy, and VFDL-2 in real estate. And third, the follow-on offerings for our listed REITs. As I mentioned earlier, this scale loan raised more than $1 billion in a three-month span.

Through our existing flagships that are ongoing fund raising.

Such as this it before in private equity the ICC in infrastructure and Vince credit and credit.

Second new vintages of existing strategy, which we plan to raise this year.

Such as Sps for in our special situations.

<unk> five in our impact and return strategy and <unk> in real estate.

And third follow on offerings for our listed REIT.

As I mentioned earlier.

Scott alone raised more than $1 billion in a three month span.

Alessandro Horta: We think this could be an important contributor in a more constructive environment and, mainly, with lower nominal interest rates expected as the Brazilian Central Bank continues on its easing cycle. Lastly, we work to leverage our partnership with ARI. One of the aspects that we found the most appealing in our partnership with ARIES was the possibility to have several interactions with their management and commercial teams to seek best practice enhancements, potential co-investment opportunities, and to work on asset origination and product development. All of this on top of distribution efforts to raise additional capital for our funds and to distribute AERIS products in Brazil. So far, we have had dozens of interactions between management teams across all our private market strategies, IP&S, Corporate Advisor, Commercial Teams, and VRS.

We think this could be an important contributor with a more constructive environment and mainly with lower nominal interest rates expected as the Brazilian Central Bank continues on its easing cycle.

Lastly, we work to leverage our partnership with Arris.

One of the aspects that we found the most appealing in our partnership with Arris was the possibility to have several interactions with their management and commercial teams just seek best practice enhancements potential co investment opportunities to work on asset origination and product development.

All of this on top of distribution efforts to raise additional capital to our funds introduce debuted arris products in Brazil.

So far we had goldens of interactions between management teams across all of our private market strategies I BNS corporate adviser commercial teams and Vrs.

We have the MAPI for each of these strategies what are the opportunities to allocate capital and where we can find synergies on the investment side and on the fund raising side.

Alessandro Horta: We have been mapping out for each of the strategies, what are the opportunities to allocate capital, and where we can find synergies on the investment side and on the fundraising side. In the short term, we will tackle fundraising efforts for VCP4 and VICC, which are the main flagships we are working on fundraising for at the moment, and collaborate with others to leverage cross-LP relations. We see substantial upside for fundraising across other strategies, and one of those would be SPS. We are very excited for SPS 4 and see some interesting upside to our new vintage with the Ares theme as our part.

In the short term, we will tackle fund raising efforts of our visit before NV ICC, which are the main flagships. We are working on fund raising at the moment and collaborate with various to leverage Cross LP relationships.

We see substantial upside for our fund raising across other strategies and one of those would be Sps.

We are very excited for Sps for and see some interesting upside to our new vintage with the Arris team as our partners.

Alessandro Horta: We'll keep you posted as we advance on those fronts throughout the year. Before diving deeper into the market framework for 2024, I would like to highlight the pivotal role of our data and macroeconomic research team. In the second half of 2023, Brazil experienced a temporary impact on real interest rates following the challenging macroeconomic environment in the U.S. and a bump in medium to long-term real rates for Treasury bonds. This period was marked by market speculation about the Brazilian Central Bank's stance on the forthcoming easing cycle.

We will keep you posted.

As we advance on those fronts throughout the year.

Before diving deeper into markets framework for 'twenty to 'twenty four I would like to highlight the pivotal role of our data and macroeconomic research teams.

In the second half of 'twenty to 'twenty three weeks spirits in Brazil, a temporary backed on real interest rates following the challenging macroeconomic environment in the U S and a bump in medium to long term repo rates for treasury bonds.

This spirit was market by market speculation about the Brazilian central bank's stance on the forthcoming easing cycle.

Our in house macroeconomic research team highlighted the transient nature of this fluctuation, which allowed our investment strategies to take advantage of the market dislocation.

Alessandro Horta: Our in-house macroeconomic research team highlighted the transient nature of these fluctuations, which allowed our investment strategies to take advantage of the market dislocation. We believe having a top-tier strategy team is a key foundation for a successful asset management firm. As I conclude my remarks, I wish to share our insights on market expectations and their implications for Vinci. Last year, the discussion in global markets revolved around rising interest rates, but now we find ourselves in an environment where expectations are for an impeding, easing cycle globally. The debate has evolved to the timing and intensity of these declining rates and the tone of monetary policy. This move will likely positively impact financial markets around the world. It's worth noting that Brazil is ahead of the global curve in the easy cycle and has already implemented five rate cuts, with rates decreasing from 13.75% to 11.25%.

We believe having a top tier strategy team is a key foundation to a successful asset management firm.

As I conclude my remarks, I wish to share our insights on market spectation and their implications to Vinci.

Last year, the discussion in global markets revolved around rising interest rates, but now we find ourselves in an environment, where expectations are for impeding easing cycle globally.

This debate has evolved to timing and intensity of these declining rates and the tone of monetary policy.

This move will likely positively impact financial markets around the world.

It's not worthy that Brazil is ahead of the global curve in days cycle. It has already implemented five rate cuts with rates the crazy for 13, 75% to 11, 25%.

It's worth mentioning that Brazil trade surplus is poised to increase even further in the years ahead.

Alessandro Horta: It's worth mentioning that Brazil's trade surplus is poised to increase even further in the years ahead. The additional gains will likely come from a significant upward trend in oil production and export. This structural change will drive a substantial positive impact on exchange rates and therefore inflation, helping to restrain it and paving the way for deeper interest rate cuts.

The additional gains will likely come from a significant upward trend in oil production and exports.

This is a structural change will drive a substantial positive impact on exchange rates, and therefore inflation, helping to restrain it and paving the way for a deeper interest rate cuts.

This will potentially be an important driver to our long term easing cycle, which could become more aggressive than currently anticipated by the market leading to further GDP growth.

Alessandro Horta: This could potentially be an important driver of a long-term easing cycle, which could become more aggressive than currently anticipated by the market, leading to further GDP growth. This outlook is excellent for assets, both private and public, and substantially positive to drive meaningful reallocation in alternative asset classes as we saw in the 2016-2021 cycle. When we combine these elements with an commitment to comply with the Brazilian fiscal framework, we see enormous potential for the economic landscape, which would mean a constructive environment across all strategies. As overnight rates revert to single digits, the landscape for investors is shifting, prompting a quest for diversification to fulfill their financial objectives. Another important positive note worth mentioning is that last week, a new measure was approved restricting the nuisance of tax-free CDs backed by agriculture and real estate assets, which had been absorbing a significant amount of flow. In recent years, the Brazilian asset management industry has suffered with substantial outflows with a considerable part migrating to tax-free CD products issued by local banks. The new measure aims to restrict the type of tax-free CDs that can be issued and also increase minimum liquidity requirements for these instruments in response to market fluctuations.

This outlook is that settlement for assets, both private and public and substantially positive to drive meaningful relocation in alternative asset classes as we saw in the 2016 due to any to any one cycle.

When we combine these elements with our commitment to comply with the Brazilian physical framework, we see enormous potential for the economic landscape, which would mean a construction environment across always strategies as.

As overnight rates revert to single digits landscape for investors is shifting, prompting a quest for diversification to fulfill their financial objectives.

Yeah.

Another important positive note worth mentioning is that last week, a new measure has been approved restricting new issues.

Tax free Cds, beckoned by agriculture, and real estate assets, which had been.

Absorbing a significant amount of flows.

In recent years.

Brazilian asset management industry has suffered with substantial outflows, we saw considerable Bart migrating to tax free C. D products issued by local banks.

Did you measure aims to restrict the type of tax free Cds that can be should and also increased minimum liquidity requirement for these instruments.

Markets Dictations anticipate the cancellations of 30% of new issuances.

Bruno Zaremba: Estimate the cancellations of 30% of new issues. This opens opportunities to expand allocations to riskier investments, attracting flows back to the asset management industry. Throughout the years, we have diligently constructed a robust platform featuring a complete array of alternative products tailored to meet the needs of our clients. We are confident that as the transition away from fixed income unfolds, Vinci is strategically positioned to capture substantial market share. With that, I will turn it over to Bruno to go over our fundraising efforts and pipeline. Thank you, Alessandro, and good afternoon, everyone.

This opens opportunities to expand the locations to riskier investments attracting flows back to the asset management industry throughout the years, we have diligently constructed a robust platform featuring a complete array of alternative products tailored to meet the needs of our clients we of course.

Net debt as they transition away from fixed income unfolds as Vinci is strategically positioned to capture substantial market share.

With that I will turn it over to Bruno to go over our fund raising efforts and pipeline.

Okay.

Thank you Alessandro and good afternoon, everyone.

Bruno Zaremba: I would like to begin my remarks reinforcing what Alessandro mentioned earlier in the call. Vinci had another strong quarter fundraising for the private market. Momentum is rising, and we are excited with the prospects for the year ahead. First, let me provide some color on two important closings held in the fourth quarter. Our Shopping Mall REIT, Visk, held another close in this quarter.

I would like to begin my remarks reinforced and waterless some information earlier in the call Vitor.

<unk> had another strong quarter fund raising for private markets.

Momentum is picking up and we are excited with the prospects for the year ahead.

First let me provide some color on two important closings held in the fourth quarter.

Our shopping mall REIT Zysk held another closing this quarter <unk> raised 875 million reais through an oversubscribed public follow on offering closed in mid December.

Bruno Zaremba: Visk raised R$ 875 million through an oversubscribed public follow-on offering closed in mid-December. When you add to the previous offering, held in late September, the fund added R$1.2 billion in perpetual AOM for Vinci in a three-month span. We raised this amount, backed up by a diverse investor base comprising retail, institutions, and other funds, underscoring the strong demand for this type of product when facing favorable market conditions. The capital raise not only solidified our leadership position in the REIT market but also enhanced portfolio diversification. We closed our follow-on offering with seven advanced prospect acquisitions to fully deploy the capital, of which two were already closed. The real estate market is full of opportunities to deploy capital, and we should go back to the market to capitalize on and seize these opportunities. The other important close was in our infrastructure strategy. Back in late 2022, we announced that the federal government had selected Vinci to manage the Sustainable Regional Development Fund, or SIDIRS.

When you add to the previous offering held in late September The fund added one 2 billion Reais and perpetuate wham for Vinci in a three month span.

We raised this amount backed up by a diverse investor base, comprising retail institution and other funds underscoring the strong demand for this type of product when facing favorable market conditions.

The capital raise not only solidified our leadership position in the REIT market, but also enhanced sports, Florida diversification.

We close our follow on offering with seven advanced prospects acquisitions to fully deploy the capital of which two were already closed.

The real estate market is full of opportunities to deploy capital and we should go back to the market could capitalize on and seize these opportunities.

The other important close was in our infrastructure strategy.

Back in late 2022 we announced that the federal government had selected <unk> to manage the sustainable regional development funds or figures.

Bruno Zaremba: Given the fund's complex structure, we spent the year discussing details and specifics for the mandate, and we carried out the transfer in December. FIDEIRS will start with roughly R$1 billion in AOM and has room to grow over the years, both through appreciation and new commitments by the federal government. We are proud to be the partner of choice for such an important product in Brazil's sustainable infrastructure landscape. The fund will work on three different fronts. First,

Given the funds complex structure, we spent the year discussing details and specifics for demand it and we carried out the transfer in December.

So we'll start with roughly 1 billion reais in a whim and has room to grow over the years, both by appreciation and new commitments by the federal governments.

We are proud to be the partner of choice for such an important product to Brazil sustainable infrastructure landscape.

The fund will work on three different fronts.

<unk>.

Structuring concessions and PPP projects, helping state and municipalities to bring their infrastructure projects to an auction to raise private capital.

Bruno Zaremba: Structuring concessions and PPP projects helping states and municipalities to bring their infrastructure projects to an auction to raise private capital. Second, Implementing Guaranteed Instruments, which can be carried out through participation in Guaranteed Funds, and Thirdly, Directly Investing in Infrastructure Investment Funds. Each investment scope above carries different types of fees; for example, we are eligible to charge some success fees over the structuring of infrastructure projects that are acquired in an auction. The magnitude will depend on the size of each project.

Second implementing guarantees instruments, which can be carried out through participation in guaranteed funds and.

And third directly investing infrastructure investment funds.

Each investment scope above carries different types of vies for instance, right.

Eligible to charge some success fees over the structuring of infrastructure projects that are acquired in an auction.

The magnitude will depend on the size of each project.

Bruno Zaremba: As a regular fee base, we will have a management fee over the committed capital, and that should be the main revenue stream in the short term. We will keep investors up to date as we structure these operations and other revenue streams take place. On a general note, this fund is key to consolidate our position as a leader in infrastructure investments in Brazil.

As a regular fee base will have a management fee over the committed capital that should be the main revenue stream in the short term.

We will keep investors up to date as we structured these operations and the other revenue streams take place.

On a general note. This fund is key to consolidate our position as a leader in infrastructure investments in Brazil.

This is another important step in a segment that has substantial room to scale over the next few years.

Bruno Zaremba: This is another important step in a segment that has substantial room to scale over the next few years. To conclude the quarterly updates on private markets, I would like to highlight the following. Our Climate-Oriented Fund for Infrastructure, the ICC, closed a few commitments at the end of the year, reaching 75% of its fundraising target. Another noteworthy achievement is that the ICC has officially attained Article 9 compliance.

To conclude the quarterly updates on private markets I would like to highlight the following.

Our climate oriented fund in infrastructure, the ICC close a few commitments in the end of the year, reaching 75% of its fund raising targets.

Another noteworthy achievement is that the ICC has officially attained article nine compliance.

To put this into perspective only a selected few funds worldwide meet the standards set by article nine.

Bruno Zaremba: To put this into perspective, only a select few funds worldwide meet the standards set by Article 9. This is a truly remarkable milestone for us. The Article 9 stamp has a direct effect on our fundraising efforts, allowing us to access other pools of capital. Several investors from Europe and the U.S. demand the highest standards from climate-oriented funds before committing their capital.

This is a truly remarkable milestone for us.

The article nine stamp has a direct effect over our fund raising efforts, allowing us to access other pools of capital.

Several investors from Europe, and the U S demand the highest standards from climate oriented funds before committing their capital.

Bruno Zaremba: We are thrilled to be among these few funds. Moving on to VCP4, we also closed a few commitments towards the end of the year. The fun has been a stellar semester.

We're thrilled to be among these few funds.

Moving on to visit before we also closed a few commitments towards the end of the year.

The fun to have the stellar semester.

Bruno Zaremba: Adding up the third quarter closes with XP, we raised close to $1 billion over the last six months, mostly backed by local investors. VCP4 is officially the vintage within the VCP strategy with the biggest absolute commitment coming from local investors. This was crucial to the fund's fundraising success and bodes well for allocation into future vintages. Now, let me provide some details regarding our fundraising targets for private market funds. As most of you know, during Investor Day, we update our fundraising target to 15 billion reais until the year-end 2024. And as Alessandro mentioned, this is a key area of focus for us this year.

Adding up the third quarter closings with X P. We raised close to 1 billion over the last six months, mostly backed by local investors.

Visit before is officially the vintage with the Mississippi stress as you.

With the biggest absolute commitment coming from Lukas. This was crucial to the funds fund raising success and bodes well to a location into future vintages.

Now let me provide some details regarding our fund raising targets for private market funds.

As most of you know during Investor day, we have to date, our fundraising target 215 billion reais until the year end 2024.

And as I listened information. This is a key area of focus for us this year.

Bruno Zaremba: Since the beginning of the cycle in mid-2022, we raised more than R$8 billion for private market products, backed by products such as VCP4, VICC, and others. We accomplished that facing a challenging worldwide scenario to raise capital for calls and products. During this period, Vinci's proprietary wide and diverse distribution capabilities were our greatest asset.

Since the beginning of the cycle in mid 2022, we raised more than 8 billion reais for private market products backed by products such as visit before the ICC and others.

We accomplish that is facing a challenging worldwide scenario to risk capital for Kohl's and products.

During this spirit features preparatory wide and diverse distribution capabilities was our greatest assets will.

Bruno Zaremba: With international investors pushing back to invest in closed and private products, we leverage our local presence with LPs that exhibit strong appetites for these asset classes. Going forward, we have a robust pipeline for privates in 2024. First, we will work on final closes for VICC and VCP4. The ICC is close to the targets, and we're experiencing traction with international investors that have shown strong appetites for climate-related products. We should see final commitments coming over the next few quarters. For VCP4, we will expand our efforts with international partners.

We see internationally faster pushing back too fast in closing private products, we leverage our local presence with lp's that exhibits strong appetite for these asset classes.

Going forward, we have a robust pipeline for privates in 2024.

First we will work on final close as far as the ICC emphasis before.

The ICC is close to the targets Amer experiencing traction with international investors that have shown strong appetite for climate related products, we should see final commitments coming over the next few quarters.

Yeah.

Or is it before we will expand our efforts with international players the size and timing of this final round of investments with the band on these allocations based on recent interactions, we're seeing a more constructive environment than past quarters.

Bruno Zaremba: The size and timing of this final round of investments will depend on these allocations. Based on recent interactions, we are seeing a more constructive environment than in past quarters. We are also working alongside Ares to understand if there are LPs with whom we could work in partnership to boost this final round of commitments. Moving on to the next piece of the puzzle.

We also work alongside Arris to understand if there are Lps with whom we could work in partnership to boost this final round of commitments.

Moving onto the next piece of the puzzle.

As we discussed on our last earnings call and also during Investor Day, We will start fund raising for new vintages of additional strategies at some point during the first semester.

The first would be as each SBS, new vintage Sps for we have started testing the waters over the last few weeks and we are excited with the prospects for these funds.

Bruno Zaremba: As we discussed on our last earnings call and also during investor day, we will start fundraising for new vintages of additional strategies at some point during the first semester. The first will be Vinci SPS New Vintage, SPS4. We have started testing the waters over the last few weeks, and we are excited about the prospect for this fund. The track record for the last three vintages is stellar, with funds 1 and 2 posting attractive DPI to investors. To provide you with some updates regarding the strategy and illustrate the success of our Special Situations Vertical, the first vintage, raised in 2018, is marked today at a 26% gross IR. Towards the end of 2023, we successfully exited the fund's largest asset, originally a non-performing loan acquired from a bank. We executed our collateral, a real estate asset, and concluded a sale in the fourth quarter. The proceeds of that sale represent 40% of the investor's total commitment in the fund, which will be fully returned until the end of the first quarter of 2024. With that, the fund should achieve a 1.3 times DPI.

The track record for the last three vintages is stellar with funds wanted to posting attractive DPI to investors to provide you with some updates regarding the strategy and illustrate the success of our special situations vertical the first vintage raising 2018 is mark today at a 26% gross IRR.

So ours is the end of 'twenty to 'twenty three we successfully exited the funds largest assets or easily a nonperforming loan acquired from a bank we executed our collateral our real estate assets and concluded sale in the fourth quarter. The proceeds of that sale represents 40% of the investor's total commitment into <unk>.

<unk>, which will be fully returned until the end of the first quarter of 'twenty 'twenty four.

With that the fund should achieve a one three times at Ti.

Fun to launching 'twenty 'twenty.

Hasn't dissipated divestment period into 2023 and has already returned over 55% of total committed to investors underscoring the ongoing success of this strategy across all of its vintages.

The last vintage of Sps strategy was raised in 2021 with more than one being a rise in committed capital.

That fund has already called 65 first sample of the total capital commitments and allocated it across 20 assets that have fun has exposure to five different sub strategies and hold a broad array of opportunity pipeline to continue to deploy our capital in coming quarters, especially in legal claims litigation finance.

And secondary corporate law and acquisitions.

S. P. S raised this fund relying mostly on their proprietary relationship with the high net worth individuals now we have features extensive distribution capacity two different pools of capital and we're seeing strong demand as we have been introducing this strategy to our O piece, especially when it comes to international investors.

Bruno Zaremba: Fun 2, launching in 2020, has anticipated the divestment period into 2023 and has already returned over 55% of total commitments to investors, underscoring the ongoing success of the strategy across all of its ventures. The last vintage of the SPS strategy was raised in 2021, with more than 1 billion reais in committed caps. That fund has already called 65% of the total capital commitments and allocated it across 20 assets. The fund has exposure to five different sub-strategies and holds a broad array of opportunities in the pipeline to continue to deploy capital in the coming quarters, especially in legal claims, litigation finance, and secondary corporate loan acquisitions. SPS raised this fund relying mostly on its proprietary relationship with high net worth individuals.

The second initiative, we will start to fund raising 'twenty 'twenty four is V. I R. Five the fifth vintage in our impact and return strategy.

The previous vintage raise 1 billion Reais in 2020, and it's also performing well alrighty divesting from assets and returning capital to our peace lack.

Lastly, we plan to launch if you ask the out to our second vintage for a development strategy within real estates.

We are working to divest some assets from the first advantage to enroll in fund raising over stations for the second comparisons here are five in Sps for the F. D. L. Two should come back to market on the second half of the year.

To wrap up our fund raising prospects for a private market products in 'twenty to 'twenty four we should see.

New commitments for the Vinci credit infrastructure in our credit strategy coming from both local and international investors.

We were active on this fund.

Bruno Zaremba: Now we have Vinci's extensive distribution capacity to different pools of capital, and we're seeing strong demand as we have been introducing this strategy to RLPs, especially when it comes to international investors. The second initiative we will start to fundraise for in 2024 is VIR5, the fifth vintage in our impact and return strategy. The previous vintage raised R$1 billion in 2020, and it's also performing well, already divesting from assets and returning capital to Alpitas. Lastly, we plan to launch FDL2, our second vintage for our development strategy within real estate. We are working to divest from assets from the first vintage to enroll in fundraising conversations for the second. Compared to VRR5 and SPS4, FDL2 should come back to market in the second half of the year.

Mostly 2022 have you raised $1 4 billion Reais during those periods, we will continue fund raising for the strategy this year.

And second new offerings for the rights.

This was just the first of our funds to come back to markets. We expect that with a scenario of lower interest rates there will be an important window for new issuances for the public traded Reits.

We currently have seven of them waiting for the right timing.

On a last note is worth mentioning that we are always looking for new product development opportunities, which could come up throughout the year.

To close my remarks, let me provide for an update for the liquid portion of our business.

Throughout the fourth quarter, we experienced the effects of mark to market appreciation, which is anticipated to result in a higher fee level as we move into 'twenty to 'twenty four.

However, we are still trailing to see some positive impacts from flows both in IP N S in public equities.

We do not expect any substantial flows until nominal interest rates become more constructive at single digit levels, we still suffer from the trade off between skew high overnight returns and the diversification into riskier asset class.

Bruno Zaremba: To wrap up our fundraising prospects for private market products in 2024, we should see first new commitments for the Vinci Credit Infra Strategy and our Credit Strategy coming from both local and international investors. We are active on this fund, mostly in 2022, having raised R$1.4 billion during that period. We will continue fundraising for the strategies this year. And second, new offerings for the rich. VISC was just the first of our funds to come back to market. We expect that with a scenario of lower interest rates, there will be an important window for new issuances for the public-rated third-degree. We currently have seven of them waiting for the right time.

On the other relevant the fact, most BNS is the real interest rate level.

Last time, you were experienced a strong pickup in flows and new mandates long term real rates were around 4%.

In order to see the same traction we need real rates to stabilize at a level at least in the low fives.

Please note that with the continued to show significant resiliency in our liquid AUM Seth.

Several players suffered from huge redemptions throughout the last two years in vitro remains protected against the very negative market backdrop.

We are reaping the benefits of strategy that we adopted a longtime ago procure Terry distribution channels with the close relationship with our clients.

With that said private market should continue to set the tone in 'twenty to 'twenty, four with liquids and I P. N S b potential upsides over the second half of the year.

Bruno Zaremba: On a last note, it is worth mentioning that we are always looking for new product development opportunities, which could come up throughout the year. To close my remarks, let me provide an update on the liquid portion of our business. Throughout the fourth quarter, we experienced the effect of mark-to-market appreciation, which is anticipated to result in a higher C-level as we move into 2024. However, we are still waiting to see some positive impacts from flows, both in IP&S and public equity. We do not expect any substantial inflows until nominal interest rates become more constructive at single-digit levels.

And with that I'll turn it over to Sasha to go through our results.

Thank you Bruno.

Let's just start by covering management and advisory fees.

Fee related revenues totaled 190 million has in the quarter up.

14% on a year over year basis.

Management fees were flat on a year over year basis, yet they exhibit a positive growth trend going forward.

Upon closer examination.

<unk> management fees were up 11% year over year.

Backed by the strong fund raising over the last 12 months.

This growth was partially offset by lethal disorder and my penis.

Bruno Zaremba: We still suffer from the trade-off between still high overnight returns and diversification into riskier asset classes. Another relevant effect, mostly on APNF, is the real interest rate level. Last time we experienced a strong pick-up in flows and new mandates, long-term real rates were around 4%. In order to see the same traction, we need real rates to stabilize at a level at least in the low 5s. Please note that we will continue to show significant resilience in our liquids AOM. Several players suffered from huge redemptions throughout the last two years, and Vinci remains protected against a very negative market backdrop.

Both.

The challenging market conditions that led to a decrease in management fees on a year over year basis.

Yeah.

SPV as Lee mentioned by Bruno we should see a pickup.

Pickup over the short term for liquid starters average given the AUM of precision awkward in the later part of the year.

Moving on advisory fees were the main driver behind the fee related revenues growth on a year over year basis.

Mhm recently use our corporate advisors segment has been diligently engaged.

Finally, the origination process, resulting in a diversified exposure across various sectors.

Does this strategic initiative is designed to mitigate risk across different economic cycles position us strategically to capitalize on favorable market conditions are right.

Sergio Paz: We are reaping the benefits from a strategy that we adopted a long time ago for proprietary distribution channels with a close relationship with our clients. With that said, private markets should continue to set the tone in 2024, with liquids and IP&S being potential upsides over the second half of the year. And with that, I'll turn it over to Sergio to go through our results. Thank you, Bruno.

Currently M&A market is gaining momentum as market conditions improve.

Our corporate subdivided team successfully surpassed our third immuno has in her target for advisory revenues and we believe to be in a great position to repeated success in 'twenty 'twenty four.

Sergio Paz: Let's start by covering management and advisory fees. Fee-related revenues totaled R$190 million in the quarter, up 14% on an year-over-year basis. Management fees were flat on an year-over-year basis, yet they exhibit a positive growth trend going forward. Up and Closer is a combination, Property Marks Management Fees were up 11% year-over-year, backed by strong fundraising over the last 12 months. However, this growth was partially offset by liquid strategies and IPNF. Both companies faced challenging market conditions that led to a decrease in management fees on an year-over-year basis.

Turning to <unk> results in the fourth quarter, FRE totaled $57 3 million or <unk> or one how an <unk> <unk> per share.

Presenting a 14% year over year increase on a per share basis.

Luke cancer the N O figures F. R. E reached $208 4 million of Harris or $3 85 per share up 11% on a per share basis.

F. R E continues to grow boosted by the strong fund raising.

But I have a democracy products and a higher level of advisory fees.

Just regarding our investment E R S.

Iot markets comprise more than 60% off of Vince FRE in 2023.

When he IPO the company in January 2021, private to match last 12 months FRE.

Sergio Paz: As previously mentioned by Bruno, we should see a pick-up in the short-term for liquid strategies average, given the AUM appreciation occurred in the latter part of the year. Moving on, advisory fees were the main driver behind fee-related revenues growth on an year-over-year basis. In recent years, our corporate advisor segment has been diligently engaged in refining the de-origination process, resulting in diversified exposure across various sectors. This strategic initiative is designed to mitigate risk across different economic cycles, positioning us strategically to capitalise when favourable market conditions arise. Currently, the M&A market is gaining momentum as market conditions improve. Our corporate advisory team successfully surpassed our 30 million reais annual target for advisory revenues, and we believe to be in a great position to repeat its success in 2024. Turning to FII results, in the fourth quarter, FII totaled R$57.3 million, or R$1.07 per share, representing a 14% year-over-year increase on a per-share basis. Looking at the annual figures, FII reached R$ 208.4 million, or R$ 3.85 per share, up 11% on a per share basis.

Was $85 2 million highs.

And scale up.

<unk> hundred $34 1 million highs in 2023.

Showcasing a 57% increase.

These numbers reflect the success of our ongoing efforts to scale our priority market business.

This represents a high quality FRE growth backed by long term lockups in AUM and a higher fee rate.

When it when we discuss trends for F. R. You're going forwards, we should continue to pose health numbers as we develop our fund raising pipeline in private markets.

We expect new subscriptions coming over the next few quarters for both the ICC and visit before that will contribute via catch up effects, but also we see recurring revenues.

Addition, as Bruno mentioned on his remarks, we have a robust pipeline of new vintages with Sps for and yeah, five additional to the Reits and other funds that should boost F E into any 24.

Now, let me spend some time covering expenses.

Margins remained stable on a full year basis as we have been discussing over the past quarters, we were actually focused on cost consciousness.

In 2023 actively seeking efficiency across the entire platform.

It's important to mention that although inflation in 2023 was under control the inflationary pressure on expenses last year reflect open inflation levels from 'twenty to 'twenty, two our cross control prove.

Sergio Paz: FRE continues to grow, pushed by the strong fundraising of private market products and a higher level of advisory feedback regarding our investment in VRS. Private markets will comprise more than 60% of Vinci's FIEs in 2023. When he IPO-ed the company in January 2021, Private Max's last 12-month FIE was 85.2 million reais, and Scale-Up to 134.1 million reais in 2023, showcasing a 57% increase.

Prove it its efficient preventing a meaningful growth in G&A expenses.

To finalize my remarks on expenses and margins I do like to reinforce the following.

We have well developed platform ready to leverage rules.

So we illustrate with an example, our real estate team concluded two consecutive offerings for our shopping mall REIT risky.

Adding roughly $1 2 billion reais in perpetual.

AUM without adding hardly any costs.

Sergio Paz: These numbers reflect the success of our ongoing efforts to scale our private market business. This represents high-quality FRA growth backed by long-term lockups in AOM and a higher fee rate. When we discuss trends for FIE going forward, we should continue to post healthy numbers as we develop our fundraising pipeline in private markets. We expect new subscriptions coming over the next few quarters for both the ICC and VCP4 that will contribute via catch-up effects, but also with recurring revenue. In addition, as Bruno mentioned in his remarks, we have a robust pipeline of new vintages with SPS 4 and VIR 5, in addition to the REITs, and other funds that should boost FRE in 2024. Now, let me spend some time covering expenses. Margins remain stable on a four-wheel base.

With that said.

We've had success fund raising cycle for private democracy products in 2024 online with a more constructive scenario and I'd be at NASS and the lucrative strategies, we could experience margins improvements towards the end of the year.

Shifting to peer results bear pharmacy fees remain.

A relatively modest level.

<unk> by the recent turbulence in global and local markets that has a diversely affected portfolio precision as Alexandre previously highlighted there are positive signals.

Stability emerging in global markets reached bodes well for potential future performance of cognition.

Please note that to have approximately 17 billion here is in performance eligible AUM across that BNS and liquidity providers.

Covering our private to match funds cross accrued performance fees reached its closer to 300 million here is in the fourth quarter.

Sergio Paz: As we have been discussing over the past quarters, we will actually focus on cost-consciousness in 2023, actively seeking efficiency across the entire platform. It's important to mention that although inflation in 2023 was under control, the inflationary pressure on expenses last year reflected inflation levels from 2022. Our cost control proved it was efficient. Preventing Meaningful Growth in DNA Expansion

As we divest from assets and the return of capital to our limited partners, we should see a significant impact coming from this front starting in late 2025.

To wrap up I would like to cover our distributable earnings.

Joseph of distributable earnings totaled 60 formula hasn't their fourth quarter of 2023 or.

One row, and 18 <unk> per share up 17% year over year on a per share basis boosted by a combination of higher F. R E and realize the gains in our lease portfolio.

Sergio Paz: To finalize my remarks on expenses and margins, I would like to reinforce the following: we have a well-developed platform ready to leverage growth. To illustrate this example, our real estate team concluded two consecutive offerings for our shopping mall reach, adding roughly 1.2 billion reais in perpetual AUM without adding hardly any cost. With that said, with a successful fundraising cycle for private market products in 2024, aligned with a more constructive scenario in IP&S and liquid strategies, we could experience margin improvements towards the end of the year, the PWA results. Performance fees will remain at $6.

On an NOI basis, adjusted distributable earnings totaled 246 million is all Farha eyes, and 54 cents per share flat on a year over year basis.

It's important to note that the winch has $1 1 billion of highs and proprietary capital commitments to private market products with approximately 400 million.

I'll read cold.

Do you remain capital commitments is invested in our <unk> portfolio.

We anticipate a more significant flow of this capital into the private funds is starting 2024 onwards.

Sergio Paz: ......

Sergio Paz: , a relatively modest level influenced by the recent turbulence in global and local markets that has adversely affected portfolio appreciation. However, as Alessandro previously highlighted, there are positive signals of stability emerging in global markets, which bodes well for potential future performance recognition. Please note that you have approximately R$17 billion in performance-eligible AOM across IPNF and Liquid Storage, covering our Private MarketFund. Gross Accrual Performance Fees reached close to R$ 300 million in the fourth quarter.

It is the first call for capital.

This anticipated reduction in our lease portfolio combined with the expected easing cycle in Brazil.

We'll have an impact to our financial income in 2024, when compared to 2023.

Reach we head into cold much of the capital from the GP commitments and interest rates were at the high of this cycle.

Therefore, moving forward, we expect moderation in our realized financial income line, which should once again, so strong contribution later in the cycle as commitments into private funds.

Sergio Paz: As we divest from assets and return capital to our limited partners, we should see a significant impact on this front, starting in late 2025. To wrap up, I would like to discuss our Distributable Warning. Adjustable Distributable Earnings totaled R$ 64 million in the fourth quarter of 2023, or one real and $0.18 per share, up 17% year-over-year on a per-share basis, boosted by a combination of higher FIE and realized gains in our liquid portfolio. On an annual basis, adjusted distributable earnings totaled R$ 246 million, or R$ 4.54 per share, flat on an year-over-year basis.

Turns as realized income.

We have talked about it is FX.

Lamps during our Investor day.

With that I'd like to close out my remarks, and open the call for questions. Once again I would like to thank you for joining our call.

Please operator, you can proceed with the questions. Thank you.

Thank you we are now going to start the question and answer section. If you issue ask a question. Please breath of raising the button wait while we pull for questions.

Our first question comes from William Baldwin yard Braun Ito BBA. Please Mr. William your microphone is open.

Good night, everyone. Thank you for your time and for the presentation. My question here is directed to reach.

So I'm thinking about the fund raising scenario in 2024 can you give us more color of when to expect new new trenches. If it should be more concentrated in the first or the second half of the year.

Sergio Paz: It's important to note that Vinci has R$1.1 billion in proprietary capital commitments to private market products, with approximately R$ 400 million already called. The remaining capital commitment is invested in our liquid portfolio. We anticipate a more significant flow of this capital into private funds starting 2024 onward, as the fund's goal for CAB. This anticipated reduction in our liquid portfolio, combined with the expected easing cycle in Brazil, will have an impact on our financial income in 2024 when compared to 2023, when we hadn't called much of the capital from DGP commitments and interest rates were at the high of this cycle. Therefore, moving forward, we expect moderation in our realized financial income line, which should once again show strong contribution later in the cycle as commitments into private funds are returned as realized GP income.

And then second question here is two in the same topic.

And perhaps this is more this is more regarding the 2025, Oh look and onwards so.

If the tax regulations for income tax for right right they change in Brazil.

From from now on our investors need to pay taxes on the dividend of the FTE east of the REIT.

I would like to understand how should this impact expected future fund raising and the attractiveness of the product.

Okay.

That's all it sounds and thank you for your question I'll start with the timing of new issues is on the REIT side.

As we have several different reads as taking the example of this kit that we raised around $1 billion in there.

The end of 2023, it's difficult to predict exactly when we will go back to the market with that.

We normally go with one product at that time of course to concentrate the airports all fund raising in one product at a time, but we expect that we'll be well distributed throughout the year. So we do not have a specific date.

Sergio Paz: We have talked about this effect at length during our investor day. With that, I would like to close our remarks and open the call for questions. Once again, I would like to thank you for joining our call. Please, operator, you can proceed with the questions. Thank you. Thank you. Our first question comes from William Bollingard from Itaubba. Please, Mr. William, your microphone is open. Good night, everyone.

Date or quarter, then then that we expect more efficiencies but of course as the easing cycle develops so the interest rates goes down.

The the appealing for these products for the general public will grow so normally our expectation is that as the the progress and the interest rates continues to go down we have more issues towards the end of the year than the beginning because of the level of interest.

William Bollingard: Thank you for your time and for the presentation. My question here is directed to Rich. So thinking about the fundraising scenario in 2024, can you give us more color on when to expect new trenches, if they should be more concentrated in the first or the second half of the year? and then a second question here is still on the same topic, and perhaps this is more regarding the 2025 outlook and onwards, so if the tax regulations for income tax uh for right REITs change in Brazil, and from now on, investors need to pay taxes on the dividends of the FEEs that the REITs pay, So I would like to understand how this should impact expected future fundraising and the attractiveness of the product. Okay, William. That's Alessandro.

Rates.

And regarding your consideration about the possibility of change in terms of the taxation of the fund.

My personal view is that that will affect more.

People that will come into the market for the first time.

Doing the first IPO of fund Dan follow ons.

Did change in taxation of the the rise in the bracket of tax will affect more the price off of the REIT itself not necessarily the fund raising going forward. That's my view that could affect the market as a whole in terms.

Alessandro Horta: Thank you for your question. I will start with the timing of new issuances on the REIT side. As we have several different REITs, such as the example of Visky, which we raised around $1 billion for at the end of 2023, it's difficult to predict exactly when we'll go back to the market with that. We normally go with one product at a time, of course, to concentrate the efforts of fundraising on one product at a time.

Adapting.

I R.

Net to <unk>.

New taxation more than really affecting future fundraise that to be automatically adapt in terms of the yields.

That we will.

Hum.

Require.

For the seller when we our current assets from the REIT, Okay. So what I'm trying to save that the cost of capital for the overall market in real estate.

Alessandro Horta: But we expect that issuances will be well distributed throughout the year. So we do not have a specific date or quarter that we expect more issuances. But of course, as the easing cycle develops, so interest rates go down, the appeal of these products for the general public will grow. So normally, our expectation is that as the year progresses and the interest rates continue to go down, we have more issuance towards the end of the year than at the beginning because of the level of interest rates. And regarding your consideration about the possibility of a change in terms of taxation of the fund, my personal view is that that will affect more people that will come into the market for the first time, doing the first IPO of the fund, then follow on. The change in taxation of the rise in the tax bracket will affect more the price of the REIT itself, not necessarily the fundraising going forward. That's my view, too.

Go up.

If there is the case of Oh.

A change in the tax taxation for this product.

That is great. Thank you for the explanation.

Our next question comes from Ricardo Book Big L from BTG Pactual. Please Mr. Macdougall, Yeah, Mike bunch of it.

Hello, everyone I have two topics I wanted to Alaska.

First we saw very good recovery in terms of public equities that unfold.

It has reached a very important mark of one beat in a high as any flows and that Dorian in an environment, where interest rates are very high. So I wanted to understand if it makes sense to expect as one being a heightening pools as a floor and progressively improve over the next quarter or should it be kind of a one off in a.

And mainly in the second half of the year, we should see.

Okay.

Higher higher numbers mark towards the beat in the public equity side.

And also I wanted to understand a bit that despite the very strong advisory fees are registered in Q4, reaching almost 20 million of highs in topline I wanted to understand what should be a more recurrent level, Florida adviser business.

Alessandro Horta: That could affect the market as a whole in terms of adapting the IRR net to the new taxation more than really affecting future fundraisers that will be automatically adapting in terms of the yields that we will require for the seller when we acquire an asset from the REIT, okay? So what I'm trying to say is that the cost of capital for the overall market in real estate will go up if there is a case of a change in the taxation of this product. That is great; thank you for the explanation. Our next question comes from Ricardo Buque-Pigal from BTG Pactual. Please, Mr. Buque-Pigal, your microphone is open.

Florida, especially thanks for thank you.

Oh, Okay got it. Thanks for the question. This is Bruno so in regards to equities, we actually saw in 'twenty three are kind of a flattish.

Inflow environment was actually a little bit positive, but it wasn't very.

Very material, what we did have in the fourth quarter was a mature appreciation impact.

So our.

Thinking about the the inflows.

The situation is is kind of stable.

At this point at least we're still seeing kind of stable.

Ricardo Buque-Pigal: Hello everyone, I have two topics I wanted to ask you about. First, we saw a very good recovery in terms of public equity net inflows. You guys reached the very important mark of 1 billion reais in inflows, and that during an environment where interest rates were very high. So I wanted to understand if it makes sense to expect this 1 billion reais in inflows as a floor and progressive improvement over the next quarter, or should it be kind of a one-off, and mainly in the second half of the year, we should see kind of higher numbers more towards the billion on the public equity side. And also, I wanted to understand a bit more about the very strong advisory fee that was registered in Q4, which is almost Thank you. Okay Ricardo, thanks for the question. This is Bruno.

Equities inflows I P. N S continues to be a little bit down.

It's the same environment that we saw in the in the last several quarters.

If equity is kind of stable N N I P. N S insurance of our flows a little bit down so as we mentioned during the call.

We expect this to turn at some point in the second half.

Likely with.

Nominal interest rates recently reached a number close to single digits. So we believe that could be an important trigger and historically when you look at our performance in the past.

When that happens usually we see very strong flows in both equities and and I've been asked so hopefully this is the second half.

The events for us that will that will.

Allow us to start to grow we've been to those businesses.

Quicker.

But the appreciation impact last year was was relevant when it when you combine equities with with five BNS and ethically son, who's going to take the advise your question.

Bruno Zaremba: So, in regards to equities, we actually saw in 2023 kind of a flattish inflow environment. It was actually a little bit positive, but it wasn't very much here. What we did have in the fourth quarter was a material appreciation impact on the AOM. So, thinking about the inflows, the situation is kind of stable at this point, at least.

Oh, Thank you Ricardo.

I think regarding your question. It's a very good question indeed about about revenues coming from advisory.

We have been discussing and what we are seeing now is that really our advisory business. The change in terms of the level of recurrent fees I think doing this last few years have been seeing.

Bruno Zaremba: We're still seeing kind of stable equity inflows, but IP&S continues to be a little bit down. It's the same environment that we saw in the last several quarters with equities kind of stable and IP&S in terms of flows a little bit down. So, as we mentioned during the call, we expect this to turn at some point in the second half, likely with nominal interest rates reaching a number close to single digits. We believe that could be an important trigger.

Seeing very very repeated clients and a lot of reference from.

Pharma clients. So I think all our franchise of course being a very straightforward.

As he Kyushu franchise, especially on and there are many side, but.

We have been able to capture some additional market share in this whole M&A market. So our expectation is that our.

Bruno Zaremba: And historically, when you look at our performance in the past, when that happens, usually, we see very strong flows in both equities and IP&S. So hopefully, this is a second half event for us that will allow us to start growing those businesses a bit quicker. But the appreciation impact last year was relevant when you combine equities with IP&S. And I think Alessandro is going to take the advisory question. Thank you, Ri

Our recurrent fees regarding advisor will really reach a new level. So I think we could take an average of what we did in 2023 and <unk>.

But take in consideration that we really change it.

I would say the penetration of our franchise that's due to the pipeline that we currently have in future and current mandates where we believe that will matter lies in revenues.

Alessandro Horta: I think regarding your question, it's a very good question indeed about revenues coming from advisory. We have been discussing, and what we are seeing now is that really, our advisory business has changed in terms of the level of recurrent fees. I think during these last few years, we have been seeing very, very repeat clients and a lot of referrals from former clients.

Future quarters.

No very clear and and given what you mentioned in terms of being flows for for liquids all the private market.

Fundraising you'll have and there's improvement in the advisory business does it make sense to think about <unk> growth of around 15% for the year.

More or less.

Okay.

I got a I think I mean, when you look at when we're when we look at our internal budgets are we are a positive for the year of 74, if everything goes well on the because we have several different opportunities to grow the business.

Alessandro Horta: So I think our franchise, of course, being a very straightforward execution franchise, especially on the M&A side, but we have been able to capture some additional market share in this whole M&A market. So our expectation is that our recurrent fees regarding advisory will really reach a new level. So I think we could take an average of what we did in 2023 and take into consideration that we really changed the penetration of our franchise due to the pipeline that we currently have in future and current mandates where we believe that will materialize in revenues in the future quarter. No, very clear.

I think a double digit growth certainly is possible given all the given all the things that we have at our at our table at this point.

Great. Thank you.

Our next question comes from Mrs. Beatrice <unk> from Goldman Sachs. Please Mrs. Abril your microphone is open.

Hi, Alistair I sound, a little bit on all and good.

Good evening and thank you for taking my question I have two questions. If I may. The first question is regarding C related expenses for Vrs. So you had a significant increase in expenses for for the segment in the fourth quarter. My question is how much more do you expect to invest in this segment.

Ricardo Buque-Pigal: And given what you mentioned in terms of flows for for liquids, all the private market fundraising you have, and this improvement in the advisory business, does it make sense to think about an FRE growth of around 15% this year, more or less? Ricardo, I think, I mean, when we look at our internal budgets, we are positive for the year 24 if everything goes well, because we have several different opportunities to grow the business. I think double-digit growth is certainly possible, given all the things that we have at our table at this point. Great, thank you. Our next question comes from Mrs. Beatriz Abreu of Goldman Sachs. Please, Mrs. Abreu, your microphone is open.

And what kind of expenses or are there more to do is it you know in terms of personnel are related to the product itself.

Also do you still expect a vrs to breakeven this year given the piece it's been evolving.

And my second question is regarding her in the knee strategy. If you can give us more color on how you're thinking about potential M&A and organic growth, especially given the recent investment that you got from Arris.

My questions. Thank you very much.

I've got three thank you for a question that Philips Sandra in terms of D. R. S. What's what started to happen in the last quarter of the year is that we start to traumatize.

Beatriz Abreu: Hi, Alessandro Bruno and Sergio, good evening and thank you for taking my question. I have two questions, if I may. The first question is regarding fee-related expenses for VRS. So you had a significant increase in expenses for the segment in the fourth quarter. My question is, how much more do you expect to invest in this segment? And what kind of expenses are there more to do?

Part of the I'll say the investment already especially in technology. So I think that was the first quarter as we have this effect. So since the beginning of the project, we start investing and have our running costs and on this last quarter. We started almost so what we.

Alessandro Horta: Is it, you know, in terms of personnel or related to the product itself? Also, do you still expect VRS to break even this year, given the pace it's been evolving? And my second question is regarding your M&A strategy. If you can give us more color on how you're thinking about potential M&A and organic growth, especially given the recent investment that you got from AERIS, those will be my questions.

So in our financial statements. It's exactly these effect, we do not expect to to to invest more I think the platform is evolving we are seeing a very good.

I'd say outlook for E. R. S. So.

I personally believe that we probably end up at the end of this year, we will have a ronnie right that could be already on the.

Alessandro Horta: Thank you very much. Hi Beatriz, thank you for asking a question. This is Alessandro. In terms of DRS, what started to happen in the last quarter of the year is that we started to amortize part of the investment, especially in technology. So I think that was the first quarter that we had this effect.

The breakeven side. So 2024, it is an important year for vrs for different reasons, but.

Especially all of this changed on the tax.

<unk> in Brazil, its benefit a lot the retirement type of products as you know so we are very very optimistic about that until the end of the year. We believed that we could be reaching.

Alessandro Horta: So since the beginning of the project, we started investing and have running costs. And in this last quarter, we started to amortize. So what we saw in our financial statements is exactly this effect. We do not expect to invest more; I think the platform is evolving. We are seeing a very good, I'd say, outlook for DRS. So I personally believe that at the end of this year, we will have a running rate that could be already on the... break-even side.

Something near the breakeven and there the investments it is exactly.

What I explained to you.

Concerning the M&A side, we continue to be very very active on the M&A.

And things are at.

Developing.

We have two main let's say fast.

In terms of M&A that we are pursuing right now one is our international expansion, especially for Latin America. So we are currently in a lot of items.

Alessandro Horta: So 2024 is an important year for VRS for different reasons, but especially all these changes to the tax system in Brazil have benefited the retirement type of products, as you know. So we are very, very optimistic about that. And so at the end of the year, we believe that we could be reaching something near break-even, and the investment is exactly what I explained to you. Concerning the M&A side, we continue to be very, very active in the M&A, and things are progressing. We have two main, I would say, paths in terms of M&A that we are pursuing right now. One is our international expansion, especially in Latin America. So we are currently analyzing, as we have told you in the last few quarters, a few opportunities.

We told you in the last few quarter a few opportunities.

And at the same time, we are looking specifically for asset.

Asset managers.

Specialty that are focusing just one asset class normally that will have a presence or a very small presence for <unk>.

Reasonable PRASM that could add not just a wham, but also capability to our platform. We have a pipeline that's strong on that in that sense and we believe that we will probably have.

Some of these deals that we have in our lives concluded.

The near future.

Perfect. Thank you so much ellison.

Our next question comes from Leandro <unk> from UBS.

Please Mr. Leandro <unk> open.

Yeah.

Good evening, everyone. Congrats on the results and thank you for the call Oh.

My question, perhaps the more qualitative one eighth required regarding our interactions with the arris team.

Alessandro Horta: At the same time, we are looking specifically for asset managers, especially those that are focused on just one asset class. Normally, they will have a presence or a very small presence or a reasonable presence that could add not just a WAM but also capability to our platform. We have a pipeline that's strong in that sense, and we believe that we will probably have some of these deals that we analyzed concluded in the near future. Perfect. Thank you so much, Alessandra.

You already talked about.

A bit on the new vintage in the STS four but if you. Please could talk about how conversations are going.

<unk> plans and what we can expect throughout the year.

Uh huh.

For the question. This is Bruno the Arris a partnership so far has been excellent.

We're making progress on several different fronts.

Leandro Leite: Our next question comes from Leandro Leite from UBS. Please, Mr. Leandro, your microphone is open. Good evening, everyone.

This week, we have several of our people in the United States visiting the offices of various we had.

Just to give you. Some examples we had caused them to either to go ahead of Brexit equity he went to the Los Angeles.

Operator: Congratulations on the results, and thank you for the call. My question, perhaps the more qualitative one, is regarding the interactions with the Ares team. You talked a bit about the new vintage in the SPS-4, but could you please talk about how the conversations are going, strategic plans, and what we can expect throughout the year? Leandro, thank you for the question. This is Bruno.

Headquarters of Aries, We had my family fun, the head of our Sps special situations units also in Los Angeles.

Better Kent Taylor, who runs our international distribution business was in a both offices in New York and Los Angeles. So we are really very.

Engage with them.

Talking about all of the potential opportunities for us to develop with them.

Bruno Zaremba: The AERIS partnership so far has been excellent. I think we are making progress on several different fronts. This week, we had several of our people in the United States visiting the offices of Ares. We had, just to give you some examples, we had Carlos Eduardo, the co-head of private equity. He went to the Ares headquarters in Los Angeles.

There are certainly some that are more meaningful and have more of what they shrink back then the short term we are working with the team there to find which would be the more interesting products for us too.

Represent them in Brazil across all our Investor base.

So there are several interesting products that we can show to our investor base in Brazil.

Bruno Zaremba: We had Marcelo Mifano, the head of our SPS, Special Situations Unit, also in Los Angeles. Pedro Quintela, who runs our international distribution business, was in both offices, New York and Los Angeles. So we are really very engaged with them, talking about all of the potential opportunities for us to develop with them. There are certainly some that are more meaningful and have more potential impact in the short term. We are working with the team there to find which would be the more interesting products for us to represent them in Brazil across our investor base. So there are several interesting products that we can show to our investor base in Brazil, people that want to allocate both institutions and high net worth individuals that want to allocate capital outside of the country.

People that want to allocate both institutions and high net worth individuals that want to allocate capital outside of the country. There is obviously the opportunity for us to work alongside with them on are improving the relationship with the common obese and perhaps mlps that they have that might have interest in.

Strategies in Latin America, with whom we can discuss our allocation to our products and finally, there's a very strong effort.

Two.

To originate opportunities.

Together, so we have a pipeline and infrastructure private equity special situations credits.

Well, we feel there is fit for arris to quite fast with us we're starting to analyze that opportunity there hopefully by the end of the year, we're going to have a one or two of those opportunities are turning into REO a co investment situations. So it's a very broad a conversation.

Bruno Zaremba: There is obviously the opportunity for us to work alongside them on improving the relationship with common LPs and perhaps some LPs that they have that might have an interest in strategies in Latin America with whom we can discuss allocation to our products. And finally, there's a very strong effort to originate opportunities to invest together. So we have a pipeline in infrastructure, private equity, and special situations credit where we feel there is a fit for Aries to co-invest with us. We're starting to analyze that opportunity, and hopefully, by the end of the year, we're gonna have one or two of those opportunities turning into real co-investment situations. So it's a very broad conversation, interactions are becoming more pulverized, and the teams are getting to know each other, and that's probably gonna speed up the opportunity sets for us and for the partnership. But we're extremely happy with what we have been able to accomplish with them so far. So things are looking very promising for the next few years. That's great.

Interactions there are becoming more overrides and it seems are getting to know each other and that's probably going to speed up our the opportunity set for.

For us and for the partnership but.

But we are extremely happy with what we have been able to accomplish.

With them so far so things are looking very promising for the next few years.

That's great. Thank you Bruno.

Our next question comes from dynamic Chris Bohn from J P. Morgan.

Please Mr. <unk>, let me give my phone is open.

Thank you so much of the Central Bruno says you two questions on our side. The first one is like DNS.

If you kind of remind us a little bit what we should expect going forward in terms of of outflows.

Specifically just remind us if this is a specific client.

Or if it's a broader outflow related to the pension given interest rates et cetera, just to see how we model going forward.

If a vertical.

And the second question is related to performance fees.

Basically on the two sides of course equities.

If you if you can remind us the how far you are from the cats from the from the watermarks on the funds.

And if you believe can be a relevant driver of performance going forward.

Bruno Zaremba: Thank you, Bruno. Our next question comes from Guilherme Grisbon from JP Morgan. Please, Mr. Guglielmi, your microphone is open.

And on the private side, we noticed a pretty strong.

Unrealized adjustment I think was 40% growth in the unrealized performance fees.

Guilherme Grisbon: Thank you so much, Alessandro, Bruno, and Sergio. We have two questions on our side. The first one is APNS, and remind us a little bit what we should expect going forward in terms of outflows. Specifically, just remind us if this is a specific client or if it's a broader outflow related to the pension, given interest rates, etc. Just to see how we model going forward the vertical. And the second question is related to performance fees. Basically, on the two sides, first equity.

The question is basically if there was any specific event or basically what drove this this inquiries. Thank you.

Okay. Thank you very much and Ah that's Alessandro I'll start with like DNS IP and asked the outflows is concentrated more on the clients that distributed through retail.

Through our allocators and distributors' channel.

And this is more related with the high interest rates and the outflows.

Alessandro Horta: If you can remind us how far you are from the watermarks on the front, and if you believe this can be a relevant driver of performance going forward. And on the private side, we noticed a pretty strong unrealized adjustment. I think it was 40% growth in the unrealized performance fees. The question is basically if there was any specific event or basically what drove this increase.

Are sufficient that some of them went to.

Tax exempt Cds incentivize that by this tax issues.

Issues that the recently the equipment.

Closed some doors.

This is not in specific clients not necessarily.

<unk>, but more retail projects that we have in our a P N S.

Alessandro Horta: Thank you. Okay, thank you very much, and that's Alessandro. I'll start with IP&S. IP&S, the outflows are concentrated more on the clients that distribute through retail, through our allocators and distributors channel, and this is more related to the high interest rates and the outflows, our suspicion that some of them went to tax-exempt CDs incentivized by these tax issues that recently the government closed some doors, but this is not a specific client, not necessarily pensions, To your question, we are close, very close to the majority of funds to the high watermarks. So yes, we could expect that to be a more relevant driver in terms of performance going forward if the market continues to behave appropriately. And finally, the unrealized number is related to a market for our VCP3 fund, where it's a relevant fund, and we had a recent re-evaluation of the portfolio, and that translated into an uptick in the marks that, of course, will translate into higher expected unrealized performance numbers.

Hum.

Our strategy.

Regarding equities to your question, we are close very close on the majority of the funds to the high watermarks. So yes.

We could expect that to be a more relevant driver in terms of performance going forward. If the market continues to behave appropriately.

And finally.

The unrealized number is related to a mark to market to our DCP three fund, where it's irrelevant a fund and two we had the recent.

Reevaluation of the portfolio.

And that translated in a.

Uptick into marks that of course on the and translate in a more a higher expected unrealized performance numbers.

Yeah.

Okay Super clear Thank you Alessandro.

Thank you I would now like to turn the floor back to Mr. Lu Central water for the closing remarks. Please Mr. Arthur you can proceed.

So I would like to thank you again.

For your continued support and interest.

We believe that a 'twenty 'twenty four would be very bought in a year, where we expect to accelerate our growth, while again, showing our resilient and well constructed business model.

Alessandro Horta: Okay, this is super clear. Thank you, Alessandro. Thank you. I would now like to turn the floor back to Mr. Alessandro Arta for his closing remarks. Please, Mr. Arta, you can proceed. I would like to thank you again for your continued support and interest. We believe that 2024 will be a very important year where we expect to accelerate our growth while again showing our resilient and well-constructed business model. So, thank you again, and have a good night to you all. This does conclude today's presentation. We thank you all for your participation and wish you a very good evening. VINCI PARTNERS www.vinci-partners.com www.vinci-partners.com www.vinci-partners.com

So thank you again and have a good night to you all.

This does conclude todays presentation well. Thank you all for participation and wish you a very good evening.

Okay.

[music].

Yeah.

Yeah.

Yeah.