Q1 2024 Vinci Partners Investments Ltd Earnings Call

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Operator: Good afternoon, and welcome to the Vinci Partners First Quarter 2024 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 call over to Anna Castro, Investor Relations Manager. Please, go ahead, Anna.

Good afternoon, and welcome to the Vinci Partners' first quarter 2024 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.

Operator: As a reminder, this call will be recorded.

Operator: I would now like to turn the conference over to Emma Castro Investor Relations manager. Please go ahead Anna.

Anna Luiza de Castro Santos: Thank you and good afternoon, everyone joining today Alessandro after Chief Executive Officer, but who knows that amber private equity chairman and head of Investor Relations and Sascha Buss Chief Financial Officer earlier today, we issued a press release slide presentation, and our financial statements for the quarter, which are available on our.

Anna Luiza de Castro Santos: Thank you and good afternoon, everyone. Joining us today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, Private Equity Chairman and Head of Investment Relations; and Sergio Passos, Chief Financial Officer. Earlier today, we issued a press release, a slide presentation, and our financial statements for the quarter, 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 that 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 20F.

Anna Luiza de Castro Santos: We will also refer to some 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 any Vinci Partners fund. On results, Vinci generated fee-related earnings of R$ 53.6 million, or R$ 1.01 per share, and adjusted distributable earnings of R$ 49.6 million, or R$ 0.93 per share, for the first quarter of 2024. We declare a quarterly dividend of $0.17 per common share, payable on June 7th to shareholders of record as of May 23rd. With that, I'll turn the call over to Alessandro.

Alessandro: Website at IR <unk> com.

Alessandro: 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.

Alessandro: Does 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.

Alessandro: We will also refer to certain non-GAAP measures and you'll find reconciliations in the release.

Alessandro: Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any interest in any of each partners fund on results venture generated fee related earnings of $53 6 million or one how and <unk> 10 per share.

Alessandro: And adjusted distributable earnings of $49 6 million highs or 93.

Alessandro: Per share for the first quarter 2024.

Alessandro: We declared a quarterly dividend of 17 cents on the dollar per common share payable on June seven to shareholders of record as of May 23.

Anna Luiza de Castro Santos: With that I will turn the call over to Alison.

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

Alessandro Monteiro Morgado Horta: Thank you, Anna, good afternoon, and thank you all for joining our call. We are very pleased to join you today as we announce results for the first quarter of 2024. I would like to start by highlighting the following: we posted another quarter with double-digit growth in fee-related earnings, pushed by strong fundraising across private markets products over the last 12 months and advisory fees in the first quarter. Vinci continues to deliver results facing challenging conditions, where several asset managers in Brazil focused on single strategies have suffered to stay in business. We are truly proud of the platform that we have built over the last 15 years.

Alessandro Monteiro Morgado Horta: We are very pleased to join you today as we announced results for the fourth quarter 2024.

Alessandro Monteiro Morgado Horta: I would like to start by highlighting the following.

Alessandro Monteiro Morgado Horta: We posted another quarter with double digit growth in fee related earnings boosted by strong fund raising across private markets products over the last 12 months and advisory fees in the first quarter.

Alessandro Monteiro Morgado Horta: Vince you continues to deliver results facing challenging conditions.

Alessandro Monteiro Morgado Horta: Where several asset managers in Brazil focused on single strategies have suffered to stay in business.

Alessandro Monteiro Morgado Horta: We are truly proud of the platform that we have built over the last 15 years.

Alessandro Monteiro Morgado Horta: I have no doubt that the combination of proprietary relationships across each funding base, a strong track record across different market cycles, and a broad product offering was key to achieving such results. Bruno and Sergio will go over specifics for the earnings result and the fundraising pipeline in a few minutes, but I couldn't leave out of my remarks something that makes me personally very proud. You must have seen that Vinci has been very active in M&A over the last few months.

Alessandro Monteiro Morgado Horta: I have no doubt that the combination between proprietary relationships across each funding base is.

Alessandro Monteiro Morgado Horta: <unk> track record across different market cycles, and our broad product offering was key to achieving such results.

Alessandro Monteiro Morgado Horta: Bruno Sergio will go over specifics for the earnings result, and fund raising pipeline in a few minutes, but I couldn't leave out of my remarks, something that makes me personally.

Alessandro Monteiro Morgado Horta: <unk>.

Alessandro Monteiro Morgado Horta: You must have seen that zinc was very active on M&A over the last few months.

Alessandro Monteiro Morgado Horta: Let me cover what we expect from each transaction and what we look forward to accomplishing with additional M&A as we are just getting started. First, in early March, we announced our combination with Compass, a leading asset manager and investment advisor firm in Latin America with strong brand recognition, consistent performance, and more than $37 billion in AUM distributed across IP&S, credit, and public equity. We believe this transaction is a significant milestone in our history and a turning point for what Vinci could be in the next few years.

Alessandro Monteiro Morgado Horta: Let me cover what we expect from each transaction.

Alessandro Monteiro Morgado Horta: We look forward to accomplishing with additional M&A as we are just getting started.

Alessandro Monteiro Morgado Horta: First early March we announced that our combination with compass, a leading asset manager an investment advisor for in Latin America with strong brand recognition consistent performance and more than $37 billion in AUM distributor.

Alessandro Monteiro Morgado Horta: Of course, I BNS credit and public afterwards.

Alessandro Monteiro Morgado Horta: We believe this transaction is a significant milestones in our history and a turning point from what Vinci could be in the next few years.

Alessandro Monteiro Morgado Horta: Okay.

Alessandro Monteiro Morgado Horta: We will leverage the complementary strengths of both firms and position Vinci as the Premier Gateway to alternative asset management in Latin America, creating a leading player with more than $50 billion in assets under management.

Alessandro Monteiro Morgado Horta: We will leverage the complementary strengths of both firms and position Vinci as the premier gateway to alternative asset management in Latin America, creating a leading player with more than $50 billion in assets under management. The combination will also expand Vinci's geographic presence with offices in 8 different countries, including 7 in Latin America.

Alessandro Monteiro Morgado Horta: The combination will also expand <unk> geographic presence with offices in eight different countries, including seven in Latin America.

Alessandro Monteiro Morgado Horta: Moreover, the transaction will enable v-chip DAP into campus unmatched distribution platform with long term relationships with more than 1700 Lps across institutional and high net worth investors.

Alessandro Monteiro Morgado Horta: Moreover, the transaction will enable Vinci to tap into Compass' unmatched distribution platform with long-term relationships with more than 1,700 limited partners across institutional and high-net-worth investors. We believe we have the tools to push additional growth for the combined company from cross-selling and developing new products across both firms, becoming the ultimate one-stop shop in Latin America for alternative investors and will be able to offer local, regional, and global solutions to local, regional, and global clients.

Alessandro Monteiro Morgado Horta: We believe we have the tools to push additional growth for the combined company from cross selling and developing new products across both firms, becoming the automate one stop shop in Latin America for alternative investments.

Alessandro Monteiro Morgado Horta: Vinci will be able to offer local regional and global solutions to local regional and global clients.

Alessandro Monteiro Morgado Horta: We are extremely excited with the prospects of this business combination and have already be looking to capture value since day one of signing.

Alessandro Monteiro Morgado Horta: We are extremely excited about the prospects of this business combination and have already been looking to capture value since day one of signing. We are already working with a global consulting firm to support us throughout this integration journey. Our aim is to enhance value by aligning our structures and operations effectively. Our primary objectives include optimizing our corporate structure to seamlessly accommodate and integrate both entities in terms of strategies, office locations, leadership, and more.

Alessandro Monteiro Morgado Horta: We are already working with a global consulting firm to support us throughout this integration journey.

Alessandro Monteiro Morgado Horta: Aim is to enhance value by aligning our structures and operations effectively.

Alessandro Monteiro Morgado Horta: Our primary objectives include optimizing our corporate structure to seamlessly accommodate and integrate both entities in terms of strategies office locations leadership and more.

Alessandro Monteiro Morgado Horta: Although we are still going through the process progress has been promising and remarkable cultural and strategic alignment between executives from both firms is already evident.

Alessandro Monteiro Morgado Horta: Although we are still going through the process, progress has been promising, and remarkable cultural and strategic alignment between executives from both firms is already evident. These early indicators are excellent, and we are eager to continue capitalizing on insights coming from this process once this transaction is closed. We have also started to identify short-term opportunities to fundraise for Vinci's products in countries across Latin America, such as through private equity and public equities, and we are working with the Compass team on those initiatives.

Alessandro Monteiro Morgado Horta: These early indicators are excellent and we are eager to continue capitalizing on insights coming from this process.

Alessandro Monteiro Morgado Horta: This transaction is closed.

Alessandro Monteiro Morgado Horta: We have also started to identify short term opportunities to fund raise for Vinci brought in countries across Latin America, such as private equity and public equity.

Alessandro Monteiro Morgado Horta: And we are working with the compass team on those initiatives.

Alessandro Monteiro Morgado Horta: We have also held teachings from Compass group to our distributions teams to leverage our distribution capabilities in Brazil with the objective of growing product availability to our local clients.

Alessandro Monteiro Morgado Horta: We have also held teachings from Compass Group to our distribution teams to leverage our distribution capabilities in Brazil with the objective of growing product availability to our local clients. Given the complementary mix of products and distribution geographies, there are plenty of short-term revenue synergies opportunities, which we are not waiting on the closing to attack. In terms of closing, we are working on regulatory approvals, and we should be able to close between the third and fourth quarters.

Alessandro Monteiro Morgado Horta: Given the complementary mix of products and distribution geographies. There is plenty of short term revenue synergy opportunities, which we are not waiting on the clothing to attack.

Alessandro Monteiro Morgado Horta: In terms of clothing, we are working on the regulatory approvals and should be able to close between the third and fourth quarters. Thus compass should have important contributions in our numbers starting in 2025.

Alessandro Monteiro Morgado Horta: This compass should make important contributions to our numbers starting in 2025. Moving forward, we announced just a few weeks ago the acquisition of MAV Capital, an alternative asset manager with a focus on agricultural assets across private credit funds. MavCapital is led by a highly seasoned team with more than 20 years of experience. The team manages roughly 550 million reais in assets through five investment funds with lockups of up to 10 years.

Alessandro Monteiro Morgado Horta: Moving forward, we announced just a few weeks ago, the acquisition of Mod capital, an alternative asset manager with a far coop in agriculture assets across private credit funds.

Alessandro Monteiro Morgado Horta: <unk> capital is led by a highly seasoned team with more than 20 years of experience.

Alessandro Monteiro Morgado Horta: The team manages roughly 500 million realizing assets through five investment funds with lockups of up to 10 years.

Alessandro Monteiro Morgado Horta: Mobs flagship strategy is focused on agribusiness and has two vintages were between 221 and 2023.

Alessandro Monteiro Morgado Horta: Marv's flagship strategy is focused on agribusiness and has two vintages between 2021 and 2023. By Synergizing Maths, Profound Experience, with Vinci's distribution capabilities, we anticipate... Significant Expansion in Subsequent Vintages. By bringing the MAV team into the fold, we are not just broadening our range of offerings, but we are also deepening our roots in the agribusiness space.

Alessandro Monteiro Morgado Horta: By sooner Jivey maths profound expertise with Vinci distribution capabilities, we anticipate significant expansion in subsequent vintages.

Alessandro Monteiro Morgado Horta: By bringing the <unk> team into the fold we are not just broadening our range of offerings. We are also deepening our roots in the agribusiness space.

Alessandro Monteiro Morgado Horta: And why agribusiness, Brazil boasts numerous competitive advantages and holds a prominent position as a key global player.

Alessandro Monteiro Morgado Horta: Brazil boasts numerous competitive advantages and holds a prominent position as a key global player. Locally, the agribusiness sector and related activities significantly contribute to the country's GDP. Moreover, the investment funds industry in Brazil has largely overlooked this sector, leaving it highly underserved. With that said, we perceive a substantial opportunity for growth in the coming years. By leveraging top-tier human capital, we are positioning Vinci to emerge as a front-runner in this segment.

Alessandro Monteiro Morgado Horta: Locally the agribusiness sector and related activities significantly contribute to the country's GDP Mauro.

Alessandro Monteiro Morgado Horta: Moreover, the investment funds industry in Brazil has largely over look at this sector, leaving it highly underserved.

Alessandro Monteiro Morgado Horta: With that said, we perceive a substantial opportunity for growth in the coming years.

Alessandro Monteiro Morgado Horta: By leveraging top tier human capital, we are positioning vinci to emerge as a front running in this segment.

Alessandro Monteiro Morgado Horta: In concluding my remarks on M&A allow me to outline what you can anticipate from Vinci in the coming years.

Alessandro Monteiro Morgado Horta: In concluding my remarks on M&A, allow me to outline what you can anticipate from Vinci in the coming years. Over the past years, we have actually focused on several opportunities in Brazil, spanning across all strategies, with a keen eye for a transformative transaction in Latin America. This stands as a significant milestone, positioning Vinci with a notable presence across Latin American countries in terms of both strategies, commercial presence, and office location. This robust foundation is pivotal for the next phase of our M&A agenda. Now, when we think about acquisitions in Latin America, we focus on a local-to-local basis.

Alessandro Monteiro Morgado Horta: Over the past years, we are actually focused on several opportunities in Brazil spanning across all strategies with a keen eye for a transformative transaction in Latin America.

Alessandro Monteiro Morgado Horta: The transaction is campus stance as a significant milestone positioning vinci with a notable presence across Latin America countries in terms of both these strategies commercial presence and office locations.

Alessandro Monteiro Morgado Horta: This robust foundation is.

Alessandro Monteiro Morgado Horta: <unk> for the next phase of our M&A agenda.

Alessandro Monteiro Morgado Horta: Now when we think about acquisitions in Latin America, we are focusing on a local to local base.

Alessandro Monteiro Morgado Horta: We are committed to actively exploring opportunities across multiple countries to complement and expand our strategies with our newfound emphasis on small to mid sized managers, who were previously off operator.

Alessandro Monteiro Morgado Horta: We are committed to actively exploring opportunities across multiple countries to complement and expand our strategy, with a new emphasis on small to mid-sized managers who were previously off our radar. Leveraging our compass, expertise, and extensive network, we aim to expand our regional platform and add more critical mass in alternative asset management content to our presence in Latin America. Markets like Mexico and Chile present promising targets for expansion and consolidation.

Alessandro Monteiro Morgado Horta: Leveraging compass expertise and extensive network, we aim to expand our regional platform and add more critical mass in alternative asset management content to our presence in Latam countries.

Alessandro Monteiro Morgado Horta: Markets, like Mexico, and Chile present, promising targets for expansion and consolidation.

Alessandro Monteiro Morgado Horta: With Mexico's projected growth trajectory in the coming years, we are dedicated to positioning Vinci favorably to capitalize on this prospective growth. In Brazil, our journey is far from over. Investments such as the MAZ capital deal are instrumental in fortifying our foothold in what we perceive as a compelling market opportunity, as we remain steadfast in our pursuit of such ventures. In conclusion, I would like to convey the following message.

Alessandro Monteiro Morgado Horta: With Mexico's projected growth trajectory in the coming years, we are dedicated to positioning vinci favorably to capitalize on this prospective group in.

Alessandro Monteiro Morgado Horta: In Brazil, our journey is far from over investments such as the amount of capital deal I assume mantle in fortifying our foothold in what we perceive as a compelling market opportunity as we remain steadfast in our pursuit of such event.

Alessandro Monteiro Morgado Horta: Yours.

Alessandro Monteiro Morgado Horta: In conclusion, I would like to convey the following message.

Alessandro Monteiro Morgado Horta: Despite the challenges posed by turbulent global market.

Alessandro Monteiro Morgado Horta: Despite the challenges posed by a turbulent global market, exacerbated by uncertainties in interest rates impacting asset performance and fundraising opportunities across various strategies, we have demonstrated resilience and patience, performing well across the board in this environment. We remain committed to enhancing our platform on a daily basis, focusing on providing our clients the best solution. Why are we content with short-term uncertainty?

Alessandro Monteiro Morgado Horta: Market by uncertainties in interest rates impacting asset performance and the fund raising opportunities across various strategies, we have demonstrated resilience and patients performing well across the board.

Alessandro Monteiro Morgado Horta: And this environment, we remain committed to enhancing our platform on a daily basis, focusing on providing our clients.

Alessandro Monteiro Morgado Horta: <unk> solutions.

Alessandro Monteiro Morgado Horta: Why would contend with short term uncertainty stemming from interest rate cuts in the U S.

Alessandro Monteiro Morgado Horta: Stemming from interest rate cuts in the U.S., Brazil continues its trajectory towards achieving single-digit nominal rates by year-end 2024. Last week, Moody's released a report changing the outlook of Brazil's sovereign credit to positive, which reflects Brazil's dedication to economic reforms, proactive response to global challenges such as the COVID-19 pandemic, and improving macroeconomic fundamentals, including decreasing inflation and interest rates and a Historically, following a positive outlook, an upgrade typically follows within six months, on average.

Alessandro Monteiro Morgado Horta: <unk> continues its trajectory towards achieving single digit nominal rates by year end 2024.

Alessandro Monteiro Morgado Horta: Last week, Moody's released that report changing the outlook of Brazil's sovereign credit to positive does optimist reflect Brazil's dedication to economic reforms proactive response to global challenges such as the COVID-19, pandemic and improving macroeconomic.

Alessandro Monteiro Morgado Horta: Fundamentals, including the queasy inflation and interest rates and a strong and growing trade balance.

Alessandro Monteiro Morgado Horta: Historically, following a positive outlook and Napa grade typically follows within six months on average.

Alessandro Monteiro Morgado Horta: Should this project materialize, we would find ourselves one notch away from an investment rating in Moody's, potentially serving as a pivotal catalyst for increased foreign investment in Brazil. At Vinci, we remain extremely committed to generating strong risk-adjusted returns to our clients and shareholders. We will navigate this challenging and uncertain market with caution and prudence but fueled by enthusiasm for this forthcoming chapter in our history. With that, I would like to turn the call over to Bruno. Thank you, Alessandro.

Alessandro Monteiro Morgado Horta: Should this project a matter of life, we would find ourselves one notch away from an investment grade rating E. Moody's potentially serving as a pivotal catalyst for increased foreign investment in Brazil.

Bruno: At Vinci, we remain extremely committed to generating strong risk adjusted returns to our clients and shareholders. We navigate this challenging and uncertain market with caution and prudence, but fueled by enthusiasm for this forthcoming chapter in our history.

Alessandro Monteiro Morgado Horta: With that I would like to turn the call over to Bruno.

Bruno Augusto Sacchi Zaremba: Thank you, Alessandro, and good afternoon, everyone. I'll start by covering our fundraising efforts. Starting with IP&S, our Vinci Strategic Partners Strategy, or VSP, raised approximately R$500 million this quarter. Through VSP, we offer allocation services across the alternative asset space to investors, a trend we believe has great potential to grow as local institutions raise their allocation to alternatives. Currently, our IP&S business is mostly allocated to liquid assets.

Bruno: Thank you Alison and good afternoon, everyone.

Bruno Augusto Sacchi Zaremba: I'll start by covering our fund raising efforts.

Bruno Augusto Sacchi Zaremba: Starting with IP N a S R.

Bruno Augusto Sacchi Zaremba: <unk> strategic partner strategy, our VSP raised approximately 500 million <unk> this quarter.

Bruno Augusto Sacchi Zaremba: <unk>, we offer location services across the alternative asset space to investors.

Bruno Augusto Sacchi Zaremba: Friend, we believe has great potential to grow as local institutions raised their allocation to alternatives.

Bruno Augusto Sacchi Zaremba: Currently our Ips business is mostly allocated to illiquid assets. We are pleased to observe the growing traction of this strategy now in the alternative side and anticipate further opportunity in the future.

Bruno Augusto Sacchi Zaremba: We are pleased to observe the growing traction of this strategy, now on the alternative side, and anticipate further opportunities in the future. Moving on, let me provide some color on our upcoming initiatives in private markets over the short term. This quarter, as predicted, we do not have relevant contributions for the private markets funds as we had a few big closes at the end of 2023.

Bruno Augusto Sacchi Zaremba: Moving on let me provide some color on our upcoming initiatives and private markets over the short term.

Bruno Augusto Sacchi Zaremba: This quarter as predicted we do not have relevant contributions for the private markets funds as we had a few big closes at the end of 2023.

Bruno Augusto Sacchi Zaremba: However, we will continue to work across several fronts in the next few quarters. VCP4 and VICC both should hold final closes this year. VCP4 is set to see additional capital activated in AUM over the second quarter, while we continue to work on additional local and international investors until the expected close of the fund in the second half of 2024. With one successful investment already under its belt and capital deployment gaining momentum, we anticipate announcing new acquisitions in the coming quarters, capitalizing on a very good environment to allocate capital, with limited dry powder and competition for assets when compared to previous vintage

Bruno Augusto Sacchi Zaremba: However, we will continue to work across several fronts in the next few quarters.

Bruno Augusto Sacchi Zaremba: This is before the ICC both should hold final closes this year.

Bruno Augusto Sacchi Zaremba: I said before is set to see additional capital activated in AUM over the second quarter, while we continued to work on additional local and international investors until the expected close of the funds in the second half of 'twenty to 'twenty four.

Bruno Augusto Sacchi Zaremba: With one successfully investment already under its belt and capital deployments, gaining momentum, we anticipate announcing new acquisitions in the coming quarters capitalizing on a very good environment to allocate capital with limb to dry powder and competition for assets when compared to previous vintages.

Bruno Augusto Sacchi Zaremba: For the ICC, we're experiencing good action with international investors and already have good visibility for the next committee. We anticipate the fund reaching its R$ 2 billion target sometime in the second half of the year. Deployment activity for VICC has been very robust, evidenced by the signing of two transactions earlier in the year to develop green-fueled assets focused on solar distributed generation across Bahia, Rio de Janeiro, Goiás, and So Paulo. We have a diverse pipeline ready for execution in the coming quarters.

Bruno Augusto Sacchi Zaremba: Farha I should see it we're experiencing good action with internationally fasteners and already have good visibility for the next commitments, we anticipate the fund, reaching 2 billion Reais target sometime in the second half of the year.

Bruno Augusto Sacchi Zaremba: [noise] deployment activity as far as the ICC has been very robust.

Bruno Augusto Sacchi Zaremba: Evidenced by the signing of two transactions earlier in the year to develop greenfield assets focused on solar distributed generation across by year. He was different IRA glass and some policy.

Bruno Augusto Sacchi Zaremba: We have a diverse pipeline ready for execution in the coming quarters.

Bruno Augusto Sacchi Zaremba: And adding up these two signed transactions with the approved investments by the IC of the fund, the ICC has reached 40% of the fund already invested. It is interesting to mention that this quicker-than-expected deployment pace for VICC was met with higher-than-anticipated levels of returns for projects at IC approval. Therefore, we couldn't be happier with the ICC's development so far.

Bruno Augusto Sacchi Zaremba: Adding up these two signed transactions with the approved investments by the IC off the phone. The ICC has reached 40% of the fun Alright vestige. It is interesting to mention that this quicker than expected deployment pace for RV ICC wasn't math with higher than anticipated level of returns for projects.

Bruno Augusto Sacchi Zaremba: At IC approval.

Bruno Augusto Sacchi Zaremba: Therefore, we couldnt be happier with the ICC is development so far.

Bruno Augusto Sacchi Zaremba: It is noteworthy that both funds feature retroactive fee clauses, meaning new commitments will retroactively apply fees from the fund's inception. This should contribute to management fees in the upcoming quarters as final commitments are set. Now we are wrapping up our discussions on private market initiatives. In private credits, we've resumed fundraising for Vinci Credit Infra. The fund, which has already secured R$1.4 billion in 2022 from two anchor institutional investors, holds significant promise for additional fundraising from additional capital pools.

Bruno Augusto Sacchi Zaremba: It is noteworthy that both funds feature retroactive C causes many new commitments, we will rip retroactively apply fees from the fund's inception, this should contribute to management fees in the upcoming quarters as final commitments are secured.

Bruno Augusto Sacchi Zaremba: Now wrapping up our discussions on private market initiatives.

Bruno Augusto Sacchi Zaremba: In private credits, we've resumed from raising for Vinci credit Infra the fund, which has already secured $1 4 billion Reais in 2022 from two anchor institutional investors hold significant promise for additional fund raising from additional capital pools.

Bruno Augusto Sacchi Zaremba: We anticipate attracting capital from both institutional and retail clients through our allocators and distributors channels. With strong visibility for additional capital subscriptions in the second quarter, we are targeting an AUM of around R$ 2 billion for this fund by the end of 2024. Moving to Vinci SPS, we are in the final stages of structuring for the first closing of Vintage 4, slated for the upcoming month. Their first two vintages are fully allocated and have impressive track records.

Bruno Augusto Sacchi Zaremba: We anticipate attracting capital from both institutions and retail clients through all the theaters and distributors' channel.

Bruno Augusto Sacchi Zaremba: With strong visibility for additional capital subscriptions in the second quarter, we're targeting an overall 2 billion Reais for this fund by the end of 'twenty to 'twenty four.

Bruno Augusto Sacchi Zaremba: Moving to reach Sps, we are in the final stages of structuring for the first closing of vintage four slated for the upcoming months.

Bruno Augusto Sacchi Zaremba: Their first two vintages are fully allocated and have your breath with track Records fund III has surpassed the 70% deployment threshold and is marked as a 41% gross IRR in U S dollars.

Bruno Augusto Sacchi Zaremba: Fund 3 has surpassed the 70% deployment threshold and is marked as a 41% gross IR in U.S. dollars. The standout performance should be a catalyst for raising capital for the 4th Vintage. Today, Vinci SPS's 3rd Vintage Fund screens in the top tier of Global Opportunity Credit Funds, which serves as a testament to the exceptional work being done by Marcelo Mifano. We should sign first commitments in June, supported by re-up from previous vintages and local high net worth individuals. Adding to that, we expect commitments from international investors in the third quarter, where we should officially hold the first closing for the fund. This will be the first Vintage Raise with international capital for Vichy SPS.

Bruno Augusto Sacchi Zaremba: This standout performance should be a catalyst for.

Bruno Augusto Sacchi Zaremba: Raising capital for the fourth vintage today VTS, Yes, there is vintage fund screens in the top tier of global opportunistic credit funds, which serves as a testimony of the exceptional work being done by myself and my finance team.

Bruno Augusto Sacchi Zaremba: We should sign first commitments in June supported by re up from previous vintages and local high net worth individuals.

Bruno Augusto Sacchi Zaremba: Adding to that we expect commitments from international investors in the third quarter, where we should officially hold the first closing for the funds.

Bruno Augusto Sacchi Zaremba: This will be the first vintage raised with international capital for VTS, Yes, our existing <unk> relationships are expressing strong interest in investing in ongoing discussions with arris indicate promising prospects for hfcs.

Bruno Augusto Sacchi Zaremba: Our existing LPO relationships are expressing strong interest. Investing, and ongoing discussions with ARIES indicate promising prospects for VTF. We will keep investors updated as we progress through the fundraising process. Moreover, in alignment with Alessandro's earlier remarks, our collaboration with the Compass team to integrate selected Vinci funds onto their platforms holds significant potential. We anticipate exciting opportunities emerging from this collaboration. We elected to start this effort with VCP4, followed by Mosaico Inequities, VICC, and Vinci SPS.

Bruno Augusto Sacchi Zaremba: We will keep you updated as we evolve through the fundraising.

Bruno Augusto Sacchi Zaremba: Moreover, in alignment with the foundries earlier remarks, our collaborations with the compass team to integrate selective zetia funds onto their platforms holds significant potential we.

Bruno Augusto Sacchi Zaremba: We anticipate exciting opportunities emerging from this collaboration we elected to start this effort with visa before followed by more equity in equities, the ICC and Vichy Sts.

Bruno Augusto Sacchi Zaremba: An interesting tidbit of this initial effort with our ability to guard destructuring work of the compass team across our lives deal.

Bruno Augusto Sacchi Zaremba: An interesting tidbit of this initial effort was our ability to gauge the structuring work of the Compass team across a live deal. The level of access to regional peace, organization, and effort put out by the teams in Chile and Mexico has been amazing and really highlights what we can achieve as a combined entity in the future.

Bruno Augusto Sacchi Zaremba: The level of access to regional peace organization and effort put out but it seems in Chile, and Mexico has been amazing and it really highlights what we can achieve as a combined entity in the future.

Bruno Augusto Sacchi Zaremba: Moving on to net inflows across our liquid funds in public equities, there might be an S.

Bruno Augusto Sacchi Zaremba: Moving on to netting flows across our liquid funds in public equities and IP&S. Over the past quarters, we've navigated through considerable market volatility, which has impacted flows mainly in our IP&S vertical. However, as reiterated in recent communication, Vinci invests in maintaining robust relationships with our clients, which are proprietary and enduring.

Bruno Augusto Sacchi Zaremba: Over the past quarters, we have navigated through considerable market volatility, which has impacted flows mainly in our Ips vertical.

Bruno Augusto Sacchi Zaremba: However, as reiterated in recent communication, reaching invests in Montana robust relationships with our clients, which are prepared Terry and enduring.

Bruno Augusto Sacchi Zaremba: We have been consistently outperforming the rest of the asset management industry in Brazil in fundraising efforts amidst an environment where we see a number of competitors suffering from outflows. When facing more favorable market conditions, we anticipate a resurgence in capital raising for equities and IP and NS. Our investment funds boast an impressive long-term track record, positioning us favorably for this anticipated uptick. For example, our flagship fund in public equities, Intimozaico, has consistently outperformed its benchmark since inception, delivering a remarkable 541% return compared to the Bovespa's index, 113%.

Bruno Augusto Sacchi Zaremba: We have been consistently outperforming the rest of the asset management industry and Brazilian fundraising efforts.

Bruno Augusto Sacchi Zaremba: It's an environment, where we see a number of competitors suffering from outflows.

Bruno Augusto Sacchi Zaremba: When facing a more favorable market conditions, we anticipate a resurgence in capital raising for equities in IPO N S.

Bruno Augusto Sacchi Zaremba: Our investment funds, both an impressive long term track record positioning us favorably for this anticipated uptick.

Bruno Augusto Sacchi Zaremba: For example, our flagship fund in public equities, each <unk> has consistently outperformed its benchmark since inception, delivering a remarkable 541% return compared to the Boa Vista's index of 113% in summary, armed with strong funds in the history of solid performer.

Bruno Augusto Sacchi Zaremba: In summary, armed with strong funds and a history of solid performance, we stand ready to capitalize on improving conditions and reignite inflows. To conclude my remarks, I wanted to cover in more detail our financial income and GP commitment return. This quarter, we introduced a slide in the earnings presentation highlighting the company's GP commitment. You can find that on slide 14 of our earnings presentation.

Bruno Augusto Sacchi Zaremba: As we stand ready to capitalize on improving conditions and reignite inflows.

Bruno Augusto Sacchi Zaremba: To conclude my remarks, I wanted to cover in more detail our financial income in GP commitment to returns.

Bruno Augusto Sacchi Zaremba: This quarter, we introduced this slide in the earnings presentation, highlighting the company's GP commitments.

Bruno Augusto Sacchi Zaremba: You can fight that in slide 14 at our earnings presentation. As we have discussed in our Investor day back in October as capital is called against our GP commitments in closed end funds the liquid balance off our cash allocation will drop against that increase in GP commitment that location.

Bruno Augusto Sacchi Zaremba: As discussed at our investor day back in October, as capital is called against our GP commitment in close-end funds, the liquid balance of our cash allocation will drop against an increase in GP commitment allocation. As of the first quarter, we have approximately R$1.1 billion committed to Vinci Partners funds as GP commitments, which will be called upon for capital deployment throughout their investment horizon. These funds are strategically allocated to investment offerings that provide higher returns compared to the average portfolio returns of our liquid products.

Bruno Augusto Sacchi Zaremba: As of the first quarter, we have approximately $1 1 billion reais committed to each of partner funds as <unk> committed.

Bruno Augusto Sacchi Zaremba: Which will be called upon for capital deployment throughout their investment horizon. These funds are a strategically allocated to investment offerings higher returns compared to the average portfolio returns of our liquid products.

Bruno Augusto Sacchi Zaremba: As these phone divest from assets and returning capital in the future, we anticipate significant contribution to our financials.

Bruno Augusto Sacchi Zaremba: As this fund divests from assets and returns capital in the future, we anticipate a significant contribution to our finances. Investment gains will be realized as GP investment income, subsequently reflected in our distributed earnings. In the short term, as cash from the Liquid Portfolio is transferred to GP Commitments across flows and funds, the realized return on this Liquid Portfolio will become an unrealized return on the GP Commitments, becoming realized once capital is returned to the balance sheet.

Bruno Augusto Sacchi Zaremba: Investment gains will be realized as GP investment income subsequently reflected in our distributable earnings.

Bruno Augusto Sacchi Zaremba: In the short term S cash from the liquid portfolio transfer to GP commitments across close end funds. The realized return on this liquid portfolio will become realized return on the GP commitments, becoming realized once captors returned to their balance sheets.

Bruno Augusto Sacchi Zaremba: Okay.

Bruno Augusto Sacchi Zaremba: If we realized the current portfolio at its star market value at this moment, we would have roughly R$12 million in realized GPs. That number is not meaningful yet, as many of our close-end fund commitments are still early in their investment periods, and public REITs have encountered marked challenges in recent years. However, as this commitment season progresses, you can expect this figure to become increasingly more meaningful each year. We wanted to highlight this potential, as we do for our managerial accrued performance fees, as we believe it will be an important component of our future earnings potential. And with that, I'll turn it over to Sergio to go through our results.

Bruno Augusto Sacchi Zaremba: If we realize the current portfolio at fair market value at this moment, we would have roughly 12 million reais in realized your fee income.

Sergio: That number is not meaningful yet or a closed end fund commitments are still early in their investment periods and public Reits have encountered market challenges in recent years.

Sergio: However, as these commitments season, you can expect this figure to become increasingly more meaningful each year.

Sergio: We wanted to highlight this potential as we do for our managerial accrued performance fees as we believe it will be an important component of our future earnings potential.

Sergio: And with that I will turn it over to Sarah to go through our results.

Sergio: Thank you Bruno.

Sergio Passos Ribeiro: Before you delve into the financials, I'd like to address a recent managerial adjustment we have made. This quarter, we executed a strategic realignment across our segment; we are signing R$ 2.3 billion in AUM from our hedge fund business to IP&S, while allocating the remembered R$ 534 million in AUM to our Public Equity Division. The objective of this realignment was to form a dedicated public equity vertical while sending open-ended macro commingle funds vehicles from the prior liquid storage's umbrella to IPNF.

Sergio: Before I delve into financials I'd like to address our recent managerial adjustments we have made.

Sergio Passos Ribeiro: This quarter.

Sergio Passos Ribeiro: Is it good to date strategic realignment across our segments.

Sergio Passos Ribeiro: We are signing two 3 billion reais in AUM.

Sergio Passos Ribeiro: Our hedge fund business, so I'd Dennis while allocating the reminder, 534 amino has new M. Two hour public equities division.

Sergio Passos Ribeiro: The objective with this realignment was to form a dedicate public equity vertical.

Sergio Passos Ribeiro: While standing open ended macro commingled funds vehicles from the prior lethal disorder umbrella to identify.

Sergio Passos Ribeiro: I P N S.

Sergio Passos Ribeiro: IPNF has already boosted a dedicated strategy for managing a macro-community fund. Thus, we are consolidating these funds that were previously under liquid starters within IPNF, where he commingles the story of Umbrella. Our pro forma numbers for past quarters and the last several months have been adjusted to reflect this managerial shift agreement. This adjustment underscores our commitment to transparency and ensures precise financial reporting.

Sergio Passos Ribeiro: Boosted our dedicated to start for managing micro commingled funds. Thus we are consolidating these funds that were previously under liquidity starters reading identities under.

Sergio Passos Ribeiro: Under the co mingled started umbrella our pro forma numbers for past brought us in the last several months.

Sergio Passos Ribeiro: Has it been adjusted to reflect this amount as you shift to equities.

Sergio Passos Ribeiro: Is that just meant underscores our commitment to transparency and insurers besides financial reporting.

Sergio Passos Ribeiro: Now, let's start by covering management and advisory fees. Fee-related revenues totaled R$ 107 million in the quarter, up 6% on an annual basis. Management fees were flat on a year-over-year basis, yet they exhibit a positive growth trend going forward. When adjusted by retroactive fees that occurred in the fourth quarter, we continue to have a mixed effect on revenue. Private market management fees posted another quarter of growth, increasing 7% on an year-over-year basis.

Sergio Passos Ribeiro: Now, let's just start by covering management and advisory fees.

Sergio Passos Ribeiro: Fee related revenues totaled 107 million hasn't you brought it up 6% on a year over year basis.

Sergio Passos Ribeiro: Management fees were flat on a year over year basis, yet they exhibit positive growth trend going forwards.

Sergio Passos Ribeiro: When adjusted by retroactive fees that occurred in the fourth quarter.

Sergio Passos Ribeiro: We continue to have a mix effect on revenues.

Sergio Passos Ribeiro: Private marks management fees offset another product roof, increasing 7% on a year over year basis.

Sergio Passos Ribeiro: This is a direct result of the strong fund raising across private marks over the last 12 months.

Sergio Passos Ribeiro: This is a direct result of the strong fundraising across private markets over the last 12 months. As mentioned by Bruno, the pipeline is stacked for private market products over the short to medium term, which should improve management. On top of that, VCP4 and VICC have a retroactive fees clause. Therefore, new capital commitments will charge fees from the start of the fund. As an example, BCP4's start date is June 2022; therefore, new subscriptions will charge almost two years' worth of management fees.

Sergio Passos Ribeiro: Yeah.

Sergio Passos Ribeiro: As mentioned by Bruno the pipeline stacked for private markets products over the short to medium term.

Sergio Passos Ribeiro: Which should improve our management fees.

Sergio Passos Ribeiro: On top of that visit before N V ICC.

Sergio Passos Ribeiro: Retroactive fees clause, therefore, new capital commitments will charged fees from the stance of the fund.

Sergio Passos Ribeiro: As an example, this is before you start date is June 2022, therefore, new subscriptions will charge almost two years of management fees.

Sergio Passos Ribeiro: These are nonrecurring effects that will contribute to revenue growth over the next two quarters.

Sergio Passos Ribeiro: These are non-recurring effects that will contribute to revenue growth over the next quarter. On the other hand, we had a negative impact on revenues coming mostly from IP&S. In 2023, we suffered from outflows in our pension plan strategies, mostly from retail clients.

Sergio Passos Ribeiro: On the other hand, we had a negative impact on revenues coming mostly from BNS.

Sergio Passos Ribeiro: Entrenchment in Korea, we suffered from outflows in our pension funds strategies, mostly by retail clients.

Sergio Passos Ribeiro: These clients have an investment portfolio where they have the flexibility to reallocate assets between managers without triggering tax implications, which adds to volatile inflows based on short-term performance. These funds carry a higher level of fees than the average fee for the SEGRE, thus affected by the segments ROA when we look at each one on a year over year basis. However, with nominal rates reaching single-digit figures and the outlook for future real rates stabilizing, we anticipate a shift in investor sentiment from outflows to inflows.

Sergio Passos Ribeiro: These clients have an investment portfolio, where they have flexibility to reallocate assets between managers without triggering tax implications, which adds to vornado inflows based on short term performance.

Sergio Passos Ribeiro: These funds carry a higher level of fees than the average fee for this segment, thus affected by segments.

Sergio Passos Ribeiro: When we look at each one a year over year basis.

Sergio Passos Ribeiro: However, with nominal rates, reaching single digit figures and the outlook for future rate real rates stabilizing we anticipate a shift investor sentiment from outflows to inflows. These shifts present, a significant opportunity for growth, especially give.

Sergio Passos Ribeiro: This shift presents a significant opportunity for growth, especially given the favorable conditions in both private markets and liquid assets. Since our IPO, we have yet to witness all the pieces aligned to their full potential. We believe the convergence of a strong private market landscape with a conductive environment for liquid assets could prove to be transformative.

Sergio Passos Ribeiro: The favorable conditions in both private and marks in liquid assets.

Sergio Passos Ribeiro: Since our IPO, we have yet to witness all the pieces align at this.

Sergio Passos Ribeiro: Their full potential.

Sergio Passos Ribeiro: We believe the convergence of a strong private and Max landscape.

Sergio Passos Ribeiro: With a conductive environment, probably could their assets could prove to be transformative.

Sergio Passos Ribeiro: Move on advisory fees had once again, a great quarter.

Sergio Passos Ribeiro: Moving on, advisory fees had once again a great quarter. Over the past 12 months, advisory fees amounted to R$ 46 million, a two-fold increase compared to the first quarter of 2023. This significant growth underscores the remarkable momentum within our Corporate Advisory Segment. Turning to FRE results, in the first quarter, FRE totaled R$ 54 million, or R$ 1.01 per share, a 12% year-over-year increase on a per-share basis. Looking at the last 12-month figures, FRE reached R$ 213 million, or R$ 3.96 per share, up 11% on a per-share basis.

Sergio Passos Ribeiro: Over the past 12 months advisory fees amounted to 46 million highs.

Sergio Passos Ribeiro: Representing a two fold increase compared to the first quarter of 2023.

Sergio Passos Ribeiro: This significant growth underscores the remarkable momentum within our corporate advisors segment.

Sergio Passos Ribeiro: Turning to FRE results in the first quarter FRE totaled 54 million of her eyes, or one how and <unk> <unk> per share.

Sergio Passos Ribeiro: Representing a 12% year over year increase on a per share basis looking at the last several months figures FRE reaches 213 million of H R. Three has 96 cents per share up 11% on a per share basis.

Sergio Passos Ribeiro: FRE continues to grow, pushed by strong fundraising for private market products and a higher level of advisory feedback. When considering our short-term FRE, we anticipate an upward trajectory. These projections are supported by several factors, including new commitments in private markets, the impact of retroactive fees, and the robust pipeline for advisory services. Now, let me spend some time covering expenses. Margin has increased by 130 base points on an year-over-year basis. However, we anticipate marginal movement in March 2024 compared to 2023, likely indicating a slight expansion.

Sergio Passos Ribeiro: FRE continues to grow boosted by strong fund raising for private markets products and a higher level of advisory fees.

Sergio Passos Ribeiro: When considering our short term FRE.

Sergio Passos Ribeiro: We anticipate an upward trajectory. This project is supported by several factors, including new commitments in private markets the impact of a retroactive fees and drew a birth purple line for advisory service.

Sergio Passos Ribeiro: Now, let me spend some time covering expenses.

Sergio Passos Ribeiro: Margins have increased by 130 basis points on a year over year basis. However, we anticipate marginal movement in margin for 2024 compared to 2023 likely indicating isolate Spanish fronts looking.

Sergio Passos Ribeiro: Looking ahead to 2025, with several products already fully raised and an improved economic landscape, we may experience traction in margins due to the high operating leverage of our platform. A closer examination of costs reveals a controlled trajectory; expenses have increased by 4% year over year.

Sergio Passos Ribeiro: Looking ahead shrank 25, we've set.

Sergio Passos Ribeiro: Several projects already fully raise it and improve the economic landscape.

Sergio Passos Ribeiro: May experience Directionally margins due to the high operating leverage of our platform.

Sergio Passos Ribeiro: A closer examination of course reviews, our control transitory.

Sergio Passos Ribeiro: Expenses have increased by 4% year over year.

Sergio Passos Ribeiro: As we consistently emphasize cost control remain key across all market cycles, particularly in challenging environments.

Sergio Passos Ribeiro: As we consistently emphasize, cost control remains key across all market cycles, particularly in challenging environments, through exercise and program cost management, and position ourselves to accelerate the growth of FRE and DE during more favorable conditions, shifts into PRE results. Bear in mind that most of our open-end funds charge performance fees semi-annually in June and December. Although the first and third quarters usually are weaker ones in terms of performance, we have approximately R$ 17 billion in performance eligible AUM across IP&S and public AMP.

Sergio Passos Ribeiro: By exercising prudent cost management and position ourselves to accelerate the growth of FRE E N D. During more favorable conditions.

Sergio Passos Ribeiro: Shifting to PRA results their pharmacy fees remain at a relatively modest level.

Sergio Passos Ribeiro: Bear in mind that most of our open fronts charged performance fees semiannually in June and December the first and third quarter is usually a weaker ones of performance fees.

Sergio Passos Ribeiro: Okay.

Sergio Passos Ribeiro: We have approximately 17 billion hasn't performed eligible AUM across <unk> and <unk> been favorable conditions arise this could be a relevant earnings stream.

Sergio Passos Ribeiro: When favorable conditions arise, this could be a relevant earnings stream. For private market funds, gross accrued performance fees reaches closer to R$ 300 million in the first quarter. However, it's important to note that most of these funds have not yet entered the carry season, as they are still in the early stages of divesting from us. Consequently, significant performance fees from these funds are not expected until late 2025 and beyond.

Sergio Passos Ribeiro: Four priority markets funds gross accrued performance fees reached close to 300 <unk> in the first quarter. However, it's important to note that most of these funds have not yet entered the curry season.

Sergio Passos Ribeiro: See you in the early stages of divesting from asset.

Sergio Passos Ribeiro: Consequently significant performance fees from these funds are not expected until late 2025 and beyond.

Speaker Change: As an analyst Elucidative exercise.

Sergio Passos Ribeiro: As an illustrative exercise, if we were to realize this performance, we would potentially see close to R$ 135 million in performance-related earnings, equating to approximately R$2.50 per share. However, it is crucial to acknowledge that these funds are still in their maturation phase and have yet to sell a significant portion of their assets, indicating a potential for this figure to increase over time. To wrap up, I would like to cover our distributable earnings.

Sergio Passos Ribeiro: If you were to realize this performance, we would potentially see close to $135 million in performance related earnings.

Sergio Passos Ribeiro: Wait into approximately two highs and 50 cents per shares it's crucial try knowledge that these funds are seeing their maturation phase and have he adds to sell a significant portion of their assets indicate a potential for this figure to increase overtime.

Sergio Passos Ribeiro: To wrap up I'd like to cover our distributable earnings.

Sergio Passos Ribeiro: Adjusted Distributable Earnings totaled R$ 50 million in the first quarter of 2024, on 0.93 per share, down 15% year-over-year on a per-share basis due to the weaker performance of the liquid portfolio, which impacted financial results. The widening of the real interest rate curve throughout the quarter negatively affected our liquid portfolio as it invests mainly in fixed income bonds.

Sergio Passos Ribeiro: So that just stayed with the ball earnings totaled 50 million has in the first quarter of 2024 90.

Sergio Passos Ribeiro: <unk> 93 per shares down 15% year over year on a per share basis due to the weaker performance of the liquid.

Sergio Passos Ribeiro: Volume, which impacted the financial results.

Sergio Passos Ribeiro: The widening of the real interest rate curve throughout the quarter negatively affects our lift portfolio as they invest mainly in fixed income bonds.

Sergio Passos Ribeiro: Over the last 12 months adjusted distributable earnings totaled 235 million highs or for her eyes and 38 cents per share in closing I would like to reiterate that we anticipate a positive outlook for F FRE over the upcoming.

Sergio Passos Ribeiro: Over the last 12 months, Adjusted Distributable Earnings totaled R$ 235 million, or R$ 4.38 per share. In closing, I would like to reiterate that we anticipate a positive outlook for FFRE over the upcoming quarter, which should consequently bolster our distributable earnings. The ongoing fundraising efforts for our private market segment are expected to be an important foundation for short-term growth.

Sergio Passos Ribeiro: Quarters, which should consequently, bolster our distributable earnings.

Sergio Passos Ribeiro: The ongoing fund raising efforts for our private demand segments are expected to be an important foundation for short term growth.

Speaker Change: With that I would like to close our remarks and open the call for questions.

Sergio Passos Ribeiro: With that, I would like to close our remarks and open the call for questions. Once again, we would like to thank you for joining our call. Please operator, you can proceed with the questions. Thank you.

Speaker Change: Again, I would like to thank you for joining our call.

Sergio Passos Ribeiro: Please operator, you can proceed with the questions. Thank you.

Speaker Change: We are going to start the question and answer session for investors and analysts if you wish to ask a question. Please press the bottom right hand.

Operator: We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please press the bottom Raise Hand. Wait while we poll for a question. Our first question comes from Tito Labarta with Goldman Sachs.

Operator: Wait while we poll for question.

Daer Labarta: Our first question comes from Tito <unk> with Goldman Sachs.

Daer Labarta: Hi, Good evening, everyone. Thank you for the call and taking my question.

Daer Labarta: Hi, good evening, everyone. Thank you for the call. And thank you for my question.

Daer Labarta: A question.

Daer Labarta: On your fee.

Daer Labarta: Related revenues look at management fees in particular.

Daer Labarta: I have a question on your fee-related revenues. Look at management fees in particular. We're down in the quarter kind of flattish year over year. You mentioned in the press release that, you know, private markets continue to do well, but you're facing some headwinds from IPNS. Just, you know, double click on both of those a little bit.

Daer Labarta: Down in the quarter kind of flattish year over year, you mentioned here in the press release that private markets.

Daer Labarta: Yes.

Daer Labarta: Continuing to do well.

Daer Labarta: Facing some headwinds from Ips.

Daer Labarta: Just.

Speaker Change: That will take on both of those a little bit on the private market side, we did see the fees as a percentage of the AUM come down a little bit.

Daer Labarta: On the private market side, we did see the fees as a percentage of the AUM come down a little bit. What's driving that? And also, just how do you see those headwinds in the IPNS? Do you think that will continue? Could that be a headwind for the rest of the year? How dependent is it on your rates coming down significantly? Right? We saw the leak fall only by 25 bits yesterday. You need to see that come down a lot more to see IPNS recover. Thank you.

Daer Labarta: What's driving that and also.

Daer Labarta: How do you see those headwinds in the Ips do you think that continues could that be a headwind for the rest of the year how dependent is it on rates coming down significantly right. We saw the weak fall only 25 bps yesterday do you need to see that come down a lot more.

Daer Labarta: The CIP in natural color. Thank you.

Daer Labarta: Hi, Tito. Thank you very much that's Alessandro Thank you very much for your question I'll cover that.

Alessandro Monteiro Morgado Horta: Hi Tito, thank you very much. This is Alessandro.

Alessandro: The part of Ips of your question, then Bruno will more on.

Alessandro: On the other part related to the private markets fees and et cetera.

Alessandro Monteiro Morgado Horta: Thank you very much for your question. I will cover the part of IP&S in your question, then Bruno will go more on the other part related to the private market fees and etc. Regarding IP&S, as you know, and as we continue to have the movement that we saw in the last few quarters that follows overall, I would say, trends in the Brazilian market, where the most liquid portion of our IP&S funds suffer some redemptions, basically people moving the money to other more shorter fixed income types of investments.

Alessandro: Got you.

Bruno: <unk> as you know and we continue to have a movement that we saw in the last few quarters.

Alessandro Monteiro Morgado Horta: <unk> overall, let's say trend in the Brazilian market with where the most liquid portion of our IP N S funds.

Alessandro Monteiro Morgado Horta: So for some redemptions basically people moving.

Alessandro Monteiro Morgado Horta: The money to order more short term fixed income type of investments.

Alessandro Monteiro Morgado Horta: We are seeing this movement reducing, so on a daily basis, we see this reduction being less and less to the point that we expect this to be neutral going forward, and with the interest rates going down at such a pace that now it's reaching close to a single-digit interest rate nominal interest rates, we'll see this movement. We expect this capital to come back, but this is really a moral consequence of this movement regarding interest rates at a high On the contrary, we believe this movement is in this final stretch, and probably as soon as we see interest rates in a single digit, even high single digits, we will see new money coming back to this type of investment and fund.

Alessandro Monteiro Morgado Horta: We are seeing this movement, reducing so it's in a daily basis, we see this redemption, the less and less to the point that we expect this to be neutral going forward.

Alessandro Monteiro Morgado Horta: And and with interest rates going down.

Alessandro Monteiro Morgado Horta: In enough base, that's now reaching.

Alessandro Monteiro Morgado Horta: Close to single digit interest rate normal interest rates.

Alessandro Monteiro Morgado Horta: We will see this movement.

Alessandro Monteiro Morgado Horta: Effective capital to come back, but this is really a more of course the quest of this movement.

Speaker Change: Got it.

Alessandro Monteiro Morgado Horta: Interest rates at a high level and some of the flows.

Alessandro Monteiro Morgado Horta: More retail flows.

Alessandro Monteiro Morgado Horta: We redeemed from this type of funds to go into more exempt type of fixed income instruments. So regarding <unk>, we do not anticipate.

Alessandro Monteiro Morgado Horta: Strong movements I had on the opposite we believe this movement is in the final stretch.

Alessandro Monteiro Morgado Horta: Stretch and probably as soon as we see interest rates.

Alessandro Monteiro Morgado Horta: Single digit even high single digits, we see.

Alessandro Monteiro Morgado Horta: New.

Alessandro Monteiro Morgado Horta: Money coming back to this type of.

Alessandro Monteiro Morgado Horta: Investments in funds.

Alessandro Monteiro Morgado Horta: Yeah.

Alessandro Monteiro Morgado Horta: Okay too this is bruno.

Bruno Augusto Sacchi Zaremba: Okay, this is Bruno. Talking about the revenue side, so the first quarter of 2023 and the fourth quarter of 2023, both of them had retroactive impacts on the revenue base. So those are VCP and VICC, right? So in the first quarter of 23, we had about 2 million and a half rising impact. In the fourth quarter of 23, we had about 6 and a half million rising impact. The first quarter of 24 was a clean quarter.

Bruno Augusto Sacchi Zaremba: About the revenue side.

Bruno Augusto Sacchi Zaremba: So the first quarter of 'twenty three in the fourth quarter of 23, both of them had a retroactive impact.

Bruno Augusto Sacchi Zaremba: On the on the revenue base, so and those are <unk>.

Bruno Augusto Sacchi Zaremba: So in the first quarter of 'twenty, two we had about 2 million.

Bruno Augusto Sacchi Zaremba: And I have raising backed in the fourth quarter of 'twenty three we had about six and a half million reais impact the first quarter of 'twenty four.

Bruno Augusto Sacchi Zaremba: Was a clean quarter. So we didn't have any.

Bruno Augusto Sacchi Zaremba: So we didn't have any impact in terms of AOM being activated in those two funds. However, we are working with several investors regarding additional commitments for both strategies. As I mentioned in the prepared remarks, we expect to have, hopefully, VCP having more capital activated now in the second quarter. If not in the second quarter, certainly in the beginning of the third quarter. So either one or the two quarters could have impact coming from new capital being activated.

Bruno Augusto Sacchi Zaremba: Any impact in terms of AUM.

Bruno Augusto Sacchi Zaremba: And be activated in those two funds we are working with.

Bruno Augusto Sacchi Zaremba: With us several investors regarding additional commitments for both strategies.

Bruno Augusto Sacchi Zaremba: As I mentioned in the prepared remarks, we expect to have hopefully disappear.

Bruno Augusto Sacchi Zaremba: Having more capped activated now in the in the second quarter, if not in the second quarter certainly at the beginning of the third quarter. So.

Bruno Augusto Sacchi Zaremba: Either one or the two quarters could have impacts coming from.

Bruno Augusto Sacchi Zaremba: New capital B be activated but the main difference in the first quarter of 'twenty four was that it was a clean quarter. So we didn't have any new.

Bruno Augusto Sacchi Zaremba: But the main difference in the first quarter of 2024 was that it was a clean quarter, so we didn't have any new commitments coming in for the retroactive CPA funds during the first few months of the year.

Bruno Augusto Sacchi Zaremba: New commitments coming for the retract if you're paying funds.

Bruno Augusto Sacchi Zaremba: During the first two months of the year.

Speaker Change: Okay great.

Daer Labarta: Okay, great. That's helpful, Bruno and Alessandro.

Speaker Change: Oh, Bruno and Alessandro I mean, just one follow up I guess I'm also on the fee related revenues.

Bruno Augusto Sacchi Zaremba: Just one follow-up, I guess, on some of the fee-related revenues. On the advisory fees, which were down in the quarter, but still very strong year-over-year, how do you think about those going forward? Is this a base that we can maybe consider, or was there anything specific to the quota that kept the fees relatively high?

Bruno Augusto Sacchi Zaremba: Advisory fees.

Bruno Augusto Sacchi Zaremba: In the quarter, but still a very strong year over year.

Bruno Augusto Sacchi Zaremba: Do you think about those going forward.

Bruno Augusto Sacchi Zaremba: Is this a base that we can maybe consider or was there anything specific to the quarter.

Bruno Augusto Sacchi Zaremba: These relatively high.

Bruno Augusto Sacchi Zaremba: Yes, of course. The pipeline for the advisory business is pretty good at this point. We had a very good first quarter, as you said. We're working on several transactions for the second and third quarters of this year. But again, it's very difficult to say when the transactions are going to close. I think for the year, we talked about a number between $30M and $40M for 2024. It seems at this point in time that we're going to hit that range, but it's difficult to say when exactly the revenue is going to fall.

Speaker Change: Yeah of course, so the pipeline for the advisory business is is pretty good at this point.

Bruno Augusto Sacchi Zaremba: We are work do we had a very good first quarter as you said.

Bruno Augusto Sacchi Zaremba: We're working on several transactions for the second and third quarter.

Bruno Augusto Sacchi Zaremba: Of this year, but again, it's very difficult to say when the.

Bruno Augusto Sacchi Zaremba: Transaction, we're going to close I think for the year, we talked about a number between 30 and 40 meter for 2024.

Bruno Augusto Sacchi Zaremba: It seems at this point in time that we're going to hit.

Bruno Augusto Sacchi Zaremba: That range, but its difficult to say when exactly the revenues for the first quarter was a little bit stronger.

Bruno Augusto Sacchi Zaremba: The first quarter was a little bit stronger. The second quarter depends on when the deals close, but I would say the outlook for the second and third quarters, at this point, with the deal flow that we have in the pipeline, looks good. So, we feel for the year that $30M to $40M is a good range to work with in terms of corporate advisory revenues for 2024.

Bruno Augusto Sacchi Zaremba: Second quarter.

Bruno Augusto Sacchi Zaremba: It depends on when the deals close.

Bruno Augusto Sacchi Zaremba: But I would say the the the outlook for our second and third quarters at this point with the deal flow that we have.

Bruno Augusto Sacchi Zaremba: And the pipeline looks good so we feel for the year that 30 to 40 meters a good range to work with.

Bruno Augusto Sacchi Zaremba: Advisory revenues for corporate and other revenues were 24.

Alessandro Monteiro Morgado Horta: Okay, perfect. Very good. Thanks, Bruno. Thanks, Tiru, for the question.

Speaker Change: Okay, perfect very clear thanks Brendan.

Speaker Change: Thanks, Tito further questions.

Caribou Spiegel: Next question from he caribou Spiegel with BTG Pactual.

Operator: Next question from Ricardo Buchpiguel with BTG Pac-12

Ricardo Buchpiguel: Hi, everyone and thank you for the opportunity of making questions I have two here on my side.

Ricardo Buchpiguel: Hi everyone, and thank you for the opportunity to ask questions. I have two here on my side.

Ricardo Buchpiguel: First, can you please give us an update in terms of the key private market fundraising events that we could see in Q2? And if you could also comment on what has been seen so far in terms of inflows for Liquid and IP&S strategies, it would be helpful, particularly for Q2. And for my second question, if you could please explain what drove the unrealized investment income that you booked in the quarter. We saw there was a deterioration in macro conditions; we even had a negative effect on our liquid portfolio. So I wanted to understand the rationale for the unrealized portion. Thank you.

Ricardo Buchpiguel: First can you please give us an updated their resolve the key private market fund raising event that I could see in Q2.

Ricardo Buchpiguel: And if you could also comment on.

Ricardo Buchpiguel: Why do you have been seeing so far in terms of inflows for Lakewood and I have been asked strategies also be helpful, particularly for Q2.

Ricardo Buchpiguel: And for my second question, if you could explain what drove the unrealized you're being <unk>.

Ricardo Buchpiguel: Net income that you book an acquirer.

Ricardo Buchpiguel: We saw that was like a deteriorating macro conditions, if you will.

Ricardo Buchpiguel: And then had a negative effect in our liquid portfolio. So Atlantic I understand the rationale for the unrealized portion. Thank you.

Speaker Change: Ah Okay got it so the first the first question that you mentioned regarding our pipeline.

Bruno Augusto Sacchi Zaremba: Ricardo, the first question that you mentioned regarding the pipeline of private market products for the second quarter. So, we have, as I mentioned in the prior question, we have... We have been working on VCP and VICC for new commitments. We expect it to happen over the next couple of quarters for some additional capital to come in. VCP, there is a chance that we might have commitments rolling in the second quarter. We're working on a few soft circle commitments to activate them in the second quarter. At this point in time, I would say the probability is 3 quarters, 75% of what we have in the second quarter. If not, it's going to move towards the third quarter.

Bruno Augusto Sacchi Zaremba: Private market products in the second quarter. So we have.

Bruno Augusto Sacchi Zaremba: As I mentioned too in the in the prior question we have.

Bruno Augusto Sacchi Zaremba: We have been working visit boj ICC for new commitments, we expect.

Bruno Augusto Sacchi Zaremba: Them to happen over the next couple of quarters for some additional capital to come in.

Bruno Augusto Sacchi Zaremba: It should be that there is a chance that we might have.

Bruno Augusto Sacchi Zaremba: Commitments rolling into the second quarter were working on a few.

Bruno Augusto Sacchi Zaremba: Soft circle commitments to activate them in the second quarter.

Bruno Augusto Sacchi Zaremba: At this point in time as I would say probably the probe you lose like three quarters, 775% that we have in the second quarter, if not it's going to move towards the third.

Bruno Augusto Sacchi Zaremba: Third quarter.

Bruno Augusto Sacchi Zaremba: We expect to have in the second quarter were working towards that goal to have the first subscription documents being signed.

Bruno Augusto Sacchi Zaremba: We expect to have in the second quarter, we're working towards that goal, the first subscription documents signed for SPS 4. So this is going to be focused on re-ups mainly from funds 1, 2 and 3. We are targeting at least $500 million for SPS 4, so it's going to be a big increase in terms of size. Remember that SPS as a whole, when we purchased SPS, the total AUM was $400 million.

Bruno Augusto Sacchi Zaremba: For Sps for.

Bruno Augusto Sacchi Zaremba: So this is gonna be focused on.

Bruno Augusto Sacchi Zaremba: Re ups mainly.

Bruno Augusto Sacchi Zaremba: From funds, one two and three.

Bruno Augusto Sacchi Zaremba: We are targeting at least $500 million for Sps for so it's gonna be a big increase in terms of the size.

Bruno Augusto Sacchi Zaremba: Remember that Sps as a whole when we purchased Sps. The total AUM was 400 meter. So we're talking about the fourth fund b.

Bruno Augusto Sacchi Zaremba: Hum at least at least with higher than the total AUM that the the platform carriers today.

Bruno Augusto Sacchi Zaremba: So we're talking about the fourth fund being at least a bit higher than the total AUM that the platform carries today. And the reception of that product in the market has been quite positive. So we are very excited about SPS 4.

Bruno Augusto Sacchi Zaremba: And the reception of that product in the market has been.

Bruno Augusto Sacchi Zaremba: <unk> positive so.

Bruno Augusto Sacchi Zaremba: We are very we're very excited about the about Sps for.

Bruno Augusto Sacchi Zaremba: And therefore the reminder, for the reminder of the year, we have additional call me too as far as the ICC, which we expect to close until the end of the year, we have as we mentioned Vg crediting for.

Bruno Augusto Sacchi Zaremba: And then for the remainder of the year, we have additional commitments for the ICC, which we expect to close until the end of the year. We have, as we mentioned, Vinci Credit Infra. We can have big tickets coming from that fund and some coming from a retail placement that we are working towards activating at some point in the next few months. We raised the first Vintage Residential Development Fund during the first quarter of the year.

Bruno Augusto Sacchi Zaremba: We can have a big ticket is coming from from that fund and some some coming from our retail placement that we're working toward.

Bruno Augusto Sacchi Zaremba: Words are activating at some point.

Bruno Augusto Sacchi Zaremba: The next few months.

Bruno Augusto Sacchi Zaremba: We raised our first vintage residential development funds during the first quarter of the year.

Bruno Augusto Sacchi Zaremba: That has already started to return capital and is doing very well, so we expect to do a potential second installment of that fund in the second half of the year, probably with a few hundred million. And then we have the second vintage of our Industrial Development Fund as well, slated for the second half. So these would be, I would expect, the main products that work on the private market side until the end of the year.

Bruno Augusto Sacchi Zaremba: That has already started to to return capital is doing very well, so we expect to do well.

Bruno Augusto Sacchi Zaremba: Actual second installment of that funds are in.

Bruno Augusto Sacchi Zaremba: In the second half of the year.

Bruno Augusto Sacchi Zaremba: Probably with a few hundred meeting.

Bruno Augusto Sacchi Zaremba: And then we have the second vintage of our industrial development fund as well.

Bruno Augusto Sacchi Zaremba: Slated, but they should be for for the second half. So these would be I would expect the main.

Bruno Augusto Sacchi Zaremba: Products are.

Bruno Augusto Sacchi Zaremba: That will work on the private market side until the end of the year.

Bruno Augusto Sacchi Zaremba: We might also have VIR 5 coming this year, but it's still uncertain if we're going to be able to fit VIR 5 in 2024 because the fund is still a little bit below the threshold from an allocation standpoint to be able to come back. So we depend on getting minimum sizes in terms of percentage allocation to be able to come back with the fund. So, the second question, Ricardo, was about..., was about Unrealized Games, so could you please rephrase the question so I have exactly what you need in terms of information there?

Bruno Augusto Sacchi Zaremba: We might have also var five coming this year, but it's it's still uncertain, if we're gonna be able to fit.

Bruno Augusto Sacchi Zaremba: Five two in 'twenty to 'twenty four because the fund is still a little bit below the threshold from.

Bruno Augusto Sacchi Zaremba: From Oh allocation standpoint to be able to come back. So we depend on gallium minimal sizes in terms of percentage of location to be able to come back with the funds.

Speaker Change: So the second question you guys it was on.

Speaker Change: Was on the unrealized gains right. So could you please.

Ricardo Buchpiguel: Rephrase the question the way I have exactly which one and what.

Speaker Change: What you need in terms of information there Oh, yeah like first.

Ricardo Buchpiguel: Oh yeah, first of all, thank you for the answer. My question was that you booked R$9 million in GP investment income at a moment when you saw a more challenging macro environment, where you even saw more negative..., in the Liquid portion of the portfolio. I want to understand what was the rationale for booking 9 million reais in this generalized game?

Ricardo Buchpiguel: First of all thank you for the answer my question is that your book 9 million of highs in GP investment income in a moment, where we saw a more challenging microenvironment rightmove and salt Lake are Mara.

Ricardo Buchpiguel: <unk> negative.

Ricardo Buchpiguel: The performance from the liquid portion of the portfolio and so I wanted to understand why was the rationale for booking 9 million yeah.

Ricardo Buchpiguel: In these unrealized gains.

Ricardo Buchpiguel: Okay.

Bruno Augusto Sacchi Zaremba: The Unrealized Gains are the effect of the Mark-to-Markets of the funds, right, so they depend on performance for the funds that we have allocated and committed from the balance sheet. So there are a couple of portions there; one is a Mark-to-Market on the liquid REITs. If I'm not mistaken, the first quarter was positive in that regard, and the other one is the mark-to-market of our closed-end funds. The closed-end funds are typically re-evaluated once a year, usually at the end of the year when we have the formal audit of the funds; we re-evaluate the shares of the closed-end funds.

Ricardo Buchpiguel: The unrealized gains are the effect of the mark to markets of the funds right. So.

Bruno Augusto Sacchi Zaremba: They depend on performance for the funds that we have allocated.

Bruno Augusto Sacchi Zaremba: And committed from from the balance sheet. So there are couple of portions they are what is a mark to market on the liquid Reits.

Bruno Augusto Sacchi Zaremba: If I'm not mistaken the second the first quarter was positive in that front.

Bruno Augusto Sacchi Zaremba: And the other one is the mark to market of our.

Bruno Augusto Sacchi Zaremba: Our closed end funds the closed end funds. They typically are reevaluated once a year usually at the end of the year, where we have the formal audit of the funds.

Bruno Augusto Sacchi Zaremba: Reevaluate the the shares of the closed end funds.

Bruno Augusto Sacchi Zaremba: I would expect that impact to be more relevant.

Bruno Augusto Sacchi Zaremba: I would expect that impact to be more relevant. At the end of the day, a market to market comparison of the illicit rigs on a quarter to quarter basis. And the second one is the mark-to-market of the closing funds, which is likely going to happen at the end of the year when we do the audits for the funds.

Bruno Augusto Sacchi Zaremba: In the end of.

Bruno Augusto Sacchi Zaremba: In the end of starting the end of 'twenty four so we're going to have capital being called by disappear, we're going to have a the.

Bruno Augusto Sacchi Zaremba: The reevaluation of our of our other closed end funds I think we had also some impact from the water and sewage fund recently so those are the two I would say components. One is the mark to market of the listed Reeks went up on a quarter to quarter basis base and the second one is the mark to market of the closed end fund.

Bruno Augusto Sacchi Zaremba: <unk>.

Bruno Augusto Sacchi Zaremba: It's likely going to happen at the end of the year when we do the audits for the funds.

Bruno Augusto Sacchi Zaremba: And have you got that <unk> be more specific the largest contribution to this.

Alessandro Monteiro Morgado Horta: And Ricardo, Ricardo, that's Alessandro, being more specific, the largest contribution to this unrealized gain on DGP commitments came from some commitments in one of our infrastructure funds that were being kept at par, and that was the first mark of the fund.

Alessandro Monteiro Morgado Horta: All make sense. Thank you.

Alessandro Monteiro Morgado Horta: Unrealized gain on the GP commitments came from.

Alessandro Monteiro Morgado Horta: Some commitments in one of our infrastructure fund that was being kept at par and that was the first mark are different.

Speaker Change: That makes sense. Thank you.

Alessandro Monteiro Morgado Horta: I would like to turn the floor back to Mr. Alessandro for the closing remarks. Please Mr. Arthur you can proceed.

Alessandro Monteiro Morgado Horta: I would like to turn the floor back to Mr. Alessandro Horta for the closing remarks. Please, Mr. Horta, you can proceed.

Alessandro Monteiro Morgado Horta: Thank you.

Alessandro Monteiro Morgado Horta: Thank you. I'd like to, one more time, thank you all for your continuous support and interest in Vinci. We continue to be very optimistic about delivering growth while providing stable results. We are highly dedicated to preparing our integration with Compass, which will open a huge opportunity for us in the years ahead. So, with that, I'd like to thank you again, and a good night to all.

Alessandro Monteiro Morgado Horta: I'd like to one more time to thank you all for your continued support in <unk>.

Alessandro Monteiro Morgado Horta: Interest in <unk>.

Alessandro Monteiro Morgado Horta: We continue to be very optimistic.

Alessandro Monteiro Morgado Horta: Delivery growth, while providing stable results.

Alessandro Monteiro Morgado Horta: We are highly dedicated and prepare our integration with corpus.

Alessandro Monteiro Morgado Horta: What will.

Alessandro Monteiro Morgado Horta: Open a huge opportunity for us in the years ahead.

Alessandro Monteiro Morgado Horta: So.

Alessandro Monteiro Morgado Horta: With that I'd like to thank you again and good night for all.

Speaker Change: This does concludes today's presentation. We thank you all for your participation and wish you a very good evening.

Operator: This does conclude today's presentation. We thank you all for your participation and wish you a very good evening.

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