Q4 2024 Patria Investments Ltd Earnings Call
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I'd now like to hand, the conference over your Speaker today, Rob Lee head of shareholder Relations. Please go ahead.
Rob Lee: Thank you good morning, everyone and welcome to <unk> fourth quarter 2024 earnings call.
Speaker Change: Today on the call are our Chief Executive Officer, Alex <unk>, and our Chief Financial Officer, Ana Russo and our Chief Economist Luis Fernando Lopes with a Q&A session.
Speaker Change: This morning, we issued a press release and earnings presentation detailing our results for the quarter, which you can find posted on the Investor Relations section of our website.
Speaker Change: Or on form 6K filed with the Securities and Exchange Commission.
Speaker Change: This call is being webcast and a replay will be available.
Speaker Change: Before we begin I'd like to remind everyone that today's call may include forward looking statements, which are uncertain do not guarantee future performance and undue reliance should not be placed on them.
Speaker Change: <unk> assumes no obligation and does not intend to update any such forward looking statements such statements are based on current management expectations and involve risks, including those discussed in the risk factors section of our latest form 20-F annual report.
Speaker Change: Also note that no statements on this call constitute an offer to sell or a solicitation of an offer to purchase an interest in any patria fun.
Speaker Change: As a foreign private issuer Parcher reports financial results using international financial reporting standards or Ifr rats as opposed to U S. GAAP.
Speaker Change: Additionally, we would like to remind everyone that we will refer to certain non <unk> measures, which we believe are relevant in assessing the financial performance of the business but.
Speaker Change: But which should not be considered in isolation from or as a substitute for measures prepared in accordance with ifr rats.
Speaker Change: Conciliation of these measures to the most comparable <unk> measures are included in our earnings presentation now.
Alex: Now I will turn the call over to Al Alex.
Alex: Thank you Rob.
Speaker Change: And good morning, everyone.
Alex: The fourth quarter capped a very exciting.
Alex: Indeed transformational ear for Patria.
Alex: As we raised $5 $5 billion.
Alex: Exceeding our full year fund raising targets of $5 billion.
Alex: Fund raising included approximately 300 million.
Alex: We raised in our advisory business for third party managers for which we earn a placement fee.
Alex: With a balance of $5 $2 billion contributing to our asset base.
Alex: A wide variety of strategies and products contributed to our fund raising mode.
Alex: Most of which did not exist at our IPO.
Alex: We also achieved our 'twenty to 'twenty four FRE fee related earnings targets of $170 million or a dollar and 12 cents per share.
Alex: Reflecting the resiliency of our business and the momentum we have built heading into 'twenty 'twenty five.
Alex: As we highlighted at our recent Investor day on December nine.
Alex: The greater diversification of our platform is spinning off.
And we are confident in our new three year targets, we introduced at Investor Day.
Alex: Now let.
Speaker Change: Let me quickly summarize our full year 2024.
Alex: Fourth quarter results.
Alex: Before we move on to some of the other highlights for the quarter.
Alex: First.
Alex: We are pleased to report that we achieved our full year 2024 fee related earnings starting <unk> of $117 million.
Alex: Up.
Alex: 15% from 'twenty to 'twenty three.
Alex: While fee related earnings per share reached a dollar and 12 cents up 13%.
Alex: For the fourth quarter fee related earnings reached $55 million.
Alex: 35% from the prior quarter.
Alex: And 18% from fourth quarter 2023.
Alex: On a per share basis fee related earnings of 36 cents in the fourth quarter rose, 35% from the third quarter.
Alex: 13% year over here.
Heading into 2025, we believe we are on track to reach our full year fee related earnings targets of $200 million to $225 million or.
Alex: A dollar and 27 two.
Alex: Two a dollar and 43 cents per share.
Alex: Next week.
Alex: We generated over $41 million in performance related earnings.
Alex: Or B R E driven primarily by the previously disclosed sale of our Chilean desalinization projects Agua specific though.
Alex: In infrastructure fund III.
Alex: With this monetization we believe we are on track to deliver on our updated cumulative.
Alex: Performance related earnings guidance through 2027 that we announced at the Investor Day.
Alex: Approximately 120.
Alex: To $140 million.
Alex: As a reminder, we expect our infrastructure three funds with approximately $47 million of nits.
Alex: Crude carry remaining as of year end.
Alex: To be the primary source of carry generation through 2025.
Alex: Since 2022 <unk>.
Alex: Including Agua specifically.
Alex: Our infrastructure strategies, we will have returned over $2 billion to investors.
Guidance through 2027 that we announced at the Investor day of approximately 120.
Alex: Putting it all together we.
Alex: We generated $189 million of distributable earnings for the full year.
To $140 million.
As a reminder, we expect our infrastructure three funds with approximately $47 million of net.
Alex: And $89 million in the fourth quarter.
Alex: On a per share basis, we delivered a dollar and 24 cents.
Crude carry remaining as of year end.
Alex: And 58 cents respectively.
To be the primary source of carry generation through 2025.
Alex: Yeah.
Next the net accrued performance fee balance of $319 million or.
Since 2022 <unk>.
Including Agua specifically.
Alex: $2.08 per share declined.
Our infrastructure strategies, we will have returned over $2 billion to invest.
Alex: 30%, mainly due to our significant realization in infrastructure three.
Putting it all together.
Alex: The appreciation of the dollar.
We generated $189 million of distributable earnings for the full year.
Alex: Which was partially reversed scores so far in the current quarter.
Alex: And lower marks on publicly traded holdings in our carry funds.
And $89 million in the fourth quarter.
On a per share basis, we delivered a dollar and 24 cents.
Alex: For perspective, and notwithstanding declines in the value of the public holdings in our carry funds in the fourth quarter.
And 58 cents respectively.
Alex: Underlying business trends at our private equity portfolio companies generally remains strong.
Next the net accrued performance fee balance of $319 million or.
Alex: In local currency terms.
$2.08 per share decline.
Alex: EBITDA at our private equity portfolio.
30%, mainly due to our significant realization in infrastructure three.
Alex: Companies Rose approximately 14% on average over the past year as of September 2024.
The appreciation of the dollar.
Which was partially reversed scores so far in the current quarter.
Alex: As we focus on resilient sectors of the economy within private equity such as agribusiness food and beverage and health care.
And lower marks on publicly traded holdings in our carry funds.
For perspective, and notwithstanding declines in the value of the public holdings in our carry funds in the fourth quarter.
Alex: Third a war.
Alex: Infrastructure, we invest in and develop across the region long duration assets.
Underlying business trends at our private equity portfolio companies generally remains strong.
Such as the Agua specifically this sudden innovation project mentioned previously.
Alex: The benefit from secular straw.
In local currency terms.
Alex: Strong payer wins.
EBITDA at our private equity portfolio companies rose approximately 14% on average over the past year as of September 2024.
Alex: Other examples include the data centers Seltzer.
Cell towers renewable energy and toll roads.
Alex: These infrastructure assets often enjoy the benefits.
Alex: Of long term service contracts with inflation escalators.
As we focus on resilient sectors of the economy within private equity such as agribusiness food and beverage and health care.
Speaker Change: I know, sometimes the nominated in U S dollars.
Speaker Change: Providing long term resiliency against short term fluctuations in interest rates and other macro factors.
Third a war within infrastructure, we invest in and develop across the region long duration assets.
Speaker Change: The earning AUM of $33 billion rose a robust 38% year over year.
Such as the Agua specifically southern innovation project mentioned previously.
The benefit from secular.
Strong tailwind.
Speaker Change: But declined 3% sequentially.
Other examples include the data centers cell.
Speaker Change: Driven substantially by the dollar appreciation.
Cell towers renewable energy and toll roads.
Speaker Change: However.
Speaker Change: It is important to put this in perspective.
These infrastructure assets often enjoy the benefits.
Net organic inflows in fee, earning AUM in the fourth quarter were a positive $380 million.
Of long term service contracts with inflation escalators.
Speaker Change: I know, sometimes the nominated in U S dollars.
Speaker Change: Providing long term resiliency against short term fluctuations in interest rates and other macro factors.
Speaker Change: With each investment vertical except public equities generating positive inflows.
Speaker Change: Our asset base remains very sticky with 20% in permanent capital vehicles, and approximately 90% in vehicles with no or limited redemption rights.
Speaker Change: The earning AUM of $33 billion rose a robust 38% year over year.
Speaker Change: But declined 3% sequentially.
Speaker Change: Driven substantially by dollar appreciation.
Speaker Change: As we highlighted at Investor day.
Speaker Change: However.
Speaker Change: It is important to put this in perspective.
Speaker Change: The fee related earnings impact from FX volatility is modest given that most of our expense base is denominated in local currencies.
Speaker Change: Net organic inflows in fee, earning AUM in the fourth quarter were a positive $380 million.
Speaker Change: Providing a substantial natural hedge.
Speaker Change: With each investment vertical except public equities generating positive inflows.
Speaker Change: We estimate that for every 10% change in soft currencies.
Speaker Change: Our fee related earnings impact is approximately 2%.
Speaker Change: Our asset base remains very sticky with 20% in permanent capital vehicles.
Speaker Change: And for perspective.
Speaker Change: And approximately 90% in vehicles with no or limited redemption rights.
Speaker Change: Only about 20% of our expense base is denominated in dollars versus over 55%.
Speaker Change: As we highlighted at Investor day.
Speaker Change: Our revenues.
Speaker Change: The fee related earnings impact from FX volatility is modest given that most of our expense base is denominated in local currencies probes.
Speaker Change: Since year end the dollar has depreciated against most of the currencies relevant to our business.
Speaker Change: Dollar denominated fee earnings AUM and account for approximately 55%.
Speaker Change: Providing a substantial natural hedge.
Speaker Change: We estimate that for every 10% change in soft currencies.
Speaker Change: Of our asset base.
Speaker Change: With another 15% in other hard currencies.
Speaker Change: Our fee related earnings impact is approximately 2%.
Speaker Change: Dollar exposure includes close to 10% of our investments that are directly exposed to the United States, primarily through G. P. M S.
Speaker Change: And for perspective.
Speaker Change: Only about 20% of our expense base is denominated in dollars.
Speaker Change: Versus over 55%.
Speaker Change: As highlighted in the earnings presentation in local currency terms investment performance in 2024 was strong.
Speaker Change: Our revenues.
Speaker Change: Since year end the dollar has depreciated against most of the currencies relevant to our business.
Speaker Change: Particularly within credit.
Speaker Change: Local currency returns are increasingly important as we source more assets from local investors. So we invest in local strategies.
Speaker Change: Dollar denominated fee earnings AUM and account for approximately 55%.
Speaker Change: Of our asset base.
Speaker Change: Moving on to fundraising as I noted at the start of my remarks, we are very pleased to report that we exceeded our $5 billion fund raising targets for 2024.
Speaker Change: With another 15% in other hard currencies.
Speaker Change: Dollar exposure includes close to 10% of our investments.
Speaker Change: Not directly exposed to the United States, primarily through G. P. M S.
Speaker Change: Raising $5 $5 billion.
Speaker Change: Inclusive of approximately $300 million of advisory assets.
Speaker Change: As highlighted in the earnings presentation in local currency terms investment performance in 'twenty 'twenty four was strong.
Speaker Change: Third party managers.
Speaker Change: For which we earn a placement fee.
Speaker Change: Indeed, achieving our targets for 2024 means we exceeded the three year fund raising targets, which set back at our 2022 Investor day.
Speaker Change: Particularly within credit.
Speaker Change: Local currency returns are increasingly important as we source more assets from local investors to invest in local strategies.
Speaker Change: As we continued to benefit from the greater diversification of our product offering and distribution capabilities.
Speaker Change: Moving on to fundraising as I noted at the start of my remarks.
We are very pleased to report that we exceeded our $5 billion fund raising targets for 2024.
Speaker Change: Yeah.
Speaker Change: We believe we entered 2025 with positive fund raising momentum.
Speaker Change: <unk> five $5 billion.
Speaker Change: We are excited with the opportunity to achieve our 'twenty to 'twenty five targets of $6 billion.
Speaker Change: Inclusive of approximately $300 million of advisory assets.
Speaker Change: Third party managers.
Speaker Change: As we are actively fund raising across a number of funds and strategies. In addition to a variety of SMA and G. P. M S.
Speaker Change: For which we earn a placement fee.
Speaker Change: Indeed, achieving our targets for 'twenty 'twenty four means we exceeded the three year fund raising targets, which set back at our 'twenty to 'twenty two investor day.
Speaker Change: Private equity and infrastructure.
Fund raising in the quarter and for the full year was led by our credits and G. P EMS platforms.
Speaker Change: As we continued to benefit from the greater diversification of our product offering and distribution capabilities.
Speaker Change: Where we raised approximately $1 $4 billion.
Speaker Change: And two points or $3 billion respectively.
Speaker Change: Yeah.
Speaker Change: We believe we entered 2025 with positive fund raising momentum.
Speaker Change: Further highlighting our progress in diversifying our platform and enhancing the growth profile of our business is the progress we are making in building, our local investment and distribution capabilities.
Speaker Change: We are excited with the opportunity to achieve our 'twenty to 'twenty five targets of $6 billion.
Speaker Change: As we are actively fund raising across a number of funds and strategies. In addition to a variety of SMA and G. P. M S.
Speaker Change: Approximately 70% of our fund raising in 2024 and 50% in the fourth quarter 2024 came from local investors investing in local products versus virtually nil in 2020 the ear.
Speaker Change: Private equity and infrastructure.
Speaker Change: Fund raising in the quarter and for the full year.
Speaker Change: Led by our credits and G. P M S platforms.
Speaker Change: Where we raised approximately $1 $4 billion.
Speaker Change: Prior to our IPO.
Speaker Change: And two points or $3 billion respectively.
Speaker Change: Years ago.
Speaker Change: Indeed, one of the benefits of our expanding investments and products capabilities is that we can better serve shifting investor demands within the region in response to changes in the investing environment.
Speaker Change: Further highlighting our progress in diversifying our platform and enhancing the growth profile of our business.
Speaker Change: Is the progress we are making in building, our local investments and distribution capabilities.
Speaker Change: In Brazil. For example, we have seen increased demand for our credit strategies as demand for more equity oriented strategies has softened in response to higher interest rates.
Speaker Change: Approximately 70% of our fund raising in 2024 and 50% in the fourth quarter 2024 came from local investors investing in local products versus virtually nil in 2020 the ear.
Speaker Change: Our efforts to diversify our business.
Speaker Change: Also increases our resiliency in the face of near term macro headwinds.
Speaker Change: Prior to our IPO four years ago.
Speaker Change: Indeed.
Speaker Change: For example.
Speaker Change: One of the benefits of our expanding investments and products capabilities is that we can better serve shifting investor demands within the region in response to changes in the investing environment.
Speaker Change: Contrary to common perception Bruce.
Speaker Change: Brazil represents less than a third of our investment exposure.
Speaker Change: 90% plus at the time of our IPO only four years ago.
Speaker Change: In Brazil. For example, we have seen increased demand for our credit strategies as demand for more equity oriented strategies have soften in response to higher interest rates.
Speaker Change: Reflecting on the macro environment.
Speaker Change: It is also important for investors to recognize.
Speaker Change: Despite near term macro headwinds within the region.
Speaker Change: Our effort to diversify our business.
Speaker Change: In addition to global uncertainty.
Speaker Change: That has been created by the recent election in the United States and.
Speaker Change: Also increases our resiliency in the face of near term macro headwinds.
Speaker Change: And its potential impact on cross border flows.
Speaker Change: For example, and contrary to common perception.
Speaker Change: We believe patria is well positioned to weather and indeed thrive in these uncertain conditions.
Speaker Change: Brazil represents less than a third of our investment exposure.
Speaker Change: Latin America.
Speaker Change: Versus 90% plus at the time of our IPO only four years ago.
Speaker Change: It remains a very attractive destination for investors long term capital commitments given.
Speaker Change: Given its many positive attributes, including large internal markets with a growing middle class.
Speaker Change: Reflecting on the macro environment it.
Speaker Change: It is also important for investors to recognize.
Speaker Change: Global leadership in clean energy and ongoing demand for infrastructure investments.
Speaker Change: Despite near term macro headwinds within the region.
Speaker Change: In addition to global uncertainty that has been created by the recent election in the United States and.
Speaker Change: Not to mention competitive advantages in key business sectors, such as agribusiness.
Speaker Change: And low levels of geopolitical risk.
Speaker Change: And its potential impact on cross border flows.
Speaker Change: These competitive advantages are increasingly being recognized by larger sophisticated global investors such as sovereign wealth funds.
Speaker Change: We believe patria is well positioned to weather any indeed thrive in these uncertain conditions.
Speaker Change: Latin America.
Speaker Change: As well as local institutions that are often required to invest locally.
Speaker Change: It remains a very attractive destination for investors long term capital commitments given.
Speaker Change: Many of our private equity strategies, such as health care logistics and.
Speaker Change: Given its many positive attributes, including large internal markets with a growing middle class.
Speaker Change: And food and beverage businesses focused primarily on serving local domestic and regional markets and.
Speaker Change: Global leadership in clean energy and ongoing demand for infrastructure investments.
Speaker Change: In infrastructure by definition focuses on serving local market needs.
Speaker Change: Not to mention competitive advantages in key business sectors, such as agribusiness.
Speaker Change: In industries with an export oriented components, such as agribusiness Asia and Europe tend to be our primary export markets.
Speaker Change: And low levels of geopolitical risk.
Speaker Change: These competitive advantages are increasingly being recognized by larger sophisticated global investors such as sovereign wealth funds.
Speaker Change: Our direct investment exposure to Mexico is quite limited at approximately $1 $2 billion or less than 3% of our AUM.
Speaker Change: As well as local institutions that are often required to invest locally.
Speaker Change: Many of our private equity strategies, such as health care logistics and.
Speaker Change: With investments primarily in credit and public equities.
Speaker Change: And food and beverage businesses.
Speaker Change: Our G P M S business, which comprises approximately.
Speaker Change: Focused primarily on serving local domestic and regional markets and.
Speaker Change: 30% of our fee, earning AUM.
Speaker Change: In infrastructure by definition focuses on serving local market needs.
His focus on middle market private equity investments within Europe, and North America.
Speaker Change: In industries with an export oriented components, such as agribusiness Asia and Europe tend to be our primary export markets.
Speaker Change: With over 3 billion of our assets exposed to the United States and $7 billion to European markets.
Speaker Change: Our direct investment exposure to Mexico is quite limited at approximately $1 $2 billion or less than 3% of our AUM.
Speaker Change: In total close to 10% of our assets are directly exposed to the United States and our current direct exposure to Canada is immaterial.
Speaker Change: With investments primarily in credit and public equities.
Speaker Change: We also wanted to take this opportunity to reiterate a theme that we cover in depth at the Investor day name.
Speaker Change: Our G P EMS business, which comprises approximately.
Speaker Change: Namely that our ability to deliver our expanding range of investment capabilities.
Speaker Change: 30% of our fee, earning AUM.
Speaker Change: His focus on middle market private equity investments within Europe, and North America with.
Speaker Change: Through a broader range of investment vehicles and structures.
Speaker Change: Allows us to reach and better serve new pools of investors globally.
Speaker Change: With over 3 billion of our assets exposed to the United States and $7 billion to European markets.
Speaker Change: This is an under appreciated but very important aspect of our evolution.
Speaker Change: In total close to 10% of our assets are directly exposed to the United States and our current direct exposure to Canada, It's immaterial.
Speaker Change: From a product centric alternative manager.
Speaker Change: A client centric focus investment solution provider for our investors.
Speaker Change: For example.
Speaker Change: We also wanted to take this opportunity to reiterate a theme that we cover in depth at the Investor day.
Our enhanced SMA capabilities.
Speaker Change: Hours to develop customized solutions for large sophisticated L. PS both globally and within Latin America.
Speaker Change: Namely that our ability to deliver our expanding range of investment capabilities.
Speaker Change: Through a broader range of investment vehicles and structures.
Speaker Change: The inherent complexity and customization of an SMA creates a very long dated relationship that often provides for the recycling and compounding of cap.
Speaker Change: Allows us to reach and better serve new pools of investors globally.
Speaker Change: This is an under appreciated but very important aspect of our evolution.
Speaker Change: We now have approximately 16% of our fee, earning AUM in sma's versus zero at the time of our IPO.
Speaker Change: From a product centric alternative manager to a client centric focus investment solution provider for our investors.
Speaker Change: We have also been expanding the number of domiciled in which our investment products, Our register and buffer.
Speaker Change: For example.
Speaker Change: Our enhanced SMA capabilities.
Speaker Change: Hours to develop customized solutions for large sophisticated L. PS both globally and within Latin America.
Speaker Change: Within credit for example, re domicile our flagship dollar denominated high yield credit fund from Chile to a more widely accepted Ireland list is fun.
Speaker Change: The inherent complexity and customization of an SMA.
Speaker Change: Creates a very long dated relationship that often provides for the recycling and compounding of cap.
Speaker Change: This greatly enhances the ability of global investors to efficiently and at low cost access this important strategy.
Speaker Change: We now have approximately 16%.
Speaker Change: As do our new Luxembourg based.
Speaker Change: Our fee, earning AUM in Sma's versus zero at the time of our IPO.
Speaker Change: You see I tease UCITS structure.
Speaker Change: And a U S focused credit fund.
Speaker Change: We have also been expanding the number of domiciled in which our investment products are registered and offered.
Speaker Change: We also continue to build locally domiciled vehicles to take advantage of our local investment capabilities and investors home country bias in order to attract both retail and institutional investors.
Speaker Change: Within credit for example, re domiciled our flagship dollar denominated high use credit funds from Chile to a more widely accepted Ireland list that's fun.
Speaker Change: Prime examples being at Columbia focused private equity and infrastructure funds that co invest alongside our flagship funds.
Speaker Change: This greatly enhances the ability of global investors to efficiently and at low cost access this important strategy.
Speaker Change: Pulling this altogether, our financial results and strong fund raising provided additional evidence that our strategy to diversify and grow our business both organically.
Speaker Change: As do our new Luxembourg base.
Speaker Change: Cit's UCITS structure.
Speaker Change: And our U S focused credit fund.
Speaker Change: We also continue to build locally domiciled vehicles to take advantage of our local investment capabilities and investors home country bias in order to attract both retail and institutional investors.
Speaker Change: And Inorganically, while also increasing its resiliency is paying off.
Speaker Change: It's been only four years since our IPO, but as we highlighted at our Investor day.
Speaker Change: Which is available on our website.
Speaker Change: Prime examples being a Columbia focused private equity and infrastructure funds that co invest alongside our flagship funds.
Speaker Change: Over that bridge brief periods of time.
We have greatly expanded our regional and global Investor base and distribution capabilities.
Speaker Change: And how significantly diversified our invest without product platforms.
Speaker Change: Pulling this altogether, our financial results and strong fund raising provide additional evidence that our strategy to diversify and grow our business both organically and inorganically, while also increasing its resiliency.
Speaker Change: We are proud that we have been able to deliver on the targets, we set out at our IPO as well as our first Investor day.
Speaker Change: In 2022.
Speaker Change: It's paying off.
Speaker Change: And are excited to deliver on the fund raising fee related earnings and other targets.
Speaker Change: It's been only four years since our IPO, but as we highlighted at our Investor day.
Speaker Change: Yields at our recent Investor day this past December.
Speaker Change: Which is available on our website.
Speaker Change: Over that bridge brief periods of time.
Speaker Change: Now, let me turn the call over to Anna to review our financial results in more detail. Thank you.
Speaker Change: We have greatly expanded our regional and global Investor base and distribution capabilities.
Speaker Change: And have significantly diversified our invest for those product platforms.
Anna: Thank you Alex and good morning, everyone.
Anna: Alex mentioned, the fourth quarter capped an exciting and transformative year for pet as it significantly enhance the diversification growth potential and we gave them the sales our business achieve our 2024, FRE and fundraising goals and Oak Hill, our new three year targets at our recent Investor day.
Speaker Change: We are proud that we have been able to deliver on the targets, we set out at our IPO as well as our first Investor day.
Speaker Change: In 2022.
Speaker Change: And are excited to deliver on the fund raising fee related earnings and other targets.
Anna: We believe we are entering the year with good momentum necessary to meet our 2025 objectives.
Speaker Change: Yields at our recent Investor day this past December.
Anna: That's what the full year and fourth quarter results as Alex highlighted earlier, we are very pleased that we achieved our fundraising target for 2024 hour T. A L. M rose, 38% year over year to approximately $33 billion and this increase was largely driven by 11 billion from acquisition.
Speaker Change: Now, let me turn the call over to Anna to review our financial results in more detail. Thank you.
Anna: Thank you Alex and good morning, everyone.
Anna: Alex mentioned, the fourth quarter capped an exciting and transformative year for Pat.
Anna: Mainly in G. P M S and real estate, partially offset by an FX impact of about $1 9 billion due to the appreciating dollar of which one 5 billion occur in the fourth quarter.
Anna: Is it significantly enhance the diversification growth potential and begin myself, our business achieve our 2024, FRE and fundraising goals and.
Anna: Our new three year targets at our recent Investor day.
Anna: Total inflow to fee a U N. A $4 2 billion were offset by the planned stepped out of private equity fund for that we reviewed on our last earnings call as well as expected realization in G. P. M S dividends across the platform and redemptions in public equities.
Anna: We believe we are entering the year with good momentum necessary to meet our 2025 object.
Anna: That's what the full year and fourth quarter results as Alex highlighted earlier, we are very pleased that we achieved our fund raising targets for 2024 hour P. A L. M rose, 38% year over year to approximately $33 billion and this increase was largely driven by 11 billion from Microsoft.
Patrick: The quarter, Patrick generated approximately $380 million of net inflows despite outflow pressure in public equity however, mainly due to the appreciating dollar.
Anna: Mainly in G. P M S and real estate, partially offset by an FX impact of about one 9 billion due to the appreciating dollar of which one 5 billion in the fourth quarter.
Patrick: <unk> declined 3% quarter support.
Patrick: Although the appreciation of the U S dollar negatively impact fee when it had little impact on our FRE in the quarter as.
Speaker Change: As we redeemed at our Investor day, our FY He has limited sensitivity to FX movements.
Anna: Total inflow to fee a U N. A $4 2 billion were offset by the planned stepped out of private equity fund for that we reviewed on our last earnings call as well as expected realization, Egypt, pms dividends across the platform and redemptions in public equities.
Speaker Change: Our expense base provides a substantial hedge against currency movements that may impact Z wave and our S. G Matthews.
Speaker Change: Based on our current asset class needs, a 10% variance in soft currencies against the dollar impacts SRU, but only about 2%.
Anna: In the quarter <unk> generated approximately $380 million of net inflows despite outflow pressure in public equity however, mainly due to the appreciating dollar.
Speaker Change: It's worth noting that since the end of fourth quarter net dollar has depreciated against most currencies, including the real.
Anna: Decline, 3% what is the point.
Speaker Change: Assuming the average exchange rates in the relevant currencies in the past two weeks, we estimate C win in net accrued performance fees would be approximately one third and 50% of the FX impact experienced in the fourth quarter.
Anna: Although the appreciation of the U S dollar negatively impact Chi Wen it had little impact on our FRE in the quarter as.
Anna: As we redeemed.
Anna: Our Investor day, our FY. He has limited sensitivity to FX movements as our expense base provides us with substantial hedge against currency movements that may impact Chi Wen and I'll ask Jim Matthews.
Speaker Change: Total fee revenue in the fourth quarter and full year reached $93 2 million and $308 million up 41, and 25% from a year ago respectively.
Anna: Based on our current asset class makes up 10% variance in soft currencies.
Speaker Change: Fourth quarter total revenues increased 27 million versus Q4, 'twenty three driven by the full impact of the G. P. M as credit Suisse, CPI indexes acquisitions and higher <unk>.
Anna: The dollar impact SRU, but only about 2%.
Anna: It's worth noting that since the end of fourth quarter. The dollar has depreciated against most currencies, including the real.
Speaker Change: Additionally fee revenue for the full year benefited from the $2 eight.
Anna: Assuming the average exchange rates in the relevant occurrences in the past two weeks, we estimate Chi Wen in net accrued performance fees would be approximately one third and 50% of the FX impact experienced in the first quarter respectively.
Speaker Change: 8 million incentive fees $12 3 million of which were recognized in the fourth quarter.
Speaker Change: As a reminder, incentive fees are primarily realized in the last months of the year and in 2024 were driven mainly by our credit platform and more specifically from our Latam and Chilean high yields and Chilean local currency strategy.
Anna: Total fee revenue in the fourth quarter and full year reached $93 2 million and $308 million up 41, and 25% from a year ago respectively.
Which continued to generate strong performance in new business.
Anna: Fourth quarter total revenues increased $27 million versus Q4 'twenty three.
Speaker Change: Our management fee rate for the year averaged 96 basis points as we viewed and everything has to be we are diversifying our business, introducing new investment strategies and product structures, which are key drivers of our growth.
Anna: And by the full impact of the G. P. M. S Credit Suisse, CPI indexes acquisition and higher C. A F.
Anna: Additionally fee revenue for the full year button a finished founded the company nearly I think incentive fees 12 contain many of which were recognized in the first quarter.
Speaker Change: Consequently, our management fee rate will continue to evolve and we expect our fee rate over the coming years to trend towards approximately 90 basis points.
Anna: As a reminder, incentive fees are primarily realized in the last months of the year and in 2024 were driven mainly by our credit platform and more specifically from our Latam and Chilean high yields and Chilean local currency strategy, which continued to generate strong performance in new business.
Speaker Change: Moving on operating expenses, which include personnel and G&A expenses totaled $37 6 million in the quarter and 128 million for the full year.
Speaker Change: The increase was driven by acquisitions with the remainder attributable to increased personnel expenses, reflecting salary increases and buttons and continue investing in our business. In addition to the impact of inflation.
Anna: Our management fee rate for the year averaged 96 basis points as we viewed it tends to be we are diversifying our business and introducing new investment strategies and product structures, which are key drivers of our growth.
Speaker Change: The increase in personnel expenses in the fourth quarter compared to the 2023 also reflects the 2020 to impact related to the equity based compensation program that we launched by mid 2023, and a seasonal increase in expense.
Anna: Consequently, our management fee rate will continue to evolve and we expect I wouldn't see rate over the coming years, the trend towards approximately 90 basis points.
Speaker Change: Putting it together, what you're delivering C related earnings of $54 8 million in the quarter up 18% versus the prior year and $171 million for full year, achieving our targets and reflecting an increase of 15%.
Anna: Moving on operating expenses, which include personnel and G&A expenses totaled 37 6 million in the quarter and 128 million for the full year.
Anna: The increase was driven by acquisitions with the remainder attributable to increased personnel expenses, reflecting salary increases and buttons and continuing investments in our business. In addition to the impact of inflation.
Our FRE margin in the fourth quarter was 58, 8% helped by high margin incentive fees, while our full year margin was 56, 5% within the range of our 56% to 58% guidance.
Anna: The increase in personnel expenses in the first quarter compared to the 2023 also reflects the 2023 impact related to the equity based compensation program that we launched by mid 2023, and a seasonal increase in expenses.
Speaker Change: Overall as we enter 2025, we remain constant in our fundraising target of 6 billion and in our ability to achieve our FY <unk> target of $200 million to $225 million with an FRE margin between 58% to 60%.
Anna: Putting them together watching deliberate C related earnings of $54 8 million in the quarter up 18% versus the prior year and $171 million for full year, achieving our target and reflecting an increase of 15%.
Speaker Change: On the subject of FRE and FRE targets. We also wanted to remind everyone that with our M&A in 2024 now fully reflected in our results. We are very focused on generating organic growth and we expect only about 10% of our 'twenty 'twenty seven FRE targets.
Anna: Our FRE margin in the fourth quarter was 58, 8% helped by high margin incentive fees, while our full year margin was 56, 5% within the range of our 56% to 58% guide.
Speaker Change: $260 million to $290 million to come from acquisitions.
Anna: Overall as we enter 2025, we remain confident in our fundraising target of 6 billion and in our ability to achieve our FY <unk> target of $200 million to $225 million with an FRE margin between 58% to 60%.
Speaker Change: Next is Alex highlighted we realize a healthy performance fee in Q4 out of the infrastructure fund fee realization puts us well underway to reaching our updated pea or eat target through 2020.
Speaker Change: Also our net financial and other income and expense in Q4 24.
Anna: On the subject of FRE and FRE targets. We also wanted to remind everyone that with our M&A in 2024 now fully reflected in our results. We are very focused on generating organic growth and we expect only about 10% of our 'twenty 'twenty seven FRE target.
Speaker Change: A negative $3 $7 million and a negative $9 2 million in 2024.
Speaker Change: This line item, mainly reflects interest expenses on our credit facilities, partially offset by income generated in our new energy trading platform <unk>.
Anna: Of $260 million to $290 million to come from acquisition.
Speaker Change: Our effective tax rate in 2024, it was six 5% representing an increase of one six percentage points versus 2023, reflecting our improving business mix and new platforms located in higher tax jurisdictions.
Speaker Change: Next is Alex highlighted we realize a healthy performance in Q4 out of the infrastructure fund fee realization puts us well underway to reaching our updated CRE target through 2020.
Speaker Change: Our full year tax was within our 6% to 8% guidance and is expected to trend towards 10% at the end of the three year target period in 2020.
Speaker Change: Also our net financial and other income and expense in Q4, 24 total is negative $3 $7 million and a negative $9 2 million in 2024.
Speaker Change: Regarding distributable earnings we generated 89 million in the quarter and 189 million for the full year up 26, and 2% respectively.
Speaker Change: This line item, mainly reflects interest expenses on our credit facilities, partially offset by income generated in our new energy trading platform <unk>.
Speaker Change: On a per share basis, Q4, 'twenty four and full year 2024 D. E were 15 cents and $1 24, respectively.
Speaker Change: Our effective tax rate in 2024 was six 5% representing an increase of one six percentage points versus 2023, reflecting our evolving business mix and new platforms located in higher tax jurisdictions.
Speaker Change: Fourth quarter deep a share was up 22% versus 23, mainly on higher F. R. E. N theory, but full year D was essentially flat year over year due to higher financial expenses, lower PRA higher taxes and higher share count.
Speaker Change: Our full year tax loss within our 6% to 8% guidance and is expected to trend towards 10% at the end of this three year target period in 2020.
Speaker Change: With regard to the share count we finished the year at 153 6 million shares in line with expectations and continue to expect share count to average between 158 and 106 million from 2025 to two.
Speaker Change: The garden distributable earnings we generated 89 million in the quarter and 189 million for the full year up 26, and 2% respectively.
Speaker Change: On a per share basis, Q4, 'twenty, four and full year 2024 D E.
Speaker Change: 27 <unk>.
Speaker Change: This share repurchase which will be focused on offsetting stock based compensation.
Speaker Change: 15 cents and $1 24, respectively.
Speaker Change: Shifting to balance sheet discipline, we finished the year with approximately $190 million net debt as we funded M&A related payments and other ear and obligations.
Speaker Change: Fourth quarter deep a share was up 22% versus 23, mainly on higher FRE and theory, but full year D was essentially flat year over year due to higher financial expenses, lower PRA higher taxes and higher share count.
Speaker Change: Our total funding is expected to reduce throughout 2025 in line with our objective mentioned to impact state as.
Speaker Change: With regard to the share count.
Speaker Change: As we previously discussed we expect to use proceeds from P. M E mainly to pay down M&A related debt.
Speaker Change: Finished the year at 153 6 million shares in line with expectations and continue to expect share count to average between 158 and $106 million from 2025 to 27 inclusive of share repurchases, which will be focused on offsetting stock.
Speaker Change: Finishing up on capital management items in keeping with our guidance, we announced a fourth quarter dividend of <unk> 15 per share.
Speaker Change: We did not repurchase shares in the quarter, but it remains our intention to repurchase shares in 2020.
Speaker Change: As compensation.
Speaker Change: Shifting to balance sheet discipline, we finished the year with approximately $190 million of net debt as we funded M&A related payments and other ear and applications.
Speaker Change: Finally, while we believe F E N D. I had the best financial metrics with which to measure our results and ongoing earnings power and are the metrics that are most comparable with our alternative manager peers, we will like to comment on some items in our D to net income.
Speaker Change: Our total funding is expected to reduce throughout 2025 in line with our objective mentioned to impact state.
Speaker Change: As we previously discussed we expect to use proceeds from P. R E mainly to pay down M&A related that.
Speaker Change: Reconciliation.
Speaker Change: You will notice that transaction costs, our M&A related expenses rose in the quarter to $13 $7 million.
Speaker Change: Yeah.
Speaker Change: Finishing up on capital management items in keeping with our guidance, we announced a fourth quarter dividend of <unk> 15 per share.
Speaker Change: This mainly reflects the ear and catch up of expenses related to M&A, including legal regulatory and consulting fees among others.
Speaker Change: We did not repurchase shares in the quarter, but it remains our intention to repurchase shares in 2020.
Speaker Change: We would expect and M&A expenses to approach nearly zero in 2025.
Speaker Change: Finally, while we believe F. I N D. I had the best financial metrics with which to measure our results and ongoing earnings power and are the metrics. There are most comparable with our alternative manager peers, we will like to comment on some items in our D to net income.
Speaker Change: As we have no current M&A plan over the next several quarters.
Speaker Change: Our stock based compensation was 7 million in the quarter, bringing our full year total of $20 million.
Speaker Change: For 2025, we expect our full year stock.
Speaker Change: Reconciliation.
Speaker Change: Base compensation to total around 28% to $30 million as our program enters its third year.
Speaker Change: You will notice that transaction costs, our M&A related expenses rose in the quarter to $37 million.
Speaker Change: Subsequent to 2025, we expect the pace of growth in our stock based compensation costs to moderate.
Speaker Change: This mainly reflects the ear and catch up of expenses related to M&A, including legal regulatory and consulting fees among others.
Speaker Change: Overall, we are pleased with our 2024 results and the momentum we have built as we continue to diversify and improve the resilience. Our business. We believe we are on track to meet our FRE targets for 2025, and we are excited regarding the growth opportunity that lies ahead.
Speaker Change: We would expect and M&A expenses to approach nearly zero in 2025.
Speaker Change: As we have no current M&A plan over the next several quarters.
Speaker Change: Our stock based compensation was $7 million this quarter, bringing our full year total of $20 million.
Speaker Change: Everyone for dialing in and we are now ready to take your questions.
Speaker Change: For 2025, we expect our full year stuff.
Speaker Change: As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced.
Speaker Change: Based compensation to total around $28 million to $30 million and our program enters its third year.
Speaker Change: Your question. Please press star one again.
Speaker Change: Subsequent to 2025, we expect the pace of growth in our stock based compensation costs to moderate.
Speaker Change: In the interest of time, we ask that you. Please limit yourself to one question and one follow up you may rejoin the queue. If you have any additional questions. Please standby, while we compile the Q&A roster.
Speaker Change: Overall, we are pleased with our 2024 results and the momentum we have built as we continue to diversify and improve the resilience of our business. We believe we are on track to meet our FRE targets for 2025, and we are excited regarding the growth opportunity that lies ahead.
Speaker Change: Okay.
Speaker Change: Our first question comes from Beatrice at Baruch with Goldman Sachs. Your line is open.
Beatrice: Hi, good morning, everyone. Congrats on the results and thank you for taking my question I have two questions. The first one would be a clarification on PR E.
Speaker Change: Everyone for dialing in and we are now ready to take your questions.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
Beatrice: So on the sale of eyeglass the.
Beatrice: <unk> press release, you mentioned that.
Speaker Change: To withdraw your question. Please press star one again.
Beatrice: The sale would be completed in one Q, although the transaction was signed and in the last quarter of 2024. So just wanted to understand if we.
Speaker Change: In the interest of time, we ask that you. Please limit yourself to one question and one follow up you may rejoin the queue. If you have any additional questions. Please standby, while we compile the Q&A roster.
Beatrice: We should expect something or an additional distribution on perry or or if all of the distribution happened in for Q.
Speaker Change: Yeah.
Beatrice Bruce: Our first question comes from Beatrice Bruce.
Beatrice: Also if you have any visibility regarding our their exit strategies of Infra fund three anything you're able to comment on that would be really helpful.
Speaker Change: With Goldman Sachs. Your line is open.
Speaker Change: Hi, good morning, everyone.
Speaker Change: Grasp on the results and thank you for taking my question I have two questions. The first one would be a clarification on P. R E.
Beatrice: Second question would be on the redemption on public equities and credit strategies and for Q, If you see that trend continuing or reverting into the first quarter of 2025.
Speaker Change: So on the sale of Atlas the Oh, what's the cyclical press release, you mentioned that.
Speaker Change: The sale would be completed in one Q, although the transaction was signed and in the last quarter of 2024. So just wanted to understand if.
Beatrice: Thank you.
Beatrice: Thank you <unk>.
Beatrice: Please <unk>. Thank you very much for your question.
Speaker Change: Should expect something or an additional distribution on perry or or if all of the distribution happened in for Q. Also if you have any visibility regarding our their exit strategies of infra fund three anything or able to comment on that would be really helpful.
Beatrice: This is Alex here and nice to talk to you again.
On a PRA and then the.
Speaker Change: Redemption on PRA I think we we did sign the deal late 2024.
All the conditions precedent to the deal as of today have already been completed.
Speaker Change: A second question would be on the redemption on public equities and credit strategies and for Q. If you see that trend continuing are reverting into the first quarter of 2025.
Speaker Change: So the closing of the deal actually happened last week.
Speaker Change: So that just basically done.
Speaker Change: Of course noise no disease.
Speaker Change: <unk>. This is not kind of a normal process now you sign and then there are conditions precedent that includes several regulatory bodies antitrust.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: Thank you Beatrice.
Speaker Change: <unk>. Thank you very much for your question.
Speaker Change: We have other regulatory condition.
Speaker Change: Conditions precedent social perhaps.
Speaker Change: This is Alex here and nice to talk to you again.
Speaker Change: To do this particular deal but again.
Speaker Change: On a PRA and then the residential and CRE I think we we did sign the deal late 'twenty 'twenty four.
Speaker Change: All the conditions precedent precedents were completed and resolved by last week, so that your schools.
Speaker Change: Yes, it did generate approximately $60 million of performance fees.
Speaker Change: All the conditions precedent to the deal as of today have already been completed.
Speaker Change: $40 million approximately $40 million.
Speaker Change: So the closing of the deal actually happened last week.
Speaker Change: I wanted for the general partner and $20 million bonus.
Speaker Change: So just basically done.
Speaker Change: Of course noise no disease.
Speaker Change: We do break down the performance fees in 35% goes to the team so 35% of $60 million approximately $20 million that's paid out to the team. So we do not account for that or not it does not run through our P&L, who speak directly to the team.
Speaker Change: <unk>. This is not kind of a normal process now you sign them.
Speaker Change: There are conditions precedent.
Speaker Change: <unk> several all regulatory bodies antitrust.
Speaker Change: We have other regulatory conditions.
Speaker Change: Conditions precedent, social perhaps up to do this particular deal but again.
Speaker Change: And $40 million, we account is not performance fees, approximately $40 million, which is 65% or $60 million.
Speaker Change: All the conditions precedent precedents were completed and resolved by last week, so the deal with schools.
Speaker Change: All accounted for in the fourth quarter because the deal was.
Speaker Change: Yes, it did generate approximately $60 million of performance fees.
Speaker Change: Finally in the fourth quarter than the bi accounting procedures and measures we have to accomplish in the fourth quarter.
Speaker Change: $40 million approximately $40 million.
Speaker Change: Just as a general comment.
Speaker Change: <unk> for the general partner and $20 million bonus.
Speaker Change: I feel comfortable.
Speaker Change: We are on target there with the guidelines that we gave in our lab.
Speaker Change: We do break down the performance fees in 35% goes to the team so 35% of $60 million approximately $20 million that's paid out to the team. So we do not account for that.
Speaker Change: <unk> December December 9th of 'twenty 'twenty four.
Speaker Change: The $120 million to $140 million of performance.
Speaker Change: Performance fees over the next three years, so that's not.
Speaker Change: It does not run through our P&L, let's be directed to the team.
Speaker Change: That is already accounting for that or if you go back to <unk>.
Speaker Change: And $40 million, we account is not performance fees of approximately 40 million, which is 65% and $60 million.
Speaker Change: <unk> 2000, $20 million to $180 million for the 'twenty 'twenty four 'twenty three moderately five period, if you sum.
Speaker Change: All accounted for in the fourth quarter because the deal was.
Speaker Change: Finally in the fourth quarter, then the body.
Speaker Change: You already have.
Speaker Change: Since the 22022 proxy to today's 100 sand more or less so another 70 to go for the 180, which is the guidance that we gave you 22 or the guidance that we're giving now in the 120 to $1 40 for the next few years. So I think we're going to be able to reach.
Speaker Change: Procedures and measures we have to accomplish in the fourth quarter.
Speaker Change: Just as a general comment.
Speaker Change: I feel comfortable with it.
Speaker Change: We are on target there would be <unk>.
Speaker Change: Guidelines that we gave.
Speaker Change: Last black sea.
Speaker Change: Any kind of guidance that you set you'll see ships.
Speaker Change: And some of our ninth of 'twenty 'twenty four.
Speaker Change: The $120 million to $140 million so far.
Speaker Change: <unk> going on.
Speaker Change: On your question on other divestments, yes of infrastructure fund III that you asked.
Speaker Change: Performance fees over the next three years so that's.
Speaker Change: Already accounting for that or if you go back to <unk>.
Speaker Change: He asked of several other assets that we are pursuing exits yes, we have.
Speaker Change: <unk> 2000, $20 million to $180 million for the 'twenty 'twenty four 'twenty three 'twenty four 'twenty five period, if you sum.
Speaker Change: We are an infrastructure fund III is still several very interesting assets like a thermal power plants.
Speaker Change: Already huh.
Speaker Change: We did construct that's together with Mitsubishi and shell.
Speaker Change: Since the 22022 proxy to today's 100 sand more or less so.
Speaker Change: Sorry.
Speaker Change: 70 to go for the 180, which is the guidance that we gave you the 22 or the guidance that we're giving now in the 120 to $1 40 for the next few years. So I think we're going to be able to reach.
Speaker Change: In operation.
Speaker Change: So which is not the first.
Speaker Change: Thermal plant in Brazil that uses the gas from the pre sold oil exploration.
Speaker Change: Any kind of guidance that you set you'll see ships.
Speaker Change: As energy.
Speaker Change: We also have toll roads in that fund we also have.
Speaker Change: <unk> going on.
Speaker Change: On your question on other divestments, yes of infrastructure funds III that you asked.
Speaker Change: A participation.
Speaker Change: In a parking lot business that we sold to indigo the French company.
Speaker Change: Yes, there are several other assets that we are pursuing exits yes, we have.
Speaker Change: All of these companies.
Speaker Change: Are in discussions for realizations. So we continue to see.
Speaker Change: We are an infrastructure from fleet is still several very interesting assets like a thermal power plants.
Speaker Change: A good momentum of realizations for infrastructure funds, which was your question and also for other assets as well in other funds of the portfolio, but specific to infrastructure fund suite that you asked yes.
Speaker Change: We did construct.
Speaker Change: With Mitsubishi and shell.
Speaker Change: Hey.
In operation.
Speaker Change: Because it is already in the <unk> zone.
Speaker Change: So which is not the first.
Speaker Change: Which is the most obvious ones that will generate performance fees for 2025.
Speaker Change: Thermal plant in Brazil that uses the gas from the pre sold oil exploration.
Speaker Change: On the redemption I think we have no specific bse. Besides if I understand your question, we saw a residential for our high yield credit fund.
Speaker Change: As energy.
Speaker Change: We also have toll roads in that fund we also house.
A participation.
Speaker Change: Yeah.
Speaker Change: In the parking lot business that we sold to indigo the French company.
Speaker Change: Sure.
Speaker Change: Late 2024, but that was already.
Speaker Change: And all of these companies.
Speaker Change: We invested or committed early 2025 was basically is the SMA. The MC the mechanic of this SME that once we have.
Speaker Change: Are in discussions for realizations.
Speaker Change: We continue to see.
Speaker Change: A good momentum of realizations for infrastructure company, which was your question and also for other assets as well.
Speaker Change: Realizations in this SMA this is a credit.
Speaker Change: Their funds of the portfolio, but specific to infrastructure from three that you asked yes.
Speaker Change: Strategy SMA with an.
Speaker Change: Excellent.
Speaker Change: Because it is already in the <unk> zone.
Speaker Change: Quasi sovereign.
Speaker Change: Funds.
Speaker Change: Which is the most obvious ones that will generate performance fees for 2025.
Speaker Change: In North America, and the mechanics is that once we have realizations, we have to give the money back to the Investor and then this investor.
Speaker Change: On the redemption I think we'd know specifically I think I understand your question, we saw a redemption for our high yield credit funds.
Speaker Change: To recommit.
Speaker Change: And which this investor did early 25, so it was more of the.
Speaker Change: And.
Speaker Change: Movements that has to do with this particular our clients in this particular SME in the way that the SME was constructed.
Speaker Change: Late 2024, but that was already.
Speaker Change: We invested or committed early 2025 was basically is the SMA with the mic.
Speaker Change: It's a north American quasi sovereign funds.
Speaker Change: The mechanics of the SMA either once we have.
Speaker Change: The best with Us for.
Speaker Change: More than 20 years.
Speaker Change: Our realizations in this SMA this is a credit fund.
Speaker Change: We have the sesame was with them for more than 10 15 years.
Speaker Change: Strategy SMA with an.
Speaker Change: And you will see that.
Excellent.
Speaker Change: Quasi sovereign.
Speaker Change: Once we do post the first quarter results for 2025 that this these resources were already reinvested back in the credit strategy. Okay.
Speaker Change: <unk>.
Speaker Change: In North America, and the mechanics is that once we have realizations, we have to give some money back to the investor and then this investor.
Speaker Change: We are actually the redemptions for our credit strategies.
Speaker Change: To recommit.
Speaker Change: And which this investor did early 25, so it was more of the.
Speaker Change: 25, we're in a very very small compared to the size of the funds.
Speaker Change: Movements that has to do with this particular clients in this particular SME in the way that the <unk> was constructed.
Speaker Change: Going back to 2022, we had the redemptions that were basically driven from.
Speaker Change: Because of the Chilean pension funds the issues that we have out there that you know because of Covid and then in 'twenty three redemption start diminishing any 2024, there were basically insignificant for the size of this one.
Speaker Change: North American plasma sovereign funds.
The best with Us for.
Speaker Change: More than 20 years.
Speaker Change: We have this SME with them for more than 10 15 years.
And we foresee that in 2025, that's going to continue to be the same small redemptions for the credit strategies.
Speaker Change: And you will see them.
Speaker Change: Once we do post the first quarter results for 2025 that this these resources were already reinvested back in the credit strategy. Okay.
Speaker Change: With net with a positive net new money flows.
Speaker Change: Those strategies okay.
Speaker Change: Hopefully I answered your questions that.
Speaker Change: We are actually the redemptions for our credit strategies.
That was very clear thank you Alex Thank you.
Speaker Change: <unk> thousand 25, we're very very small compared to the size of the funds.
Alex: Thank you.
Speaker Change: And our next question comes from William Aaron yard with Ito BBA. Your line is open.
Speaker Change: Going back to 2022, we had the redemptions that were basically driven from.
Speaker Change: The Chilean pension funds the issues that we have out there, but you know because of Covid and then in 2023 redemption start diminishing.
Speaker Change: Thank you everyone for your time I have two questions here.
Speaker Change: First one is more related to the fund raising figure expected for 2025.
Speaker Change: And in 2024, there were basically insignificant for the size of the fund and we foresee that in 2025, that's going to continue to be the same.
Speaker Change: But we can release is around $6 billion.
Speaker Change: If you could give us a little bit more color on how you expect the breakdown of it by the strategies.
Speaker Change: Small redemptions for the credit strategies.
Speaker Change: With net with a positive net new money flows.
Speaker Change: And my second question is on the debt figure you disclosed so not that far off.
Speaker Change: Those strategies okay.
Speaker Change: Hopefully I answered your questions that was very clear. Thank you Alex Thank you.
Speaker Change: 100, and 190 million and USD I just wanted to check if the indication given from you during the Investor day.
Speaker Change: Thank you.
Speaker Change: Our next question comes from William Aaron yard with <unk> BBA.
Speaker Change: All of that.
Speaker Change: So far our main change so if it is maintained it's okay. If I you should expect.
Speaker Change: Your line is open.
William Aaron: Thank you everyone for your time I have two questions here the.
Speaker Change: Parents grass that's levels to be maintained throughout.
William Aaron: The first one is more related to the fund raising figure expected for 2025.
Speaker Change: <unk> 2027.
Speaker Change: Yes.
William Aaron: Which in a religious around $6 billion.
Speaker Change: Yes.
Speaker Change: Thank you very much William <unk> nice to talk to you as well thanks for your questions.
William Aaron: If you could give us a little bit more color on how you expect the breakdown of it by the strategies.
Speaker Change: I'll try to answer the fundraising question, then I'll turn it over to one on the <unk>.
William Aaron: And my second question is on the debt figure you disclosed so not that Ah ha.
Speaker Change: On the net debt.
Speaker Change: We are we'd like to John gives us the flexibility on the on the $6 billion fund raising targets.
William Aaron: 190 million and USD just wanted to check is the indication gives them from you during the Investor day.
Speaker Change: It's it's very hard to pinpoint exactly of course, we have.
William Aaron: Hum.
William Aaron: For our main change so if it is maintained it's okay. You feel you should expect the current gross that's levels to be maintained throughout <unk>.
Speaker Change: Now you see a very very well organised.
Speaker Change: Not planning for the whole year of 2025 and 26 onwards.
Speaker Change: Per asset class, so perhaps in the facilities at 38 different strategies within these.
William Aaron: <unk> 2027.
Speaker Change: Uh huh asset classes six asset classes that we have.
Yes.
Speaker Change: Thank you very much William <unk> nice to talk to you as well thanks for your questions.
Speaker Change: And our channel or geography.
Speaker Change: Really well.
William Aaron: I'll try to answer the fund raising question, then I'll turn it over to Anna.
Speaker Change: Well done and organized by the commercial team that.
Speaker Change: The question on the net debt.
Speaker Change: Is headed by Danielle So Regina my partner.
Speaker Change: We are we would like to give us the flexibility on the on the $6 billion fund raising.
Speaker Change: But we don't give out the breakdown of the 6 billion because we'd like to keep this flexibility and maybe raise more here maybe no. It goes on.
Speaker Change: Got.
Speaker Change: It's very hard to pinpoint exactly of course, we have.
Speaker Change: In SMA.
Speaker Change: Sami there chunky right normally SMA as our $500 million plus it's.
Speaker Change: May be a very very well organised.
Speaker Change: Not planning for the whole year of 2025 and $4 six onwards.
Speaker Change: So a billion dollar to a bit on the other half dollar. So these chunks of SMA is going to close in the SMA for specific strategy that can change the mix.
Speaker Change: Per asset class. So we have the facilities of 38 different strategies with entities.
Speaker Change:
Speaker Change: Asset classes six asset classes that we have.
Speaker Change: As we as we move forward during 2025.
Speaker Change: The four channels or geographies.
Speaker Change: However, as we see things during the year as we mentioned we did raise.
Speaker Change: Really well.
Speaker Change: Well organized.
Speaker Change: Organized by the commercial team that.
Speaker Change: Around $535 4 billion for 2000 $25 million to $100 million of those work.
Speaker Change: Is headed by Danielle So Regina my partner.
Speaker Change: But we don't give out the breakdown of the 6 billion because we'd like to keep this flexibility and maybe raise more here maybe nobody goes on.
Speaker Change: Oh placement agents related to the fund raising which does not add to our theories that AUM base.
Speaker Change: Just receive a fee. So we have to go from 5.2 billion five to six so it is of.
Speaker Change: On an SMA.
Speaker Change: Semi there chunky right normally SMA as our $500 million plus.
Speaker Change: Of course, they jumped but no given what we have been doing and growing disability of fund raising it more products more strategies more geography over time, we feel comfortable that we're going to get there.
Speaker Change: Billion dollar she'll be done on a half dollar. So these chunks of SMA controls.
Speaker Change: SMA for specific strategy that can change the mix.
Speaker Change: Uh huh.
Speaker Change: No.
Speaker Change: As we as we move forward during 2025.
Speaker Change: Right.
Speaker Change: Having said that.
Speaker Change: However, as we see things during the year as we mentioned we did raise.
What I can say is as I look into.
Speaker Change: 2025 at least.
Speaker Change: Around 535.
Within the Latin American region.
Speaker Change: $5 4 billion.
Speaker Change: 2025 to 100 million of those work.
Speaker Change: And then going to Brazil specifics and then I'll talk about the other countries given the high interest rates in Brazil still for 2025, we're probably going to see more appetite for credit related strategies and infrastructure related strategy because of the inflation protection that you have for the infrastructure for our infra.
Speaker Change: Placement agents related to fundraising.
<unk> adds to our fee earnings AUM base.
Speaker Change: We just receive a fee. So we have to go from $5 2 billion.
Speaker Change: Two six.
Speaker Change: It is.
Speaker Change: Of course, they jumped but given what we have been doing and growing disability of fundraising and more products more strategies more geography over time, we feel comfortable that we're going to get there.
Speaker Change: Structure strategies versus equities related strategies.
Speaker Change: Number one also weird.
Speaker Change: We also see.
Speaker Change: Now five.
Speaker Change: Other countries in Latin America.
Speaker Change: Having said that.
Speaker Change: Chile because of already.
Speaker Change: What I can say is as I look into.
Speaker Change: No the low inflation and low interest rates environment in Chile.
Speaker Change: 2025 at least.
Speaker Change: Within the Latin American region.
Speaker Change: Heading down.
Speaker Change: We see a turn in Chile already for.
Speaker Change: Going to Brazil specifics and then I'll talk about the other countries given the high interest rates in Brazil still for 2025, we'll probably going to see more appetite for credit related strategies and infrastructure related strategy because of the inflation protection that you have for the infrastructure for our.
Speaker Change: For equity related strategies as investors want to position themselves.
Speaker Change: Before the market actually starts moving up again.
Speaker Change: So these are no. So it's country by country I'm going to give you a general color as we move out of Latam.
Speaker Change: We still see a.
Speaker Change: Infrastructure strategies versus equities related strategies.
Speaker Change: A very.
Speaker Change: Intense interest in our <unk> strategies.
Speaker Change: Number one also.
We also see.
Speaker Change: Interest rates in the U S continues continues to be high and you know not every few thereabout.
Speaker Change: In other countries in Latin America in Chile, because already D.
Speaker Change: The general view.
Speaker Change: No the low inflation and low interest rates environment in Chile.
Speaker Change: U S interest rates with us and all of these.
Speaker Change: Do we see a turn in Chile already.
Speaker Change: Divestments or for the private equity funds and generally the U S.
Speaker Change: For equity related strategies as investors want to position themselves.
Speaker Change: Continues to be.
Speaker Change: Smaller than the vessels expect so the general partners and limited partners look for deals.
Speaker Change: Before the market actually starts moving up again.
Speaker Change: So these are no. So it's country by country I'm going to give you a general color as we move out of Lockdown.
Speaker Change: Deals in the secondary market, which benefits our GP strategies.
Speaker Change: In the U S and in Europe.
Speaker Change: We still see a.
Speaker Change: So I see no outside of Latam GPS.
Speaker Change: A very.
Speaker Change: <unk>.
Speaker Change: People will benefit from this macroeconomic situations and in Latin America, it's country by country.
Speaker Change: Intense interest in our GP strategies.
Speaker Change: Interest rates in the U S continues continues to be high and you know not every few thereabout.
Speaker Change: <unk> I think it's.
Speaker Change: We like to keep the flexibility.
Speaker Change: And not give a specific.
The general view.
Speaker Change: Specific breakdown on the $6 billion fundraising.
Speaker Change: On the U S interest rates.
Speaker Change: With us in all of these.
Speaker Change: I'll turn to now on the net debt.
Speaker Change: Divestments or for the private equity funds and generally the U S.
Speaker Change: Okay.
Speaker Change: Hi.
Speaker Change: This would be.
Speaker Change: Yeah.
Speaker Change: Uh huh.
Speaker Change: Our.
Smaller than the vessels expect so the general partners and limited partners look for deals.
Speaker Change: Net debt.
Speaker Change: 190, Dan mentioned in the call it in line.
Speaker Change: Deals in the secondary market, which benefits our GP strategies.
Speaker Change: Our expectation I think if you remember when we discuss our earnings call. The last time you called in Q3. This is Glenn.
Speaker Change: In the U S and in Europe.
Speaker Change: So I see no outside of Latam GPS.
Speaker Change: Station and this net debt is in fact, our funding.
Speaker Change: Well I think we will benefit from this macroeconomic situations and in Latin America, it's country by country.
Speaker Change: That said by our M&A team in <unk> and.
Speaker Change: And also the year end.
Speaker Change: <unk> I think it's.
Speaker Change: On litigation that we have.
Speaker Change: We like to keep the flexibility.
Speaker Change: So this was something that we expected to and it was in line with our expectations.
Speaker Change: And not give a.
Speaker Change: Specific breakdown on the $6 billion fundraising.
Speaker Change: When we look going forward.
Speaker Change: I'll turn to now on the net debt.
Speaker Change: We look into two things first is we have a likely reduction in the first half for the year, which as it progressed as first quarter and in the second quarter, but a more I would say.
Speaker Change: Okay.
Speaker Change: Hi.
Speaker Change: Arnie.
Speaker Change: Our.
Speaker Change: Net debt.
Speaker Change: 190 been mentioned in the call it in line.
Speaker Change: Our expectation I think if you remember when we discuss our earnings call. The last time you closed in Q3. This is what our expectation and this net debt is in fact a bit our funding.
Speaker Change: I mean, a higher reduction second half of the year, but our debt to a F. F. Our innovation is expected as we discussed in the past.
Speaker Change: That said by our M&A payments and also the ear and.
Speaker Change: Can be a likely below our one.
Speaker Change: What litigations that we have.
Speaker Change: One to one debt, so it's going to be likely.
Speaker Change: So this was something that we expected two as it was in line with our expectations.
Speaker Change: It's likely.
Speaker Change: When you look into that and you can look into it.
Speaker Change: When we look going forward.
Speaker Change: A reduction throughout the year as we progressed through our two.
Speaker Change: We look into two things first is we have a likely reduction in the first half of the year, which as it progressed at first quarter end.
Speaker Change: 2025.
Speaker Change: Okay.
Speaker Change: Okay, well thank you.
Speaker Change: Thank you very much fruit.
Speaker Change: In the second quarter, but a more I would say and let you know.
Speaker Change: Please answer thank you William.
William: Thank you.
Speaker Change: A higher reduction second half of the year, but our debt.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone.
Speaker Change: U F F. R E inflation is expected as we discussed in the past.
William: When that is star one to ask a question.
Ricardo: Our next question comes from Ricardo <unk> with BTG Pactual.
Speaker Change: Can be slightly below our one.
Speaker Change: One to one that's always going to be slightly.
William: Line is open.
Ricardo: Good morning, everyone and thank you for your preterm doesn't make the questions I have also true here on my side.
Speaker Change: It's likely that when we look into that and you can look into it.
Speaker Change: A reduction throughout the year as we progress through our.
Ricardo: So first we saw that chaparral patiently farm this year that would add more money for their local pension funds.
Speaker Change: 2025.
Speaker Change: Yeah.
Ricardo: And I imagine that quiet and public equities would be very very benefited with that.
Speaker Change: Okay cool thank you.
Speaker Change: Thank you very much fruit for the complete answer thank you William.
Ricardo: So al why don't you hear a little more on your thoughts on the potential this reform could add in.
Speaker Change: Thank you.
Speaker Change: As a reminder to ask a question. Please press star one one on your telephone.
Ricardo: Talk a little bit about the timing.
Ricardo: How are you expecting a potential impacts of that.
Speaker Change: And that is star one to ask a question.
Ricardo: And also related to the arm I forgot another possibility that we could have is more inflows coming from pension funds at chewy infrastructure and private equity local politics right you mentioned in the call there I will contribute more.
Ricardo: Our next question comes from Ricardo <unk> with BTG Pactual.
Speaker Change: Line is open.
Ricardo: Good morning, everyone and thank you for the preterm doesn't make the questions I have also true here on my side.
Ricardo: Kind of a low code specific products for each region. So I wonder if you guys already kind of are preparing should be able to.
Ricardo: So first we saw that Chiapparone patiently farm this year that would add more money for the local pension funds.
Ricardo: More local Chilean buyback was then infrastructure funds showed another show.
Ricardo: And I imagine that quiet and public equities would be like very very benefited with that.
Keith: Keith This is opportunity and I'm not a team that I wanted to ask.
Ricardo: So al why don't you hear a little more on your thoughts on the potential this reform could add in.
Keith: If you could talk a little bit about your expectations on real estate folks easier right because.
Ricardo: Talk a little bit about the timing.
Ricardo: How are you expecting a potential impacts of that.
Keith: It's an asset class that I believe it's more connected to their funding.
Ricardo: And also related to the arm I forgot another possibility that we could have a more inflows coming from pension funds at chewy infrastructure and private equity local politics right. You mentioned on the call there I will contribute more.
Keith: In Brazil, right and given the tough one quick one on the scenario we are facing it's fair checks back that perhaps will be harder for your children launch Neil.
Keith: New friends are the follow on is easier given the exposure and perhaps most of the growth will come from from other regions in the real estate segment.
Ricardo: Kind of a low code specific products for each region. So I wonder if you guys already kind of are preparing should be able to.
Keith: Thank you.
Keith: Yeah.
Ricardo: Our local GDP and private equity and infrastructure funds showed another show.
Keith: Yes. Thank you. Thanks for the question CCAR, the last nice talking to you as well.
Ricardo: Jesus is opportunity.
Keith: On the starting on the pension fund reforms in Chile, I think it's I'm, taking one step back I think is not only Chile.
Ricardo: And another thing that I wanted to ask.
Ricardo: Is if you could talk a little bit about your expectations on real estate falls easier right because.
Keith: But in general.
Ricardo: It's an asset class that I believe it's more connected to their funding.
Keith: Given the kind of governments that Chile, Colombia, Mexico.
Ricardo: In Brazil, right and given the tough Mark quick one on the scenario we are facing a it's fair checks back that perhaps will be a lot harder for you to launch a new.
Keith: The house recently.
Keith: <unk>.
Keith: These three countries all of these the leaderships to sweep the presidents of these three countries have actually approved reforms to increase their contributions to the pension funds of.
Ricardo: And your friends are the follow on is easier given the exposure, perhaps most of the growth will come from from other regions in the real estate segment.
Keith: Of course, the increase of these contributions comes mostly from the employer.
Speaker Change: Thank you.
Keith: Not the employee.
Ricardo: Yeah.
Keith: But whatever so in Mexico from around 6% to around 12% and <unk> in.
Speaker Change: Yes. Thank you thanks for the questions. He called the last nice talking to you as well.
Keith: In Chile, the same trends of increasing contributions to the pension plans in Colombia are the same.
Speaker Change: On the starting on the pension fund reforms in Chile, I think it's I'm, taking one step back I think he is not only Chile I think in general.
Keith: So.
Actually.
Keith: We here in the bank of America.
Speaker Change: Given the kind of governments that Chile, Colombia, Mexico.
Keith: Conference.
Keith: The Bank of America, Mexican economist did put out a report that the total pool of pension funds managed money.
Speaker Change: The house recently.
Speaker Change: <unk>.
Speaker Change: D C countries all of these key leadership C suite no precedence of these three countries have actually approves reforms to increase the contributions to the pension funds.
Keith: The Mexican pension funds Colombian Peruvian.
Keith: Chilean and Brazilians, which total approximately $700 something billion will basically doubled to $1 five trillion.
Speaker Change: Of course, the increase of these contributions comes mostly from the employer.
Speaker Change: Not the employee.
Keith: In the next five five years because of exactly what he said plus of course and easy appreciation.
Speaker Change: But whatever so in Mexico from around 6% to around 12% in Chile in.
Keith: So and these pension funds they do have the home biased approach to investing plus regulatory restraints and investing outside of the country.
Speaker Change: In Chile, the same trends of increasing contributions to the pension plans in Colombia are the same.
Speaker Change: So.
Speaker Change: Actually.
Speaker Change: We here in the bank of America.
Keith: And in addition in Colombia and in Mexico.
Speaker Change: Conference.
Speaker Change: The Bank of America Mexican economies did put out the reports that the total pool of pension funds managed money Oh.
Keith: Pension funds are also required to invest in.
Assets that promotes.
Keith: The development of the economy, and private equity and infrastructure fits right into those categories. So investing.
Speaker Change: The Mexican pension funds Colombian Peruvian.
Speaker Change: Chilean and Brazilians, which total approximately $700 something billion will basically doubled to $1 five trillion.
Keith: Investing in our funds in Colombia, and in Mexico, private equity and infrastructure funds. They comply with the requirements of the regulation okay.
Speaker Change: In the next five five years because of exactly what he said plus of course MPC appreciation.
Keith: And we're seeing that the the same.
Keith: It might happen in Chile, as well as interesting enough. The same is actually being considered to happen in the UK and the United Kingdom, which the current Labour government is also.
Speaker Change: So.
Speaker Change: And these pension funds they do have the home biased approach to investing plus regulatory restraints and investing outside of the company.
Speaker Change: And in addition in Colombia and in Mexico.
Keith: Proposing a legislation that's UK.
Keith: UK pension funds will have to re invest the percentage.
Speaker Change: Funds are also required to invest in.
Keith: In promoting the local economy, the U K economy.
Speaker Change: Assets that promotes.
Speaker Change: The development of the economy, and private equity and infrastructure fits right into those categories.
Keith: And so our funds as well there in the U K can benefit from that spin.
Keith: Specifically in Chile, Yes, and I think through the strategy and in Colombia, and in Brazil, and as we.
Speaker Change: Investing in our funds in Colombia, and Mexico, private equity and infrastructure funds. They comply with the requirements of the regulation, Okay and we are seeing that's the.
Keith: Moving to Mexico not at this moment, we don't have this strategy implemented in Mexico, we started that developing.
Speaker Change: The same.
Keith: Local products for local investors.
It might happen in Chile, as well as interesting enough. The same is actually being considered to happen in the UK and the United Kingdom, which the current Labour government is also.
Keith: I will tell you about the most recent ones.
Keith: We are not currently.
Keith: Z, a private equity and infrastructure fund in.
Speaker Change: Proposing legislation that's.
Keith: In local Chilean Colombian business for the local Colombian pension funds and we already got the significant commitments from some local Colombian pension funds to this private equity and infrastructure fund.
Speaker Change: UK pension funds will absolutely invest the percentages in promoting the local economy the U K economy.
Speaker Change: And so our funds as well there in the UK can benefit from that spin.
Keith: We did the same in Brazil.
Speaker Change: Specifically in Chile, Yes, and I think that the strategy and in Colombia, and in Brazil, and as we.
Keith: For local institutional investors, mainly pension funds.
Speaker Change: Moving to Mexico not at this moment, we don't have this strategy implemented in Mexico. We started then developing.
Keith: But active infrastructure.
Keith: In Chile for example.
Keith: We mentioned a couple of minutes ago, the Agua specifically divestments, the desalinization plant in Chile divested.
Speaker Change: Local products for local investors.
Speaker Change: I'll tell you about the most recent ones though.
Keith: The investors some piece of this.
Speaker Change: We are not currently.
Keith: The acquires the group of investors that the acquired.
<unk> see a private equity and infrastructure funds in.
Speaker Change: In local Chilean Colombian business for the local Colombian pension funds and we already got the significant commitments from some local Colombian pension funds stood this up a private equity and infrastructure funds.
Keith: Wireless assets one of them was the Chilean pension funds.
Keith: You can see the interest of these pension funds and infrastructure related assets. So for all of our strategies not taking on Doubleclick now be it infrastructure private equity.
Speaker Change: Uh huh.
Speaker Change: We did the same in Brazil.
Speaker Change: Our local institutional investors, mainly pension funds.
Keith: Credits public equities, we are we have and will continue to develop local strategies in credits.
Speaker Change: Private equity and infrastructure.
Speaker Change: In Chile for example.
Keith: And then a question that you asked we do have a local Chilean credit strategy, which is extremely popular with our investors because in the very very good returns we also allowance.
Speaker Change: We mentioned a couple of minutes ago, the Agua, specifically divestments, the desalinization plants in Chile divested.
Speaker Change: The investors some piece of this.
Keith: Now a local Colombian business credit strategy.
Speaker Change: The acquirers the group of investors that acquired this assets one of them was the Chilean pension funds.
Keith: For Colombian investors.
Keith: We have a local.
Keith: Public equity strategy in Chile.
Speaker Change: So you can see the interest of these pension funds and infrastructure, we laid it out so.
Keith: Which is all a renowned few on Aero funds.
Keith: <unk> actually did reach its 30 year anniversary last year.
Speaker Change: So for all of our strategies Northlake Double-quick now be it infrastructure private equity.
Keith: With <unk> being the manager of this and that.
Speaker Change: Credits public equities, we are we have and will continue to develop local strategies in credits.
Speaker Change: Cofounder of Moneda.
Keith: With amazing returns since inception.
Speaker Change: We're also.
Speaker Change: Now as we speak the Brazilian public equity strategy.
Speaker Change: The question that you asked we do have a local Chilean credit strategy, which is extremely popular with our investors because and that's very very good returns. We also allowance.
Speaker Change: The way that we see that our menu of products developing.
Speaker Change: Therefore every asset class, we will have a pan regional dollar denominated strategy.
Speaker Change: Now a local Colombian business credit strategy for Colombian investors.
Speaker Change: We're gonna have a pan regional local currency denominated strategy and we have we're going to have a country by country country by country. As these five countries that I mentioned, that's Mexico, Colombia, Peru, Chile, Brazil, a local to local strategy for the five different asset classes not.
Speaker Change: We have a local.
Speaker Change: Public equity strategy in Chile.
Speaker Change: Which is all a renowned view on the auto funds.
Speaker Change: <unk> actually did reach its 30 year anniversary last year.
Speaker Change: Would probably be the manager of this.
So we have for example in credits a pan regional dollar denominated credit strategy. We also have a pan regional local currency denominated strategy, which invests in these five countries in local currencies and we have a specific Chilean credit strategy specific Colombian credit.
Speaker Change: Cofounder of <unk>.
Speaker Change: With amazing returns since inception.
Speaker Change: We're also.
Speaker Change: Launching as we speak the Brazilian public equity strategy.
Speaker Change: And the way that we see that our manual products developing.
Speaker Change: That for every asset class, we will have a pan regional dollar denominated strategy.
Speaker Change: Credit strategies. So these vessels can actually truths, mostly investors that are outside of lepton.
Speaker Change: We got to have a pan regional local currency denominated strategy and we have we're going to have a country by country country by country as these five countries language.
Speaker Change: Like the Pan regional dollar denominated strategy.
Speaker Change: Is that focuses more on buying dollar denominated securities and the local pension funds because of their homebuyers because of regulatory issues because they like to have assets and liabilities in the same currency they prefer investing locally in the local strategies.
Speaker Change: Mexico, Colombia, Peru, Chile, Brazil, a local to local strategy for the five different asset classes, it's not.
Speaker Change: So we have for example in credits a pan regional dollar denominated credit strategy. We also have a pan regional local currency denominated strategy, which invests in these five countries in local currencies and we have a specific Chilean credit strategy specific Columbia.
Speaker Change: So there's no yeah. This is this is exactly.
Speaker Change: The core of our strategy, we think it's a major differentiating factor of Patria I don't see any other global alternative asset manager being able to do what I just mentioned.
Speaker Change: The boots on the ground as you need to have in these five countries. We have over 80 people in Colombia today, we have over 150 people in Chile today.
Speaker Change: Credit strategies, so the investors can actually truths, mostly investors that are outside of lepton. They.
Speaker Change: They liked the Pan regional dollar denominated strategy Doug.
Speaker Change: Over 200 people in Brazil are they developing these local strategies for these local investors as we develop this.
Speaker Change: Is that focuses more on buying dollar denominated securities and the local pension funds because of their homebuyers because of regulatory issues because they like to know how assets and liabilities in the same currency they prefer investing locally in the local strategy Scott.
Speaker Change: With our brand name and Manila brand name and the Bancolombia JC in Colombia, we're not only reach the institutional channel. We also reach other channels like the multifamily offices.
Speaker Change: No. Yeah. This is this is exactly the.
Speaker Change: The core of our strategy, we think it's a major differentiation factor of Patria I don't see any other global alternative asset manager being able to do what I just mentioned because of the boots on the ground as you need to have in these five countries. We have over 80 people in Colombia today.
Speaker Change: Yeah.
Speaker Change: Single family offices.
Digital platform independent financial advisers et cetera, so going also into retail.
Speaker Change: And mostly the our retail related products are the listed funds in the more liquid strategies because of the nature of.
Speaker Change: Over 150 people in Chile today.
Speaker Change: And the profile of this retail investors.
Speaker Change: We're very excited this is this is core of what we're doing and I think we mentioned during my part of the earnings call script here that's over.
Speaker Change: We have over 200 people in Brazil today developing these local strategies for these local investors.
Speaker Change: As we develop this.
Speaker Change: Our brand name and the only other brand name in the Bancolombia JC in Colombia, we'll not only be reach the institutional channel. We also reach other channels like the multifamily offices.
Speaker Change: 50%.
Speaker Change: Over 70% was raised last year and over 50% of what we raised in the fourth quarter of last year came from local.
Speaker Change: Vessels in these global strategies.
Speaker Change: D a.
Speaker Change: Single family offices.
Speaker Change: As we talk also about the.
Speaker Change: Digital platforms independent financial advisers et cetera, so going also into retail.
Speaker Change: Real estate inflows in Brazil.
Speaker Change: Yes.
Speaker Change: High interest rates do affect CEB inflows for our real estate funds, but I'll break down the <unk>.
Speaker Change: And mostly the our retail related products are the listed funds in the more liquid strategies because of the nature.
Speaker Change: Our real estate funds in two major categories, what we call the bricks and mortar strategies under security strategies right.
Speaker Change: <unk>.
Speaker Change: The profile of this retail investors.
Speaker Change: We're excited is this is core of what we're doing and I think we mentioned during my part of the earnings call script here that's over.
Speaker Change: So we have these two strategies we are market leaders in most of the sub segments of the real estate industry investment trusts industry in Brazil. So as you know this industry in Brazil is segmented by by thesis always have.
Speaker Change: 50% over 70% wasn't raised last year and over 50% of what we raised in the fourth quarter of last year came from local investors in these global strategies.
Speaker Change: A strategy that focuses and corporate offices a strategy to focus on.
Speaker Change: As we talk also about the.
Speaker Change: Logistics assets another.
Speaker Change: Real estate inflows in Brazil.
Speaker Change: Another strategy that focuses in retail.
Speaker Change: Yes, so from a high interest rates do affect.
Speaker Change: That's.
Speaker Change: All real estate of course and strategies that focus has been buying securities and that by the the.
Speaker Change: The inflows for our real estate funds, but I'll break down.
Chris: C R ice, but Chris no.
Speaker Change: Our real estate funds in two major categories, what we call the bricks and mortar strategies and the security strategy right.
Chris: That strategy I think what's going to be very successful this year.
Chris: Because.
Chris: As other strategies Mike.
Speaker Change: So we have these two strategies we are market leaders in most of the sub segments of the real estate industry investment Trust industry in Brazil. So as you know this industry in Brazil segmented by by thesis always have.
Chris: My suffered because of the high interest rates.
Speaker Change: On the contrary.
Speaker Change: The security strategies do benefit from that and as we see demand for those strategies in our funds have been performing very well where their market value.
Speaker Change: A strategy that focuses in corporate office as a strategy to focus on.
Speaker Change: No very close to two <unk>.
Speaker Change: Sometimes even some of our funds even with a premium to <unk>.
Speaker Change: Logistics assets.
Speaker Change: The strategy of the folks in retail assets.
Speaker Change: So we see no raising money for growth strategy, but yes, I think that the.
Speaker Change: Real estate of course and strategies that focus has been buying securities Bye bye.
Speaker Change: The brick and mortar strategy.
Speaker Change: We will be affected negatively because of the high interest rates in Brazil outside.
Speaker Change: The C R ice cream.
Speaker Change: That strategy I think what's going to be very successful this year.
Speaker Change: Brazil, we have.
Speaker Change: Our real estate strategy in Chile, and in Colombia, and Chile, as I mentioned, no. We see no interest rates coming down so thats the opposite we've seen vessels actually willing to investing in the real estate related strategies to lock in duration unlocking duration.
Speaker Change: Because.
Speaker Change: As other strategies Mike.
Speaker Change: My suffered because of the high interest rates.
Speaker Change: On the contrary.
Speaker Change: The security strategies to benefit from that.
We see demand for those strategies in our funds have been performing very well where their market value.
Speaker Change: In Colombia, not yet so I think you Colombia, the interest rates are coming down, but not as a philosophy that we see coming down in Chile.
Speaker Change: No very close to two <unk>.
Speaker Change: Sometimes even though some of our funds even with a premium too.
Speaker Change: So it depends on the country, depending on the on the strategy that I just mentioned.
Speaker Change: So we see no raising money for those rights, but yes I think.
Speaker Change: The brick and mortar strategy.
Speaker Change: But brick and mortar specifically in Brazil suffers with high interest rates.
Speaker Change: That will be affected negatively because of the high interest rates in Brazil outside.
Speaker Change: I hope I answered your questions. Thank you.
Speaker Change: That's very clear and just a very quick follow up how much of the brick and mortar strategy over the total AUM from the real estate.
Speaker Change: Brazil, we have.
Speaker Change: Our real estate strategy in Chile, and in Colombia, and Chile, as I mentioned, no. We see no interest rates coming down so thats the opposite we've seen vessels actually winning through investing in the real estate related strategies to lock in duration unlocking duration.
Speaker Change: Switching to real estate, Brazil was approximately 23 billion reais.
Speaker Change: Let me, let me I think there is no.
Speaker Change: Other questions coming in.
Speaker Change: I'll come back to you page 17.
Speaker Change: In Colombia, not yet so I think in Colombia, the interest rates are coming down, but not at the velocity that we see coming down in Chile.
Speaker Change: <unk> performance is also giving you the breakdown of the AUR and by type.
Speaker Change: He comes to us it could be investor presentation, Rob has just mentioned in here.
Speaker Change: So it depends on the country, depending on the on the strategy that I just mentioned.
Speaker Change: The investor presentation on page 17, we give.
Speaker Change: But brick and mortar specifically in Brazil suffers with high interest rates.
Speaker Change: All of our real estate investment Trust.
Speaker Change: AUM and fee.
Speaker Change: I hope I answered your questions. Thank you.
Speaker Change: And performance.
Speaker Change: That's very clear and just a very quick follow up how much of the brick and mortar strategy over the total AUM from the real estate.
Speaker Change:
Speaker Change: I will do the math as I answered the other questions here over the call, but I know that the total was approximately <unk> billion Reais will give you the breakdown on a couple of minutes if you don't mind.
Speaker Change: Switching to real estate, Brazil was approximately 23 billion reais.
Speaker Change: Thank you. Thank you very much.
Speaker Change: Let me linear I think Theres no.
Scott: Thank you Scott.
Speaker Change: Yes.
Speaker Change: Other questions coming Dream and I'll come back to you page 17.
Speaker Change: Sure.
Speaker Change: Thank you.
Speaker Change: I'm showing no further questions at this time, but as a reminder, if you'd like to ask a question. Please press star one on your telephone.
Speaker Change: So performance is also giving you the breakdown of the AUR.
Speaker Change: Hi.
Rob: He can practically be investor presentation, Rob has just mentioned in here.
Speaker Change: The investor presentation on page 17, we give.
Alex: I'm showing no further questions at this time I would now like to turn it back to Alex <unk> for closing remarks.
Rob: All of our real estate investment Trust.
Speaker Change: AUM and fee.
Ricardo: Okay, Great and then just as a side note Ricardo just doing the math, though.
Speaker Change: And performance.
Speaker Change: I will do the math as I answered the other questions here over the call, but I know that the total was approximately <unk> billion Reais will give you the breakdown on a couple of minutes if you don't mind.
Ricardo: We reach out to you offline to give you the breakdown of the 23 billion reais of wheat, so how much is brick and mortar or how much is securities.
Ricardo: So there is no thanks for your patience.
Speaker Change: Thank you. Thank you very much.
Thank you.
Ricardo: Now coming back to the open until the closing remarks again.
Yes.
Speaker Change: Thank you.
Ricardo: So very very now.
Speaker Change: I'm showing no further questions at this time, but as a reminder, if you'd like to ask a question. Please press star one on your telephone.
Ricardo: I am pleased and extremely no.
Ricardo: 100.
And happy with the team, though and at the end of the day, we managed to reach these results.
Ricardo: No no again the guidance.
Ricardo: Reaching the target of $170 million of fee earnings AUM and distributable earnings of $189 million.
Alex: I'm showing no further questions at this time I would now like to turn it back to Alex <unk> for closing remarks.
Ricardo: With performance fees of $40 million, plus et cetera, an extremely good year for <unk> 'twenty 'twenty four for us.
Ricardo: Okay, Great and just as a side note Ricardo just doing the math.
Ricardo: Really happy knowing that we are a people business.
Ricardo: We reach out to you offline to give you the breakdown of the 23 billion reais of weeks. So how much is brick and mortar or how much is securities.
Ricardo: No I hear no equity.
Ricardo: I really want to congratulate the huge effort that was done.
So thanks for your patience.
Ricardo: <unk>.
Ricardo: Now coming back to the open until the closing remarks again with <unk>.
Ricardo: In environments that are sometimes we're not very pro.
Ricardo: Very very well.
Ricardo: I am pleased and extremely or no.
Ricardo: Business that we faced.
Ricardo: Globally geopolitical issues whatever it around the world and is now going into 2025, we're very excited we had a good January already.
Ricardo: <unk>.
Ricardo: And happy with the team, though at the end of the day, we managed to reach these results.
Speaker Change: No no again the guidance.
Speaker Change: Reaching the target of 170 million adults with reorganization, Guam and distributable earnings.
Ricardo: Looking into the year.
Ricardo: As I mentioned I think we feel very comfortable in reaching the $6 billion, even though our fund raising targets.
Speaker Change: <unk> hundred $89 million.
Speaker Change: With performance fees of $40 million, plus et cetera, an extremely good year for <unk> 'twenty 'twenty four for us.
Ricardo: Also we are we see that.
Ricardo: We will.
Ricardo: To deliver on the $200 million to $125 million FRE and also.
Speaker Change: Really happy you know we are a people business.
Speaker Change: No no.
Ricardo: With good perspective of generating additional performance fees with the sale.
Speaker Change: I really want to congratulate the huge effort that was done.
Ricardo: Several of our assets our funds to do generally carry excited here and thanks for your patience. Thanks for.
Speaker Change: <unk>.
Speaker Change: In environments that are sometimes.
Speaker Change: Sometimes we're not very pro.
Ricardo: With me up with US here for this call I hope to see you presents Lee.
Speaker Change: The business that we faced.
Speaker Change: Globally geopolitical issues whatever it around the world and as well going into 2025, we're very excited we had a good January already.
Ricardo: In this in this conference here or shortly as we visit you at your mature offices. Thanks. Thanks, a lot and talk to you guys. Soon bye bye.
Speaker Change: Looking into the year.
Speaker Change: As I mentioned I think we would feel very comfortable and reaches a $6 billion of note. Our fund raising targets are also we are we.
Ricardo: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: We see that.
Speaker Change: We will.
Speaker Change: To deliver on the $200 million to $125 million FRE and also.
Speaker Change: With good perspective of generating additional performance fees with the seal.
Speaker Change: Several of our assets our funds are generally carry excited here and thanks for your patience. Thanks for keeping up with US here for this call I hope to see you presents really.
Speaker Change: In this in this conference here or in a in a shortly as we visit you. What's your what's your offices. Thank you. Thanks, a lot and talk to you guys. Soon bye bye.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].