Q1 2025 Patria Investments Ltd Earnings Call

Unknown Executive: Good day and thank you for standing by.

Good day and thank you for standing by welcome to attach rates first quarter 2025 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need a press star one one on your telephone you will then hear an automated message.

Unknown Executive: Welcome to Patria's first quarter 2025 earnings conference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

Unknown Executive: To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again.

New your hand is raised to withdraw your question. Please press star one again.

Unknown Executive: Please be advised that today's conference is being recorded.

Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Rob Lee head of Investor Relations. Please go ahead Sir.

Rob Lee: I would now like to hand the conference over to your speaker today, Rob Lee, Head of Investor Relations. Please go ahead, sir. Thank you.

Speaker Change: Thank you good morning, everyone and welcome to the Park. She is first quarter 2025 earnings call speaking today on the call are our Chief Executive Officer, Alex site, and our Chief Financial Officer on our routes and our Chief Economist Luis Fernando Lopes for the Q&A session.

Rob Lee: Good morning, everyone. Welcome to Patria's first quarter 2025 earnings call. Speaking today on the call are our Chief Executive Officer, Alex Saigh, and our Chief Financial Officer, Ana Russo, and our Chief Economist, Luis Fernando Lopes, for the Q&A session.

Rob Lee: 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, or on form 6K filed with the Securities and Exchange Commission. This call is being webcast and a replay will be available.

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 web site or on form 6K filed with the Securities and Exchange Commission.

Speaker Change: Call is being webcast and a replay will be available.

Rob Lee: 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 Patria 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: Before we begin I'd like to remind everyone that today's call may include forward looking statements, which are uncertain.

Speaker Change: We're 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.

Rob Lee: 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 fund.

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 fund.

Rob Lee: As a foreign private issuer, Patria reports financial results using International Financial Reporting Standards, or IFRS, as opposed to US GAAP. Additionally, we would like to remind everyone that we will refer to certain non-IFRS measures, which we believe are relevant in assessing the financial performance of the business, but which should not be considered in isolation from, or as a substitute for, measures prepared in accordance with IFRS. Reconciliations of these measures to the most comparable IFRS measures are included in our earnings presentation.

Speaker Change: As a foreign private issuer part shared reports financial results using international financial reporting standards or Ifr S. As opposed to U S. GAAP. Additionally, we would like to remind everyone that we will refer to certain non I FRS measures, which we believe.

Speaker Change: We've are relevant in assessing the financial performance of the business.

Speaker Change: Which should not be considered in isolation from or as a substitute for measures prepared in accordance with ifr Ias reconciliations of these measures to the most comparable <unk> measures are included in our earnings presentation now I will turn the call over to al.

Alex Saigh: Now, I will turn the call over to Alex. Alex? Thank you, Rob, and good morning, everyone. 2025 is off to a very exciting start. Fundraising totaled a record $3.2 billion, highlighting the expanded reach of our investment platforms and distribution capabilities. and putting us well on the way to achieving our $6 billion fundraising target for the year. This record fundraising benefited from the signing of several large customized investment accounts and SMAs, Special Managed Accounts.

Speaker Change: Alex.

Alex Site: Thank you Rob.

Speaker Change: And good morning, everyone.

Speaker Change: 2025 is off to a very exciting start.

Speaker Change: As fund raising totaled a record $3 2 billion highlighting the expanded reach of our investment platforms and distribution capabilities.

Speaker Change: And putting us well on the way to achieving our $6 billion fund raising targets for the year.

Speaker Change: This record fund raising benefited from the signing of several large customized investment accounts in Sma's special managed accounts.

Alex Saigh: emblematic of how we evolved from a product centric asset manager to becoming a solutions provider to for our investors. We also reported first quarter 25 fee-related earnings, or FREs. of $42.6 million or $0.27 per share. representing 21% and 16% year-over-year growth, respectively, despite rising global uncertainty. Fee-earning AUM grew 6% sequentially and 46% year over year. Most notably, we generated over 700 million dollars of organic net inflows into fee-earning AUM in the first quarter 25. reflecting an annualized organic growth rate of over 8.6%. This is an important key P.I. to monitor over time as it highlights our ability to drive organic revenue and earnings growth independent of M&A and investment return.

Speaker Change: But magic.

Speaker Change: How we evolve from a product centric asset manager to becoming a solutions provider for our investors.

Speaker Change: We also reported <unk>.

Speaker Change: First quarter 'twenty five fee related earnings or F. R E.

Speaker Change: Of $42 $6 million or 27 cents per share.

Speaker Change: Representing 21% and 16% yes.

Speaker Change: Year over year growth respectively.

Despite rising global uncertainty.

Speaker Change: Fee, earning AUM grew 6% sequentially.

Speaker Change: 46% year over year.

Speaker Change: Most notably we generated over $700 million.

Speaker Change: Organic net inflows into fee, earning AUM in.

Speaker Change: In the first quarter 'twenty five.

Speaker Change: Reflecting an annualized organic growth rates of over eight 6%.

This is an important PPI.

Speaker Change: Monitor over time.

Speaker Change: As it highlights our ability to drive organic revenue and earnings growth independent of M&A and investment returns.

Alex Saigh: As we highlighted at our recent Investor Day on December 9th. our increased diversification. and the expansion of our investment and product capability. is paying off in the form of robust fundraising and profitable net organic growth. In addition, C-earning AUM growth and management C-revenue. benefit from the over 60% proportion of our assets which earn fees based on net asset value and or market value. compared to below 10% at the time of our IPO. and which provides the opportunity for long-term compounding.

Speaker Change: As we highlighted at our recent Investor day on December nine.

Speaker Change: Our increased diversification.

Speaker Change: And the expansion of our investments and product capabilities.

Speaker Change: The spin off in the form of robust fundraising and profitable net organic growth.

Speaker Change: In addition.

Speaker Change: Ernie AUM growth and management fee revenues benefits from the over 60% proportion of our assets, which earned fees based on net asset value.

Speaker Change: Or market value.

Speaker Change: Compared to below 10% at the time of our IPO.

Speaker Change: And which provides the opportunity for long term compounding.

Alex Saigh: All of the above reinforces our confidence in the three-year targets we introduced at the event.

Speaker Change: All of the above reinforces our confidence in the three year targets.

Speaker Change: Introduced at the events.

Alex Saigh: Now, let me quickly summarize our first quarter results before we move on to some of the other highlights for the quarter. First, as we just noted, F.R.E. per share of 27 cents. The first quarter 25 rose 16% year over year driven by higher management fees. due to higher fee-earning AUM. The sequential decrease of 22% mainly reflects the expected seasonal decline in incentive fees. which totaled 12 million dollars in the fourth quarter 24. Overall, we remain comfortable with our 2025 FRE per share guidance of $1.25 per cent. to $1.50 respectively. at the midpoint of the range, approximately 20% year over year growth.

Speaker Change: Now, let me quickly summarize our first quarter results before we move on to some of the other highlights for the quarter.

Speaker Change: First.

Speaker Change: As we just noted.

Speaker Change: FRE per share of 27.

Speaker Change: The first quarter 'twenty fives.

Speaker Change: Rose, 16% year over year.

Driven by higher management fees.

Speaker Change: Due to higher fee, earning AUM.

Speaker Change: The sequential decrease of 22% mainly reflects the expected seasonal decline in incentive fees.

Speaker Change: Which totaled $12 million in the fourth quarter 'twenty four.

Speaker Change: Overall, we remain comfortable with our 2025 FRE per share guidance.

Speaker Change: A $1 25.

Speaker Change: So $1 50.

Speaker Change: Reflecting.

Speaker Change: At the midpoint of the range approximately 20% year over year growth.

Alex Saigh: We generated $37 million of distributable earnings in the first quarter 25, or $0.23 per share, up 12% year over year. driven by strong FRE growth. Performance-related earnings were the diminished in the quarter. However, the net accrued performance fee balance of $368 million, or $2.33 per share, rose 15% in the quarter, mainly due to the depreciation of the dollar partially offset by declines in publicly listed portfolio companies within private equity. For perspective and notwithstanding changes in the value of the public holdings in our Cary Fund, Underlying business trends at our private equity portfolio companies generally remain positive.

Speaker Change: We generated $37 million of distributable earnings in the first quarter to 25 or 23 cents per share.

Speaker Change: Up 12% year over year.

Speaker Change: Driven by strong FRE growth.

Speaker Change: Performance related earnings where the diminished in the quarter.

Speaker Change: However, the net accrued performance fee balance of $368 million or $2 33 per share.

Speaker Change: Rose, 15% in the quarter mainly.

Speaker Change: Mainly due to the depreciation of the dollar partially offset by declines in publicly listed portfolio companies within private equity.

Speaker Change: For perspective, and notwithstanding changes in the value of the public holdings in our carry funds.

Speaker Change: Underlying business trends at our private equity portfolio companies generally remained positive.

Alex Saigh: In local currency terms, EBITDA at our non-public PE portfolio companies rose approximately 15% on average in 2024, as we focus on resilient sectors of the economy, such as agribusiness, Food and Beverage and Health Care Furthermore, Infrastructure 3, with $53 million of net accrued performance fees, remains in catch-up. And we expect it will be the main source of realized performance-related earnings over the year. Assets under management of $46 billion grew 43% year over year and over 9% sequentially. with a sequential growth driven by the record quarterly fundraising of 3.2 billion dollars and positive impacts from investment returns and effects.

Speaker Change: In local currency terms.

Speaker Change: EBITDA at our nonpublic portfolio companies rose approximately 15% on average in 2024.

Speaker Change: We focus on resilient sectors of the economy, such as agribusiness.

Speaker Change: Food and beverage and healthcare.

Speaker Change: Furthermore, infrastructure three with $53 million of net accrued performance fees remains in ketchup.

Speaker Change: And we expect it will be the main source of realized performance related earnings over the year.

Speaker Change: Assets under management of $46 billion grew 43% year over year and over 9% sequentially.

Speaker Change: With the sequential growth was driven by the record quarterly fund raising of $3 2 billion.

Speaker Change: And positive impacts from investment returns and FX.

Alex Saigh: Moving on, the earning AUM of $35 billion rose a robust 46% year-over-year and 6% sequentially.

Speaker Change: Moving on to <unk>.

Speaker Change: AUM of 35 billion.

Speaker Change: Those are your robust, 46% year over year and 6% sequentially.

Alex Saigh: There are several important things to keep in mind regarding our fee-earning AOM results. There were no acquisitions in the quarter and net organic inflows in the first quarter 25 were above 700 million dollars. representing an 8.6% annualized organic growth. This was our second straight quarter of positive net organic fee-earning AOM growth, and we believe it highlights how our expanded platform is primed to grow organically. Supported by the capabilities we have acquired through our M&A activity, in addition to those we have developed internally. As a result, we have built a better and more resilient business. Fee-earning AUM in the quarter also benefited from continued strong investment returns and a positive effects impact.

Speaker Change: There are several important things to keep in mind regarding our fee, earning AUM results.

Speaker Change: There were no acquisitions in the quarter.

Speaker Change: And net organic inflows in the first quarter 'twenty five.

Speaker Change: Above $700 million.

Speaker Change: Representing an eight 6% annualized organic growth rates.

Speaker Change: This was our second straight quarter of positive net organic fee, earning AUM growth.

Speaker Change: And we believe it highlights how our our expanded platform is primed to grow organically.

Speaker Change: Supported by the capabilities, we have acquired through our M&A activity in.

Speaker Change: In addition to those we have developed internally.

Speaker Change: As a result, we have built a better and more resilient business.

Speaker Change: Fee, earning AUM in the quarter also benefited from continued strong investment returns and a positive FX impact.

Alex Saigh: Keep in mind that, as we highlighted at Investor Day, The FRE impact from soft currency FX volatility is modest given that most of our expense base is denominated in local currency. providing a substantial natural head. We estimate that for every 10% change in soft currency, Our fee-related earnings, in fact, is approximately 2%. Finally, as we highlighted in the earnings presentation, investment performance remains strong, particularly within credit. It is worth keeping in mind that even though many of our strategies are U.S. dollar or hard currency denominated, Local currency returns are increasingly important as, over time, we expect to source more assets from local investors to invest in local strategies.

Speaker Change: Keep in mind that as we highlighted at Investor day.

Speaker Change: FRE impact from soft currency FX volatility is modest given that most of our expense base is denominated in local currency.

Speaker Change: Providing a substantial natural hedge.

Speaker Change: We estimate that for every 10% change in soft currencies, our fee related earnings impact is approximately 2%.

Speaker Change: Finally, as we highlighted in the earnings presentation.

Speaker Change: Investment performance remains strong.

Speaker Change: Particularly within credits.

Speaker Change: It is worth keeping in mind that even.

Even though many of our strategies are U S dollar or hard currency denominated.

Speaker Change: Local currency returns are increasingly important.

Speaker Change: Overtime, we expect to source more assets from local investors to invest in local strategies.

Alex Saigh: Moving on to fundraising, as I noted at the start of my remarks, We are very excited to report that we raised $3.2 billion in the first quarter. of 2025 and $7.4 billion over the last 12 months. both a record for past. The quarter's outstanding results highlight the diversified product offering and distribution capabilities of the platform we have been building. Fundraising included a mix of customized investment accounts, SMA, Special Managed Accounts, and other fund structures, including drawdown funds. Permanent Capital Listed Vehicles and Interval Fund. all spread across a variety of asset classes. As of the end of the first quarter 2025, approximately 20% of our fee-earning AUM were in permanent capital vehicles.

Speaker Change: Moving on to fundraising as I noted at the start of my remarks.

Speaker Change: We are very excited to report that we raised $3 $2 billion in the first quarter.

Speaker Change: Of 2025, and $7 $4 billion over the last 12 months.

Speaker Change: Both a record for Patriot.

Speaker Change: The quarter's outstanding results highlight the diversified product offering and distribution capabilities of the platform we have been building.

Speaker Change: Fund raising included a mix of customized investment accounts SMA special managed accounts.

Speaker Change: Other fund structures include the drawdown funds.

Speaker Change: Permanent capital vehicles and interval funds.

Speaker Change: Oh spread across a verity of asset classes.

Speaker Change: As of the end of the first quarter of 2025.

Speaker Change: <unk>, 20% of our fee, earning AUM were in permanent capital vehicles.

Alex Saigh: the growth of which remains a key long-term objective.

Speaker Change: The growth of which remains a key long term objectives.

Alex Saigh: Drilling down into some of the fundraising highlights for the quarter. We continue to see strong demand from Asian sovereign wealth fund investors. And we closed on approximately $1 billion of commitments from these investors in customized investment accounts and SMAs, Special Managed Accounts, that will be invested in or in conjunction with our current vintage private equity buyout and infrastructure development fund. The quarter amply demonstrated the expertise we have developed in crafting customized solutions for our investors. and we continue to work on additional mandates for these strategies.

Speaker Change: Drilling down into some of the fund raising highlights for the quarter.

Speaker Change: We continue to see strong demand from.

Speaker Change: Asian Sovereign wealth fund investors.

Speaker Change: And we closed on approximately $1 billion of commitments from these investors and customize investment accounts.

Speaker Change: In Sma's special managed accounts that will be invested in.

Speaker Change: In conjunction with our current vintage <unk> buyouts and infrastructure development funds.

Speaker Change: The quarter amply demonstrated.

Speaker Change: The expertise, we have developed and crafting customized solutions for our investors.

Speaker Change: And we continue to work on additional mandates for these strategies.

Alex Saigh: We hope to have more news to share over the coming quarter. within GPMS, we raised over $620 million in a new special managed account. in addition to normal course fundraising in our commingled vehicles and other special managed accounts. We also continue to see significant momentum across our credit platform. led by our flagship U.S. dollar high-yield credit fund. Regarding real estate, while high interest rates in Brazil have impacted demand for many of our listed REITs. We see selected opportunity to raise capital on the floor of the exchange through M&A and consolidation, as well as through credit-oriented REIT strategy.

Speaker Change: We hope to have more news to share over the coming quarters.

Speaker Change: Within GPS.

Speaker Change: We raised over $620 million.

Speaker Change: In a new special managed accounts.

Speaker Change: In addition to normal course fund raising in our co mingled vehicles and other special managed accounts.

Speaker Change: We also continue to see significant momentum across our credit platform.

Speaker Change: Led by our flagship U S dollar high yield credit fund.

Speaker Change: Regarding real estate, while high interest rates in Brazil have impacted demand for many of our listed Reits.

Speaker Change: We see selected opportunities to raise capital on the floor of the exchange through M&A and consolidation as well as through credit oriented REIT strategies.

Alex Saigh: It's important to keep in mind that a significant portion of the capital we raised in the quarter is customized accounts, SMAs, and other products. will flow into Fee Ernie AOM. As capital is deployed, and our current pending C-earning AUM totals about $3.5 billion. Also, we will earn fees on most of the co-investment capital sourced through the customized accounts and SMAs once deployed.

Speaker Change: It's important to keep in mind that a significant portion of the capital we raised in the quarter.

Speaker Change: Customized accounts sma's and other products.

Speaker Change: We will flow into fee, earning AUM.

Speaker Change: As capital is deployed.

Speaker Change: And our current pending fee, earning AUM totals about $3 5 billion.

Speaker Change: Also we will earn fees on most of the co investment capital sourced through the customized accounts in Sma's once deployed.

Alex Saigh: Of course, while we are excited about our robust fundraising this quarter and believe we are comfortably on track to hit our $6 billion target for the year, it is important to note that the first quarter benefited from the closing of several large SMAs . and customized accounts that we have been working on for some time. While we continue to work on other customized solutions across the platform, in addition to our normal fundraising. The timing of when large and complex customized investment contracts will close is very difficult to predict.

Speaker Change: Of course.

Speaker Change: While we are excited about our robust fundraising this quarter and believe we are comfortably on track to hit our $6 billion target for the year.

Speaker Change: It is important to note that the first quarter benefited from the closing of several large sma's.

Speaker Change: And customized accounts that we have been working on for some time.

Speaker Change: While we continue to work on other customized solutions across the platform.

Speaker Change: In addition to our normal fundraising.

Speaker Change: The timing of when large and complex customized investments contracts will close is very difficult to predict.

Alex Saigh: With that, we caution against extrapolating the extraordinary fundraising success in the first quarter across the entire year as a new level of quarterly fundraising.

Speaker Change: With that we caution against extrapolating.

Speaker Change: Extraordinary fund raising success in the first quarter.

Speaker Change: Across the entire year.

Speaker Change: As a new level of quarterly fundraising.

Alex Saigh: Our efforts to diversify our platform and increase the resiliency of our business could not be timelier considering the highlighted global macro uncertainty and increased volatility that has gripped economies and markets around the world since the proposed imposition of widespread tariffs by the U.S. on its trading partners and uncertainty over future trade and economic policy. Against this backdrop, it's important for investors to understand and appreciate how the region in general, and Patria specifically, are positioned in these uncertain times. In a nutshell, while it's possible that increased economic uncertainty and volatility could have a dampening impact on investors willingness to commit capital to new investments in the short run.

Speaker Change: Our efforts to diversify our platform and increase the resiliency of our business could not be timing the year, considering the highlighted global macro uncertainty and increased volatility that has gripped economies and markets around the world.

Speaker Change: Since the proposed imposition of widespread tariffs by the U S on its trading partners and uncertainty over future trade and economic policies.

Speaker Change: Against this backdrop it is important for investors to understand.

Speaker Change: And appreciate how the region in general and Patriot, specifically our position in these uncertain times.

Speaker Change: No Thats shell.

Speaker Change: It's possible that increased economic uncertainty and volatility could have a dampening impact on investors' willingness to commit capital to new investments in the short run.

Alex Saigh: We believe Latin America is becoming a more attractive destination for capital. even as our locally focused and diversified business model enhances our resilience.

Speaker Change: We believe Latin America is becoming a more attractive destination for capital, even as our locally focused and diversified business model enhances our resilience.

Alex Saigh: While much uncertainty remains and the potential for a global recession creates challenges and headwinds, We believe the region and Patria are positioned to weather and indeed possibly thrive in these challenging conditions. Consider that. Save for Mexico, where our current exposure is minimal at below 3% of AUM. The region is less exposed to potential tariffs and initially faced lower effective tariffs than other regions. Long term, however, we believe Mexico remains an attractive potential market for expansion. As the trade war between the U.S., China, and other countries escalates, We believe Latin America as a region is a beneficiary, given the region's low level of geopolitical risk.

Speaker Change: While much uncertainty remains and the potential for a global recession creates challenges and headwinds.

Speaker Change: We believe the region and Patria are positioned to weather and indeed, possibly thrive.

Speaker Change: In these challenging conditions.

Speaker Change: Consider that.

Speaker Change: Save for Mexico, where our current exposure is minimal.

Speaker Change: Low 3% of AUM.

Speaker Change: The region is less exposed to potential tariffs and initially faced lower effective salaries than other regions.

Speaker Change: Long term however, we believe Mexico remains an attractive potential markets for expansion.

Speaker Change: As the trade war between the U S, China and other countries escalates.

Speaker Change: We believe Latin America as the region is the beneficiary.

Speaker Change: Given the reagents low level of geopolitical risk.

Alex Saigh: and export markets that focus on in-demand agricultural products in addition to both hard and soft commodities. with a population of over 650 million people and a combined GDP of over $6.5 trillion. The region also has large and growing internal markets that provide an attractive export destination for trading partners.

Speaker Change: In export markets that focus on in demand agricultural products. In addition to both hard and soft commodities.

Speaker Change: With a population of over 650 million people and they combined GDP of over six five trillion.

Speaker Change: The region also has large and growing internal markets that provide an attractive export destination for trading partners.

Alex Saigh: as evidence of these attributes. China is already Brazil's largest trading partner. and the largest in the region when excluding Mexico. Also, the European Union and the Mercosur, a regional consortium of countries including Brazil and Argentina, recently signed a trade agreement after nearly 20 years of negotiation. spurred on, we believe, by the pending imposition of tariffs and increased uncertainty out of the U.S. The region's relative attractiveness as a destination for investment can also be seen as it captures the growing market share of foreign direct investment, which the United Nations Trade and Development Organization estimates. reached 14.5% in 2023.

Speaker Change: As evidence of these attributes.

Speaker Change: China is already Brazil's largest trading partner.

Speaker Change: And the largest in the region when excluding Mexico.

Speaker Change: Also the European Union and the Merkle sewer.

Speaker Change: Regional consortium of countries, including Brazil, and Argentina.

Speaker Change: Recently signed a trade agreement.

Speaker Change: After nearly 20 years of negotiation.

Speaker Change: Spurred on we believe by the pending in position of tariffs and increased.

Speaker Change: Certainty out of the U S.

Speaker Change: The regions relative attractiveness as a destination for investment can also be seen as it captures the growing market share of foreign direct investments.

Speaker Change: United Nations trade and development organization estimates.

Speaker Change: Reached 14, 5% in 2023.

Alex Saigh: more than three times the four percent in 1990. which represents the beginning of the data series, making Latin America one of the few regions to record a pickup in market share. From Patria's perspective, as investors in the region, with over 36 years with significant boots on the ground resources, we have extensive experience in dealing with and investing through periods of high interest rates, FX, volatility, and economic uncertainty. At the strategy or investment level, our private equity investments are mostly oriented toward domestic consumption markets. not export market. Infrastructure, by its nature, is local, and our GPMS solutions business is focused on the European and, to a lesser extent, US middle market PE secondaries, primaries, and co-investors.

Speaker Change: More than three times, the 4% and $90 90.

Speaker Change: Which represents the beginning of the data series, making Latin America, one of the few regions to record a pickup in market share.

Speaker Change: From <unk> perspective, as investors in the region with over 36 years with significant boots on the ground resources, we have extensive experience in dealing with and investing through periods of high interest rates FX vol.

Speaker Change: And the economic uncertainty.

Speaker Change: The strategy or investment level, our private equity investments are mostly oriented towards domestic consumption markets.

Speaker Change: Export markets.

Speaker Change: Infrastructure by its nature is local.

Speaker Change: Our <unk> solutions business is focused on the European and to a lesser extent U S.

Speaker Change: Middle market, <unk> secondaries primaries and co investments.

Alex Saigh: Direct exposure to export-focused businesses and or investments in the US is minimal. Our position within Latin America as the go-to alternative manager for global investors looking to invest in the region is best evidenced by the customized investment accounts we completed in the first quarter with several Asian sovereign wealth funds. While this interest preceded the recent tariff-induced economic uncertainty, we believe recent trade actions by the U.S. have led to early signs of increased interest from Asian, Middle Eastern, and increasingly European investors in our infrastructure and other strategies, including our European solutions business. as investors seek alternative destinations outside the U.S.

Speaker Change: Direct exposure to export focused businesses and our investments in the U S is minimal.

Speaker Change: Our position within Latin America as the go to alternative manager for global investors looking to invest in the region is best evidenced by the customized investment accounts, we completed in the first quarter.

Speaker Change: With several Asian sovereign wealth funds.

Speaker Change: While this interest preceded the recent tariff induced economic uncertainty.

Speaker Change: We believe recent trade actions by the U S.

Speaker Change: So early signs of increased interest from Asian.

Speaker Change: Middle Eastern and increasingly European investors in our infrastructure and other strategies.

Speaker Change: <unk>, our European solutions business.

Speaker Change: As investors seek alternative destinations outside the U S to deploy capital.

Alex Saigh: to deploy capital and earn returns.

Speaker Change: <unk>.

Alex Saigh: Also... The potential for the denominator effect to once again rear its head. as well as the prospect for lower DPIs in the global PE industry. should also benefit our solutions business. particularly our secondary strategy. Our business is also built to serve local investors. and at the local level. We continue to see early signs of increased allocations to alternatives from local investors and institutions that are both under allocated to alternative strategies. and are often required to invest locally and understandably. have a home country bias in times of economic stress and uncertainty. Local investors in LATAM accounted for approximately 17% of our fundraising in the first quarter of 2015.

Speaker Change: Also.

Speaker Change: The potential for the denominator effect to once again rear its head.

Speaker Change: As well as the prospect for lower DPI and the global <unk> industry.

Speaker Change: Should also benefit our solutions business, particularly our secondary strategies.

Speaker Change: Our business is also built to serve local investors.

Speaker Change: And at the local level.

Speaker Change: We continue to see early signs of increased allocations to alternatives from local investors and institutions that are both under allocated.

Speaker Change: So alternative strategies.

Speaker Change: And are often required to invest locally and understandably.

Speaker Change: Have a home country bias in times of economic stress.

Speaker Change: And uncertainty.

Speaker Change: Local investors in Latam.

Speaker Change: Accounted for approximately 17% of our fund raising in the first quarter 'twenty five.

Alex Saigh: and over 40% in 2024.

Speaker Change: And over 40% in 2024.

Alex Saigh: and we believe the current uncertainty is also supportive of demand for our European solutions business. Last but not least, economically, our fee-earning AUM and management fees are very sticky and highly predictable, as approximately 20% of our fee-earning AUM are in permanent capital vehicles. and approximately 90% in vehicles with no or limited redemption features. At the same time, our FRE has little sensitivity to both currency FX volatility, as we mentioned earlier.

Speaker Change: And we believe the current uncertainty is also supportive of demand for our European solutions business.

Speaker Change: Last but not least economically.

Speaker Change: Our fee, earning AUM and management fees are very sticky and highly predictable.

Speaker Change: Approximately 20% of our fee, earning AUM are in permanent capital vehicles.

Approximately 90% in vehicles with no or limited redemption features.

Speaker Change: At the same time, our fr EE has.

Speaker Change: Has little sensitivity to both currency FX volatility as we mentioned earlier.

Alex Saigh: Pulling this all together, our financial results and strong fundraising provide additional evidence that our strategy to diversify and grow our business both organically and inorganically. while also increasing our resilience is paying off in the form of better organic growth and growing FRH. It's been only four years since our IPO.

Speaker Change: Putting this altogether, our financial results and strong fund raising.

Speaker Change: Provide additional evidence that our strategy to diversify.

Speaker Change: And grow our business, both organically and Inorganically.

Speaker Change: While also increasing our resilience is spinning off in the form of better organic growth and growing FRE.

Speaker Change: It's been only four years since our IPO.

Alex Saigh: But as we highlighted at our Investor Day, which is available on our website. Over that brief period, we have greatly expanded our regional and global investor base and distribution capability. And we have significantly diversified our investment strategies and product offering. In addition to consistently achieving or beating virtually all of the objectives we set for ourselves since the time of our IPO, we believe we are off to a strong start to deliver on the new fundraising, fee-related earnings, and other targets we unveiled at our recent Investor Day.

Speaker Change: But as we highlighted at our Investor day.

Speaker Change: Which is available on our website.

Speaker Change: <unk> reef periods, we have.

Speaker Change: Grizzly expanded our regional and global Investor base and distribution capabilities.

Speaker Change: And we have significantly diversified our investment strategies and product offering.

Speaker Change: In addition to consistently achieving or beating virtually all of the objectives. We've set for ourselves since the time of our IPO.

Speaker Change: We believe we are off to a strong start to deliver on the new fund raising fee related.

Speaker Change: The earnings and other targets, we yields at our recent Investor day.

Ana Russo: Now, let me turn the call over to Ana to review our financial results in more detail. Thank you.

Anna: Now, let me turn the call over to Anna.

Anna: To review our financial results in more detail. Thank you.

Ana Russo: Thank you, Alex, and good morning, everyone. As Alex mentioned, 2025 is off to a very exciting start as expanded reach of our investment platforms and product and distribution capabilities helped us raise $3.2 billion in the first quarter, a quarterly record. Strong results in the quarter increases our confidence that we are on track to achieve our 2025 objectives.

Anna: Thank you Amit and good morning, everyone.

Anna: I'll just mention 2025 is off to a very tightened.

Anna: Alright.

Anna: And distribution capabilities helped us.

Anna: Three 2 billion in the first quarter.

Anna: Ultimately.

Anna: Strong results in the quarter increases our confidence that we are on track to achieve our 2020 as of yet.

Ana Russo: That's with your first quarter. As Alex highlighted earlier, we are very pleased with our fundraising in the quarter and believe we are well on track to achieve our $6 billion target for the year against a backdrop of increased global uncertainty and volatility. Our VAUM grew 46% year-over-year and 6% sequentially, to approximately $35 billion. While acquisitions drove most of the year-over-year increase, the strong sequential growth reflects a combination of solid net organic inflow, as well as positive contributions from investment, performance, and effect movements due to depreciating U.S. dollars. As a result of the U.S. dollar depreciation in the quarter, C-burning AUM recouped approximately half of the negative effects impact in the fourth quarter 2020.

Thanks.

Anna: First quarter results.

Anna: I would highlight.

Anna: We are very pleased with our fund raising in the quarter MVP.

Anna: On track to achieve our $6 billion.

Anna: But the euro against the backdrop of increasing global uncertainty.

Anna: Our 46% year over year, and 6% sequentially to approximately 35.

Anna: Acquisition.

Anna: The year over year increase it's Tom.

Anna: The combination of solid.

Anna: As well as positive contributions from <unk>.

Anna: Thanks.

Anna: This is the proceedings.

Anna: As a result of the U S dollar depreciation in the quarter.

Anna: Lastly.

Anna: Approximately half of the negative FX impact.

Anna: All right.

Anna: 24.

Ana Russo: More importantly, however, and as we highlighted in prior calls, a fast punctuation has limited impact on our FRE, since our expense base provides a substantial hedge against currency movements that may impact our fee-earning AUMs and, consequently, our fee revenue. As reviewed at our investor date back on December 9, based on our current asset class mix, a 10% variance in subcurrencies against the dollar impacts FRE by only about 2%. It's particularly noteworthy that in the quarter, Patria generated approximately $700 million of net inflows into FIAT Web for an 8.6% annualized organic growth rate. Since the end of the third quarter of twenty four, PASO has generated about one billion of organic net inflows, highlighting the organic growth potential of our expanded plant.

Anna: More importantly, however, and as we highlighted in prior calls that subsequent creation has limited impact.

Anna: This provides a substantial hedge against currency movements.

Anna: Our.

Anna: <unk>.

Anna: Consequently, our team.

Anna: At the meeting.

Anna: That's the date back.

Anna: Based on our current asset class mix.

Speaker Change: Thanks Darren.

Anna: Okay.

Anna: About two years.

Anna: Its particularly noteworthy that in the quarter back in January.

Anna: $700 million up net insurance.

Anna: Alright.

Anna: Eight 6% annualized organic growth rate.

Anna: Since the end of the third quarter totaled four one.

$1 billion upfront any net income.

Highlights in the organic growth potential of ours.

Ana Russo: Of note, we reintroduce our pending fee-earning AUM KPI, which highlights that we have almost $3.5 billion of already-committed capital that should turn into fee-earning AUM as the capital used to pay For comparative purposes, this KPI was approximately $2 billion at year-end 2020. The spending fee-earning AUM combined with our fundraising goals, the 20% of fee-earning AUM that are in permanent capital vehicles, and the 35% of fee-earning AUM in drawdown funds with average life of 6.5 years, all point to our ability to generate net organic growth over time. Total fee revenue in the first quarter reached $77.3 million, up 28% over the prior year, about a $17 million increase, driven in large part by the full impact of our acquisitions completed in 2024.

Anna: We can.

Anna: Our pending.

Anna: PPI, which highlights that we have.

Anna: $3 5 billion.

Anna: Already committed capital that should turn into <unk>.

Anna: Roth.

Anna: Capital.

Anna: Hello.

Anna: For comparative purposes.

Anna: <unk> 2 billion.

Anna: In 2024.

Expanding the earnings call.

Anna: Combined with our fundraising goals the 20%.

Anna: E.

Anna: Permanent capital vehicles and.

Anna: 35% of CME.

Anna: Jonathan.

Anna: Slide six on five years, all point to our ability to generate net okay.

Anna: Yes.

Anna: Total fee revenue in the first quarter reached $77 $3 million.

Anna: 28% over the prior year.

Anna: 17 million increase.

Anna: In large part.

Anna: Impact.

Anna: <unk> completed a title 24, it incremental inflow, mainly to credit partially offset by private equity for which sees charging.

Ana Russo: Incremental inflows, mainly into credit, partially offset by private equity for which sees charging It is worth mentioning that due to timing of net asset flows into fee-earning AUM, management fee revenues in the first quarter did not reflect the full impact of the quarter's asset growth. First quarter 25 fee revenue decreased 17% versus prior quarter, primarily due to year-end seasonal incentive fee of about $12 million in addition to retroactive management fees of approximately $2.7 million that were recognized in the fourth quarter, compared to just $0.3 million that were recognized in the Excluding the impact of retrofit, management fee revenue was essentially flat sequentially.

Anna: It is worth mentioning that due to timing.

Anna: Sure.

Anna: Management fee revenue.

Anna: In the first quarter did not reflect the full impact.

Anna: Whereas asset.

Anna: First quarter revenues decreased 17% versus prior quarter, primarily due to year end.

Anna: <unk> up about $12 million in addition to retract.

Anna: Approximately two points.

Anna: There were a couple of nights in the fourth quarter compared to just $3 million that were recognized in the first quarter.

Anna: Excluding the impact of my management team.

Anna: It should be flat.

Anna: Firstly.

Ana Russo: We currently expect retrofits to be at least $1 million in the second quarter of 2025. Our management fee rate averaged about 96 basis points for the last 12 months. As we review at our Investor Day, we are steadily diversifying our business and introducing new investment strategies and product structures, which are key drivers of our growth. 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, but can vary substantially from quarter to quarter, depending on. Moving on, operating expenses, which include personal and G&A expenses totaling approximately $35 million in this quarter, were up 36% versus Q1 2024, or $9.3 million.

Anna: We currently expect <unk> to be at least $1 million.

Anna: Second quarter 'twenty.

Anna: Our management team.

Anna: 96 basis points, primarily.

Anna: Absolutely.

Anna: Yes.

Anna: Yes.

Anna: Defining our introducing new interested in Scottish as some projects, which.

Anna: Which are key drivers.

Anna: Consequently, our management fee lately continue to result.

Anna: A few weeks over the coming years to trend towards approximately 90 basis points.

Anna: Substantially.

Anna: Got it.

Anna: <unk>.

Anna: Moving on operating expenses.

Anna: Rich.

Anna: Personal journey.

Anna: Approximately 35 million.

Anna: We're up 36%.

Anna: Q1 2024.

Anna: $10 million.

Ana Russo: About 75% of this increase reflects the impact of acquisitions, with the balance driven by continued investment of our business. The sequential decline reflects a combination of the seasonal effects of both our bonds of personal costs as well as seasonality in GME. Looking ahead, we believe the First Corps personnel and GNA expenses combined are a good baseline run rate. Putting it all together, Patria delivers P-related earnings of $42.6 million in the quarter, up 21% versus prior year, with an FRA margin of 55%. We continue to expect the full-year margin to fall within the range of our 58 to 60% guidance as we grow fee revenues and capture incremental expenses synergies from our acquisition.

Anna: About 75% of this increase reflects the impact of acquisition with <unk>.

Anna: Driven by continuing.

Speaker Change: On what.

Anna: The sequential decline reflects.

Anna: Yes.

Anna: Both our cluster.

Anna: Customer.

Anna: This analogy in G&A.

Looking ahead, we believe.

Anna: The first quarter personnel and G&A.

Anna: Alright, good baseline run rate.

Anna: Putting it all together to deliver fee related earnings of $42 6 million this quarter up 21% versus prior year with an operating margin of 55%.

Anna: Continue to expect the full year margin to fall within the range.

Anna: Sure.

Anna: Guidance as the growth in revenues.

Anna: Incremental synergies.

Ana Russo: Overall, given the strong start to the year, we remain confident in our fundraising target of $6 billion and our ability to achieve our FRA target of $200 to $225 billion. Next, our net financial and other income and expense in Q1'25 total a negative $2.8 million, reflecting mainly interest expense on our credit facilities, partially offset by income generated in our new energy trading platform, TRIA, which contributed about $1.1 million in the As of the first quarter, net debt totaled approximately $143 million compared to $190 million at year-end. Our net debt to FRA ratio was well below one time at the end of the quarter in line with our long-term cut.

Anna: Overall, given the strong start to the year, we remain confident in our fundraising target of $6 billion and our ability to achieve our target of 200 to 225.

Anna: Next our net financial and other income.

Anna: And the next.

Anna: Q1, 25, total with negative $2 $8 million.

Anna: Mainly interest expense on our credit facility, partially offset by income of <unk>.

Anna: In our new energy trading platform <unk>.

Anna: Which contributed $1 1 million EBIT quarter.

Anna: And the first quarter net debt totaled approximately 40.

Anna: <unk> thousand three nine compared to <unk> 90.

Anna: Our net debt to equity ratio was well below one.

Anna: At the end of the quarter in line with our long term guide.

Ana Russo: Our effective tax rate in the quarter was 9.2%, an increase of 5.5 percentage points versus the prior quarter, mainly reflecting the impact of performance of our Q4-24 tax rate and our mix of jurisdictions. We continue to expect our tax rate to trend towards 10% at the end of our three-year target period in 2027, given our evolving business needs and new platforms located in higher tax rates. In Q1 2025, we generated $37 million of distributor earnings of almost 17% year-over-year, reflecting higher FRE, partially offset by higher net financial interest expense, while the sequential decline reflects the impact of both performance fees and incentive fees of fourth quarter 2024 results First quarter DE per share of $0.23 was up 12% versus the prior year on higher FRE, partially offset by a higher share cap.

Anna: Our effective tax rate in the quarter was nine 2%.

Anna: Increased five five percentage points.

Anna: Hi.

Anna: Reflecting the impact of performance fees.

Anna: Q4 tax.

Anna: Tax rate and our mix of jurisdictions.

Anna: We continue to state tax rate to trend towards the 2%.

Anna: At the end.

Anna: See your target period.

Anna: You cannot meet.

Anna: And new platforms located in higher tax rate.

Anna: Okay.

Anna: In Q1, 2025, we generated $37 million or sub distributor earnings.

Anna: 17% year over year, reflecting higher.

Anna: Partially offset by higher net financial interest expense line.

Anna: Sequential decline reflects the impact of this.

Anna: Steve.

Anna: Mtc.

Anna: Quarter four results.

Anna: First quarter <unk> per share of 23.

Anna: It's up 12% versus the prior year on higher Ed.

Anna: Partially offset by a higher share count.

Ana Russo: and a slightly higher tax rate and financial income. Regarding the share count, we finished the quarter at 158 million shares and continue to expect the share count to average between 158 and 160 million from 2025 to 2027 inclusive share repurchase, which will be focused on off-site stock-based compensation.

Anna: Slightly higher tax rate in financial income.

Anna: Regarding the share count we finished the quarter at 158 million shares.

Anna: Q2 expect share count to average between 158.

Anna: 60 million from 20 to 25 to 2020.

Anna: The share repurchase which will be focused on a section.

Anna: Stock based compensation.

Ana Russo: Finally, as we announced during our PAC day, the board approved for 2025 a quarterly dividend per share of $15,000. With regards to our share repurchase program, we did not repurchase shares in the quarter, but it remains our intention to repurchase shares over the course of the 2020-21.

Anna: Finally, as we announced during our.

Anna: The board approved for 2025 quarterly dividend per share of <unk> 15.

Anna: With regard to our share repurchase program, we did not repurchase shares in deployment, which remains our intention to repurchase shares over the course of the countries.

Ana Russo: Overall, we are very pleased with our first quarter results and the momentum we have built as we continue to diversify and improve the resilience of our patients. We believe we are on track to meet our SRE targets for 2025 and we are excited regarding the growth opportunities that lie ahead.

Anna: Overall, we are very pleased with our first quarter results and the momentum we have to deal with as we continue to diversify and improve the resilience of our pit.

Anna: We are on track to meet our targets for 2025, and we are excited.

Anna: A lot of opportunity.

Anna: Yes.

Unknown Executive: Thank you everyone for dialing in, and we are now ready to answer your questions. Thank you.

Speaker Change: Thank you everyone for dialing in and we are now ready to answer your question.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Unknown Executive: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit yourself to one question and one follow-up.

Speaker Change: Could you please limit yourself to one question and one follow up one moment for our first question.

Unknown Executive: One moment for our first question.

Craig Siegenthaler: Our first question is going to come from the line of Craig Siegenthaler with Bank of America. Your line is open. Please go ahead. Good morning, Alex. Hope everyone's doing well. My question is on the macro side. Trade conflicts should be a positive for LATAM in Brazil, encouraging more FDI. How are your portfolios positioned from higher tariffs from the U.S. and some of its largest trade partners, including China? Thank you, Craig. Nice speaking with you. This is Alex here, and thanks for your presence here in this call. Well, if we break it down, I think most of our investments are now LATAM-oriented.

Speaker Change: Our first question is going to come from the line of Craig Siegenthaler with Bank of America. Your line is open. Please go ahead.

Speaker Change: Alright good.

unknown: Morning, Alex Hope everyone's doing well.

Speaker Change: My question is on the macro side.

Speaker Change: Trade conflicts should be a positive for Latam in Brazil, encouraging more FDI how are your portfolio's position.

Speaker Change: Position from higher tariffs in the U S with some of the largest trade partners, including China.

Alex Site: Thank you Craig Nice nice speaking with you. This is Alex here and thanks for your presence here.

Speaker Change: In this call.

Speaker Change: Yeah.

Speaker Change: If we break it down I think most of our investments are now Latam.

Speaker Change: Oriented.

Alex Saigh: So within Latin America, our exposure to Mexico is minimum, less than 3%, 1 to 3. So most of our exposure, when I say Latin America, is basically South America. And there, I think our investments are pretty much local in sectors that we think are very resilient and locally driven, like healthcare, food and beverage, and on the infrastructure side, it's very local by nature, toll roads, etc. And our exposure to companies through our credit portfolio, very local as well, as I mentioned, less than 3% Mexico. And when I go to real estate, it's even more local.

Speaker Change: So within Latin America.

Speaker Change: Our exposure to Mexico is minimum less than 3%, one two or three.

Speaker Change: So most of our exposure when I say Latin America is basically South America.

Speaker Change: And there I think our investments are.

Speaker Change: Pretty much local.

Speaker Change: In.

Speaker Change: In sectors that we think are very resilient and locally driven like healthcare.

Speaker Change: Food and beverage.

Speaker Change: On the infrastructure side, it's very local local by nature, So rules et cetera.

Speaker Change: And our exposure to companies through our credit portfolio.

Speaker Change: No very local as well as I mentioned, the less than 3%, Mexico and when I go through real estate is even more so to do with the local drivers of the of the countries like Brazil, like no, Chile, Colombia et cetera.

Alex Saigh: It has also to do with the local drivers of the countries like Brazil, like Chile, Colombia, etc. So, in general, I think that our exposure to this whole tariff war is relatively low. As you know, the region is in the group of the 10% tariffs, which is now the lower end of the spectrum of the tariffs that was imposed by the US. On the other side of this equation here, I definitely think that the region will be benefited from if this trade war continues as it is, as you know, it changes every half an hour, but if it continues, where the region will be tariffed at the 10% level and the other regions of the world with higher tariffs, I think that region will benefit because it's a huge consumption market, you know, large part of the GDPs of these countries are composed by local consumption, the sea of the GDP formula.

Speaker Change: So in general.

Speaker Change: I think that our exposure.

Speaker Change: So this whole tariff war is relatively low.

Speaker Change: You'll know the region.

Speaker Change: As in the group.

Speaker Change: Of the 10% tariffs, which is the lower ends of the spectrum of the tariffs.

Speaker Change: As imposed by the U S.

Speaker Change: On the other side of the of this of this equation here.

Speaker Change: We think that the region will be benefited.

Speaker Change: From if this trade war continues as it is as you know it changes every half an hour, but if it continues where the region.

Speaker Change: We will be.

Speaker Change: Start ups.

Speaker Change: The 10% level in the other regions of the world with higher tariffs.

Speaker Change: I think that region will be benefit because it's a huge consumption market.

Speaker Change: Large part of the GDP of these countries are concerned.

Speaker Change: <unk> by local consumption.

Speaker Change: C a R.

Speaker Change: The GDP formula.

Alex Saigh: And these trading partners, our trading partners will look into the region as a place to actually sell their products. China being, I think, the largest trading partner in the region, excluding Mexico. So, and lastly, I think, even if the whole tariff debacle goes back to square one, in my humble opinion here, I think this was a credibility shakeup with the current U.S. leadership, that I think that investors around the world will look for other places to invest besides the U.S. Now, when we were talking to investors during 2023 and 24, and even the later part of 24, there was a big push towards U.S.

Speaker Change: And these.

Speaker Change: Trading partners, our trading partners, we will look into the region as a place to actually sell their products.

Speaker Change: China.

Speaker Change: I think the largest trading partner in the region, excluding Mexico.

Speaker Change: So <unk>.

Speaker Change: Lastly, I think even if the whole tariff.

Speaker Change: Debacle going back to square it goes back to square one in my humble opinion here I think this was a credibility shakeup.

Speaker Change: The current U S leadership.

Speaker Change: That I think that investors around the world will look for other places to invest besides the U S. When we were talking to investors join.

Speaker Change: <unk> 2023 and 'twenty four.

Speaker Change: And even the later part of 'twenty four.

Speaker Change: Was a big push towards U S investments U S equities and whatever and.

Alex Saigh: investments, U.S. equities and whatever. And when I talk to investors now, I think there's a big push outside of the U.S. And as I mentioned, it's just my personal opinion, even if the tariff debacle goes back to square one, I think there was a credibility shock here and investors will look for other places to invest. And Latin America, I think, is a very, very interesting region, low geopolitical risks, et cetera. So three parts of my answer here. Number one, a straight answer to your question. I don't think our portfolio will be, will be affected, negatively affected by the tariffs.

Speaker Change: And when I talk to investors now I think there's a big push outside of the U S and as I mentioned is just my personal opinion, even if the <unk>. One I think there was a credibility shock here and investors will look for other places to invest in Latin American I think is a very very interesting region.

Speaker Change: Low geopolitical risks et cetera.

Speaker Change: Sophie parts of my answer here number one.

Speaker Change: A straight answer to your question I don't think our portfolio will be.

Speaker Change: No.

Speaker Change: We'll be affected negatively affected by the tariffs of course, it is a global recession or whatever things.

Alex Saigh: Of course, if there's a global recession or whatever, you know, things, everything moves in the wrong direction. But as we see it now, I think it's a low risk portfolio as far as the effects of the tariffs are concerned. Second, I think in investors, our region will be benefit because we are in the low tariff bracket and investors see this very, very large consumption market to sell products into. And lastly, I think investors will invest more in the region. I gave an FDI figure here for 2024. The region represented 14.3% of all the FDI versus 4% in 1990.

Speaker Change: <unk>.

Speaker Change: If it moves in the wrong direction, but as.

Speaker Change: As we see it now I think it's a it's a.

Speaker Change: Low risk portfolio.

Speaker Change: As far as the effects of the tariffs are concerned second I think investors.

Speaker Change: Our region will be benefits because we are in the low tariff bracket and investors see this very very large consumption markets, who sell products too.

Speaker Change: And lastly, I think investors will invest more in the region I gave it an FDIC eager here for 2024.

Speaker Change: The region represented 14, 8% of all the FDI versus 4% to 90 90, So no basically three times more even more than that in market share.

Alex Saigh: So, you know, basically three times more, even more than that in market share. And I think that's gonna increase as we look into the near future.

Speaker Change: And I think thats going to increase as we look into the near future.

Alex Saigh: Hope I answered your question.

Greg: Hope I answered your question Greg.

Craig Siegenthaler: Now, that was great, Alex, just for my fault, and we can stick with the trade war topic, but move on to the fundraising front. There has been some news that Chinese institutions will be divesting from US private markets. Could this open the door for Patria if they divert their private markets allocations from US to LATAM and Brazil specifically? We're just curious how your LP meetings and calls have gone since April. The answer is yes. And I think this conversation was already happening last year. I think the Chinese investors specifically were already anticipating a potential Mr. Trump winning the election, the US election as president.

Greg: No that was great Alex just for my follow up and we can stick with the trade where topic, but move on to the fundraising front. There has been some news that Chinese institutions will be divesting from U S private markets.

Greg: Could this open the door for Patria, if they divert their private markets allocations from U S to Latam and.

Greg: In Brazil, specifically.

Greg: We're just curious how your LP meetings and calls have gone since April 2nd.

Greg: The answer is yes.

Greg: I think this this.

Greg: This conversation.

Greg: What's already happening last year.

Greg: I think the Chinese investors, specifically we're already.

Greg: Anticipating a potential.

Greg: Mr. Trump's.

Greg: Mr Trump winning the election in the U S election, as president so they were already taking steps.

Alex Saigh: So they were already taking steps in the direction of lowering their, reducing their US exposure. and having us sign a billion dollars of SMAs, which is for us a very large amount in the first quarter of 2025, is a reflection of that. And these negotiations were going on during 2024, when Mr. Trump was not the U.S. president yet. So I think it's going to continue to drive in this direction. Our conversations after April 2nd really intensify that. We learned from our Asian, and not only Asian, but also Middle Easterns and some European investors, a concern in continuing allocating to U.S.

Greg: <unk>.

Greg: In the direction of the lowering theyre, reducing their U S exposure.

Greg: And having us sign a $1 billion of SMA, which is for us a very large amounts in the first quarter of 2025 is a reflection of that in these negotiations were going on during 2024 when Mr. Trump was not.

Greg: The U S presence yes.

Greg: So I think it's going to.

Continue to drive.

Greg: In this direction our conversation.

Greg: On the stations after April 2nd we densify that.

Greg: We.

Greg: We learned from our Asian, not only Asia, but also.

Greg: Middle East and some European investments, a concern and continue allocating to use alternative asset managers.

Alex Saigh: alternative asset managers for geopolitical reasons, going all the way to, you know, we might have our accounts frozen and blah, blah, blah. So all the way from a small amount of precaution to all the way down to the red zone of, you know, what happens if this and this and this. And we are completely out of this, right? And all of our fund structures, they do not flow through the U.S. They flow through other jurisdictions. We are not a U.S. company. We are a Cayman-based company, which has no U.S. jurisdictions influence there, et cetera, et cetera, et cetera.

Greg: For geopolitical reasons going all the way to know when we might have our accounts frozen and blah blah blah blah blah, so all the way from.

Greg: A small amount of precaution to all the way down to the Red zone of what happens if this on this and this and that.

Greg: And we are completely out of this right.

Greg: All of our fund structures.

Greg: They do not flow through the U S.

Greg: So flow through other jurisdictions, we are not a U S company.

Greg: Our team in based company, which has no USD restrictions influence, there et cetera, et cetera et cetera. So I think besides b in the part of the world that I think will benefit from this geopolitical confusion.

Alex Saigh: So I think besides being in a part of the world that I think will benefit from this geopolitical confusion, uncertainty, specifically for Patria, we are structured and designed as a non-U.S. company. We were always like that. And I think this will definitely benefit us, you know, in this, you know, very uncertain world. And we already had these kinds of conversations with our investors after April.

Greg: Confusion uncertainty specifically for Patria.

Greg: We are structured and designed as a non U S company, we were always like that and I think this will.

Greg: We will definitely benefit us.

Greg: In this in a very uncertain world and we already had these kind of conversations with our investors after April 2nd.

Alex Saigh: Hopefully I answered the question. Thank you, Alex.

Greg: Hope I answered your question.

Alex Site: Thank you Alex.

Unknown Executive: Thank you and one moment as we move on to our next question.

Alex Site: Thank you and one moment as we move on to our next question.

Tito Labarta: Our next question is going to come from the line of Tito Labarta with Goldman Sachs. Your line is open. Please go ahead.

Speaker Change: Our next question is going to come from the line of Tito <unk> with Goldman Sachs. Your line is open. Please go ahead.

Tito Labarta: Hi, good morning, Alex, Ana, and Rob. Thanks for the call and taking my question. My question also on the fundraising, but I think you mentioned that you didn't really see any impact yet from the noise around tariffs, given that in the first quarter we saw very good fundraising. But, you know, just thinking about the outlook from here, you're already more than halfway to your target of $6 billion for the year. So, I mean, given this uncertainty with tariffs, potential more interest in LATAM, do you see potential upside to that $6 billion in fundraising for the full year?

Tito: Hi, Good morning, Alex and Rob Thanks for the call and taking my question.

Tito: My question also on the fund raising but I think you mentioned.

Tito: You don't really see any impact yet from the noise around tariffs and given that in the first quarter. We saw very good fund raising but just thinking about the outlook from here you already more than halfway to you.

Tito: Target of $6 billion for the year. So I mean, given this uncertainty with tariffs potential more interesting Latam do you see potential upside to that $6 billion in fund raising for the full year or was there anything extraordinary in the quarter that maybe is not recurring.

Alex Saigh: Or is there anything extraordinary in the quarter that maybe is not recurring? Well, thanks. Thanks for the question, Tito. It's nice talking to you. Thanks for participating in this call.

Tito: Well. Thanks, Thanks for the questions Keith Tonight Nice talking to you. Thanks for participating in this call. We're keeping I think straight and since we are to your question and then ill.

Alex Saigh: We're keeping, I think, straight answer to your question, then I'll expand. I think we're keeping the $6 billion target. We had a great first quarter, but I caution, like, you know, 3.2 billion times 4. That's, I think, that's a very aggressive number. So we're keeping the $6 billion target. However, as I see it today, we're a little bit over halfway through, which is a very good position to be in. So I know I feel very comfortable and the team feels very comfortable that we're going to actually hit our $6 billion target, which for us is an amazing number, right?

Tito: I will expand I think we're keeping the $6 billion target.

Tito: We had a great first quarter, but I caution that $3 2 billion times four that's I think that's a that's a very aggressive number but so we're keeping the $6 billion. However.

Tito: As I see it today, we're more a little bit over halfway through which is a very good position to be in.

Tito: So no I feel very comfortable on the team feel very comfortable that we can actually hit our 6 billion target, which for US is an amazing number right when we gave out.

Alex Saigh: When we gave out the number, the $21 billion for the next three years, six this year, seven next year, eight in 2027, during our investor day, December 9th, 2024. and now $21 billion for us in three years, six billion this year, it's a very, very substantial number given our size. And we already know over $3 billion in the first quarter. And more so, I think we did raise, through that $3.2 billion, $700 million in TPAWM in the quarter of net new money. So you see the strategy being paid off. And I'm not even counting the valuation increases in the $700 million, I'm not counting the valuation increases, and we charge on NAV.

Tito: The number of about 21 billion for the next few years six this year seven next year, <unk>, and 2020 and 'twenty seven during our Investor day.

Tito: December 9th 2024.

Tito: And the $21 billion for us into the year 6 billion. This year is it's a very very substantial number given given our size and we already over 3 billion in the first quarter and more so I think we did raise.

Tito: Through that $3 2 billion, a $700 million and fee paying AUM in the quarter of net new money.

Tito: So you see the strategy being paid off now and I'm not even counting the valuation increases in the $700 million accounting valuation increases and we charge on NAV.

Alex Saigh: So no, we started with a, in 2024, with a net new money of around $380 million for the whole year. And then we have $700 million of net new money in the fee paying AUM accounts in the first quarter. So again, no, it's extremely good fundraising, very strong fundraising. I know that April 2nd was after the end of the first quarter. However, I don't think that all of these Asian investors and sovereign funds would have signed all these SMAs with us in the first quarter of 2025, because The whole uncertainty on the tariffs were already there, even though April 2nd was after the end of the quarter, but they would have cautiously said, look, Alex, let me sign this during the second quarter to see what's going to happen.

Tito: So.

Tito: We started with a in.

Tito: In 2024 with a <unk>.

Tito: Net new money of around $380 million for the whole year, and then we have $700 million of net new money in the fee paying AUM.

Tito: Our accounts in the first quarter. So again no. It's extremely good fund raising very strong fundraising Dwight I know that April 2nd was after the end of the first quarter power.

Tito: However, I don't think that all of these Asian investors and sovereign funds would have signed all these estimates with us in the first quarter of 2025 because.

Tito: The whole uncertainty on the tariffs were already there even though April 2nd was after the end of the quarter, but they would have cautiously.

Speaker Change: Look Alex let me sign this during the second quarter to see what's going to happen and they didn't.

Alex Saigh: And they didn't. And they didn't actually, if I go back to Craig's question in 2024, stop these conversations. On the contrary, they are actually pushing on these conversations to expose themselves more to LATAM. And a tiny move on their side is a huge effect for us, right? What is a billion dollars or two billion dollars for these Asian sovereign funds? It's nothing for them. And for us, a billion, two billion, three billion is half of what we have to fundraise for the year, right? So anything that we and we are the largest alternative asset manager in the region.

Tito: And they didn't actually.

Tito: If I go back to Greg's question in 2024 stop these conversations on the contrary they are.

Tito: Actually pushing on these conversations to expose themselves more to let them in.

Tito: A tiny move on their side is a huge.

Tito: For us right.

Tito: What is the $1 billion or $2 billion for Dizzy No Asian sovereign funds.

Tito: Nothing for them and for US a billion 2 billion $3 billion is half of what we have to fund raise for the year right.

Tito: So anything that we and we are the largest alternative asset manager in the region and in my view.

Alex Saigh: And in my view, of course, I have a biased view, the most better positioned to take on this additional flow of money in infrastructure, in credit, in private equity, whatever. The first of these two SMAs will. drive money into our infrastructure and private equity flagship funds or vintages. However, the conversations with these investors are much more broader. As we go into the year, you we might, you might be hearing news from us, from other kinds of SMAs, like managing assets that they already have on the ground in Latin America, them investing on the credit side.

Tito: Of course, I have a biopsy.

Tito: The most better positioned to take on this additional flow of money in infrastructure in credit and private equity or whatever.

Tito: The first of these two SMA is will <unk>.

Tito: <unk> money into our infrastructure and private equity.

Tito: Flagship funds are vintages. However, the conversations with these investors are much more broader as we go into the year, we might you might be hearing news from us from other kinds of SMA like managing assets that they already have on the ground.

Tito: In Latin America.

Tito: Damn investing on the credit side. The so many ideas that its going on I think the conversation changed.

Alex Saigh: There's so many ideas that is going on.

Alex Saigh: I think the conversation changed dramatically to the better, Tito. And us, and us being there, I think, investing in the region and I mean, in Asia for so many years, we opened our office in Hong Kong, you know, eight years ago, we opened our office in Dubai, actually in, in the first investor we had was a, in our 97 fund one vintage from KIO, the Kuwait Investment Authority. So we've been there in the region. So being there the right place at the right time, and being the largest in the region here in LATAM, we are now being able to maximize those investments and taking advantage of it.

Tito: Dramatically to the better Tito and us and us being there I think.

Tito: Investing in the region.

Tito: In Asia for so many years, we opened an office in.

Tito: In Hong Kong now eight years ago.

Tito: We opened an office in Dubai actually in in the first.

Tito: Inverter, we had was in our 97 funds one vintage from Tio equate investment authority. So we've been there in the region. So it's been the right place at the right time and being the largest in the region here and let them well.

Tito: We have now been able to maximize those investments and taking advantage of this and you can see the numbers already there in the first quarter I think I'm going to we're going to be talking a lot more about this during the rest of 2025, where are we going to be announcing other SMA is another relationships of this sorts.

Tito Labarta: And you can see the numbers already there in the first quarter, Tito. I think I'm going to, we're going to be talking a lot more about this during the rest of 2025, where we're going to be announcing other SMAs and other relationships of this sort. I hope I answered all of your questions. Yeah, no, that's very helpful, Alex. Thank you.

Tito: Hope I answered your question yes.

Alex Site: Yes, no that's very helpful. Alex. Thank you maybe I guess just on the follow up Conversely, if you look at the fee.

Alex Saigh: Maybe, I guess, just on the follow-up, conversely, you know, if you look at the fee-related earnings, you know, just analyze it, and even considering some incentive fees in 4Q, you are running a bit below the $225 million guidance. So, just the jump in the fee-earning AUM that we saw this quarter, should that already begin to benefit in 2Q? Would that be more for 3Q and 4Q? And along those lines, I mean, do you expect a jump in that fee-related earnings to get closer to the trend to deliver on the guidance for the full year? Thank you.

Tito: Later in earnings.

Tito: If you just annualize it and even considering some incentive fees and <unk> you are running a bit below the 200 $225 million guidance.

Tito: So just.

Speaker Change: Jumping to fee, earning AUM that we saw this quarter should that already begin to benefit in <unk> would that be more for <unk> and <unk> and along those lines. I mean, you do it do you expect a jump in that fee related earnings to get closer to the trend can deliver on the guidance for the full year.

Tito: Thank you.

Alex Saigh: Yes, I think. Yeah, we see everything that you that you just mentioned. And if I do a straight math here, I think we are now right, right on target to do to deliver the middle of the guidance. And I think we can And I think we can do better than that. But just a very simple math. Now the fee related earnings for us for the first quarter 2025 was $42.6 million. As you can see there from our presentation and earnings call, if we just multiply that by four, we get to $170 million. So we're gonna do better than that because of everything that you said.

Tito: Yes, I think.

Tito: Yes, we see everything that you that you just mentioned.

Tito: If I do a straight math here I think we are right right on targets.

Tito: To deliver the middle of the guidance and I think we can.

Tito: I think we can do better than that but just a very simple math the fee related earnings for us.

Tito: First quarter 2025 was $42 6 million.

Tito: As you can see there from our presentation on the earnings call. If you just multiply that by four we get to a $170 million okay.

Tito: So we're going to do better than that because of everything.

Tito: Everything that you said the other fee earning.

Alex Saigh: Now, the AUM that was raised will turn into fee earnings, et cetera, as we invest that capital, blah, blah, blah, but just $42.6 million for the quarter times 401 selling. If we add to that to the same $12 million of incentive fees that we had in 2024, I'm just repeating that. Again, most of that piece came from our credit strategies and the volatility or whatever in the market favors our credit strategies here, trading our bonds, et cetera, but whatever I'm keeping the same $12 million of last year. So 170 plus 12, that's 182. If we do raise the $6 billion for the year, now we raised 3.2 in the first quarter, so I think we're very well positioned to raise the six.

Tito: AUM that was raised will turn into fee earnings et cetera, as we invest our capital above just $42 $6 million for the quarter. Thanks for once daily.

If we add to that to the same $12 million of incentive fees that we had.

Tito: In 2024, I'm just repeating that.

Tito: Again most of that.

Tito: Most of that came from our credit strategies.

Tito: The volatility or whatever in the market favors our credit strategies year trading our bonds et cetera about whatever I'm, keeping the same $12 million last year.

Tito: 170, plus 12 Thats 182.

Tito: If if we do raise the $6 billion for the year, we raised $3 two in the first quarter. So I think we're very well positioned to raise the 6% to six means on average 3 billion $1 six for the whole year average of three even though we jumpstarted with three points, so, but lets say average of three for the whole year.

Alex Saigh: The six means on average $3 billion a year, right? Six for the whole year. Average of three, even though we jump started with 3.2, but let's say average of three for the whole year. 96 basis points of management fees. So 96 basis of the $6 billion is $28 million. So if I add now to the 182 number, 28 million, that's 210 million right in the middle of the 200 and 225. So if I just repeat the first quarter on FRE, which I think, again, we're very strong in doing better. If I have the same incentive fees as last.

Tito: 96 basis points of management fees, So 96 basis of the $6 billion is $28 million.

Tito: So if I add to the 182 number 28 million to $110 million right in the middle of the 200 225. So if I just repeat the first quarter on FRE, which I think again, we are very strong and doing better.

Tito: I have the same incentive fees of last year.

Alex Saigh: And if I raise the $6 billion average of $3 billion, and again, I started the year with $3.2 billion, I already get to $2.10 billion, right, in a simple math. So, again, that's why we think I'm here saying that we are reiterating the guidance of $200 billion, $225 billion. I hope I answered it. Yep. Perfect. That's very clear. Thank you, Alex. Thank you.

Tito: And if I raise the 6 billion average of 3 billion and again I started the year with three points, so I already to get to 210 right.

Tito: Right in the simple math.

Tito: So.

Tito: That's why we think I'm here, saying that we are reiterating the guidance of 200% to 125%.

Tito: I hope I answered that.

Speaker Change: Perfect that's very clear thank you Alex.

Unknown Executive: One moment for our next question.

Tito: Thank you one moment for our next question.

Ricardo Buchpiguel: Our next question comes from the line of Ricardo Buchpiguel with with BTG. Your line is open, please go ahead. Good morning, everyone, and thank you for the opportunity of making questions.

Speaker Change: Our next question comes from the line of Ricardo <unk> with Pete.

Speaker Change: With BTG.

Speaker Change: Your line is open. Please go ahead.

Speaker Change: Good morning, everyone and thank you for the preclinical making questions.

Alex Saigh: Could you please provide an update on the integration of all the M&A's completed last year, talking about also what parts of the process have been easier or more challenging than expected so far? Thank you very much. Of course, Ricardo, nice speaking to you and thanks for participating.

Speaker Change: Could you. Please provide an update on the integration all fault emanates completed last year talking about also what parts of the process have been easier or more challenging than expected. So far. Thank you very much.

Speaker Change: Of course, it has a nice speaking to you and thanks for participating I think.

Alex Saigh: I think we are internally here, we're calling 2025 our integration year. And as you know, we did then in our three-year guidance give an inorganic guideline, but to the tail-ended, right, now doing acquisitions in 26, 27, and not doing relevant acquisitions, leasing the guidelines for 2025 in order for us during the later part of 2024 and in 2025 to integrate the business and give us that time to do that. That's how it has been our focus. I think we know we launched internally what we call a One Patria program going all the way from The front line to the middle office.

Speaker Change: Internally here, we're calling 2025 hour no integration year end, because as you know.

Speaker Change: We did then.

Speaker Change: In our fee guidance give in.

Speaker Change: Organic guideline, but so the tail ended right now of doing acquisitions.

Speaker Change: In 'twenty, six 'twenty, seven and not doing.

Speaker Change: Rather than acquisitions.

Speaker Change: The guidance for 2025 in order for us.

Speaker Change: The later part of 24, and 25 to integrate the business and give us that.

Speaker Change: At that time to do that that's been our focus I think we know.

We launched internally, what we call a one patriot one battery program.

Speaker Change: Going all the way from.

Speaker Change: The.

Speaker Change: The frontline.

Speaker Change: Line, two new office.

Speaker Change: Support areas of back office et cetera.

Alex Saigh: Right now we're pretty happy that we are on target on the integration. We haven't seen any major issues there, any things that actually concerns us. No yellow flags, to be honest, I think we had already designed what we wanted to do on the process side and on the governance side, on the system side. We are implementing, so giving you one example, all of our HR is already under the same system, all our payroll, compensation schemes, valuation, blah, blah, blah, that's all done. And that's, we actually did go through end of year evaluations of our 800 plus employees, so late 2024.

Speaker Change: Right now we're pretty happy that we are on target on the integration we haven't.

Speaker Change: Not seeing any major issues there.

Speaker Change: Things that actually concerns us no no yellow flags.

Speaker Change: The honest I think we.

Speaker Change: We had the exact we have already designed what we wanted to do on the process side and on the governance side on the systems side.

Speaker Change: We are implementing so giving you one one example, all of our our HR is already under the same system, all our payroll compensation schemes valuation blah blah blah.

Speaker Change: That's all done.

Speaker Change: And.

Speaker Change: And Thats.

Speaker Change: Actually did go through.

Speaker Change: At the end of the year.

Speaker Change: Evaluation, so our 800 plus.

Alex Saigh: Under the common system, common methodology, we use the nine blocks, we use a one system to do all these evaluations, blah, blah, blah, blah. Everything under our Oracle ERP, we use, we have everybody already downloaded in our shared compensation program, that is a company that manages all of our employees in a global scale, blah, blah, blah, blah, blah. We go on and on and on. So basically done, so which is, we are a people business, right? So this is the most important part of our business because it is the majority of our costs and we have to treat people very well as we are people business.

Speaker Change: Employees. So late 2024 under the common system common methodology, we use the nine box we use the state.

Speaker Change: They come at a one system to do all these evaluations blah blah blah blah.

Speaker Change: Everything under our Oracle ERP we.

Speaker Change: We use.

Speaker Change: We have everybody already.

Speaker Change: Downloaded an hour.

Speaker Change: Sure sure compensation program that is a company that manages all of our employees and our global scale Blah Blah Blah Blah blah, we gone on so basically done so.

Speaker Change: <unk>, which is known we are a people business right. So this is the most important part of our business because it is no.

Speaker Change: The majority of our costs and we hope to treat people very well as we are a people business.

Alex Saigh: And then I can go on and on, Ricardo, on the other support areas and back office areas integration, but as I used one example, which was HR, I can, and yes, so I think we see into 2025 where we are already there, but getting to the end of the year with everything fully integrated and ready to go. And I think with that, we do generate synergies. So that's why we're also given the guidance that for the year 2025, we're going to post 58 to 60% FRE margins. And why is that? Because you saw lower margins last year than that, because we are then with this integrations generating the synergies and being able to push the margins back to the 58% to 60% level that we had in 2023.

Speaker Change: And then I can I can go on and on.

Speaker Change: On the other on the other.

Speaker Change: No.

Speaker Change: Support areas and.

Speaker Change: And back office areas integration, but as I use one example, which was HR.

Speaker Change: Yes.

Speaker Change: I think we see into 2025.

Speaker Change: Where we.

Speaker Change: Already there, but getting to the end of the year with everything fully integrated.

Speaker Change: And ready to go and I think what.

Speaker Change: With that we do generate synergies that's why we also given the guidance thats for the year of 2025, we're going to post 58% to 60% FRE margins.

Speaker Change: And why is that because you saw lower margins last year.

Speaker Change: And that's because we are then with this integration is generating the synergies and being able to push the margins back to the 58% to 60% level that we had in 2023.

Unknown Executive: So we're fine, I think. We haven't. seen any again, as I mentioned, any yellow flags up to up to now and hopefully that we're going to stay that way until until the end of the year. I hope I answered your question. But if you have anything specific about integration, I'm happy to, to be able to answer. I'm very clear. Thank you very much. Thank you. One moment as we move on to our next question.

Speaker Change: So we're fine I think is.

Speaker Change: We haven't.

Speaker Change: Seen any again as I mentioned any yellow flags up to up to now and hopefully that we're going to stay that way into until the end of the year.

Speaker Change: I hope I answered your question, but if you have anything specific about integration I'm happy to be able to answer it.

Speaker Change: Very clear thank you very much.

Speaker Change: Thank you one moment as we move on to our next question.

William Barranjard: Our next question comes from the line of William Barranjard with E2BBA. Your line is open. Please go ahead. Okay. Thank you. Thank you, everyone. Thank you, Alex, Ana, for the presentation. My question here is regarding the pending fee AUM you said, you told us during the call.

Speaker Change: Our next question comes from the line of William Beringer with <unk> BBA. Your line is open. Please go ahead.

Speaker Change: Okay. Thank you. Thank you everyone. Thank you Alexandra for the presentation.

Speaker Change: My question here is regarding the pending <unk> AUM.

Speaker Change: You told us during the call.

William Barranjard: So could you give us an overview of this $3.5 billion, maybe a breakdown, such as what are the strategies they will be allocated and the expected management fee on them? And also, if you could share expectations in terms of timing of these allocations, that would be great. Okay, no, thank you very much. Thanks for your question here and thanks for participating in our call. Well, we mentioned there that we have around 3.4, 3.5 billion dollars of pending fee-paying AUF. 3.5 billion of pending fee-paying AUF. I think it's it's this is pretty much broken down in in most of it go into our infrastructure and GPMS verticals.

Speaker Change: So could you give us an overview of this $3 5 billion, maybe a breakdown such as what are the strategies. They will be located in the expected management fee on them.

Speaker Change: And also if you could share expectations in terms of timing of these applications that would be great.

Speaker Change: Okay no. Thank you very much. Thanks for your question here and thanks for participating in our call.

Speaker Change: We mentioned that we have around three four.

Speaker Change: $3 $5 billion of Av.

Speaker Change: Pending.

Speaker Change: Fee paying AUM fee.

Speaker Change: $3 5 billion of pending CPA.

Speaker Change: I think this is pretty much broken down.

Speaker Change: In.

Speaker Change: In <unk>.

Speaker Change: Most of it.

Speaker Change: Our infrastructure and Gpm's verticals.

Alex Saigh: However, this number changes a lot over time. So I'm giving you a picture, not a not a film of what happened. So I would, my humble suggestion here, project as we look into the future, the average management fee that we that we that we are currently. of 96 basis points over once we actually deploy that money. You can see that the breakdown that actually favors infrastructure and GPMS infrastructure has a higher management fee than the 96 basis points. But as a suggestion, I would use the average. It's very hard to to to break down quarter by quarter.

Speaker Change: However, this number changes a lot over time, so I'm, giving you a picture not a film.

Speaker Change: What happens so.

Speaker Change: I would my humble suggestion here.

Speaker Change: Project as we look into the future.

Speaker Change: The average management fee.

Speaker Change: We are currently.

Speaker Change: Having of 96 basis points.

Speaker Change: Over once we actually deploy that money.

Speaker Change: Sure.

Speaker Change: You can see that the breakdown that actually favors infrastructure <unk> infrastructure has a higher management fee.

Speaker Change: The 96 basis points, but as a suggestion I will use the average.

Speaker Change: It's very hard to.

Speaker Change: To break down quarter by quarter as we see during the year you might.

Alex Saigh: Now, as we see during the year, you might in the in the second quarter have a higher fundraising for another asset class, et cetera. So on average, I would I would use a 96 basis. When are we deploying that money? Normally, we deploy that money over the next four to six quarters, but again, on the infrastructure and GPMS side, I think within 2025, I think we're going to be able to deploy that money along the year. I would also use an average for the year, as we do deploy that money over the second, third, and fourth quarter.

Speaker Change: In the second quarter and will have a higher fund raising for another asset class et cetera. So on average.

Speaker Change: I would use of 96 basis points.

Speaker Change: When are we deploy that money normally we deploy that money over that over the next.

Speaker Change: Four to six quarters, but again on the on the infrastructure <unk> side I think is no within I think within 2025, I think we're going to be able to deploy that money along the year. Audi also use that average for the year as.

Speaker Change: As we do deploy that money over the second third and fourth quarter.

Alex Saigh: And as I mentioned during my answer to Tito's question, when we project that we're going to raise $6 billion, which is our guidance, we projected on average, we're going to have $3 billion of T-Pain AUM, right? Just as a natural average here, but as we did raise the $3.2 billion in the first quarter, we're in a better position to be able to invest that money earlier than our projections because of the fact that we are now with this money ready to go. I hope I answered your question. Maybe if you want to know any other further questions, I'm glad to answer.

Speaker Change: And as.

Speaker Change: As I mentioned during.

Speaker Change: My answer to Tito's question.

Speaker Change: <unk>.

Speaker Change: When we project that we are going to raise $6 billion, which is our guidance. We projected on average we're going to have $3 billion of fee paying AUM right.

Speaker Change: Just just to say natural average here, but as we did.

Speaker Change: The $3 2 billion in the first quarter.

Speaker Change: We're in a better position to be able to.

Speaker Change: No invest that money earlier than our projections because of the <unk>.

Speaker Change: Fact that we are now with this money ready to go.

Speaker Change: Hope I answered your question, maybe you have noise you wont have any other further questions.

Speaker Change: Glad to answer.

Guilherme Grespan: No, that is perfect. Thank you. One moment for our next question. Our next question comes from the line of Guilherme Grespan with JPMorgan. Your line is open. Please go ahead. Hey, Alex and team. Good morning. Thank you for for the presentation. Congratulations on the fundraising. My my question is basically two. The first one is on credit, a very strong performance. It was mostly the high yield, right? And also Chilean fixed income was also strong. Just a little bit more granularity. What do you think drove this this very strong performance on credit in terms of fundraising?

Speaker Change: No that's perfect. Thank you. Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from the line of <unk> <unk> with J P. Morgan. Your line is open. Please go ahead.

Speaker Change: Hey, Alex and team good morning, Thank you for your presentation.

Speaker Change: Congratulations on the fund raising my my question is basically tool.

Speaker Change: The first one is on credit a very strong performance. It was mostly the high yield rate and also Chilean fixed income was also shrunk.

Speaker Change: Just a little bit more granularity why do you think drove this very strong performance on credit in terms of fund raising and.

Guilherme Grespan: And if you expect it to be resilient throughout the year? I know we had the pension reform in Chile, but I don't think it's in the numbers yet. So I just want And then the second thing, just to recap, on the drawdown funds, I think nowadays we're sitting at $2.4 billion committed capital on infra already, and private equity $1.5.

Speaker Change: And if you expect it to be resilient throughout the year.

Speaker Change: I know, we had the pension reform in Chile, but I don't think it's in the numbers yet.

Speaker Change: Just one.

Speaker Change: This performance and then secondly, just a recap on.

Speaker Change: The drawdown funds I think nowadays we are sitting at $2 4 billion.

Speaker Change: Committed capital and infra already in private equity one five.

Alex Saigh: Just a reminder, what is the fund target, the size target you want to have on the funds? and what is going to be the timeline ahead, until when you expect to fundraise those funds. Thank you. So thank you very much, Guilherme. Thanks for participating in the call. And going back to the to your credit question. Now, we've been performing very well. I think the team has been able to actually. ride these volatility moments extremely well and beating the benchmark as you saw in most of the credit funds and even more so in the flagship funds, the dollar denominated last time high yield.

Speaker Change: As a reminder, what is the target.

Speaker Change: The size target, we want to have on the funds.

Speaker Change: And what is going to be the timeline.

Speaker Change: Until when you expect to fundraise those words thank you.

Speaker Change: No. Thank you very much and many thanks for participating in the call.

Speaker Change: Going back to the to your credit question.

Speaker Change: <unk> been performing very well I think the team has been able to actually.

Speaker Change: <unk> volatility moments.

Speaker Change: Streamline well and no beating the benchmark as you saw in most of the credit funds.

Speaker Change: And even more so in the flagship funds.

Speaker Change: Dollar denominated Latam high yield.

Alex Saigh: It was a question of being the right overall for the fund, the right duration with everything that happened. Also, there was a, as we see within the countries in South America, Chile coming first in lowering inflation expectations, low inflation, lowering interest rates with an interesting view on the potential political change later this year. So, I think that also reflects in better equities and better credit prices for Chile. And I think going into Colombia that we'll have elections early next year. Now, we're also seeing that the current government is driving very low popularity rates and there might be a change there as well.

Speaker Change: No. It was a question of <unk>.

On the right note overall for the fund the right duration with everything that happened.

Speaker Change: Also there was a as we see within the countries in South America, Chile coming first in lowering.

Speaker Change: Inflation expectations low inflation low interest rates.

Speaker Change: With a interesting view.

Speaker Change: On the a potential political change.

Speaker Change: Later this year. So I think that also reflects in.

Speaker Change: Better equities and better credits.

Speaker Change: Prices for Chile, and I think going into two.

Two to Colombia.

Speaker Change: Elections.

Speaker Change: Early next year. We are also seeing that the current government is.

As is.

Speaker Change: Driving very low popularity of rates in the <unk>.

Speaker Change: Might be a change there as well the markets will begin to dissipate that I think later this year, which will continue to benefit us as we position ourselves in these securities from these countries and then it comes to Brazil later next year.

Alex Saigh: The markets will begin to anticipate that I think later this year, which will continue to benefit us as we position ourselves in these securities from these countries. And then it comes to Brazil later next year. So it's a little bit far from the Brazilian election here. So that's plus I think the strategy of the team plus the moment of high interest rates in general did benefit the asset class. And I think it will continue to do that. I think we raised a private credit fund late last year, early this year. And I think we're already anticipating on raising a second private credit fund, a LATAM, Pan Regional, sometime this year because of no high interest from investors.

Speaker Change: So it's a little bit far from from the Brazilian election year.

Speaker Change: So that plus I think the strategy of the team plus the moment no high interest rates in general.

Did benefit.

Speaker Change: The asset class.

Speaker Change: I think it will continue to do that I think we raised a private a private credit funds.

Speaker Change: Late last year early this year and I think where we are.

Speaker Change: Anticipating no raising our second private credit funds.

Speaker Change: Latam regional some.

Speaker Change: Sometime this year because of no high interest from investors. So we might launch private present number number two already.

Alex Saigh: So we might launch a private credit number two already nine months after closing private credit number one, which you can see that I'm giving you some data points on the high level of interest from investors for our credit products in general. On the private equity seven and infrastructure five that you asked, Private Active 7 will probably finish with around $2 billion if no adding this SMAs that were directed to Private Active that I just mentioned during the call. The SMAs that we raised in the first quarter, most of them were guided to invest along Private Active 7 and to invest along Infrastructure 5.

Speaker Change: Nine months after closing credits.

Speaker Change: Credit private credit and number one which you can see that I'm, giving you some data points on the high level of interest from investors.

Speaker Change: For our credit products in general.

Speaker Change: On the private equity, 7% infrastructure five that you asked.

Private equity seven we'll probably finish with around $2 billion of adding this sma's.

Speaker Change: Were directed to private equity that I just mentioned joined.

Speaker Change: Joining the call.

Speaker Change: Some the Smes that we raised in the first quarter most of them were guided to private equity.

Speaker Change: To invest along private equity seven and to invest along infrastructure five.

Alex Saigh: So we'll probably land around $2 billion. There are very good fee pay management fees and performance fees, these SMAs. So it adds to that vintage. So within the vintage of Private Active 7, we have the closed-end fund. We have some closed-end funds that are quite regional, closed-end funds just for Brazilian Reais. We're going to have a closed-end fund just for Colombian Pesos. And we have now these SMAs. So if you add the Pan-Regional Dollar Denominated Fund with the Brazilian just Reais fund, the Colombian just Pesos, this Colombian Pesos Denominated Fund, and the SMA, and all of these, they have to invest together because it's a...

Speaker Change: So we will probably land around $2 billion.

Speaker Change: <unk>.

Speaker Change: And very good feedback.

Speaker Change: Management fees and performance fees. These sma's.

Speaker Change: Add to that.

Speaker Change: So that vintage so within the vintage of of private equity seven we have the closed end fund we have some.

Speaker Change: Closed end funds that are planned regional closed end funds just for Brazilian Reais, we are going to have a closed end fund just for Colombian vessels and we have now. These estimates. So if you add the pan regional dollar denominated funds with a Brazilian just rice funds.

Speaker Change: The Colombian just business.

Speaker Change: Columbia business denominated funds and the <unk>.

Speaker Change: And the SME and all of these they have to invest to get that because its sake.

Alex Saigh: That's how investors ask us to invest alongside. One fund investing alongside the other, even though they have different currencies that denominate their management fees and performance fees, they all invest together. So it's a $2 billion vintage. Same for Infrastructure Fund 5. I think we're going to surpass the $2 billion. Probably we're going to be at the $2.5 billion. We already surpassed the $2 billion, probably going to be at the $2.5 billion. And I was also always saying that it's going to be around $2 billion to $2.5 billion. And Private Equity 7 is going to be around $2 billion.

Speaker Change: That's that's how investors asked us to invest alongside one fund investing alongside the other even though.

Speaker Change: They are they.

Speaker Change: They have different color currencies that denominator their management fees and performance fees. They all invest together.

Speaker Change: So it is a $2 billion vintage now same for infrastructure.

Speaker Change: Structural fund five I think we're going to surpass the $2 billion.

Speaker Change: Probably we're going to be at the $2 five we already surpassed 2 billion probably going to be at the two five.

Speaker Change: Was also always saying thats going to be around 2% to two five in private equity.

Speaker Change: <unk> is going to be around two so we will get there are private equity seven and info is going to be closer to two five.

Alex Saigh: So we'll get there for Private Equity 7. And Infra is going to be closer to $2.5 billion. We have Infrastructure Development Fund 5 dollar denominated and regional. We have Infrastructure Development Fund 5 Reais denominated. We have Infrastructure Development Fund 5 Columbia Business denominated. And we have these SMAs that invest paying fees alongside all these funds that I mentioned. So only that we're going to reach, I think, over $2.5 billion. So happy that we're there. I think it took longer than we expected. I think not only us, but all the other alternative managers around the world are feeling that fundraising is taking longer than they expect.

Speaker Change: Same.

Speaker Change: We have infrastructure development fund five dollar denominated Pan regional we have infrastructure development from five Reais denominated we have infrastructure development from five <unk>.

Speaker Change: Columbia business the nominated and we have these SMA invest bases alongside these all these funds that I mentioned total knee that.

Speaker Change: We're going to reach I think over $2 5 billion.

Speaker Change: So happy that we're there I think.

Speaker Change: Took longer than we than we expected.

Speaker Change: I think not only us, but all the other alternative managers around the world.

Speaker Change: <unk>, that's a fundraising is taking longer than they expected, but I'm happy that we're landing at least.

Guilherme Grespan: But I'm happy that we are landing at least with the numbers that we were talking throughout the last two years, actually. Thank you very much for... I hope I answered your question exactly. Yes, yes, you did. Thank you very much.

Speaker Change: With the numbers that we were talking throughout the last two years actually.

Speaker Change: Thank you very much for I hope I answered your question exactly thank you.

Speaker Change: Yes.

Speaker Change: Yes, yes.

Speaker Change: Thank you Alex.

Alex Saigh: Thank you and I would now like to hand the conference back over to Alex Fogg for closing remarks. Well, thank you very much for your time here. I think, you know, again, out for a great start in 2025, you know, great fundraising, great results. I think the, as I mentioned here, when answering Tito's question, our FRA for the quarter $42.6 million dollars. multiply by four and then if you add the same incentives as last year and then an average $3 billion capital raise for this year, we get already to the 210. So very well positioned here to deliver the $225 million guidance that we gave you guys.

Speaker Change: Thank you and I would now like to hand, the conference back over to Alexander for closing remarks.

Speaker Change: Well. Thank you very much for your time here I think now again for a great start in 2025.

Speaker Change: Great Fund raising.

Speaker Change: Great results I think the as I mentioned here when answering <unk> question, our FRE for the quarter of $42.6 million.

Speaker Change: If you multiply by four by four and then if you add the same incentive fees of last year and then.

Speaker Change: On average $3 billion capital raise for this year, we get as already said the 210, so very well positioned here to deliver the $200 million to $125 million guidance that we gave you guys of course also very well positioned to deliver on the $6 billion.

Alex Saigh: Of course, also very well positioned to deliver on the $6 billion fundraising target. And as we move into the year, I think that the region and Patria probably will be very, very much benefited from the whole tariff uncertainties because of the low geopolitical risks of the region and how we are very well positioned to serve our Asian clients, Middle Eastern clients and European clients. So thanks for your patience.

Speaker Change: Fundraising target.

Speaker Change: And as we move into the year I think.

Speaker Change: The region is battery, probably it would be very very much benefited from the hole.

Speaker Change: Tariff uncertainties because of the low geopolitical risks of the region and how we are very well positioned to serve our Asian clients middle Eastern clients in European client clients. So thanks for your patience I hope to see you in person soon.

Unknown Executive: I hope to see you in person soon. And again, have a good Friday. Thank you very much. Bye bye.

Speaker Change: Again have a good Friday, thank you very much bye bye.

Unknown Executive: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect everyone have a great day.

Speaker Change: [music].