Good afternoon, and welcome to the Vinci Partners First Quarter 2021 Earnings Conference Call. As a reminder, this call will be recorded. I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead, Anna..

Thank you, and good afternoon, everyone. Joining me today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, Head of Private Equity and Investor Relations; and Sergio Passos, Chief Financial Officer.

Earlier today, we issued a press release, slide presentation and our financial statements for the quarter which are available on our website @ir.vincipartners.com..

Thank you, Anna. Good afternoon, and thank you all for joining our call. This was the first quarter for Vinci Partners as a public company. After our IPO earlier this year. We were able to generate very strong results as we continue to deliver solid returns for our fund investors.

Nonetheless, the current market valuation of our stock in our view does not represent the actual value of our platform, our existing investments in our very significant growth opportunities across the firm. So you're not deficient to analysis in our quality results.

We are also initiation our share repurchase program of up to 85 meter rise, which has been approved by our board of directors. We are committed to delivering shareholder value and this buyback program, outdoor recreation reflects the Board's confidence in our current prospects and long-term growth.

We believe that this program represents an, a creative opportunity to deploy cash from our results in a way that should benefit our shareholders. Bruno we'll discuss the rest purchase plan in more detail in a few moments.

On to all financial results, Vinci Partners reported excellent results for the quarters with IFRS net income of BRL47 million, a few related earnings of BRL50 million or R$0.88 per share and distributive earnings or BRL47 million or R$0.83 per share.

Our business is profitable and growing with a strong operating leverage, long-term FYE and distributable earnings margins continue to expand in our relative fixed costs over AUM are decreasing year after year. We ended the quarter with BRL55 billion in AUM, which represents 45% growth year-over-year.

Our very expressive AUM growth this quarter was a result of primarily two factors. First we have probably one of our best quarters for fundraising in private market strategies. We raised almost BRL2 million to five different fundraisings of which two are new strategies.

We are very excited about in the real estate and infrastructure segments for which we will continue to raise capital throughout the year..

Thank you, Alessandro and good afternoon everyone. On slide eight, we will walk through some of the financial highlights for the quarter. Stimulated earnings were BRL60.2 million for the first quarter or R$0.88 per share, a 13% increase year-over-year and BRL157 million over the last 12 months up 25% year-over-year.

Vinci generated distributable earnings of BRL47.2 million in the quarter or R$0.83 per share up 41% year-over-year and BRL139.8 million over the last 12 months up 17% year-over-year. As I mentioned, total AUM reached BRL55 billion at the end of the first quarter, an increase of 45% on a year-over-year basis.

Our ended the quarter at BRL52 billon grow even faster up 48% year-over-year, with much of it's related to the private market capital subscriptions and that inflow seen across our IP&S business. Performance fee eligible AUM, total BRL35 billion at the end of the quarter and represented nearly 70% of our total fee in the AUM.

Let me now touch on the rationale and details for the share repurchase program we announced today. We are long-term believers in our business and continue to be focused on how to further strengthen it.

Our desire is to continue building our shareholder base and our presence in the markets as a public company in the vision, all partners are and will continue to be shareholders of the firm for the long-term, given the lockups agreed upon during the IPO process.

We're aligned with other shareholders to generate returns while investing in Vinci Partner stock. Our platform is diversified and presents many different growth avenues. We have grown our company against the backdrop of cyclical market volatility in Brazil, since our foundation in 2009 and have been able to demonstrate its resiliency over time.

As I did some information before we have not seen annual relevant change of the current market scenario that could justify our opportunity being any different than a few months ago and the acceleration of our AUM growth in the first quarter of 2021 is a testimony to that..

Thank you, Bruno. In slide 16, we can see that our field related revenues continue to expand alongside AUM growth, management and advisory fees were BRL97 million highs in the quarter. He presented an increase of 23% year-over-year.

Management fees having been the main contributor to revenues accounting for almost 80% of total net revenues over the last 12 months and have grown 30% year-over-year.

As we have mentioned in our 20 half and during our IPO process management fee revenues during 2019, or benefit by an extra revenue recognition coming from the management fee, catch up, charge it on last closes off a VCP III. This was fully charged during the first and second quarter of 2019 and not to the fundraising period of VCP III.

This affects the base of our first quarter of 2020 last 12 months numbers favorably. We are showing 19% growth over the last 12 months of the first quarter, 2020 round against the prior year period on that and adjusted basis. But I just in for the VCP III catch-up revenue, this growth would have been a much higher 31% figure.

The main reason for this growth rate was growth in fee pay AUM. In slide 16, we give a little more detail regarding our expenses for the product. Total expenses had an increase of 52% year-over-year during the first quarter 21. This is primarily due to new recurring costs related to becoming a public company totaling about BRL3.3 million.

These new costs can be segregating three categories, the first and most relevant representing 40% of new recurring costs related to becoming a public company at third party service provider’s fee such as adjutant auto fees, NASDAQ listing fees and others. Additionally, as a Public Company, we had to make some adjustments in our structure.

We hired new members of our board of directors, and we also had to make some new addition in our support teams like the shareholder relations team and additional people for financial reporting.

That's last, as we stated in our F1, during our IPO process, we adjusted the company's compensation structure for regular G&A compensation style after that PO, which impacted personnel costs.

So when you look at our expenses line bonus related to management and advisor fees view at that 24% rate year-over-year in line with the growth seen in fuel related revenues. Therefore compensation is directly linked to performance revenues.

So when they have a quarter with a bigger contribution from performers, we should see bigger compensation as well. We also had an additional BRL1.6 million expense in the quarter related to a new branding project that is not mention in the beginning of our call targeted mainly towards our retail dedicated distribution channels.

We initiated this process during the quarter and it should take place throughout the year. Both a new public company costs and one time strategic brand effort. We will present headwinds for a stronger margins gains easier.

Although we do expect to be able to grow FRE margins in 2021 versus last year, despite the effects, if the current AUM growth trends continue and additional comment, our Board Of Directors just approved the stock compensation plan presenting 5% of the company's total stock on this first range, we will locate approximately 2.8% of the shares for senior employees that have inj as a strike off $18 per share as the company's IPO price.

This plan will take place three years from our IPO date with a one year maximum deadline for full exercise, turning to slide 17, we present a fee related earnings, FRE was BRL50.2 million or R$0.88 per share. He presented an increase of 13 year-over-year. Over the last 12 months, FRE was BRL157 million, an increase of 25% year-over-year.

It would be even greater considering the catch up effect from VCP III in private equity. FRE continues to be the core indicator of our business.

As management fees continue to grow alongside our strong fundraising in the FRE Bridget chart, we present a breakdown of a few related revenues and expenses disregarding additional costs for the quarter are compatible FRE margin would have been 57%, five percentage points higher than our fee managing for the quarter of 52% and 50 basis points higher.

Then after imagine for the first quarter of 2020, which was positively impacted by lower than user 35 expenses in slide 32 in the presentations appendix, we break down our expenses for the quarter in comparison to the same period last year for the full year 2020 FRE margins reached 50.5% as is a typical quarter was normalized throughout the middle of the year.

Next is slide 18 pre was BRL6.7 million in the quarter, Most of it coming from our international IP&S business, which was up BRL9.2 million year-over-year. This increase was primarily due to a bigger contribution from performance fees in IP&S in the first quarter of 2021. Additionally FRE in the first quarter of 2020 was impacted by a reversal effect.

Since we had provision performance fee as negative only alleged performance in the quarter during the last 12 months, PRE was still a BRL6 million earn 2% year-over-year It's important to mention that our PRA has a seasonal effect since most of our liquid funds charge performance semiannually, usually in the second and fourth quarters of the year.

Next thing is like 2019, we present results from GP commitments in private market funds. We broke down the exposure and results between our GP investment income, which reflects the returns of capital allocated to our liquid funds and financial income, which is the result of our liquid allocations.

Total portfolio returns reached BRL5.6 million in the quarter representing an increase of 536% year-over-year as we had the relevant increasing financial income due to the impact from the deployment of the IPO proceeds.

As discussed in that last call, we designed, the portfolio to locate our balance sheet capital until resource are called into our e-Leaked funds. This portfolio was designed for a tax return of CDI plus super year, while we also displayed low volatility. Given the market volatility required we are located, the IPO proceeds conservatively.

Therefore at the end of the quarter, we still had about 82% of our cash allocated in fixed income investments. Since the end of the quarter, as we saw markets is starting to recover. We accelerated cash deployment towards the target portfolio.

In terms of returns, we presented the quality direct records of the proposal target, look at the purchase volume for the last 24 months on a quarterly basis. We do expect to see some minor volatility in your financial income throughout the quarters.

As you can see in the back test, we have some quarters better than others, but in the long term, we expect to achieve returns at that target of CDI. Plus 2% per year for the liquidity portfolio location. Turning to slide 20, distributable earnings worth BRL47.2 million in the quarter or R$0.83 per share. That present an increase of 41% year-over-year.

Over the last 12 months, distributable earnings totaled BRL140 million or R$2.46 per share. Finally is slide 21 shows our cash and investment balance. We finished the first quarter of 2021 with a total of R$1.45. in cash and investments or R$25.39 per share. To date our cash investment balance are comprised primarily by fixed income and liquid funds.

Although we expect to be gradually shifted into private markets, GP funds’ investments as capital commitments are called in the coming years. As shown in the appendix, we ended the first quarter of 2021 with total GP commitments of BRL179 million of which BRL24 million has it been called.

And that currently valued at approximately BRL40 million with that. I will turn the call back to Bruno..

Thank you, Sergio. Turning to our segment highlights. As we have stated in our latest earnings conference call, we will start presenting this quarter FRE, PRE and segment distributable earnings for each of our segments.

As you can see in slide 23, almost 50% of our effort in segment distributable earnings come from our private market strategies followed by a 20% contribution from liquid strategies, both in our FRE and segments and business represents 13% of FRA and 21% of our segment distributable earnings.

As in this quarter, it had a bigger contribution on realized performance revenues. Finally, our financial advisory business accounted for 18% of FRA and 16% of segment distributable earnings in the quarter.

Moving on to each of the segments, starting with our private market strategies on slide 24, FRE and segment distributable earnings were up 14% year-over-year due to the growth in CPA AUM, we have seen over the year with highlights from our fundraising in our listed vehicles in real estate and infrastructure.

The final closing of VIR four in private equity, and the first close is over to new strategies the FDL and VS. Our private market strategy still have great room to grow, especially across new strategies. We were allowing over the year, such as our newly listed REIT that is currently going through an IPO process in the Brazilian stock market.

We have also signed a joint venture recently for a new strategy in the agribusiness sector, which will be co-managed by our real estate and credit segments, therefore all around great opportunity to continue to grow our business.

We're seeing great deal making activity in our funds, our private equity impact funds VIR IV has already deployed about 10% of its committed capital in VIGT our listed infrastructure fund fully deployed the proceeds raised in its latest fundraising this year, and already has a pipeline of potential assets that can lead to a follow on offering for the funds.

Liquid Strategies, FRE was up 12% year-over-year, as it can see in slide 25, while segment deceptive earnings were up 20% year-over-year due to a bigger contribution. Our performance season, the quarter compared to the first quarter of 2020, that had booked about one meter realized and unrealized performance.

Fee-Paying AUM grew at a 40% rate year-over-year with a significant portion coming from the sovereign wealth fund mandate that does not pay management fees we mentioned earlier on the call.

Because of this effect, the average management fee rate decreased seven basis points year-over-year, over the next quarters this effect will be lapped, and we should also see a positive effect on the average management few rates coming from the end of the revenue share agreement with announces that happened at the end of last year.

Moving on to our IP&S business on slide 26 AUM almost doubled since the first quarter of 2020, which translated into FRA growth of 71%.

This quarter, the IP&S offshore mandates were the main contributors to realize performance revenues, bring the IP&S per year to BRL5 million rise, which translated into 183% growth in segment distributable earnings year-over-year.

Finally, in slide 27, we can see advisory revenues for our financial advisory business, which is mostly aligned with the same quarter the year before. In this quarter, we acted as an exclusive advisor to Espaçolaser and its shareholders in its initial public offering in the Brazilian stock market or B3.

The company was the first beauty service company to publicly listed shares in the Brazilian stock market. With that, we thank you all for joining the call and I would like to open it for questions operator,.

Our first question comes from the line of Tito Labarta of Goldman Sachs. Your line is open..

Hi Good evening, everyone. Thank you for the call and taking my question. A couple of questions first maybe if you can give an update on, on how you see the, the fundraising continue in into TQ so far.

I guess in April and may can give any color on that in second question, in terms of margin that you highlighted some additional expenses you're incurring, but how should we think about that FRE margin going forward, particularly as you continue to grow and gain scale, do you think that can expand this year or any color you can give on, on sort of the evolution of that FRE margin going forward? Thank you..

Hi, Tito, this is Sandra. Thank you for attending our call. Taking your first question about the fund raising trans. We are seeing pretty much the same trends that we saw on the left quarter.

So we believe that we continue to see a very strong trend, both from the private market side and this comprise all the different, I'd say private markets strategies, private equity, real estate infrastructure, and also private credit and also very, very strong activity.

And we are gaining a lot of different mandates and competing for others in our IP&S division. So we have seen pretty much the same trends especially strong in private markets as a whole. And in IP&S talking about the FRE margin to your point we continue to see the trans off the, the FRE margins keep growing as we get are more AUM.

Of course, as Sasha explained during the call, I will have some effects this quarter.

That's the cost is that we had to incur related to being a public company, but going forward, of course, that will be nor a no, no new situation, because it will be a public company move forward, but we'll continue to have an improvement that we expect over time, you know, FRA margin due to the gains od AUM.

That's pretty clear, maybe just a couple of ups, if I may. Just, how about on the public equity side, some concern Thursday afternoon.

You, do you think that that outlook for the public equity side to improve on the fundraising and just to be clear on the, on those additional expenses, is this sort of like the new recurring level or those continue to grow? Just to get a sense of, of how much of those recurring expenses will impact going forward knowledge Republic?.

Okay, I'll take the first question about the public athletes fundraising and Bruno. We'll talk a little bit about more detail about the expenses in terms of public equity.

We are not seeing any redemptions important redemptions but of course the public markets have be a little bit more soft in terms of fundraising on the first quarter, as you saw taking out the redemption that came from the sovereign wealth fund that Bruno explained.

But on average, the core of AUM in public act has been very stable in the growing slightly, but not so strong. Like the other asset class, we are seeing the same trend a few now in this quarter. So we use, you probably see the growth from AUM coming more from private markets and IP&S..

Yeah Ttito and going through a question regarding the margins. So the, the, there were two, two effect that I would say in the first quarter first started a new, new recurring level of expenses that we're going to have that impacted our first quarter, 2021 number. So that will be the current, the, the new level of expenses going forward.

So if you look at second quarter, third quarter we only going to be able to laugh that next year once we have a full year of expenses coming from, from public company costs. And then the second point is that last year, the first quarter margin was seasonally very high. So you remember that the year ended FRA margin was about 50%.

We are for the first quarter, we did close to 52, and I think if the trends continue in the same direction we should be able to post a low fifties type of FRA margin. So that's 51, 52 52% if the right direction, that that should be more or less the level four for margins this year. Right. So if the trends continue the current base that they are..

Okay, great. That's very clear. .

Thank you. Our next question comes from the line of Michael Carrier of Bank of America. Your question, please..

Hey guys, this is Dean Stephan on for Mike. You know, just given the announcement around the, the share, buyback program. Can you just provide an update on your capital priorities moving forward and how they may be split between buy backs, the semi-annual dividend that you mentioned potential M&A opportunities, well as investment in the business.

And then related to that, you know, on the buyback side, you expect this to be more of a one-time authorization, or do you, do you expect to have a continual authorization moving forward? Thanks..

Okay. Thank you so much. This is Bruno again. So we, we made a commitment of distributing as cash dividends, at least 75% of our distributable earnings. And we expect to continue to have that commitment but we did have flexibility regarding the, the audit 25%, right.

So the idea was to take advantage of that access 25% now in a moment where we still have a very large cash balance from the IPO, that's going to be directed towards mostly funny off new private markets funds that is still one allocated, right. So it's going to take a few years for us to allocate that fully.

So use that access 25% of the Subaru earnings to buy back our stock. Right.

So w the way that we thought about this was to kind of look forward a few quarters in time in the amount of the shift to burn is that we expected to post and then back that would that 25% to see what will be like a medium term buyback that we'll be able to support we far on free cash flow.

So that that's the plan for the current for the current program. I think once this program is exhausted we will probably sit down again and rethink what will be the destination of that access 25% distributable earnings that we have that is unallocated today.

So that could be either a refresh into a new buyback program or eventually pay it out as dividends. But that was more or less a lot of thought in regards to the buyback in regards to the Audre capital uses it really hasn't changed. So we are looking forward to deploying the capital on our public markets fund.

So if you look at the appendix today, we have about 175 million of commitments to 180 million of commitments to our private market funds. So the idea is to continue to roll out those commitments at that leverage ratio that we mentioned during our IPO process using about 5% of amusement all the total size target size of the funds.

And obviously we continue to look for M&A opportunities as well in the markets trying to figure out if there's anything that might enhance the platform. So that also continues to be a potential use of, of the capital that we have in balance sheet of the firm today..

Got it. Thanks. That's helpful. And just as a follow-up, you know, in the slide deck and in the prepared remarks, you guys highlighted the new branding project that started in one Q and is expected to run through 2021.

Can you just provide some additional detail on kind of what that project entails and what impacts that could potentially have to both revenue at revenues and expenses in the near and the long-term? Thanks..

Okay. Thank you very much. That's Alessandro. The idea is that stew today we have the minority portion of our AUM coming from retail, being directly through our listed funds as traded in the stock exchange or Fu located as in distributors.

But this is growing over time, if a large number of retail investor expose it to our brand, and we never communicated through a marketing branding directly to this public.

And the idea is that we have been developing is exactly how with tap this market in a better way through a branding and marketing project, we expect this to be of course highly creative in terms of the understanding of our platform and the understanding of follow-up products and service to the retail clients.

We did some inside this costs we have some kind of up interviews and understanding of how the public view ourselves today. And we got to the point that they know not so much of Vinci just on the high level.

So we decided to create this project exactly to create a deeper understanding of our brand and that we are very constant and we believe that will translate in more avenues in the future as we believe that that will translate into more AUM coming from just public. That's the retail investor..

Yeah. And just to compliment that this is Bruno again you, you asked the question in regards to the costs. So today the disabilities for just a few medium, more in terms of expenses in the next few quarters. So we had to think 1.5 in the first quarter, and it's going to be assume, you know, more spreads throughout the next few quarters. .

Thank you, therapeutically. No further questions in queue at this time.

Are there any closing remarks?.

That's Alessandro I just would like, thank you all for your patience and attention with us. We are very happy to deliver this results as our first quarter as a public company, and we expect that we'll be able to deliver all the growth that we're expecting going forward. So I'd like to thank you all and good evening to everybody..

No, this concludes today's conference call. Thank you for participants. You may now disconnect..