Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vinci Partners Investments Ltd (VINP, Financial) reported an 8% year-over-year growth in assets under management (AUM), reaching 70 billion.
- The company successfully closed a combination with Compass, establishing a leading regional alternative asset manager in Latin America.
- Vinci Partners Investments Ltd (VINP) announced the acquisition of Laon, allowing them to launch a new forestry strategy, which is expected to be immediately accretive to earnings.
- The firm reported a 12% year-over-year increase in distributable earnings, highlighting strong financial performance.
- Vinci Partners Investments Ltd (VINP) saw positive net inflows in their public equity strategy, indicating growing investor interest.
Negative Points
- The IP and S segment continues to experience outflows, primarily driven by withdrawals within separate mandate strategies.
- The company anticipates a larger amount of non-operational expenses in the fourth quarter due to M&A activities, which could impact short-term profitability.
- The high real interest rate environment in Brazil poses challenges for certain investment strategies, particularly in the IP and S segment.
- Performance fees were primarily recognized in public equity segments, with local market conditions impacting the performance of leaked funds.
- The company faces headwinds in the IP and S segment due to fluctuations in short-term interest rates, which may continue to affect performance.
Q & A Highlights
Q: Can you talk more about the ambitions for the Laon acquisition, particularly in terms of AUM, geographies, and subproducts? Also, could you explain the increase in personal expenses and other G&A lines?
A: We are enthusiastic about Laon's prospects, especially with the potential for carbon market returns. We aim to reach around $1 billion in AUM, focusing initially on Brazil but potentially expanding to other Latin American countries. Regarding expenses, the increase was mainly due to the incorporation of Miu, with other increases aligned with inflation and health plan costs.
Q: Could you update us on the fundraising for VCP four and the demand from foreign investors? Also, do you think the positive net inflows in public equity mark an inflection point?
A: We expect to close VCP four by year-end, with strong interest from local institutional investors, marking a shift from previous international dominance. For public equities, the positive inflow is driven by international investors recognizing undervaluation in Brazilian securities. We anticipate further growth, especially with new product launches in collaboration with Compass.
Q: What was the amount of retroactive fees this quarter, and what are the expected closings for other flagship funds? Also, could you provide details on Laon's fourth vintage fundraising?
A: Retroactive fees were 3 million this quarter. We expect significant closings for VCP four and ICC in the coming quarters. Laon's fourth vintage is targeting $800 million, with commitments already around a third of this target. We aim to leverage our international distribution platform to achieve this.
Q: Regarding IPNS, should we expect continued outflows given the interest rate environment?
A: The trend has shifted slightly, with fewer outflows from commingled funds and more from specific mandates. We expect moderation in outflows due to improved fund performance, but significant inflows are unlikely without a more favorable interest rate environment.
Q: Could you provide more details on the expected timeline for additional closings in your flagship funds?
A: We anticipate closing ICC in the first quarter of next year, possibly extending to mid-year depending on demand. SPS four is expected to have its first close above the size of the previous fund, indicating strong interest and potential for growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
