Vinci Partners(VINP)2024-11-10 03:33Financial Data and Key Metrics Changes - Vinci generated fee-related earnings of R1.02 per share for Q3 2024, with adjusted distributable earnings of R1.08 per share, reflecting a 12% year-over-year increase on a per share basis [6][55] - The company reached R169 million or R57 million in the quarter, reflecting a 12% year-over-year increase on a per share basis [10] - The public equity strategy saw positive net inflows, primarily from institutional investors, indicating a potential recovery in this segment [22][71] - The IP&S segment experienced outflows of R1.2 billion, primarily driven by withdrawals within separate mandate strategies [25][88] Market Data and Key Metrics Changes - The Brazilian economy has been growing strongly post-pandemic, while the stock market has remained stable since early 2021, leading to a perception of undervaluation among international investors [23][71] - The company noted that Brazil's market is currently two standard deviations from the mean compared to the S&P 500, suggesting a favorable entry point for medium-to-long term investors [22] Company Strategy and Development Direction - The combination with Compass marks the establishment of a leading pan-regional alternative asset manager, enhancing the product offering across major strategies [11][20] - The acquisition of Lacan will allow Vinci to launch a forestry strategy, which is expected to complement existing investment solutions and tap into the carbon market [16][60] - The company aims to expand its reach into other Latin American markets beyond Brazil, with potential growth in countries like Uruguay and Chile [62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong finish to the year, anticipating final closings for several funds and continued fundraising success in private markets [8][10] - The company expects to see growth in the retirement services vertical following the launch of the Mio Vinci Partners platform [27][30] - Management acknowledged the challenges posed by high interest rates in Brazil but remains focused on navigating these conditions effectively [25][94] Other Important Information - The integration process with Compass is progressing well, with a strong cultural alignment and shared vision between teams [13] - The company expects the acquisition of Lacan to favorably impact AUM and segment results for Q4 2024 and into 2025 [19] Q&A Session Summary Question: Can you talk about the ambitions for the Lacan vertical mid to long-term? - Management expressed enthusiasm for Lacan, estimating potential AUM could reach around R5.5 billion to R3 million in retroactive fees for the quarter, with expectations for continued impact from new commitments in VCP IV and VICC [78][80] Question: How is the IP&S segment expected to evolve given the current interest rate environment? - Management noted that while the high interest rate environment poses challenges, recent performance improvements in funds may help moderate outflows [94]