Patria Investments (PAX) Update / Briefing Transcript

Summary of Patria's Infrastructure Business Conference Call Company Overview - Company: Patria - Focus: Infrastructure business, specifically in Latin America - Key Personnel: Robert Lee (Head of Shareholder Relations), Matt Cook (Investor at Potento Partners), Roberto Siddharra (Partner and Chief of Portfolio Management for Infrastructure) Key Points and Arguments Infrastructure Platform - Patria's infrastructure platform started in 2006 and is currently raising Development Fund V with over $2.1 billion in fee-paying commitments [5] - The platform has $6.7 billion in Assets Under Management (AUM), with $3.7 billion in fee-earning AUM and $1.6 billion in pending fee-earning AUM [5] - Infrastructure generated approximately 17% of management fee revenues in Q1, with expectations for Infrastructure Fund III to be a major source of performance fee generation [5] Growth Potential - Infrastructure fee-paying AUM is expected to grow from 10% to 12%-16% of total fee-earning AUM, indicating a potential growth rate of over 30% per annum [6] - Significant deployment opportunities exist, with an actionable pipeline of over $400 billion in the region over the next five years [7] Competitive Advantage - Patria has over 80 professionals in its infrastructure business, including engineers and operations professionals, providing a competitive edge in generating consistent excess returns [6] - The firm has a specialized investment team organized into verticals, allowing for in-depth market knowledge and relationships [28] Market Opportunities - Recent privatizations in Brazil, such as SABESP (valued at over $8 billion) and Electrobras (valued at over $12 billion), present significant opportunities for Patria [16] - The firm is well-positioned to capitalize on upcoming auctions in various sectors, including 30,000 kilometers of transmission lines and 5,000 kilometers of toll roads, with expected CapEx exceeding $20 billion [93][95] Data Center Platform - Patria has launched a new data center platform called Omnia, starting with over 100 megawatts in IT capacity and an initial commitment of around $1 billion [21][22] - The demand for data centers is expected to grow significantly, driven by advancements in AI and the availability of renewable energy in Brazil [24] Value Creation Strategy - Patria employs a hands-on approach to managing portfolio companies, focusing on operational efficiency and cost reduction [40][43] - The firm has successfully implemented strategic procurement initiatives, saving millions across its portfolio [45] - Examples of successful value creation include reducing operational expenses in toll roads by 15%-20% and improving asphalt procurement strategies [43][66] Investor Relations and Fundraising - Strong relationships with Limited Partners (LPs) have led to co-investments and direct involvement in auctions, enhancing fundraising capabilities [75][76] - The firm has a track record of successful fundraising, with significant capital raised from sovereign wealth funds [6] Conclusion - Patria's infrastructure business is positioned for substantial growth, driven by a robust pipeline of opportunities, a competitive team, and a strategic focus on value creation. The firm aims to leverage its expertise to capture a significant share of the privatization and infrastructure development market in Latin America.