Patria(US:PAX)2025-11-04 15:00Financial Data and Key Metrics Changes - Patria's assets under management (AUM) exceeded $50 billion, representing a growth of over 3.5 times since its IPO in 2021 [6][7] - Organic fundraising surpassed $1.5 billion in Q3 2025, with year-to-date totals reaching $6 billion, indicating strong momentum [8][11] - Fee earning AUM grew to approximately $38.8 billion, up 4% sequentially and 14% year-over-year [19][20] - Fee related earnings (FRE) for Q3 2025 were reported at $49.5 million, reflecting a 22% increase year-over-year and a 7% increase sequentially [22][23] - Distributable earnings reached $46.9 million, up 34% year-over-year and 22% sequentially [26] Business Line Data and Key Metrics Changes - The infrastructure and credit businesses led the organic fundraising efforts, contributing significantly to the overall growth [8][12] - The infrastructure Fund V raised $2.9 billion, marking a 40% increase compared to the previous vintage, making it the largest dedicated infrastructure fund focused on Latin America [12][13] - The credit business surpassed its total 2024 fundraising by nearly 15%, reaching $1.6 billion in 2025 [12] Market Data and Key Metrics Changes - The depreciation of the U.S. dollar against other currencies is seen as a catalyst for international portfolio diversification, prompting investors to seek exposure in regions with stronger fundamentals [10][11] - There is increased global interest in infrastructure investments in Latin America, benefiting Patria as a leading infrastructure investor in the region [11][12] Company Strategy and Development Direction - The company aims to raise $21 billion from 2025 to 2027, with specific targets of $6 billion in 2025, $7 billion in 2026, and $8 billion in 2027 [16] - Patria plans to focus on organic growth in 2025, with a potential restart of acquisition efforts in 2026 and 2027, particularly in real estate and credit sectors [35][36] - The company is looking to expand its GPMS (Global Private Market Solutions) business, particularly in the U.S. and Mexico, to enhance its global presence [36][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding the high end of the 2025 fundraising target of $6.6 billion, supported by strong fundraising momentum [16][18] - The company expects to generate approximately $15 million in performance-related earnings in Q4 2025, with potential for more monetization events [10][24] - The overall macroeconomic environment, characterized by persistent inflation and high interest rates, is seen as favorable for fundraising efforts [12][13] Other Important Information - The effective tax rate for Q3 2025 was reported at 3.3%, with expectations to hover around 10% annually in the coming years [26] - The Board approved an annual dividend of $0.60 per share for 2025, with a declared dividend of $0.15 per share for Q3 [27] Q&A Session Summary Question: Update on capital deployment pacing with $3.2 billion in pending fee earning AUM - Management indicated that the pending AUM will likely be deployed over the next 12 to 18 months, primarily in infrastructure investments [30][33] Question: Update on inorganic growth and asset classes of interest - Management stated that no acquisitions are planned for 2025, with a focus on organic growth, and potential acquisitions in real estate and credit sectors in 2026 and 2027 [34][35] Question: FRE guidance for the year and potential upside in Q4 - Management expects around $10 million to $12 million from incentive fees in Q4, which will be a significant contributor to surpassing the $200 million FRE target [44][46] Question: Update on GPMS product cross-sell evolution - Management highlighted successful phases in gaining client confidence and attracting new investments, with plans to launch new products in the GPMS structure [66][75]