Good day, and thank you for standing by. Welcome to Patria's First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Rob Lee, Head of Investor Relations. Please go ahead, sir.

Thank you. Good morning everyone. And welcome to Patria's first quarter 2025 earnings call. Speaking today on the call are our Chief Executive Officer, Alex Saigh; and our Chief Financial Officer, Ana Russo; and our Chief Economist, Luis Fernando Lopes for the Q&A session. This morning, we issued a press release and earnings presentation detailing our results for the quarter, which you can find posted on the Investor Relations section of our website or on Form 6-K filed with the Securities and Exchange Commission. This call is being webcast and a replay will be available. Before we begin, I'd like to remind everyone that today's call may include forward-looking statements which are uncertain, do not guarantee future performance, and undue reliance should not be placed on them. Patria assumes no obligation and does not intend to update any such forward-looking statements. Such statements are based on current management expectations and involve risks, including those discussed in the risk factors section of our latest Form 20-F annual report. Also note that no statements on this call constitute an offer to sell or a solicitation of an offer to purchase an interest in any Patria fund. As a foreign private issuer, Patria reports financial results using International Financial Reporting Standards or IFRS as opposed to U.S. GAAP. Additionally, we would like to remind everyone that we will refer to certain non-IFRS measures which we believe are relevant in assessing the financial performance of the business, but which should not be considered in isolation from or as a substitute for measures prepared in accordance with IFRS. Reconciliations of these measures to the most comparable IFRS measures are included in our earnings presentation. Now I will turn the call over to Alex. Alex?

Thank you, Rob, and good morning, everyone. 2025 is off to a very exciting start as fundraising totaled a record $3.2 billion, highlighting the expanded reach of our investment platforms and distribution capabilities, and putting us well on the way to achieving our $6 billion fundraising target for the year. This record fundraising benefited from the signing of several large customized investment accounts and SMAs special managed accounts, emblematic of how we evolved from a product-centric asset manager to becoming a solutions provider for our investors. We also reported first quarter '25 fee related earnings or FRE of $42.6 million or $0.27 per share, representing 21% and 16% year-over-year growth, respectively, despite rising global uncertainty. Fee earning AUM grew 6% sequentially and 46% year-over-year. Most notably, we generated over $700 million of organic net inflows into fee earning AUM in first quarter '25, reflecting an annualized organic growth rate of over 8.6%. This is an important KPI to monitor over time as it highlights our ability to drive organic revenue and earnings growth independent of M&A and investment returns. As we highlighted at our recent Investor Day on December 9th, our increased diversification and the expansion of our investment and product capabilities is paying off in the form of robust fundraising and profitable net organic growth. In addition, fee earning AUM growth and management fee revenues benefit from the over 60% proportion of our assets, which earn fees based on net asset value and/or market value compared to below 10% at the time of our IPO, and which provides the opportunity for long-term compounding. All of the above reinforces our confidence in the three-year targets we introduced at the event. Now let me quickly summarize our first quarter results before we move on to some of the other highlights for…

Thank you, Alex, and good morning, everyone. As Alex mentioned, 2025 is off to a very exciting start as the expanded reach of our investment platforms and products, and distribution capabilities helped us raise $3.2 billion in the first quarter, a quarterly record. Strong results in the quarter increases our confidence that we are on track to achieve our 2025 objective. Let's review our first quarter results. As Alex highlighted earlier, we are very pleased with our fundraising in the quarter and believe we are well on track to achieve our $6 billion target for the year against a backdrop of increased global uncertainty and volatility. Our FEAUM grew 46% year-over-year and 6% sequentially to approximately $35 billion, while acquisitions drove most of the year-over-year increase, the strong sequential growth reflects a combination of solid net organic inflows as well as positive contribution from investment performance and FX movements due to the depreciating U.S. dollar. As a result of the U.S. dollar depreciation in the quarter, fee earning AUM recouped approximately half of the negative FX impact in the fourth quarter 2024. More importantly, however, and as we highlighted in prior calls, FX fluctuation has limited impact on our FRE since our expense base provides a substantial hedge against currency movements that may impact our fee earning AUM and consequently our fee revenues. As reviewed at our Investor Day back on December 9th, based on our current asset class mix, a 10% variance in soft currencies against the dollar impacts FRE by only about 2%. It's particularly noteworthy that in the quarter, Patria generated approximately $700 million of net inflows into FEAUM for an 8.6% annualized organic growth rate. Since the end of the third quarter '24, Patria has generated about $1 billion of organic net inflows, highlighting the organic…

[Operator Instructions] Our first question is going to come from the line of Craig Siegenthaler with Bank of America. Your line is open. Please go ahead.

Good morning, Alex. Hope everyone's doing well. My question is on the macro side, the trade conflicts should be a positive for LatAm and Brazil, encouraging more FDI. How are your portfolios positioned from higher tariffs from the U.S. and some of its largest trade partners, including China?

Thank you, Craig. Nice speaking with you. This is Alex here, and thanks for your presence here in this call. Well, we are -- if we break it down, I think most of our investments are now LatAm oriented. So in -- within Latin America, our exposure to Mexico is minimum, less than 3%, 1% to 3%. So most of our exposure, when I say Latin America, is basically South America. And there I think our investments are pretty much local in sectors that we think are very resilient and locally driven like healthcare, food and beverage, and on the infrastructure side, it's very local by nature, toll roads, et cetera. And our exposure to companies through our credit portfolio, very local as well; as I mentioned, less than 3% Mexico, and when I go to real estate, it's even more local. It has all to do with the local drivers of the countries like Brazil, like Chile, Colombia, et cetera. So in general, I think that our exposure to this whole tariff war is relatively low. As you know, the region is in the group of the 10% tariffs, which is the lower end of the spectrum of the tariffs that was imposed by the U.S. On the other side of this equation here, I definitely think that the region will be benefited from -- if this trade war continues as it is, as you know, it changes every half an hour, but if it continues, where the region will be tariffed at the 10% level and the other regions of the world with higher tariffs, I think that region will be benefited because it's a huge consumption market. Large part of the GDPs of these countries are composed by local consumption, the C of the GDP formula, and…

Yes. That was great, Alex. Just for my follow-up and we can stick with the tradeword topic, but move on to the fundraising front, there has been some news that Chinese institutions will be divesting from U.S. private markets. Could this open the door for Patria, if they divert their private markets allocations from U.S. to LatAm and Brazil specifically? We're just curious how your LP meetings and calls have gone since April 2nd.

The answer is yes. And I think this conversation was already happening last year. I think the Chinese investors specifically were already anticipating a potential Mr. Trump's -- Mr. Trump winning the election, the U.S. election as President. So they were already taking steps in the direction of lowering their -- reducing their U.S. exposure. And having us sign $1 billion of SMAs, which is, for us, a very large amount in the first quarter of 2025 is a reflection of that. And these negotiations were going on during 2024 when Mr. Trump was not the U.S. President yet. So I think it's going to continue to drive in this direction. Our conversations after April 2nd, we intensified that, we learned from our Asian, and not only Asian, but also Middle Easterns and some European investors a concern in continuing allocating to U.S. alternative asset managers for geopolitical reasons, going all the way to no, we might have our accounts frozen and blah, blah, blah. So all the way from a small amount of precaution to all the way down to the red zone of what happens if this and this and this. And we are completely out of this, right. And all of our fund structures they do not flow through the U.S., they flow through other jurisdictions. We are not a U.S. company, we are a Cayman-based company which has no U.S. jurisdictions influence there et cetera, et cetera, et cetera. So I think besides being in a part of the world that I think will benefit from this geopolitical confusion, uncertainty, specifically for Patria, we are structured and designed as a non- U.S. company. We were always like that. And I think this will definitely benefit us in this very uncertain world. And we already had these kind of conversations with our investors after April 2nd. Hope I answered the question?

Thank you, Alex.

Thank you. And one moment as we move on to our next question. Our next question is going to come from the line of Tito Labarta with Goldman Sachs. Your line is open. Please go ahead.

Hi. Good morning, Alex, Ana, and Rob, thanks for the call and taking my question. My question also on the fundraising, but I think you mentioned that you didn't really see any impact yet from the noise around tariffs given the -- in the first quarter, where you saw very good fundraising. But just thinking about the outlook from here, you're already more than halfway to your target of $6 billion for the year. So I mean, given this uncertainty with tariffs, potential more interest in LatAm, do you see potential upside to that $6 billion in fundraising for the full year, or was there anything extraordinary in the quarter that maybe is not recurring?

Well, thanks for the question, Tito. Nice talking to you. Thanks for participating in this call. We're keeping, I think straight answer to your question, then I'll expand. I think we're keeping the $6 billion target. We had a great first quarter, but I caution 3.2 billion times 4, that's -- I think that's a very aggressive number. So we're keeping the $6 billion target. However, as I see it today, we're more -- a little bit over halfway through, which is a very good position to be in. So I feel very comfortable, and the team feels very comfortable that we're going to actually hit our $6 billion target, which, for us, is an amazing number, right? When we gave out the number $21 billion for the next three years, $6 billion this year, $7 billion next year, $8 billion in '27 during our Investor Day, December 9th, 2024, and now $21 billion for us in three years, $6 billion this year, it's a very, very substantial number given our size, and we already know over $3 billion in the first quarter. And more so, I think we did raise, through that $3.2 billion, $700 million in fee paying AUM in the quarter of net new money. So you see the strategy being paid off, and I'm not even counting the valuation increases in the $700 million. I'm not counting the valuation increases, and we charge on NAV. So we started with a -- in 2024, with a net new money of around $380 million for the whole year, and then we have $700 million of net new money in the fee paying AUM account in the first quarter. So again, it's extremely good fundraising, very strong fundraising. Though I -- I know that April 2nd was after the…

Yes, no, that's very helpful, Alex. Thank you. Maybe I guess on -- just on the follow-up, conversely, if you look at the fee related earnings, just analyze it, and even considering some incentive fees in 4Q, you are running a bit below the $200 million, $225 million guidance. So this -- the jump in the fee earning AUM that we saw this quarter, should that already begin to benefit in 2Q? Will that be more for 3Q and 4Q? And along those lines, I mean do you expect a jump in that fee related earnings to get closer to the trend to deliver on the guidance for the full year? Thank you.

Yes. I think -- yes, we see everything that you just mentioned. And if I do a straight math here, I think we are right on target to deliver the middle of the guidance. And I think we can -- and I think we can do better than that, but just a very simple math. Now, the fee related earnings for us for the first quarter 2025 was $42.6 million, as you can see there from our presentation and earnings call. If you just multiply that by four, we get to $170 million. Okay? So we're going to do better than that because of everything that you said, the fee-earning -- the AUM that was raised will turn into fee earnings et cetera. As we invest that capital, blah, blah, blah, but just $42.6 million for the quarter times 4, $170 million. If we add to that, Tito, the same $12 million of incentive fees that we had in 2024, I'm just repeating that. Again, most of that fees came from our credit strategies and the volatility or whatever in the market favors our credit strategies here, trading our bonds, et cetera. But whatever, I'm keeping the same $12 million as last year. So $170 million plus $12 million, that's $182 million. If we do raise the $6 billion for the year, now as -- now we raised $3.2 million in the first quarter, so I think we're very well positioned to raise the $6 billion. The $6 billion means on average $3 billion a year, right? $6 billion for the whole year, average of $3 billion, even though we jump started with $3.2 billion, but let's say average of $3 billion for the whole year, 96 basis points of management fees. So 96 basis of the $6 billion is $28 million. So if I add now to the $182 million number $28 million, that's $210 million right in the middle of the $200 million and $225 million. So if I just repeat the first quarter on FRE, which I think again we're very strong in doing better. If I have the same incentive fees as last year, and if I raise the $6 billion average of $3 billion, and again I started the year with $3.2 billion, I already get to $210 million, right, in a simple math. So again, that's why we think I'm here saying that we are reiterating the guidance of $200 million to $225 million. I hope I answered it.

Yes, perfect. That's very clear. Thank you, Alex.

Thank you. One moment for our next question. Our next question comes from the line of Ricardo Buchpiguel with BTG Pactual. Your line is open. Please go ahead.

Good morning, everyone, and thank you for the opportunity of making questions. Could you please provide an update on the integration of all the M&As completed last year. Talking about also what parts of the process have been easier or more challenging than expected so far. Thank you very much.

Of course, Ricardo, nice speaking to you, and thanks for participating. I think we --internally here we're calling 2025 our integration year. And as you know, we did then in our three year guidance give inorganic guideline, but to the tail-ended, right, now doing acquisitions in '26, '27, and not doing relevant acquisitions at least in the guidance for 2025, in order for us during the later part of '24 and in '25 to integrate the business and give us that time to do that. That's how have been our focus. I think we know we launched internally what we call a One Patria program, going all the way from the frontline to the middle office, the support areas, the back office, et cetera. Right now, we're pretty happy that we are on target on the integration. We haven't seen any major issues there, any things that actually concerns us, no yellow flags, to be honest. I think we had already designed what we wanted to do on the process side and on the governance side, on the systems side, we are implementing. So giving you one example, all of our HR is already under the same system, all our payroll, compensation schemes, valuation, blah, blah, blah, that's all done and that's -- we actually did go through end of the year evaluations of our 800 plus employees late 2024. Under the common system, common methodology, we use the nine blocks, we use a -- one system to do all these evaluations, blah, blah, blah, blah, everything under our Oracle ERP. We use -- we have everybody already download it in our share compensation program. That is a company that manages all of our employees in a global scale, blah, blah, blah, blah, blah. I could go on and on…

Very clear. Thank you very much.

Thank you. One moment, as we move on to our next question. Our next question comes from the line of William Barranjard with Itau BBA. Your line is open. Please go ahead.

Okay, thank you. Thank you, everyone. Thank you, Alex, Ana for the presentation. My question here is regarding the pending FEAUM you said -- you told us during the call. So could you give us an overview of this $3.5 billion, maybe a breakdown such as what are the strategies they will be allocated? And the expected management fee on them. And also, if you could share expectations in terms of timing of these allocations, that would be great.

Okay. No, thank you very much. Thanks for your question here, and thanks for participating in our call. Well, we mentioned there that we have around $3.4 billion, $3.5 billion of pending fee paying AUM. $3.5 billion of pending fee paying AUM. I think this is pretty much broken down in most of it go into our infrastructure and GPMS verticals. However, this number changes a lot over time. So I'm giving you a picture, not a film of what happened. So I would -- my humble suggestion here, project as we look into the future, the average management fee that we are currently halving of 96 basis points over once we actually deploy that money. You can see that the breakdown that actually favors infrastructure and GPMS infrastructure has a higher management fee than 96 basis points. But as a suggestion, I would use the average. It's very hard to break down quarter by quarter. As we see during the year, you might in the second quarter have a higher fundraising for another asset class, et cetera. So on average, I would use a 96 basis point. When are we deploying that money? Normally, we deploy that money over the next four quarters to six quarters. But again, on the infrastructure and GPMS side, I think within 2025, I think we're going to be able to deploy that money. Along the year, I would also use an average for the year as we do deploy that money over the second, third, and fourth quarter. And as I mentioned during my answer to Tito's question, when we project that we're going to raise $6 billion, which is our guidance, we project that on average we're going to have $3 billion of fee paying AUM, just as a natural average here, but as we did raise the $3.2 billion in the first quarter, we're in a better position to be able to invest that money earlier than our projections because of the fact that we are, now with this money, ready to go. Hope I answered your question. Maybe if you want to -- any other further questions, I'm glad to answer.

No. That is perfect. Thank you.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Guilherme Grespan with JPMorgan. Your line is open. Please go ahead.

Hi, Alex and team. Good morning. Thank you for your presentation. Congratulations on the fundraising. My question is basically two. The first one is on credit, a very strong performance. It was mostly the high yield, right? And also, Chilean fixed income was also strong. Just a little bit more granularity. What do you think drove this very strong performance on credit in terms of fundraising? And if you expect it to be resilient throughout the year? I know we had the pension reform in Chile, but I don't think it's in the numbers yet. So, I just want to drive this performance? And then the second is just a recap on the drawdown funds. I think nowadays, you're sitting at $2.4 billion committed capital on infra already, and private equity 1.5 billion. Just a reminder, what is the size target you want to have on the funds? And what is going to be the timeline ahead until when you expect to fund raise those funds?

Thank you very much, Guilherme. Thanks for participating in the call. And going back to the -- to your credit question, we've been performing very well. I think the team has been able to actually ride these volatility moments extremely well and beating the benchmark, as you saw, in most of the credit funds and even more so in the flagship funds, the dollar denominated LatAm high yield. It was a question of being the right -- overall for the fund, the right duration with everything that happened. Also there is a -- as we see within the countries in South America, Chile coming first in lowering inflation expectations, low inflation, low interest rates, with an interesting view on these potential political change later this year. So I think that also reflects in better equities and better credit prices for Chile. And I think going into Colombia, that will have elections early next year, we're also seeing that the current government is driving very low popularity rates, and might be a change there as well. The markets will begin to anticipate that, I think, later this year, which will continue to benefit us as we position ourselves in these securities from these countries. And then comes Brazil later next year. So it's a little bit far from the Brazilian election here. So that plus I think the strategy of the team, plus the moments of high interest rates in general, did benefit the asset class. And I think it will continue to do that. I think we raised a private credit fund late last year, early this year, and I think we're already anticipating raising a second private credit fund of LatAm pan-regional credit sometime this year because of now high interest from investors. So we might launch a private…

Yes. Yes, you did. Thank you, Alex.

Thank you. And I would now like to hand the conference back over to Alex Saigh for closing remarks.

Well, thank you very much for your time here. I think again, out for a great start in 2025. Great fundraising, great results. I think, as I mentioned here when answering Tito's question, our FRE for the quarter, $42.6 million if you multiply by four. And then if you add the same incentive fees as last year and then an average $3 billion capital raise for this year, we get already to the $210 million. So very well positioned here to deliver the $225 million guidance that we gave you guys. Of course, also very well positioned to deliver on the $6 billion fundraising target. And as we move into the year, I think that the region and Patria are probably going to be very much benefited from the whole tariff uncertainties because of the low geopolitical risks of the region and how we are very well positioned to serve our Asian clients, Middle Eastern clients, and European clients. So thanks for your patience. I hope to see you in person soon. And again have a good Friday. Thank you very much. Bye-bye.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.