Good afternoon and welcome to the Vinci Partners Second Quarter 2024 Earnings Conference Call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder this call will be recorded. I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead Anna.

Thank you and good afternoon everyone. Joining today are Alessandro Horta, Chief Executive Officer, Bruno Zaremba, Private Equity Chairman and Head of Investor Relations and Sergio Passos, Chief Financial Officer. Earlier today we issued a press release slide presentation in our financial statements for the quarter, which are available on our website at ir.vincipartners.com. I'd like to remind you that today's call may include forward-looking statements, which are uncertain outside of the firm's control and may differ from actual results materially. We do not undertake any duty to update these statements. For discussion on some of the risks that could affect results, please see the risk factors section of our 20-F. We will also refer to certain non-GAAP measures and refine reconciliations in the release. Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Partners fund. On results, Vinci generated fee-related earnings of R$61.9 million or R$1.16 per share and adjusted distributable earnings of R$58.4 million or R$1.10 per share for the second quarter 2024. We declared a quarterly dividend of $0.17 on the dollar per common share payable on September 5th to shareholders of record as of August 21. With that, I'll turn the call over to Alessandro.

Thank you, Anna. Good afternoon and thank you all for joining our call. We are very pleased to join you today as we announce results for the second quarter 2024. Let me start by saying that we posted, once again, a double-digit growth in fee-related earnings on a year-over-year basis. This quarter was even more significant, close to a 25% increase on a per share basis. This remarkable growth is largely attributed to our exceptional fundraising performance in private market strategies over the past quarters, which continues to deliver across several fronts. We accomplished these results despite the challenging environment for raising capital outside traditional fixed income investments in Brazil. Delving into our fundraising efforts, we are excited to share notable progress this quarter for our private markets products. Despite the global asset management industry facing significant challenges in raising capital equity, closed-end funds, we successfully secured nearly R$500 million in new capital subscription for VCP IV from both local and international institutional investors. By the end of the second quarter, VCP IV has reached the same size as VCP III in Brazilian Real, achieved during one of the most challenging fundraising conditions for the private equity asset class worldwide in the past decade. This significant milestone highlights Vinci resilience in navigating through a tough market. We are extremely pleased with these results, which not only affirm the effectiveness of our proprietary distribution channels and the solid relationships we have cultivated with our LPs over the years, but also our testimony of the solid performance from our private equity strategy since inception. We are very excited for the promising deployment opportunities that Fund IV will enable us to pursue. Moreover, Fund IV stands out at the largest vintage in the strategy in the terms of local commitments by a considerable…

Thank you, Alessandro, and good afternoon, everyone. I'll start by covering our fundraising efforts in private markets. As anticipated by Alessandro, we had a stellar quarter fundraising for the fourth meeting in our private equity flagship strategy, VCP IV. Developed by both local and international institutional investors, we successfully raised nearly R$0.5 billion in commitments for VCP IV this quarter. Excluding coin investments, VCP IV has virtually matched the commitment capital of its predecessor [ph] funds. Moreover, we've seen substantial interest from local institutional investors for this vintage, with Fund IV becoming the largest local fund we've raised for this strategy since [indiscernible]. This aligns with our ongoing discussions about the need for Brazilian investors to diversify away from traditional fixed-income investors and explore alternative products as they build their long-term allocations. To wrap up VCP, we are aiming for a final closing by the end of the year, as we continue to work towards additional commitments primarily from international institutional investors. Additional commitments will continue to trigger retroactive fees from the start of the funds. This has been a significant contributor to management fees in the second quarter and could have a significant impact when we finalize the fundraising later in the year. Moving on to private credits, we have successfully secured commitments for the Vinci Credit Infra Fund, which has now exceeded R$1.5 billion in assets under management. The initial investments that established the fund came from local institutional investors, and we continue to see strong demand for this asset class from this client base. However, our fundraising efforts are now expanding across other distribution channels. In July, we achieved a significant milestone by securing our first capital subscription from an international institutional investor for Vinci Credit Infra. In addition to international investors, Vinci Credit Infra is also…

Thank you, Bruno. Now, let's start by covering management and advisory fees. Fee-related revenues totaled R$126 million in the quarter, up 18% on an year-over-year basis. Focusing specifically on management fees, we saw an even more significant increase, with a remarkable 23% year-over-year growth, driven by robust fundraising across our private markets products. This quarter also benefited from retroactive fees associated with the capital raise in VCP IV, which included approximately two years' worth of fees. This resulted in an additional R$14.9 million in the net revenue for the quarter. When excluding retroactive fees, management fees still show a positive trend, supported by new commitments in private markets. Looking ahead, we expect continued growth in revenues from this asset class, although liquid products and IP&S face ongoing challenges, as Bruno mentioned earlier. Please note that we will continue fundraising for VCP IV and VICC in infrastructure during the second half of the year. Both funds include retroactive fees clauses, so new commitments will generate fees from the fund's inception, which could continue to positively impact our numbers in the later half of the year. Turning to advisory fees, we had another strong quarter. Year to-date, we have accumulated nearly R$22 million in net revenues from advisory fees, highlighting the momentum in our corporate advisory segment. For the second half of the year, we already have over R$10 million in advisory fees from signed transactions that are pending closing. Additionally, we have a robust pipeline of opportunities to execute upon. We are confident in achieving our target of annual R$30 million in net advisory revenue, with potential for upside. Despite challenging market conditions and a muted IPO marketing, our corporate advisory business has delivered excellent results. We believe that as market conditions improve, we will be well positioned to make an…

We are now going to start the question-and-answer session for investors and analysts. [Operator Instructions] Our first question comes from Ricardo Buchpiguel with BTG. You can open your microphone.

Hi everyone and thank you for the opportunity of making questions. I have two here on my side. Can you please talk about what type of clients and geographies have you been focusing on your fundraising for private markets? And do you believe it will be more challenging to raise money now that you are moving to focus more on international clients given the current market conditions? And also related to this topic, if you could remind us, out of the R$15 billion target of fundraising from 2022 to 2024, how much have you raised so far? Thank you.

Hi Ricardo. Thank you very much for the question. That's Alessandro speaking here. Just to your first point regarding the type and geographies of clients of private markets, that of course depends a bit on each of the private market asset classes. Talking about private equity, the last quarter, as we mentioned, the R$550 million of fundraising, they came both from local and international investors. The international investors came more from Europe this quarter and locally they were coming more from institutional local investors. I would say more around half of both sources in terms of private markets. Talk a little bit more about infrastructure. So we are talking about VICC. Recently you have been a very important push in Asia where we expect some field commitments coming for the next few quarters. And we had a very strong success, as we mentioned, in previous calls in Europe. Now we have a more soft-circled and expected pipeline of fundraising more in Asia going forward. And in SPS, as Bruno mentioned, I think, we are expecting [Audio Gap] back to family office, multifamily office in some allocators and distributors and then moving forward from international investors. That will come -- we expect more from the North American market and also from Asia. And I will leave the second part of your question to Bruno to complement on that.

Ricardo, good talking to you tonight. We are currently at about R$10 billion of the R$15 billion targets. We have, as you know, the next six months, we have commitments coming from all of the funds that we have that are still open. Our expectation is that the contribution until the end of the year will be likely stronger from SPS on a relative basis now that the other funds are tapping off a little bit. So we expect some commitment still from BCP, VICC and Credit Infra. But our biggest check will likely come from SPS until the end of the year that we have an unexpected big first close to happen now in the third and fourth quarters. But we are today at close to about R$10 billion.

Thank you very much, guys.

Our next question comes from Beatriz Abreu with Goldman Sachs. You can open your microphone.

Hi, everyone. Good evening, and thanks for taking my question. I have two questions on my side. The first one is on the positive management fees, right, due to the catch-up fees mostly from VCP IV. And I see that you have a good pipeline for fundraising expected for the second half of the year. I guess my question is related to next year. Since, you know, the R$15 billion has fundraising target is until the end of this year, what are you expecting the increase in fundraising to come from mostly for next year? And the second question is related to the strong appreciation of accrued performance fees this quarter. If you can comment a little bit more about what drove that, maybe if you could give some color on the investments. And what are your expectations for timing of performance fees, distributions, or any of the funds close to their hurdle rate? If you could talk a little bit more about that, it would be great? Thank you.

Hi, Beatriz. How are you? That's Alessandro. Nice to have you today with us. Starting with the first part of the question regarding management fees, accrued retroactive fees, sorry, regarding, especially as I said, regarding VCP IV. And that's a very good question. We expect a good part of VCP IV to be concluded this year, and also VICC. But we still expect from both some final fundraising to the beginning of next year. Next year, we have -- we expect the international portion of SPS IV. So that will be something that will be tapping probably in the end of this year to the beginning of the next year, maybe first and second quarter, maybe. And also, we will have a few products, especially VIR V that we postponed at the beginning of the fundraising that will be more important next year. And also, VFDL-2, that's our logistics for private equity type real estate funds that again will be to next year. Besides of that, also, we expect the opportunistic residential real estate fund also to be relevant next year. So we'll be having less of the funds that we already reaching the targets like VCP IV and VICC. But we'll still have important contribution that we expect coming from SPS IV in terms of fundraising, VIR V, VFDL-II, and the opportunistic real estate fund second vintage next year. And I'll leave Bruno to talk a little bit about the appreciation of expected performance fee.

Yes, I think the performance fee is something that we have discussed also in the past. We're seeing other families of products starting to contribute to future performance fees. In the case of this quarter, we saw mainly SPS coming into the math. So just as an information, the first SPS fund is already paying performance fees. They are not impacting our numbers because in the transaction, we negotiated that the first couple of funds, the performance would be retained by the management fees. But the third fund is also above the preferred return rates and started to accrue towards the future performance fees as well. SPS has a profile of a quicker turnaround in terms of the performance. So if you think about the fact that they are paying already performance from Funds I and probably Fund II very quickly. Those funds are around five years old. So thinking about Fund III , we would expect that Fund III to start paying performance fees probably into late 2025, early 2026. So of that accrued performance, I think probably SPS will likely be the first one to start transitioning to realize GP results. And then after that, we're likely going to see VCP III as the one that is going to start contributing, but VCP III probably a little bit later in terms of dates. But I would expect that diversification of the performance fees on the accrued part to continue. So we will likely see other families of funds starting to have a piece of that pie going forward. So we have the infra funds as well. At some point, they should start -- other infra funds should start contributing there. Obviously, the contribution from SPS is likely going to grow in size over time. So the tendency is…

Yeah, just to complement that, Beatriz, to that point of Bruno, we are studying a lot new products on the credit spectrum and even using the best practices and exchanging, I'd say, ideas with Ares. And we believe that this type of semi-liquid type of funds will be something that probably will be very relevant moving forward and especially next year as we identify the demand for this type of a product and they match very well with the, I'd say, asset liability management sum of our clients.

Perfect. That's very clear. Thank you, Alessandro and Bruno.

Our next question comes from [indiscernible] with Kepos Capital. You can open your microphone.

Hello. Thank you for taking my question. I wanted to ask about the operating profit on the financial statements versus the operating profit that shows up in the presentation in page 36. They are different and wanted your help for reaching it. It's R$48 million in the financial statements and R$65 million in the presentation. So I wanted to know the difference

Okay, Tommy. Thanks for the question. So the difference is basically some non-cash impacts that we have that we segregate from the distributable earnings number. So the two main components there are the unrealized mark-to-market effects on our GP commitments. So this quarter we had a negative impact from the mark-to-market coming mainly from the REIT performance during the quarter. So the REITs that we have in our GP commitment, they depreciated in value this quarter. So that was more than the positive impact that we had from VCP IV markup. So that was part of the unrealized and that impacts operating profit. And the other impact is the stock option impact that we have, the stock option program, which we usually have an impact of now around 5 million per quarter more or less, which also is a non-cash impact and that impacts the accounting operating profit, but not the distributable earnings operating profit that we show on the cash -- let's say cash, distributable earnings number. So those are the two main -- those could vary. I mean, obviously the unrealized portion could vary up and down. So we have had quarters in the past where that number was very much early up. We have had quarters in the past that it was a little bit down. Over time we expect it to be up. The SOP is obviously always a negative impact, which today is running at around 5 million. And the final impact is the non-recurring M&A expense that Sergio mentioned in his remarks. This quarter was about 12 million and it is related to lawyer and the due diligence fees that we have expanded both in the MAV transaction, which has already closed, and in the Compass transaction they'll expect to close, as we said, between the end of third quarter and beginning of the fourth. So those were the expenses or the impact this quarter. This quarter was a little bit heavier than normal because we had the negative unrealized and we had a bigger expense on the M&A side, but those are typically the differences between the distributable earnings and the net earnings from an accounting standpoint.

Thank you. And can I ask another one?

Yes, of course, go ahead.

Thank you. In the cash flow statement, there's a line for a contribution for retirement plan, plans for R$140 million. Is that contributions to the retirement services segment or what is the original line?

So when we launched VRS, regulatory in Brazil, you need to have an insurance company, right? So part of the launching of VRS had to do with us creating an insurance company. And in Brazilian accounting, the insurance company, the assets of the insurance company are reserves. And that is what you see in the income statement -- so, on the cash flow statements, the reserves that are being constituted for the liabilities that we have against the pension plans that we carry in our own insurance company.

Thank you.

The question and answer session is over. I would like to turn the floor back to Mr. Alessandro Horta for the closing remarks. Please, Mr. Horta, you may proceed.

I'd like to thank you once again for your support and interest in our company. As we said during the call, we are very, very positive with the year so far, even though the macroeconomic environment has not been favorable and the fundraising environment has been very challenging. We have been able to really tip a very, very decent path and growth. And we expect once we have a better macroeconomic environment moving forward, the reduction of interest rates outside Brazil and also a better environment locally that can speed up the fundraising, the realization of performance. So we are quite waiting for this moment and optimistic that we will be very resilient in a very difficult scenario and we can grow in a very important way when we see a more benign scenario. So thank you very much and good night for you all.

This concludes today's presentation. We thank you all for participating and wish you a very good evening.