13-05-2025
Vinci Partners Investments Ltd (VINP) Q1 2025 Earnings Call Highlights: Strong Fundraising Amid ...
Release Date: May 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Vinci Partners Investments Ltd (NASDAQ:VINP) reported strong fundraising results with 1.1 billion reais in capital subscriptions during the first quarter of 2025, marking their most active first quarter in recent years.
The company successfully completed the second closing of its long-term private credit fund in Peru, raising over 600 million reais from institutional investors.
Fee-related earnings increased by 22% year over year, reaching 65.7 million reais in the first quarter.
Vinci Partners Investments Ltd (NASDAQ:VINP) maintained its position as the leading partner to Chilean pension funds, holding a close to 20% market share.
The company is well-positioned to capture potential capital inflows into Latin America, which is seen as a stable region amid global geopolitical shifts.
The appreciation of the Brazilian real against the US dollar negatively impacted Vinci Partners Investments Ltd (NASDAQ:VINP)'s reported AUM, leading to a 7% decrease quarter over quarter.
There were net outflows in the global IPNS segment, primarily due to capital returns and net flows in other substrategies.
The company experienced a markdown in accrued performance, mainly due to currency fluctuations affecting offshore funds.
There was a trend of redemptions across Vinci Partners Investments Ltd (NASDAQ:VINP)'s equity funds, although foreign investors began returning as net buyers.
The macroeconomic uncertainty subdued activity in the corporate advisory segment, resulting in no material revenue from this area during the quarter.
Warning! GuruFocus has detected 10 Warning Signs with VINP.
Q: Can you provide some insight into the expected growth range for fee-related costs over the next four years, considering the goal to improve the FRE margin to around 40%? Also, what was the impact of the Brazilian real appreciation on your FRE? A: Bruno Ariamba, President of Finance and Operations, explained that the business model's strong leverage allows for managing more AUM without significantly increasing costs. He expects FRE costs to remain disciplined, with only inflationary impacts anticipated. Regarding the real appreciation, the impact on FRE was not significant, with a 2 million positive impact on distributable earnings. A 10% depreciation in AUM would have a minimal effect on FRE revenue.
Q: Could you clarify the drivers behind the 24 billion decline in the IPNS segment, particularly the 14 billion related to liquid TPD? Also, why was there a markdown in accrued performance, especially in private equity? A: Bruno Ariamba noted that the decline in accrued performance was mainly due to currency fluctuations, not asset performance. The markdown was due to exchange rate changes from the fourth quarter, and if rates stabilize, accrued performance should recover. Alessandro Arte, CEO, added that the net outflow in liquid TPD was around 7 billion reais, influenced by forex variations and market volatility, not specific asset classes or managers.
Q: Is there a heavy agenda of capital returns in TPD alternatives this year, and how does it impact your revenue? A: Bruno Ariamba clarified that capital returns in TPD alternatives do not impact future revenue significantly, as fees are charged upfront during fundraising. The impact is more on semi-liquid businesses, but most TPD business is closed-end, so recurring fees are mainly affected by TPD liquid redemptions.
Q: What are the expectations for the macro-political environment in Latin America, and how might it affect your business? A: Alessandro Arte expressed optimism about a more benign macro-political environment in the second half of the year, which could benefit their business. The company is prepared for AUM inflows and expects to capitalize on favorable conditions in various countries.
Q: How often do you mark your funds, and when should we expect to see changes in accrued performance? A: Bruno Ariamba stated that local funds are marked once a year, while offshore funds are marked quarterly. Therefore, changes in accrued performance should be visible in the second quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
