Patria Investments Limited Q2 FY2025 earnings call

• Fundraising: Raised $1.3 billion in Q2 2025, with total first half at $4.5 billion. Revised full-year 2025 fundraising guidance to $6.3 billion to $6.6 billion.
• Fee-related earnings: $46.1 million in Q2 2025, up 8% sequentially and 17% year-over-year. Fee-earning AUM grew 20% year-over-year and 6% sequentially to $37.2 billion.
• Net organic inflows: Over $600 million in Q2 2025, $1.3 billion year-to-date, $2.4 billion over the last 12 months, with an annualized organic growth rate of about 8% based on fee-earning AUM.
• Acquisitions: Announced acquisition of 7 listed REITs in Brazil in Q2 2025, adding ~$600 million of fee-earning AUM; also acquired a small Mexican real estate REIT.
• Infrastructure and Credit: Strong fundraising in infrastructure (Infrastructure Fund V with $2.5 billion commitments) and credit (flagship LatAm U.S. dollar high-yield strategy).
• Market positioning: Diversified platform resilient to macroeconomic changes, with strategies like credit and infrastructure in demand during high interest rates, and equity-oriented strategies expected to improve when rates decline.

In the second quarter, Patria's fee-related earnings were $46.1 million, representing 8% sequential and 17% year-over-year growth. Fee-earning AUM was $37.2 billion, rising 20% year-over-year and 6% sequentially. Fundraising in the second quarter was $1.3 billion, with total first half at $4.5 billion. The firm revised its full-year 2025 fundraising guidance to $6.3 billion to $6.6 billion (5% to 10% higher than the initial $6 billion target). Approximately 20% of fee-earning AUM are in permanent capital vehicles.

• Full-year 2025 fundraising revised to $6.3 billion to $6.6 billion (5% to 10% higher than initial $6 billion target).
• Fee-related earnings target for 2025 remains $200 million to $225 million ($1.25 to $1.40 per share).
• Performance-related earnings target for Q4 2024 through 2027 is $120 million to $140 million, with $41 million realized in Q4 2024 and $15 million to $20 million expected in the second half of 2025.

• Global macro uncertainty and increased volatility, including U.S. tariffs and trade policy uncertainty affecting the Brazilian economy and global markets.
• Currency fluctuations, though FX impact on fee-related earnings is modest due to natural hedging from local currency-denominated expenses.
• Dependence on successful execution of M&A and investment strategies to maintain growth.

Q: Rodrigo Ferreira asked about Mexico expansion and partner acquisition.

A: Mentioned a small Mexican real estate REIT acquisition, focus on real estate, credit, and infrastructure in Mexico, and local clients in Mexico investing in the acquired REIT.

Q: Tito Labarta asked about higher fundraising and driver.

A: Asian, Middle East, European investors, local pension funds, and alpha in credit and infrastructure strategies are driving the higher fundraising.

Q: Ricardo Buchpiguel asked about REIT acquisition timeline and shareholder approval.

A: Vectis acquisition closed, Genial REITs need shareholder votes but 90% of AUM already approved, with ~$1 million fee-related earnings impact expected.

Q: William Barranjard asked about U.S. tariffs impact and dividends.

A: Tariffs have marginal impact on Brazil's GDP, net debt is expected to remain stable, and dividends are at $0.15 per quarter for now.

Q: Guilherme Grespan asked about Brazil's bull case and Patria's geography.

A: Patria is diversified geographically, with 65% fundraising from outside LatAm, 28% in Brazil, and exposure to other Latin American countries and Europe, benefiting from election arbitrage opportunities