Patria Investments Limited Q4 FY2025 earnings call

Highlights - 2025 was a successful year with organic fundraising of $7.7 billion, surpassing the target. Fee-related earnings in 2025 were $202.5 million, up 19% year-over-year. Distributable earnings per share reached $1.27. - Announced acquisitions: acquired 51% of Solis, several REITs from RBR, and WP Global Partners. - Fundraising by asset classes: infrastructure strategies raised ~$2.3 billion in 2025, GPMS raised almost $2 billion, credit raised a record $1.8 billion, real estate strategies raised over $520 million in Q4 2025. - FEAUM growth: grew 24% year-over-year and 5% sequentially to $40.8 billion in Q4 2025, with pending FEAUM of $2.9 billion. - Management changes: Ana Russo to step down as CFO, Raphael Denadai to assume CFO role in April 2026, Nikitas Psyllakis appointed as Global COO.

In 2025, Patria achieved strong financial performance across segments. For infrastructure strategies, approximately $2.3 billion was raised in 2025, which was about 5 times the amount raised in 2024, led by the final closing of the Infrastructure Development Fund V and various fee-paying SMAs and co-investment vehicles. GPMS raised almost $2 billion in 2025. Credit fundraising reached a record $1.8 billion in 2025, surpassing the $1.4 billion raised in 2024. Real estate strategies raised over $520 million in the fourth quarter of 2025. The fee-earning AUM (FEAUM) in the fourth quarter of 2025 reached $40.8 billion, up 24% year-over-year. Pro forma for recently announced acquisitions, FEAUM is $47.4 billion. The FEAUM base is diversified across asset classes with 29% in GPMS, 26% in credit, 19% in real estate, 12% in private equity, 9% in infrastructure and 6% in public equities.

- 2026 Fee-related earnings target: $225 million to $245 million or $1.42 to $1.54 per share; 2027 target: $260 million to $290 million or $1.60 to $1.80 per share. - 2026 and 2027 fundraising targets remain unchanged at $7 billion and $8 billion respectively. - Performance-related earnings target range: $120 million to $140 million from Q4 2024 to end of 2027, with $62 million already realized.

- Litigation liabilities: Approximately $100 million in litigation liabilities, with over 85% expected to be removed from reports in early 2026. - M&A transaction costs: Transaction costs related to M&A can impact net profit, with higher costs in the quarter due to recent acquisitions.

Q: On private equity valuation process, how is the internal valuation process and validation by third parties?

A: Use industry practice, independent appraisers value funds once a year with discounted cash flow model and compare with industry multiples. Valuation doesn't affect management fees as fees are charged on costs, and performance fees are only recognized when cash is received.

Q: Maintaining 2026 fundraising guidance, any risks to fundraising and upside potential?

A: Mainly conservative, no major worries about fundraising, but will monitor first quarters of 2026. Fund of funds not investing in own funds significantly, with a listed trust funding a secondary fund with $75 million.

Q: Color on $100 million litigation liabilities and M&A transaction costs?

A: Over 85% of $100 million litigation liabilities to be removed in early 2026. Transaction costs higher in the quarter due to recent acquisitions, with next years' costs expected to be slightly lower but not at $20 - $25 million quarterly level.

Q: On flagship PE and infrastructure funds, LP base changes and re-up rates?

A: Shift from endowments/family offices to institutional investors. Re-up rates for recent funds around 40% - 60%, with latest secondary opportunistic opportunity fund #5 having above 50% re-up rates.

Q: Share count and EPS evolution?

A: Share count expected to stay within 158 million - 160 million for 2025 - 2027. DE per share hard to predict due to uncertainty in performance fees. Tax rate expected to average around 10% over the next few years.

Q: Real estate business strategy and dependence on lower rates?

A: Real estate business is growing aggressively. Dependent on interest rates, with fundraising pace in Brazil expected to increase as interest rates are likely to decrease, and asset exchange opportunities also contributing to fundraising.