Vinci Compass Investments Ltd. Q3 FY2025 earnings call

• Important milestones: Second Investor Day in October, acquisition of VERGI, Q3 results with 32.3% FRE margin.
• Cost reduction initiatives and operational leverage contributing to margin expansion.
• SPS4 secured first offshore and Brazilian pension plan commitments, showcasing distribution ability.
• Global IP and S AUM reached over BRL241 billion with strong inflows, TPD business showing reach.
• Private equity portfolio companies like Agibanc and ARCLOC delivering strong operational results.
• AI adoption mainstream at Vinci Compass, used by ~80% of team to enhance productivity.

Vinci Compass generated BRL77.1 million in earnings or BRL1.22 per share in the third quarter, with a FRE margin of 32.3% and adjusted distributable earnings of BRL73.1 million or BRL1.16 per share. AUM ended the quarter at BRL316 billion, with global IP and S reaching over BRL241 billion supported by approximately BRL8 billion in inflows. The credit segment saw various fundraisings, including over BRL500 million in Brazil's liquid credit strategies. The opportunistic capital solution funds (SPS) secured first offshore and Brazilian pension plan commitments.

• Aim to achieve 38% FRE margin by 2028 supported by platform growth, cost reduction, and fundraising.
• Expect FRE margins above 30% going forward, with the fourth quarter likely slightly below 30% but still above 30%, aiming for 30% for the year.
• VEG acquisition to impact financials starting next year, adding to margin improvement.

Q: Regarding the first Brazilian pension plan commitment to SPS four, how fast could new demand come and what cross-sell opportunities it creates?

A: Alessandro Huerta stated they expect further commitments as Vinci Compass's main funds come from institutional investors, and this strategy has uncorrelated nature with low penetration, expecting it to gain important space in AUM.

Q: Regarding FRE margins improving, should the new level be the base for next quarter and if advisory fees will decelerate improvement?

A: Bruno Zaremba mentioned seasonality in expenses, with third quarter lighter, expecting margins above 30% going forward, fourth quarter likely slightly below 30% but still above, and hoping to reach 30% for the year, with VEG acquisition impacting only one month of the fourth quarter but boosting margins from next year