Vinci Compass Investments Ltd. Q4 FY2025 earnings call

• 2025 was the first full year operating as a pan-regional platform following business combination with Compass. Hosted first Investor Day as Vinci Compass, announced acquisition of Verge which closed in December and added ~R$ 16 billion in AUM. Launched first product from collaboration between Vinci Compass and Verge, the Vinte Verde F.I. Infra.
• In 2025, positioned as Latin America platform, driving synergies across products and commercial teams. Acquired Verge and started revenue synergies with Verge team from start.
• Fourth quarter fundraising: ended year with 354 billion reais in total AUM, R$ 14 billion in capital formation and appreciation during quarter. Full year had R$ 42 billion, 13% year-over-year growth. Robust fundraising momentum in Global IPNS and credit segments.
• Infrastructure credit won BNDES tender process, new fund to target sectors like energy transition, decarbonization, nature-based solutions.
• Private equity: first couple of months of 2026 had exciting transactions, VCP3 IPO'd Agibank on NYSE, VCP2 portfolio company CBO in reverse IPO into OceanPact.
• Real assets: signed 2.8 billion reais SMA with Asian LP in infrastructure strategy. Infrastructure team partnered with Shanji and acquired controlling stake in Rio de Janeiro's international airport, Galeão, preparing for March auction.

For the fourth quarter 2025, Vinci Compass generated fee-related earnings of R$ 80.4 million, or R$ 1.23 per share. FRA margin of 32.6% and adjusted distributable earnings of R$ 81.3 million, or R$ 1.24 per share. For full-year 2025, fee-related earnings were R$ 288.4 million, or R$ 4.52 per share. FRA margin was 30.4% and adjusted distributable earnings were R$ 292.4 million, or R$ 4.58 per share. In terms of AUM, ended the year with 354 billion reais in total AUM, with R$ 14 billion in capital formation and appreciation during the fourth quarter and R$ 42 billion for the full year, a 13% year-over-year growth. Global IPNS and credit segments had robust fundraising momentum. Credit vertical delivered approximately R$3 billion of capital formation and appreciation in the fourth quarter, with Credit AOM reaching 36 billion reais, up 25% year-over-year.

• Expect continual momentum in FRI growth in 2026 supported by strong fundraise pipeline and full contribution of VERGE revenue and FRI.
• For IRE, expect unrealized part to be more of a contributor to net profits in 2026 as funds like VCP4, SPS4, VICC are out of J curve. Hoping this can translate to distributable earnings soon.
• Expect 2026 to have low double-digit growth rate on currency-adjusted basis for AUM, with pipeline of six or seven funds across regions for credit segments.

• Anticipate periods of volatility, particularly considering upcoming electoral cycles in Brazil, Colombia and Peru.
• Remain attentive to broader global macroeconomic environment and its potential impact on alternative managers' portfolios.

Q: Good evening, team, and thank you for taking my question. It seems like you have strong fundraising expectations for the year. But as you said, a lot of uncertainty, a lot of elections in the region. Do you get the sense that maybe there's some money on the sidelines? And if the elections go in a certain direction, there could be a big increase towards the end of the year. Is there anything you're kind of looking for in elections that could be a big catalyst? And kind of just in general, what are you thinking about elections and the impact on fundraising?

A: Yeah, so we had, I think we had a good 25 in regards to AUM. We had a 13%, if I'm not mistaken, 13% growth in our AUM on a year-on-year basis if you take out the effects from the exchange rate variation that was against us in 25 when you look at the reais number. So I think that number was healthy. It is a number that we are expecting to hopefully repeat this low double-digit growth rate on a currency-adjusted basis for 26. As we said, there is a very big pipeline, mainly in the credit segments. We have six or seven funds that are structured funds across the region, Colombia, Peru, Chile, Mexico, Brazil. So there's a lot of different strategies and opportunities to raise capital there. I think elections are obviously one of the variables, but more than elections, I think the main variable for us is the impact from cyclicality on products that are more correlated with interest rates. So this is something that obviously over the last few years has been idle for us. So if you look at our equities business, if you look at our real estate business, and even the Brazilian investment solutions business, we have had a little bit more a challenge to raise capital in these verticals. And now we're seeing for the first time in a very long time real interest rates, the long-term curve starting to come in. And obviously, there is an expectation of lowering rates, and we saw that through the REITs performance during the fourth quarter. Now the first quarter, again, we're seeing good REIT performance in the portfolio. So this is a variable that has more of an impact. Obviously, interest rates curve has by itself a correlation with the election outlook. But at the end of the day, what impacts us is the curve, right? So if we are in a position where the curve is more benign and we see that coming down and with that create an opportunity for us to grow in these more cyclical asset classes, I think that would be very, very positive for the platform. So the 13% that we did last year, growth, was without the contribution of the cyclical groups. So if we can have real estate REITs, local Brazilian investment solutions, equities participating, I think this would be a tremendous uplift to the expectations of further AOM gains.

Q: a bit more specific, just trying to get a sense of how to model the advisory fees line going forward. I mean, understand that the TPD alts up front can be kind of chunky depending on when you expect them. I mean, one, do you have any expectations for kind of how the timing is going to go throughout 2026? Or is it better to, you know, maybe just annualize the 2025 level? And then second, on the corporate advisory side, how much of an increase do you kind of expect this year in dealmaking activity from the expected decrease in rates and kind of where can that number go to?

A: So we have a little bit more visibility at this point on the corporate advisory at least. The first half looks like, at least for now, it's going to continue to be more on the softer end. So we do have some transactions that are in the pipe, but the volume is still not as relevant as we saw in 2022 and 2023. or maybe 23, I would say. It was a good year for us. We're still lagging in terms of volume and the level of advisory mandates that we have that are in line to be closed. So I would expect at least the first half to be a little bit slower like what we saw in in 25 and in regards to the to the up front uh on the on the global ipns side it's really very tough to say when those will fall As you said, it really depends on the calendar and how the fundraisings fall over the year. Overall, we expect 26 to be slightly lower than 25 on the advisory, on the upfront as well. So advisory probably at the same level and then upfront a little bit slower than we saw in 25, given the calendar that we have. But tying in the quarterly, like every quarter, how that will fall at this point is very difficult, Lindsay. So what I can say that directionally, the overall advisory line, if you add up front and corporate advisory, is likely going to be a little bit smaller than 25.

Q: first, we saw that in the last couple of quarters there was a materialization of some of the cost synergies related to the M&A appearing, particularly as we see the FRA margins going up, mainly in Q3 and then a little bit more in Q4. So I wanted to ask, what is the next step in terms of M&A synergies to be captured, particularly in 2026, right? And where would that appear in the results?

A: Of course, the low-hanging fruit type of synergies, we are already incorporating in the numbers. but still there are a lot of other opportunities moving forward. We are looking for the optimization of the structure, procurement, also rationalizing our investment in strategies and people. expanding some of our strategies through audio geographies. So still inside the M&A and, of course, Compass is the most relevant one, the transaction for a combination of Compass, we see interesting possibilities to continue appropriating of this value. Of course, there is more recent ones like that will more like segregate in terms of strategy, but still we do have some synergy, especially from the commercial side in , for example. So answering your question straightforward, yes, we still see synergies to be captured moving forward from the previous M&A activities.

Q: can you talk a little bit more about the expectations in terms of the investment-related earnings in 2026, both in terms of realized and unrealized portions, right? I understand there are a few moving parts here since you – need to keep investing the capital proceeds. So it will be very helpful to get any guidance on this line for this year.

A: So, yeah, so I think the IREs is what's happening now is I think we're getting to the interesting part of the IRE developments because over the past couple of years or a year and a half, it wasn't a very good point, right, because we were in the deployment phase and the funds were in the J curve. So we had a situation where we were taking money out of short-term rates, which are at a very high level, and putting money into these funds that were in the beginning of their life cycle within the J curve and not really contributing a lot to profitability. I think in the fourth quarter we saw for the first time mark-to-market in one of the funds that we have contributed capital, which was VCP4. on top of the depreciation of the REITs. And given that the fund is now out of the J curve, we would expect this movement to start being more material going forward. So as VCP4, SPS4, VICC, these three main funds in which the balance sheet of the company has a bigger exposure. out of the J curve, this should materialize in higher unrealized IRA. Obviously, this is the, let's say, the next stage that we're getting in, right? So we're getting into this phase where we're going to see the profitability and increase in the share value of the funds in our net profit. And then the following phase, once these funds start to return capital, those proceeds are going to become impactful to our distributable earnings number. This will probably take a little bit longer to happen. There might be, given the better liquidity environment that we see in Brazil over the past few months, there might be an opportunity for us to start having a quicker monetization of these funds. but it will take a little bit longer. So the expectation for 26 is for us to start having the IRE on the unrealized part being more of a contributor to net profits. And hopefully this can be translated to distributable earnings as soon as the end of this year or next year. But the expectation is for this number to start being more material for the net profit line in 26.

Q: on the private credit side. There's been a big discussion globally, right? I think the thesis that we are hearing nowadays, I think, is less applicable to Vinci's portfolio. But I see the mood on the private credit, which has been important, I think, credit as a strategy, I think, added more than $5 billion in fundraising in the last 12 months. Just want to get your views on how is the sentiment on fundraising on this vertical? And just remind us a little bit the profile of the client that you fundraise. If I recall correctly, I think on credit, the two main products is going to be Compass, high yield, and corporate debt. But just a refresh on this vertical. What is the mood? Is it affecting the fundraising or not?

A: I would say that that's a very good question. If you take into consideration what's happening in the global markets, in the auto business globally, we still believe, brief for us, that we are optimistic with the credit vertical. Our credit business is today very diversified. We've seen different strategies, different type of funding. But as you said, we have an important component that's more like corporate debt. That's different type of clients from institutional to high net worth, especially international money flowing in Latin America, corporate debt. So this is really more liquid stuff. with less link to what's going on on the private credit side, especially the semi-liquid fund globally. Also talking more about the countries. We do not have first exposure to the same sectors that are being questioned, like IT, tech, and et cetera. Of course, Latin America is one good example, let's say, in terms of the majority of the business as the hallow business. type of investment, so it's really assets and low obsolescence. So even our private credit business within Brazil or the other countries like America, like Peru, Colombia, and so it's still much more plain vanilla stuff. And the exposure to this asset class is still very small. We do not have, especially on these specific private credit funds, a lot of funding coming from retail or affluent business, like the main semi-liquid fund is not the reality here. This is more institutional money, closed-end funds. So it's really not – the peril is really very small. Where maybe we can see some effect is the fundraising of private credit globally in our TPD business. But still, this is not the most relevant pipeline that we have moving forward. but is where technically we can see the investor a little bit more cautious in allocating private credit moving forward globally in TPD, not in our main business that's our own self-managed funds that's in a strategy that not relates a lot with the main drivers of their worries regarding private credit internationally.