00:02 Good day, and thank you for standing by. Welcome to the Patria Third Quarter twenty twenty one Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions]. 00:20 I would now like to hand the conference over to your speaker today, Josh Wood, Head of Shareholder Relations. Please go ahead.

00:37 Thank you. Good morning, everyone and welcome to Patria's third quarter twenty twenty one earnings call. Joining on the call today are our Chief Executive Officer, Alex Saigh; and our Chief Financial Officer, Marco D'Ippolito. Earlier this morning, we issued a press release and earnings presentation detailing our third quarter twenty twenty one results which you can find posted on our Investor Relations website at ir.patria.com or on Form 6-K filed with the Securities and Exchange Commission. 01:07 Any forward-looking statements made on this call are uncertain, do not guarantee future performance and undue reliance should not be placed on them. Patria assumes no obligation and does not intend to update any such forward-looking statements. Such statements are based on current management expectations and involve inherent risks, including those discussed in the Risk Factors section of our Form 20-F annual report filed earlier this year. As a foreign private issuer, Patria reports financial results using International Financial Reporting Standards or IFRS, as opposed to U.S. GAAP. 01:38 Additionally, we will report and refer to certain non-GAAP industry measures which should not be considered in isolation from, or as a substitute for measures prepared in accordance with IFRS. Reconciliations of these measures to the most comparable measures calculated in accordance with IFRS are included in our earnings presentation. 01:58 As a quick overview of the results, Patria generated twenty one point five million dollars in IFRS net income in Q3 twenty one. On key non-GAAP measures for the third quarter, we generated fee related earnings of twenty one point eight million dollars and performance related earnings of one point five million dollars, resulting in distributable earnings of twenty two point five million dollars or zero point one six five dollars per share. In alignment with our policy, we declared a dividend of zero point one four dollars per share, payable on December sixteenth to shareholders of record as of December two. 02:30 With that, I'll now turn the call over to our Chief Executive Officer, Alex Saigh.

02:36 Thank you, Josh. Good morning to you all and thank you for joining us today. We now find ourselves nearing the end of twenty twenty one. Patria’s first year as a public company, and it has been a privilege getting to know many of our shareholders in these past months. 02:53 I want to reiterate upfront that we greatly value your support, and I think our results continue to demonstrate that we are delivering on the targets we put forward for this year and positioning ourselves well for strong growth in twenty twenty two. 03:10 We remain on track for last quarter's guidance of at least seventy five million dollars of fee related earnings and one dollar per share of distributable earnings, which would generate a five percent dividend yield for an investor in our IPO. Year to date we have generated zero point eight three dollars of distributable earnings per share, of it, zero point one seven dollars of distributable earnings per share in this last quarter, in the third quarter. Meaning, we just need to deliver the same results from third quarter again in the fourth quarter to reach our targets. 03:46 This outcome would represent fee related earnings growth of thirty percent plus and distributable earnings growth of more than one hundred and forty percent compared to twenty twenty, when adjusting the prior year for comparable compensation structure. 04:02 And our twenty twenty one results are purely organic, with other contribution of any acquisition were diluted for the cash raised in our IPO. We see that momentum continuing in twenty twenty two, where we expect, based on current, factors to see our fee related earnings increase by more than fifty percent compared to twenty twenty one, including Moneda’s fee related earnings to Patria’s standalone. 04:32 Our…

16:00 Thank you, Alex. And good morning to everyone on the call. Our financial results for the quarter reflect our continued progress toward our prior guidance for the full year twenty twenty one and demonstrate the top line impact from the heavy deployment we saw in the first half of the year. 16:24 Fee related earnings were twenty one point eight million dollars in the third quarter of twenty twenty one, up twenty four percent from seventeen point six million dollars in the second quarter. Fee revenue of thirty seven point four million dollars rose sixteen percent from last quarter as we added nearly one billion dollars net of our fee earnings AUM through deployment. 16:54 Our FRE margin for the Q3 was fifty eight percent up from fifty five percent in Q2 due to the jump in revenue, putting us on pace for a margin in the high fifties range for the full year. Compared to 3Q twenty, fee related earnings were actually similar as you see reported in our P&L, but that is not comparable due to the post IPO adjustment to the compensation structure. 17:31 Adjusting the prior year quarter for an apples to apples compensate structure, fee related earnings were up twenty five percent compared to third quarter twenty twenty. Fees earnings AUM of nine point two billion is up eleven percent from eight point three billion last quarter. And up twenty two percent from seven point five billion dollars one year ago. We landed slightly below the range of nine point four billion dollars to nine point six billion dollars we suggest last quarter, with private equity and infrastructure as expansion, but a slightly lower outcome in our company specific strategies, where we have lower visibility due to in part to FX and local equity…

27:03 Thank you. [Operator Instructions] Our first question comes from Craig Siegenthaler with Bank of America. Your line is open.

27:09 Good morning, Alex and Marco. I hope you both are do well?

27:16 Hey, Greg. How are you? Good morning.

27:19 HI, Craig. This is Alex here. I hope you are well. I’m well as well.

27:24 Thank you. And thanks for all the guidance and targets for twenty twenty two, that will be helpful. But my first question is on the M&A outlook after Moneda. So, how do you quantify deal capacity after Moneda? And also, do you have an appetite to pursue additional transactions after this one?

Well, this is Alex again, and thanks for the question. The answer is, yes. We still have appetite. We did consume around one hundred million dollars from the three hundred million dollars that we raised with the primary issuance of shares in the IPO, indeed Moneda deal, or we will consume, because we're going to now close the deal by year end, hopefully, everything looks completely on track, just for instance here. 28:20 With that, we have two hundred million dollars still in cash from the issuance of primary shares at the IPO to direct for additional acquisitions and we want to do that. So if we do translate that two hundred million dollars of cash, if we buy something also using stock, fifty percent cash, fifty percent stock we can still have another four hundred million dollars there of powder to buy other asset managers. Why the fifty-fifty? Because I think it's important as we are people driven business to give the new partners of ours our shares and keep them locked up for a while and to align interests. So if we divide that by the same multiple that we bought Moneda, we have another forty million dollars of earnings to buy. 29:14 In several different geographies and products. We did feel, I think, the credit space quite nicely with the Moneda acquisition as mentioned earlier and today. And I think there we can really continue to grow their private credit with ours and their listed credits, high yields, which is a product that a lot of investment around the world are seeking for given the yields in the region. We also acquired a very, very significant pipe -- a portfolio with Moneda that, we also had a smaller pipe strategy that can join forces and we can…

33:11 Yes. Just think about our acquisition program aiming at – with three prong, enhancing product offering, expanding our geographic footprint and binding new geographic capabilities and improving the distribution capability. So, Moneda brings the three of them. Following acquisitions may bring the two of -- three of them, but may not be the case as well. So, as Alex alluded to, there's lot of opportunity in infrastructure and credit, real estate, and we will continue with this effort.

33:52 Great. Thanks for that very comprehensive response. In fact, it was so comprehensive, you actually answered my follow-up on M&A, but I do have another one here. And it's on the macroeconomic front. And listen, I know you guys have spent a while answering this, but very simply, the COVID conditions are getting better in Brazil, but inflation starting to rise. Low interest rates are generally a benefit for many private market asset classes, but how do you see higher interest rates impacting -- in Brazil impacting your business, especially your ability to sell to local investors where you're competing with fixed income?

34:34 No, I think -- great question here. And we have of course been asked by other investors the same -- the same question as far a similar kind of question. Yes, I think the interest rates are going up in the region because inflation is going up. But I think here is important to say that actually the products that we offer has always been actually interbank rates linked loss of premium, of course, and inflation linked plus the premium. I mentioned the real estate products, now all of our real estate products, the rental contracts are adjusted by inflation. 35:14 So when we sell the product here in Brazil, we sell a REIT. And normally the way that we actually market it is inflation plus six percent inflation plus eight percent, that's how you actually sell the shares of REIT in Brazil, not only our REIT. So investors that are worried with inflation they look at a real estate see investment trust actually as a protective investment and also our credit products, the same. Of course, sometimes they are interbank plus a premium interbank rates plus the premium and the rates here are power going up in order to cope with the raise of inflation. One hundred percent of our credit products here are variable rates linked. So we are not stuck to any low interest rates that we did lend money in the past and now we were caught off guard. All of our products actually are variable rates. So with the increase of the interbank rates, with the increase of inflation, so does increase of the rates that we receive in our credit products. So they are very much sought after by investors. 36:23 If the infrastructure space, the same Craig, or If you look at…

39:14 Very comprehensive again. Thank you guys.

39:19 Thank you. And our next question comes from Robert Lee with KBW. Your line is open.

39:26 Thanks. Good morning, everyone. Appreciate taking the questions. I'm just kind of curious -- couple of questions around the fundraising. So, with the fund you raised now, is there – are you seeing any change in the LP base? Is it mostly, say, eighty percent re ups and you're getting twenty percent new investors, just trying to -- just curious that how maybe the LP base may be changing if at all? And then on renewable fund do you – have you – can you possibly size that? Do you think that that would kind of take any demand away from the fund when you start to raise that, maybe later next year or early the year after or do you view them more as complementary?

40:18 Thanks again, and nice talking to you and thanks for the questions. As with your first question, we see the same LP based on institutional LPs that are most of our LPs in our private equity strategy today. Of course, sometimes there are little shift here or there and one of our LPs is merged with another LP and that's life, and that's -- I'm talking a minority part of our LP base. But yes, the majority are re ups, as you mentioned, eighty percent. What we're trying to do and I think we want to do is to expand our LP base to other regions and other types of clients. We would really enjoy having more money from ultrahigh net worth individuals through the private banking. I think no distributors, we see that private equity alternative investments in general is becoming more and more attractive for individuals – high net worth individuals. So that's I think there's a lot of money to be raised there. 41:34 I think there's some regions in the world that we would like to increase our share of wallet. Australia, for example that we have an amazing amount of, as you know, very large pension funds. I think our market share there is low. So I’d love to bring them in into this fund. So the answer is yes. I think most of our capital for private equity fund VII will come from current LPs and the current LPs are the ones that actually do come earlier in the process. So they are the ones that actually really support us in a first closing, for example, because they already know is, it's a re up, now great returns for private equity fund five and six fully divested for private equity fund one, two…

44:16 Thanks for the complete answer. I appreciate it. And I did have one follow-up. I mean PE fund five performance has been very good and obviously, that's where you expect the next realizations. But do you see much of an opportunity to maybe even accelerate that? I mean, obviously continuation funds, GP led secondary’s have been really growing in the industry, and I'm sure you have some assets there you maybe would like to hold even longer. So is there a possibility that you may be able to deploy some of those strategies to kind of accelerate the return of capital realizations, but also kind of keep the assets and fees in place.

44:59 Yes, definitely so, I think that part of the market is so fighting today. I think there are so many new things and new strategies going on. But the concept of continuing to invest in these, what we call champions has always been parts of our day to day strategy. I'll give you an example, the first deal that we did was a drugstore retail chain, we bought it for twenty eight million dollars, we sold it for three hundred and something million dollars. We thought that we were just genius. This company today is worth five billion dollars. 45:41 And we made twelve times our money, we said, wow what an investments. And we could have made -- the company today worth five billion dollars, the same company. Okay? And it's an amazing company, number one in Brazil, in drug store retailing, blah blah blah blah and continue to grow very strongly. And I can give you other amazing examples from our private equity fund from our infrastructure fund one and two champions per fund, I would love to continue investing in these company's given that they continue to deliver twenty percent plus returns per year. 46:15 And to do that for twenty years for thirty years this drugstore retail company that I mentioned we divested in the late nineties, whatever, twenty something years ago and grow -- and growing twenty percent per year. That's something rare to find. And we have other companies in the diagnostic field, in the energy fields that we could have continued to invest. So, yes, we are looking to set up continuation driven vehicles listed. We are looking at strategies that you can list these funds in exchanges like in Brazil exchanges, like in London that have a pocket for these kind…

48:54 Great. Thank you for the full answer.

48:56 [Multiple Speakers] to Alex, there also opportunities to hold some these investments that have been developed under the development trends into a permanent capital structures aiming at offering to local investors field products. That's something that we saw happening in other parts of the globe, that also are opportunities that we are looking at.

49:24 Great. Thank you so much. Appreciate it.

49:28 Thank you. Our next question comes from Marcelo Telles with Credit Suisse. Your line is open.

49:34 Hi, Alex. Hi, Marco. Thanks for the time and congratulation on the results. I have two questions. The first one, I mean, think up to twenty twenty two how do you see the level of capital deployment next year. Of course, you had a remarkable performance this year, one point eight billion in deployed capital. How should you think about twenty twenty two, you think it should be around that two billion that historically have been or given that perhaps valuation in Brazil have come down a lot. I mean, do you see room to deploy capital even faster than that? And my other question is kind of the flip side of that argument in terms of the realizations. Of course, those are big derating in the Brazilian market. Currently the valuations delicious have come down quite a lot. Does that impact and I know you just mentioned your willingness to divest particularly I think the Fund five, how do you think that environment impacts your ability to divest next year, maybe it would be worth maybe to wait a little bit, maybe after elections in Brazil and see to maybe get better valuations in twenty thirty three hopefully. So how should we square these two things that are in some way kind of opposite at this point in time in Brazilian cycle.

51:13 Thank you and nice talking to you. Thanks for the question. On the investment slide, I think the first part of your question, we continue to see a very interesting environment to continue investing. Much more so, I think because we know the size that we have today and plus the opportunity sets, I think that is going on in the market. We continue to be extremely positive on that front and we continue to see kind of same level of activity that we had this year for next year. 51:50 On the infrastructure side, it's amazing. We mentioned during our earnings call, we run a two billion dollars fund, now we raise another infrastructure fund sometime in twenty three, a year ahead of schedule, late twenty twenty two, twenty twenty three. But there are like forty billion dollars, fifty billion dollars, sixty billion dollars of concessions going on just in Brazil. And there's not a lot of capital chasing in this concession. And our interaction with the regulatory bodies in Brazil and the decision makers in Brazil. I mean, the minister of infrastructure, the minister of telecom and energy is very, very close. Now we are talking to them and one is -- because we became a very important bidder in these auctions. 52:41 So, I'm very excited on that front. I think there's so much to do. And again, two billion dollars fund and just in Brazil four billion dollars, fifty billion dollars, sixty billion dollars of concessions, you can really choose the best assets to go after, right? On the private equity side, I think we do focus on three or four sectors, as you know, healthcare being number one and then agriculture, food and beverage and then business services, logistics -- logistics became kind of…

57:49 And in addition there, Marcelo, that I would encourage you to pay attention to is the underlying quality of the portfolio. Not only when you look to the different possibilities of divestment. As Alex noted too, the return of private equity five which is twenty twenty, twenty fifteen vintage is twenty nine percent, product equity six is twenty seven percent, infrastructure four is now yielding twenty five percent. So, I think what is key here is, we will always be – pay a lot of attention to the timing of divestment. But the great thing is that the underlying assets are great. So when the right timing comes we will be in a very good positioning to divesting. So that's -- I just wanted to bring this up. Thank you.

58:48 Extremely clear. Just two follow if I may. Number one, regarding the fundraising for the country specific strategist, you think like a one billion dollars a year still, let's say, a good base case scenario? And secondly, look at your guidance for twenty twenty two, the FRE grows more than the fifty percent, how should we think about Moneda standalone business? Should we expect like perhaps like double digit growth from Moneda in twenty twenty two? How should you think about that? Thank you.

59:33 Well, on the first part of the question, I think you're right on there. I think organically, I think, that's a number that you can work on. We plan to do acquisitions in the local market as well. As mentioned earlier, but yes, organically I think that's the kind of AUM growth that I would expect from the team here. One billion dollars that you mentioned, right? 60:02 On the other fronts, we continue to see very strong growth for Moneda and ourselves. It’s getting harder to actually breakdown, which is -- which to be honest as we are really merging the two businesses and consolidating the back office and the fund administration side. But I think we can definitely, if you do the math here, I think over fifty percent growth from where we landed, where we are landing, I'm sorry, twenty twenty one, it is a double digit growth, high double digit growth for both companies, right? 60:48 Marco, if you want to add anything here, what's your view?

60:53 Yeah. On the Moneda side, well, the whole dynamics with the higher interest rate in the region poses a favorable set up for the high yield dollar denominated funds and the local currency denominated fund, so I'm very positive with the possibilities there. It's still early to say as we are -- we're closing the transaction in the upcoming weeks and there's a lot of work to do there. But as Alex noted, there's also some opportunities on the cost side and the tax side and that would help us out to reached double digits, so I can see a double digit coming in. Still early to say where we're going to land at the point, we'll certainly provide better guidance over the following quarters.

61:51 And I think just as a notes here given that the deal is not yet approved by the regulatory bodies, we have limited capacity of talking to Moneda, okay? The antitrust bodies, they have to approve the deal. And before doing that we are not -- we cannot and we are not in full contact to go deep into the numbers of Moneda. So just as a caveat, which is a very important caveat, right? As you know, it's actually natural of every deal, right? So, we have not gone into any discussions with caveat in a deeper manner, given what I said. 62:40 However, we see on their side demand for their products as Marco just explained and we already seeing on our side from our investor demand for credit related products. But as we get the approvals and they should come, I think there's nothing in the horizon that says that the regulatory body not approve this deal on the contrary, then we're going to be able to have more in-depth conversations with the guys from Moneda. Isn’t that's correct Marco?

63:15 Right. We're on the way for the closing, there is certain approvals that have been granted. There are certain preceding conditions that are still pending, but we're pretty much very positive that we're walking solidly to the closing in the upcoming weeks.

63:34 Thank you.

63:38 Thank you. Our next question comes from Guilherme Grespan with JP Morgan. Your line is open. Q – Guilherme Grespan: 63:47 Hi, Alex, Marco, Josh. Thank you for organizing the call. Two quick ones on our side. We saw the average management fee rate in the quarter is slightly going up. It seems to be related to partially mix on the segments, but also if we recap correctly, for some funds and specifically thinking for four, the last one you raised, the management fee goes up as we deploy? And then my question is actually looking forward, do you still have one point four billion dollars to be deployed if we should expect not only fee earning AUM to grow, but also management fees to go up as a result of this different pricing scheduled? 64:28 And then the second one is just to confirm the general term of the new PE fund being raised? Again if we recap correctly, the latest one, the pricing was only over deployed and was at two percent rate if this new PE follow the same rule? Thank you.

64:48 I can get that one. And thank you for the question. So it's a very simple answer to the trending up of the fees and specific on the infrastructure fund as we deploy capital, there's a component of the fee that kicks up and as we strongly deployed over the quarters that is building up the mix upward is just the nature of the fee setup of the infrastructure fund. And as for the private equity, we expect to have precisely the same dynamics. 65:27 We feel -- and by the way, I think I mentioned that before in previous quarters, but we have a very positive supply demand dynamics to our funds that enable us to continue to sustain the base of fees that we have on the private equity, both on the infrastructure too.

65:55 Yeah. And just to be clear here is, two one twenty for private equity and just -- we just charge when we commit to deploy the capital. Okay. Q – Guilherme Grespan: 66:10 Okay, guys. Super clear. Just one follow-up, the one point four billion still to be deployed. This is -- what is the breakdown between the infra and private equity?

66:22 It's across several family of funds, there's a big piece that is on the – big thing that is on private equity and another big thing, that is infrastructure, but it add up to other products as well.

66:43 Yeah. I think from math here, I think, eighty percent -- seventy percent, eighty percent is private equity and infra, right? Q – Guilherme Grespan: 66:55 Okay, guys. Perfect. Thank you.

66:58 Thank you very.

67:01 Thank you. And I'm showing no further questions. I'd like to turn the call back to Alex Saigh for closing comments.

67:09 Well, thank you very much again for your support. I think we're extremely proud of my team – I’m extremely proud of my team. I think I can say also from the Board, Olympia and Ontario now very proud of what we've been able to accomplish. Now getting out of the gates as a first year public company and managing to deliver what we expected and we talked to most of you during the IPO process of one dollars per share for twenty twenty one. Looking into twenty twenty two with fee related earnings expected to grow by at least fifty percent with all the fundraising efforts that we mentioned to you guys, which would then push us into a good twenty twenty three as well. In addition, we have the two hundred million dollars of cash still left from the primary issuance shares in the IPO to do acquisitions. 68:11 Again, as I mentioned if we buy two hundred million dollars and then another two hundred million of financing, whatever, we have four hundred million still of dry powder in the way that I see, which is at the multiples that we did acquire Moneda, another thirty five million dollars, forty million dollars of fee related earnings to add to the numbers that I just said. 68:32 Then on the performance fee related earnings, great performance from our funds, which was already mentioned and private equity fund five now is ripe for us to harvest the performance fees as we did for private equity fund three in twenty twenty one. Also then broaden a little bit of view on the strategic side, I think we've been able to accomplish also what we wanted to do and what we actually conveyed and talked to you guys over this year,…

70:44 This concludes today's conference call. Thank you for participating. You may now disconnect.