Good day. Thank you for standing by. Welcome to Patria's Fourth Quarter and Full Year 2022 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]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Josh Wood, Head of Shareholder Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Patria’s fourth quarter and full year 2022 earnings call. Joining today are our Chief Executive Officer, Alex Saigh; our Chief Financial Officer, Ana Russo; and our Chief Corporate Development Officer, Marco D’Ippolito. This morning, we issued a press release and earnings presentation detailing our results for the fourth quarter and full year 2022, which you can find posted on our Investor Relations Web site at ir.patria.com or on Form 6-K filed with the Securities and Exchange Commission. 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 statement. Such statements are based on current management expectations and involve inherent risks, including those discussed in the Risk Factors section of our latest Form 20-F annual report. Also note that no statements on this call constitute an offer to sell or a solicitation of an offer to purchase an interest in any Patria fund. As a foreign private issuer, Patria reports financial results using International Financial Reporting Standards, or IFRS, as opposed to U.S. GAAP. 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 IFRS measures are included in our earnings presentation. On headline metrics, Patria generated fee-related earnings of $35.3 million and distributable earnings of $53.3 million or $0.36 per share for 4Q '22. We declared a quarterly dividend of $0.308 per share payable on March 22 to shareholders of record as of March 1. For the full year 2022, fee-related earnings were $130 million and distributable earnings were $147.1 million, or $1 per share, bringing cumulative dividends to shareholders to $0.85 per share for the full year. With that, I'll now turn the call over to Alex.

Thank you, Josh, and good morning to everyone joining today as we close out our second year as a public company. Patria generated strong results in the fourth quarter of 2022, and again demonstrated our ability to deliver on our earnings guidance from the beginning of the year. In 2022, this required performing amid a backdrop of uncertainty and transition across the globe, and conditions that caused many companies to fall short or adjust expectations. We continue to execute on our growth plans and strategically position the firm to achieve our ambitions in the coming years. We generated $147 million of distributable earnings or $1 per share in 2022. The resulting $0.85 in dividends per share would give a shareholder who bought the stock at the beginning of the year a 5.2% annual yield. With fee-related earnings of $130 million, we delivered on our annual growth target of 50%, highlighting the resiliency and predictability of this earnings stream, even in a challenging environment. We've demonstrated real progress on the divestments of our mature drawdown fund portfolios. Our third generation infrastructure fund reached the threshold with crystallized performances, realizing $19 million net in Q4, following the exit transactions of ODATA, our data center platform, and Entrevias, one of our toll roads in Brazil. While it was a challenging year across our industry on the fundraising front, we raised $3.1 billion and including acquisitions totaled 4.5 billion in overall inflows. While timelines have lengthened in areas like private equity, we are also seeing strength in areas like infrastructure, where we now see a larger first closing for the next flagship fund in early 2023 versus a smaller one at the end of 2022. We clearly shared our aim to grow the platform through M&A and following our major transaction with Moneda in…

Good morning, everyone. I'm thankful for Marco and the team for onboarding me during this transition period. I'm looking forward to engaging with all of you. As we bring a successful '22 to a close, we look forward to our task of executing on 2023 and the next few years as we discussed with you at our Investor event. Our top line outlook remains very strong, even in the current perspective of the world economy and challenges facing our sector. And our footprint and diversification position Patria for attractive growth. As Alex noted, we are targeting to grow FRE to $150 million in 2023, while maintaining a similar margin to 2022 in the high 50% range. Much like 2022, we have at this point good fee revenue visibility based on where we begin the year and our expected deployment pace. We do expect the revenue and therefore the fee-related earnings to ramp over the course of the year in contrast to the more steady FRE results we saw over the four quarters of 2022. Given factors such as the holiday for the first closing [ph] our new private equity fund, we expect FRE in the first quarter of 2023 to be similar to the run rate level we saw in 2022, excluding the impact of incentive fees into Q4 and then ramping up through the rest of the year. As of December 31, our net accrued performance fees stand at $462 million, up 33% from one year ago and that's after realizing $19 million in the fourth quarter. At more than $3 per share, this accrued is predominantly supported by mature portfolios in private equity Fund V and Infrastructure Fund III with more than 80% of the accrual in those two funds. These funds are positioned to divestment and we have already seen that in action for infrastructure at the end of the last year. We think about performance fee realization over cycle, not individual years. As we noted at Investor Day, we would expect to realize 50% to 80% of the accrual in those two funds by the end of 2025. As we progress in integrating our written M&A transaction, we are focusing on standardizing and automating back office process, streamlining through systems and ensuring efficiencies throughout the organization. This will be crucial as we pursue a high rate of growth and we enable Patria to mitigate inflationary pressure, reinvest in the business and maintain current margins with continued high standards of controlled environment. The future for Patria is bright, and I'm thrilled to be part of the journey. Let me now turn back to Alex for some closing remarks.

Thanks, Ana. Altogether, we're very pleased with the firm's performance in 2022. While it was a year of headwinds in our industry and challenges across the globe, we believe the stability of our business model and talent of our people are the key drivers of our resilience and success. We have set ambitious goals over the next several years, and I'm confident we have the right team and resources in place to deliver on the targets. Delivering on 5 billion to 6 billion of fundraising and 150 million of fee-related earnings this year will have us well on the path to our 2025 goals. And we expect to continue to be active on the M&A front. We believe we are uniquely positioned to be the gateway for alternatives in Latin America. And with success in that endeavor, we can deliver significant value to all of our stakeholders. We're now happy to take your questions. Thank you.

Thank you. [Operator Instructions]. Our first question comes from the line of Mike Brown with KBW. Your line is now open.

Great. Hi. Good morning, everyone.

Good morning, Mike. How are you?

Good. Thank you. I wanted to start on the fundraising commentary. So I thought that was certainly positive that you guys are targeting 5 billion to 6 billion of inflows for 2023 and you gave a lot of great commentary on the call. Could you just maybe dimensionalize that a little bit here? I know you don't have a crystal ball. There's a lot of moving pieces in the market. But what would be the main drivers there if you had to kind of split that organic inflow number up a bit?

Hi, there. This is Alex. And thanks for participating and thanks for your question. I think it's hard to give a specific detailed guideline. As you mentioned, we have several moving parts and the market is adjusting itself. What I would say in general terms that the infrastructure and credit related products are now easier if you can say that expression that's fundraised today. And I think the equity related products are harder to fundraise in this current environment. Of course, kind of what I'm going to say now, the interest rate environment does affect this specifically what I just mentioned, equity related products, harder to fundraise, no fixed income, no infrastructure like products, easier to fundraise. So we're on the road, as you know, with infrastructure Fund V and private credit, infrastructure credit, and some other credit products. And those I think might be the big chunk of those 5 billion to 6 billion. Of course, we have a fantastic track record on the private equity. And as mentioned, we feel confident that as we move into 2023, we're going to be able to reach our targets there, the flagship fund. We're also on the road with our venture capital fund and our growth equity fund, and we will hit our internal target there as well. But of course, it's taking more time on the equity side in general and on the public equity side as well. So all of these moving parts in the end I think we'll get there on the drawdown funds as mentioned on the 5 billion to 6 billion target. But fixed income related I think will be more of a chunk of the next fundraising and a lot of drawdown funds in that bucket, as mentioned infrastructure Fund V, private credit fund II for Brazilian investors, infrastructure credit fund I also for international and Brazilian investors, a LatAM private credit fund also that we are raising that will target Latin America as a whole on the private credit side, plus the real estate permanent capital vehicles, and infrastructure permanent capital vehicle. So that's more of where we see things going. Again, I think when we look into the number of general -- total $20 billion capital formation that we gave as a guideline in our PAX Day in December from '22 through '25 having raised organically and inorganically close to 4.5 last year and having another 5 billion to 6 billion this year, now puts us in a very, very good position to reach the 20 billion target capital formation by '25. So I think we know we feel comfortable, far from easy, as you know, but I think we feel very comfortable that we'll get there. But I think a different kind of profile of products. I hope I answered your question.

Yes. Thank you, Alex. That was great. Thank you. If we can maybe double click in a little bit on the infrastructure side here. So clearly investor demand is very strong for that asset class. When we think about PAX, can you just help us understand a little better how do you differentiate your infrastructure strategies versus some of your larger global peers that also invest in the LatAm region? How does PAX approach infrastructure differently?

Okay, and thanks for your question again. Within our infrastructure vertical, I think we have our flagship fund. As I mentioned, we're raising right now our infrastructure flagship number V. The strategy or the differentiator of that fund, the strategy that makes that fund or family of funds very different is the fact that we take on development risk. And we have dominated that. And I think that's why we do continue to perform extremely well. As mentioned also during the call and also doing some of our earlier calls late last year, the divestments of two great companies that we had in our infrastructure fund III. And what does it mean taking development here? Now in the end, what we do is pretty easy to explain. I think it's harder to execute. We do win an auction or we buy an asset, we then take the risk of that asset by taking the development of that project, and then we sell it. So we buy the risk itself and we derisk mainly through development of that asset, because it can be a greenfield. When you win a concession of a new power project, for example, where we can buy a small brownfield and then develop that to create a larger asset. An example of the data center business that we just sold late last year and we started from scratch, we actually bought a piece of land. We constructed our first data center in the outskirts of Sao Paulo here in Brazil. And from there, we created over 60 megahertz company now with potential to expand to 100 this year, and we have pent-up demand already, signed contracts to bring this company to 400 mega and we sold it and we made over 4x our money there in U.S.…

Yes. Thank you for all of that color, Alex. I appreciate it.

Thank you. And our next question comes from Ricardo Buchpiguel with BTG Pactual. Your line is open.

[Indiscernible] by the performance fee-related booking in the quarter given the generalization of performance fee if OpEx was still pretty much flat for the quarter, right? So can you please explain what has happened with this line and efficiency, the margins of the related FRE actually similar in the following quarter? Thank you. Marco D’Ippolito: Ricardo, your voice --

This is Alex again here. Marco, do you want to take this question. Marco D’Ippolito: I'm not sure I got the full -- just confirm to me if I got the full question because the voice came in a little bit broken up. The question is about overall margins and also income tax. Is that -- those are the two components of the question.

No, sorry. We just saw that the OpEx were pretty much flat despite the performance of fee related booking in the quarter. So I am trying to understand what drove this better performance and exactly if you can normalize this level of OpEx for the following quarter? I’m not sure if you heard me now. Marco D’Ippolito: Okay. So let's first differentiate the two kinds of expenses, the expenses related to the carry. You're going to find that below the FRE on the carry interest on location and bonuses for the quarter, which is 10.2. So that ties to the 29.1 that you see for the quarter which is completely different from the personnel and admin expenses that you see on the top. The 58% margin is what -- it's in sync with the overall margin for the year. It is slightly above what we have indicated throughout the quarters during the last year, we indicated in the mid 50s. And we are ending up slightly higher than that. We're gaining some margin on personnel expenses throughout the year. And we were losing a little bit of margin on the admin expenses due to some of the fixed cost associated with the acquisition of Moneda that had a lower margin, a lower overall margin. But overall, we can say that we're happy with the margins and with the progress of the expenses in a year where of course inflation hit very strong.

Very clear. Thank you.

Thank you. Our next question comes from the line of Beatriz Abreu with Goldman Sachs. Your line is now open.

Hi, Alex, Marco, and Ana. Good morning. Thank you for taking my questions. First question would be on the FRE guidance of 150 million for 2023, which implies a 15% increase from 2022. Could you tell us how much of that growth do you expect to come from organic growth versus how much coming from inorganic growth if any? And a second question, if I may, would be on the real estate strategy. So this was a segment that you expect it to grow the most in fee AUM by 2025, if I'm not mistaken. So if you could give us some color on the segment’s outlook for 2023 and what kind of growth you're expecting, that would be great? Thank you.

Hi, Beatriz. This is Alex. Marco, do you want to take the first question? And I'll take the second please. Marco D’Ippolito: Sure. So Beatriz, we don't provide the distinction between what is the FRE organic and inorganic. I think what you can have as a reference, as Alex indicated in the call, is he guided on the 5 billion to 6 billion of accretion of capital, and that's all organic accretion, if you will. So this is not encompassing any sort of accretion that is coming from acquisitions. I confirm that we will remain active on acquisitions. And the other data point, if it's worth, is that last year, the accretion of fee paying AUM inorganic was in the vicinity of 1.4 billion out of the total $4.5 billion.

And going to your second question, and then I'll ask if we did answer most of them, Beatriz. This is Alex again. Yes, we're very excited with the whole real estate expansion of our product lines and, of course, our general AUM. More specifically I think in Brazil and countries like Chile and Colombia where we're looking into this very closely. In Brazil, we did an acquisition, as you know, called VBI. But I think to say [ph] very interesting consolidation play on the REIT side and we're looking into that very closely. And VBI has been very active, looking into that as well. We have within the Brazilian context a R$220 billion REIT market, which are these listed Brazilian real estate trusts are listed in the Brazilian Stock Exchange, B3 as you know, and you have several listed REITs in the Brazilian Stock Exchange that are basically a single asset REIT or very few assets within that REIT. And that REIT trades very poorly in the secondary market because it says no single asset REIT, has very low liquidity and investors are basically stuck with that REIT having difficulty in selling their shares. So I think merging a group of those REITs to create a large one headed by our VBI partner is a great opportunity. Within VBI, we have three fematic [ph] REITs, one focused on corporate, the other one focused on logistics, the other one focused on credit related instruments in the real estate market, what we call in Brazil the CRIs and there I think we have so much to do on those fronts in consolidating other REITs in those themes that I just mentioned. So there's so much -- we manage around R$5 billion of REITs in R$220 billion market. So you can imagine what…

No, that's very clear. Thank you.

Thank you. [Operator Instructions]. I would now like to hand the conference back over to Mr. Alex Saigh for closing remarks.

Well, thank you very much, again, for your participation in this call, your patience to go through this 50 minutes, an hour with us. I think as all of us mentioned here, Ana, Marco and Josh, myself, Alex, are extremely pleased with 2022 results. I think we did manage to hit our targets and the targets that we actually designed for 2022 and late '21, when we had a different world environment and a different market for alternative assets. As we look into '23, I think we're confident that we're going to be able to deliver again on our $150 million guideline for FRE and hopefully be able also to convert some of that performance fees into realizations throughout the next years. We have over $400 million of inventory, right, of performance fees. And some of our funds, namely our infrastructure fund III are already in the carry mode or carry status. So thanks again. And I also want to again congratulate the team for an amazing year. Far from easy, but I think the team managed to perform. We wouldn't be having this call here if it were not for the team, their competence, their dedication, and congratulate Ana as well here on her new CFO role. So as we go through '23, Ana will be taking more of a protagonist role here in our finance department as a CFO as Marco leaves our corporate development side and looks for additional exciting acquisition opportunities for Patria. Thanks, again. Hope to see you soon. And have a great week. Thank you.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.