Good day and thank you for standing by. Welcome to the Vinci Partners Fourth Quarter and Full Year 2021 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. Please be advised that today's conference may be recorded. I would now like to hand the conference over to Anna Castro, Investor Relations Manager. Please go ahead.

Thank you, and good afternoon, everyone. Joining today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, Private Equity Chairman and Head of Investor Relations; and Sergio Passos, Chief Financial Officer. Earlier today, we issued a press release, slide presentation and our financial statements for the quarter, which are available on our website at ir.vincipartners.com. I'd like to remind you that today's call may include forward-looking statements, which are uncertain and outside of the firm's control and may differ from actual results materially. We do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our 20-F. We will also refer some non-GAAP measures and you'll find reconciliations in the release. Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Partners fund. With that, I'll turn the call over to Alessandro.

Thank you, Anna. Good afternoon, and thank you, all for joining our call. We are extremely pleased to join you all today, as we announce results for our first year as a listed company. Distributable earnings totaled BRL68.5 million in the fourth quarter or BRL1.22 per common share, an increase of 86% year-over-year. Additionally, Vinci announced a quarterly dividend of $0.20 per common share. We continue to deliver strong results across all our segments backed by management and advisory fees. Fee related earnings in the fourth quarter totaled BRL54 million a 43% increase year-over-year. We expanded our FRE margin by 155 basis points this year and in 2021, with 52% FRE margin versus 50% in 2020. We are pleased with this margin expansion, as we had to absorb additional cost this year as we became a public company. We ended 2021 with BRL57.2 billion in AUM, 15% above year-end 2020, driven by almost BRL8 billion in fund-raising, coming primarily from our IP&S and private market strategies. Vinci has been gaining significant market share within the Brazilian alternatives market since 2018. Our AUM has been expanding at a 31% CAGR since while the alternative Brazilian market has been growing at a 19% annual compound rate. This relative performance became even stronger in 2021. This year, Vinci's fundraising represents 60% growth over 2020 year-end AUM. In comparison, Brazilian overall fundraising expanded by only 4%, highly impacted by the recent rise in interest rates and the volatility in public markets. Even in this scenario, our platform was able to raise capital organically and grow faster than the market without the contribution of a flagship private market fund. In the prior cycle, from 2018 to 2020, we had the benefit of raising our latest flagship private equity vintage, we've had a significant impact on…

Thank you, Alessandro, and good afternoon, everyone. Starting on Slide 10, we go over AUM roll forwards for the quarter and the full year. Private market funds accounted for BRL2.5 billion in new capital subscriptions in the full year, with highlights for follow-on offerings in our listed vehicles, the launch of new strategies such as VFDL and VIAS, the IPO of VIUR, and the final closing for VIR IV. We also returned BRL225 million to investors as we divested from assets with highlights to the sale of Lest in the FIP Infra Transmissao in the fourth quarter. Turning to our liquid funds. In the fourth quarter, we had BRL393 million in outflows coming from our liquid strategies and IP&S funds, representing less than 1% decrease in AUM quarter-over-quarter, confirming our resiliency when compared to the strong outflows witnessed elsewhere in liquid strategies within Brazil. In the full year, net inflows represented BRL5.3 billion with highlights to our notable fundraising IP&S exclusive mandates and strong inflows into our hedge funds and liquid funds in the credit segment. AUM appreciation was flat in 2021, following a strong depreciation during the second semester and liquid strategies after a strong correction in the local market as the IBOVESPA Index dropped by 17% in the period. Moving on to Slide 11. We are starting 2022 a very strong cycle for fundraising in private market funds, which we'd like to cover in more detail on this call. As Alessandro mentioned in his remarks, in the fundraising cycle between 2018 and 2020, our AUM growth was positively impacted by the fundraising for VCP III. In 2021, we do not have any flagship fund coming to market. So our AUM growth was driven by organic fundraising from existing products and the launch of spin-off synergistic strategies in private…

Thank you, Bruno. Turning to our segment highlights. As you can see in Slide 24, our platform is highly diversified, and that is the main contributor to the resilience of our business. 48% of our FRE in 2021 came from our private market strategies, followed by liquid strategies with 19%, IP&S with 17% and financial advisory contributing with 16%. The same level of diversification is reflected in our segment distributable earnings. Moving on to each of the segments, starting with our private market strategies on Slide 25. FRE in the fourth quarter was up 22% year-over-year, following a strong fundraising in 2021. Total AUM grew 15% year-over-year with new strategies within real estate and infrastructure, follow-on offerings in REITs and VIGT and the final closing of our impact fund VIR IV. Our REITs were resilient, faced a challenging market in the second half of the year. Our shopping mall REIT, VISC closed a pioneer share swap transaction in the REITs market, exchange fund codes for the acquisition of four shopping malls, assuring our capability to deliver solid growth during a more challenging market scenario. Our Infrastructure segment launched its new water and sewage strategy, VIAS, raising BRL384 million in capital commitments throughout 2021. VIAS announced recently its first investment, a partnership with Aguas do Brasil to invest in the public concession of CEDAE's Block 3, deploying 90% of the capital raised. We believe this is a sector with extensive opportunities with the current public concession agenda in Brazil. Our closed-end private market funds continue to deliver outstanding returns. VCP III, it's current market at a 57% gross IRR and 37% gross IRR in dollars. FIP Transmissao in infrastructure is marked at a gross IRR of 72% in reals and 54% in dollars. As we addressed earlier in the call, FIP…

Our first question comes from the line of Tito Labarta with Goldman Sachs.

A couple of questions. I guess, first on the advisory fees continue to be very healthy, as you mentioned. Curious how you would think about the advisory fees for this year, if you can sustain that level, or if that should normalize a bit to what we saw in 2020? And then second question on the public equities. AUM has still been a bit under pressure there. How do you think about your ability to increase AUM for public equity particularly in the current market environment?

Tito, thank you very much for your question. That's Alessandro. Just starting with your first question about adviser fees. We think to be conservative this year, with very difficult to replicate the same level of adviser fees at least, it's something that we'll not expect. But for sure, we changed the level of this business at Vinci. With the banner year, as I said before, in 2021 for this type of mandates and especially M&A advisory, we have been engaged in a lot of more important than higher fee-based mandates. And also at the same time, we have been able to reach more a larger number of clients. So we expect this line of business to normalize in terms of level of revenues in a higher tone. But this year, specifically 2021 was a very special year. So we do not expect the same level for 2022. But for sure, we are raising the bar here for the revenues coming from our advisory business. Talking about now about the public equities. As you saw, we had, of course, despite of the market, a very good performance in terms of keeping the money side Vinci, especially because the majority of the money in our public equity funds and separate managed accounts comes from institutional investors. We are not seeing right now still the money coming back from retail. We have a very, very thin activity from institutional investors so far. We are not seeing redemptions. But what we are seeing, it's a growing interest coming from international investors for public equities. This did not translate in our case still for a very strong inflow. But for the first time, and this is not just for public equities, this is happening for some private markets business here at Vinci, for, I don't know, at least in the last three years, we did not see so many interest in the country coming from foreigners right now. If that will translate in an important inflow in our -- not just public equities. As I said, we have the question about public equity mandates, but also in the private market side, if that will translate in inflows, it's still early to say. But for the first time in the last three years, we have seen much more interest coming from international clients. I can give you one specific point on that. We just did, I think, last week, a call about macroeconomic scenario in Brazil, how we see the elections going forward with current clients and also prospects. And we had more than 100 clients joining this call. This for us is something that grew from the last one around 30 on average for more than 100. So this, for us, a sign of growing interest in Brazil coming from foreign institutional investors.

Maybe just one follow-up, right, on the IP&S, which continues to grow very strongly. But it does have lower FRE margins. If that kind of growth continues, do you expect to see some pressure on your FRE margin this year or any outlook you can give on how the margin should evolve for 2022?

No. We expect this growth to continue, but the margin will stay the same in the business. We are seeing still, even with this volatility in the market in the last two quarters, now it's a little bit better. We have seen a continuous interest in our IP&S business, especially coming from institutional investors. So we expect that this growth to continue steadily because we can always agree with the clients that we will park this money in the mandate in more, let's say, conservative allocation, conservative portfolio, like more fixed income and then migrate slowly for an ideal asset allocation portfolio. So that's why we continue to see this interest and the mandates still being done here at Vinci and the money flowing in. But in terms of margin, we continue to see this very stable at the same level that we saw before.

Tito, just to complement on Alessandro. We had a nice few years of FRE expansion since '17, '18 until now, which was associated with the expansion that we saw in the AUM side of the business. This year, we continue to grow AUM, but the mix was a little bit more towards IP&S. So our average fee rate has not moved a lot in 2021, although we did get some traction on the FRE margin as well in '21. We got an almost 200 basis points of expansion in '21. For '22, we feel that the margin expansion movement will likely be less pronounced, probably a little bit more stable FRE in '22. And then with the fundraise that we have in private markets that going through throughout the year, we expect the margins to resume expansion in '23. So that's more or less how we're looking at the margin profile going forward.

Our next question comes from the line of Ricardo Buchpiguel with BTG Pactual.

Congrats on the good results. Could you please comment how we should expect performance fees flowing for the P&L this year, and the reason for the lower tax rate in the quarter? I know that there is a lot of uncertainty in the slide, but any color would be appreciated.

Thank you, Ricardo, for the question. So in terms of performance, I mean, obviously, we depend on how the markets perform, right? So we have a lot of our funds that are accruing performance now in the short term that are on the liquid side of the business. So 2021 wasn't a particularly strong year for that side of our performance or in AUM. A lot of the products have high watermarks. So it depends really on how the local markets perform. I think on the positive side, we started the year strong in Brazil on the liquid side. So we had a lot of inflow to the market. The exchange rate is stronger and also the stock market is performing better. So I think -- to that extent, if that continues throughout the year, we will probably have a better picture from the liquid side of the business than we had in 2021. What we do have as well, and we noted that in the fourth quarter, we had some impact from the sale of a part of the FIP Infra Transmissao. We continue to work on divesting from the rest of that fund. So we expect to be able to conclude that divestment through the year. We expect that to be concluded in '22. And the impact for the rest of the divestment of the fund will be similar to what we had in '21. So if we're able to sell the rest of the portfolio, we're going to have another impact of more or less the same magnitude in the '22 distributable earnings number. So it's a neutral impact to PRE because we already had that flow into the balance sheet. But on the distributable earnings, it is going to be a positive impact this year, and we are hoping to close the rest of the sale this year. In regards to the tax, the majority of the explanation behind the low tax rate is the financial income. So the financial income, it impacts our income statement, net of taxes. So it's not a taxable line. So when you look at the pretax income, that part of the result has already been taxed. So that's why the tax rate is a little bit lower than what we had last year. And of course, I mean, to the extent that we continue to have realized income, and that realized income is flowing through the income statement, the tax rate will continue to have the same profile going forward. So that's the explanation behind the tax line.

Thank you. And I am showing no further questions at this time. And I would like to turn the conference back over to Alessandro for any further remarks.

Thank you very much. I would like to, again, thank you all for the support and the questions, and we hope we can deliver another year or a very outstanding results like we did in 2021. That was our first year as a public company, and we are very happy to really could deliver the results that we did, in line with what we thought that will be possible during the time of the IPO. So I would like to thank you very much, and I hope to see you on our next call.

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