Good afternoon, and welcome to the Vinci Partners Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this call will be recorded. I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead, Anna.

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 to certain 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 very pleased to join you all today as we announce results for the third quarter of 2022. Adjustable distributable earnings totaling BRL73.2 million in the third quarter or BRL1.32 per common share, an increase of 19% year-over-year. Distributable earnings results are backed by extremely defensive FRE pushed by fundraising across our private market strategies and long-term lockups with a considerable upside coming from our liquid investment portfolio. Our business model has been able to guarantee an extremely healthy growth for our company in one of the most challenging scenarios this past quarters and helped us navigate these times while still delivering growth and attractive dividend distributions to our shareholders. Vinci announced a quarter dividend of $0.20 on the dollar per common share, totaling $1.20 in dividend distribution since our IPO. Considering yesterday's closing share price, VINP stock is currently trading north of 6% last 12 months dividend yield. This yield is secured by a highly visible management fee-driven revenue stream in a very conservative investment policy on our balance sheet cash position. Vinci ended the third quarter with BRL63.4 billion in assets under management, up 9% year-over-year, driven by our fundraising across private market funds in the second and third quarters of 2022 and the recently closed acquisition of SPS. Results for Vinci SPS will be included in our private market segment. This quarter presented a partial impact from a revenue standpoint from Vinci SPS as we closed the acquisition in the middle of the quarter. We'll see revenues from the segment impacting the fourth quarter onwards. On the fundraising side, we had some great news regarding our efforts in private markets this quarter. The first one is the capital raise for our first fund…

Thank you, Alessandro, and good afternoon, everyone. Starting on Slide 9, we will cover AUM trends for the quarter. Vinci ended the quarter with BRL63.4 billion in AUM, up 9% year-over-year. During the third quarter, we launched our first fund focused on the agribusiness strategy, VICA, raising BRL360 million in a perpetual capital fund structure to become listed in the B3 to a public follow-on offering in up to 5 years. VICA should come back to the market next year for a new round of financing due to the substantial demand we experienced from investors and the extensive pipeline of assets we have identified for this strategy. For the fourth quarter, we expect the first closing for our climate change fund within the Infrastructure segment, VICC, in a second round of investments for Vinci Credit Infra. As a reminder, each fund has a BRL500 million approved commitment from BNDES. For the VICC, that commitment should be partially activated at the first closing, reaching the full commitment as the fund reaches its targeted fundraising. In the case of Vinci Credit Infra, we expect the commitments to be fully activated in the fourth quarter. Concluding our AUM update, it's important to highlight that half of our AUM is comprised by long-term products. This results in a more predictable revenue stream for management fees, which translates into stability in our earnings and dividend distribution. Bear in mind that exclusive separate mandates from our IP&S segment do not formally account within long-term AUM as they don't have formal lockups. However, this is an extremely sticky investor base with a long-term view for its allocations. We have proprietary relationship with these clients. And generally, their goal is to stay with us for the long term. And as a consequence, we have very low churn in…

Thank you, Bruno. Turning to our segment highlights. As you can see in Slide 21, our platform remains highly diversified, which we believe to be main contributor to the resilience of our business. Regarding the investments made in the VRS segment, 52% of our FRE in the year-to-date came from our private market strategies, followed by IP&S with 22%, Liquid Strategies with 20% and Financial Advisory contributing with 5%. The same level of diversification is reflected in our segment distributable earnings. Moving on to each of the segments starting with our Private Markets strategies on Slide 22. This quarter, we are including our new strategy, Vinci SPC into the Private Markets segment results. FRE totaled BRL26.9 million in the quarter, up 3% over the prior period, driven by the strong fundraising of the last 12 months and the incorporation of SPS Capital. As a reminder, the acquisition of SPS was closed in the middle of the quarter. Thus, we are only being partially impacted by management fees. In the next quarter onwards, we will have the full impact from the SPS business. Private Markets average management fee rate was down year-over-year and quarter-over-quarter due to 2 main factors. First, due to the recent fundraising for Vinci Credit Infra within our credit strategy with BRL900 million in AUM. Fees are charged on invested capital, so we should see an increase in management fees and in the average rate as deployment progresses. Second, in the last quarter, the Private Equity strategy had a significant inflow from a non-fee-earning AUM mandate due to the structuring of a due in VCP III, which also impacts our average fee rate. Closing on average management fee rate, as the reported vintage from SPS Capital is still investing its capital and charges, higher fees on invested capital,…

Thank you. At this time, we will conduct the question-and-answer session. [Operator Instructions] Our first question will come from William Barranjard of ITAU BBA. William, please proceed your question?

And my question here is regarding Liquid Strategies. So, the FRE levels this quarter was lower compared to last quarter and the last year, right? So, I would like to understand this impact from the mark-to-market one-offs. And if the levels we should expect to have similar to this quarter or the last quarter going forward, at least for the next few quarters? And then looking at the total FRE, I would like to understand how you expect it to evolve in the fourth quarter of this year and then next year also? So -- and particularly take a look in how you look at the Advisory segment if the mood is improving or not for the next quarters?

Okay. This is Bruno, I'm going to cover your questions. So, in regards to the Liquids FRE margin, what happened was a combination of some mark-to-market impact and some small redemptions that we had that accumulated over the past few quarters. So, revenues were a little bit down when you compare on a year-over-year basis. And the other thing was that once we had the decline in the Advisory revenue, the cost allocation for the corporate center was rebalanced. So, that means that the other verticals had to cope with more of the corporate center costs. So, it ended up affecting the margin of the Liquid business a little bit more this quarter, right? Going forward, I mean, if you look into the fourth quarter, there was an appreciation in AUM in the third quarter. So, we're likely going to have a little bit more of a tailwind from revenues in Liquids there. But I wouldn't expect margins from Liquids to change materially. I mean, from the levels that we had this quarter, probably improve a little bit, but not substantially, right? In terms of Advisory, what we have been saying is that last year was a very strong year. So, we had around $60 million in revenue. This year, we already -- when we came into the year, we knew that the pipeline was looking a little bit slower for '22. For '23, when we look at the pipeline of deals for '23, the ones that are able to be closed in '23, I would say, probably we are somewhere in the middle between '22 and '21. Difficult to say if it's exactly in the mid or if it's a little bit lower, then the mid were higher, but today, from the vantage point that we have today, the expectation is that we should have a year that should be between '21 and '22 from a revenue standpoint in the Advisory business. So, I don't know if I covered all your questions, but those are the ones that I had here.

Our next question comes from Pedro Leduc of Itau BBA as well. Pedro, you have the mic?

Hello, can you hear me?

Yes, Pedro, we can hear you.

So, first on -- two questions, please. On a more broader perspective, as we look into the next year, you mentioned reduced uncertainty now with elections behind, helping on some products. We certainly agree that the moment is opportune to invest in Brazil looks good. Could you elaborate a little bit on which products you believe will drive the most under business cycle that's now unfolding for us. That will be the first question.

Pedro, this is Alessandro speaking. I'll try to address your questions. Of course, now as we have the elections behind us with the reduction of this uncertainty with interest rates reaching a peak after this tightening cycle, we believe we have coped with the lower, I would say, one of the lowest ever allocations for the international LPs that we talk with. We believe that Private Markets will benefit a lot with that. We continue to be -- we have a very constructive view on the private equity VCP IV fundraising going forward next year. We also are highly optimistic about the prospects of fundraising of our climate change fund that's related to infrastructure. We are having a very good welcome to this product from the international base. And also, we have been discussing a lot of international mandates for equities that will be allocated in Brazil. So these 3, taking the point of view of the international LP community would be the ones that we are believing that we'll see the most of the inflows coming from next year. Talk a little bit about the local, I'd say, LP universe, we are optimistic with the I would say, the recovery of the fundraising activity for the REIT. So, the real estate listed funds, we already saw that a bit with VICA, that's our agribusiness fund that in a way goes to the same type of market. And we saw a recovery in prices in the last quarter for our real estate investment trust the listed SAEs. So, we believe that very soon, we will have a more robust fundraising activity for that. So, I would say that the local institutional clients with that also, and we are already seeing this interest coming back for more long-term yield-related assets, especially in infrastructure. So, we also believe that we have some flows coming from local institutional for infrastructure products going forward to 2023.

On the second, on also a little more broader perspective. We're seeing big banks get hurt in retail credit in Brazil, but doing well in corporate and in agro. So, how are you seeing the broader capital market perspective competitive environment? And how could you shield yourself potentially from a greater role of public banks as BNDES in this next administration?

Okay. That's a very good question. For us, as you know, we have more like uncorrelated, I would say, activity with this, I would say, what's driving the results of the bank that we have been seeing in the last few days especially. But I would say where we would see maybe some competition and from the different approach from the state-owned banks will be more on the private credit side. But we are in a very specific niche of more like a high grade, a very, very long-term type of credit where we should see maybe the BNDES actually a bit more. But even BNDES is not exactly in the same type of structure that we are. So, we are a little bit junior related to BNDES, but it's still very long term with real assets as a guarantee of our loan. So, I would say that there, we could see some petitions but for the allocation, but we not see much since we asked for higher spreads that normally be in [indiscernible] when they go more further on the, I would say, the capital structure of the companies. Talking about the other verticals, to be very honest with you, we do not see that affecting too much. Coming back a little bit on the beginning of your question, we, as you know, on the -- especially on the the funding side, the liability side of our business, where the money comes from, we have a very, very low exposure relatively to the rest of the asset management industry coming from retail investors and from distributors and allocators that this is a little bit more from 10% of our total AUM. So, that's why we do not see this affecting much also the overall activity in capital markets and the flows of money on through retail affecting much of our business. So, I don't know if I answered your question, but that's how we see this developing going forward.

[Operator Instructions] Our next question is coming from Ricardo Buchpiguel of Banco BTG Pactual. Ricardo, please proceed with your question.

I have 2 questions on my side. First, can you please comment what are the next steps to seize all the synergies after the acquisition with SPS Capital? And also, is Vinci studying to buy other asset managers given its high cash position? And if so, in what sort of segments should we expect?

Ricardo, this is Bruno. In regards to Vinci SPS, the structure of SPS is already very lean. So, I wouldn't necessarily see any synergies from a cost or integration standpoint. I think synergies there, I would say, mostly they come from 2 sides. One is on the sourcing and collaborating with the rest of the platform, right? So, as we said in the call, that we announced acquisition, this was a part of the business that was very a gap that was very clear. And what happened was that we were generating a lot of deal flow and potentially having opportunities to deploy capital in a special situation structure, but we didn't have the correct vehicle or the correct capital pool to deploy those opportunities, right, forward? So, I think the one thing that we are noting is that [indiscernible] and team, they have been able to work very closely with other verticals at the firm and already leveraging this partnership potential from a deal flow standpoint, right, deals that we received over time and that were not suitable for our traditional strategies. And the other point, I think we're going to start to see materializing in '23, we are now starting to map out the '23 launches. So, products that are structured products that we should launch in 2023. We have a couple of positive developers in that front. So today, we are budgeting potentially VIR V resuming coming back to market in the second half of '23. And also Vinci SPS vintage for potentially coming to market in the second half of '23. When that happens, I think that there's going to be a lot of potential synergies because the potential addressable market for the strategy will be greatly enhanced, right? We will be able to work with…

Kaio Prato of UBS is online right now. Do you have a question, Kaio?

Yes. I have two quick on my side here. First, on the Financial Income, I just would like to have a view about if we could consider that this level of Financial Income could be sustainable for the next quarters? And moreover, I would like to understand your views about the performance fees going forward. If there is any expectation of any performance fee already for the fourth quarter in any of your strategies? And what can we expect for the following quarters as well?

Kaio, this is Bruno again. So, I think we try to convey that the message during the call, but I would like to take advantage of your question to reinforce it. I think the third quarter Financial Income, obviously, there is a benefit of the from the fact that interest rates are at the peak levels now, right? So obviously, that is an important part of the boost that we received in that line in the third quarter? However, we did have a very good, I would say, drivers of performance within the liquid funds that we were allocated in the quarter. So, we would expect probably a partial sustainability of the number, right? A part of it has to do with a higher rate, part of it has to do with good performance in the funds. I would say not likely that we're going to be able to sustain, obviously, it could happen. But the target is not to have the level of returns that we did in the third quarter, probably a little bit lower, perhaps, I would say probably 10%, 15% lower than we had in the quarter as we had guided to that at least 80% of CDI rates, I think that's a level that we feel comfortable in delivering over the long term, right? So, that's the first question. The second question regarding performance fees, we expect not in 2022 any significant change. I think what happened with the rebound in markets in Brazil is that we have gotten closer to the high water marks although we are not still above them, but I think the gap has reduced in the past quarter and half, I would say, probably. And then looking forward, we do expect a big realization of performance to happen in 2023…

Thank you, Kyle. At this time, I would like to hand it back to Alessandro Horta for some closing remarks.

So, I would like to thank you all for your continued support and we hope to talk to you again in the next quarter. So, have a good night, and thank you again.

Thank you, Alessandro. Thank you for everyone's participation today. This does conclude the program, and you may now disconnect.