Good afternoon and welcome to the Vinci Partners Fourth Quarter and Full Year 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 in 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 will 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 will 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 fourth quarter and full year of 2022. Vinci posted adjusted distributable earnings of BRL55.8 million in the quarter. For the full year of 2022 adjusted distributable earnings totaling BRL247.7 million or BRL4.47 per common share, an increase of 9% in our cash earnings per share when compared for the full year of 2021. Our business model has once again proven its resilience while navigating through more turbulent and uncertain markets. Vinci was able to generate substantial amounts of cash flow backed by predictable FRE with an added contribution from our liquid investment portfolio. As a result, the company will be able to maintain a meaningful dividend distribution to its shareholders. We announced a quarterly dividend of $0.17 on the dollar per common share in the fourth quarter totaling $0.71 in the full year, representing a compelling dividend yield while we undergo a fundraising cycle that can drive significant growth for the following years. Vinci ended the fourth quarter with BRL63 billion in assets under management, up 10% year-over-year, driven by fundraising across private market funds and the acquisition of SPS in the second half of the year. In 2022, we started a fundraising cycle for private market products raising close to BRL6 billion in new capital subscriptions over the year, which alongside the acquisition of Vinci SPS, represented roughly BRL8 billion in new long-term AUM for Vinci. This cycle of fundraising will drive long-term growth and is expected to allow us to push margins higher as these funds carry a higher fee rate than the current blended average fee for Vinci. And on top of that, long-term lockups that directly contribute to…

Thank you, Alessandro and good afternoon everyone. Starting on Slide 11, we will cover AUM trends for the fourth quarter and full year 2022. Vinci ended the quarter with BRL63.1 billion in AUM, up 10% year-over-year. Here, we post strong growth in our credit strategy, growing its AUM by 72% when compared to the end of 2021. The growth in credits was driven by the launch of Vinci Credit Infra our new strategy focused on infrastructure debentures with a long-term oriented structure. The fund has shown great demand from institutional investors who committed BRL1.3 billion to the new strategy so far. We will continue to fundraise for this product throughout 2023. Another highlight this year was the further development of the partnership between our credit and real estate teams, launching two new perpetual REITs, one exposed to the agribusiness sector, a leading sector of the Brazilian economy and the other focused on MBS instruments. These two new funds were able to raise capital in a tough market environment and broaden our product offering in listed perpetual vehicles. Combining these two new REITs with creative [indiscernible] kind operations in our offices and shopping mall REITs [indiscernible], we raised approximately BRL800 million in perpetual capital through 2022. In infrastructure, our climate change fund, VICC signed its first commitments, including an anchor investment from BNDES for BRL500 million. VICC is expected to hold a first close in the first quarter of 2023 and continue to fund raise throughout the year. The fund will start to earn fees beginning at the first close and following capital raises should accrue retroactively management fees. Another important contributor to our AUM growth in 2022 was the acquisition of SPS Capital, adding long-term capital in a new vertical to our platform. At the end of the year, long-term…

Thank you, Bruno. Turning to our segment highlights. As you can see in Slide 22, our platform remains highly diversified, which we believe to be the main contributor to the resilience of our business. Disregarding the investments made in the VRS segment, 56% of our FRE over the full year 2022 came from our private market strategies, followed by IP&S with 21%, liquid strategies with 19% and financial advisory contributing with 4%. 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 23. FRE totaled BRL33.7 million in the quarter, up 25% year-over-year, driven by the strong fundraising over the year and the incorporation of Vinci SPS. The biggest achievement across private markets this quarter was the signing of BNDES investment in Vinci Credit Infra and the VICC totaling BRL1 billion in capital commitments. Both investments were activated in the fourth quarter, but we will start to have a positive impact on management fee revenues in 2023. As predicted in previous quarter, we started to experience an increase in private markets average management fee rate. We should see continuous tailwinds to average management fee rates as we advance on fundraising and capital deployment over the next two quarters. Segment distributable earnings were BRL134.3 million in the full year, an increase of 5% year-over-year, boosted by FRE growth. Total AUM was BRL28.7 billion for the end of the quarter, up 30% year-over-year, driven by strong fundraising across all private market strategies and the acquisition of Vinci SPS. Adding to the previously mentioned contribution from BNDES, we also had contributions throughout the year in our fourth vintage for our flagship private equity strategy, VCP IV before. Lastly, although facing an environment with high nominal interest…

[Operator Instructions] Our first question comes from Ricardo Buchpiguel from BTG Pactual. Please Mr. Ricardo, your microphone is open.

Good morning guys and congrats on the results. I have a couple of questions here. First, can you please talk about how do you guys see the asset class mix that you have today? How – if you believe that you are too concentrating on a specific asset class, if you believe you want you to develop another area or something like that? And also, can you please talk a little bit about your pipeline in terms of M&As and what types of eventual new segments would you be interested in looking into. And finally, we found the results that there was a positive non-recurring impact related to adjustments on contingents and considerations. So, can you please provide more color on what these adjustments are? Thank you.

Thank you, Ricardo. That’s Alessandro here. I will pick up the first two questions, and I will leave to Bruno to answer the adjustment. In terms of asset classes, we continue to believe that we have already a very important diversification. So, we will continue to focus on the asset classes that we have, as we have been stressing doing the time that we have been a public company. Of course, the movements in terms of AUM, the growth changes on one asset class to another over time, but we believe that we will grow all of them. As you saw recently, we saw a pickup of activity of fundraising for our private markets, being private equity, infrastructure and private credit. A few quarters ago, we saw more in our investment solutions, but that will come and go in that way. But we still believe that we have around a very important diversification in terms of asset classes, and we should concentrate in these asset classes going forward. Second, in terms of M&A pipeline, with the market, the conditions of the market that we have today, as we mentioned before, we are seeing a lot of good quality teams and firms with not so easy environment to fundraise. But we see that as an opportunity for M&A transactions. Right now, we have a very big pipeline and we are focusing more in long-term lockup type of products being perpetual capital or very long-term. So, we are right now focused on M&A activity more on the private market side. And the last question I will leave to Bruno to answer.

Thanks for the question, Carlo. Good to hear from you. So, the non-recurring impact that you mentioned that has impacted our net earnings number for the quarter was an adjustment on the obligation that we have that is attached to the SPS transaction. So, there is a portion of that transaction, which is linked to stock issuances. So, we had two components in that deal. We had a cash component at closing in the third quarter of last year, and we have an equity component, which is based on an earn-out regarding additional revenue generated by the company. So, that earn-out was adjusted in the fourth quarter for the change in stock price of Vinci. So, that’s the impact that we had, the one that you mentioned.

Very clear. Thank you.

Our next question comes from Beatriz Abreu from Goldman Sachs. Please Ms. Beatriz, your microphone is open.

Hi everyone. Can you hear me well or?

Yes. Beatriz, go ahead.

Hi everyone. Good evening. Thanks for taking my question. I guess the first question would be, I noticed that there was an IP&S outflow in the quarter. If you could maybe talk a little bit about that, give us some color around what that was and your expectations for the segment going forward? If you expect any more outflows this quarter or in the next few quarters? And the second question would be around VRS. So, you did mention you expect to launch this quarter, first quarter of ‘23. Do you have any expectations as of now in terms of when you expect to breakeven in that segment? And also, what kind of management fee levels are you expecting from VRS? Thank you.

Okay. Beatriz thanks for the questions. This is Bruno. So, I am going to answer the first question, and Alessandro is going to tackle the second one. So, in regards to IP&S, the outflow was concentrated in one coming fund that we have in that segment. And the reason was basically the same reason why we had a little bit lower return in our assets, in our liquid portfolio in the third quarter – sorry, in the fourth quarter, which was the widening of interest rates. So, this fund is a fund that has usually positioned in short duration bonds. It’s a quasi-fixed income fund that is looking to shorten or increase the duration of the portfolio, depending on the views on the markets. But usually, it carries very short-term duration bonds. And with the widening in interest rates that we saw in the fourth quarter, the fund ran a couple of months or two months or three months below the nominal CDI rates and that led to some redemptions. I think we had the same effect in the third quarter, but due to a different reason, which was a couple of prints, monthly prints of deflation that we had that also hurt the short-term duration real interest rate bonds. So, this fund was hit, let’s say, a couple of quarters for different reasons in terms of performance. We saw some redemptions in the fourth quarter that we are very focused on this fund. Now in the first quarter, we are already running above CDI in this fund. So, the first couple of months, the performance is above 100% of CDI. So, we expect that effect to now to become immaterial. And also regarding IP&S, we do expect to have some new mandates to come online eventually in the next few months, and those should also have a positive impact. We have won a few merits that are going to be the – those funds are going to be transferred to us in the next few months. So, that should probably have a positive impact in IP&S inflows in the next couple of quarters, we expect that to happen. So – and then I will ask Alessandro to cover the second question.

Hi Beatriz. Thank you for your question. Regarding VRS, as we said, we are very near the launch of the product, but we start especially through our high net worth kind of clients and also with later, we have selected corporate. Having said that, that will – means that we will start with more wholesale type of clients instead of going more with through massive clients. So, the idea to start slowly to test all the systems, to use the technology to make it everything ready is to have more and more transactions in our platform. Having said that, our idea in terms of breakeven will be in 2024, maybe in the beginning of 2024, we will start in our view, already running a breakeven of VRS as a unit standalone.

Perfect. And just a follow-up on that if I may. Just in terms of management fee level if you guys are thinking something closer to an IP&S or something closer to liquid strategies given the client base? Thanks.

That’s a very good question. That will depend on the type of the mandate because inside VRS, we will have two different sources of income, okay. The management fee itself and being an insurance company, we will also have the part of the insurance company that’s already charged today in the scheme that we have on the funds that are related with pension plans. So, we have these two type of revenues. Of course, one will be related with the insurance company itself and another one more like an asset management. And that will depend on the type of the mandate. We will have a lot of flexibility to build a kind of more like traditional portfolio that to carry, as you said, something more similar to IP&S. But we could have technically something more towards alternatives that will carry higher fees. And we use our own products and the external products and also as maybe ETF to compose the overall portfolio of a client so that we have different components of this. If you allocate more like liquid stuff with some more like an asset allocation point of view, we will go for more like IP&S. But if you go more in the direction and the client wants on the alternatives, you have higher fees related to that.

Perfect. That’s very clear. Thank you.

Our next question comes from William Barranjard from Itau BBA. Please Mr. William, your microphone is open.

Thank you for the opportunity and good night. So, I have two questions here. The first one is regarding the realization of performance fees for 2023. So, can you share with us how do you expect it to evolve earlier this year and then later second half of the year? And the second question here is – also regarding capital raise. So, I would like to understand how you view which products should be easier or harder to grow and raise capital this year, and with that, if we should expect the increase in overall AUM being pushed mainly by the long-term part of the business? That’s the questions.

Thank you for the questions, William. This is Bruno. So, on the PRE side, we have, I think I made a comment in the past and just to reaffirm that there is an expected realization for ‘23 in the private side, which is our expected exits of the remaining assets in FIP Infra Transmissão, which is one of the funds that we have in the infra side. And that asset is already booked in our income statement – sorry, in our balance sheet, the expectation of that realization. We have that in the slide that shows the future potential performance fees and also in the balance sheet. In this particular asset, we also have GP investments. So, as was the case of the first assets that we realized in ‘21, the second asset will have an impact in both lines. So, we are going to have an impact in PRE and also an impact in realize GP investments. That impact should be around BRL15 million to BRL20 million, combined the two impacts for our distributable earnings. There is significant demand for the asset. We are finalizing getting the required licenses for the assets to be fully approved by the regulatory body, but we have already received inbounds from strategic players. So, we feel confident that having the approval from the regulatory body, we should be able to move the asset quite easily, and that’s expected to happen in ‘23. In regards to fundraising, we have discussed in the past few quarters, the target for fundraising in 2023 coming from our private market funds. We have all of them in the market today, the ones that we have mentioned. So, we have the credit fund, we have VICC. We have private equity VCP IV. We should have also eventually the anticipation…

That is very clear. Bruno thanks for the answer.

Thank you. That’s all for today. I would like now to turn the call over to Mr. Alessandro for the final remarks. Please, Mr. Alessandro, you can proceed.

So, I would like to thank you all for your support and confidence in the last 2 years since we have become a public company. And I would like to share our optimism that derives from our very tested resilient model that we expect to continue to grow, at the same time, provide a very good profitability and dividend yield. So, good night to you and thank you all.

Vinci Partners conference call has now concluded. Thank you for attending today’s presentation. You may now disconnect and have a great day.