Good afternoon, and welcome to the Vinci Partners First Quarter 2024 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Ana 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 Factor section of our 20-F. We will also refer to certain non-GAAP measures, and you find reconciliations in the release. Also note nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Partners fund. On results, Vinci generated fee-related earnings of BRL 53.6 million or [ BRL 1.01 per share ], and adjusted distributable earnings of BRL 49.6 million or [ $0.93 per share ] for the first quarter 2024. We declared a quarterly dividend of $0.17 on the dollar per common share, payable on June 7 to shareholders of record as of May 23. 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 today as we announce results for the first quarter 2024. I would like to start by highlighting the following: we posted another quarter with double-digit growth in fee-related earnings, pushed by strong fundraising across private markets products over the last 12 months in advisory fees in the first quarter. Vinci continues to deliver results facing challenging conditions where several asset managers in Brazil focused on single strategies have suffered to stay in business. We are truly proud of the platform that we have built over the last 15 years. I have no doubt that the combination between proprietary relationships across each funding base, a strong track record across different market cycles and a broad product offering was key to achieving such results. Bruno and Sergio will go over specifics for the earnings results and fundraising pipeline in a few minutes. But I couldn't leave out of my remarks something that makes me personally fairly proud. You must haven't seen that Vinci was very active on M&A over the last few months. Let me cover what we expect from each transaction, and we look forward to accomplishing with additional M&A as we are getting started. First, early March, we announced that our combination with Compass, a leading asset manager and investment advisory firm in Latin America -- with strong brand recognition, consistent performance and more than [ $37 billion ] in AUM distributed across IP&S, credit and public equities. We believe this transaction is a significant milestone in our history and a turning point from what Vinci could be in the next few years. We will leverage the complementary strengths of both firms and position Vinci as the premier gateway to…

Thank you, Alessandro, and good afternoon, everyone. I'll start by covering our fundraising efforts. Starting with IP&S. Our Vinci strategic partner strategy or VSP, raised approximately BRL 500 million this quarter. Through VSP, we offer location services across the alternative asset space to investors, a trend, we believe, has great potential to grow as local institutions raise their allocation to alternatives. Currently, our IP&S business is mostly allocated to liquid assets. We are pleased to observe the growing traction of this strategy now in the alternative side and anticipate further opportunities in the future. Moving on, let me provide some color on our upcoming initiatives in private markets over the short term. This quarter, as predicted, we do not have relevant contributions for the private market funds as we had a few big closes at the end of 2023. However, we will continue to work across several fronts in the next few quarters. VCP 4 and VICC, both should hold final closes this year. VCP 4 is set to see additional capital activated in AUM over the second quarter, while we continue to work on additional local and international investors until the expected close of the fund in the second half of 2024. With one successful investment already under its belt and capital deployment gaining momentum, we anticipate announcing new acquisitions in the coming quarters, capitalizing on a very good environment to allocate capital with limited dry powder and competition for assets when compared to previous vintages. For VICC, we are experiencing good action with international investors and already have good visibility for the next commitments. We anticipate the fund reaching BRL 2 billion target sometime in the second half of the year. Deployment activity for VICC has been very robust, evidenced by the signing of 2 transactions earlier in…

Thank you, Bruno. Before you delve into financials, I'd like to address our recent managerial adjustments we have made. This quarter, we executed a strategic realignment across our segments. We are signing BRL 2.3 billion in AUM from our hedge fund business to IP&S -- while allocating the remainder BRL 534 million in AUM through our public equities division. The objective with this realignment was to form a dedicated public equities vertical, while sending open-ended macro Commingled fund vehicles from the prior liquid strategies umbrella to IP&S. IP&S already boosted a dedicated strategy for managing macro- Commingled funds. Thus, we are consolidating these funds that were previously under liquid states within IP&S -- under the Commingled [ strategy ] umbrella. Our pro forma numbers for past quarters and the last 2 months have been adjusted to reflect this managerial shifts [ accretive ]. This adjustment underscores our commitment to transparency and ensure precise financial reporting. Now let's start by covering management and advisory fees. Fee-related revenue totaled [ BRL 107 million ] in the quarter, up 6% on a year-over-year basis. Management fees were flat on a year-over-year basis, yet they exhibit positive growth trend going forward when adjusted by retroactive fees that occurred in the fourth quarter. We continue to have a mixed effect on revenues. Private market management fees posted another quarter to growth, increasing 7% on a year-over-year basis. This is a direct result of the strong fundraising across private markets over the last 12 months. As mentioned by Bruno, the pipeline is stacked for private market products over the short to medium term, which should improve management fees. On top of that, VCP IV and VICC, have retroactive fees clause. Therefore, new capital commitments will charge fees from the start of the fund. As an example,…

We are going to start the question-and-answer section for investors and analysts. [Operator Instructions] Our first question comes from Tito Labarta with Goldman Sachs..

I had a question on your fee-related revenues. If you look at management fees, in particular, were down in the quarter, kind of flattish year-over-year. You mentioned here in the press release that private markets continue to do well, but you're facing some headwinds from IP&S. Just double click on both of those a little bit. On the private market side, we did see the fees as a percentage of the AUM come down a little bit. What's driving that? And also just how do you see those headwinds in the IP&S? Do you think that continues? Could that be a headwind for the rest of the year? How dependent is it on rates coming down significantly, right? We saw [ Salil ] only 25 bps yesterday. You need to see that come down a lot more to CIP and natural color...

That's Alessandro. I will cover the part of IP&S of your question, then Bruno will go more on the other part related to the private markets fees and et cetera. Regarding IP&S, as you know, and we continue to have the movement that we saw in the last few quarters that follows overall, I would say, trends in the Brazilian market, where the most liquid portion of our IP&S funds, we suffer some redemptions, basically people moving the money to order more short-term fixed income type of investments. We are seeing this movement reducing -- so it's on a daily basis, we see this reduction being less and less to the point that we expect this to be neutral going forward. And with the interest rates going down in a pace that now it's reaching close to single-digit interest rate -- nominal interest rates. We will see this movement, we expect this capital to come back. But this is really more a consequence of this movement regarding interest rates at a high level and some of the flows, more retail flows redeemed from these type of funds go into more exempt type of fixed income instruments. So regarding IP&S, we do not anticipate strong movements ahead on the opposite. We believe this movement is in the final stretch. And probably as soon as we see interest rates in a single digit, even high single digits, we see new money coming back to this type of investments and funds.

Okay. This is Bruno. Talking about the revenue side. So, the first quarter of '23 and the fourth quarter of '23, both of them had a retroactive impact on the revenue base. So those are VCP and the VICC, right? So in the first quarter of '23, we had about [ BRL 2.5 million rise ] impact. In the [ fourth quarter ] of '23, we had about BRL 6.5 million rise impact. The first quarter of '24 was a clean quarter. So we didn't have any impact in terms of AUM being activated in those 2 funds. We are working with several investors regarding additional commitments for both strategies. As I mentioned in the prepared remarks, we expect to have, hopefully, VCP having more capital activated now in the second quarter, if not in the second quarter, certainly in the beginning of the third quarter. So either one or the 2 quarters could have impacts coming from new capital being be activated. But the main difference in the first quarter of '24 was that it was a clean quarter. So we didn't have any new commitments coming for the [ retroactive fee ] paying funds during the first few months of the year.

Okay. Great. That's helpful, Bruno, and Alessandro. Just one follow-up, I guess, also on the fee-related revenues on the advisory fees, I mean we drew down in the quarter, but still very strong year-over-year. How do you think about those going forward? Is this a base that we can maybe consider? Or was there anything specific to the quarter that kept the fees relatively high?

Yes, of course. So the pipeline for the advisory business is pretty good at this point. We are working -- we had a very good first quarter, as you said. We're working on several transactions for the second and third quarter of this year. But again, it's very difficult to say when the transaction is going to close. I think for the year, we talked about a number between BRL 30 million and BRL40 million for 2024. It seems at this point in time that we're going to hit that range. But it's difficult to say when exactly the revenue is going to fall. The first quarter was a little bit stronger. Second quarter depends on when the deals close. But I would say the -- the outlook for second and third quarters at this point with the deal flow that we have in the pipeline looks good. So we feel for the year, that BRL 30 million to BRL 40 million is a good range to work with in terms of advisory revenues for corporate revenues for '24.

Next question from Ricardo Buchpiguel with BTG Pactual.

I have two here on my side. First, can you please give us an update in terms of the key private market fundraising events that we could see in Q2? And if you could also comment on what we have been seeing so far in terms of inflows for liquid and IP&S strategies also would be helpful, particularly for Q2. And for my second question, if you could please explain what drove the unrealized investment income that you booked in the quarter. We saw there was like a deteriorating [ macro ] conditions. You even had like a negative effect in our liquid portfolio. So, I wanted to understand the rationale for the unrealized portion?

Okay, Ricardo. So, the first question that you mentioned regarding pipeline private market products in the second quarter. So, we have -- we -- as I mentioned in the prior question, we have been working VCP and VICC for new commitments. We expect temp to happen over the next couple of quarters for some additional capital coming in. VCP, there is a chance that we might have commitments rolling in the second quarter. We're working on a few soft circle commitments to activate them in the second quarter. At this point in time, I would say probably the probability is like 3/4, 75% that we have in the second quarter, if not it's going to move towards the third quarter. We expect to have -- in the second quarter, we're working towards that goal to have the first subscription documents being signed for SPS IV. So, this is going to be focused on reups mainly from Funds 1, 2 and 3. We are targeting at least $500 million for SPS IV. So, it's going to be a big increase in terms of the size. Remember that SPS as a whole, when we purchased SPS, the total AUM was BRL 400 million. So we're talking about the fourth fund being at least a bit higher than the total AUM that the platform carries today. And the reception of that product in the market has been quite positive. So, we are very excited about SPS IV. And there for the remainder of the year, we have additional commitments for the VICC, which we expect to close until the end of the year. We have, as we mentioned, Vinci Credit Infra, we can have big tickets coming from that fund and some coming from a retail placement that we are working towards activating…

Yes. Like -- my question was that you booked BRL 9 million in GP investment income in a moment where we saw like a more challenging macro environment, right? We even saw like more negative performance from the liquid portion of the portfolio. So, I wanted to understand what was the rationale for booking BRL 9 million in these unrealized gains?

The unrealized gains are the effect of the mark-to-market of the funds, right? So, they depend on performance for the funds that we have allocated and committed from the balance sheet. So, ,there are a couple of portions there. One is mark-to-market on the liquid REITs. If I'm not mistaken, the second -- the first quarter was positive in that front. And the other one is the mark-to-market of our closed-end funds. The closed-end funds they typically are reevaluated once a year, usually at the end of the year where we have the formal audit of the funds, we have reevaluate the shares of the closed-end funds. I would expect that impact to be more relevant in the end of in the end of -- starting the end of '24. So. we're going to have capital being called by VCP. We're going to have the revaluation of other closed-end funds. I think we had also some impact from the -- our water and sewage fund recently. So those are the 2, I would say, components. One is the mark-to-market of the listed [ rigs ] on a quarter-to-quarter basis? And the second one is the mark-to-market of the close-end funds that's likely going to happen at the end of the year when we do the audit for the funds.

It's Alessandro. Being more specific, the largest contribution to this unrealized gain on the GP commitments came from some commitments in one of our infrastructure fund that was being kept at par, and that was the first mark of the fund.

I would like to turn the floor back to Mr. Alessandro Horta for the closing remarks. Please, Mr. Horta, you can proceed.

Thank you. I'd like to -- one more time to thank you all for your continued support and interest in Vinci. We continue to be very optimistic in delivering growth while providing stable results. We are highly dedicated in preparing our integration with Compass, what will open a huge opportunity for us in the years ahead. So, with that, I would like to thank you again, and a good night for all.

This does conclude today's presentation. We thank you all for your participation and wish you a very good evening.