Operator:

Good afternoon, and welcome to VINCI Compass Third Quarter twenty twenty five Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this call will be recorded. I would now like to turn the conference over to Ana Castro, Investor Relations Manager. Please. Go ahead, Ana. Thank you, and good evening, everyone. Joining us today are Alessandro Huerta, Chief Executive Officer Bruno Zaremba, president of finance and operations and Sergio Pazos.

Ana Castro:

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.vintucompass.com. I'd like to remind you that today's call may include forward looking statements. Which are answered and outside of the firm's control and may differ from our results materially. We do not undertake any duty to update these statements. 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 find reconciliations in the release. Also note that nothing on this call constitutes an offer sale or solicitation of an offer to purchase an interest in any Venture Compass Fund. Our results for the third quarter, Vinci Compass generated February earnings of BRL77.1 million or BRL1.22 per share. FRE margin of 32.3% and adjusted distributable earnings of BRL73.1 million, or one point BRL1.16 per share. We declare a quarterly dividend of $0.15 on the dollar per common share, payable on December 9 to shareholders of record as of November 24. With that, I'll turn the call over to Alessandro. Thank you, Anna.

Alessandro Huerta:

Good evening, and thank you all for joining our call. We appreciate you joining us. We hit important milestones for VINCI Compass this quarter. Before we start discussing our quarterly results, I would like to take a moment to highlight some important recent milestones. In October, we hosted our second Investor Day in New York. It was a great opportunity to catch up with analysts and investors, reinforce Vincicampa's long term vision showcase the strength of our integrated platform and provide greater transparency into each of our business segments. During the event, we shared how we are positioning the firm to growth across our core strategies, driven by disciplined capital allocation innovation in product development and continued focus on delivering value to our clients and shareholders. The strong engagement and positive feedback from participants reaffirmed investors' confidence in our differentiated model and growth prospects in Latin America. On the same day, we also discussed the acquisition of VERGI, a transaction that represents a significant milestone in our strategic expansion. This transaction further strengths Vinci Compass position as a leading alternative investment platform in Latin America by combining forces with the region's leader in global and local asset allocation with an exceptional investment track record. The transaction was very well received by the local community as well as global clients in our shareholder base. We had the opportunity to discuss the Investor Day and the Visa transaction in person with analysts and investors in the following days that week in New York, and the feedback was very constructive. We feel our constituents recognize the strategic and culture alignment between the two firms and the long term value creation potential for this combination. Leaving us very excited and confident about the future. We remain on track to close the transaction by the November. Although we had an exciting start of fourth quarter, with the Investor Day in the VEG transaction, the work hasn't stopped since. We are already executing on the priorities we outlined, such as accelerating regional expansion capturing the secular growth opportunity in private credit, and expanding FRE margins through revenue stream leverage and operating cost discipline. In SPS four, we secured not only our first offshore commitment, but also the first Brazilian pension plan commitment in the history of our opportunistic capital solution funds. A clear evidence of our outstanding ability to penetrate long standing relationships to distribute proprietary funds across different channels. Bruno will unpack the fundraising pipeline in a moment, but we are very encouraged by the depth of interest we are encountering. Particularly from foreign investors tracking our upcoming second closing. Shifting to our third quarter results, we crossed the 30% FRE margin threshold in the third quarter. Delivering a 32% FRE margin, the highest level year to date. This reflects both the potential for margin expansion from platform growth we have been discussing with you and our disciplined cost execution. This quarter, we began to see the impact from cost reduction initiatives carried out this year throughout the firm, combined with the operational leverage resulting from the strong fundraising in our funds over the past few quarters. We have been extremely focused on driving efficiencies since closing the combination with Compass and we are very satisfied with the result which are now starting to flow through the income statement this quarter. This progress is the result of the thorough work of all management teams and the executive committee as we approach the final stage of integrating both companies. And we have discussed, we see substantial opportunity to expand our margins and efficiencies represent only a portion of that. The most meaningful driver is platform growth, whether organically or through acquisitions. We are on the path to achieve our 38% FRA margin target by 2028, as discussed at the Investor Day, supported by additional cost reduction initiatives in the pipeline substantial fundraising across all segments and the expected closing of VEG in 2025. Shifting to the macro environment. Broad based asset appreciation, and easing rate bias across emerging economies continue to create a constructive environment for our platform. Brazil should benefit even more than its peers supported by the potential of a future political shift that could reinforce fiscal responsibility and by a likely select cutting cycle beginning in the coming months. With lower rates and better anchored inflation expectations, we see further room for a re rating of local assets, which has already begun. Across the region, Mexico and Chile are meaningfully ahead in their easy cycles. Bensico has cut from 11.25% to 7.5% over roughly eighteen months with further reductions expected. And Chile is already below 5%, with its cycle well advanced. This creates differentiated asset allocation deployment and capital gains opportunities across Latin America. Reinforcing this environment, several countries are moving or are expected to move toward more market friendly policies, including potentially Chile and Brazil, as well as Colombia and Argentina, which is already undergoing Malay's pro market shift. In Argentina specifically, authorities are taking meaningful steps to reverse years of persistent fiscal deficits. These dynamics are also reviving the case for international portfolio diversification. We believe the trend of global investors seeking exposure beyond The U. S. Has further to run supporting our fundraising, offering attractive risk adjusted opportunities and potential currency diversification. Turning to credit, this segment is building momentum as expected with Latin America investors and increasingly global allocators. Our LatAm corporate debt strategy raised over BRL1 billion in the quarter with 30% coming from investors outside the region. Underscoring both strong international appetite and the reach of our distribution across Europe and The U. S. Our forest vertical is also drawing strong international interest, especially from European development finance institutions. We aim to converse this attention into capital subscription for our LACANFOR fund in the 2025 and into 2026. Our positioning as a leading provider of nature based solutions in Latin America and the ability to scale through planted forest while capturing higher quality carbon credits and biodiversity co benefits position us to pursue a significant addressable market across DFIs, global corporations, institutional investors and family offices. Recent international announcements in support of Brazil's forest programs underscore rising global capital flows into conservation and nature based solutions. Moving on to Global IP and S. Our third party distribution business continues to deliver strong results. With TPD alternative and liquid funds key growth drivers. We think that semi liquid funds are standing out by pairing sophisticated products with retail friendly features. We are seeing very strong receptivity in retail channels and expected continued traction as we broaden distribution. Private debt and middle market strategies continue to attract sophisticated investors and we plan to expand our middle market funds offering. Altogether, we delivered BRL19 billion capital formation and appreciation in the quarter, bringing AUM to BRL316 billion. In U. S. Dollars, AUM reached just a tad below $60,000,000,000 at a record $59,400,000,000 To wrap up, our opportunity set has never been stronger. Structured tailwinds in alternatives and emerging markets are accelerating and VINCI Compass is the reference partner in our region. More investors across channels are adopting private market solutions than ever. And we expect this trend to continue in the medium term. We are investing behind this demand with scalable products, disciplined risk management, and a growing distribution footprint. Looking ahead, our platform is built for this environment and positioned to capture the generational shifts underway in the global economy and markets, compounding value for our clients and shareholders. Thank you again for joining us. With that, I'll turn it over to Bruno.

Bruno Zaremba:

Thank you, Alessandra, and good evening, everyone. We are thrilled to share that we delivered BRL 19,000,000,000 in capital formation and appreciation this quarter. Global IP and S and credit were key growth drivers, we believe we are still in the early innings of a significant growth opportunity across all of our asset classes. We laid out this opportunity in detail during our Investor Day. Starting with SBS-four, we achieved important milestone this quarter. Our first offshore commitments and the launch of the offshore vehicle. With the fund live and seeded, follow on offshore commitments tend to accelerate. Our pipeline includes several foreign investors, and we expect to sign additional commitments by year end. We also secured our first Brazilian pension plan to the strategy, which we expect will catalyze a additional allocations from other local institutions. Our track record is a key driver to new commitments. The first vintage SPS one which recently returned additional capital to investors from a successful exit is currently delivering a DPI of 1.9x and a gross IRR of 25%, both in Brazilian reais. Further validation comes from SPS three, which distributed during October over 9% of total commitments. This vintage is still within its investment period, which ends only in the 2026, and has already started to return meaningful capital to LPs. Stealing private credit, we received additional commitments in our senior secured lending product in Peru, PEPCO two. We expect further commitments over the coming quarters in both Pepco two and Fai Peru, our semi liquid confirming and factoring funds. Our long standing presence in Peru together with our position as the largest fund in that market, gives us a clear edge to keep capturing opportunities. In addition to deepen engagement and showcase the full breadth of our regional platform, we hosted Peruvian institutional investors for a road show at our Brazil offices. We have also introduced COPCO ONE to our Colombian LPs, our first secured lending fund in Colombia. Patient funds and insurance companies are increasing allocation to local currency alternative strategies, giving regulatory frameworks. And Covco One is designed to meet that demand. The vehicle have a ten year term and is expected to launch in the 2026. In Brazil, our liquid credit strategies are also showing strong growth. Infrastructure debentures, credit and corporate liquid credit funds all displayed strong investor interest and raised over BRL500 million in the quarter. Our diversified product lineup widens our addressable base, and drives demand across different credit sub strategies. In equities, we continue to see outflows from our Brazilian domestic equity funds, reflecting a more risk averse stance among local institutional investors. This trend is driven by the ongoing shift in their portfolios from equities to local inflation linked government bonds, whose yields remain near historical highs have not compressed this year despite the rally in the equity markets. Shifting to global IP and S. AUM reached more than BRL241 billion, supported by approximately BRL8 billion of inflows. As Alessandro noted, we're encouraged by the reach of our TPD business and more importantly, the depth of coverage from our client relations team. We expect to continue raising capital in this vertical, although we believe most TPD alternative inflows that charge upfront fees were recognized by the September, and thus should have a more limited impact in the fourth quarter. On the liquid side, we see room for additional traction by year end. A highlight in TPD alternative this quarter, was a $300,000,000 commitment from a Latin American investor to a global private equity fund managed by our world class we represent in the region. This is an exceptional commitment that underscores the growing appetite for alternative among LatAm institutions. As highlighted in all of our recent communications. Lastly, in private equity, as we work towards the first closing of VIR5, expected in the 2026, We're very encouraged by interest from LPs to re up in this fund. On the VCP front, the team is highly active in origination with pipeline of 40 plus active opportunities in and four transactions in advanced negotiations to deploy VCPs for dry powder. In terms of portfolio performance, VCP III companies delivered solid operational results. In the 2025, aggregate EBITDA grew 16% year over year. We are particularly excited with our portfolio company, Agibanc, as it continues to deliver very strong KPIs expanding revenues year over year by 50%. In VCP4, ARCLOC has been increasing revenue by 30% year over year, another company we have been very excited about. These results reinforce the health of our portfolio and our conviction in disciplined deployment of VCP4. Our distribution teams are executing exceptionally well across channels, and October got off to a constructive start for the 2025. We are also preparing to navigate Chile's pension reform as benchmarks and target date frameworks finalize. Our clients facing group will have a Fund 2026, as our product slate is quite full. We have private credit products being launched across the region We have our UCIT's equities funds and several closed down funds across other strategies such as private equity and real assets. In addition, on top of our TPD funds, which continue to exhibit strength as global allocation grows. Global IP and S will launch a series of new discretionary allocation products allowing LatAm investors to have a diversified exposure to portfolios of semi liquid funds across developed markets. This will lower entry tickets while helping investors with optimal allocation to their portfolios. All this alongside a nascent cyclical improvement in the region, with higher demand for allocations from both local and currently under allocated global LPs. On the operations front, AI adoption is now mainstream at Vinci Compass, with roughly 80% of our team using AI in their daily work enhance productivity, client service and risk management. As we discussed internally, we want to lead the transition into an AI enabled workplace, and Vincic Compass needs to sponsor this change. So it's done safely in addressing the specific needs of our groups. This agenda is accelerating, and we expect it ultimately to be felt by investors through better overall decision making and execution positively affecting risk adjusted returns. We entered the fourth quarter with clear and strong momentum. And the pipeline of opportunities allows us to build on these results into 2026. With that, I'll hand it over to Sergio to walk through the financials. Thank you, Bruno. Starting with our AUM, ended the quarter with billion, representing

Sergio Pazos:

an increase of 4% quarter over quarter. Capital formation

Bruno Zaremba:

and appreciation totaled billion dollars partially offset by a negative FX impact

Sergio Pazos:

of BRL6 billion. Had significant inflows coming from global IP and S, getting close to billion dollars in the quarter. A portion of those inflows came from TPD Alternative, generating million in advisory fees recognized onetime as upfront fees. We We expect another meaningful, though smaller, contribution from this line in next quarter. Reflecting the time of commitment signings. In addition, we recognized success fee in our real estate advisory business and million dollars in corporate advisory. On a management fee basis, we posted million in the quarter. We expect to continue delivering consistent growth supported by an active fundraise pipeline and to further enhance our revenue mix as we scale our recurring fee earning base. Total fee related revenues were million in the quarter, while fee related expenses were BRL161 million. This translated to BRL77 million of FRE and a 32.3% FRE margin, our highest in 2025. The increase in the FRE margin is a result of operating leverage from revenue growth some transaction costs that stopped impacting us this quarter, combined with cost reduction initiatives we have been working on since the beginning of the year, which have started to pay off now. Delivering what we set out to do is in our DNA, and we remain focused on further compounding growth with efficiency. Performance related earnings were 1,000,000 in the quarter, coming primarily from equity funds. As a reminder, most of our Brazilian open end funds crystallized performance fees semiannually in June and December. So the first and the third quarters typically show lower performance fee recognition. This is the first quarter that we highlight our investment related earnings. Or We introduced this metric in our Investor Day, and our objective is to be the most transparent as we can and highlight the realized and unrealized gains from our commitments in proprietary funds. IRE is an important value driver in our business model, designed to compound growth and create long term shareholder value through our GP commitments. IRE in the third quarter was BRL5 million, with leased REITs contributing to realized income and positive markups in funds supporting the unrealized component. Finally, putting it all together, adjusted distributable earnings totaled R73 million dollars or BRL1.16 per share. Representing a 28% increase year over year on a nominal basis and 7% growth on a per share basis. This quarter, underscores durable fee power and an improving margin profile validating our disciplined approach to growth. Expand allocate capital, leaving us well positioned for continued progress in the fourth quarter and 2026. With that, I would like to close our remarks and open the call for questions. Once again, we would like to thank you for joining our call. Please operator, you may proceed with the questions. Thank you. Thank you.

Operator:

We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please press the button Raise Hand. Our first question comes from William Parangia with Itau BBA. You can open your microphone.

Sergio Pazos:

Hey, hi. I have a question here regarding one of the things you mentioned.

William Parangia:

During the call. The first Brazilian pension plan to commit in the SPS four. Right? And you also said that this first commit commitment should unlock for further ones from this type of pocket. Right? So I wanted to dive a little bit here So how fast do you think this new demand could come? And also, what kind of cross sell opportunities this this opportunity creates. Right? But more importantly here, how big do you think this pocket is this new opportunities? For for you guys?

Alessandro Huerta:

Hi, William. That's Alessandro. Thank you for your question. That's that's true. That's the first pension fund commitment to SPS at all. Right? Not just in the Fund IV, but overall the whole history of SPS. Of course, we expect that would be an opportunity for raising money for this type of clients since, as you know, Vinci Compass main source of funds comes from institutional investors, both local investors, Latin America institution, and of course, international ones. We do expect further commitments for this strategy still in fund four, but we cannot predict exactly the size of it. But this strategy due to the uncorrelated nature and really very low penetration on the portfolios of this type of investors. Both local institutions and international institutions, both as first for SPS, we expect this to gain an important space on the overall AUM of the vertical.

William Parangia:

Okay. Thank you. And if I could ask another one regarding your FRE margins, right, improved a lot quarter on quarter. Just wanted to hear from you if we should use this new level as the base for the next quarter or if there's any other effect that might decelerate this improvement, maybe lower advisory fees in the next quarter How should I think about the the evolution from here?

Bruno Zaremba:

William, this is Bruno. Yes, there are some seasonality as well on the expense line. So we usually have second quarter that's a little bit stronger in terms of expenses. The third quarter is a little bit lighter from a seasonal standpoint. However, we did have some aspects of the combination in terms of cost that through the numbers during the past three quarters and started to reduce a little bit in the third. So looking forward to the fourth quarter, and beyond and obviously not considering the VEG acquisition because that's going to change a little bit the number. But thinking about VICI standalone, we should be able to see margins on the 30s going forward. So probably the fourth quarter would be a little bit smaller than that, but still above 30%. We hope be able to reach the 30% for the year. I think we are within that that distance at this point. I think it's a possibility. And then looking forward to '26 probably we should see margins in general above 30 without the combination with VEG. With November. So they will impact only one month of the fourth quarter. But starting in the beginning of next year, once we have them on board for the full year, the impact should be of several 100 basis points. So this 30 let's say, percent to 31% will push towards probably at least the mid-thirty percent level. So that's the expectation that we have once we have VEG onboard. But we expect the the continuation of better numbers in the margin level going forward.

William Parangia:

All right. Very clear. Thank you.

Operator:

Our next question comes from Lindsay Shima with Goldman Sachs. You can open your microphone.

Ana Castro:

Hi, good evening and thank you for taking my We saw exceptionally strong

Lindsay Shima:

global IP and S inflows this quarter. Just wondering about how much of this was related to the TPD alts then you mentioned that there should be a small percentage of the upfront fees in next quarter. But how should we think about this line kind of going forward? And then IPNS inflows more broadly in the future. Thank you.

Bruno Zaremba:

Okay. So, this is Bruno again, Lindsay. Good to hear from you. So TPD was was very good. This quarter as was the case of the second quarter as well. The alts, this quarter we had billion positive impact There was this big check that we mentioned from from from a regional player into a U. S.-based closed end funds, which was very relevant. And although the fourth quarter is like it's going to be a little bit slower, mainly on the outside The liquid side started the quarter pretty strong. So the volume in the first month was similar to what we had in the third quarter on a monthly basis. And I think even more so when you look at this picture, for TPD In General Over The Medium And Long Term, I Think The Picture Is Quite Constructive. We Have In Chile and Mexico, which are two markets that are important for us, of course, we have very strong tailwinds from increased contribution to the local institutional plans. We have in general more interest from high net worth individuals into mainly alternatives. So this is also going to be a driver for mid to long term growth. And finally, in Brazil, we are starting from a very low base The penetration of this type of allocation is still very small. So we expect this also to be a positive tailwind for for TPD in the medium and long term. So so far fourth quarter flows continue to be strong and medium to long term we continue to be quite optimistic about the business line in terms of flows.

Alessandro Huerta:

Lindsay, that's Alessandro, like to to add on top of what Bruno said that very, very quick quick comment. In global, APNs and TPDO specifically, we are seeing some I'd say rotation of portfolios from our clients in LatAm. Especially moving from more traditional to new verticals for them of course. Where we do have a very good good managers and products and give you an example like secondaries. So, this is also providing a very interesting opportunity in terms of allocation. And another point is that we are looking to the future As we mentioned during the call, we see an opportunity for more discretionary allocated allocation of funds and SMAs. In out on behalf of the same type of investors, ones that do not want to directly, but would like us to pick up the best managers and strategies for them. Thank you.

Operator:

Once again, if you wish to ask a question, please press the button. Raise hand. Please wait while we poll for questions. The Q and A session is over. I would like to turn the floor back to Mr. Alessandro Orta for the closing remarks.

Alessandro Huerta:

I'd like to thank you all once again your continuous interest and support. This was a very important quarter in which we were able to demonstrate the planned improvement in our operating margin and we remain optimistic that we will continue to deliver in line with the expectations we outlined at our Investor Day in New York. So, thank you again and have a good evening.

Operator:

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