Vinci Compass Investments (VINP) Q2 2024 earnings summary

Executive summary

• Fee-related earnings per share grew 24% year-over-year, driven by strong private market fundraising, especially in private equity, despite challenging global fundraising conditions.

• Assets under management reached R$69 billion, up 7% year-over-year, supported by R$5.1 billion in capital subscriptions, MAV Capital acquisition, and appreciation across strategies.

• MAV Capital acquisition added over R$540 million in AUM, expanding agribusiness expertise and presence in private credit.

• Quarterly dividend of US$0.17 per share declared, with a 7.0% dividend yield (LTM), payable September 5, 2024.

• Integration with Compass progressing, targeting closing between late Q3 and early Q4.

Financial highlights

• Fee-related earnings (FRE) for Q2 2024: R$61.9 million (R$1.16/share), up 24% year-over-year per share; FRE margin was 49.3%.

• Adjusted distributable earnings: R$58.4 million (R$1.10/share), down 17% year-over-year due to lower financial income and FX impact.

• Management fees up 23% year-over-year, boosted by retroactive fees from VCP IV capital raise.

• Net cash and investments stood at R$1.1 billion (R$20.85/share) at quarter-end.

• Margins improved by 154 bps year-over-year; core FRE margin at 52% excluding VRS investments.

Outlook and guidance

• Continued fundraising for VCP IV and VICC expected in H2 2024, with retroactive fees to positively impact results.

• Management expects further growth in private market strategies and momentum in liquid/IPNS segments as macro conditions improve.

• New product launches in credit and real estate expected to drive fundraising in 2025.

• Ongoing focus on cost efficiency and capital return to shareholders.

• Performance fees from SPS and other funds expected to begin materializing in late 2025/2026.