Vinci Compass Investments (VINP) Q4 2023 earnings summary

Executive summary

• FY23 AUM reached R$68.5bn, up 9% YoY, supported by R$4.2bn in Private Markets subscriptions and R$5.6bn in appreciation; R$2.8bn of IP&S outflows partly offset growth.

• FY23 adjusted distributable earnings were R$245.8mn, down 1%, while adjusted DE per share rose 2% to R$4.54; FRE per share increased 11%.

• Ares Management invested US$100mn in a strategic partnership to support LatAm platform growth and collaboration on distribution and new products.

Financial highlights

• FY23 fee-related revenue rose 10% to R$433.2mn, including management fees of R$393.4mn, up 6%; service revenue was R$454.4mn, up 11%. Q4 fee-related revenue was R$119.0mn, up 14%, and service revenue was R$125.4mn, up 12%.

• FY23 FRE increased 9% to R$208.4mn and 11% to R$3.85/share; Q4 FRE was R$57.3mn, up 12%, and R$1.07/share, up 14%.

• Q4 adjusted DE was R$63.6mn, up 14%, and R$1.18/share, up 17%; FY23 adjusted DE was R$245.8mn, down 1%, and R$4.54/share, up 2%.

• FY23 operating profit rose 10% to R$219.0mn; net income was R$219.5mn, flat YoY, and adjusted net income rose 7% to R$231.6mn. Q4 adjusted net income increased 37% to R$67.7mn.

• FY23 operating expenses rose 13% to R$235.7mn, partly reflecting Vinci SPS integration; Q4 expenses were R$65.3mn, up 16%, and R$35.5mn excluding bonus compensation, up 5%.

Outlook and guidance

• Private Markets raised R$8.2bn in 2022–23, reaching 55% of the R$15bn YE24 fundraising target; existing fundraisings and new products were expected to support 2024 efforts.

• VISC follow-on offerings and the Sustainable Regional Development Fund mandate are expected to begin contributing positively to revenue from 1Q24.

• Stabilizing global markets could improve performance-fee prospects; R$17bn of performance-eligible AUM was reported across IP&S and Liquid Strategies.