Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What should we expect about the evolution of FRE margin throughout this year, especially after the big M&A with Compass? Also, what should we expect in terms of payout for 2025? A: Alessandro Horta, CEO, explained that they expect to regain FRE margin through efficiencies in cost structure and by leveraging the complementarity of Vinci and Compass. Bruno Zaremba, President of Finance and Operations, added that they expect FRE margins to be in the low 30% range for 2025. Regarding payout, they plan to maintain the target of paying around 80% of distributable earnings, consistent with past practices.
Q: There was a significant FX impact on AUM due to BRL depreciation. How does this affect revenues? A: Bruno Zaremba noted that approximately 30% of their revenue is in US dollars. The depreciation of the BRL had a positive effect on AUM, impacting the 30% of revenue in dollars. The rest of the impact depends on the movement of other currencies against the BRL.
Q: Can you explain the $160 million FX impact from US debt and whether it will continue to be unhedged? Also, are performance fees from IPNS recurring? A: Bruno Zaremba clarified that the FX impact is related to the convertible preferred with Aries, which is partially unhedged. The exposure is managed based on their dollar revenue, and they expect to recover the impact over time. Regarding performance fees, they were diversified across 20 products, with Argentina being a significant contributor in 2024. However, they do not expect Argentina to be a consistent contributor in the future.
Q: Is there any new seasonality in the consolidated business we should be aware of, particularly in terms of fundraising, fees, and expenses? A: Bruno Zaremba highlighted that the advisory fee line will have more seasonality due to the timing of fund closings in the third-party distribution business. This line will be more than double what it was previously, leading to variability in quarterly results.
Q: Regarding advisory fees, particularly for IPNS, how much should we consider as one-time versus recurring? How should we think about management fees as a percentage of AUM for IPNS going forward? A: Alessandro Horta stated that the fee level should stabilize, excluding one-time fees related to drawdown funds. Bruno Zaremba added that advisory fees from third-party distribution are recurring but less stable due to their dependence on fund closings. The management fee level should remain consistent, considering the two months of Compass integration.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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