Patria Investments Limited

Good day, and thank you for standing by. Welcome to the Apache Investment Second Quarter Earnings Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Josh Wood, Head of Shareholder Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to PATRIA's second quarter 2021 earnings call. Joining on the call today are our Chief Executive Officer, Alex Saig, and our Chief Financial Officer, Marco DiFalito. Earlier this morning, we issued a press release and earnings presentation detailing our second quarter 2021 results, which you can find posted on our investor relations website at ir.patria.com. are on Form 6K filed with the Securities and Exchange Commission. Any forward-looking statements made on this call are uncertain, do not guarantee future performance, and undue reliance should not be placed on them. PATRIA assumes no obligation and does not intend to update any such forward-looking statements. Such statements are based on current management expectations and involve inherent risks, including those discussed in the risk factor section of our Form 20F Annual Report filed earlier this year. As a foreign private issuer, PATRAO reports financial results using International Financial Reporting Standards, or IFRS, as opposed to U.S. GAAP. Additionally, we will report and refer to certain non-GAAP industry measures which should not be considered in isolation from or as a substitute for measures prepared in accordance with IFRS. Reconciliations of these measures to the most comparable measures calculated in accordance with IFRS are included in our earnings presentation. As a quick overview of the results, PATRIA generated $73.4 million in IFRS net income in Q221. On key non-GAAP measures for the second quarter, we generated fee-related earnings of $17.6 million and performance-related earnings of $56.4 million, driving distributable earnings of $74.2 million, or 54.5 cents per share. In alignment with our policy, we declared a dividend of 46.3 cents per share payable on September 16th to shareholders of record as of September 2nd. With that, I'll now turn the call over to our Chief Executive Officer, Alex Saig.

Thank you, Josh. We appreciate all of you joining the call this morning to discuss our excellent second quarter results and outlook. We are very excited with our progress since the IPO. and we have generated distributable earnings of 67 cents per share year to date. Now, with good visibility on fee-related earnings for the second half of the year, we have a clear line of sight to near $1 per share of distributable earnings for the full year. And not only are we delivering strong results here in 2021, but our key growth drivers for the coming years are well intact and running ahead of our expectations from the beginning of the year. We are deploying capital faster, with nearly $1.8 billion invested or reserved in the first half of 2021, equating to an annualized pace well above our historical average. This deployment acceleration means faster fee earning AUM growth, which is driving 31% fee revenue growth and 19% fee-related earnings growth compared to the second quarter of last year. Faster deployment also means that we are accelerating our fundraising timelines. and we expect to have a first closing for our next generation private active fund in the second half of this year. Our funds are performing even better, with more than $2 billion of valuation growth across the platform over the last year, and our net accrued performance fee is rising to $325 million. We are now delivering an attractive yield to our shareholders, as evidenced by our realization of $56 million in performance-related earnings in the second quarter. I'll now cover some key highlights across our businesses. The strong deployment environment is again evident in our second quarter activity. as we invested or reserved more than $1.2 billion in our closed-end funds. That is on top of $550 million in the first quarter, bringing the year-to-date total already to almost $1.8 billion. In terms of strategies, more than $1.2 billion was deployed in our flagship private active fund, and $450 million in our flagship infrastructure fund year-to-date. In private equity, recent investment activity included new commitments in our thesis areas of cybersecurity, grocery retail, and code logistics, where we have conviction in our ability to build market-leading businesses in Latin America. Our current vintage private equity fund is almost fully committed as of June 30, and well above the threshold that allows us to go back to the market. As noted, we expect to begin raising the next generation private equity fund during the second half of this year, and continue to be optimistic on the opportunity to scale this fund again by up to 50%. The timing acceleration is positive for our fee-related earnings growth in 2022 and beyond, and this new revenue stream pulls forward. Investment performance here continues to be outstanding, with Private Active Fund 5, a 2015 vintage fund, generating a net IIR of 36% in U.S. dollars, which has stopped the style by vintage, not just on a Latin America or emerging market basis, but on a global basis. Private Active Fund 6, a 2019 vintage fund, which is still in its investment period, is already generating an impressive 28% net IIR in US dollars. We are excited about the value creation our world-class investment team is delivering, which will also accrue to shareholders over time as these funds mature. Our latest flagship infrastructure fund continues to actively commit capital to new projects. You may have seen our press release highlighting our growing toll road portfolio, and specifically our success expanding into Colombia in this space, making PATRIA now the third largest toll road operator in Latin America. We take pride in not only generating returns for our limited partners with these investments, but also in delivering projects that will fill critical needs for our communities and society. We believe there is an incredibly large and diverse infrastructure opportunity to address in the region. And PATRA's scale and expertise allows us to be selective with an ability to tackle complex development projects where few other firms have the necessary resources. While we expect to bring the Next Generation Flagship Infrastructure Fund back to market sometime next year, also ahead of schedule, we are excited to announce plans to launch a new dedicated Renewable Energy Fund in the second half of this year. This will also be a closed-end fund targeted to our global institutional LPs, which we believe fills an important sleeve of demand from investors who want more targeted mandates focused on renewables and the accelerating global energy transition. Fundraising in our country-specific strategies should also pick up in the second half of this year, with opportunities to raise money in credit, as well as our real estate investment trusts and infrastructure core vehicles. These vehicles are denominated in local currency, and we see a path to raise about R4 billion this year, including R800 million raised for our infrastructure fund in the first quarter. About 80% of that would be in permanent capital type vehicles, which further contributes to the duration and stickiness of our fee earnings AUM. On the realization front, our major news for the quarter is the crystallization of $56 million in realized performance fees from Private Active Fund 3. We are nearing a great outcome for a 2007 vintage fund that has generated nearly a 2X, two times return, and top quartile Latin America and emerging markets performance while investing through a very challenging time period. Marco will provide more detail on this realization in a moment, but I want to congratulate the team who has worked diligently to deliver value both to the limited partners and now shareholders with this fund. Since the quarter end, we also completed the initial public offering of portfolio company SmartFit, a great example of PATRA's approach to value creation and building market-leading businesses through consolidation and geographical expansion. SmartFit is now the largest fitness club operated in Latin America and is one of the nine investments in our outstanding Private Active Fund 5 portfolios. This initial public offering is another step towards creating liquidity in this fund and being able to realize gains for our limited partners and performance fees for our shareholders. To put it simply, PATRA is executing on all fronts, and these examples are only the highlights, just scratching the surface of an excellent work our investment teams and portfolio companies are doing. Let me turn the call over to Marco to take you through the detailed results, and then I'll come back for some final words. Marco, the floor is yours.