Patria Investments Limited

Good day, and thank you for standing by. Welcome to the PATRIA third quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. 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 third quarter 2021 earnings call. Joining on the call today are our Chief Executive Officer, Alex Saig, and our Chief Financial Officer, Marco DiPolito. Earlier this morning, we issued a press release and earnings presentation detailing our third quarter 2021 results, which you can find posted on our investor relations website at ir.patria.com or 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 factors section of our Form 20F Annual Report filed earlier this year. As a foreign private issuer, PATRIA 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 $21.5 million in IFRS net income in Q3 21, On key non-GAAP measures for the third quarter, we generated fee-related earnings of $21.8 million and performance-related earnings of $1.5 million, resulting in distributable earnings of $22.5 million, or $0.165 per share. In alignment with our policy, we declared a dividend of $0.14 per share, payable on December 16th to shareholders of record as of December 2nd. With that, I'll now turn the call over to our Chief Executive Officer, Alex Saig.

Thank you, Josh. Good morning to you all, and thank you for joining us today. We now find ourselves nearing the end of 2021, Patria's first year as a public company, and it has been a privilege getting to know many of our shareholders in these past months. I want to reiterate upfront that we greatly value your support, and I think our results continue to demonstrate that we are delivering on the targets we've put forward for this year, and positioning ourselves well for strong growth in 2022. We remain on track for last quarter's guidance of at least $75 million of fee-related earnings and a dollar per share of distributable earnings, which would generate a 5 percent dividend yield for an investor in our IPO. Year-to-date, we have generated 83 cents of distributable earnings per share, of it 17 cents of distributable earnings per share in this last quarter, in the third quarter, meaning we just need to deliver the same results from third quarter again in the fourth quarter to reach our targets. This outcome would represent feed-related earnings growth of 30 percent plus and distributable earnings growth of more than 140 percent compared to 2020 when adjusting the prior year for comparable compensation structure. And our 2021 results are purely organic, without a contribution of any acquisition, but diluted for the cash raised in our IPO. We see that momentum continuing in 2022, where we expect, based on current factors, to see our fee-related earnings increase by more than 50% compared to 2021, including Moneda's fee-related earnings to Patriot's stand-alone. Our flagship strategy timelines have accelerated, with our next-generation private equity fund in the market as we speak, putting us roughly one year ahead of schedule. Our strong investment performance is the backbone of everything we do, driving loyalty and larger capital flows allocations from our limited partners, as well as a substantial performance fee of $14 million dollars which will benefit shareholders as distributable earnings in future periods. As notably in the third quarter, we took a major first step in our M&A growth strategy with the announcement of our combination with Moneda Asset Management, which will be further additive to earnings in 2022, as it provides the foundation for a leading alternative credit platform in the region. For our flagship private equity and infrastructure strategies, we have raised each new vintage on consistent time intervals, raising the majority of capital from sophisticated international limited partners and with the commitments denominated in U.S. dollars. We have done this through many different macro environments, and we don't believe now it's somehow special or different. Supported by a track record of strong investment performance, we have established trust with our investors as a partner of choice to access private markets in the region. Since they tend to invest in private markets around the globe, they understand that times of volatility are often when firms like Patra can do their best work, and they recognize our ability to be opportunistic during market dislocations through deep and localized industry knowledge. For those reasons, we have been able to raise new vintages of long-term, locked-up capital every three to four years, while also scaling the capital commitments at an impressive rate. We are almost fully committed on our current generation private equity fund, and we are now back in the market, raising the next vintage one year ahead of schedule. We expect the first closing to be around the end of the year, or perhaps just after, depending on logistics for some of our ILPs, and we continue to see demand to scale this fund up by 50%. The two latest vintage funds, Private Active Fund 6 and Private Active Fund 5, are performing extraordinarily well, with Private Active Fund 5 net IIRs of 29%, and Private Active Fund 6 net IIRs in U.S. dollars of 27%, and we are seeing great progress within the portfolio. For example, our heavy deployment in the first half of 2021 included a commitment to our cybersecurity thesis in Private Active Fund 6. In the third quarter, we announced the acquisition of Nail Secure and ProTails to consolidate the largest information security platform in Latin America with operations in five countries. This platform can continue to grow through additional consolidation, and this is a classic example of our distinctive approach to building market leaders in the region. Likewise, in the infrastructure space, our current generation fund continues to progress nicely, addressing an opportunity set in the region that only continues to grow. With a $2 billion fund, we are analyzing a pipeline for the next 24 months of around $50 billion of potential equity checks for transactions and CapEx. This figure includes actionable opportunities in sectors like power, logistics, telecom, and others in Colombia, Chile, Brazil, and other countries in the region. In our Infrastructure Fund 4 portfolio, we have seen two fantastic stories develop just in the last month. The first was in the telecom sector. Just two weeks ago, Brazil held its 5G spectrum auction. Our telecom platform, Winity, placed the winning bid for the 700 megahertz band for national coverage. As a result of this winning bid, our company will build more than 5,000 telecom towers in the coming years, all pre-contracted, serving the largest telecom operators and other corporate customers in Brazil. This will drive significant additional deployment of capital from our Infrastructure Fund 4 at attractive returns. The second was in the power sector. Back in late October, Essentia Energy, a renewable energy portfolio focused on solar and wind power generation, announced the beginning of operations at the Sol do Sertão solar panel plant in the northeast of Brazil. Developed from scratch by PATRIA, Essentia has now delivered the second largest solar complex in Brazil and third largest in Latin America with a capacity of 475 megawatts. This plant, now fully operational, serves an estimated 580,000 households and saves the emissions of about 465,000 tons of CO2 per year. We are particularly proud of this project, and I think it underscores Patrick's commitment to making ESG not just a block that we check, but an active and purposeful effort throughout our portfolio. Addressing the growing desire from global investors for dedicated allocations to ESG themes and the global energy transition, we also announced last quarter that we are currently raising a renewable energy fund to complement our flagship infrastructure fund. We are targeting to raise the renewables fund before coming back to market with flagship infrastructure fund next year. In our country-specific strategies, we believe the financial deepening in the region continues to be a substantial long-term opportunity, and these locally-focused products continue to be important to our growth strategy. Currently, they still account for less than 10% of our assets under management and fee revenues, And so, for better or worse, this bucket is not yet a big needle mover for our P&L. The more recent developments in local interest rate environments are particularly supportive of credit strategies. And accordingly, we are seeing the immediate fundraising opportunities shifting in that direction. In the coming quarters, we expect to raise capital for our second middle market credit fund, as we finish investing the $200 million raised for the first fund, where performance has been excellent with no defaults and improving credit ratings in several portfolio companies. We are also targeting to raise capital for our first infrastructure credit product, where there is significant demand for capital given the regional momentum in infrastructure and investment activity. At this point, we have established anchor investors for both products, which should be primary contributors to country-specific fundraising in 2022. There are multiple work streams in motion within this area, and we will keep you posted on progress as it becomes more material. Our big news from the third quarter is, of course, Moneda, and we are well on track to close the transaction before end of the year, as we previously noticed. We hope the information we shared with you at the announcement in September was helpful, but let me reiterate our big picture view on this strategic combination. Moneda has established an outstanding brand and track record across both credit and equities over the last few decades. And first and foremost, they are an attractive addition to our platform based solely on their existing business today. But the vision here is not just bolting on an adjacent business. This is about complementary expertise that enables us to build much bigger things together. With global investors reducing their number of GP relationships, Patra's goal is to stand alone as the premier comprehensive provider for alternatives in Latin America. In that regard, credit was the most competing white space in our platform. Moneda manages the largest high-yield credit fund in the region, which is 10 times the size of the next largest competitor, and has delivered leading returns with more than 350 basis points of outperformance against the benchmark since inception. In their team, we are gaining a level of truly regional expertise, not just Brazil, that would be difficult for us to build organically. Immediately out of the gates, we see strong synergies with our global clients who are interested in credit allocations in the region, where they can find yields that remain absent in developed markets around the world. This translates to incremental wallet share from our existing clients and incremental growth channels that would have been difficult for Moneda to access on their own. Bigger picture. you should expect to see product development on the private credit front. Moneda's current private credit portfolio of roughly $450 million adds to the previously mentioned 200 million PATRIA managers already. And together, we expect to develop distinct private credit offerings with drawdown structures similar to our current flagship products. As I noted, We are progressing with plans for middle market credit and infra-credit products in our country-specific strategies. Given the steep growth trajectory of private credit across the globe, we believe we can attract significant credit allocations from international investors over the coming years as well. Beyond Moneda, we continue to be active in pursuing other inorganic opportunities, and there is more activity on that horizon. This could mean bolting on high demand and complementary sub-strategies or acquiring local talent in different regional geographies. In any case, our efforts will always be patient and diligent to ensure that any new partners will be a fit for our culture and highly aligned with our vision for what PATRA has become. With that, I'll now turn the call over to Marco to walk you through the numbers. Marco.