Patria Investments Limited

Good day and thank you for standing by. Welcome to the Patria first quarter 2022 earnings conference call. Participants are now 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. If you require any further assistance, please press star 0. I would 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 first quarter 2022 earnings call. Joining 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 results for the first quarter, 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 factor section of our latest Form 20F Annual Report filed in April. Also note that no statements on this call constitute an offer to sell or a solicitation of an offer to purchase an interest in any PATRIA fund. 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. On headline metrics, Patria generated fee-related earnings of $32 million and distributable earnings of $35 million, or 24 cents per share, for 1Q22. We declared a quarterly dividend of 20 cents per share, payable on June 16th to shareholders of record as of June 2nd. With that, I'll now turn the call over to our Chief Executive Officer, Alex Saag. Thank you, Josh.

Good morning, everyone, and we hope you are all well. Patria started 22 very strongly. delivering excellent first quarter financial results and significant new inflows to our platform. We are on track for our 2022 FRV guidance with first quarter fee-related earnings of $32 million, which are up 85% compared to the first quarter of 2021. Distributable earnings of nearly $0.24 per share are up 90% compared to the prior year quarter. And that's our dividend to shareholders of 20 cents per share is up 90% as well. Our platform is growing with a total AUM of 96% totaling approximately $27.5 billion. And fee earnings AUM of 136% totaling approximately $19 billion. driven by both organic growth and our M&A activity. Just in the first quarter, total AUM is up 16 percent, and fee-earning AUM up 6 percent, which is all organic, with moneda already included in the beginning balance. We're now seeing significant AUM inflows from fundraising, with 1.5 billion raised in the first quarter, across a diverse range of products, putting us in a good position to raise more than $4 billion organically this year, including a first closing of more than $800 million for our seventh generation private equity fund, one year ahead of expectations at the time of our IPO. That capital is available for us to deploy immediately. And that fundraising process will continue as we move through 2022 and in early 2023, as we normally keep our flagship funds open for fundraising 12 to 18 months after the first closing. We also listed our first SPAC, Patria Latin American Opportunity Acquisition Corp., a $230 million effort. which gives our private equity business a versatile pool of capital to pursue attractive investments that may not fit our flagship fund profile. Our funds continue to perform very well, reflected in our net accrued performance fee balance of $503 million, which is up 45% just from last quarter and has doubled from one year ago. All of these points illustrate that PATRA's growth trajectory is on track and the strength of our business model allows us to maintain this momentum. While major geopolitical events and economic policy developments have undoubtedly changed the world around us in the past few months, PATRA continues to march forward and we believe our business continues to be well positioned for success in this environment. Indeed, The current global landscape clearly makes a favorable differentiation between Patriot's target geography, Latin America, and the rest of the world. Latin American economies are typically net exporters of commodities that are in high demand today, which speaks of increasing trade surpluses and stronger foreign investment inflows. Also, geopolitical risk for the region has been historically very low and uncorrelated with more problematic areas. Furthermore, there were never experiments with zero interest rates or massive quantitative easing programs in the region, which resulted in current lower leverage in public and private sectors compared to advanced nations or even other emerging markets. Lastly, Most Latin American economies have lower fiscal deficits, higher domestic interest rates, and exchange rates that are still undervalued vis-a-vis other geographies, which is quite a suitable mix to face turbulent times. It is not simply fortuitous that the S&P Goldman Sachs Commodity Price Index was up 34% in U.S. dollars year-to-date to the end of April. And the MSCI stock market index for Latin America had also risen by 9%. In the same period, the broader global MSCI index was down by 13.5%. Currencies, fixed income, and other assets were showing similar performances. This uncorrelated Latin American performance is by no means an anomaly. On the contrary, it has happened time and again. Against this backdrop, economic activity and investment returns in Latin America have outpaced most of the rest of the world. Now, turning back to Patria, we saw strong progress across all of our major asset class verticals in the first quarter. Both value creation and strong currency appreciation benefited the current portfolio in the quarter. And we are in the early stages of a fundraising cycle that we reload our platform for the next several years. In private equity, we had more than a billion dollars of AUM inflows, driven by the first closing of more than $800 million in our next vintage flagship fund, as well as the SPAC listing, which raised an additional $230 billion. While the SPAC will not earn management fees like our funds, It can contribute significantly to our earnings in the future through the sponsored promotes that PATRIA earns in the form of shares in the resulting business combination. The private equity portfolio continues to generate outstanding performance, with Fund 5 and Fund 6 generating 32% and 27% net IIRs in U.S. dollars, respectively. Fund 5 now has accrued more than $300 million in net performance fees. We also closed the first trench of our previously announced transaction with Kamaru P, which anchors our new growth equity strategy, and we have kicked off our process to jointly raise a new growth equity fund. In infrastructure, the current funds continue to deliver performance and some great stories in the portfolio. Infrastructure Fund 3 is now generating a two times multiple and 13% net IIR in U.S. dollars and has quickly ramped up its net accrued performance fees from less than $10 million one year ago to $110 million a day. Infrastructure Fund 4 is much earlier in its lifecycle, but is generating a 1.7 times multiple and 37% net IIR in U.S. dollars. as the team looks to finish committing the fund's capital this year. Our investment team continues to evaluate a pipeline of actual projects totaling more than $25 billion, which, by the way, is more than 10 times the size of our current fund. Most of the AUM in credit and public equities relates to our Moneda products, and we are off to a great start as we continue to integrate and pursue cross-selling synergies. Credit AUM is up 7% in the quarter, driven by both new inflows and solid performance. It was a challenging quarter for credit markets globally, with the increasingly hawkish US Federal Reserve driving the yield curve upwards and the situation in Ukraine contributing to wider credit spreads. Despite this backdrop, Moneda's flagship credit strategies beat their benchmarks during the period. For example, Our Latin high-yield strategy outperformed the benchmark by more than 320 basis points in this first quarter and by more than 850 basis points over the last 12 months. As noted earlier, the Latin American region benefits from having well-capitalized corporate issuance, many of them commodity producers, which resonates well with clients in this higher interest rate environment. Public equities AUM increased 18% in the quarter, driven mostly by strong portfolio performance, as we saw the best quarter for Latin American equities since 1991. The combination of higher commodity prices, depreciated currencies, and companies with capital expenditures disciplined are producing record free cash flow, which is being distributed to respected shareholders. Looking at the sum of these parts, I see a scaling investment platform that is delivering outstanding performance to investors across a diversified range of products and asset classes, with opportunities to expand asset classes, improve our local distribution capabilities, and continue our journey to become a truly comprehensive provider of alternatives investing in the region. With that, I'll now turn over to Marco for more details on the results and come back with some final thoughts on the year ahead. Marco.