Patria Investments Limited

Executive Officer, Alex Tsai, our Chief Financial Officer, Anna Russo, and our Chief Corporate Development Officer, Marco DiPalito. And we are also joined by our Chief Economist, Luis Fernando Lopez, for the Q&A session. This morning, we issued a press release and earnings presentation detailing our results for the second quarter of 2023, which you can find posted on our investor relations website 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 latest Form 20F Annual Report. Also note that no statements on this call constitute an offer to sell or 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 US 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 IFRS measures are included in our earnings presentation. On headline metrics, PATRIA generated distributable earnings of $43.6 million, or 29.5 cents per share, for 2Q23, including fee-related earnings of $33.8 million and performance-related earnings of $10.7 million. We declared a quarterly dividend of 25.1 cents per share, payable on September 8 to shareholders of record as of August 16. With that, I'll now turn the call over to Alex.

Thank you, Josh. And good morning, everyone. In the second quarter, PATRA delivered excellent financial results for our shareholders, and we are also seeing accelerating momentum in key drivers of our business. Second quarter distributable earnings of $43.6 million, or nearly 30 cents per share, was driven by the predictable and growing base of fee-related earnings, and again, the positive contribution of performance fees from Infrastructure Fund 3. With fee-related earnings of $65 million year-to-date, we continue to see the outlook on track to reach our targets of $150 million in 2023, with more growth coming in the back half of the year. Performance fees have been a more regular contributor to earnings recently. And while we have not them every quarter, the 11 million generated in Q2 and 40 million over the last three quarters demonstrate the early stages of a performance fee realization cycle that can be a powerful driver of shareholder value over the coming years. Capital formation continues to accelerate with $1.9 billion in organic inflows through the end of the second quarter and more than $2.2 billion secured through Q3. If we include pending new AUM from the recently announced joint venture with Banco Colombia expected to close in Q3, total capital formation will reach approximately $3.4 billion year-to-date and nearing a cumulative 8 billion since the beginning of 2022, tracking towards the four-year cycle target of 20 billion by the end of 2025. While the fundraising environment remains very challenging in some areas, this is where platform diversification shines. With more than 30 products and counting, PATRIA enjoys many vectors for growth as we still see the path to reach our target of $5 to $6 billion of organic inflows in 2023 across all products. Looking specifically at our drawdown funds, we also still believe we can achieve the previously noted $6 to $7 billion in fundraising over this vintage cycle, through a diversified product offering, including our flagship private equity and infrastructure funds, as well as newer strategies like growth equity, venture capital, infrastructure credit, and private credit. We also continue to diversify our sources of capital, harnessing the financial deepening in Latin America to raise more money locally. We have been successful in Brazil-focused products, with AUM growing more than threefold since our IPO, and in Chile with the addition of Moneda's platform. We are now seeing the joint venture with Bancolombia provide a new anchor in Colombia. We are carefully moving forward with our strategy for our presence in Mexico. We expect that 2 to 3 billion out of the 5 to 6 billion inflows target for 2023 could come from Latin American-based investors. The earning AUM growth of 8% since last quarter and 15% over the last year is also a testament to asset class diversity with permanent capital real estate and liquid public equity strategies leading the way. Put simply, This doesn't mean our strategy is changing. It means it is working. We're also seeing traction on divestment with a transaction for delis and block sales of Smart Fit in Private Active Fund 5 during Q2. Over the last 12 months, our flagship funds have secured proceeds of approximately $2.2 billion for fund investors, delivering a multiple of 2.7 times invested capital on these investments in US dollars. And finally, in late June, Patria was added to Russell 2000 and 3000 indices, an important step in our journey as a public company, which expands our exposure across the investment community, positive catalyst for our investment profile moving forward. So overall, a great quarter for the business. But importantly, we also see positive sentiment building around the regional macro story, a result of structural factors as well as timely economic policy actions. Latin America has long enjoyed the benefits of low geographical risk and richness of natural resources. Now, with war in Eastern Europe and growing US-China tensions, The region is benefiting from its neutrality and stability within emerging markets and trends of near shoring and friendly shoring are certainly constructive. The comparatively lower indebtedness of individuals and companies in the region allowed governments to preemptively tighten monetary and fiscal policies to combat inflation starting in 2021 which also helped mitigate adverse shocks from abroad. Sharp disinflation for several months have now paved the way for cuts in short-term interest rates, and countries such as Chile, Uruguay, and Costa Rica have already embarked on cycles of monetary easing. Brazil is expected to follow them in the third quarter. A scenario of stronger fiscal positions, decreasing inflation, and comparatively higher interest rates led to substantial carry gains in Latin America, with several regional currencies being global top performers versus the U.S. dollar in 2023. An important institutional factor too frequently overlooked is the effectiveness of checks and balances in the region. Most of recent Latin American elections resulted in left-leaning presidents, but without their coalitions holding a congressional majority and with an independent judiciary in place to limit their discretionary powers. Against this backdrop, we have indeed seen the necessity of moderation in proposed new legislation and the tax reform efforts moving forward in Brazil are a good example of that. Progressive administrations are still committed to delivering ambitious social agendas, but they must preserve fiscal and monetary discipline while building an enabling environment for private investment. Accordingly, markets are upgrading Latin American economic growth forecasts for 2023 and beyond which is driving asset appreciation. That translates to a backdrop that is constructive across each phase of PATRA's investing cycle, fundraising, deployment, value creation, and divestment, although factors can impact asset classes differently. In private equity, making progress on divestment was critical as we entered 2023, and we are indeed seeing results. So far this year, Private Equity Fund 5 has completed the NASDAQ listing of Lavoro, a leading agricultural inputs business, completed two block sales of Smartfit, the well-known fitness company, and also signed the transaction for the sale of Delis, our food distribution platform, where another financial sponsor will partner with Patras Private Equity Fund 7 to support this company's next phase of growth. The divestment pipeline continues to be very active, and we think the improving macro backdrop can be a solid tailwind in the second half of the year and into 2024. On the fundraising side, we continue to make progress in private equity with more than 360 million of inflows in Q2 between the newest flagship private equity fund, the first closing in the next vintage venture capital fund led by the team from IGAR, and the recognition of Camaro Pins legacy growth equity funds following the closing of the second trench of that transaction and Patria's full acquisition of the platform. The structural challenges in the private equity space remain, however, particularly in the US market. Although we are seeing upside in other parts of the world, like Asia, the Middle East, and Latin America, the headwinds will likely impact the size of this flagship vintage. Should we ultimately close this fund under our target, we expect a diversification into growth equity and venture capital to help compensate in the short term to reach the six to seven billion target for this overall drawdown fund vintage. And note, these funds carry a similar structure to the flagship funds. Looking forward, a solid investment pipeline should also bring us back to the market for the flagship fund sooner than the typical cycle. Turning to infrastructure, As we indicated last quarter, we are completing the initial closings of our newest flagship development fund with approximately $550 million secured as of today. With $350 million closed in Q2 and another $200 million secured in early Q3, we continue to be optimistic about the momentum here and expect to reach roughly a billion mark by the end of Q3, representing approximately 40% of the fund's cover target. The $11 million of performance fee-related earnings in Q2 was generated from Infrastructure Fund 3, and as of quarter end, this fund remains five active investments and nearly $130 million in net accrued performance fees. And remember, the realization impact is enhanced in this initial catch-up phase as the majority of commitments are subject to 100% catch-up, which enhances our performance impact until we reach our 20% share of the cumulative investment gains. Out of the current $130 million accrual, the catch-up phase will account for approximately the next $60 million of realizations. In credit, encouraging trends continued as the redemption pressure we saw during 2022 has faded. As net flows were positive in Q2, our credit platform achieved scale with the acquisition of Moneda in 2021. And while I usually highlight the flagship high yield fund and its phenomenal long-term track record, it is important to note the increasing breadth of this vertical. The benefits of our diversification across PAN and LATAM, Brazilian and Chilean strategies, hard currency and local currency strategies, further expansion of private credit and soon infrastructure credit, means multiple vectors of growth and the ability to capitalize when certain strategies are in high demand. For example, our local LATAM strategies has delivered outstanding absolute returns over the last year, enhanced by currency performance against the dollar. The main LATAM local currencies fund delivered a 12% return just in Q2 and 27% over the last year. Our Chilean fixed income strategy has also seen strong inflows and performance, returning more than 10% over the last year and now seeing its AUM top $500 million, we have launched our locally focused credit 365 product in Brazil and continue to work towards our formal first close of infrastructure credit, which already has backing from multilateral agency as anchor investors. On public equities, Our funds have a phenomenal quarter in terms of both inflows and fundraising, as the improving sentiment in the region drove capital to both the large and small-cap Penn regional products. Inflows were nearly $370 million in Q2, and net of redemption activity, we were up nearly $290 million, including the strong market appreciation Total and fee-earning AUM were both up 23% in Q2 alone, fully recovering from the pressure seen in 2022 to reach a new high mark. And in real estate, our major story was of course the announcement of the new joint venture with Bancolombia, which is expected to close in Q3. And I'll allow Marco to give more detail on that in a moment. But there were also strong inflows in the quarter of more than $300 million driven by VBI, our real estate platform, as they continue to expand their platform in Brazil. Real estate is an asset class where we really aim to gain scale over the next few years. And indeed, the AUM has grown from $400 million at the end of 2021 to more than $1.8 billion today. With the incorporation of the new joint venture with Bancolombia, AUM will nearly reach $3 billion in the coming months and more to come. To summarize, Q2 was another solid quarter of results for our shareholders. We are executing our growth plans amid an improving macro backdrop that is positive across our investment cycle. And our 2023 targets for fee-related earnings and fundraising remain well in sight. Let me now turn things over to Marco to talk about our latest corporate development views, and then Ana to walk through the results in more detail.

Thank you, Alex, and good morning, everyone. Expansion of product offering. Geographic expertise and distribution capabilities are the three pillars of our corporate development strategy, and the joint venture with Bancolombia announced a few weeks ago touches each aspect. Not only are we bringing 1 billion of permanent capital AUM to the real estate platform, but we are expanding that afterclass into the Colombian market. and we are gaining a distribution partner that can help us reach Colombian investors with a broad suite of alternative investment products. PATRIA will contribute capital into the joint venture over a multi-year period to fund operations and GP commitments to fund, meaning cash consideration is quite minimal upfront. To help you frame the immediate impact, we've disclosed that PATRIA will have 51%, and thus controlling ownership in the JV. Assuming $1 billion of fee earnings AUM earning typical market rates and a similar FRA margin to PATRIA, you will calculate an annualized fee-related earnings contribution of a few million dollars after adjusting for the JV ownership. While that's certainly a positive, And we believe there are further REIT consolidation opportunities in this market. The long-term vision for this partnership is the broader facilitation of alternatives products to the local investor base across multiple asset classes. Bancolombia is the country's largest bank by asset and shareholders equity. It has been serving clients in Colombia and Central America for nearly 150 years, giving them a tremendous depth of relationship with companies and investors and the brand power that we view as unmatched in the country. We believe the financial deepening in the region is real and poised to accelerate further with interest rates trending downwards. leveraging Bancolombia's client base and distribution capabilities and PATRA's expertise in private markets and alternatives. We can provide access to PATRA's existing diverse offering of regional products and also design new alternative products tailored for the local market in the local currency. We're very excited to move this relationship forward following the expected closing of the transaction in Q3 and confident it will be a driver of platform growth and accretive to our shareholders. We've been successful in leveraging the financial deepening in the region in both Brazil and Chile, and now Colombia. As we look to the remaining countries in the region, we believe Mexico continues to be the next logical country for geographical expansion. and we remain active in pursuit of deals. On another front, as much as we acknowledge that the financial deepening is generating solid interest for private markets in the region, it also does on a global scale. In fact, PATRA already manages more than $1 billion of Latin American capital through feeders to global alternatives. And we are actively pursuing opportunities to expand our capabilities on this run. We hope to have more to say on this theme soon. Let me now turn to Ana for further details on the results.