Patria Investments Limited

Good day, and thank you for standing by. Welcome to the PATRA second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, please press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Rob Lee, Head of Shareholder Relations. Please go ahead.

Thank you. Good morning, everyone. Welcome to Patria's second quarter 2025 earnings call. Speaking today on the call are our Chief Executive Officer, Alex Saib, and our Chief Financial Officer, Ana Roos, and our Chief Economist, Luis Fernando Lopes, for the Q&A session. This morning, we issued a press release and earnings presentation detailing our results for the quarter, which you can find posted on the Investor Relations section of our website or on Form 6K, filed with the Securities and Exchange Commission. This call is being webcast, and a replay will be available. Before we begin, I'd like to remind everyone that today's call may include forward-looking statements which 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 expectation and involve risks, including those discussed in the list FACTORS SECTION OF OUR LATEST FORUM 20F ANNUAL REPORT. ALSO NOTE THAT NO STATEMENTS ON THIS CALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE IN INTEREST AT ANY PATRIA FUND. AS A FORUM PRIVATE ISSUER, PATRIA REPORTS FINANCIAL RESULTS USING INTERNATIONAL FINANCIAL REPORTING STANDARDS, OR IFRS, AS OPPOSED TO U.S. Additionally, we would like to remind everyone that we will refer to certain non-IFRS measures, which we believe are relevant in assessing the financial performance of the business, but 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. Now, I will turn the call over to Alex.

Thank you, Rob, and good morning, everyone. In the second quarter, we made continued progress leveraging and expanding the diversified platform we have built the past several years as fundraising was a solid $1.3 billion in the quarter, led by our credits, infrastructure, real estate, and GPMS, Global Private Market Solutions, businesses. And total fundraising over the first half of the year reached approximately $4.5 billion, 75% of our original $6 billion target for 2025. Reflecting our strong fundraising momentum and confidence in our outlook, we now expect full-year fundraising for 2025 to be 5% to 10% higher than our initial target, or $6.3 billion to $6.6 billion versus the original $6 billion guidance. We also reported second quarter 25 fee-related earnings of $46.1 million, representing 8% sequential and 17% year-over-year growth, while fee-earning AUM grew 6% sequentially and 20% year-over-year, and total AUM reached $48.7 billion. Importantly, we generated over $600 million of organic net inflows into fee-earning AUM in the second quarter of 2025, $1.3 billion over the first half of this year, and $2.4 billion over the last 12 months. Year to date, net inflows reflect an annualized organic growth rate of about 8% based on fee earning AUM since the start of the year. This is an important KPI to monitor over time as it highlights our ability to drive organic revenue and earnings growth independent of M&A and investment returns. Overall, our diversification and the expansion of our investment and product capabilities is paying off in the form of robust fundraising and profitable net organic growth, enhancing our confidence in the three-year targets we introduce at our investor day last December. Now, let me quickly summarize our second quarter results before we move on to some of the other highlights for the quarter. First, fee-related earnings per share of $0.29 in the second quarter of 25 rose 7% sequentially and 11% year-over-year driven by higher management fees due to higher fee-earning AUM, as well as a higher fee-related earnings margin as we continue to focus on expense management even as we invest in our business. Overall, we remain comfortable with our 2025 fee-related earnings target of $200 to $225 million, or $1.25 to $1.40 per share, reflecting at the midpoint of the range approximately 20% year-over-year growth. We generated $39 million of distributable earnings in the second quarter of 2025, or 24 cents per share, up 4% sequentially and 9% year-over-year, driven by strong fee-related earnings growth. We did not generate performance-related earnings in this quarter. The net accrued performance fee balance of $394 million, or $2.47 per share, rose approximately 7% from the first quarter of this year, mainly due to the depreciation of the dollar. For perspective and notwithstanding changes in the value of the public holdings in our carry funds, underlying business trends at our private equity portfolio, companies generally remain positive. In local currency, EBITDA, at our non-public private equity portfolio companies rose approximately 25% on average over the past year as we focus on resilient sectors of the economy, such as agribusiness, food and beverage, and healthcare. Furthermore, Infrastructure Fund 3, with $47 million of net accrued performance fees, is in full realization mode, and we continue to expect it will be the main source of realized performance-related earnings over the balance of 2025 and through 2026. On that note, we remain confident that we can achieve our performance-related earnings target of $120 to $140 million for the fourth quarter of 24 through 2027. Against this target, we realized $41 million of performance related earnings in the fourth quarter of 24 and expect to realize an additional $15 to $20 million of performance related earnings over the second half of this year. Moving on, fee earning AUM of $37.2 billion rose a robust 20% year over year and 6% sequentially. There are several important things to keep in mind regarding our fee earning AUM results. Net organic inflows in the second quarter of 25 were over $600 million, $1.3 billion year to date, and $2.4 billion over the past year. This was our fourth straight quarter of positive net organic fee earning AOM growth. And our annualized organic growth rates over the first half of 2025 was over 8% based on fee earning AUM since the start of the year. Additionally, it is very important to mention that our organic growth was helped by 34% year-over-year reduction on redemptions. We believe this highlights how our expanded platform is primed to grow organically supported by the capabilities we have acquired through our M&A activity, in addition to those we have developed internally. As a result, we have built a better and more resilient business. Indeed, one of the key features of our business is that it's built to grow no matter the macroeconomic environment. For example, in a high interest rate environment where concerns over inflation may be high, such as the current one, strategies such as credit and infrastructure investments with high yields and or built-in inflation protections are in demand relative to equity-oriented strategies. When interest rates decline, and those concerns recede, we would expect demand for more equity-oriented strategies such as equity REITs or private equity to improve. With regard to acquisitions, our ability to leverage our platform and scale to drive growth through incremental M&A is exemplified by the Brazilian REIT acquisitions we announced in second quarter of 2025 and closed in July. At a time when the interest rate environment in Brazil makes it difficult to raise capital in listed REITs, we were able to use our position as market leaders to go shopping on the floor of the exchange and acquire a total of seven listed REITs, which are expected to add approximately $600 million of high margin permanent capital fee earning AOM. This is an example of how M&A can be an attractive alternative to fundraising as the prices paid for acquisitions are often similar to or even lower than what it would cost to fundraise the same amount of capital. The fee-earning AUM in the quarter also benefited from continued strong investment returns and a positive FX impact. Keep in mind that, as we highlighted at investor day, the fee-related earnings impact from soft currency FX volatility is modest given that most of our expenses base is denominated in local currencies, providing a substantial natural hedge. As we reviewed at our investor day back on December 9th, based on our current asset class mix, a 10% variance in soft currencies against the dollar impacts fee-related earnings by only 2%. Moving on to fundraising, as I noted at the start of my remarks, we are pleased to report that we raised $1.3 billion in the second quarter, approximately $4.5 billion over the first half of the year, and are raising our initial $6 billion target for 2025 by 5% to 10% to $6.3 billion to $6.6 billion. The quarter's strong results coming on the heels of our record fundraising in the first quarter of this year highlights the diversified product offering and distribution capabilities of the platform we have been building. Fundraising continues to benefit from new strategies and products we have introduced over the past several years, including various institutional products targeted to local institutional investors in local currencies. As of the end of the second quarter of 2025, approximately 20% of our fee earning AUM were in permanent capital vehicles, the growth of which remains a key long-term objective. Drilling down into some of the fundraising highlights for the quarter, credit was once again a standout led by solid flows into our flagship LATAM US dollar high yield strategy. Infrastructure benefited from another closing on our flagship development fund, Infrastructure Fund 5, and co-investment with demand driven by Asian and local institutional investors. It is worth noting that over the first half of 2025, fundraising in infrastructure is approximately three times greater compared to all of 2024. led by Infrastructure Fund 5, which has reached $2.5 billion of commitments between the drawdown fund and fee-paying co-investment vehicles. Fundraising in credit has already reached 85% of the level achieved in 2024, which was itself a strong year. We believe these extraordinary results highlight how we are leveraging our strong investment performance in these verticals and the investments we have made in our platforms. In addition, Private Active Fund 7 reached $1.4 billion inclusive of related fee-paying co-investment vehicles. It is important to keep in mind that as we expand our business, a large portion of the capital we raise will only flow into fee-earning AUM as capital is deployed. Our current pending fee-earning AUM totals about $3.3 billion, down modestly from the $3.5 billion in the first quarter of this year due to deployment partially offsets by fundraising. While the level of pending fee earning AUM can vary over the short term, over time we would expect it to grow as our fundraising grows and we raise more capital in drawdown funds, SMAs, and similar fund structures. Our efforts to diversify our platform and increase the resiliency of our business could not be timelier considering the highlighted global macro uncertainty and increased volatility that has gripped economies and markets around the world since the proposed imposition of widespread tariffs by the United States on its trading partners and the uncertainty over future trade and economic policies. Against this backdrop, it is important for investors to understand and appreciate how the region in general and patria specifically are positioned in these uncertain times. Consider President Trump's renewed threats to impose high tariffs on multiple trading partners, including high tariffs on imports from Brazil, which if implemented, could have some negative impact on the Brazilian economy. However, the continued uncertainty caused by these on-again, off-again threats in fact highlights why LATAM and Europe are becoming more attractive destinations for global capital as investors rethink their global asset allocations. While much uncertainty remains, we believe these regions and patria are positioned to weather and indeed possibly thrive in these challenging conditions. Consider that at the strategy or investment level, our private equity investments are mostly oriented towards domestic consumption markets, not export markets. Infrastructure by its nature is local. And our GPMS solutions business is focused on European and, to lesser extent, United States, middle market, private active secondaries, primaries, and co-investments. Direct exposure to export-focused businesses and or investments in the United States is minimal. Investments in Brazil account for approximately 30% of our invested assets. As we noted earlier, demand for our credit and infrastructure products increases in periods of high interest rates and higher inflation concerns. Also, demand for our GPMS products increases as global institutional investors look for liquidity and flexible portfolio solutions for their middle market private equity exposure. Our current exposure to Mexico is minimal at below 3% of AUM. Long term, however, we believe Mexico remains an attractive market for expansion. As the prospects for a trade war remain high, we believe LATAM as a region is a beneficiary given the region's low level of geopolitical risk and export markets that focus on in-demand agricultural products in addition to both hard and soft commodities. With a population of over 650 million people and a combined GDP of over 6.5 trillion dollars, the region also has a large and growing internal markets that provide an attractive export destination for trading partners. The trade war is also driving global investors to take a deeper look at Europe as an alternative destination for investment capital, as investors become increasingly concerned that the United States may become a less reliable partner. From PATRA's perspective, as investors in Latin America for over 37 years with significant boots on the ground resources, we have extensive experience in dealing with and investing through periods of high interest rates, FX volatility, and economic uncertainty. As the go-to alternative manager in LATAM, the recent tariff-induced economic uncertainty and other trade actions by the United States have led to increased interest from Asian, Middle Eastern, and increasingly European investors in our infrastructure and other investment strategies, including our European private equity solutions business, as investors seek alternative destinations outside the United States to deploy capital and earn returns. This is exemplified by the significant portion of this year's fundraising which has been sourced from Asian investors. Our business is also built to serve local investors at the local level. We continue to see early signs of increased allocations to alternatives from local investors and institutions that are both under-allocated to alternative strategies and often required to invest locally and understandably have a home country bias in times of economic stress and uncertainty. Local investors in LATAM and Europe accounted for approximately 55% of our fundraising over the first half of 2025 and 68% in 2024. Finally, economically, our fee-earning AUM and management fees are very sticky and highly predictable as approximately 20% of our fee-earning AOM are in permanent capital vehicles and approximately 90% in vehicles with no or limited redemption features. At the same time, our fee-related earnings have little sensitivity to soft currency, FX, volatility, as we mentioned earlier. Pulling this all together, our financial results and ongoing fundraising momentum provide additional evidence that our strategy to diversify and grow our business both organically and inorganically while also increasing our resilience is paying off. We believe we are off to a strong start to deliver on our 2025 goals, including the new fundraising target of $6.3 billion to $6.6 billion, and fee-related earnings of $200 to $225 million, or $1.25 to $1.40 per share. Additionally, we expect to achieve the 2027 targets we unveiled at our investor day such as total fee earning AUM of $70 billion and fee-related earnings of $260 million to $290 million, or $1.60 to $1.80 per share. Now, let me turn the call over to Anna to review our financial results in more detail. Thank you.

Thank you, Alex, and good morning, everyone. As Alex highlighted, we are very pleased with the strong momentum we achieved as we raised $1.3 billion in the second quarter and about $4.5 billion over the first half of the year. Clear proof that these strategic investments we've made in our investment platforms, products, and distribution capabilities are paying off. These strong results in the quarter increases our confidence that we are on track to achieve our 2025 objectives and off a solid start of our three-year plan. That should be our second quarter results. As Alex highlighted in his remarks, our robust fundraising year to date demonstrated that we are well on track to achieve and indeed surpass our initial $6 billion target for the year against a backdrop of increased global uncertainty and volatility. Our fee AUM rose 20% year-over-year and 6% sequentially to approximately $37 billion. While acquisitions contributed to the year-over-year increase, the strong growth reflects a combination of solid net organic inflows as well as the positive contribution from strong investment performance and asset movement due to depreciating U.S. dollars. It's particularly noteworthy that in the quarter, PACA generated over $600 million of net inflows into FIA-US, bringing our year-to-date to $1.3 billion and approximately 8% annualized organic growth. This is the fourth straight quarter of the net organic inflows, highlighting our expanding fundraising capabilities coupled with the thickness and resilience of our attributes. While the U.S. dollar depreciation in the quarter contributed to our strong sequential growth in AUM and fee-earning AUM, importantly, however, and as we highlighted in prior calls, FX fluctuations have limited impact on our FRU. since our expense base provides a substantial hedge against currency movement that may impact our fee-earning AUM and consequently our fee revenues. As we reviewed at our investor date back on December 9th, based on our current asset class mix, a 10% variance in soft currencies against the dollar impacts FRE by only about 2%. Spending fee-earning AUM totaled about $3.3 billion down somewhat from the first quarter due to the active deployment partially offset by fundraising. This pending fee-earning AUM, combined with our fundraising goals, the 20% of fee-earning AUMs are in permanent capital vehicles, and the almost 35% of fee-earning AUMs in the drawdown funds with an average life of six and a half years, all point to our ongoing ability to generate net organic growth over time. Total fee revenue in the second quarter reached $81.1 million, up 14% over the prior year, and about 5% sequential. The sequential increase was driven by strong growth in fee-earning AUM and some incremental incentive fees from one of our real estate funds in Brazil and from the strong active public equity performance. It is worth mentioning that due to the timing of net asset flows into fee-earning AUM, management fee revenues in the second quarter did not reflect the full impact of the quarter's asset growth. Our measurement fee rate averaged 95 basis points over the last trading four quarters. As we view at our investor day, we are steadily diversifying our business and introducing new investment strategies and product structures. which are key drivers of our growth. Consequently, our management fee rate will continue to evolve, and we expect our fee rate to average between 92 and 94 basis points over the coming course, but with the potential to vary depending on the mix. Moving on, operating expenses, which include personnel and G&A expenses. total approximately $35 million in the quarter, practically flat versus Q125, and up 10.7% year-over-year. The year-over-year increase mainly reflects the impact of acquisitions. The very slight sequential increase reflects our continued focus on expense controls and capturing operating efficiency, even as we continue to invest in the business. Looking ahead, we believe second quarter personnel and key G&A expenses combine our good baseline run great. Putting it all together, PATRA delivered fee-related earnings of $46.1 million in the quarter, up 17% versus the prior year and 8% sequentially, with an FRA margin that rose 170 basis points sequentially to 56.8% in the quarter. We continue to expect the full year margin to fall within the range of 58% to 60% guidance as we grow fee revenues and capture incremental expense synergies from our acquisitions. We want to remind everyone that the fourth quarter is often our strongest in terms of SRA margin, driven by the recognition in the quarter of most of our high margin incentive fees from our credit and public equities products. Regarding FIE, with half of the year completed and as our visibility into remainder of 2025 improves, we remain very confident in our ability to hit our 2025 target FIE range of 200 to 225 million and 2027 FIE target of 260 to 290 million with an FIE margin target of 58 to 60%. Next, our net financial and other income and expense in the second quarter of 2025 totaled a negative $4 million, reflecting mainly interest expenses on our credit facilities, partially offset by income generated in our new energy trading platform, TRIA, which contributed about $0.7 million in the quarter. As of the second quarter, net debt totaled approximately $130 million, and our net debt to FRA ratio of 0.6 times was well below the one time at the end of the quarter, in line with our long-term guidance. As we manage our cash flow and capital structure over the balance of the year, we expect our debt level to remain relatively unchanged, even as we fund M&A-related deferred cash payments of approximately $40 million throughout year-end. including the latest REITs acquisition in Brazil. Following this payment, our current deferred M&A-related cash payments through 2027 would be approximately $100 million, consistent with our guidance at our December investor date. Consequently, given our expectations regarding our net debt over the balance of the year and a somewhat higher contribution from TRIO, our net financial and other expenses line should be at about 30% lower over the coming quarters compared to the second quarter. Our effective tax rate in the quarter was 8%, an increase of one percentage point versus the prior quarter, mainly reflecting our mix of jurisdictions. We expect our tax rate over the coming years to hover around 10% annually, but will vary quarter to quarter depending on the evolving mix of our business, although we expect 2025 to be below 10%. Of note, as exemplified in the fourth quarter 24, quarters with large amounts of PRE tend to have lower tax rates as PREs largely generate in low or no tax jurisdictions. In the second quarter, 25, we generated $38.8 million of distributive earnings, up 15% year-over-year, and over 5% sequentially, mainly reflecting higher FRE, partially offset by higher net financial interest and expense and higher debt. Second quarter DE per share of 24 cents was up 9% versus prior year and 4% sequentially, mainly on higher FRE, partially offset by higher share count versus both second quarter 24 and first quarter 25. Regarding the share count, we finished the quarter at 159.5 million shares and continue to expect the share count to average between 158 and 160 million from 2025 to 2027 close of share repurchase, which will be focused on offsetting stock-based compensation. On that note, the Board of Directors voted to renew and increase our share repurchase program. And over the next 12 months, we have the authorization to repurchase up to 3 million shares. We did not repurchase shares in the quarter, but we remain to our intention to repurchase shares over the balance of 2025 and keep our share count within the target range. Finally, as we announced during the past day, the board approved for 2025 a quarterly dividend per share of $0.15. Overall, we are very pleased with our second quarter results and the momentum we have built as we continue to diversify and improve the resilience of our business. We believe we are on track to meet our FRE target for 2025, and we are excited regarding the growth opportunity that lies ahead. Thank you, everyone, for dialing in, and we are now ready to answer your questions.

Thank you. As a reminder, if you would like to ask a question, please press star 11 on your telephone. We also ask that you limit yourself to one question and one follow-up. As well, wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. And the first question today will be coming from the line of Rodrigo Fiera of Bank of America. Your line is open.

Good morning. I hope everyone is doing well and thank you for taking my question. You've mentioned how Mexico is an area of interest for future expansion. What type of partner acquisition would you look for there? And is that the next target as we think about your $14 billion target of inorganic inflows from the investor day?

Thank you, Rodrigo, for the participation here in our Q&A session. Just as a note, I think before we begin here the Q&A session, I would like to acknowledge here the tragic and senseless events that occurred earlier this week at Blackson and other firms in their building in New York that led actually to the death of a friend or one of their employees and others in their building. We have many friends at Blackson given our decade-long relationship with them and we are heartbroken here over the tragedy they had to endure and our best wishes go out to everyone there and indeed everyone and their respective families that suffered at the hands of this very senseless violence. Going back to Mexico here, Rodrigo, I think Mexico is definitely, as we've mentioned here, in a long-term perspective, an attractive market. It's the second largest economy in Latin America, as you know. And the way I think that we see Mexico as of now is to try to find local partners in some of the asset classes that we think are are better to expand at the current moment of the country. So real estate being one of them and credit and infrastructure, I think, being the other ones. On the real estate front, we did actually buy a very small real estate fund in Mexico, the FIBRAS, which is now similar to the REITs in the US, similar to the FIIs, the TEEs here in Brazil. It was a very small acquisition, so we didn't announce it. It was a total assets of this Mexican real estate lease of $26 million. We did buy the management company together with a local partner called Lexington that is a real estate manager in Mexico. And this management company, the JV, between us and them, 50-50, will then manage this $26 million FIBRA. In addition to buying this small management company that manages just this FIBRA, this $26 million FIBRA, we did buy a portion of the shares of the FIBRA. So as an asset, it would be an investment in our balance sheet. The strategy here is to continue to grow, raising money mainly for logistics real estate in Mexico. I don't know if you did see this latest news or not, but two weeks ago, the largest Mexican fibra, Fibra Uno, did announce a spinoff together with new money of its industrial properties, its logistics properties, and raised in this spinoff plus IPO over $400 million of fresh capital. So what did Fibra Uno do? I believe that Fibra Uno is the largest real estate investment trust in Latin America with around $5 billion of assets, actually $15 billion of assets of $10 billion of debt, so $5 billion of net worth. So probably is the largest real estate investment trust in LATAM listed in the Mexican Stock Exchange and did the spin-off of their industrial assets. So there is a demand for industrial assets in Mexico as you can see from this deal that happened two weeks ago. And our strategy is to use this small fee that we did acquire in order to expand into the Mexican also industrial assets, logistic assets. It's slow steps that we're going to take here, so we don't want to have to take a very large step into Mexico as of now, but this came about as a very unique opportunity. The Mexican authorities are not actually giving out authorization for new fibras, so that's why we decided to buy one. And we decided to buy a small one so we can actually learn and grow from there into other assets. And we're excited about the deal, of course, it's very small, it doesn't move the needle at all, given the size of the fibra, but very excited that it's the first step. With that, I think we also, as I mentioned earlier in the answer here, a huge opportunity to go in the credit space in Mexico. We do get exposure to the credit space in Mexico through our Penn Regional credit funds, our flagship fund, which is the High Yield Latam Penn Regional Dollar Denominated Fund that does carry securities issued by Mexican economies in U.S. dollars. In total, we have a 3% exposure of our total assets into Mexico, a very small exposure, but most of that is in credit and some in equities, public equities. As you know, the pension system in Mexico is growing very healthily. It's basically doubling in the next five years in assets under management. NAV growth is one reason, but the main reason is the higher contributions that the government approved from the employers to the pension It is the largest pool of pension funds in Latin America. Mexico is the second largest economy in Latin America, but the pension funds do manage the largest pool of capital, $350 billion approximately versus $250 billion here in Brazil versus $150 to $180 billion in Chile. And this largest pool, $350 billion, will double in five years. So we have to tap that market with local products. Fibra is a very local product. the real estate investment trust in Mexico that we just acquired, and we intend to actually launch other local products into the Mexican economy, targeted initially to the institutional investors. Finally, the main investors of this small FIBRA are the Mexican pension funds, and one of them being the largest Mexican pension fund that is now our client, together with a couple of other pension funds that became our clients. So we have local clients now in Mexico investing in a local product, which is this FIBA, managed by us. So this is what we intend to do in Mexico. But will it be a major portion of the $14 billion that you mentioned in the later part of your question? I don't think so, Rodrigo. I think it's still early to say that over the next two years up to the end of 27, I think Mexico is going to be still very modest, very small. portion of our total AUM. Thank you. I hope I answered your question.

Thank you. That was great. For my follow-up, can you touch on how the deployment pipeline looks like at the moment, particularly in infrastructure? How should we think about the pace of deployment there given the $3.3 billion of uncalled capital?

Yes. Thanks for the second question here. We are now excited with all the fundraising for For this first half of the year, as you probably heard during the call, and we have this, for us, sizable pool of capital that we can actually invest, the $3.3 billion that you mentioned. And infrastructure, I think, is one of the main asset classes. It's 1.3 out of the 3.3, so a third of that pending fee earning AUM. We have a lot of things in the pipeline and infrastructure, mainly in Brazil and Colombia. The usual suspects that we feel very comfortable with investing, for example, toll roads. A lot of auctions are going on in Brazil, as you know, over the next months, and we pretend to select what we consider the best ones to participate. We have... not only the fund investing, Infrastructure Fund 5, but we have a pool of fee-paying co-investors that want to invest alongside, so making us able to actually sign bigger checks for bigger concessions. We also see the energy market in Colombia very, very attractive, as you know. We are finalizing the construction of the largest solar panel farm in Colombia, serving the largest utility company there, and we plan to expand that relationship. We also look into water sanitation, we also look to other sectors of the infrastructure but mainly these three are our priorities as we speak. Also, what we also have is in the GPMS, the other $1.4 billion out of the $3.4 billion, so another basically 40% of the money there, money that we have raised. One of them, our flagship secondaries, Opportunity Fund 5, investing in secondaries, buying positions of other LPs and GPs, mid-market, mainly European private active funds, so very excited with that product, as LPs seek for liquidity of their portfolios. So it's a very hot product right now, and we are very well positioned with our GPMS and SOF5, another that we did raise within our GPMS industry. Thank you. I hope I answered your question.

Yes, thank you. Thank you. And one moment for the next question. Our next question will be coming from the line of Tito Laberta of Goldman Sachs. Your line is open.

Hi, this is Tito from Goldman. I think I was called. Just to make sure. Good morning, Alex and everyone. Thank you for the call and taking my question. Alex, my question, I guess on the higher fundraising that you're expecting for the year, one, just to clarify, that is separate from the REIT that you announced that you acquired of around $600 million, right? So it would be that that should be considered inorganic, right? So the 5% to 10% increase in fundraising is organic, just to clarify that. And if so, What is driving that? Because as you mentioned, interest rates are still high in Brazil, but you seem to be getting some more interest here. So where do you see that interest is coming from that's leading to a better fundraising? Thank you.

Yes. Hi, Chito. Thanks for participating, and thanks for the question here. Yes, the uplift in the guidance from $6 to $6.3 to $6.6 billion, or 5% to 10% higher, is in addition to to the $600 million, approximately $600 million of AUM REITs that we bought in Brazil. And of course, also in addition to the small Mexican $26 million there that I just mentioned while answering Rodrigo's question from Bothell. So it is in addition. So in addition to the 6.3, 6.6, we did this acquisition of $600 million. of Brazilian REITs, plus the $26 million of a small Mexican REIT. We see a lot of interest coming from Asian investors, Middle Easterners, and Europeans mainly, and LATAM, local to local, into our infrastructure credits and GPMS products. So infrastructure, again, inflation protected with alpha. We see a lot of the local pension funds in the region in Latin America willing to get exposed to this product because of the nature of the inflation-protected revenues that we have for infrastructure and the long-term contracts and concession contracts that is part of the business, that is a characteristic of this business. On the credit side of the interest rates and on alpha, we have been delivering great returns. what we're going to see as we file our presentation right now, which we didn't actually file last night, I'm sorry. You can see the returns on the credits, all of our credit strategies performing very well as our infrastructure strategies as well. So continue to deliver alpha throughout our credit strategies, which then of course attracts investors to be able to tap into the high interest rate environment of most of the Latin American countries, high real interest rates in most of these Latin American countries, so a continued interest from investors. We also see a slight shift, as I tried to describe and mention during my part of the earnings call, of investors looking into LATAM as a place to allocate capital versus the U.S. I don't see people actually redeeming money from the U.S., but I think the additional allocation, I think people are rethinking about the additional allocation into the U.S. And a small shift of this additional allocation into LATAM is already for us here a huge amount of money. So as we see a small shift coming from Asian investors, a small shift coming from Middle Eastern investors. Last time investors willing to invest more locally, given the volatility, the whole bias nature that people actually feel in certain times. And European investors now with a trade agreement between European bloc, European Union and the South Core market. All of this together adds the uncertainty, the tariffs in the US, the trade agreements be bilateral, be made between Latin America and Europe, for example. The allocation of the additional amount of capital, not 100% in the U.S. as we were seeing during the year 2024, a bit of that being shifted to other regions, Latam being one of them. All of this together, and of course we are the go-to alternative asset manager in the region is benefiting us in the fundraising. And this is the fourth quarter, no, sequential quarter that we see net new money in a very positive and growing. So that's why we feel comfortable that we can actually uplift the guidance here. And also within the Brazilian setup that you mentioned, high interest rates, yes, but Our credit products here are also doing well and being able to raise capital. In addition, again, investors are trying to tap this high real interest rates environment in Brazil as well. I hope I answered your question.

Yeah, no, that's very helpful. Very thorough. Thank you, Alex. Maybe just a follow-up. Given that you are maintaining your guidance for FRE? I mean, should we assume to already see a step change from all this fundraising in 3Q? I know 4Q tends to be seasonally stronger. You get the incentive fees. But just to get to that guidance, FRE will need to go up in the second half of the year. But should we already begin to see that in 3Q or should we expect most of that in 4Q?

Yeah, I think most of that more tail-ended because we now have to, which is The good part of it and the fun part of it for all my portfolio managers here, we have to then invest this money. And as we invest the money, this money becomes then invested capital that we can charge fees, revenues, et cetera. But there's a small time lag. So as we're already in late July, early August here, we'll see more in the fourth quarter. But what is the message here? We will deliver the guidance of $225 million of FRE. We feel very comfortable with that, given all the fundraising that transforms into revenues. And we get into, when we end 2025, when we get into 2026, in a very strong position. Because if these investments are not made this year, it's gonna be late this year, so turning into revenues early 2026. So, puts us in a very good position to deliver 26 and then heads us to 27. That's why we feel comfortable as it's a very long-term, sticky management team business that we manage. We can see 2027 delivering the $260 to $290 million FRE guidance. So all of the fundraising in the beginning of the three-year plan, because we could have this fundraising later in the three-year plan, We would still read the numbers, but now all of this good fundraising, the beginning of the FEAR plan, makes it even more comfortable that we will deliver. If we do a simple math here, Achito, our fee-related earnings in the second quarter was approximately $44 million. Again, just remembering there's no incentive fees in the second quarter. If you multiply that by four, we're already at $176 million. If we add 10 to $12 million of incentive fees that happens in the fourth quarter, we're at 186, 188. So we are a touch off the 200 million, which is the entry level of the range of 200 to 125. So $12 million of additional fee-related earnings in the next two quarters is a small amount. If you do the math, I have to invest more or less $1.3 to $1.5 billion, and we have $3.3 already pending here at AUM. So I think we're in a very good position. Of course, we have to do great investments because our name of the game here is to continue delivering great returns. As we are, with great returns, we manage to then raise more money. But of course, we're going to do great investments with the high-quality portfolio managers that we have here at Patria. I'm sure that we're going to do that, but Now, we are in a good position. We are in a good position. If I do half of my fee in AUM that I have in inventory, as of today, things work in the way that I just described, and here we are delivering the $200 to $225 million FRE and putting us in a strong position to start 26. So, good position to be in. We, of course, as you know, we have a very sophisticated CRM structure to manage our fundraising. We can see what we call internally here the funnel all the way from a lead to a subscription document signed. And when we see that funnel, it also makes us comfortable that we can hit the 5% to 10% higher guidance of the $6 billion that we announced as a fundraising guidance for 2025. No, we're in a great position. I'm happy for the team, and congratulations for my team here, for Patrick's commercial team. They did a great job this first half of the year. Thank you, Jim.

Okay. No, very clear. Thank you, Alex.

Thank you. One moment for the next question. And the next question will be coming from the line of Ricardo Vacpaquell of BTG. Your line is open.

Good morning, everyone, and thank you for the opportunity of making questions. You mentioned the seven REITs acquisition representations package you had, $600 million in fairness AUM. Could you walk us through the timeline for when they will start being consolidated on your results? Will any shareholder approval from this REIT be required? And if so, are there any meaningful costs that will be associated with these approvals? Thank you.

Hi, Ricardo. Thanks for the question. Thanks for participating. We did two acquisitions here, or a group of REITs that we acquired from Genial, as you know. It's a Brazilian local bank. And a group of REITs that we bought from a local alternative asset manager, a real estate alternative asset manager called Vectis. On the Vectis front... we did the acquisition of one of their holding companies, which managed these funds. So the transaction is basically already closed. So we did sign and already closed. So you will see these numbers already in the third quarter, adding to our fee earnings AUM, as we did announce in July. In the case of Geniao, We have to go through the assemblies. We have to call a shareholder's vote. But for 90% of the funds, we already got the approval. Too much detail here, but we probably know that we need 25% of the quota holders of each fund to actually vote to transfer the management of these REITs from Genial to us. And for 90% of the AUM, we already got the votes in for the shareholders' meetings. They're still going on because it's 45 days that we have in order to reach out for these votes, but we already have more than 25% count as of today. So we are in a good position. Just 10% of the Genial funds, which is a $30 million fund out of the whole $600 million that we did acquire, 5%. We're still counting to get to the 25%, but I think we'll probably get there, but we still have a couple weeks to go, which is the 45-day period within the shareholders meeting that we did call for. And in the worst of the worst case, we can extend that, but it's only 5% of the AUM. You're probably going to see during our third quarter of 2025. Revenues from that is on an annualized basis of $3 million. So going forward, it should add $1.5 million to our revenue, which should translate into $1 million of fee-related earnings. not annualized for the year, $2 million for annualized, but for the year, $1 million, as we did do this transaction in July. So it doesn't move the needle, but it's $1 million that we will add to our FRE within the year of 2025. The costs associated with these are irrelevant. It's basically calling on a shareholders meeting and a very, very insignificant cost that doesn't move the needle at all of our transaction costs. And I think this is it.

Very clear. And just a follow-up here, still on the real estate segment, we saw a pickup in fundraising during the quarter. If you could comment on what type of investors are driving this demand, which products are they mainly focusing in, it would be helpful. And also, if you could comment if we should see this level of fundraising from Q2 in the following quarters, it would also be helpful. Thank you.

Yeah, our funds have been performing extremely well, and I congratulate here the portfolio managers and my partners that run the business, mainly the industrial logistics, which is the HGLG, and also the urban retail fund, which is the HGRU, the ticker of these two funds. And of course, the credit fund as well, doing very well given the times of high interest rates that we are living in Brazil right now. So we announced the follow-on offering for the logistics fund, the HGLG, as we speak. The 2 billion reais follow-on. We already have 1 billion reais taken, which we are exchanging. assets for shares of the fund. So investors that own assets, own real estate assets, are in this follow-on offering, are exchanging these assets and receiving in-exchange shares of the fund. That accounts for more or less half of the offering and the other half of the offering would be new money. So it's a significant offering that we are running right now. And the other fund that looks into a good position to be able to do a follow-on is our street retail fund, the HGRU. Why do I see that? Because the share price is trading at a very close level to the NAV of the fund and puts us in a good position to do a follow-up. So street retail, logistics, of course, more than an office fund, and credit. also doing very well. Again, high interest rates, environment, but being able to manage the funds. Our logistics funds manage them very well. Our logistics fund is the largest in the segment, so that attracts a lot of investors because of its size, because of its liquidity. Same with street retail, one of the largest of the segment. The Brazilian economy is doing reasonably well. I think those particular things of Brazil, and one of them is very high interest rates, very high real interest rates, but the economy continues to perform reasonably well. GDP at around 3% growth for 2025, which is impressive. You would imagine that such a high interest rate, you would, you know, cause a slowdown of the economy, but the economy will probably finish 2025 boasting a 3% growth. And that reflects in all our businesses. And as you know, Brazilians find a way to protect themselves against inflation, indexing, hedging, et cetera, to the good or to the bad, to what I'm saying. And we see in our private equity portfolio, EBITDA, I mentioned during my earnings call, organically up 20% year-over-year, which is the whole portfolio. We have everything in the portfolio, from Fund 4 all the way to Fund 7, exposure to several sectors. Our private equity portfolio is a quasi-ETF of the Brazilian economy, because it's exposed to so many different sectors, and that 20% EBITDA growth organically, it's over 30-something percent if I consider the acquisitions. So, again, you know, as the Brazilian particularities of the Brazilian economy, we continue to perform given this environment, and we continue to fundraise in real estate, in infrastructure, for infrastructure, for real estate, and for credit. I hope I answered your question. Thank you.

Thank you. Very clear.

Thank you. One moment for the next question. And the next question will come from the line of William. Barren Yard of ITU, BBA, your line is open.

Okay, good morning. Thank you, everyone, for the presentation. I have a couple of questions here, starting with, you know, a first one regarding fundraising. I just wanted to pick our brains on how do you think the recent news flow regarding the U.S. tariff's on Brazil affected maybe the mood of international investors towards Brazil and the region. I would say it apparently didn't affect so much because of the upward guidance revision, but maybe if you could comment here a little bit. And I have a second question now regarding a different topic, regarding net debt, dividends, and buybacks. So Ana commented during the call, the net debt should remain stable throughout the year, right? and also that you should use this new buyback program as a way to keep the number of outstanding shares in the range of the guided range. So I wanted to understand here what should we see in order for the dividends increase from the 50 cents per share we've been seeing for the past year and a half. When do you expect net debt to decrease, and if we should see that in order for this dividend to increase again?

Okay. Thank you very much, Guilherme. And thanks, William, for participating in the call. I would ask some stories. First question on U.S. tariffs. They're all predictions and expectations, right? It's very hard to understand exactly what's gonna happen given that we haven't lived in an environment similar to this for a while now, for over 50, 60, 70 years, so we don't have a lot of data to be able to go back and understand what are the exact effects. Of course, my general view, higher tariffs globally It's not good news for global trade, for global growth in general, making this general comment. How will the cost of these tariffs be absorbed by the supplier of the goods and services, by the importer of the goods and services? It's hard to say. I think it will probably be absorbed within the whole system. As far as Brazil is concerned, as you know, 12% of our exports are directed to the U.S., And a lot of 45% of that 12% were exempt from the tariffs. So 45% of 12 exempt, so 55% of the 12, around 6% of our exports are going to the U.S. with higher tariffs. And we might see some additional, I think, exemptions. For example, coffee, it seems it doesn't make a lot of sense given the exemptions. that the Trump administration gave on products similar to coffee with the rationale that if there is a plant or something that does not grow in the U.S., they have to import it without tariffs. And coffee is one of them. Coffee does not grow in the northern hemisphere. So that can be another 5% to 7% of the exports. So it might be affected by 35 to 40% of the export, not 55 as of now. So in the end, I think we're, might not really change the needle dramatically for Brazil. I have here Luis Fernando Lopes with us. Our initial math does account for a 0.2 to 0.4. of a reduction in GDP and the whole thing gets into effect and nothing comes back. And that was more of the 100% of tariffs on 100% of the goods. Tariffs on 55% of the goods is more to the 0.2, 0.3 than the 0.4. So as I was mentioning earlier, we were expecting GDP to grow around 3% this year in Brazil. So we might see by the end of the year that's reducing to an annualized growth rate of 2.6, 2.7 because of the tariffs. So of course it's painful, but I don't think it's dramatic in the sense that our 3% GDP growth will go down to zero in Brazil or something like that. It's on the, as we say here, on the margin, right, on the margin. So that, I think, is more of the economic impact. I think the second part of your question, I think there's a political impact, which is no cause. I think everybody's concern and attention that these tariffs are not really derived from trading issues, but they come from political issues. And that puts us in a more... uncertain scenario, right? Because even if we go back and we have good trade negotiations, but we didn't fix, as far as Mr. Trump is concerned, the political side of it, where do we land? And so that puts us in a more uncertain position. So it's harder to say where will this thing land. So the third thing that I would say before I conclude the question here, other regions of the world, Middle Eastern, and Asians, and Europeans, I think they have moved in the direction of investing more in Latin America, as we see from our higher and robust fundraising for the first half of 25, and we see the pipeline with very robust fundraising for the next five, six months of 2025. And some of it has to do with this. I think, say, look, I'm going to direct my exports not into the US, I'm going to direct my exports to Latin America and the Chinese car industry, for example. They're very competitive, they're directing their exports to Brazil and other countries in LATAM. Other European manufacturers and service providers are directing exports to LATAM and Brazil in particular. And that, of course, brings them to invest more, be it financial investors, be it strategic investors in the country. And we didn't see any blip in the interest. On the contrary, we saw more interest in the region. And I think it has to do, and they say it, actually our clients say that, the uncertainty of the, now of the U.S. economy in general and maybe the uncertainty of the U.S. being that trade partner that we thought that he was in the past. I'm going to look for new markets, for new partners. And even if they shift a small amount of their total, and it's only the new money, and in the margin of the new money, that's already a huge amount of money for us, right? For Brazil, we have an FDI of around $60 to $70 billion. another $5 to $10 billion raises the FDI by 10%, and in today's terms, $5 to $10 billion is not a lot of money. Look at us now. We're managing close to $50 billion, a Brazilian alternative investment manager. So even us could raise another $10 billion. It would be another 10% of our AUM, and that increases the FDI into Brazil by 5% to 10%, which is amazing. So I think we still continue to be in a good position. So finalizing my answer, I think it's the effects of the tariffs are marginal. They're not going to cause major harms in Brazil. Of course, particular sectors are going to suffer a lot more than what I just mentioned. We look into a 0.2 to 0.4 reduction in GDP out of a 3% growth in GDP from Brazil. Of course, very painful but not very dramatic. But my main concern is on the political side where we land there. But nevertheless, investors continue to show very high interest in our products and in the region. On the net debt, the share count dividend recounts here, William, what I can say is like Zana mentioned, we see net debt remaining relatively flat from the number that we posted By the end of the second quarter of 25, around $120, $130 million net debt. Probably finish the year with $120, $130 million of net debt. Share count, we are at 159.5. The range that we gave at our December 9, 2024 investor day was 158, 160 million shares. And I think we're going to stay within that share count. And we don't foresee any increase in the dividends as of today. So we continue with 15 cents per share per quarter. And our boards last week approved the dividends of 15 cents per share to be paid for the second quarter of 2025. And we see that dividends will remain in the third quarter and the fourth quarter. As we approach the end of the year, And if the fundraising continues to go the way that we are seeing, and the uncertainties that we just described in my answer here, Carl, recedes, and we see 2026 as robust as we are seeing when I answer my question here to Tito from Goldman, we can review this dividend policy. But as of today, we're remaining with 15 cents per share for the third quarter and the fourth quarter. Thank you. I hope I answered your question. You did.

Very complete. Thank you, Alex.

Thank you. One moment for the next question. And the next question will come from the line of Gud Herme Gespen of J.P. Morgan. Your line is open.

Good morning, Alex and team.

My question is more As well, to pick your brain a little bit related, how do you think the business, Alex, in relation to geography? And just the context of the question, I have been having more and more debates around a Brazil potential bouquet scenario next year. And this bouquet, I think it's a combination of potential administration change plus lower rates, So some investors are seeing the scenario of a risk-con scenario in Brazil. And my question to you is how you see Patria nowadays and how much should we expect in terms of benefits from Brazil specifically? Because if you go into the past 10 years ago, it used to be a very specific concentrated asset in Brazil, right? But I think for the right reasons, you diversified a lot of business. Nowadays, Brazil, I think, if I recall correctly, is only 25% of the fundraising. And if you can recap, I'm not sure how much it represents in terms of asset allocation. But my point to you is, if we see this bull case scenario in Brazil in terms of risk-calling environment, do you think fundraising... trends are expected to accelerate? Or at this point, do you think it's reasonable to see a steady growth going forward independent if Brazil does super well or not? That's it. Thank you.

Thank you, Guilherme. Thanks for your question. No, definitely so. I think if there's a re-rating, as you just explained, linked to the political shifts to a center-right government in Brazil, definitely, in my view, fundraising and prices of assets post-election will rise. And we've been seeing that and we've been following that and we do cover that very closely and you can see from all kinds of graphs and data points what happens in the shifts from center-left to center-right in economies like Brazil. There's some correction or increase in the prices of assets before, but a big correction in prices of the assets post the election and increases in fundraising in general. But what I would like to highlight is it's not just Brazil. And we, not by chance, but by strategy, as you mentioned, we did diversify our business into other countries in Latin America first and then into Europe. And what you just mentioned about Brazil is also happening in other countries in Latin America, mainly in Chile and Colombia. And today, on the liability side, we have 65% of our fundraising from investors that are based outside of Latam, 20% from investors based outside of Brazil, Latin investors that are not Brazilians or based in Brazil. and 15% of our fundraising coming from Brazilian-based investors, 65.15. On the asset side, where do we invest this money? It's more or less a third, a third, a third, a third in Brazil. It's 28, 30%. I'm just rounding the numbers to make it easier here and illustrate my example. A third in LATAM ex-Brazil and a third outside of LATAM, okay? So taking a view of the third, which is Latam ex-Brazil, and I also mentioned earlier it's just 3% in Mexico, so it's mainly Chile, Peru, and Colombia. These three countries are growing over the next six, three, no, four to 12 months or four to 18 months through elections. And we already see the same effect that you just mentioned for Brazil and Chile. Most probably, the election polls are showing us that a center-right government in Chile will win. Is it Mrs. Matei or Mr. Cass? And that puts us in a very good position to re-rate Chile, so you can see that the more liquid securities in the Chilean economy are already being priced up, and we can see also fundraising of our Chilean clients to be more exposed to this re-rating of Chile going up, so we're raising more money in Chile to bet on this re-rating strategy, or election strategy, or election arbitrage, as we call it. And we go then, next, which is the Chile, presidential elections in Chile are happening, should happen the end of this year. Then we go into 2026, we have elections in Colombia and Peru. And in Colombia, the same, the same. A little behind Chile because the elections in Colombia is just in the second quarter of 2026. But what the polls show today, that most probably we're gonna have a center-right government because the popularity of the current president there, Mr. Petro, is really, really low. And with that, the whole re-rating, the whole election arbitrage, and we're playing, of course, with that. We see investors willing to invest in our funds. We're having success in raising a private equity fund in Colombia, success in raising an infrastructure fund in Colombia, and mostly through our institutional investors' clients. And they are saying exactly that, that you mentioned about Brazil, about Colombia. And then Peru comes next. And we have the vice president of Peru actually took over as the running president, and she is then conducting elections in 2026. She managed to do the same thing that Mrs. Rousseff managed. Her popularity is lower than the inflation, which is a rare position to be in, but her population is lower than the inflation. I think her population is around 2%, 3%. I don't know how low can you get. How can you get lower than that? and inflation in Peru around four, so inflation in Peru is higher than her popularity. We normally say here, Patrick, that when your popularity rate is lower than the inflation rate, I think it's time for you to go, right? Which is, I think, the case of the Peruvian president. And she's gonna be substituted by a center-right president, so the Peruvian economy also has this election arbitrage. And then comes us, Brazil, end of 26. Very, very early to say, you know, 16 months before an election, so many things, 18 months before an election, so many things can happen. But I think there's a chance of the center-right government to win the elections here in Brazil. And that arbitrage play will come into effect. And we see that interplay more of the hedge funds that we see investing in some of our funds. We see the local investors already betting on that. We see also several data points. As you know, we had a very large sizeable short position on the real at the end of the year. That short position basically diminished. I don't think people are in a buy long position, but I think the short position went to a neutral position. Same in the stock exchange. I think the short went to a neutral position. So I haven't seen here in Brazil, because it's the latest, it's the fourth country in my list here, Chile. Colombia, Peru, and then comes elections in Brazil. So we're a little further down the road, the Brazilian elections. But I already saw a shift from a short position to a neutral, and we might get into a long buy position as we head into the end of 25 and 26, and in the elections, polls shows that the center-right in Brazil have a good chance to win. So yeah, very exciting moments, to be honest, William. And we're going to play this two-thirds of our assets, as I mentioned, invested here in the region, not only in Brazil. In Mexico, we don't see that, of course. The president there was just re-elected for a six-year term. But it's amazing. We look into the Mexican and Colombian and Chilean economy. Why are these economies... having been able to have low interest rates in Brazil? Very simple, the fiscal, right? Mexico is investment grade with a 50% debt to GDP. Chile is investment grade, OECD, and Mexico is also OECD member. Chile is investment grade, OECD member, and also interest rates coming down with a fiscal stance relatively under control, 40% debt to GDP. Colombia, not investment-grade, but it's 50% debt to GDP, moving a notch up to 50-something percent of debt to GDP, but the leadership in Colombia is quite complex. And us here, with gross debt at 76% of gross debt to GDP, So the fiscal says a lot about these four countries as well, right, that I just mentioned. So we might have even not only a center-right government winning the next election, but a solution, or at least a path to a solution to our fiscal problem, and that adds to the whole re-rating or election arbitrage in Brazil. So we're pretty excited, to be honest, and we see all of this happening in all of these countries, and we did expose patria on purpose by strategy to these countries. And if no last, if I go to the Europe, we're basically exposed to the UK. UK is doing reasonably well given the situation and went out and already signed a tariff deal with the US administration, which seems as a good tariff deal given what the European Union signed and given what Japan signed. So they're in the good side. And that also is an economy that's interesting. A lot of infrastructure investors because of their higher defense spending, et cetera. So I'm pretty excited here, William, and I hope I answered your question. Or Guilherme, I'm sorry. I hope I answered your question. It's Guilherme. Guilherme and William is the Brazilian and English version. So sometimes I thought, is it the Brazilian version or the English version? So that's why I'm sorry I confused Guilherme. Thank you. No problem at all. Thank you, Alex.

Thank you. And this does conclude the Q&A session. For today, I would like to turn the call over to Alexan, CEO for Closing Remarks. Please go ahead.

Thank you very much. Thanks for the call. Thanks for coordinating the call as well. And again, we're very excited with the news of the first half of the year and looking to a great 2025. Thanks for your participation. Thanks for the patience. And I hope to see you all in person and safe in the near future. Thank you. Bye-bye.

Thank you all for participating in today's conference call. You may now disconnect.