Vinci Compass Investments Q3 Earnings Call Highlights

Key Points

• Record Q3 results: Net income rose 278% year over year to BRL 184 million, partly due to an unrealized BRL 99 million Galeão indemnification gain; fee-related earnings were BRL 106.8 million. Vinci declared a $0.17 quarterly dividend per share.
• Fees and assets grew: Fee-related revenue increased 31% to BRL 311 million, and assets under management rose 15% to BRL 363 billion, supported by fundraising and acquisitions including Navi and BACS.
• AustralRe could launch a new growth engine: Vinci expects to close the reinsurer acquisition in Q1 2027, subject to approvals, and establish a separately reported permanent-capital business. Management expects double-digit accretion to distributable earnings per share.

Vinci Compass Investments NASDAQ: VINP reported record third-quarter net income and fee-related earnings as acquisitions and fundraising expanded its asset management platform. The company also outlined plans to create a permanent capital business through its proposed acquisition of reinsurer AustralRe.

Net income rose 278% from a year earlier to BRL 184 million, including an unrealized BRL 99 million gain from the Galeão indemnification, Chief Financial Officer Sergio Passos said on the company’s earnings call. The gain did not contribute to third-quarter distributable earnings, but the company expects it to be realized in the fourth quarter.

Fee-related earnings were BRL 106.8 million, or BRL 1.61 per share, while adjusted distributable earnings were BRL 71 million, or BRL 1.07 per share. The company declared a quarterly dividend of $0.17 per common share, payable December 11 to shareholders of record on November 27.

Acquisitions and organic growth lift fees

Fee-related revenues increased 31% year over year to BRL 311 million, helped by acquisitions as well as fundraising in credit, real assets and Global IP&S, Passos said. The fee-related earnings margin reached 34.3%, up from 32.3% a year earlier.

The quarter included approximately BRL 3.5 million in severance expenses, which the company did not exclude from fee-related earnings. Without those costs, the margin would have been 35.5%, Passos said.

Management provided conflicting figures for quarterly management fees: Chief Executive Officer Alessandro Horta cited BRL 280 million, while Passos cited BRL 208 million. Both said the figure increased 39% year over year.

The acquisition of real estate manager Navi closed on September 1, ahead of the company’s prior expectation for a fourth-quarter closing. Navi began contributing management fees in September and is expected to provide a full quarter of fees going forward, Horta said. The BACS acquisition also contributed for a full quarter.

Excluding acquisitions, third-quarter asset management fee-related revenues rose 12% from a year earlier, while fee-related earnings grew 28% after adjusting for nonrecurring severance costs, said Bruno Zaremba, president of finance and operations.

AustralRe to anchor permanent capital business

Vinci Compass expects to close the AustralRe acquisition in the first quarter of 2027, subject to regulatory approval and other customary conditions. The transaction will anchor a new vertical called Vinci Permanent Capital Solutions, or VPCS, which will be reported separately from the asset management division.

Horta said AustralRe will become a client of Vinci Compass and invest in the same funds and structures as other investors. Management expects the acquisition to produce double-digit accretion to distributable earnings per share.

Zaremba said that estimate assumes no positive contribution from the appreciation of general partner commitments transferred to VPCS. Vinci Compass has close to BRL 1 billion in such commitments that could be transferred, he said.

Under the planned reporting structure, VPCS will report net income that includes realized and unrealized gains on those commitments. The asset management business would no longer have to fund future capital calls on the transferred commitments, freeing its cash generation for potential dividends, share repurchases or other opportunities, Zaremba said.

Assets and fundraising advance

Assets under management ended the quarter at BRL 363 billion, up 15% year over year, Horta said. The company reported approximately BRL 4 billion in quarterly net inflows, led by Global IP&S. Over the previous 12 months, capital formation and appreciation contributed BRL 36 billion, while the Verde, BACS and Navi acquisitions added approximately BRL 20 billion, according to Zaremba.

Credit assets under management rose 31% year over year to BRL 43 billion. Argentina accounted for the largest share of credit-segment capital formation during the quarter, although flows in Mexican short-duration strategies moderated after strong second-quarter inflows, Zaremba said.

In private equity, the company’s VCP IV fund signed a sale of AGV’s Colombian operations to DHL Supply Chain. Horta said the transaction is expected to return more than 90% of the capital invested in AGV while the fund retains the Brazilian business. VCP IV also signed an investment in Brazilian medical education platform Sanar.

Management said it expects final closings for the SPS IV and Lacan IV funds around year-end, although Zaremba noted that fundraising timing depends on market conditions and client approval cycles.

About Vinci Compass Investments (NASDAQ:VINP)

Vinci Compass Investments is an alternative investment and asset-management firm with roots in Brazil. It provides investment products and services to institutional and individual clients, with strategies spanning private equity, infrastructure, real estate, credit and public markets. The company's platform serves clients in Brazil and other Latin American markets. Its business traces its origins to Vinci Partners, founded in 2009, and its regional presence has expanded through the combination with Compass Group.

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