Vinci Partners Investments Ltd - Ordinary Shares - Class A Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is Vinci Partners Investments Ltd - Ordinary Shares - Class A a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $612.58m | Revenue (TTM) = $203.86m
Market Cap = $612.58m | Estimated Revenue = $226.20m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $788.32m | Revenue (TTM) = $203.86m
Enterprise Value = $788.32m | Forward Revenue = $226.20m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Vinci Partners Investments Ltd - Ordinary Shares - Class A Stock Analysis
Analyst Opinions
12 Analysts have issued a Vinci Partners Investments Ltd - Ordinary Shares - Class A forecast:
Analyst Opinions
12 Analysts have issued a Vinci Partners Investments Ltd - Ordinary Shares - Class A forecast:
Vinci Partners Investments Ltd - Ordinary Shares - Class A Events
Past Events
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AUG
11
Q2 2026 Earnings Call
about 2 months ago
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MAY
11
Q1 2026 Earnings Call
5 months ago
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MAR
4
Q4 2025 Earnings Call
7 months ago
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NOV
13
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11 months ago
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OCT
7
Analyst/Investor Day - Vinci Compass Investments Ltd.
12 months ago
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StocksGuide Free
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q2 2026 Earnings Call
1. Management Discussion
Good afternoon, and welcome to Vinci Compass Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call will be recorded.
I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead, Anna.
Thank you, and good evening, everyone. Joining us today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, President of Finance and Operations; and Sergio Passos, Chief Financial Officer.
Earlier today, we issued a press release, slide presentation, and our financial statements for the second quarter 2026, which are available on our website at ir.vincicompass.com.
I'd like to remind you that, today's call may include forward-looking statements which are uncertain and outside of the firm's control, and may differ from actual results materially. We do not undertake any duty to update these statements. For discussion of some of the risks that could affect results, please see the Risk Factors section of our 20-F.
We will also refer to certain non-GAAP measures and you'll find reconciliations in the release. Also note that, nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Compass' fund.
Our results for the second quarter of 2026, Vinci Compass generated fee-related earnings of BRL 88.7 million, or BRL 1.35 per share, with an FRE margin of 32.5%, and adjusted distributable earnings of BRL 63.3 million, or BRL 0.96 per share. We declared a quarterly dividend of $0.17 on the dollar per common share, payable on September 9 to shareholders of record as of August 25.
With that, I'll turn the call over to Alessandro.
Thank you, Anna, and good evening, everyone. Thank you for joining us today.
The second quarter marked another important step in Vinci Compass' journey as the leading full-service alternative asset manager in Latin America.
Over the past few years, we have consistently executed on a strategy built around 3 pillars: expanding our investment capabilities, increasing the scale of our platform, and building a more diversified and resilient business. This quarter reflects tangible progress across each of these fronts, and I am particularly pleased to announce today the signing of an agreement to acquire Navi's Real Estate funds.
Navi's Real Estate platform spans 6 funds across multi-strategy and residential strategies, with 4 vehicles listed on the Brazilian stock exchange and/or the CETIP.
After closing, which we expect to happen during the fourth quarter, the transaction will add approximately BRL 800 million in assets under management, concentrated primarily in perpetual and long-term lock-up vehicles.
Strategically, the fit couldn't be better. The transaction deepens our presence in the Multi-strategy Real Estate segment, by adding scale to one of our smaller strategies across the REIT business spanning across Real Estate and Credit. This is significantly important in the REIT market, as larger funds tend to benefit when it comes to follow-on offerings once markets are supportive, when compared to smaller funds.
The transaction also broadens the range of solutions we can offer our clients and strengthens our ability to compete in a market where scale, distribution and specialized investment expertise carry increasing weight.
Together with our existing funds, this brings our pro forma Real Estate AUM for the second quarter of 2026 to approximately BRL 7 billion, of which BRL 750 million now within multi-strategy, giving us a stronger foundation from which to grow the business over time.
It also reinforces Vinci Compass' role as a consolidator of high-quality investment franchises across Latin America, and it reflects the discipline we bring to every opportunity we pursue, seeking those that are strategically compelling, financially attractive and highly complementary to what we already do.
Moreover, this transaction speaks to a defining characteristic of our model. Over the years, we have invested in building a scalable organization, underpinned by deep investment expertise and a robust corporate infrastructure. That foundation allows us to absorb a meaningful volume of additional assets, while leveraging the resources we already have in place.
Another important milestone was the successful closing of our combination with BACS asset management in early June, adding BRL 4 billion in AUM across Credit and Equities.
By combining our asset management capabilities with BACS' extensive corporate and retail distribution network, we took an important step towards building a scaled and increasingly relevant asset management platform in Argentina, one that's well positioned to benefit from the ongoing transformation of the country's financial system and the growing demand for more sophisticated investment solutions.
We remain constructive on the long-term outlook for Argentina, supported by the evolving savings' dynamics in the region, rising financial penetration and a growing need for scale and efficiency.
Against this backdrop, the combination enhances our ability to capture attractive growth opportunities across mutual funds, money market products, dollar-based strategies and alternative investments, while strengthening our position in a market that is still in the early stages of consolidation.
Since announcing the transaction, we have been very pleased with the reception from clients and partners, and we are already seeing early signs of that enthusiasm beginning to translate into inflows, which we expect to build over the second half of the year.
Taken together, BACS and Navi capture something we have consistently emphasized to investors. The strategic benefits of our platform compound as we grow, becoming more powerful with scale.
Alongside these developments, our existing businesses continued to perform well, reinforcing the strength of the platform we have built over many years. In the quarter, we had BRL 13 billion in capital formation and appreciation, with close to BRL 1 billion in new commitments across our newest vintages currently in the fundraising phase, SPS IV, MAV IV, Lacan IV, and VSP II.
Looking at the fundraising pipeline going forward, we are very excited about a strong and well-diversified set of flagship strategies in the market during the second half of 2026, such as COPCO, VIR V, Credit Infra and further commitments in VSP II, SPS IV and Lacan IV, spanning our Credit, Real Assets, Private Equity and Global IP&S segments.
The breadth and quality of this pipeline reinforce our confidence in the growth ahead, and Bruno will walk you through it in more detail shortly.
Supporting this extensive product suite, the macro environment across Latin America remains constructive in general, though still marked by volatility. Political uncertainty has started to ease in some markets, with recent market-friendly election outcomes in Peru and Colombia. Mexico, in particular, remains an important growth lever for Vinci Compass.
During the quarter, we saw strong momentum in our short-duration strategies, with over BRL 440 million in inflows into our Mexican Credit funds. It also remains one of the most compelling structural opportunities in the region.
Following the pension reform, mandatory contribution rates are set to rise toward 15% by 2030, and we expect the AFORE system to keep growing meaningfully over the coming years.
In addition, the structural nearshoring trend, reflected in recent record foreign direct investment, reinforces our long-term conviction in the market.
In Brazil, the current interest rate environment continues to create attractive conditions for disciplined capital deployment in private markets, as elevated rates support more compelling entry valuations and allow us to negotiate downside protection structures, including hybrid debt-and-equity solutions that enhance risk-adjusted return potential.
At the same time, still-elevated real interest rates, a more cautious monetary easing cycle and election-related fiscal uncertainty continue to impact risk appetite, broader M&A activity and liquidity events, which may affect the timing of certain realizations and deals.
In Private Equity, we had some important liquidity initiatives in early 2026 through the listing of Agi, a reverse IPO of CBO into OceanPact, and the sale of Mundo do Cabeleireiro. We continue to maintain a meaningful pipeline of potential divestment opportunities for the second half of the year.
In Corporate Advisory, a constructive environment could gradually translate into higher deal activity. Against this backdrop, the team is working on an extensive pipeline of opportunities for the second half of 2026, which we expect to materialize as market conditions improve. At this point, we expect that the second half of the year will be better than the first half revenue wise, with some mandates expected to close in the next 6 months.
Moreover, external fundamentals remain supportive, with strong trade flows, resilient commodity exports and a stable currency backdrop. With the Brazilian real and regional currencies continuing to benefit from these external fundamentals, we could reopen room for an improvement in domestic assets.
A relevant factor during the quarter was the strong supply of IPOs and follow-on offerings tied to artificial intelligence and the broader technology sector in the U.S. Enthusiasm around AI remains one of the main drivers of the U.S. market, but the sheer size of these transactions requires meaningful capital absorption.
As a result, some investors have reduced positions in other markets to participate in these deals, putting pressure on assets outside the technology sector. Encouragingly, this dynamic appears less intense going forward. The most recent AI and technology-related offerings do not seem to carry the same extraordinary volumes observed earlier, suggesting that the technical pressure from capital rotating out of other markets may begin to ease. In this context, our Equities segment could be a beneficiary of this rotation.
Turning to a brief snapshot of our financial performance, this quarter we posted higher management fees, with an initial 1 month contribution from BACS, as well as organic growth across Credit and Global IP&S.
Fee related earnings reached BRL 89 million in the second quarter '26, up 36% year-over-year, with an FRE margin of 33%, up 450 basis points year-over-year. In the second quarter '26 year-to-date, FRE margin reached 34%, up 580 basis points year-over-year. This profitability expansion reflects the operating leverage of our platform, as revenue growth from both recent acquisitions and organic fundraising continues to outpace the growth in our cost base. We remain firmly on track toward the 38% FRE margin target by 2028 that we laid out at our Investor Day.
As we have been highlighting over the past communications, distributable earnings naturally carries more volatility and this is particularly true at this stage of our cycle, as we accelerate capital calls into our proprietary funds, which will impact our short-term financial income.
During the quarter, we called approximately BRL 56 million, bringing total capital called from our IRE commitments to over BRL 960 million, or roughly 65% of our BRL 1.5 billion in total commitments. As this capital is deployed, it temporarily reduces the short-term financial income we earn on our cash, which weighs on distributable earnings in the near term.
This, however, is a natural and intended feature of our model. Capital invested today into our own funds is designed to generate management fees, carry and capital gains as these funds mature and begin returning capital.
In that sense, once again, I would like to highlight the long-term value embedded in our balance sheet. We currently hold approximately BRL 890 million in long-term proprietary funds on our balance sheet, which is not fully reflected in our distributable earnings, and by consequence, at this stage constitutes a hidden asset in our business. We expect this value to translate into meaningful distributable earnings in the coming years, as capital begins to flow back to us.
That same focus on building durable, long-term value is evident across our funds. In Infrastructure, VICC closed the acquisition of a stake in Faro Energy, one of Brazil's leading distributed generation solar platforms. The transaction gives the fund exposure to a scaled and highly contracted portfolio, with operations across multiple Brazilian states, while also providing a meaningful pipeline for future expansion.
Importantly, the investment aligns well with VICC's strategy of building exposure to essential infrastructure assets supported by long-term contracted cash flows and secular trends linked to the energy transition. We believe this deal further reinforces our team's ability to deploy capital in sectors where operational expertise and active asset management can create substantial long-term value.
Another important development within our Infrastructure platform relates to the international airport of Rio de Janeiro, Galeao. As previously disclosed, Vinci Compass expects to receive between BRL 90 million and BRL 100 million, net of taxes and associated expenses, from the indemnification associated with the airport's concession process.
This amount should be recognized during the second half of 2026 and will impact our distributable earnings. Beyond its financial contribution, this outcome reflects the value generated by our infrastructure team prior the auction, including involvement in the negotiation and structuring the new regulatory model.
To conclude, what we find most compelling is the alignment between where our platform is today and where the structural opportunity is heading. The demand for alternatives across Latin America is accelerating, the region stands out as a stable and diversifying destination for global capital, and we have spent years building the platform, the talent and the execution capabilities required to capture it.
Each transaction we complete adds scale, deepens our capabilities, broadens the solutions we can offer our clients, and reinforces our ability to compound value.
Vinci Compass enters the second half of 2026 from a clear position of strength. We are executing with discipline against the priorities we laid out on our Investor Day, strengthening our regional presence, scaling our highest-growth strategies, and allocating capital with rigor.
Above all, our focus remains on creating long-term value for our clients, shareholders and partners. I have never been more confident in our ability to deliver it.
Thank you all for joining us today. I'll turn the call over to Bruno.
Thank you, Alessandro, and good evening, everyone. We are very encouraged by the extensive fundraising pipeline we have in place for the second half of the year, supported by the combination of an expanded distribution footprint and a more comprehensive product suite following our recent acquisitions and fund launches.
Starting with Credit, the strategic combination with BACS is a great example of this. What excites me most is the highly complementary nature of the 2 platforms. Together, we now manage over BRL 8 billion in Argentine funds, mostly across Credit, with a smaller portion in Equities.
Through this transaction, Vinci Compass gained access to the extensive corporate and retail distribution networks of BACS and Banco Hipotecario, meaningfully strengthening our local capabilities in Argentina. We expect this to translate into inflows over the coming quarters, supported by the positive feedback and momentum we are seeing from local investors, whose profiles are gradually shifting from defensive, wealth-preservation strategies toward more active investment positioning.
The Navi Real Estate funds acquisition reinforces our full-service platform from a different angle. By expanding our footprint in the Multi-strategy Real Estate segment, we unlock a new fundraising channel for Vinci Compass through an already sizeable vehicle that gains immediate relevance in the market.
Following closing, expected in the fourth quarter 2026, our Multi-strategy Real Estate vertical will hold approximately BRL 750 million in AUM. As we often say, smaller funds without scale struggle to grow and lose relevance with distribution platforms.
By building vehicles with sufficient critical mass for organic growth, we gain relevance in the short term, access new pockets of capital, and position ourselves to scale further as market conditions for REITs become more favorable.
On that note, we remain attentive to the potential reopening of market windows as the Brazilian easing cycle advances, which could create a more favorable environment to raise capital for REITs.
As a reference, during the last easing cycle we successfully raised BRL 1.2 billion in a single quarter, and, as you know, REITs remain one of the most attractive investment vehicles for individual investors in the Brazilian capital markets.
Turning now to AUM and our fundraising efforts during the quarter. We reached the milestone of $70 billion in AUM, an increase of 5% quarter-over-quarter on a dollar basis.
In Brazilian reais, it represented BRL 361 billion of AUM with BRL 13 billion of capital formation and appreciation, including close to BRL 1 billion in capital subscriptions across closed-end funds.
The second quarter reinforced the strength and resilience of our diversified platform, with BRL 17 billion in appreciation. This is a clear demonstration that we have reached a scale and product quality that allows the platform to compound and perform consistently on its own.
In Real Assets, we continue to see capital subscriptions during the quarter, across Lacan IV and our opportunistic fund targeting the warehouse sector in Brazil. In Lacan IV, we continue to see strong engagement ahead of the fund's final closing by the end of the year.
Commitments in this type of strategy tend to build at a more measured pace, reflecting the nature of institutional investor profile, the recent European summer period and the time required to finalize legal documentation. Encouragingly, the fund has already attracted strong interest from new investors, many of which have advanced in their internal processes and are now moving toward signing.
This is exactly the kind of momentum we have been signaling over the past quarters. European institutional demand, in particular, has stood out. Interest has been strong enough that a group of European development finance institutions named themselves a DFI consortium and chose to advance in a coordinated manner, sharing due-diligence efforts as they progress through their approvals, which we see as a clear evidence of their conviction in the strategy.
At this point, and with this overwhelming international support, there is high probability that Lacan IV will hit its hard cap.
Moving on, let's turn to our Global IP&S segment. It is worth taking a step back to recall that the largest portion of our AUM comes from our Third-Party Distribution business, which is comprised of the TPD Liquid and TPD Alternative sub-strategies. While funds in TPD Alternative are structured as long-term, closed-end vehicles under a capital-subscription model, we classify them as inflows in our AUM Rollforward, rather than under capital subscriptions.
As a result, the net inflow line reflects a combination of capital subscriptions and capital returns from TPD Alternative funds, together with inflows and outflows from other sub-segments, such as TPD Liquid, Global Solutions and Multi-strategy.
During the quarter, we saw continued inflows into TPD Alternative, with approximately 70% coming from Chilean institutional and high-net-worth investors, and the remainder distributed across other geographies, including Brazil and Mexico.
These flows reflect our ongoing efforts to provide local investors with access to top-tier global GPs in the alternatives space, with most of the capital allocated into global private equity secondaries and technology-focused growth equity strategies.
These inflows were offset by capital returned from TPD Alternative funds and by some rebalancing within TPD Liquid. The capital returned was meaningful and represents a positive outcome for our clients, which we would expect to be reinvested and recycled into other products over time.
On the liquid side, the movements this quarter reflected 2 main drivers: part came from our Chilean pension fund clients and relates to local regulatory limits on offshore exposure, which require them to rebalance when strong appreciation pushes their holdings above permitted thresholds; and part was related to a specific external asset manager that underperformed during the quarter.
We therefore see these flows as a natural part of the business rather than a cause for concern, and we would expect this dynamic to be increasingly mitigated over time as we continue to broaden our client base and diversify our funding geographies within TPD business.
Looking at TPD Alternative going forward, the fundraising environment remains quieter, with capital-raising periods for global funds extending beyond historical patterns, which naturally leads investors to defer commitments toward later closings. As a result, we would not expect meaningful alternatives flows in the third quarter.
Within Multi-strategy, our Verde flagship fund is seeing meaningful engagement from a broad base of clients, including pension funds and multi-family offices, which could translate into positive inflows in the second half of the year. In fact, in July, the strategy already received an inflow from a multi-family office we had been engaging with since the beginning of the year, and we are in final discussions on the first commitments from pension funds into the flagship. This remains a key priority for the third and fourth quarters.
Shifting to Equities, we saw inflows into our LatAm UCITS vehicle from clients across the region, reflecting the impact of our sustained efforts and improving performance being recognized by the market. These were offset by outflows in our Brazilian products, primarily reflecting the more cautious domestic backdrop of still-elevated real interest rates and election-related uncertainty.
In addition, this was compounded by strong global demand for AI- and technology-related offerings, as Alessandro detailed, which temporarily drew capital toward that sector. We believe our Brazilian Equities funds stand to benefit as local flows return. Specifically, one of our current fundraising efforts is directed toward local pension funds, the RPPS, to raise capital for our Verde equities strategy, where we expect inflows to begin materializing by the fourth quarter.
Switching gears to Credit, which continues to be one of our fastest-growing franchises, AUM surpassed BRL 42 billion, up 15% quarter-over-quarter and 40% year-over-year, supported by BRL 4 billion from the BACS acquisition and BRL 2 billion from capital formation and appreciation. This performance reflects the continued diversification of our platform across local-to-local and cross-border strategies, reinforcing our position as a one-stop-shop across Latin America.
Since closing in June, we have been consolidating BACS results into our FRE, and we expect a tailwind on margins in the second half, as our Argentina operation carries a higher margin than that of the entire company, which translates into a positive mix impact to consolidated numbers. We continue to see full year FRE margins in the mid 30s range.
Within our closed-end funds, we raised close to BRL 550 million across SPS IV in opportunistic capital solutions, MAV IV in agribusiness, and FAE Peru, our private credit strategy focused on confirming, factoring and trade receivables financing.
SPS IV secured commitments from investors in the U.S. and Uruguay, further validating the strategy's differentiated proposition and capitalizing on its strong track record. We continue to see encouraging fundraising momentum and expect additional commitments ahead of the fund's final closing later this year.
In agribusiness, we successfully launched MAV IV, and achieved the fund's fundraising target through local Brazilian intermediaries, highlighting the strength of our distribution capabilities and the continued investor demand for agribusiness products.
In Peru, fundraising activity also remained solid. During the quarter, FAE Peru secured additional commitments, reflecting the continued demand for private credit solutions and further reinforcing our position in the market.
Building on this momentum, we expect to launch FAE II by year-end while continuing to advance fundraising efforts for PEPCO II, our flagship senior secured lending strategy, which has been generating strong interest among institutional investors.
In parallel, we are broadening access to our credit platform through new fund formats. In Chile, we have just launched VCCL, our first proprietary semi-liquid credit fund, an important milestone that brings our institutional credit capabilities to a wider client base in a very accessible format with higher liquidity.
Consistent with what we have discussed in previous quarters, this launch is aligned with our strategy of expanding into semi-liquid structures, a segment that has seen growing demand globally and that we believe represents an attractive long-term opportunity across the region.
We were pleased to see this thesis validated almost immediately, with the fund securing its first commitment in July, a strong early signal of the appetite we expect this format to unlock across the region.
In Brazil, our co-managed credit fund with Verde continued to attract growing interest from a diversified investor base, and we expect fundraising activity to accelerate in the third quarter.
More broadly, infrastructure credit remains one of the most compelling opportunities in the market, supported by resilient fundamentals, sustained demand for incentivized debentures and increasing investor interest in long-duration real asset strategies.
In this context, Credit Infra, our flagship infrastructure credit strategy, remains well positioned, with a portfolio focused on high-quality infrastructure assets across sectors such as renewable energy, transmission and sanitation, supported by an ESG framework. We continue to see positive investor engagement and expect additional commitments over the coming quarters.
Turning to Colombia, COPCO, our first private credit strategy in the country, focused on senior secured lending, is also advancing very well. At this point, we expect a closing to happen in the second half, with a few hundred million dollars in commitment, a sound fundraising performance given its first time fund nature.
Our next generation of private credit strategies in Peru also has been generating constructive discussions with local investors. We believe this momentum reflects the strength of our regional franchise, built over many years of local presence and relationships, and it is further evidenced by our ongoing engagement with development finance institutions.
Going back to COPCO, this product underlines exactly the rationale behind the Compass combination. The combination of leading commercial penetration across Latin America with Vinci's know-how and track record of structuring alternative products led to the development of a strategy that should be a meaningful contributor to the economics of our Colombian office. We expect to lean on this experience to develop additional Vinci Compass' alternative offerings across the region.
Taken together, these efforts highlight the breadth and increasing relevance of our credit platform across Latin America. With fundraising progressing across liquid, semi-liquid and closed-end strategies, a growing regional footprint and multiple products gaining traction simultaneously, we believe Credit continues to stand out as one of the most attractive and scalable growth drivers within Vinci Compass.
Stepping back, what this extensive pipeline truly reflects is the strength and ambition of the franchise we have built over the years. Across Private Equity, Real Assets, Equities, Credit and Global Solutions, we have created a uniquely diversified, integrated and connected platform, one that allows us to seize differentiated opportunities and to be a true partner to our clients across the full investment cycle.
We therefore enter the second half of the year with a remarkable pipeline and multiple initiatives already translating into results. And what excites us most is that this is just the start. The opportunities ahead of us are the direct result of years of investment in our people, capabilities, products and distribution, and as they continue to mature, we see an exceptionally attractive runway for growth.
The last point I would like to touch on is our GP commitments. At this point, we are starting to have visibility on initial capital returns from this first cycle of investments. We expect some of our closed end funds to start returning capital this year. This will not only allow the balance sheet to receive this capital back, restart earning short term returns and recycle it into new GP commitments, but also has the potential to impact favorably our realized IRE line.
We are very bullish on our prospects for the second half. With a strong product lineup, tailwinds from recent acquisitions, strong distributable earnings contribution from the Galeao transaction, and the beginning of more meaningful GP commitments capital returns cycle, we have a strong outlook for the remainder of the year.
With that, I will hand it over to Sergio to discuss the financial results.
Thank you, Bruno, and good evening to everyone. The second quarter of 2026 reflected continued progress in our business, with management fees growing and our FRE margin expanding year-over-year.
Let me start with our AUM. We ended June with BRL 361 billion in AUM, up 19% year-over-year and 4% quarter-over-quarter. The quarterly growth was driven by portfolio appreciation across Global IP&S and Credit and by the combination with BACS, partially offset by negative FX variation and by net outflows in our Third-Party Distribution business.
On this point, it is worth highlighting that, as Bruno detailed, a significant portion of the net outflows in Global IP&S corresponds to returned capital within our Third-Party Distribution Alternatives strategy, where fees had been charged upfront. As a result, this AUM no longer carries recurring fees, and the segment's management fee revenues should not be affected by these movements.
In the second quarter, management fees totaled BRL 252 million, up 29% year-over-year. The increase was driven by inorganic growth from the Verde and BACS acquisitions, contributing a full quarter and 1 month, respectively, as well as by continued organic growth, reflecting our successful fundraising efforts over the last 12 months.
Advisory fees totaled BRL 9 million in the quarter, a decrease of 65% year-over-year. As we have highlighted in prior calls, upfront fees in our Third-Party Distribution Alternatives business can vary significantly depending on the timing of commitments.
As Bruno mentioned, the current environment for global alternatives is characterized by longer capital-raising periods, which naturally lead investors to defer commitments toward later closings. As a result, we do not expect meaningful alternatives flows in the third quarter.
Our Corporate Advisory segment are also continued to reflect a slower environment for deal activity in the second quarter, amid still-elevated interest rates and election-related uncertainty in Brazil.
Looking ahead, we have a meaningful pipeline of opportunities for the second half of the year and we expect a gradual pickup in deal activity by year-end. At this point, we expect a stronger second half of the year than first half for the Corporate Advisory business. Altogether, fee-related revenues reached BRL 272 million in the quarter, up 17% year-over-year, and BRL 544 million in the first half of 2026, also up 17% year-over-year.
Turning to fee-related earnings, reaching BRL 89 million in the quarter, or BRL 1.35 per share, up 36% year-over-year on a nominal basis and 31% per share.
Our FRE margin expanded to 33%, an improvement of approximately 450 basis points compared to the second quarter of 2025. This progression was driven by the acquisition of Verde, 1 month of BACS and the operating leverage embedded in our platform as revenues grow faster than costs, as well as the cost-efficiency initiatives we implemented over the past year.
As we mentioned last quarter, the second quarter tends to carry higher seasonal costs, particularly related to third-party services, such as legal and consulting fees. As a result, the fluctuation in our FRE margin compared to the first quarter of 2026 was expected, as these seasonal costs materialized.
It's also worth noting that BACS contributed only 1 month of results this quarter. Beginning in the third quarter, we will benefit from its full-period contribution, which should further support management fee growth and reinforce the operating leverage of the business going forward.
Moving to performance-related earnings, or PRE, we recognized BRL 4 million in the second quarter, primarily across Credit, Equities and Global IP&S. In line with seasonality, both the second quarters of 2026 and 2025 benefited from performance fees generated by liquid funds across these strategies, though performance fees in Equities were slightly higher in the second quarter of 2025, reflecting stronger local stock market performance.
Realized GP investment income totaled BRL 9 million in the quarter, supported by REIT dividends and a Real Estate closed-end fund realization. This was partially offset by mark-to-market adjustments in Real Estate funds, which weighed on unrealized GP investment income and brought IRE to BRL 1 million in the period.
While IRE can fluctuate from quarter to quarter, we continue to view our proprietary commitments as an important long-term driver of value creation for Vinci Compass.
Turning to realized financial income, and consistent with the capital call dynamic we have been emphasizing around our IRE commitments, this line declined 63% year-over-year in the quarter, as capital calls reduced our cash position. We expect it to keep trending lower as our proprietary funds mature toward their realization cycle.
The minority interest line, introduced following the Verde transaction to reflect the portion of Verde's earnings attributable to the remaining 49.9% non-controlling interest, now also comprises the minority interest related to BACS.
Before turning to adjusted distributable earnings, a quick word on non-operational expenses. This quarter included some costs related to our M&A activities, mainly attributable to BACS.
As a reminder, these are added back in our adjusted distributable earnings, which provide a cleaner view of the recurring earnings power of the business. On that basis, Vinci Compass generated BRL 63 million in adjusted distributable earnings for the quarter, or BRL 0.96 per share, bringing our first half total to BRL 126 million, or BRL 1.92 per share.
As anticipated, the year-over-year comparison was primarily impacted by lower realized financial income and softer advisory and PRE contributions, even as FRE continued to grow meaningfully. The growth seen in our FRE reinforces the scalability of our platform, while the successful closing of the BACS combination and the recently announced Navi acquisition underscore the selective inorganic expansion that, together with organic growth and operating leverage, remains central to how we compound earnings over time.
As we look ahead to the second half of the year, we do so with fundraising visibility and additional earnings contribution expected from the acquisitions and initiatives already underway, leaving us well positioned to continue creating value for our shareholders.
With that, I would like to open the call for questions. Once again, thank you for joining us this evening. Operator, please proceed.
[Operator Instructions] The first question comes from Ricardo Buchpiguel with BTG Pactual.
2. Question Answer
I have 2 here on my side. So first, could you comment on what drove the acceleration on fee-related expenses this quarter, which grew around 5%? And could you help us understand how much of this is related to one-off investment specifically this quarter? And what should drive the recovery in FRE margins to get to the mid-30s that you guys reiterated?
And for my second question, how much of the BRL 5.7 billion in net outflow from IP&S was related to the capital returns you mentioned? And do you have a sense of how much of the capital returns are usually recirculated and should translate into future inflows in situations like this? Just wanting to understand, if this should be a pickup in fundraising already for the next quarter or the second half of the year or should be a longer cycle?
Okay. Ricardo, thank you for the question. This is Bruno. So in your first question, the second quarter tends to be seasonally stronger for us in terms of expenses. We have some of the payments that fall into the second quarter, some of the service payments mainly so service providers.
And in the second quarter, this time, as we continue to improve the productivity of the platform and try to see whether there is opportunity for us to improve the productivity, we had some cost reduction regarding to people as well this quarter, which we do not adjust as we had not adjusted in '25.
So in the second quarter, I would say probably those were the two most significant impacts, this severance costs that we had in the second quarter related to some cost reductions that we did in people and also the seasonality nature of expenses.
When we look at the forecast for the second half, as we said in the prepared remarks, we continue to see FRE margins in the mid-30s range. I think now as we also made a comment, there is also this tailwind from BACS consolidation, which will add to FRE margins as well. So at this point, we see the number solidly in the mid-30s, right? It could be actually a little bit better. But that's the number that we're sticking to at this time.
Regarding your second question, on the outflows, I would say approximately 1/3 of the outflows were due to capital returns from the alternative TPD funds. What we see in the industry in this case, our main clients for the line of products are in Chile and Mexico, right? Although, we also do have some exposure in Colombia, but the TPD markets, mainly the institutional investors in Chile and Mexico. These investors, they are almost all of the time fully allocated, right? They don't carry cash positions in their balance sheet. They're usually fully allocated.
So although, we might have some fluctuation from quarter-to-quarter, as we did have -- if you remember, I think we did have some fluctuation in the first quarter of '25. We had some redemptions also in the first quarter of '25 in the TPD Liquid side. We are seeing those redemption flows in the second quarter now of '26. But given that they are fully allocated by nature and the growth rate of both the Chilean AFPs and the Mexican AFORE are quite high. They are growing in the low to mid-teens now given the contribution factors.
Over time, the TPD line will be very positive for us. If you look at the organic growth that we had in TPD in AUM on a year-to-year basis, if you add inflows and depreciation, that organic growth is close to 20%. So we expect that to continue to be the case as these institutional investors continue to grow their basis. And we might have these fluctuations from quarter to the other, but the fundamentals for these 2 asset lines, both the TPD Liquids and the alternatives continue to be quite favorable for us.
And Ricardo, that's Alessandro. Just to add on top of Bruno said, just to complement these outflows. This is very normal, as Bruno said, like the AFPs and the authorities, we balance the portfolio, especially after the growth because of the markets going on the right direction. And the majority of these outflows that we saw came from the liquid side.
Of course, we have some capital returns, as Bruno mentioned, on the alternative side. But in terms of the outflows, they came from the liquid side that is like some of these investors in a way, if you may, taking profits of a very benign market. And to Bruno's point, they will come back to rebalance the portfolios and then you see the fluctuation when the markets go in one direction or the other.
The next question comes from Fernanda Sayao with JPMorgan.
My question is on the recent acquisition of BACS and Navi. I was wondering, if you could discuss how this should impact management fee revenues, FRE margins, expenses. Anything you can share would be very helpful. And you specifically mentioned that BACS has a higher margin. Would it be possible to quantify that?
Okay Fernanda, this is Bruno. So BACS, to give you some sense in June, the impact was about BRL 4 million in revenue in the month of June. So as we consolidate the numbers going forward, I think that's a good run rate in terms of the revenue base. The margin for BACS is higher than the average of the company. It's closer to 50%.
So if you do the math between the 2 and the FRE that we have, the positive impact to us should be around 50 basis points, more or less in terms of the tailwind for the second half.
I think the other thing that is important to mention is even pre-BACS, Argentina was about 40% above budget for us. So the flows are very strong in the business in Argentina. Hopefully, with BACS, we have even more of that impact. But that's also another interesting information that we're seeing Argentina be very strong.
In the case of Navi, we calculated -- it's a much smaller business, right? So we are talking about BRL 750 million AUM, although the fees are good, they are around 1%. And as we mentioned in the press release, we are not bringing anyone from the original team. So the Real Estate team is going to manage this money. So it's fully incremental to us.
So this margin is going to be very high, probably on the FRE line, probably, I mean, in the 60%, 70%, right, after taxes and some bonus provision. So this should be also interesting for the platform, but the size is not very big. So it shouldn't move the needle as BACS will, but it's going to help. It's going to be incremental to us as well.
The next question comes from William Barranjard with Itau BBA.
Also a follow-up on BACS acquisition and Argentina operation as a whole, right? On a more qualitative view, what are the integration milestones you expect for BACS, your operation in Argentina, in terms of products, cross-selling opportunities, the KPIs you think are relevant there? Overall, I wanted to grasp what is your view for Vinci Compass in Argentina?
And the second one, maybe quicker on inorganic growth, beyond BACS, Navi, how active is the M&A pipeline if M&A continues -- inorganic growth continues being one of the priorities ahead? Or are you shifting your focus to growth towards organic growth and working with all the suite of products you've already built in the past year since you've been listed? That's it.
Thank you for your question. It's Alessandro. So talking about BACS in a more qualitative way, as you mentioned, you know that the Argentine market is still in the early days of gaining more traction on the asset management side.
Our combination with BACS was a very, I'd say, good one in terms of not just about the products, but also about the channel of distribution. Our activity was more on the institutional side in BACS because of the relationship with Hipotecario. The liability side comes more from the retail/wealth management side.
So having said that, that was very, very synergic. We have been able to integrate smoothly. Of course, this is the merit of our team in Argentina that knew the partners of BACS for a long time and also our new partners, the Hipotecario Group has been a very good surprise in terms of the way that we have been integrating with them.
The market today is very concentrated. It's more like private -- sorry, public credit and fixed income in general. But we see a lot of opportunities to introduce more sophisticated and more specific and structured products to the Argentine market. So we are really very optimistic with the setup that we have, a very strong from our Argentine operation also together with Toronto BACS.
But we think there is a huge opportunity for asset management in Argentina as the market continues to improve and to require more structured products. So we think that's a market that we are very well positioned in a very good situation to take advantage of the trends that we believe will happen there.
Talking a little bit more to your second question about the M&A activity or inorganic versus organic growth. We continue to have a very strong pipeline of inorganic possibilities. As we have been repeating here, our main focus would be to grow inorganic if the opportunity arise outside Brazil. It's more on the other countries in Latin America to reinforce our capabilities on the local markets. But there is -- there are not so many opportunities, and it's very difficult to structure these deals, but we have a very strong pipeline on them.
And talking more about Brazilian opportunities, that's the case of Navi, we would be a little bit more opportunistic on that sense to look for more creative in terms of acquisitions because, as you know, the asset management market in Brazil is passing an adjustment. And for us has been very good because we have been consolidators of this market and continue to grow organically and also taking advantage of some opportunities.
But we should be very careful to understand the drivers for each of the opportunities that we have in our pipeline. So we will continue to focus on the organic growth, but being very selective in the inorganic opportunities. I don't know, if Bruno would like to add on top of that.
Yes. I think it was a good question from William to touch on a few additional points, which I think makes sense. As Alessandro said, right, M&A outside of Brazil, we are looking into those options to grow the alternative asset management base and in Brazil, options that complement the platform, right? And I think the Galeao inflow is going to increase our flexibility.
I think it's a point that I would like to make because we're going to receive virtual equity injection of about BRL 90 million to BRL 100 million in the second half, most likely in the fourth quarter, which will add flexibility when we analyze these opportunities. We're going to have dry powder to perhaps pursue things that we feel makes sense and that add value to the platform.
And the other thing that, I would like to mention, I mean, even with all of the deals that we did, I think the base that we have created over these last few years with the movements that we did is already yielding a lot of positive momentum in the business, right? So if you look at the organic growth rates in some of our verticals, if you look at -- I had mentioned already Global IP&S with almost 20% growth in AUM, real assets. The organic growth in AUM year-on-year in the second quarter was about 40%. Credit was about 30%.
And when you look at our FRE performance with no acquisitions, we had about high single-digit revenue growth, about flat expenses and FRE growth of 35%. So the FRE growth of the platform without M&A in the second quarter was more or less the same growth that we had with M&A.
So I think to that end, I think M&A continues to be a way for us to branch out and complement the platform. But I think the presence that we have across the region is already strong enough to sustain the organic growth to us and to be meaningful value creators to the business on a go-forward basis. So I think those points are points that I think are important that we make that the platform is already in itself without any additional M&A generating a lot of value and growing quite handsomely in the second quarter.
The next question comes from Tito Labarta with Goldman Sachs.
A couple of questions also just, I guess, on the AUM, right, very good growth in Credit IP&S, I mean, probably considering the rate environment, it makes a lot of sense. Do you think that sort of is where the growth is going to continue? What about some of the other lines that are not growing private equity continue to be fairly muted? Anything that could change that outlook there? And how much does the mix also impact your margin a bit to some extent? And also, because advisory was weak that also have a negative impact on the FRE margin?
Thank you, Tito for the question. So yes, so I mean, we have been talking about credit a lot. And I think obviously, the rate environment helps in Brazil, mostly, not the case of the other countries. Other countries, the rates are much smaller already than here.
But I think there is a lot of product momentum. I think the rates help in Brazil, but we have a lot of product momentum outside of Brazil. I think COPCO in that sense is a good example, right? We have the visibility from Carvalho, who is the lead person on Colombia for us about demand from institutional investors on the private debt side.
We went after capability to run a private credit product in Colombia, which we obviously didn't have at the time. And we are in line to have a closing of this fund in the third quarter of a few hundred million dollars. So as the case of COPCO, we have similar developments in other credit products outside of Brazil. And also in Brazil, right?
So in Brazil, we continue to see demand for new products. We actually approved a new product today in our product committee, which is a partnership with the bank where we distribute the product, which is a mix of 2 products that we have and could be BRL 1 billion product, I mean, in terms of the size of the distribution channel and what we see as potential. So I think not only the rate environment, obviously, in Brazil has a tailwind in the case of this segment, but also really product proliferation and the ability to launch new strategies across other countries in Latin America.
Regarding the Private Equity business, I think we are in a hiatus now in terms of fundraising. VCP IV is still within the investment cycle. So we are not in a position now to raise another VCP fund. We need to fully invest VCP IV before coming back to market.
And we are in the final, let's say, prelaunch stages of VIR V. VIR V is a fund that we expect to have a first close in the next several, I would say, at this point in time, probably the next several weeks. We already have aligned the anchor investors for that fund. So either in the third quarter or very early in the fourth quarter, we should have a first close for that fund. And then depending on how the VCP IV strategy performs in the next 2 quarters, we could have VCP V coming back to market later next year.
So it's more of a let's say, a life cycle issue in Private Equity. It doesn't necessarily have to do with demand. But we have -- we do have a private equity product coming online in the short term.
When you look at the growth components, I would say probably given that private equity is less strong at this time, you have the growth coming from real assets, real estate and IP&S, I would say probably would be net positive, very marginally net positive for us. I wouldn't say, it's a relevant impact.
And obviously, your last question, corporate advisory is very important for us for the FRE margin because the -- when we have results and revenues coming from corporate advisory, the leverage of that revenue is very high. So it really helps us dilute the fixed cost base of the company.
So the first half in that sense, we had, I think, was something around 550 or 540 basis points of margin expansion in the first half. And that was without corporate advisory because the first half corporate advisory number was very small.
For the second half, we expect that number to improve. What we have now in terms of visibility is for low teens million of revenue for the second half. So that also goes into, I think, was Ricardo's earlier question regarding the visibility of the FRE margin.
If we do have that, corporate advisory revenue kicking in, in the second half, and I would say the visibility at this point that we have for a big chunk of that revenue is quite high. That will also help us to drive that margin comfortably into the mid-30s or eventually a little bit higher that we are seeing when we look at the models for the second half. But certainly, not having corporate advisory is something that hurts the cost dilution of the platform.
Just to add on top of what Bruno said, just to add a very quick comment. Summarizing what Bruno said, I see to your question, 2 main products that we probably will see developing in short term on the credit side, that's the COPCO in Colombia and also a final closing to the end of the year probably or further development that's SPS IV, okay?
And also, we probably will see a final closing of the Lacan IV. So we have been able, at the same time that we see the growth coming from IP&S and the TPD side and et cetera. We are seeing very interesting spots of capital falling into our strategies, both in Credit, more structured ones and also in Real Assets. As Bruno said, what we see next for private equity is VIR V that we'll see first closing very soon and wait a little bit more to the flagship VSP V when, of course, the fourth vintage is already invested.
I would like to turn the floor back to Mr. Alessandro Horta for the closing remarks. Please, Mr. Horta, you can proceed.
Thank you very much again for your support, your interest. We are very, very optimistic that we have been able to deliver even against a backdrop of high interest rates, especially in Brazil. We think that soon we'll have part of the, I would say, volatility coming from the political side that we already got results from Chile, Colombia and Peru recently. We will probably in our next meeting here for the third quarter results already define it election in Brazil, too.
So even with -- against this last month's political expectations and volatility from all of these countries, we have been able to continue to deliver growth and even with the high interest rate environment, especially in Brazil. So we are very optimistic moving forward. We are very comfortable within VR platform.
So I'd like to thank you all again, and have a good night to you. Thank you.
This does conclude today's presentation. We thank you all for your participation, and wish you a very good evening.
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q2 2026 Earnings Call
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q1 2026 Earnings Call
1. Management Discussion
Good afternoon, and welcome to Vinci Compass' First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call will be recorded.
I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead, Anna.
Thank you, and good evening, everyone. Joining us today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, President of Finance and Operations; and Sergio Passos, Chief Financial Officer. Earlier today, we issued a press release, slide presentation and our financial statements for the first quarter 2026, which are available on our website at ir.vincicompass.com.
I'd like to remind you that today's call may include forward-looking statements, which are uncertain outside of the firm's control and may differ from actual results materially. We do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our 20-F. We will also refer to certain non-GAAP measures, and you'll find reconciliations in the release. Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Compass fund.
On results for the first quarter of 2026, Vinci Compass generated fee-related earnings of BRL 96.3 million or BRL 1.47 per share, FRE margin of 35.4% and adjusted distributable earnings of BRL 62.2 million or BRL 0.95 per share. We declared a quarterly dividend of $0.17 per common share, payable on June 8 to shareholders of record as of May 25.
With that, I'll turn the call over to Alessandro.
Thank you, Anna, and good evening, everyone. Thank you for joining us today. Before I turn to our quarterly performance, I would like to highlight some meaningful developments that occurred after the end of the quarter. As you know, we are diligently executing on the strategic priorities we outlined during our Investor Day, including expanding our footprint in key Latin America markets and strengthening local distribution capabilities. The start of 2026 already reflects the steady and consistent progress across each of these dimensions.
We announced in April a strategic combination with BACS Asset Management to build a scaled asset management platform in Argentina by combining our existing asset management practice with BACS' extensive corporate and retail distribution network. Argentina is undergoing a rapid transformation of its financial system, marked by growing demand for mutual funds, money market products, dollar-based strategies and alternative investments. We see the country as one of the most attractive growth opportunities for asset management in the region, supported by structural shifts in savings behavior and an increasing need for scale and efficiency. This transaction positions us for accelerated growth in a rapidly consolidating local asset management market.
A further strategic achievement has been the integration with Verde, which is progressing extremely well, with a strong cultural fit and an impressive degree of complementarity that have already proven to be invaluable. We are seeing tangible benefits from the strong collaboration between the teams. The first product we launched together, [ VIVE FI-Infra ], is gaining traction, with increasing client engagement and encouraging feedback from the local investment community. While the collaboration between the teams has only just begun, the power of expanding our solutions set by joining forces has already proven to be even greater than we initially anticipated.
Moreover, I would like to highlight a recent development within our infrastructure strategy, which we discussed in greater detail in our 2025 Form 20-F and is expected to have an impact on our results in 2026. As we disclosed in the past, our Infrastructure team had reached an agreement in 2025 to acquire an interest in the holding company owned by Changi, that held a stake, alongside Infraero, in the concessionaire of the Rio de Janeiro International Airport, Galeão. Following the outcome of the concession auction in March of this year, in which Aena was declared the winning bidder, the holding company, that a fund managed by Vinci Compass had an interest, became entitled to receive an indemnification-related amount. Vinci Compass is then expected to receive a portion of this indemnification, which we estimate to be of approximately BRL 100 million, already net of taxes and associated expenses. This outcome reflects the team's activities undertaken prior to the auction, including the Infrastructure team's involvement in the negotiation and structuring the new regulatory model, alongside general expenses incurred. We expect this amount to positively impact our distributable earnings during the third or fourth quarter of 2026.
In the Private Equity segment, we are also pleased to share exciting news. Last week, we announced the conclusion of the exit of portfolio company Mundo do Cabeleireiro from the Nordeste III fund within the VIR strategy. Since the fund's investment in 2018, Mundo do Cabeleireiro has strengthened its market presence, becoming a leading player in cosmetics retail in the North and Northeast regions and expanding significantly into São Paulo. This represents the fifth exit among 6 investments from Nordeste III, highlighting the Private Equity team's proven ability to drive value creation within portfolio companies and execute successful divestments, generating strong DPIs. This accomplishment is instrumental in supporting the success of VIR V, which was recently launched and is currently in its fundraising phase, with the first closing expected in the next few quarters.
Shifting to the macro environment, overall sentiment towards Latin America remains very constructive. As investors seek to diversify away from U.S.-centric exposures, Latin America, as a geopolitically neutral and increasingly stable region, is well positioned to attract meaningful inflows. The region benefits from strong diplomatic ties across the West and East, with no significant regional conflicts, which further enhances its appeal as a strategic allocation. Although local elections and oil price fluctuations remain sources of uncertainty, with still limited clarity on how fiscal policies and political leadership may evolve in Brazil, Colombia and Peru, recent market dynamics have been encouraging. The resiliency of the Brazilian real, for example, has highlighted growing interest from international investors, particularly during the IMF meetings, positioning Brazil as one of the countries better insulated from oil price shocks and supported by an energy surplus.
Leveraging this momentum, we held our annual global investment conferences and seminars across Chile, Brazil, Argentina and Uruguay with more than 1,500 clients and investors, including pension funds, insurance companies, intermediaries, single-family offices and high net worth individuals. The scale and reputation of our platform were further reinforced by the quality of the agenda, with over 20 speakers, including a former president of Colombia, a global geopolitical strategist and leading regional macroeconomic consultants.
Translating these trends to our AUM, during the first quarter, despite global macroeconomic uncertainty around private credit and a historically quieter quarter for the industry, we experienced strong capital formation across most segments, particularly in our TPD business and credit strategies, with contributions across different countries and products, including private credit in Peru and Brazil, public credit in Argentina, and our LatAm corporates hard currency strategy. We continue to see strong engagement in our proprietary private credit funds from sophisticated investors, and the strategy remains a core pillar of our growth agenda with new fund launches in Chile and Colombia, complementing existing funds currently in fundraising in Brazil and Peru.
Turning to a brief snapshot of our financial performance, the quarter benefited from the full consolidation of Verde, which contributed to stronger management fees, while we continued to fundraise and exercise cost discipline across the platform. As a result, we delivered the highest quarterly FRE in our history, totaling BRL 96 million with an FRE margin of over 35%. The combination of selective inorganic expansion, organic growth, and operating leverage remains central to our ability to compound fee-related earnings over the short, medium and long term.
Our FRE remains the core of our business and is the representation of our growth over the years and the operating leverage we have as we continue to raise capital across all our segments. We truly believe this quarter underlines the power of our platform, especially when looking into FRE numbers. In comparison, distributable earnings for us still represent some volatility from quarter to quarter, as we have impacts from performance and IRE mainly, besides the recurring FRE base.
It's important to highlight and remember that we have BRL 868 million in assets allocated to proprietary long-term funds, which, with the exception of a smaller allocation to REITS, are not contributing to cash earnings at this moment. If this amount was yielding close to CDI, we would have additional BRL 21 million in our distributable earnings on a quarterly basis.
Although our FRE has shown continued growth and reflect the value we have been creating in our business over the years, our balance sheet value is still not fully reflected in our results, and by consequence, constitute somewhat of a hidden asset in our business. We expect the balance sheet to start realizing substantial value on distributable earnings in coming years as capital starts to be distributed from IRE Commitment funds. In the last twelve months, for instance, our total IRE was BRL 65 million, with BRL 35 million of this total only impacting accounting net earnings. As capital starts flowing back, these unrealized gains will impact distributable earnings in a meaningful way.
To conclude, we believe Vinci Compass enters the remainder of 2026 from a position of strength. We are executing against the priorities outlined at our Investor Day by strengthening our regional presence, scaling high-growth strategies and maintaining disciplined capital allocation. At the same time, our broadening footprint, deep local origination capabilities and rigorous underwriting standards provide a strong foundation to navigate a backdrop of heightened external volatility. With a diversified platform, expanding distribution capabilities and structural tailwinds supporting alternatives in Latin America, we see a compelling opportunity set ahead. More importantly, we believe we have the platform, talent and execution capabilities required to capture it.
Thank you again for joining us today. With that, I will turn the call over to Bruno.
Thank you, Alessandro, and good evening, everyone. Against a global backdrop marked by intense headlines and market volatility surrounding the AI revolution, I would like to briefly address how artificial intelligence is reshaping Vinci Compass' operations and why we believe this will be a durable source of competitive advantage for the firm.
We are leveraging AI decisively from an operational and user perspective. Over the past 12 months, AI adoption across Vinci Compass has accelerated materially on 2 fronts: individual productivity and collective intelligence. At the individual level, more than 70% of our employees now use AI on a daily or weekly basis, and teams have created over 170 custom AI agents, tailored to their own workflows. This underscores that AI is no longer experimental. It is embedded in how the firm operates. We have deployed 7 enterprise-grade AI platforms, providing our employees with a secure and curated toolkit that actively supports financial analysis, modeling and process automation, while at the same time, taking care of governance and data security.
At the firm-wide level, we believe the greatest long-term impact will come from building proprietary institutional intelligence. We have developed a unified data platform, named Datalab, which centralizes KPIs, dashboards and analytics across all of our business units, as well as across many of our portfolio companies. This enables us to systematically transform institutional knowledge into a proprietary assets.
We're seeing substantial gains in internal development capabilities with AI-first programming within the data science and IT development teams. We have started to roll out systems that have been 100% AI coded, and the productivity gains on this development process have been very significant. In some cases, projects that would have taken several months are now being developed and put into work in weeks, if not days. As we continue to scale these programming initiatives, we should be able to more quickly address business bottlenecks and improve efficiency and productivity.
Another significant effort to increase the AI-first mentality across the platform has been the launch of the AI Ambassadors program, embedding AI expertise directly within business teams. This decentralized model is capital-efficient, execution-oriented and keeps innovation close to the decision-making. This program not only reinforces the cultural message internally, but also fosters accelerated adoption and solution building, while centralizing a firm-wide library of agents, which can be used by other groups across the firm. We are also scaling up the collaboration with companies in our funds, with increased integration and sharing of best practices that can be implemented across the portfolio.
And finally, our strategic partnership with Ares also allows us to have access to what is happening in the U.S. alts industry regarding not only in-house implementation, but also interesting investment themes that can be found across LatAm, such as digital infrastructure and power generation, 2 investment themes at the core of the AI investment cycle. Our people are more innovative than ever, and we believe Vinci Compass is exceptionally well positioned for an increasingly AI-driven future.
Turning now to AUM and fundraising efforts. We ended the first quarter with BRL 347 billion in assets under management. Excluding FX impacts, this represents 22% growth over the last 12 months and 2% growth quarter-over-quarter. In U.S. dollars, our AUM reached $66 billion in the quarter, representing a 25% growth year-over-year and 3% quarter-over-quarter.
Over the last 12 months, Vinci Compass generated BRL 52 billion of capital formation and appreciation, including BRL 7 billion in the first quarter. This expansion reflects consistent capital formation across Global IP&S, Credit and Real Assets, as well as portfolio appreciation and the acquisition of Verde.
Starting with Global IP&S, the business continued to demonstrate the strength of our distribution platform and regional footprint. We remain the largest third-party distributor of offshore mutual funds to Chilean pension funds. Despite global market headwinds, we generated inflows in TPD Liquid and TPD Alternative, primarily into Asian funds, reflecting investors' ongoing diversification away from U.S.-centric allocations. These inflows were partially offset by capital returns from TPD Alternative and the VSP strategy.
Within multi-strategy, we saw early signs of stabilization, following several quarters of outflows with initial inflows from selected clients, pointing to improved momentum. While March was challenging for the industry, the Verde flagship fund continued to deliver strong performance, ranking among the top funds across several windows. Client engagement has increased meaningfully, particularly from multifamily offices and retail platforms, which we expect to translate into positive flows over coming quarters. In addition, we believe there is opportunity to raise international capital into our multi-strategy funds. Today, the amount of international capital in this strategy is immaterial, and we have been hosting LP discussions that have strong promise.
In Equities, we are seeing encouraging traction in our UCITS platform. Both UCITS Brazil and UCITS LatAm, launched late last year, received initial inflows from intermediaries across LatAm countries, reflecting the impact of sustained distribution efforts.
Turning to one of the platform's most dynamic areas. Credit AUM reached BRL 37 billion, supported by BRL 2 billion in capital formation and appreciation during the quarter. We continue to advance both our local-to-local and cross-border strategies. The co-managed credit fund with Verde is attracting increasing demand, while Brazilian infrastructure credit continues to draw strong investor interest. In SPS IV, investor interest remains strong. While commitments this quarter were modest, we expect increased momentum closer to the fund's final closing in the second half of the year.
Shifting to Real Assets. We made solid progress across Forestry and Real Estate. Within Lacan IV, we [ structured ] commitments from European institutional investors, including DFIs, with additional investors currently in due diligence, a clear signal of growing global confidence. This is the first Forestry fund raised by Vinci Compass' distribution teams, and the feedback has been overwhelmingly positive.
In Real Estate, we completed the first close of VIOL, our logistics opportunity fund, with additional closings expected by the end of the year. We also remain attentive to potential market reopening, following SELIC cuts, which could create supportive backdrop for REIT fundraising.
The achievements of the past 12 months provide a strong foundation for the remainder of 2026. Looking ahead, in Credit, as Alessandro mentioned, we are particularly excited about the strategic combination with BACS, expected to close in the second quarter. By bringing together strong money market and transactional capabilities with value-added and longer-term duration investment strategies, the combined platform will offer a highly complementary product suite and is expected to approximately double Vinci Compass' asset management business in Argentina, reaching close to $1.6 billion in combined assets under management.
Through this transaction, Vinci Compass will gain access to BACS' and Banco Hipotecario's extensive corporate and retail distribution network, significantly strengthening our local distribution capabilities in Argentina, while driving operational efficiencies and broadening the range of solutions available to clients.
Beyond Argentina, we continue to advance a robust fundraising agenda across the region. COPCO, CHILPCO II and MAV IV are currently on roadshow and have been receiving constructive feedback from local investors. We are also launching MAV Farmtech FIAGRO, a strategy designed to invest up to 100% of its net equity in senior shares of FIAGROs that anticipate receivables from rural producers, originated through pre-authorized dealership channels.
Our liquid credit offering in Chile also remains comprehensive with funds such as FM Liquidez, FM Protección, FM Deuda Chilena and FM Deuda Plus FI currently in fundraising, spanning different liquidity and duration profiles. These strategies provide clients with diversified exposure across local and foreign debt instruments, sovereign and corporate bonds and private debt, allowing us to address a wide range of risk-return objectives.
Rounding out the fundraising pipeline, within Global IP&S, our third-party distribution platform remains well positioned, supported by the depth of our client coverage, the quality of the managers we represent and the increasing sophistication of Latin American investors. We are also broadening our product suite through the launch of dedicated strategies such as the VC Crypto Fund, focused on digital assets and cryptocurrencies, further expanding the range of investment solutions available to our clients.
Overall, we entered 2026 from a position of strength with clear visibility, a robust fundraising pipeline and multiple growth levers already underway. The combination of an expanded distribution footprint, a comprehensive product platform and continued operation discipline gives us confidence in our ability to sustain our growth trajectory and continue compounding value over time.
With that, I'll hand it over to Sergio to discuss the financial results.
Thank you, Bruno, and good evening to everyone. The first quarter 2026 was another solid period for Vinci Compass. Let me start by walking through our revenues. Management fees totaled BRL 245 million in the first quarter 2026, up 25% year-over-year, mostly driven by the full quarter contribution from Verde, combined with continued organic growth across Credit and Global IP&S, reflecting our strong fundraising success over the last 12 months.
Advisory fees were BRL 16 million, a decrease of 35% compared to the first quarter 2025. As anticipated, the environment for deal activity remains slow with the high interest rates and elections uncertainty in Brazil contributing to softer results from our Corporate Advisory segment. In addition, as highlighted in prior calls, upfront fees in our third-party distribution alternative business can vary significantly, depending on the timing of commitments.
Altogether, fee-related revenues reached BRL 272 million in the first quarter 2026, up 17% year-over-year, and BRL 990 million over the last 12 months, up 44% year-over-year.
Turning to fee-related earnings. We delivered a record BRL 96 million in the quarter, or BRL 1.47 per share, up 47% year-over-year on a nominal basis and 42% per share. Our FRE margin expanded to 35.4% in the quarter. This improvement was driven by Verde's full quarter contribution, operating leverage on revenue growth and ongoing cost efficiency we began last year. It's also worth noting that the first quarter tends to benefit from lower seasonal costs such as auditing fees. We expect some fluctuation in margin in future quarters as these seasonal costs materialize.
Moving to performance-related earnings, or PRE. We recognized BRL 2 million in the first quarter '26, primarily in Equities and Global IP&S. This result is in line with seasonality, as our liquid funds generally only recognize performance in the second and fourth quarters and most of our closed-end funds have not yet entered their realization cycle. Over the last 12 months, PRE totaled BRL 13 million, down 50% year-over-year, given that the prior period included FIP Infra Transmissão and one-off strong contributions from opportunistic funds in Argentina and Peru in 2024. In contrast, PRE this period was more normalized and concentrated in Global IP&S, Credit and Equities.
Investment-related earnings, or IRE, were BRL 4 million in the first quarter 2026, with BRL 6 million realized and an unrealized loss of BRL 3 million, reflecting mark-to-market impacts on a listed REIT that offset gains in other funds. Over the last 12 months, IRE totaled BRL 65 million, a significant increase year-over-year, reinforcing our long-term thesis and the growth potential from IRE commitments as a value compound driver for Vinci Compass.
Before moving to distributable earnings, I would like to remind you that, as we deploy cash into IRE commitments, there is a medium-term negative impact on distributable earnings since it no longer generates short-term financial income after capital calls. At Investor Day, we presented in greater detail a schedule for capital calls over the coming years with BRL 300 million to BRL 400 million expected to be called by year-end 2026 and the remaining commitments by 2029. So far, we have called about BRL 140 million of this guided range. Additionally, bonus compensation is paid annually in January, further reducing our cash position in the quarter. As a result, realized gains from financial income declined 35% year-over-year and are expected to keep trending lower as we approach the BRL 300 million to BRL 400 million range and funds mature to the realization cycle.
Bringing everything together, Vinci Compass generated BRL 62 million or BRL 0.95 per share in adjusted distributable earnings for the quarter, remaining stable year-over-year despite the higher FRE due to the decrease in realized financial income and lower PRE and IRE, as previously discussed. For the last 12 months, adjusted distributable earnings totaled BRL 292 million or BRL 4.55 per share, up 16% on a nominal basis and 5% per share year-over-year.
This quarter's results underscore Vinci Compass' disciplined approach to growth and capital allocation, leaving us well positioned for continued progress throughout 2026. As we look ahead, the fundamentals of our business remain robust: healthy fundraising, operational leverage, successful integration of acquisitions and disciplined capital management, all supporting our sustainable growth trajectory.
With that, I would like to open the call for questions. Once again, thank you for joining us this evening. Operator, please proceed.
[Operator Instructions] Our first question comes from Ricardo Buchpiguel from BTG Pactual.
2. Question Answer
I wanted to ask about 2 topics here. Can you please provide more details on how the BACS deal should help -- should impact your DE per share right away? And how can we expect the contribution to evolve over the following years? Any comments you can give us in terms of low-hanging fruits here and the main challenges for the acquisition will also be very helpful.
And another thing I wanted to ask is that we saw a good improvement in equity net inflows this quarter and would also be interesting if you could go over whether this could mark like equity inflows returning to positive territory. Or there was anything more specific on this quarter and we should still expect more softer print in the rest of the year?
Okay. Ricardo, this is Bruno speaking. Thank you for being with us today. So BACS, the math is the following. We expect the transaction to be probably high-single-digit accretive on a local basis. So, to Vinci as a whole, the impact will be very small. So I wouldn't expect any substantial change because it's a high-single-digit impact in the Argentina numbers. When you translate that into the whole Vinci numbers, the impact shouldn't be very high.
What we are very excited about is going forward, right? We are partnering with a group in Argentina that is a very relevant group. So BACS is owned by -- at the ultimate level by Banco Hipotecario, which is a very well-known retail banking institution in Argentina. And we believe that there is very strong complementarity on the platforms regarding products and regarding distribution channels. So the idea is that combining our 2 platforms and the complementarity that we see, it is very likely that we'll be able to achieve stronger growth rates looking forward. The team locally is very excited about this. So I would say more on a positioning for medium, long term than any like very relevant impact on a company-wide basis in the short term.
In regards to your second point, the inflows in equities, this is a preparation that we started to do late last year. So we launched 2 products in the UCITS -- as UCITS platform products, one in Brazil and one for our Latin American strategy -- one for the Brazilian strategy and one for the Latin American strategy. And both of these products are starting to see inflows. So this is something that we had mapped in the past with some of our LPs that there was interest to deploy capital in these strategies. The track record of both strategies has been very strong. So in Brazil, we continue to do very well. And the LatAm fund is actually doing very well. We had a very good year last year in the Chilean part of the portfolio. So those 2 funds are starting to see inflows. And hopefully, this is the -- as we discussed in the Investor Day, this will be the biggest growth driver for the equities platform going forward. We feel that the -- our market share -- the theoretical market share that we should have in these 2 funds, these 2 strategies point to very substantial fundraising potential. So it's clearly the biggest bet that we have in growing the equities platform for the next few quarters.
And Ricardo, it's Alessandro speaking here. Just complementing what Bruno said, as he said, we have a very strong performance in the majority of our equity strategies. And until now, what we have been seeing in terms of flows, as you know very well, has been foreigners through [ the ETFs ]. But we start to see a lot of interest in more active managed equity mandates in our funds. So we are expecting, as the markets improve, to see more flows for this product moving forward. And the local part of these flows didn't start yet. So this is more like international allocation for the funds. But as soon as we see the market converging for more allocation in equities locally that are -- let's say, this allocation today is in the low point historically, we could see even more stronger flows moving forward.
Our next question comes from William Barranjard from Itaú BBA.
I have 2 questions here, guys. I would like to go again back to Argentina, trying to understand future products. What do you expect to develop there, if it's international money going into the region, maybe for infra credit and -- or if it's the opposite flow of local money going outside to the other regions of LatAm?
And also, now focusing on the corporate advisory, right? You commented that given the elections and the still high SELIC rate, things are not doing that well there. So it means that you don't expect anything to accelerate there or maybe at some point in the year, things should improve? I wanted to get your overall picture for this segment.
Thank you, William. I'll get the first portion of your question. It's Alessandro here. Talking about Argentina, I think the main, I would say, target in the short term for our transaction with BACS will be to capture more flows locally, okay? Because as you know very well, the market in Argentina is still very focused on more liquid solutions. And together with BACS, that not just brings some intelligence on the asset management side, but also a very strong distribution channel that is very complementary of us. We are more on the institutional side, and they are more on the corporate and retail side.
But moving forward, one of the main reasons of this partnership is really attracting money for investing in more alternative type of investments being private credit, equity, real estate and also infrastructure. And in this specific, I would say, universe of alternatives, we believe that we will see both money coming from local investors, but also we will be able to attract international investors for these opportunities, especially in the more long-term horizon type of investments like infrastructure, private equity and so on.
William, as for Corporate Advisory, at the time being, we continue to see a slow pipeline development in the second quarter. So, as we go through the second quarter here, numbers continue to be slow. I think there are a few things that we are working on for the rest of the year. There is optimism with the pipeline that we have, which is relevant, that we could have more material revenue contribution still in 2026 at some point in the second half. And the second point is that we are working to develop this vertical also outside of Brazil. So we are looking at opportunities to deploy this expertise that we have in other markets, so I would say, mainly at this point in time, in the south part of Latin America.
So we have been discussing with some of our offices how to potentially start this project in other countries. So, that would be the priorities for -- those will be the priorities for Corporate Advisory at this point: so continue to work on the pipeline to potentially have a better second half of the year as the pipeline still looks strong on a total size, and also start looking at opportunities to create opportunities to internationalize the Corporate Advisory segment to other Latin American markets.
Our next question comes from Lindsey Shema from Goldman Sachs.
Maybe taking a step back and thinking more broadly, as we get closer to elections in Brazil, could you just kind of talk about potential outcomes and what they would mean?
And then, my second question is, we've been talking a lot about Argentina, but what other regions are you excited about? What other products are you excited about? And then, what other regions and products do you think are maybe more topics for M&A and you still need to build out your capabilities in?
So Lindsey, it's Alessandro. I could start with the first question regarding elections in Brazil. I think personally that today, it's very difficult to have a view about the outcome of the election for sure. It's clear that. But we are not really very worried about the outcome of the election. I think if we have a more pro-market, I would say, outcome, probably the market could be a little bit more positive. But in any way, we have [ either ] incumbent or someone with a [ speech more ] for market so far. So we are really not expecting a big movement either one direction or another, especially if we have the reelection of the incumbent. In a way, we believe that these elections could be an opportunity for the country, but still difficult to say that the reaction of the market, depending on the outcome, since the probability today is very -- due to the polls, it's very uncertain, okay? So I would say that we do not -- we are not worried about the -- that's the final message, with the outcome of the elections.
On your second question, and I would like Bruno to jump in also, I think after Argentina, we saw an opportunity to really have a complementary, I'd say, addition to our presence there without having to invest -- have to invest money to get this probability -- sorry, this probability of really growing our business there. So we have been able to make a deal that's very, very accretive without running so much risk.
Regarding the rest of Latin America, we continue to believe that private credit is one of the main asset classes to grow both from global to local dimension, but also local to local. Still in the early days in countries like Colombia, in countries like Mexico, where we are really advancing in this specific vertical. But also, we are seeing a lot of opportunities in the infrastructure space. So one thing that we are looking more and more is the infrastructure opportunity in Latin America as a whole. Of course, Brazil will continue to be the main market, but we are seeing a lot of opportunity in other countries, too.
Yes. I think just to complement Alessandro's second point, in the infra side, I think he touched that in his answer. I think we are starting to prepare to roll out local-to-local products in Infra and Real Estate, which I think is a couple of interesting developments, starting with those 2 verticals in Chile initially. And the other point, just to wrap up the conversation, is the feedback that we have been getting from our global LPs. So interest for LatAm has continued to improve.
We mentioned in the prepared remarks, the demand for LatAm, for instance, has been very, very strong from European LPs, I would say, mainly. But we are seeing interest from U.S. LPs into LatAm infra. We're seeing interest all around for SPS, which is still fundraising. Also the VIR V pre-close is looking very, very good. I think most of the LPs are very satisfied with the performance of the fourth fund, and a lot of the international ones have indicated to us that they continue to be interested in being engaged in the strategy. So I think the overall sentiment towards Latin America continues to improve, and that creates an urgency on our side to build these Latin American products. Like [ Alessandro said ], I think infra is a product that we see that there's really a lot of interest. But I would say that, that's true also for other of our verticals. So I think overall, those would be the 2 adds that I would make to Alessandro's comments.
Going ahead, our last question comes from Guilherme Grespan from JPMorgan.
My question is actually more straightforward just on taxes. I thought realized taxes was a little bit higher than usual, to be honest. The implied effective tax rate in my math is something close to 26%. You used to run more or less around mid-teens. Just want to understand what is the moving part here of taxes, and what we should expect going forward?
Okay, Guilherme, thanks for the question. There are a couple of effects this quarter. One is the gain that we had on the movement of the contingency payments, the earn-out payments. This quarter, we had a BRL 43 million accounting gain because of the drop of the stock price and the corresponding gain in the reduction of the liability of this account. So this created an excess income provision this quarter, which was the opposite of what we saw in the fourth quarter, right? In the fourth quarter, we saw the opposite impact. We had a loss, and this reduced the tax bracket in the fourth quarter.
And the other impact is the Verde consolidation. So Verde, in the fourth quarter, we had 1 month. And in the first quarter, we had the full quarter. Verde is a real tax regime company. So the expected run rate of income tax for us, if you normalize for the earn-out effect, you're right, we used to be around 17%, 18%. This number now is going to go in the low-20s. So probably 22% -- 21%, 22% is going to be the expected number on a go-forward basis, mainly because of the consolidation of Verde in the results.
The question-and-answer session is now concluded. I would like to turn the floor back to Mr. Alessandro Horta for the closing remarks. Please, Mr. Horta, you can proceed.
So I'd like to thank you all for your continued support one more time. As we highlighted during this call, we are pretty much optimistic with our platform. We set up a lot of different avenues for growth. Of course, we are seeing the market change is slightly in the interest for the region, and that's probably, moving forward, will help us in terms of fundraising, and of course, in a [ well condition ] of deploying capital. There is, I would say, a systematic [ scarce ] of capital in the region. So we are able to really, moving forward, to deploy this capital in a very efficient way. So thank you all, and a good evening to everybody.
This does conclude today's presentation. We thank you all for participating and wish you have a very good evening.
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q1 2026 Earnings Call
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q4 2025 Earnings Call
1. Management Discussion
Good afternoon, and welcome to Vinci Compass Fourth Quarter and Full Year 2025 Results Conference Call. [Operator Instructions] As a reminder, this call will be recorded.
I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead, Anna.
Thank you, and good evening, everyone. Joining us today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, President of Finance and Operations; and Sergio Passos, Chief Financial Officer.
Earlier today, we issued a press release, slide presentation and our financial statements for the quarter and for the full year 2025, which are available on our website at ir.vincicompass.com.
I'd like to remind you that today's call may include forward-looking statements, which are uncertain and outside of the firm's control and may differ from actual results materially. We do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our 20-F.
We will also refer to certain non-GAAP measures, and you'll find reconciliations in the release. Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Compass fund.
On results for the fourth quarter 2025, Vinci Compass generated fee-related earnings of BRL 80.4 million or BRL 1.23 per share, FRE margin of 32.6% and adjusted distributable earnings of BRL 81.3 million or BRL 1.24 per share. For full year numbers, Vinci Compass posted fee-related earnings of BRL 288.4 million or BRL 4.52 per share, FRE margin of 30.4% and adjusted distributable earnings of BRL 292.4 million or BRL 4.58 per share.
We declared a quarterly dividend of $0.17 on the dollar per common share payable on April 2 to shareholders of record as of March 19.
With that, I'll turn the call over to Alessandro.
Thank you, Anna. Good evening, and thank you all for joining our call. We are delighted to be with you today as we present our results for the fourth quarter and full year 2025. As you all know, 2025 marked a pivotal chapter in our history. It was our first full year operating as a pan-regional platform following our business combination with Compass. I'm deeply proud of all the teams across our countries in Latin America who have worked tremendously to extract the most value from our merger.
In 2025, we were able to, right from the start, position our company as a Latin America platform, working together across all teams to drive synergies across products and commercial teams. In 2025, we also hosted our first Investor Day at Vinci Compass with the heads of all our main strategies present. We presented our vision for the next cycle and how and why we are well positioned to capture the growth in alternatives in Latin America.
On the same day as our Investor Day, we also announced the acquisition of Verde, which closed in December and added approximately BRL 16 billion in AUM. As we did with Compass, we were able to start working on revenue synergies with the Verde team from the start. We are pleased to share that we have launched the first product born out of the collaboration between the 2 companies. The Vinci Verde FE Infra or VVFE Infra combines Vinci Compass' credit expertise with Verde's well-established multi-strategy track record as co-manager. The feedback from the local community has been great, and we are already seeing strong demand and growing interest from investors, especially in the intermediaries channel at this point.
We view this launch as a clear demonstration of the strategic rationale behind the combination, expanding our solutions set by joining forces, leveraging Verde's team's outstanding track record in multi-strategy funds and strong brand strength across intermediary channels and deepening synergies between the 2 firms. The collaboration between the teams has just started, and we are very excited about what's ahead.
Having Luis Stuhlberger and the Verde team as partners is one of the proudest achievements of 2025 and will be an extremely fruitful partnership for the company in 2026 and coming years.
Shifting to a brief overview of our fourth quarter fundraising. We ended the year with BRL 354 billion in total AUM, reflecting not only the impact of inorganic growth, but also strong capital formation and portfolio appreciation across our strategies. Only during this quarter, we had BRL 14 billion in capital formation and appreciation favorably impacting our AUM. For the full year, this adds up to BRL 42 billion, representing a 13% year-over-year growth.
Our fundraising momentum remained robust across the Global IP&S and Credit segments. Infrastructure credit specifically continues to demonstrate strong long-term momentum across multiple vehicles and client segments. The tax-exempt nature of several of these assets creates compelling investment opportunities, and we believe Vinci Compass has established itself as a reference manager in this space.
The positioning was further reinforced in January 2026 when we won a new BNDES tender process. We are very proud of this achievement, which marks the third time Brazil's Development Bank has appointed Vinci Compass to manage a long-term private credit fund focused on sustainable finance and incorporating strict ESG guidelines.
Another particularly strong highlight was in real assets, where we signed a BRL 2.8 billion SMA with an Asian LP within our infrastructure strategy. We have been investing a lot of time in Asia, and this SMA represents a significant milestone for our platform and reflects the growing interest we have been highlighting throughout the year from global investors seeking alternative investment exposure in Latin America.
In our view, this can be the first of several mandates that we arranged for global institutional investors to allocate capital to the region, and it reinforces our view that the macro backdrop continues to support increased international allocations to the LatAm opportunities.
Turning to private equity. The first couple of months of 2026 have been exciting for the segment. Our team has announced 2 transactions that increased the liquidity profile of both VCP II and VCP III. In January, VCP III IPO-ed Agibank on the New York Stock Exchange. This marks an important step in the fund's history, crystallizing a 3.8x gross MOIC in Brazilian reals and a 35% IRR for VCP III at the IPO price. This is the first step to generating liquidity in this investment, which has been one of the best-performing assets in Fund III.
In February, the team signed a definitive agreement for the reverse IPO of CBO, a VCP II portfolio company into OceanPact, a Novo Mercado listed company. Upon closing, the combined company will become the second largest offshore service vessel operator in Brazil and the fifth largest globally by fleet size, forming a scaled and diversified offshore and environmental services platform with long-term contracted backlog.
This quarter, through the combination of markups in VCP IV and appreciation in our listed REITs position, we noticed a very positive impact on our unrealized ROE. As we underlined during our Investor Day, we expect this phase of the ROE cycle characterized by portfolio appreciation to continue supporting unrealized gains from our proprietary commitments in closed-end funds. Towards the end of the cycle, we expect to realize the value of these investments, which will then reflect in our realized IRE and distributable earnings.
These accomplishments across the 3 vintages underscore the team's outstanding ability not only to source compelling opportunities, but also to actively create value within portfolio companies and execute successful divestments, reinforcing our discipline and hands-on approach to value creation.
On the deployment side, the current macro environment continues to create attractive entry opportunities, positioning VCP IV advantageously as private markets present compelling entry multiples relative to historical levels. Looking ahead, the expected start of a monetary easing cycle would gradually reduce debt service costs for leverage companies and lower discount rates in Brazil. The conditions for this move appear increasingly well established and expectations of monetary easing have already supported a re-rating of domestic assets.
That said, we do anticipate periods of volatility, particularly considering upcoming electoral cycles in Brazil, Colombia and Peru. In addition, we remain attentive to the broader global macroeconomic environment and its potential impact on alternative managers' portfolios. However, our business was built to navigate and capitalize on volatility and market dislocation. We have a natural hedge across geographies and strategies with the opportunity and flexibility to allocate capital locally, regionally and globally. This structural resilience is directly linked to the stage we have reached as a firm, clearly differentiating us from the other local and regional players.
As we enter the new year, we do so with a clear set of opportunities in front of us and an extensive fundraising pipeline that Bruno will address shortly. We firmly believe that the strength, scalability and diversification of Vinci Compass position us to continue displaying healthy growth in 2026 deepening our leadership across Latin America and continue delivering long-term value for our shareholders.
Thank you again for joining our call. With that, I'll turn it over to Bruno.
Thank you, Alessandro, and good evening, everyone. In January, we marked the fifth anniversary of our IPO, an opportunity to recognize how far we have come as a public company and to reaffirm the long-term vision that has guided our execution.
Before discussing the present and looking ahead, I would like to take a moment to reflect on our journey. From the outset, our objective was to deepen and diversify our asset allocation capability in Brazil through complementary strategies while building towards a pan-regional platform. We have made significant progress on both sides.
On the capital deployment side, we committed approximately BRL 1.4 billion worth of GP commitments into our proprietary funds and gains from these investments compose our investment-related earnings or IRE. The portfolio has a gross blended target IRR of 18% to 20% and an expected realized IRR annual run rate contribution of more than BRL 100 million based on a normalized realization schedule for capital gains between 2028 and 2031.
The capital invested has leveraged fundraising by 13x, meaning that for every real we committed, we raised roughly BRL 13 from our limited partners. The commitments are instrumental to successful fundraising, anchoring the funds and assisting the attraction of institutional investors in the early rounds of fundraising. This represents value creation reflected across multiple fronts, strengthening our recurring earnings base while also enhancing the long-term return profile of our capital. We are close to the end of this first cycle of deployment into funds and intend to keep it as a staple of the platform, anchoring fundraising for strategies and driving capital gains and FRE growth for Vinci Compass.
In parallel, we executed a series of strategic acquisitions that strengthened our business mix in Brazil and supported our evolution into a pan-regional platform. By the end of 2025, we had funded our M&A transactions with approximately BRL 400 million in cash and issued close to 15 million shares to our new partners. Considering 2025 numbers and accounting for potential earn-out payments based on results achieved so far, our blended EV to FRE multiple on a post-tax basis was 8.6x on these acquisitions. This underscores our commitment to smart capital allocations, focusing on complementing our asset base and driving shareholder value through accretive transactions.
On top of IRE results and M&A activity, we have been extremely active on capital return to our shareholders, having distributed over BRL 1.4 billion on dividends and share buybacks since our IPO. This disciplined execution has brought us to a new stage as a firm as we enter 2026 with a clear sense that we are on the right trajectory. The platform has been substantially complemented with new strategies, distribution capabilities, and increased regional and global reaches.
The progress we delivered in 2025 offers a strong snapshot of the potential and scalability of our platform going forward as we achieved BRL 42 billion of capital formation and appreciation for the full year of 2025.
During the fourth quarter, we generated BRL 14 billion in capital formation. As Alessandro mentioned, a highlight was the BRL 2.8 billion SMA mandate to invest in infrastructure assets across Latin America. This capital will begin contributing to fee-earning AUM as deployment progresses. We view this achievement as highly encouraging and believe it may represent the first of several SMAs focused on Latin American investment opportunities that we expect to originate over time following the nascent cyclical improvement in the region.
Beyond this mandate, the largest contributions during both the quarter and the year came from Global IP&S and Credit as anticipated. Global IP&S delivered another strong quarter in our TPD business with BRL 4.6 billion in net inflows. The largest share came from the liquid platform, as most of the TPD alternatives commitments we expected for the year were signed earlier in 2025. We expect TPD to continue exhibiting strong momentum as global allocations expand. In addition, this segment is launching a series of new discretionary allocation products designed to provide Latin American investors with diversified exposure to portfolios of semi-liquid funds across developed markets, while also allowing us to increase fees in this segment.
Now let me spend a bit of time on Credit, which remains one of the most dynamic areas of our platform. Credit continues to be a cornerstone of our platform, and we see ample room to expand market share across both local strategies and regional solutions.
In the fourth quarter, our Credit vertical delivered approximately BRL 3 billion of capital formation appreciation, contributing to a total of roughly BRL 10 billion for the full year. As a result, Credit AUM reached BRL 36 billion, up 25% year-over-year. The breadth of our Credit franchise is a key differentiator. We operate with multiple specialized teams across the region, and we continue to increase information flow and coordination across these groups to ensure we are capturing synergies in origination, structuring capabilities, and most importantly, risk management.
The LatAm corporate debt strategy is a clear sign of the growing regional interest. We recorded more than BRL 300 million of net inflows in the quarter and BRL 2.4 billion for the full year, supported by a diversified investor base across multiple geographies and capping a solid year for the strategy. We're encouraged by the breadth of this demand and expect additional inflows following continued commercial efforts expected for 2026. In infrastructure credit, as Alessandro mentioned, we are launching a new product following the winning of a BNDES tender process.
The new fund will be co-managed by the high-grade Credit and MAV teams, once again, demonstrating the strategic rationale behind our acquisitions and the synergies across the platform. The fund will target sectors ranging from energy transition and decarbonization to nature-based solutions with an expected term of 12 years. Its structure is innovative, featuring multiple local fund vehicles and a combination of subordinated mezzanine and senior tranches designed to address different investment profiles, particularly considering the tax-exempt characteristic of certain vehicles.
We also expect several additional product launches across the entire region in 2026. In Colombia, we are preparing to launch our first local fund, COPCO, a direct corporate private lending vehicle, primarily targeting institutional investors. In Chile, we're currently on roadshow for the second vintage of our direct lending strategy, CHILPCO. The first vintage was highly successful and has recently completed the investment period.
In Peru, we're seeing strong interest from local investors in LAPCO II, which is also expected to launch this year. To round out our credit pipeline, we expect additional commitments from SPS IV ahead of the fund's final closing, which is scheduled for the second half of 2026. This strategy is gaining increased momentum, particularly among Chilean and global investors, following its first offshore commitment in the third quarter.
In equities, we recorded net outflows in the fourth quarter, concentrated among foreign investors in our Brazilian equity strategy. These investors typically have a more countercyclical profile and increased their exposure in mid-2024 when Brazilian equities were trading at more depressed valuations.
Looking ahead, we remain very optimistic about our UCITS LatAm and Brazil funds and are already in advanced discussions with several institutional investors for commitments into these strategies.
Shifting to real assets. In 2025, the infrastructure team partnered with Changi and acquired a controlling stake in Rio de Janeiro's International Airport, Galeao. We are preparing for the March auction for the airport's new concession contract. Within this segment, we also expect new commitments for Lacan IV this year under our forestry strategy, reflecting continued institutional interest in real asset exposure. In real estate, we remain attentive to the potential reopening of market windows following SELIC cuts, which could create a more favorable environment to raise capital for our REITs.
As you know, REITs remain one of the most attractive investment vehicles for individual investors in the Brazilian capital markets. At the same time, we continue to advance with other opportunities within real assets, including our opportunistic development fund strategy focused on industrial and residential segments.
This strategy enhances our diversification and earnings potential as it attracts institutional investors such as pension funds and family offices, while complementing our income-oriented products and adding carry optionality to the platform. Overall, we entered 2026 with strong momentum and clear visibility across product launches, institutional mandates and multi-country fundraising initiatives. The combination of a broader distribution, a very comprehensive product shelf and ongoing operational enhancements give us confidence in our ability to continue compounding growth.
With that, I'll hand it to Sergio to walk through the financial results.
Thank you, Bruno, and good evening, everyone. 2025 was a very solid year for the firm, and we are very satisfied to report an exceptionally strong quarter, reflected across multiple fronts and delivered to shareholders through a dividend of $0.17 on the dollar per share, payable on April 2nd to shareholders of record as of March 19th.
Let me start by walking you through our revenues. In management fees, we generated BRL 220 million in the fourth quarter, up 29% year-over-year. This growth reflects the combined effect of our strategic transactions, including Compass, Lacan, and Verde, as well as a strong fundraising momentum, particularly within credit and Global IP&S. It's also important to note that Verde contributed to our results for only 1 month in the quarter, following the closing in December. Advisory fees totaled BRL 15 million in the quarter, posting a decrease year-over-year.
As a reminder, upfront fees in our third-party distribution alternative business can vary meaningfully depending on the timing of commitments, and we signed most of our commitments early in 2025. In addition, advisory revenues from corporate advisory were lower in the quarter given quieter deal activity.
Turning to fee-related earnings. We generated BRL 80 million of FRE in the quarter, or BRL 1.23 per share, with a 32.6% FRE margin. The year-over-year comparison was partially impacted by catch-up fees recognized in the Private Equity segment in the fourth quarter of 2024. Excluding that non-recurring effect, FRE grew 26% year-over-year, driven primarily by fundraising across Credit and Global P&S and acquisitions executed during the period.
For the full year 2025, FRE reached BRL 288 million or BRL4.52 per share, with a full-year margin of 30.4%. We are very pleased to have delivered FRE margin we have been targeting throughout the year. The improvement in margin reflects operating leverage from revenue growth, combined with the cost reduction initiatives we began implementing at the start of the year, as well as a small but present Verde contribution following the acquisition.
Looking ahead to 2026, we expect continued momentum in FRE growth, supported by our strong fundraising pipeline and the full contribution of Verde's revenue and FRE.
Moving to performance-related earnings. We recognized BRL 5 million of PRE in the quarter, primarily across Global P&S, Credit, and Equities. Performance fees normalized after a strong fourth quarter last year, which included one-off contributions from opportunistic funds in Argentina and Peru.
On investment related earnings, or IRE, we posted a record BRL 45 million in the quarter. The unrealized component benefited from positive year-end markups in our private markets IRE commitments, combined with appreciation in our listed REIT positions. This reflects the embedded value creation within our balance sheet commitments, which remain an important driver of long-term earnings power.
Before moving to distributable earnings, I want to highlight an important reporting change. Starting this quarter, other comprehensive income or OCI, which reflects foreign exchange variations, now flows to our distributable earnings, adjusted distributable earnings and adjusted net income. Up to the third quarter of 2025, OCI did not impact these adjusted metrics.
We believe this change provides a more comprehensive view of our results as it incorporates the impact of our consolidated U.S. dollar exposures and presents our performance in a more holistic manner. I'd also like to highlight that following the Verde transactions, we introduced a minority interest line this quarter, which represents the portion of Verde earning attributable to the remaining 49.9% non-controlling interest.
Putting it all together, Vinci Compass generated BRL 81 million or BRL 1.24 per share of adjustable distributable earnings in the fourth quarter, representing 10% growth on a nominal basis and 8% growth on a per share basis. For the full year, adjusted distributable earnings totaled BRL 292 million or BRL 4.58 per share, reflecting 22% nominal growth and 7% growth per share. The fourth quarter and full year 2025 underscored our disciplined approach to growth and capital allocation, leaving us well positioned for continued progress in 2026.
In closing, I would like to once again emphasize the strong momentum we continue to see across the firm. We remain fully committed to generating long-term value supported by breadth of our fundraise pipeline for 2026.
With that, I'd like to close our remarks and open the call for questions. Once again, I'd like to thank you for joining our call. Please, operator, you may proceed with the questions. Thank you.
Thank you. [Operator Instructions] Our first question comes from Lindsey Shema from Goldman Sachs.
2. Question Answer
I have 2 questions, actually. Let's maybe start on the first, which is a bit broader. It seems like you have strong fundraising expectations for the year. But as you said a lot of uncertainty, a lot of elections in the region. Do you get the sense that maybe there's some money on the sidelines? And if the elections go in a certain direction, there could be a big increase towards the end of the year? Is there anything you're kind of looking for in elections that could be a big catalyst? And kind of just, in general, what are you thinking about elections and the impact on fundraising? And then I'll ask my second question after.
Lindsey, this is Bruno. Yes. So we had -- I think we had a good '25 in regards to AUM. We had 13%, if I'm not mistaken, 13% growth in our AUM on a year-on-year basis if you take out the effects from the exchange rate variation that was against us in '25 when you look at the reais number. So I think that number was healthy.
And it is a number that we are expecting to hopefully repeat this low double-digit growth rate on a currency-adjusted basis for '26. As we said, there is a very big pipeline, mainly in the credit segment. We have 6 or 7 funds that are structured funds across the region, Colombia, Peru, Chile, Mexico, Brazil. So there's a lot of different strategies and opportunities to raise capital there.
I think other than -- I think elections are obviously one of the variables. But more than elections, I think the main variable for us is the impact from cyclicality on products that are more correlated with interest rates. So this is something that obviously, over the next -- over the last few years has been idle for us. So if you look at our equities business, if you look at our real estate business and even the Brazilian investment solutions business, we have had a little bit more challenge to raise capital in these verticals.
And with -- now we're seeing for the first time in a very long time, real interest rates, the long-term curve starting to come in. And obviously, there is an expectation of lowering rates, and we saw that through the REIT's performance during the fourth quarter. Now the first quarter, again, we're seeing good REIT performance in the portfolio. So this is a variable that has more of an impact.
Obviously, interest rate curve has by itself a correlation with the election outlook. But at the end of the day, what impacts us is the curve, right? So if we are in a position where the curve is more benign, and we see that coming down and with that create an opportunity for us to grow in these more cyclical asset classes, I think that would be very, very positive for the platform. So the 13% that we did last year growth was without the contribution of the cyclical groups. So if we can have real estate REITs, local Brazilian investment solutions, equities participating, I think this would be a tremendous uplift to the expectations of further AUM gains.
Definitely makes sense on the interest rate side. And then maybe for my second question, a bit more specific. Just trying to get a sense of how to model the advisory fees line going forward. I mean, I understand that the TPD alts upfronts can be kind of chunky depending on when you expect them. I mean, one, do you have any expectations for kind of how the timing is going to go throughout 2026? Or is it better to maybe just annualize the 2025 level?
And then second, on the corporate advisory side, how much of an increase do you kind of expect this year in deal-making activity from the expected decrease in rates? And kind of where can that number go to?
Okay. So we have a little bit more visibility at this point on the corporate advisory at least. The first half looks like, at least for now, it's going to continue to be more on the softer end. So we do have some transactions that are in the pipe, but the volume is still not as relevant as we saw in '22 and '23, or maybe '23, I would say. It was a good year for us. We're still lagging in terms of volume and the level of advisory mandates that we have that are in line to be closed. So I would expect at least the first half to be a little bit slower, like what we saw in '25.
And in regards to the upfront on the Global IP&S side, it's really very tough to say when those will fall. As you said, it really depends on the calendar and how the fundraisings fall over the year. Overall, we expect '26 to be slightly lower than '25 on the advisory -- on the upfront as well. So advisory probably at the same level and then upfront a little bit slower than we saw in '25, given the calendar that we have. But timing the quarterly -- like every quarter, how that will fall at this point is very, very difficult, Lindsey.
So what I can say that directionally, the overall advisory line, if you add upfront and corporate advisory, is likely going to be a little bit smaller than '25.
Got it. So it seems like the impact from corporate advisory would not be enough to offset the TPD alts?
Yes. That's how it's looking like today, but these things change. But as far as we can forecast, we see that total advisory line a little bit down when compared with '25.
Our next question comes from Ricardo Buchpiguel from BTG Pactual.
I have 2 questions here. So first, we saw that in the last couple of quarters there was a materialization of some of the cost synergies related to the M&A appearing, particularly as we see the FRE margins going up mainly in Q3, and then a little bit more in Q4. So I wanted to ask what is the next step in terms of M&A synergies to be captured, particularly in 2026, right? And where would that appear in the results? And then I ask my second question.
Thank you, Ricardo. That's Alessandro. Of course, the low-hanging fruit type of synergies, we already incorporated in the numbers. But still, there is -- there are a lot of other opportunities moving forward. We are looking for optimization of the structure, procurement, also rationalizing our investment in strategies and people, expanding some of our strategies through other geographies. So still inside the M&A, and of course, Compass is the most relevant here. One, the transaction of our combination of Compass, we see interesting possibilities to continue appropriating of this value.
Of course, there is more recent ones like Verde that we kept as a more like segregate in terms of strategy. But still, we do have some synergies, especially from the commercial side in Verde, for example. So answering your question straightforward, yes, we still see synergies to be captured moving forward from the previous M&A activity.
Well, that's clear. And should we see something -- some improvement, for example, in inflows related to this commercial synergies that you mentioned already appear in 2026? Or it should be something more relevant for '27 onwards?
No, we probably will see already. We mentioned in our previous -- in the call that we are launching new products with Verde, for instance. So we will see gains of that.
New products that we are launching from the alts -- alternative for local markets in other countries through our expertise and also the commercial effort coming from Compass presence in the countries. So yes, we do see that we will probably capture some of these commercial efforts within 2026. Of course, that will ramp up, but we probably will see some of these numbers appear in 2026.
That's clear. And for my second question, I wanted to see if you can talk a little bit more about the expectations in terms of the investment-related earnings in 2026, both in terms of realized and unrealized portions, right? I understand there are a few moving parts here since you need to keep investing the capital proceeds. So it will be very helpful to get any guidance on this line for this year.
Thank you for that question, Ricardo. It's Bruno. So, yes, I think the IRE is -- what's happening now is I think we're getting to the interesting part of the IRE development because over the past couple of years, or 1.5 years, it wasn't a very good point, right, because we were in the deployment phase and the funds were in the J-curve. So we had a situation where we were taking money out of short-term rates, which are at a very high level and putting money into these funds that were in the beginning of their life cycle, within the J-curve and not really contributing a lot to profitability.
I think in the fourth quarter, we saw for the first time mark-to-market in one of the funds that we have contributed capital, which was VCP IV on top of the appreciation of the REITs. And given that the fund is now out of the J-curve, we would expect this movement to start being more material going forward. So as VCP IV, SPS IV, VICC, these 3 main funds in which the balance sheet of the company has a bigger exposure, are getting out of the J-curve, this should materialize in higher unrealized IRE. Obviously, this is the, let's say, the next stage that we're getting in, right? So we're getting into this phase where we're going to see the profitability and the increase in the share value of the funds in our net profit.
And then the following phase, once these funds start to return capital, those proceeds are going to become impactful to our distributable earnings number. This will probably take a little bit longer to happen. There might be -- given the better liquidity environment that we see in Brazil over the past few months, there might be an opportunity for us to start having a quicker monetization of these funds, but it will take a little bit longer.
So the expectation for '26 is for us to start having the IRE on the unrealized part being more of a contributor to net profits. And hopefully, this can be translated to distributable earnings as soon as the end of this year or next year. But the expectation is for this number to start being more material for the net profit line in '26.
Our next question comes from Guilherme Grespan from JPMorgan.
My question is on the private credit side. It has been a big discussion globally, right? I think the thesis that we are hearing nowadays, I think, is less applicable to Vinci's portfolio. But I see the mood on the private credit, which has been important, I think, credit as a strategy, I think, added more than BRL 5 billion in fundraising in the last 12 months. Just want to get your views on how is the sentiment on fundraising on this vertical. And just remind us a little bit the profile of the client that you fundraise.
If I recall correctly, I think on credit, the 2 main products is going to be Compass, high yield and corporate debt. But just a refresh on this vertical. What is the mood? Is it affecting the fundraising or not? And if there's any impact to you?
Okay. Thank you for the question. That's Alessandro. I would say that that's a very good question. If you take into consideration what's happening in the global markets, in the alts business globally, we still believe -- reinforce that we are very optimistic with the credit vertical.
Our credit business is today very diversified. We've seen different strategies, different type of funding. But as you said, we have an important component that's more like corporate debt, that's different type of clients from institutional to high net worth, especially, international money flowing, in Latin America, corporate debt. So this is really more liquid stuff, with less linked to what's going on, on the private credit side, especially the semiliquid fund globally.
Also talking more about the countries, we do not have first exposure to the same sectors that have been a question like IT, tech and et cetera. Of course, Latin America is one good example, let's say, in terms of the majority of the business as the hollow type of investment. So it's really assets and low obsolescence.
So even our private credit business within Brazil or the other countries like America, like Peru, Colombia and so it's still much more plain vanilla stuff. And the exposure to this asset class is still very small. We do not have, especially on this specific private credit funds, a lot of funding coming from retail or affluent business like the main semi-liquid fund is not the reality here. This is more institutional money, closed-end funds. So it's really not -- the peril is really very small.
Where maybe we can see some effect is the fundraising of private credit globally in our TPD business. But still this is not the most relevant pipeline that we have moving forward, but it's where technically, we can see the investor a little bit more cautious in allocating private credit moving forward, globally in TPD. Not in our main business that's our own self-managed funds. That's in a strategy that not relates a lot with the main drivers of the worries regarding private credit internationally.
[Operator Instructions] I would like to turn the floor over back to Mr. Alessandro Horta for the closing remarks. Please, Mr. Horta, you can proceed.
So I'd like to once more thank you all for your continuous interest and support. Being a public company for more than 5 years now bring us a lot of optimism with the future. We strongly believe that we'll continue to deliver value for the years to come. So thank you again and good night.
This does conclude today's presentation. We thank you all for your participation and wish you a very good night.
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q4 2025 Earnings Call
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q3 2025 Earnings Call
1. Management Discussion
Good afternoon, and welcome to Vinci Compass Third Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this call will be recorded.
I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead, Anna.
Thank you, and good evening, everyone. Joining us today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, President of Finance and Operations; and Sergio Passos, Chief Financial Officer.
Earlier today, we issued a press release, slide presentation and our financial statements for the quarter, which are available on our website at ir.vincicompass.com.
I'd like to remind you that today's call may include forward-looking statements, which are uncertain and outside of the firm's control and may differ from actual results materially. We do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our 20-F.
We will also refer to certain non-GAAP measures, and you'll find reconciliations in the release. Also note that nothing on this call constitutes an offer for sale or solicitation of an offer to purchase an interest in any Vinci Compass fund.
On results for the third quarter, Vinci Compass generated fee-related earnings of BRL 77.1 million or BRL 1.22 per share, FRE margin of 32.3% and adjusted distributable earnings of BRL 73.1 million or BRL 1.16 per share. We declared a quarterly dividend of $0.15 on the dollar per common share payable on December 9 to shareholders of record as of November 24.
With that, I'll turn the call over to Alessandro.
Thank you, Anna. Good evening, and thank you all for joining our call. We appreciate you joining us. We hit important milestones for Vinci Compass this quarter. Before we start discussing our quarterly results, I would like to take a moment to highlight some important recent milestones.
In October, we hosted our second Investor Day in New York. It was a great opportunity to catch up with analysts and investors, reinforce Vinci Compass long-term vision, showcase the strength of our integrated platform and provide greater transparency into each of our business segments.
During the event, we shared how we are positioning the firm to capture growth across our core strategies, driven by disciplined capital allocation, innovation in product development and continued focus on delivering value to our clients and shareholders. The strong engagement and positive feedback from participants reaffirmed investors' confidence in our differentiated model and growth prospects in Latin America.
On the same day, we also discussed the acquisition of Verde, a transaction that represents a significant milestone in our strategic expansion. This transaction further strength Vinci Compass' position as a leading alternative investment platform in Latin America by combining forces with the region's leader in global and local asset allocation with an exceptional investment track record. The transaction was very well received by the local community as well as global clients and our shareholder base.
We had the opportunity to discuss the Investor Day and the Vinci transaction in-person with analysts and investors in the following days that week in New York, and the feedback was very constructive. We feel our constituents recognize the strategic and cultural alignment between the 2 firms and the long-term value creation potential for this combination, leaving us very excited and confident about the future. We remain on track to close the transaction by the end of November.
Although we had an exciting start of fourth quarter with the Investor Day and the Verde transaction, the work hasn't stopped since. We are already executing on the priorities we outlined such as accelerating regional expansion, capturing the secular growth opportunity in private credit and expanding FRE margins through revenue stream leverage and operating cost discipline.
In SPS IV, we secured not only our first offshore commitment, but also the first Brazilian pension plan commitment in the history of our opportunistic capital solution funds, a clear evidence of our outstanding ability to penetrate long-standing relationships to distribute proprietary funds across different channels.
Bruno will unpack the fundraising pipeline in a moment, but we are very encouraged by the depth of interest we are encountering, particularly from foreign investors tracking our upcoming second closing.
Shifting to our third quarter results, we crossed the 30% FRE margin threshold in the third quarter. Delivering a 32% FRE margin, the highest level year-to-date. This reflects both the potential for margin expansion from platform growth we have been discussing with you and our disciplined cost execution. This quarter, we began to see the impact from cost reduction initiatives carried out this year throughout the firm, combined with the operational leverage resulting from the strong fundraising in our funds over the past few quarters.
We have been extremely focused on driving efficiencies since closing the combination with Compass, and we are very satisfied with the results, which are now starting to flow through the income statement this quarter. This progress is the result of the thorough work of all management teams and the Executive Committee as we approach the final stage of integrating both companies.
As we have discussed, we see substantial opportunity to expand our margins and efficiencies represent only a portion of that. The most meaningful driver is platform growth, whether organically or through acquisitions. We are on the path to achieve our 38% FRE margin target by 2028 as discussed at the Investor Day, supported by additional cost reduction initiatives in the pipeline, substantial fundraising across all segments and the expected closing of Vinci in 2025.
Shifting to the macroenvironment, broad-based asset appreciation and an easing rate bias across emerging economies continue to create a constructive environment for our platform. Brazil should benefit even more than its peers, supported by the potential of a future political shift that could reinforce fiscal responsibility and by a likely Selic cutting cycle beginning in the coming months. With lower rates and better anchored inflation expectations, we see further room for a re-rating of local assets, which has already begun.
Across the region, Mexico and Chile are meaningfully ahead in their easy cycles. Mexico has cut from 11.25% to 7.50% over roughly 18 months with further reductions expected. And Chile is already below 5% with its cycle well advanced. This creates differentiated asset allocation deployment and capital gains opportunities across Latin America.
Reinforcing this environment, several countries are moving or are expected to move toward more market-friendly policies, including potentially Chile and Brazil as well as Colombia and Argentina, which is already undergoing Milei's pro market shift. In Argentina, specifically, authorities are taking meaningful steps to reverse years of persistent fiscal deficits.
These dynamics are also reviving the case for international portfolio diversification. We believe the trend of global investors seeking exposure beyond the U.S. has further to run, supporting our fundraising, offering attractive risk-adjusted opportunities and potential currency diversification.
Turning to Credit. The segment is building momentum as expected with Latin America investors and increasingly global allocators. Our LatAm corporate debt strategy raised over BRL 1 billion in the quarter with 30% coming from investors outside the region, underscoring both strong international appetite and the reach of our distribution across Europe and the U.S.
Our forestry vertical is also drawing strong international interest, especially from European development finance institutions. We aim to convert this attention into capital subscription for our Lacan IV fund in the fourth quarter of 2025 and into 2026.
Our positioning as a leading provider of nature-based solutions in Latin America and the ability to scale through planted forest, while capturing higher quality carbon credits and biodiversity co-benefits, position us to pursue a significant addressable market across DFIs, global corporations, institutional investors and family offices. Recent international announcements in support of Brazil's forest programs underscore rising global capital flows into conservation and nature-based solutions.
Moving on to Global IP&S. Our third-party distribution business continues to deliver strong results with TPD alternative and liquid funds as key growth drivers. Within that, semi-liquid funds are standing out by pairing sophisticated products with retail-friendly features. We are seeing very strong receptivity in retail channels and expected continued traction as we broaden distribution.
Private debt and middle market strategies continue to attract sophisticated investors, and we plan to expand our middle market funds offering. Altogether, we delivered BRL 19 billion in capital formation and appreciation in the quarter, bringing AUM to BRL 316 billion. In U.S. dollars, AUM reached just a tad below $60 billion at a record $59.4 billion.
To wrap up, our opportunity set has never been stronger. Structural tailwinds in alternatives and emerging markets are accelerating and Vinci Compass is the reference partner in our region. More investors across channels are adopting private market solutions than ever, and we expect this trend to continue in the medium term.
We are investing behind this demand with scalable products, disciplined risk management and a growing distribution footprint. Looking ahead, our platform is built for this environment and positioned to capture the generational shifts underway in the global economy and markets, compounding value for our clients and shareholders.
Thank you again for joining us. With that, I'll turn it over to Bruno.
Thank you, Alessandro, and good evening, everyone. We are thrilled to share that we delivered BRL 19 billion in capital formation and appreciation this quarter. Global IP&S and Credit were key growth drivers, and we believe we are still in the early innings of a significant growth opportunity across all of our asset classes. We laid out this opportunity in detail during our Investor Day.
Starting with SPS IV, we achieved important milestones this quarter, our first offshore commitments and the launch of the offshore vehicle. With the fund live and seeded, follow-on offshore commitments tend to accelerate. Our pipeline includes several foreign investors, and we expect to sign additional commitments by year-end. We also secured our first Brazilian pension plan commitment to the strategy, which we expect will catalyze additional allocations from other local institutions.
Our track record is a key driver to new commitments. The first vintage, SPS I, which recently returned additional capital to investors from a successful exit, is currently delivering a DPI of 1.9x and a gross IRR of 25%, both in Brazilian reals. Further validation comes from SPS III, which distributed during October over 9% of total commitments. This vintage is still within its investment period, which ends only in the fourth quarter of 2026 and has already started to return meaningful capital to LPs.
Still in private credit, we received additional commitments in our senior secured lending product in Peru, PEPCO II. We expect further commitments over the coming quarters in both [ PEPCO II ] and [ FAIPERU ] Peru, our semi-liquid confirming and factoring fund.
Our long-standing presence in Peru, together with our position as the largest fund in that market gives us a clear edge to keep capturing opportunities. In addition, to deepen engagement and showcase the full breadth of our regional platform, we hosted Peruvian institutional investors for a roadshow at our Brazil offices.
We have also introduced [ COPCO I ] to our Colombian LPs, our first secured lending fund in Colombia. Pension funds and insurance companies are increasing allocations to local currency alternative strategies, giving regulatory frameworks and COPCO I is designed to meet that demand. The vehicle will have a 10-year term and is expected to launch in the first half of 2026.
In Brazil, our liquid credit strategies are also showing strong growth. Infrastructure debentures, structured credit and corporate liquid credit funds all displayed strong investor interest and raised over BRL 500 million in the quarter. Our diversified product lineup widens our addressable base and drives demand across different credit sub-strategies.
In equities, we continue to see outflows from our Brazilian domestic equity funds, reflecting a more risk-averse stance among local institutional investors. This trend is driven by the ongoing shift in their portfolios from equities to local inflation-linked government bonds, whose yields remain near historical highs and have not compressed this year despite the rally in the equity markets.
Shifting to Global IP&S, AUM reached more than BRL 241 billion, supported by approximately BRL 8 billion of inflows. As Alessandro noted, we're encouraged by the reach of our TPD business and more importantly, the depth of coverage from our client relations team.
We expect to continue raising capital in this vertical, although we believe most TPD alternative inflows that charge upfront fees were recognized by the end of September and thus should have a more limited impact in the fourth quarter. On the liquid side, we see room for additional traction by year-end.
A highlight in TPD alternative this quarter was a $300 million commitment from a Latin American institutional investor to a global private equity fund managed by a world-class GP represent in the region. This is an exceptional commitment that underscores the growing appetite for alternative among LatAm institutions as highlighted in all of our recent communications.
Lastly, in Private Equity, as we work towards the first closing of VIR V expected in the first half of 2026, we're very encouraged by the interest from LPs to re-up in the fund. On the VCP front, the team is highly active in origination with a pipeline of 40-plus active opportunities and 4 transactions in advanced negotiations to deploy VCP's IV dry powder.
In terms of portfolio performance, VCP III companies delivered solid operational results. In the second quarter of 2025, aggregate EBITDA grew 16% year-over-year. We are particularly excited with our portfolio company, Agibank, as it continues to deliver very strong KPIs, expanding revenues year-over-year by 50%.
In VCP IV, Arklok has been increasing revenue by 30% year-over-year, another company we have been very excited about. These results reinforce the health of our portfolio and our conviction in disciplined deployment of VCP IV. Our distribution teams are executing exceptionally well across channels, and October got off to a constructive start for the fourth quarter of 2025.
We're also preparing to navigate Chile's pension reform as benchmarks and target date frameworks finalize. Our client-facing group will have a fund 2026 as our product slate is quite full. We have private credit products being launched across the region. We have our UCITS equities funds and several closed-end funds across other strategies such as Private Equity and Real Assets.
In addition, on top of our TPD funds, which continue to exhibit strength as global allocation grows, Global IP&S will launch a series of new discretionary allocation products, allowing LatAm investors to have a diversified exposure to portfolios of semi-liquid funds across developed markets. This will lower entry tickets while helping investors with optimal allocation to their portfolios.
All this alongside a nascent cyclical improvement in the region with higher demand for allocations from both local and currently under allocated global LPs.
On the operations front, AI adoption is now mainstream at Vinci Compass with roughly 80% of our team using AI in their daily work to enhance productivity, client service and risk management. As we discussed internally, we want to lead the transition into an AI-enabled workplace, and Vinci Compass needs to sponsor this change, so it's done safely and addressing the specific needs of our groups.
This agenda is accelerating, and we expect it ultimately to be felt by investors through better overall decision-making and execution, positively affecting risk-adjusted returns. We entered the fourth quarter with clear visibility and strong momentum, and the pipeline of opportunities allows us to build on these results into 2026.
With that, I'll hand it over to Sergio to walk through the financials.
Thank you, Bruno. Starting with our AUM, we ended the quarter with BRL 316 billion, representing an increase of 4% quarter-over-quarter. Capital formation and appreciation totaled BRL 19 billion, partially offset by a negative FX impact of BRL 6 billion.
We had significant inflows coming from Global IP&S, getting close to BRL 80 billion in the quarter. A portion of those inflows came from TPD alternative, generating BRL 18 million in advisory fees recognized onetime as upfront fees. We expect another meaningful though smaller contribution from this line in next quarter, reflecting the time of commitment signings.
In addition, we recognized success fee in our real estate advisory business and BRL 4.5 million in corporate advisory. On a management fee basis, we posted BRL 202 million in the quarter. We expect to continue delivering consistent growth, supported by an active fundraising pipeline and to further enhance our revenue mix as we scale our recurring fee earning base.
Total fee-related revenues were BRL 238 million in the quarter, while fee-related expenses were BRL 161 million. This translated to BRL 77 million of FRE and a 32.3% FRE margin, our highest in 2025. The increase in the FRE margin is a result of operating leverage from revenue growth, some transaction costs that stopped impacting us this quarter, combined with cost reduction initiatives we have been working on since the beginning of the year, which have started to pay off now.
Delivering what we set out to do is in our DNA, and we remain focused on further compounding growth with efficiency. Performance-related earnings were BRL 1.7 million in the quarter, coming primarily from equity funds. As a reminder, most of our Brazilian open-end funds crystallized performance fees semiannually in June and December. So the first and the third quarters typically show lower performance fee recognition.
This is the first quarter that we highlight our investment-related earnings or IRE. We introduced this metric in our Investor Day, and our objective is to be the most transparent as we can and highlight the realized and unrealized gains from our commitments in proprietary funds. IRE is an important value driver in our business model, designed to compound growth and create long-term shareholder value through our GP commitments. IRE in the third quarter was BRL 5 million with listed REITs contributing to realized income and positive markups in funds supporting the unrealized component.
Finally, putting it all together, adjusted distributable earnings totaled BRL 73 million or BRL 1.16 per share, representing a 28% increase year-over-year on a nominal basis and 7% growth on a per share basis. This quarter underscores durable fee power and an improving margin profile, validating our disciplined approach to growth, expand and allocate capital, leaving us well positioned for continued progress in the fourth quarter and 2026.
With that, I would like to close our remarks and open the call for questions. Once again, we'd like to thank you for joining our call. Please, operator, you may proceed with the questions. Thank you.
[Operator Instructions] Our first question comes from William Barranjard with Itau BBA.
2. Question Answer
I have a question here regarding one of the things you mentioned during the call, the first Brazilian pension plan to commit in the SPS IV, right? And you also said that this first commitment should unlock further ones from this type of project, right? So I wanted to dive a little bit here. So how fast do you think this new demand could come? And also what kind of cross-sell opportunities this opportunity creates, right? But more importantly here, how big do you think this pocket is these new opportunities for you guys?
William, that's Alessandro. Thank you for your question. That's true. That's the first pension fund commitment to SPS at all, right? Not just in the Fund IV, but overall, the whole history of SPS. Of course, we expect that would be an opportunity for raising money for this type of clients since, as you know, Vinci Compass main source of funds comes from institutional investors, both local investors, Latin America institutions and of course, international ones.
We do expect further commitments for this strategy still in Fund IV, but we cannot predict exactly the size of it. But this strategy due to the uncorrelated nature and really very low penetration on the portfolios of this type of investors, both local institutions and international institutions, both as first for SPS, we expect this to gain an important space on the overall AUM of the vertical.
Okay. And if I could ask another one regarding your FRE margins, right, improved a lot quarter-on-quarter. Just wanted to hear from you if we should use this new level as the base for the next quarter or if there's any other effect that might decelerate this improvement, maybe lower advisory fees in the next quarter. How should I think about the evolution from here?
Okay. William, this is Bruno. Yes, there's some seasonality as well on the expense line. So we usually have a second quarter that's a little bit stronger in terms of expenses. The third quarter is a little bit lighter from a seasonal standpoint. However, we did have some aspects of the combination in terms of costs that flowed through the numbers during the past 3 quarters and started to reduce a little bit in the third.
So looking forward to the fourth quarter and beyond and obviously not considering the Verde acquisition because that's going to change a little bit the number. But thinking about Vinci standalone, we should be able to see margins on the 30s going forward, right? So probably the fourth quarter would be a little bit smaller than that, but still above 30%. We hope to be able to reach the 30% for the year. I think we are within that distance at this point. I think it's a possibility. And then looking forward to '26, probably we should see margins in general above 30% without the combination with Verde.
With Verde, we're going to have a big impact. The expectation is to close the transaction by the end of November. So they will impact only 1 month of the fourth quarter. But starting in the beginning of next year, once we have them on board for the full year, the impact should be of several hundred basis points. So this this -- let's say, 30% to 31% will push towards probably at least the mid-30 level. So that's the expectation that we have once we have Verde on board. But we expect the continuation of better numbers in the margin level going forward.
Our next question comes from Lindsey Shima with Goldman Sachs.
We saw exceptionally strong Global IP&S inflows this quarter. Just wondering about how much of this was related to the TPD alts? And then you mentioned that there should be a small percentage of the upfront fees in next quarter. But how should we think about this line kind of going forward and then IP&S inflows more broadly in the future?
Okay. So this is Bruno again, Lindsey. Good to hear from you. So TPD was very good this quarter, as was the case of the second quarter as well. The alts this quarter, we had BRL 2 billion positive impact. There was this big check that we mentioned from a regional player into a U.S.-based closed-end funds, which was very relevant.
And although the fourth quarter is looking like it's going to be a little bit slower, mainly on the outside, the liquid side started the quarter pretty strong. So the volume in the first month was similar to what we had in the third quarter on a monthly basis. And I think even more so, when you look at this picture for TPD in general over the medium and long term, I think the picture is quite constructive.
We have in Chile and Mexico, which are 2 markets that are important for us, of course, we have very strong tailwinds from increased contribution to the local institutional plans. We have, in general, more interest from high-net-worth individuals into mainly alternatives. So this is also going to be a driver for medium to long-term growth.
And finally, in Brazil, we are starting from a very low base. The penetration of this type of allocation is still very small, o we expect this also to be a positive tailwind for TPD in the medium and long term. So far, fourth quarter flows continue to be strong. And medium to long term, we continue to be quite optimistic about the business line in terms of flows.
And Lindsay, that's Alessandro. I would like to add on top of what Bruno said, very, very quick comment. In Global IP&S and TPD alts specifically, we are seeing some, I would say, rotation of portfolios from our institutional clients in LatAm, especially moving from more traditional alts to new verticals for them, of course, where we do have a very good managers and products. I can give you an example like secondaries. So this is also providing a very interesting opportunity in terms of allocation.
And another point is that we are looking to the future, as we mentioned during the call, we see an opportunity for more discretionary allocation of funds and SMAs in alts on behalf of the same type of investors, ones that do not want to allocate directly, but would like us to pick up the best managers and strategies for them.
[Operator Instructions] The Q&A session is over. I would like to turn the floor back to Mr. Alessandro Horta for the closing remarks.
I'd like to thank you all once again for your continuous interest and support. This was a very important quarter in which we were able to demonstrate the planned improvement in our FRE margin, and we remain optimistic that we will continue to deliver in line with the expectations we outlined at our Investor Day in New York. So thank you again, and have a good evening.
This does conclude today's presentation. We thank you all for participating and wish you a very good evening.
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Q3 2025 Earnings Call
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Analyst/Investor Day - Vinci Compass Investments Ltd.
1. Management Discussion
Good afternoon, everyone, and welcome to Vinci Compass Investor Day 2025. My name is Anna Castro, from Shareholder Relations Manager for Vinci Compass. We're thrilled that you could join us today [indiscernible] present here with us in New York at Nasdaq market site as well as those watching us online for the webcast. We'll start in just a moment before that, I just have to share some important disclaimers with you.
Today's event may include forward-looking statements, which are uncertain and outside of the firm's control and may differ from actual results materially. Except as required by applicable law, we do not undertake any duty to update these statements. For a discussion of some of the risks that could affect our results, please see the Risk Factors section of our 20-F. We will also refer to certain non-GAAP measures, and you'll find reconciliations at the end of the presentation. Also note that nothing on this call constitutes an offer sell or solicitation of [indiscernible] purchase an interest in Vinci Conpass fund.
Moving on to our agenda for today. We'll have 3 blocks of presentations. We'll start off with a strategic overview covered by our CEO, Mr. Alessandro Horta, who will then follow to discuss the Vinci Asset Management acquisition announced yesterday after market close. We'll then have a session presented by Mr. Jaime Marti, Head of our Client Relations Group to cover our client relations team and the Latin American investment opportunities. To finalize the first block, we have a session dedicated to macro in Latin American opportunities presented by our Chief Strategist, Mr. Jose Carlos Carvalho.
In the second block, we'll cover our business units presented by the heads of each of our strategies, starting with Global IP&S, equities, real assets, private equity and then credit. In the third and final block, Mr. Bruno Zaremba, President of Finance and Operations, will cover a dedicated session to IRE in a financial overview, followed by a Q&A session at the end. On a final note, for those attending in person, I'd like to highlight, we'll not be taking questions during the presentation. We'll have a condensed Q&A session at the end. And for -- for those watching us online, I welcome you to submit your questions for the platform, and we'll go for those as well in the Q&A at the end.
With that said, I'd like to thank you all for your support and for your participation. And I'd like to welcome to the stage our CEO, Mr. Alessandro Horta to begin our presentation. Thank you.
Thank you, Anna. Thank you all, and welcome to our -- another Investor Day. We hope that you enjoy the content that we'll present today. We are very optimistic and keen about the prospects of the firm moving forward. As I said earlier today, this was an important year for us, a year of [ trial and trial ], but yet, reach and its rewards. And I will cover this today what we expect to the future. And I'll talk, of course, with our more recent developments like the [ Verde ] transaction.
So what are the key messages that we aim to deliver to you today, and we will try our best to do it. First, we are the gateway to alternatives in LatAm. We have an unmatched platform brand and distribution across the whole region. Again, we would like to highlight our earnings power as a firm, 3 complementary earnings streams, FRE, PRE and IRE shows a resilient and balanced business model, and we'll go this in further detail later. And the future growth of the platform of the firm. We have a very, very disciplined expansion to deliver very durable value creation to the shareholders.
So we believe that we are building an investment platform for Latin America future. How we are doing that? We today have a footprint in Latin America, really a complete footprint to take advantage of any opportunity that could arise, especially on the alternative space. We have today more than BRL 320 billion of AUM around and spread in 12 offices, 630 employees, 8 countries and more than 60 partners that create this deep bench of talent that are really the key of our future. We have more than 50 active strategies across alternatives, liquids and global solutions, diversified, both from asset class, geography, and taking consideration investor profile.
We have more than 30 years, providing investment solutions across Latin America, serving institutions, pensions and family offices. The total addressable market that we aim to reach is an addressable market of $7 trillion that today, the alternatives is just $87 billion. That has been growing, of course, since 2010, 4x, but still not very important in terms of overall addressable market.
The firm today has deep access to Latin American global LPs, so we have here in this graph, our country breakdown AUM by funding. We'll come back a few times for this specific chart that's very relevant today to show how we are diversified today, not just in terms of AUM, but I'll show you later in terms of revenues. We have a big portion of our AUM coming from the main markets in Latin America, Chile and Brazil, but also an important part of our AUM comes from international LPs and then from the other countries in LatAm. This is just the AUM volume, and we'll show you later about the revenues.
We have -- this is important to show that we have scale distribution capabilities, local on-the-ground coverage across the 8 markets plus our global coverage. We have a direct relationship with more than 2,800 LPs and more than 80% through proprietary relationships. This is very, very strong and creates a relationship with each of these LPs that's long term with a high-quality relationship, understanding their needs and the specific characteristics of each one of them. We have also a huge relationship with high net worth individual intermediaries with more than 300 direct relationships with family office and ultra-high net worth individuals across the region. And of course, more than 500 intermediaries distributing Vinci Compass strategies. So in terms of institutional investors, we will come back to that a few times today, too.
We are a very institutional investor, I would say, service provider. The majority of our AUM today comes from this type of investors where we have deep access to Latin America pension funds, including 100% penetration. So 100% of the institutional investors, the main pension funds in Chile, Peru, Colombia, Argentina and Uruguay are our clients. And this -- we do have also a very important percentage and, I would say, the largest for independent asset manager in Brazil for the same type of investors.
In Brazil, of course, the market is much more [ pulvarized ] in terms of the number, in terms of investors, but the majority of them are Vinci Compass clients. We have established distribution through global platforms and direct mandates, strong position within insurance companies, and a lot of relationship with the main sovereign wealth funds, endowments and financial institutions in the world that want to have exposure to the region or at least have interest and understanding what's going on in Latin America.
We'd like to say that our business, our service providing asset management platform have a few different dimensions. The first one is local to local. So offering customized investment solutions and investment thesis for local clients are in the local markets. So we have money raised from Brazilian clients, investing in Brazil; Chilean clients, invest in Chile, Mexico and so on. So the first dimension that's very important to us since we have a very strong presence underground all of these countries is local to local.
The other dimension is local to global. I would say after our combination of Vinci and Compass and forming Vinci Compass, we are one of the main players in the region, connecting the local markets to the global opportunities. Leverage long-standing relationships with top-tier global managers around the world, as you know, we manage allocation money through global solutions in the international markets, but also we have long-term partnerships with the top-tier global managers allocating money from local investors from all of these countries that we cover in the international markets.
Then we attract global money in our global to local dimension that where we serve international clients with deep local expertise, delivering access to opportunities in each of the countries that we are established. So we attract global money to local markets.
And finally, the final dimension, the fourth one, is global to regional, where we provide global investor access to pan regional mandates, especially covering all Latin America for different purpose or different strategies like infrastructure, private equity, equities, credit, [ ones ], we are more advanced than others, we are creating grounds to establish these global mandates.
So we have been growing steadily since back in 2009 when we were founded, of course, Compass was founded before, but we took this opportunity to show from 2009. We have been growing from the beginning of BRL 2 billion to this BRL 320 billion that where we are today. We have been doing so through, of course, a series of milestones where we have been able to grow organically, but also through partnerships with groups or other firms like we did with SPS Capital and then our partnership with Ares, MAV, Lacan, Compass and finally, what we announced yesterday, Verde.
So we are, as I said in the beginning, 1 year almost since we did the combination with Compass, and it was really a strategic combination, integration that was seamless and one of the, I would say, that corresponded a lot with what we thought when we decided to proceed both sides with this combination.
We have been able to unlock value through a lot of complementary trends, so it's really the foundation of our long-term value creation really building this Latin America platform. We have a very strong Latin America distribution and relationships for both firms. We could leverage on the Brazilian investment manufacturing of products and strategies with cross-border know-how. So growing the asset management, deep asset manager -- especially in alternatives that we had in Brazil to the other countries. Channel global capital in Latin America opportunities, as I said, in a regional -- pan-regional mandates, proprietary research led strategy with the local edge. So now we have analysts, PMs, relationship people in all the countries. So we have really a very strong deep knowledge focus on specifically alternatives and asset management. And the third-party distribution at scale that we have been able to -- that was the history, very strong feature of Compass that we have been able to build in this combined company that we can leverage in other companies -- countries.
So two things are very important here, and we will come back a lot to that is we could really leverage from our expertise of asset management and alternatives in different strategies from Brazil, in other Latin America countries. And at the same time, the success that we have been able to build especially through Compass in the other countries and exporting capital globally, we can do in Brazil that's still very parochial market that is still in the early days of exporting capital globally. And finally, with all this, I would say, knowledge, all this knowledge, we have been able to use a lot of cross-border instructing capabilities from both sides.
We have 2 strong legacies for sure. And now we are building one integrated platform. One thing that since the beginning, we noticed is that we have a huge geographic and product complementarity. So we have very, very limited geographic overlap, starting from offices, up to source of funding and capital allocation standpoint. So we didn't have much overlap even from offices, we have to us in New York that we merged in one to Austin and Sao Paulo, but the rest of the other places, either one company was not or the other. So we have been able to build this integrated platform [indiscernible]. Of course, the Latin America geographic expansion is one of the most attractive and growing alternative asset classes. GDP of $7 trillion in the region with more than 660 million people and very, very underpenetrated in alternatives with overall under 5%. And we can really take advantage of that expanding in regional funds management and distribution.
And we have a unifying long-term vision, becoming the leading one-stop shop platform for alternative investments in Latin America, establishing a local presence, both in local to local markets and import and export capitals into and out of Latin America.
We are aiming for an optimized operating model for scalable growth. What have we achieved so far. Office footprint optimization, we already did it. So we optimize our office and physical presence, so overlapping of structured streamlined. They share the infrastructure since the beginning, we integrated it up front and support functions. So now we have just one firm on that sense. And we have a unified leadership structure. It's important to say that since the beginning, we did not have separate units or silos. We integrated completely. So some of my partners that we will be talking today, either they were part from Vinci or from Compass, but now they have rose for the whole institution. This is very important that, in a way, forced us since the beginning to integrate completely the leadership in the firm by consequence.
What do we want to achieve moving forward? A LatAm wide product development. So we need and we are doing, as we speak, we have developed new regional and local alternative content across LatAm. So from the places that we didn't have specific products like private credit, real estate, infrastructure. Right now, we are aiming to build capabilities in the places that we didn't have before. So this is something that we're developing. It will be -- you'll be seeing us implementing as we speak. Now we are already discussing that. But moving forward, we need -- we'll work by this space for sure.
Expanded fee capture. High take-rates through discretionary mandates in global IP&S. This is very important. We are seeing an important opportunity to not just export capital from Latin America for specific products in our TPD business, third-party distribution, but creating really discretionary mandates for different types of clients from institutionals, high net worth, intermediaries where we are the engine of this asset allocation being a discretionary manager of these mandates moving forward where we can attract higher fees through this strategy.
And finally, scaling our international distribution. Broader capital formation through Compass Latin America footprint. So this is immediate because we do have a possibility to bring all this distribution effort to really scale our international distribution footprint and, of course, as a consequence, more AUM coming in our own products.
So we are one firm, one culture, and we have a governance that scales. Culture, shared value since the beginning, we noticed that. So we have culture alignment, long-term thinking and strong fiduciary mindset. This is not very common in the region, but we have been able to attract 2 firms that converge on this specifically thinking. Of course, meritocracy and ownership, it's part of our ethos. So a partnership model was preserved. Ownership mindset reinforced. So we have equity exposure to all the main people within the firm. We have been able to achieve a seamless integration team substantially integrated from day 1, collaboration across distribution, investments and structuring, as I said before. Talent, that's key for us since our business is based in talent. So we strengthen the leadership with the senior leaders with global experience. Now we have really a very seamless team that's hard to compare with other Latin America asset managers.
Leading distribution strategy and expansion. Elevated in seniority, of course, we have people with different backgrounds with a lot of seniority and a lot of complementary strength from the talent, digital leverage on Compass institutional reach. Compass had, as I said, all in all these countries, 100%, I would say, access to institutional investors. And Compass, of course, enhances Vinci structure expertise. So we have been able to bring this from the best from the two.
We have, of course, a very, very senior team with our reinforced governance bodies, institutional government for scale [indiscernible] decision-making, and a Board and executive committee integration with people from both firms from the Board to each of the committees. So it's important since the beginning that the senior leadership of the company are integrated in the same governance bodies.
Earnings power that's really very important. So we have a very resilient and balanced business model. We have basically 3 complementary streams or pillars; FRE, PRE and IRE. Fee-related earnings coming from recurring management and advisory fees, a durable fee base, diversified and scaling. This is the core of our business that creates the stability and the growth that keep us moving forward. The PRE, so the performance-related earnings that earnings coming from performance fees realized from our management funds -- managed funds. Since IPO, of course, PRE from liquid funds has been predominant, but PRE from private funds set to kick in, in the next cycle, of course, have been raising money on the private funds. And now we are beginning to see that will be materializing PRE moving forward.
In the final, it's very important, is the investment-related earnings. So earnings coming from GP capital gains that an embedded engine, not full price in our current valuation because they are -- the majority of this investment were made in our drawdown of private market funds, where that would translate in earnings moving forward in a current basis. But of course, we have a time this to mature. So we have these 3 main complementary streams that recurring cash flow today, significant gains coming from performance moving forward and also the GP commitments creating -- driving shareholder value creation moving forward and through different cycles.
In terms of FRE, the high-quality fee engine, as we said, is very diversified, as you can see in this graph, with this FRE by segment being very well diversified, coming from private equity, global IP&S, real assets and credit almost with the same size of the pie. This is very important. So we can really be very, very stable during cycles and Latin America, of course, is cyclical. So with this, we believe that we can really show how we can continue to grow in any environment like we have been growing in the last few years. We've tough times, more benign times, but to have keep growing. And of course, the speed will vary, but we'll keep growing with a very diversified FRE base.
So the key takeaways of this is, we are balanced across strategies and clients. We have this contracted and recurring fees. So the majority of the money is in the lockup for AUM for a long time. Private equities, we do have a sticky AUM and we just have a fresh flagship vintage extend federation moving forward and a very low concentration of risk and no single vertical dominates our FRE.
We have been able to deliver sustainable growth and resilient growth since our IPO. As you can see, we multiply assets under management with this combination with Compass that was very important to that 6x, fee-related revenues, we grew 3x and fee-related earnings 2x. So since the IPO have been growing, all these metrics related to fee-related earnings are -- as the market developed and the firm continues to deliver.
We have a proven capacity to scale revenue. This, as you can see, it's a 20% CAGR. And you can see for the calls that we have been able to do that in a very diversified way. Again, we do not depend on any specific streamline much. So this creates a really, really stable platform.
We have been able to compound FRE since the IPO with this 13% CAGR of nominal FRE. Again, being resilient predictable cash flow, we have been able to distribute a lot of dividends along the way and reinvest part of the capital. And we have a broader platform distribution to support our margin expansion moving forward.
Again, we have everything that we mentioned that we think what FRE can deliver to us. So recurring cash flows to fund dividends, self-funded growth, low concentration risk and resilient to cycles and a lot of visibility on cash flow. We have some proof points to really prove -- have a proof what I'm trying to say. It's a CAGR of 13% in the [indiscernible] per share, growing since the IPO and recurring fees around 84% of total fee AUM.
What comes next? We have a cross-sell into Compass long-term LP relationships across Latin America and abroad, product expansion, scale existing vintages and expand regional asset allocation, as we said before. And the global IP&S mix due to higher return on asset strategy to lift fee yield through discretionary mandates of asset allocation.
Another important point that till today has not -- hasn't been the main driver, but key for us is the PRE. So we have 2 value drivers. Liquids delivered in a tough cycle in private snacks. So having been resilient through the cycles, liquid strategy, sustained PRE in a high rate backdrop that we had, especially in Brazil. Private vehicles early in harvest that, as I said before, building a second driver of PRE, so we have the liquids while we had these high interest rates and building the next wave of PRE from the privates moving forward. So until now, PRE has been 80% liquid and 20% around that private. But moving forward, as you can see, the performance earning AUM is almost 50-50. So we should expect that the next cycle will be moving for more performance coming from the privates.
And what is in the pipeline. As you can see, performance eligible AUM is highly diversified between different asset classes. And we have a gross accrued performance fees as the second quarter '25. That's, of course, the majority of them coming from private equity. But as you can see that we have already accrued than expected performance moving forward of more than BRL 340 million. The portfolio is seasoning. It's core assets maturing to realization phase. So we are seeing a closer realization event that would translate in this performance that I mentioned to you coming from private in a diversified performance eligible AUM across all these strategies.
So today, we are introducing this concept and Bruno later will go with this in very further detail. That's very important to you to understand our business is the investment-related earnings. Our hidden growth engine. As you know, we have been making commitments and recommitments through as the GP of our fund, that it's very crucial. And one of the reasons that we did our IPO is really to have the balance sheet power to do it, where we are anchored in the fundraising process of especially the privates where we bring LP commitments alongside our anchor fundraising. And we put through capital call -- this capital to work in this fund that will translate in returns. We'll have these returns moving forward.
So what IRE is earning from our GP commitments invested alongside LPs. Why it matters? It's anchors fundraising. First of all, so we raise more money, so we create more FRE by doing that, aligns interest with our LPs, completes the distributable earnings flywheel. FRE, PRE and IRE and how value is created, management fees, carry through PRE and finally, GP capital gains.
So our business model is really built for resilience and long-term shareholder value creation through all the main asset classes. And with these 3 engines in streamlines of results, FRE, PRE and IRE.
So we do have this broader platform, a stronger foundation for growth. So we have this pan-regional presence with diversified exposure and product offer funding and currency. So we have this highly diversified, as you can see, global IP&S in terms of AUM is by far the largest vertical through AUM. But when we translate this, of course, it's carried lower fees. When you translate this for fee-related revenues, you see that's very, very diversified.
Client break bonds the same. As I said, the institutional part of our business is the main one, but of course, some institutional carries lower fees. So when it translates to fee-related revenues, still institutional clients are the most important in terms of revenues, but it's a little bit more diversified between other source of funding.
And here, you can see the breakdown in terms of geography and our presence in terms of product offering, funding and currency. As you can see, the AUM by country, it's really diversified, but with the Chilean portion of the business being the largest and then Brazil and then global, but when we see in terms of fee-related revenues due to the exposure for self-managed alternatives in the Brazilian portion of Brazil, change with Chile in terms of revenues. And you have also the global portion of the business that where we are, I would say, benchmark in alternatives for the region, again, being very relevant in terms of exposure and how we generate revenues from this pool of capital.
And in terms of asset allocation, where -- so the first portion is the liability side and the second graph is the asset side. Where we are investing this money? The majority, by far, part of our AUM are invested from Latin America outside, of course, because of the size of the market. But in terms of revenues, again, Brazil is very relevant, but highly diversified with 4%, 6% and then we have the international market and then the other markets. It's important to say that it's interesting because this creates a really diversified and the shock absorption of any specific countries or even the region because we have exposure to the international markets, too, and this is highly diversified. Of course, the U.S. being in the main market, but we have Europe, Asia and so for Latin America money and the other way around. So really today, we have a highly diversified platform, both in terms of funding and where we are investing the money in terms of AUM and in terms of revenues.
And this is the complete graph. I always say that I love this graph here. I know my presentations. This shows you really how we are diversified in terms of both revenues and AUM. Each of the graph goes from AUM and fee-related revenues to show how we are diversified, both in terms of where we're investing from where the money is coming from in terms of clients, in terms of geography, so we are really diversified through Latin America and globally since we are locating the majority of the AUM that we manage and we advise globally.
Private credit specifically, and we have a session later, it's one of the fast-growing allocation market. We have in Latin America a little bit late, but like what happened in -- in the international markets, the private credit market growing, and we will see the same in Latin America. Today, corporate lending, it's 70% to 80% bank-driven, and versus 40% to 50% in developed markets. So it's a huge opportunity, and we cover this through structured credit, infrastructure credit, agribusiness, high-grade real estate credit, diversified project credit and opportunistic capital solutions. Of course, we'll talk in more detail about this later. But this is a huge opportunity that we are adding BRL 13 billion in AUM by [ June 2025 ], just focus on the private credit opportunity.
And we want to be a one-stop shop of private credit becoming more and more relevant, providing these credits so people are creating an important deal flow for us since we have been growing on that sense. And of course, we are very creative and versatile on providing structural opportunities.
So we have a fast growing allocation market, as I said, the investor appetite is big. And the majority of the LPs, both global, and LatAm aim to allocate over 50% to private credit moving forward. Of course, still today, this is a spread market over a very high interest rates. But we are seeing and will listen from [indiscernible] later that we are seeing a possibility of all the markets moving interest rates down. Brazil and other Latin America counts already started this movement. But with that, the spread of credit will be more relevant in the composition of the total return of the investor on credit as a whole and private credit is already on the radar of the majority of these investors. We have -- the track record is important. So it's prevails where you have this track record. So our proven track record will help us to move ahead of the rest of the pack.
We have unmatched pan regional distribution capability to really access this capital and deploy it and the proprietary LP relationships, we understand very well what the investors want even in this private credit space.
So we have been leveraging revenue stream, as I said, generally, flows to higher free discretionary strategy. So a lot of products has been able to help us to deploy it. So on credit SPS IV, Credit Infra, CopCo and CHILPCO II, Infrastructure, Infra LatAm, VICC II that we plan to launch, Forestry LatAm IV and V, Private Equity VIR V and VCP V, real estate through the REIT since the interest rates will go down, we'll be able to raise more money from the REITs and also other opportunistic funds in real estate. So we are seeing ways to move our higher fee through this discretionary strategies, and we will cope this with the demand from global alternatives and locally through our capabilities in terms of distribution, both coming from Pan Regional, the relationship with the pension funds and global investors.
We, of course, see across our products, convert relationships in [indiscernible] mandates and allocations, higher discretionary AUM mix with higher return on assets and more recurring, stickier management fees to these higher fee products normally drawdown funds with a longer horizon in longer lockup periods.
So here, we'll cover this more in detail, but our 3-year targets at a glance. From the last 12 months number, we intend to move our fee-related revenues from BRL 800 million where we are today. We've a 22% CAGR moving forward to BRL 1.6 billion of fee-related earnings -- revenue, sorry, until 2028, full year, 23% CAGR in fee-related earnings from BRL 264 million the last 12 months to BRL 600 million. Second quarter numbers of 28% margin, up to 38% margin, moving 10 percentage points of the FRE margin and the fundraising target of this period of time from second half '25 to year -- full year of '28 of BRL 100 million.
So summarizing, I would say, my points here, we have 3 main growth drivers as being the gate alternative investments in Latin America. First, regional expansion, penetrate existing Latin America relationships to distribute, managed alternative investments. Second, private credit is in all my presentations, I come back to this because it's a huge opportunity, and we are seeing this kicking. So capture the asset class secular growth in filling Latin America financing gap through a full-service private credit platform. Finally, leverage revenue stream, increase the percentage of AUM allocated to discretionary products with higher return on assets. So this is the 3 main growth drivers to really deliver the main metrics that I showed to you in the former slide.
With that, I'll be quick here to talk about more our most recent, I would say, partnership that we just announced yesterday. Of course, we'll come back in more details later about this. But I like to give you the rationale and the main, I'd say, characteristics of the transaction with Verde Asset Management that we announced after the market.
We really, as I said before, we really want to build the region's leader in global and local asset allocation that we believe we are underway to doing that. This strategic acquisition will provide that we will scale performance, distribution and profitability. So Verde will move us to BRL 320 billion of AUM. Verde is really an outstanding brand, very recognized with amazing reputation, one of the most recognized brands in the asset management industry space in Brazil. We are partnering with one of the most respectable and sort of teams for multi-strategy funds in the region. And we'll complement a lot, an important asset gap across our multi-strategy allocation product offering, bringing outstanding track record long ago in more detail and a stellar management team. And I'm saying that with all these objectives because it's true. And it's really recognized as so in the country.
We will create a scale immediately in an AUM mix upgrade. The transaction adds scale to our multi-strategy funds immediately and pension plan strategy is very important. Within Global IP&S by bringing BRL 16 million of AUM with attractive [ hosts ] and -- of our AUM mix, reinforcing earnings quality and deepening the share of discretionary mandates in global IP&S.
That will accelerate Vinci Compass with the leading multi-strategy player in the region. This creates a new avenue of growth and put us in a very, very enviable situation. We'll combine for us to create new strategies. So the Verde brand will help us to develop new products moving forward, combining origination and presence in the alternatives market from Vinci Compass with Verde's brand power across high net worth individuals and intermediaries. Analog distribution across that, I was just commenting before with my partner, [indiscernible] how we can really scale the Verde brand that's not just a brand in Brazil, but we need to really show to our international clients, especially in the other regions of Latin America how we can introduce these products and these allocation capabilities to them. Still, since until now was not the focus of Vinci so far.
We will be building the region leaders in global localization, again, the transaction structure was, I would say, done to take in consideration, the characteristics of Verde and was structured in 2 phases with Vinci Compass acquiring 100% of Verde in 5 years and follows a price to fee-related revenues, multiple to protect against AUM oscillations, okay? We expect the transaction to be immediately accretive on a double-digit basis to FRE per share.
The management team will be aligned completely and they create a retention model. They will be responsible to continue management change in offering in the management of the Verde's fund. But they will have a preserved independent -- investment management and risk management governance. And [indiscernible] be will join Vinci Compass as a partner in the other partners of the Verde too. Alongside our own roster of partners. The share received a part of the payment will be subject to lockups like traditional lockup. And the transaction, as I said, will be structured in 2 phases, 1 now and another 1 in 5 years from now, we acquired 50.1% and then the remaining 49.9% in the end of 5 years. Even the first payment, this 50.1% will be done one part now, another part in 2 years from now and the rest of the 49.9% would be acquired in 5 years in a kind of earn-out type of arrangement are linked to the revenues of the business.
So Verde is an asset management of BRL 16 billion, has been -- the team has been working together for more than 25 years. The [indiscernible] of the fund is from 1997. So it's a very long track record, a very well-known in Brazil, 54 professionals. The majority of the AUM, it's Brazil multi-strategy. We have a portion of global multi-strategy, pension funds. They are the main, I would say, strategies of Verde. It's very well known, a very strong brand, a lot of media mentioning for the brand. So it's very interesting for our clients to have access to this type of product.
The core strategies are like I described it, multi-strategy BRL 7.2 billion with an astonishing track record, global multi-strategy too, BRL 4.4 billion in AUM. And finally, the pension plan at BRL 2.9 billion that follows, in a way, the Brazil multi-strategy, I would say, at allocation, but of course, adapted for pension plans.
So just to summarize the key transaction terms. We -- as I said, we're structuring 2 phases and follows a price to fee-related revenues in a way to amortize any AUM fluctuations. So the Phase I, we are acquiring 50.1% of Verde with total estimated consideration component of 2.1 million Class A shares and $46.8 million in cash, we'll pay this in 2 phases, 1 now, another 1 in 2 years. And the second payment in the earn-out structure to be paid over 5 years after closing to acquire the remaining 49.9% of Verde that will depend on several conditions in [ Tipco ] earnout structure. But today, the value that we've made for that is around BRL 127.4 million, that we could pay in our discretion in shares or in cash.
The transaction -- voice structure for long-term transition. So who read the newspapers, you see that what [indiscernible] said. The idea is a minimum of 5 years of the commitment of [indiscernible], but he intends to stay as a partner of Vinci forever, basically mentioned his all words. He will continue to be the CEO and CIO of Verde. The team will be untouched. So it's really a very smooth transition. The financial impact will go over in more detail, but will be a double-digit basis FRE per share and low to mid-single-digit accretive to DE per share.
The timing, we expect this to not have a lot of regulatory burden. So probably, we'll be closing this in the fourth quarter of '25. Of course, we have some regulatory approvals, customary conditions, but we don't expect much problem coming from this front.
So with that, I would like to thank you and leave to the presentation of my part to Jaime Marti, about Latin America investment opportunities.
Thank you, Alessandro. Thank you very much. Very happy to be here, happy to share our views of the LatAm market and also our client relations team, okay? This team that you see here, the client relations team that we have 80 client relationship manager there, client-facing in 9 different countries, including 1 presence there in the United Kingdom with a lot of experience, 17 years of experience. Out of the 62 partners that we are in the combined entity 21 are part of the client relations team. So very significant, on average, working together, here at Vinci Compass for 15 years. So it has been -- there's been a lot of personal -- have been 29 years at the Compass when we started, right, many years ago. I mean when we were less than 15 people, so I'm part of the inventory.
And I've been very fortunate to see the company grow significantly. And now it's -- I mean, 600 people firm sharing the same values and with the same partnership mentality, okay? Part of the team is also 35-plus professionals that play a key role in the relationship with our clients in marketing, client services, support and product specialists, okay? So a lot of experience there. And when you see here, the partners that are throughout the region, then you see sort of the 21 partners, I mean half of that -- the partners are based in Brazil there with plenty of experience there and all of us either native in Spanish or native in Portuguese. Now with the combined entity, we're all native in [indiscernible], right, obviously.
So and very deep and strong diversified client base. Alessandro touched on that in terms of our institutional background, more than 40% of the revenue is coming from LatAm institutional clients. I mean, very deep coverage there, more than 100 insurance companies in the region, 1500 single-family offices, high net worth individuals and also ultra higher world in reals, everything there. So very important, it's the second largest revenue source. It was very important for Vinci, very important for Compass and for the combined entity, 23% of the revenue is super important. More than 460 financial intermediaries that it's a very efficient and very -- in a way, scalable way to access the mass affluent market in the region, and that's also roughly the same revenue source as the ultra high net worth individuals, 22%. And then finally, 10% coming from global investors that we're going to talk about later. So again, a very deep strong and diversified client base in the region.
Here, LatAm market landscape, of course, after the merger, the sort of the addressable market doubled for the combined entity before with Vinci. I mean, mainly, mainly more than 90% of the assets were in the local to local strategies and the global to local, that we talked about before, Alessandro also touched on that, right, Brazilian investors getting into Brazilian strategies and also global investors investing in Brazil and Australia. That was mainly the case. Now it doubles because it's now LatAm, it's not only Brazil. Also the investment strategies now are -- I mean, our more investment strategies, more products there. And also, you see here the local to global gets very significant. Jaime de Barra will probably talk about that in terms of local investors investing globally. Globally, either through our discretionary global mandates and also the access to the third-party business to our global managers, super important for us now.
And also global to regional. This is happening now, basically. We have global investors investing in our LATAM products, not only Brazil, for example, our Latin American corporate debt fund, but it's a $1 billion fund, roughly 30% of that fund is coming from global investors. So very significant. So this is super important.
Here is just a sort of a double click on the addressable market by type of client, but it's the same message. I mean every type of client, the opportunity doubles in terms of that. And you see the map to your right, it's the darker the color is the larger the opportunity set or the larger of the market. And here is no surprise that Brazil and Mexico are the largest markets on that front, okay?
Here, we see that on the bottom right, the LatAm addressable market that we talked about before, we expect it to keep on growing. It's going to get to $9 trillion by the end of 2030, and part of that driven by global investors. We believe that global investors also are underweight relative to the history in terms of investment in LatAm alternatives. And that, we've seen a lot of interest on global investors. I mean all the road shows that we're doing in Middle East, in Europe, in Asia, here in [indiscernible] and everything shows us that there is a tremendous interest in LatAm alternatives.
And on the graph to your left, it's a very interesting exercise that we did is that we added up all the players of the addressable market, so LATAM institutionals, higher worth financial interments and we saw the asset allocation on an aggregate basis, how it looks like. And as you see there, if you add up the local alternative plus the global alternative assets is account to 7% of the assets. That's higher than 3 to 5 years ago, but we believe that the only direction here is going to go up. And that's basically our -- what we are thinking.
Some examples in terms of growth opportunities here. Three examples, three very concrete examples, private wealth, private wealth increase in allocation to alternative. Why? Because global alternative managers are, I mean, changing the liquidity profile of the products, having the semiliquid funds, lowering the minimum tickets there, accessing platforms like [indiscernible] all that, all that is going into the private wealth accessing more and more the alternative investments.
Global clients. We talked about that before, and we're going to talk a little bit more about that in terms of more interest in Latin American GPs. And finally, Latin American institutions give you two concrete examples in terms of the Mexican pension funds and the Chilean pension funds and the growth of the assets, driven by a higher contribution rates, okay?
On the wealth side, investing in alternative assets more than giving you sort of a high-level projection or estimates is what we wanted to show you here is our own experience, okay? So these are numbers as the combined entity on a pro forma basis, 10 years ago. 2015, $1.7 billion we had with financial intermediaries, which again is a very efficient way to access the mass affluent market in the region, only 2% invested in alternative assets. Fast forward 10 years. Now we have in this channel, we have $9.3 billion. So a very significant growth on that channel. And not only that, 24% invested in alternative assets, either our own alternate products or the global alternative products in our third-party distribution business. So we believe that the trend of this -- of the growth on the financial intermediates, but also on the percentage on alternative investments is going to be basically keep on growing.
Global investors. Here, again, this is our own example. It's not a high-level projection. It's on what has been our history on a combined basis. 2015, we had 5.4 billion of assets in our LatAm strategies, okay? Out of that, [ 800 million ] was coming from global investors, so 15%. Today, 13.6% is in our LatAm strategies or very significant growth. I mean -- I mean almost triple that. But [ 3.6 billion ] is coming from global investors. So that's 4.4x the growth on that. 26% of the assets of LatAm states are coming from global investors. There's a report a NASDAQ report, NASDAQ here of our host. So should be the best report so they can invite us again here to this audience there. The best report, 58% of global buy-side firms plan to increase their exposure to LatAm in the short to medium term. And again, we're seeing that in the visits in the one-on-one meetings with clients globally, okay? That is happening.
And then finally, 2 examples. One is the Chilean pension funds early this year. There was a pension fund most of you probably know, a pension fund reform that was approved. And that, among other things, it increased the contribution rate that it was super long due. I mean it was ultra-neded because it was very low international standards, and it's going to increase gradually, right? And you see there the graph. And with that contribution rate increasing, we believe our estimates is going to get the size of the market of the Chilean pension fund market is going to get to $360 billion in 2035. That's roughly 90% of the GDP in 2035. So a pretty significant growth and a pretty significant industry PAUSE within the capital markets and within the size of the country.
We're going to go to target date funds, just like in Mexico. So we're going to have that. And there's going to be a definition of the benchmarks being used by the regulator next year, September of 2026. And that's going to be key to assess their final exposure to the different asset classes, okay? And finally, the alternative investment limit increase. This was actually before the pension fund reform. This was said by the Central Bank. It has been increasing gradually there, and it's going to keep on increasing. And by August '27, we expect an additional allocation of $11 billion, which is pretty significant versus what is currently today used in alternative investments, okay?
And finally, the Mexican Afore, the Mexican pension funds, strong growth. It's going to get to $850 billion there. Again, contribution rate is a key driver of growth. It's going to get to almost 40% of the AUM of that country, in part driven by a very large and young population, as you know there. And because in formality that it's very high in Mexico, it's going to go down the expectations there. So that's going to be super important for the growth of the assets there. And as you see there, the contribution rate has been already increasing because the pension fund reform in Mexico was done some years ago. It's going to get to 15% by 2030. So pretty sooner than Chile.
And again, the alternative investment limit is going to go up. It's going to double there and probably it's going to have an impact -- a significant impact also on the local alternative pocket of the [indiscernible] which today, they have a minimum requirement and most probably that number is going to go up. So again, a very interesting opportunity on the Mexican Afores.
So that's pretty much it. As you see, very interesting opportunities in the region that we believe that we're very well positioned to capture these opportunities. I mean, given our strong distribution capabilities, I mean, our very experienced client relations team. So that's it.
Thank you very much [Foreign Language].
Thank you, Jaime. Now for 15 minutes overview of what you're seeing in macro in Latin America. So we have a more detailed presentation in the site because we're short of -- had to crunch it a little bit here for this talk. But I think I would say that we have at least 2 common themes all over Latin America. One is the interest rate opportunity. We saw at cutting rates here, you're going to cut even more in the near future. So countries are in different stages of [indiscernible] interest rates, some are more advanced. Brazil, as we -- we know haven't done anything at all. So we see a very good tailwind for Brazil coming from lower interest rates. Rates in Brazil are still at 15% nominal rate. We're talking about 10.5% real interest rates for the overnight rate. And we think that this is going to improve a lot. So that's a common trend all over different stages, as I said, but I have to look at it.
And the other common trend is that countries are -- we are seeing countries moving more to the center of the political spectrum. And that was an opportunity in Argentina, in Chile, and we think that in Brazil that will be the case, too. So I'm going to go very fast here. This is why we look at Brazil first, and we think there is a big opportunity in Brazil, as I just mentioned, because we see the possibility of having a political change. The red line there is people who say the government -- rule of government is bad or terrible, the green line is people who say the government rule is great or good. [indiscernible] went through a very worsening situation of this evaluation by the population. The yellow line is the regular guys. And you see that right now has more people they have a negative view of [indiscernible] government, then a positive view. That shrink a little bit after Trump tariffs because [indiscernible] was very able to frame it as attacking our sovereignity, but I think these effects mostly done.
And when we look at -- when we look at the chart on the right, how much is the approval of the government. Now, you relate that to the votes in the second round, it's amazing that Brazil is almost a straight line here. This is [indiscernible] in 2002. So we can see that had 28% and about 39% of the vote. This is also in [indiscernible], Lula 2006 and Lula right now has 32% of the great and good approval rate, and that would translate in about 44% -- 43% of the votes in the second round. So we see now that the political odds are like 60-40 for losing and that could be a good shift in Brazil.
One amazing thing is that this thing is happening despite a very low unemployment rate, relative good growth in Brazil, short on the left and unemployment rate is very low in Brazil. We think that this unemployment rate is going to start to go up. Why is it going to start to go up? Because if you look at the interest rates in Brazil, I mentioned to you that the SELIC rate is at 15% nominal, but in real terms, it reached 15% and all came back to 10.3%. This is slowing down the Brazilian economy. Why we haven't seen it slowed off faster than we saw so far? Basically, because the government increased the fiscal deficit when Lula started. Lula, when he started his government, he asked an authorization for Congress to spend more money. So he increased the government expansion by 2% of GDP in just 1 year. So the fiscal deaths in 2023 was about 0, went all the way up to minus 2.5%. But that authorization was for just 1 year. So now we move back from minus 2.5% to 0.
So getting back to my question, why rates went up so much here in this political cycle because in this inflation cycle because the Central Bank was trying to slow down the economy, but the treasury was increasing the fiscal deficit, and that was accelerating the economy. But now we are back to the fiscal policy in neutral terms. So therefore, now both engines of the economy are pushing the Brazilian economy backwards to help fight inflation. So that's going to be good for inflation, but that's probably going to be not so good for Lula's popularity.
And we already started to see that in terms of GDP growth. That's a quarterly GDP growth in Brazil. That's the first quarter of the year, very strong because of agriculture. We had a very good agricultural year. But then second quarter, already 0.4% of GDP. The third quarter, the number has not been released yet, but we have almost all the components of GDP. So if we do our calculations, it's going to be around 0.1% growth, which is now very close to 0, could be 0, so I think the political headline is going to be very hot when -- by the end of this month, pops out Brazil grows 0. So all the talk about cutting rates, that's going to warm up in the press and in the markets.
And for the last quarter of the year, we anticipate a 0.3% growth. So that means that we're going to see more below potential growth in Brazil for a while, which will help reduce inflation. Inflation in Brazil, the target is 3% and has a ceiling of 4.5%. So inflation in Brazil, the blue line has been observed, went all the way up to 5.5%. Latest number is 5.13%, and we think that by the end of this year, it's going to be 4.6% and then 4% by the end of next year. So that's the inflation going down that we will allow the Central Bank to lower rates in Brazil.
And you might think, well, we just said 4.6% for this year. And you said before that the ceiling of the inflation target was 4.5%. So how do you think you're going to cut rates in that scenario? Because the Central Bank always talks about the relevant horizon for the Central Bank, which is 1.5 years ahead. So how do I know inflation 1.5 years ahead. So from the Central Bank model. Right now, they say that in the -- by the end of this year, in their relevant horizon inflation is going to be 3.4%. But when we get by December, this blue line is going to be starting from 4.6%, which is our forecast. And we're going to have another 6 months of very high interest rates, almost double the neutral rate. So we have our model to replicate the calculations of the central bank. And we think that by December, this number here is going to be around 3.1% or 3%. So that's why they're going to start the rate cuts by the end of the year.
We already see the market forecast going down. So that's the inflation for this year from 150 financial institutions that report to the Central Bank. It's called the Focus survey. It was at 5.6%; right now, it's 4.81% and it's going down. These are -- our forecast I just told is 4.6%. So -- but these are 150 guys. So it's a little bit slower to review down. And people expect the Selic rate to be at 15% by the end of the year. So no cuts, I think they're going to be 1 cut in December, 25 basis points, but then 12%, 25% and 10% going down. How much is this correct? This forecast? Yes or no. If it's Lula, I think this is the number. If it is someone from the center right in Brazil with a very serious fiscal commitment, I think the premium that is embedded in interest rates of the fiscal risk, it's going to reduce and then think it's going to get much more if it's someone from the center right. So this is, I think, the major tailwind for Brazil for Brazilian assets, these rate cuts.
And just to give you an example, this is the 10-year rate in Brazil, and this is the stock market in Brazil. I put a small cap index instead of the [indiscernible], but the main stock is Petrobras, depends on oil and government interference. The second biggest is value, which depends on China, not Brazil. So there's a better correlation with interest rates in the small caps. So you can see the darker the blue, the closer we are to today and the red dot here is the latest observation. So you can see that, of course, as rates went up, the stock market went down. The 10-year rate in Brazil reached -- the SELIC reached 15%, but the 10-year rate reached 15.3%. And then the stock market was at the lows at [ 1.8 ]. Then when we start to see the fiscal retrench that I showed you, the fiscal policy going backwards, the rates -- the 10-year rate came from 15.3% to 14.5%. So the stock market went up to [ 2,000]. And now we are around 13.7% and 13.5%, another big jump here.
So we're going to see both cutting rates and assets in Brazil, take any cash flow. If you discuss any cash flow at 15% is one thing. If you discount any cash flow at 10% is a different thing. So assets in Brazil are going to be repriced as we start to see this interest rate cut in Brazil.
I'd like also to talk about a few other markets. They are in different stages. So Argentina has been one example of this political change. And then one of the things that this political change translated into is an improvement in the fiscal account. So that's the -- how the fiscal deficits were very persistent in Argentina for a long, long time and how we change very fast when [ Mile ] was -- became present. So that's the good part of the story of Argentina, and we think that's a very good backbone for the long-term problem. However, we think that there is a problem in the short term because they relied a little bit too much in the currency appreciation to fight inflation. Just -- it's not -- I'll do the fiscal surplus and then everything else, I don't care. No, you have to care about other things too.
So you see here, that's the real exchange rate in Argentina since 1998. So this is when Milei took off, healed the currency, but then he let the currency appreciate very, very much to help fight inflation. So opens you a few weeks -- 1 month ago, the exchange rate in Argentina was as appreciated as it was in 1998 during the convertibility area. So that was not right. And you don't have reserves to sustain it. So that's why they're coming out of the U.S. asking for more reserves. So we start to see the currency to devalue. Here, this is in real terms. This is in nominal terms. There is a band now, and they almost missed the band. They had no reserves to make significant interventions. They had to come here to the U.S. to help -- ask the help of [indiscernible]. So I think we're going to see in Argentina some bumps here is the interest rate right now. It was around 30%, went all the way up to almost 100% to fight the currency that was going out. But now they are starting to get back to 35%.
So we think in Argentina, the backbone on the fiscal side is very good. They overdid the currency appreciation. I think after election is going to be late October -- [indiscernible] of October, they're going to -- they don't have reserves. They have to accumulate reserves. After elections are over, they're going to have to do it. So we think the currency will depreciate, inflation will go up a little bit, but they're going to have to use monetary policy to bring inflation down. And then I think we might start to see a better pattern from Argentina, and I think going to be very good for assets in Argentina. In the short term, we think there might be some troubles there.
These are the elections I mentioned to you, is going to take place in October. If you look at the coalitions. If you get together, [indiscernible], the party of Milei and Pro, which is the party of [ Macri ], they're going to -- they have 41.7% of the vote. And if you get the [ Peronist ] altogether, PAUSE they have 40% of the vote. So it's going to be a very close election. Although I have to say, I follow these countries for quite some time right now. Brazilian poles are very bad, but Argentinian poles are -- I don't have words for it. They really miss big time, all the time, the numbers. So let's see what's going on there.
Chile, Chile is always the good student of the class. It's not hard to talk about it. We're going to have elections right now, the same story as I just mentioned. It's never easy. We're going to see a first round where the communist candidate, [indiscernible] will probably come out ahead in the polls. Oh, gee, but he said he's moving to the center right, yes, but she has a very big rejection. And there is a lot of center right, [indiscernible] is a center-right candidate, [ Casas ] a center-right candidate. Kaiser is a more righteous like Milei candidates. So when we get the right together and you see the second round of votes, then we see a better profile there. I think that's going to be after -- we see that definition is going to be good for Chilean assets.
In the short term, we start to see some concern about growth. Central Bank has cut rates, inflation is a little bit -- not high, but coming from Brazil, it's hard to say it's high, but it's within the target. So some concern, maybe you don't have room to cut much more. And the fiscal side, there is some concern about what's going on. But again, all those countries, we are talking about Chile, I'm so concerned about the fiscal. That's nothing compared to Latin America.
And a last word here on Mexico. Also, we are always surprised by how Mexico is performing because there are a lot of issues going on, PEMEX and everything. One point that we think it's very concerning is the Supreme Court reform that happened in Mexico and all 9 Supreme Court judges are from [indiscernible] and they have been approving a list of leisure relations that which are not, I don't think, are very positive reforms and might charge some price in the longer run. So there are some micro things that are very interesting as Jaime Marti was just mentioning right now. But in the long term, we get a little bit concerned. The [indiscernible] should be more concerned is with this renegotiation of the trade agreement with the U.S. They are going on right now that might hurt growth a little bit. I just saw a couple of days ago, President Trump putting taxes on [ drugs ] imports, which will hurt Mexico. And with lower growth, we start to see some concern about the fiscal numbers. Maybe the fiscal numbers are going to miss the numbers less in '24, it was a pretty bad number. And if you don't see growth, we might see some concern in that area, too.
Colombia is also more a political change thing -- political change story and Petro seems not to have been doing great. And I don't think that's going to be hurt also a fiscal concern, but they have already cut rates a little bit, but they might have some more room to cut rates if there is also a political change in elections next year.
So I'm short of time, but this is a major overview of what we're seeing in Latin America. Again, we have in the site a much more detailed presentation about all those countries. I just want to give you a flavor of what's going on and put it in context. Now we have Jaime de Barra talking to us a little bit about IP&S.
Thank you very much, Jose Carlos. And great to be here for the first time. Very excited about the prospects of this integration that has already produced many good things, as Alessandro said. The Global Investment Products & Solutions unit is a testament of how complementary our 2 firms were. We now have an amazing platform for offering investors across Latin America and also global investors solutions for every single piece of their portfolio and for every single in a way, need, be discretionary, not discretionary any investors that are large and sophisticated enough that have large teams normally are nondiscretionary clients, investors that are sort of more midsized that are sophisticated, but want to focus on some strategies can give us a mandate on a discretionary basis.
We also have a very interesting setup in terms of the experience of the teams. I had the area and I've been doing this for almost 30 years since we started Compass very shortly after we decided to take a strategic path to complement our own sort of asset management, manufacturing capabilities with the capabilities of a very large, sophisticated top-notch global managers. And we've been doing this for the last 30 years.
In the case of our discretionary -- our discretionary practice, Fernando Lovisotto has also decades of experience, mostly in Brazil, dealing with Brazilian clients; Daniel Navajas has also 25 years of experience in the third-party distribution business. So this is a very experienced team, seconded by professionals that have been working either at Vinci or Compass for many years. And one exciting piece of news for us and that has been a bit surprising in a way is that the culture, the integration of how teams work has been remarkable. I mean, the -- it's the heritage of Compass IP&S business was mostly, I would say, multi-asset global, more like benchmark oriented trying to find alpha in some ways. And the Vinci heritage was more absolute return on the -- following the Brazilian heritage. And now with the transaction with Verde, I think we will be, for sure, the strongest and largest solutions provider for Latin American investors.
In terms of the diversification, qualities that this business brings about, as Alessandro said in the beginning, the -- we can -- we are now able to provide any sort of solution that Latin America investor needs to invest globally or to invest locally. But we can also provide global investors with some solutions that are more sort of nuanced than the typical mandate or the typical fund to invest in each of the countries we are present. We're working on a Brazilian fixed income offering for Chilean investors. So we are able to be nimble and to offer, again, solutions to investors either globally or locally.
We also have a very diversified type of offering in the solutions space. And that's a key feature of the combined entity. On the discretionary side, we basically serve individual investors that are larger, a bit more sophisticated than the traditional mass affluent investor endowments, retirement plans on a vast array of services. We offer customized solutions. We have our own proprietary research in economics, in strategy, in fund selection. So we have a very deep team that can act as an OCIO. We manage alpha-driven strategies. We also manage multi-manager funds either in a discretionary or nondiscretionary way. We have a special team to do that, that we -- I will talk about that later.
So we have again, a team that can deliver a solution for investors that are investing either locally or globally on a multi-asset or single asset strategy.
One of the amazing things that happened when we merged is that the heritage of Vinci in Brazil in a way it matched perfectly to what we're doing at Compass. The opportunistic sort of more absolute return views combined extremely well with what we were doing in terms of asset allocation, so we now have a very strong core layer of multi-asset optimized or tools to get optimized portfolios. We have a team, a very deep team that was complemented by the expertise of Vinci in selecting hedge fund managers to our expertise in selecting GPs and [ long-only ] asset managers. We were early adopters, and this is as a result of the connection between the discretionary part of our business and the nondiscretionary part of our business, we were pioneers in including illiquid or semi-liquid solutions into a multi-asset portfolios for our clients. And the Vinci heritage comes also with a very interesting experience in providing practical ways of executing opportunistic ideas.
And there's an example about the -- about Argentina fund that from door to door produced close to 30% returns, and it was an opportunity that our teams saw when the new government took office, but that fund was liquidated 3 years after when the investment thesis was done. And that's a very interesting piece of this -- of this engine that produces multiple sources of alpha on the back of a very strong core allocation, very -- on a very systematic way.
In Global IP&S discretionary, we have approximately BRL 50 billion of assets under management invested across markets all over the world. More than 1,000 mandates, 35 people team with a long experience and track record. Approximately 30% of our AUM come from institutional investors. And this is -- I mean, this is a very nice way of putting. I mean -- thank you [indiscernible] and team for putting this slide together, but we wanted to bring to your attention here is, is this the fact that after a year of being integrated, we have been able under the leadership of Fernando Lovisotto to make teams in Mexico, Chile, Brazil, New York work together, it's been amazing. And the results in the performance have been clearly demonstrating this -- our ability to bring what is now called this organizational alpha.
We have a very broad offering in terms of strategies. One very interesting part is we can call it maybe a portable alpha type of mindset in which we tap the different expertise of the different parts of the team in terms of manager selection, in terms of the expertise in certain specific assets in Brazil and in Chile to offer a wide array of SMAs and commingled vehicles for our clients to access our knowledge.
We have been recognized in Brazil many times as one of the top-tier managers and how we deliver, it's a Compass process, but we have been honing the joint efforts in risk management in -- also in working very closely with our client teams to try and identify the need of the client. And then it actually all starts there. What are the needs of the client or the investor and then we decide if a discretionary solution is the answer or a nondiscretionary solution is the answer, but it all starts with a very, very close relationship between Jaime's team and the product's team in the discretionary and nondiscretionary parts of the business.
This is Vinci Strategic Partners is a very interesting part of our business. It's a new -- is, I would say, a newer initiative in which we try to bring to our clients in Latin America, all the experience that the Vinci team has in knowing GPs of alternative assets in Brazil and also globally and the experience we've had distributing GPs, global GPs for more than 15 years now. We started in 2010, and we've been having sort of the luxury of being in the kitchen with some of the most well-regarded and largest GPs in the world knowing how to select GPs for our clients. And we have invested in more than 150 funds. We have 15 -- more than 15 mandates in place. We are advising 40 large families in the region. And in a way, we want to be sort of an alternative to the Cambridge Associates or the step stones of the Hamilton lanes of this world for Latin American clients that prefer to deal with someone that is closer to their mindset. And in many times, they don't have the size to justify paying the fees of the likes of [ StepStone ] or Hamilton Lane or Cambridge Associates.
In terms of the other part of the business that is important for us is the Global Investment Solutions unit, where we build multi-asset, multicurrency portfolios for investors in LatAm. We have BRL 18 billion of assets under management, more than 500 clients in 7 countries, exposure to a wide array of geographies and asset classes. And we invest in both public and private markets. And we believe that this business is also a very -- it's a highly potential growth business for us since the trends in savings are very positive and the trends in making portfolios, in large countries, making portfolios that are more global that require sort of a knowledge to invest internationally, considering that investing internationally, but providing returns in your own currency is somewhat tricky. We've been doing that for almost 30 years.
The Brazil Investment Solutions is a very large team too, BRL 20 billion under management, 249 funds or vehicles. Almost 50% of that money comes from institutional investors, and we have a team that has been working together for a long time, and it's very senior. And the growth opportunities here are also very encouraging. We've been in a way crossing the dessert since 2022 when interest rates went up significantly in Brazil, I mean, when interest rates go up from 2% to 15%, it's a very challenging environment for investments that are not basically short-term fixed income or long-term fixed income, low risk. We've seen that happen in other countries of Latin America, too. But whenever interest rates start to fall, we think that there is a big opportunity in this market to grow.
Because of the third-party distribution businesses is nondiscretionary, we have relationships with many institutional clients, many family offices and many intermediaries that they make their own decision on who manager on what the asset allocation they need. So when we interact with them, our way of leveraging the relationship with these clients is to offer top-notch exposure to GPs and liquid managers in the world. We are one of the leaders in this business. As I said before, we started back in 1999 when Chilean pension funds started to invest globally. And we have been honing our capabilities to do this business, and we have a very significant market share in all the markets that we participate.
We have placed more than $100 billion for traditional managers and more than $72 billion for illiquid or alternative asset managers.
What we do that is different and that -- it's provides us with the competitive advantage is basically we have been trying, and we have been successful in attracting top quality managers to maximize the share of wallet we have from the deep relationships we have with Latin American investors. We have a strategy that is not the strategy of a fund supermarket. We select a few GPs and a few managers that, obviously, there are some overlaps, but we try to make our offering as complementary as possible in order for us to know extremely well what their product offering is, to know extremely well what are the needs of our investors and try to match that. And that's, I think, what differentiates us from many other competitors.
Jaime was referring to the deep team we have across countries in the relations with investors. And this is obviously a key competitive advantage. And we have been able, over the years, to pass on to our client relations team this mentality of looking at the investor's portfolio and translating that into what we can offer to them so we can have one of our own funds or one of our partners' funds in the portfolio of each one of our clients.
The addressable market here is the world, and that's the basis of what Alessandro was saying about the power of diversification when Latin America is out of favor, and investors want investments outside of Latin America, we have an extremely powerful offering for that environment.
The main opportunities we see, as Jaime was mentioning, there is a pension fund reform approved recently in Chile that will increase the contribution rate to 15%. In 2020, there was a pension fund reform in Mexico that also increased the contribution rate. In Uruguay, there is an increased need for making the portfolio is more international. Currently in Uruguay, portfolios of institutional investors are 100% domestic. And we think that that's something that needs to change given the small nature of the country, and those savings start to -- and we see -- we've seen this movie in other markets. We saw this move in Chile and Peru where the local market is small and the savings start to grow, so they need to diversify internationally.
And in Brazil, there's a huge opportunity, as I was telling you before, when interest rates are 15% and real interest rates are 9%, the appetite of local Brazilian investors to invest internationally is obviously diminished. And we have seen this movie also in Chile, real rates in the '90s -- in the early '90s, we were 11%. Now they're 2% and the appetite for international investments now is sort of -- it's normal for any Chile investor. It has developed an ecosystem that is a CLP based multi-asset investment ecosystem. And we believe that in other countries, this trend will also provide us with a very interesting opportunity.
As I was telling you before, one of the key aspects of our business is to have a broad and high-quality offering for each line item that our investors invest in. So we make sure that we have very good quality products for every asset classes, sub-asset class without turning into a fund supermarket. That's sort of the beauty of the model. As I was telling you before, we see opportunities in many of these markets. We think that the private market opportunity is huge. The penetration of alternative -- global alternative assets in the portfolios of some institutional investors and almost all private investors is still extremely low. So we see a huge opportunity there.
As I was telling you before, the development of the semi-liquid products on the alternative side are super encouraging. And we -- I mean, it's -- our partners at RS are here, and we're doing a very interesting effort with very -- I mean, encouraging results to penetrate the wealth management market with their funds in LatAm. In the public markets, there's a challenging environment in terms of fees and the penetration of passive strategies. But we have a very interesting experience in trying to find asset classes where investors are still looking for alpha and that's where we put most of our attention in trying to find good managers that can provide alpha in the less, I would say, efficient markets in EM, in Europe and other markets.
And the other opportunity also is in the markets that are more developed is to access sort of smaller, more niche strategies on the private side. And in the end, I mean, we will always be looking for strategies or managers that can provide or that can fulfill our investors' appetite for higher returns. That is not going to go away. I mean, interest rates have gone up, but investors need more return because, I mean, they're becoming older, the fact that the pension savings are not enough to provide for a decent retirement means that all of these investors will need to look for high returning investment strategies.
And 33 seconds before my time, I would like to thank you again for listening to us and providing us with this opportunity to tell you what we do. Now I leave with you and my partner, Roberto Knoepfelmacher to talk to you about Latin American equities.
Hello, everyone. It's a pleasure to be here. I would like to start giving a little overview of the public equities area in Vinci. So we are one of the largest public equity managers within Latin America. Currently, we have an AUM of BRL 15.6 billion across different countries and in pan-LatAm strategy. We have 85% of our investor base composed of institutional investors that just like us have a long-term horizon.
In terms of teams, we have one of the largest and most experienced by site teams in the region. Our partners have more than 25 years of experience. And we have a team composed of 6 PMs and 15 fully dedicated analysts working different in the main markets within the region. In Brazil, we have 8 analysts. We have analysts in Chile. We have analysts in Mexico. So we are with boots on the ground in the largest markets within the region. On top of that, we have a very important support from our macroeconomic team and data science team.
Looking at our product suite, we have a full [ array ] of funds. We have a long-only strategy for Pan LatAm fund. And we also have long-only strategies in Argentina, Brazil, Chile and Mexico. In Brazil, we also have a dividend strategy, and we have a long bias strategy. In Chile, we are one of the leaders in small cap strategy too.
And when we look at our track record, we have a very long and consistent performance that generated significant offer in all the regions. And this has put us in a top quartile position compared to our regional peers.
And then moving on to the current market outlook. We are very constructive about our changes of raising new capital in the current environment. Starting by looking at the attractiveness of Brazil, our largest market, I wanted to highlight that Brazil is one of the most attractive markets in terms of multiples. We are having a 35% discount vis-a-vis the average of emerging markets. And I think that this is standing out and is the first factor that I would like to highlight. On top of that, the second factor would be our monetary cycle. We are in a stage where we are getting ready to start cutting rates. I think all of you have heard Jose Carlos presentation. But in this graph, what is really striking is that Brazil last year against the trend of all the rest of the emerging markets hiked rates. So we are in one of the highest level of interest rates on record. And -- so we are probably going to be one of the economies that will have more room to cut rates in the coming years.
And historically, we have seen that in moments of easing cycle, the IBOVESPA has always performed significantly well. And we expect this to happen this time around. Actually, we are already seeing the market performing well in terms of returns in dollar, IBOVESPA is up 40%.
The third factor is about flows, right? We -- when we analyze the domestic investors positioning, we are in a moment where the allocation to equities in Brazil is one of the lowest on record. This, of course, has to do with the very high interest rates we have right now. But it's striking that we are in a level compared to a very distressed moment, for instance, what happened in '15 and '16 when we had the impeachment of President Rousseff and that we had the worst recession in Brazilian history. So we believe that when interest rates start to come down, local investors will tend to increase their exposure to equities.
On top of that, we are seeing already a significant flow of foreign investors to Brazil and to the region as a whole. And one of the leading factors for that is the relative valuation. First, we saw that Brazil positions well among the emerging markets. But now we are showing here a graph of the evolution of the relationship of the price earnings of the Brazilian market relatively to the S&P. And we can see that we are on the -- one of the highest discounts on record with almost 2 standard deviations below average. So we're seeing that this gap evaluation is starting to call attention and attract flows.
And the good momentum stands through other countries such as Mexico and Chile, right? We've been hearing from Jaime and from [ Jaime ] that we had a very important pension reform in Chile. And also, we had a very significant pension reform in Mexico that will increase the part of the salary that goes to the pension funds from 7% in 2020 to 15% in 2030, which should lead to a steady domestic flow from growing pension AUM to the market. And when we think about the Chilean market, we are seeing very good prospects of economic growth on the back of important improvements in private investment which, in a way, are turbocharged by the increase in investments in mining projects such as in copper projects.
So against this backdrop, we are seeing a very interesting opportunity to launch our own UCITS platform. The UCITS platform is an UA regulated structure with high investor protection, which is widely accepted by global allocators and by some of our most relevant LPs in other strategies, such as Chilean pension funds. We think that we are very well positioned to do so because we have a very strong distribution capability, and we have, as we've shown a very good track record on domestic funds. And we have a very experienced team with boots on the ground.
And then in this UCITS platform, we have initially 2 products, which will be the LatAm fund and a Brazil fund. And we expect to raise around [indiscernible] across these 2 products. As we are expecting using some assumptions that we believe are conservative for our market share in this -- in these 2 addressable markets, each of them have a $10 billion AUM. And for the case of LATAM, we are assuming a 7.5% market share, which we believe is achievable since we, in Compass used to have in 2020, 16% market share. And as for the Brazil fund, we are expecting to have 5% market share, leading to $500 million. And we expect to have in the future other products such as a Mexican equity fund and local LatAm currency fixed income fund.
So I now would like to call to the stage Luiz Candiota, the Head of our Forestry products.
Hello, everyone. Thank you very much for being here. It's a pleasure to be with you. I'm going to talk about the Brazilian forestry market and the opportunity is also in the LatAm forestry market and how we have been positioning ourselves to take advantage of the large opportunity that we see ahead.
So Brazilian forestry market, well, there are more than $20 billion plan in terms of investments in the industry. Brazil leads the world in eucalyptus wood productivity, which is by far, at least 2x the productivity of the second country in the world, which is Chile and then compared with European and America even greater. We have 10.2 million hectares of planted forest on degraded land, 4.9 billion tons of carbon sequestrated and stored and implanted and conservative areas. And the first one, global exporter of pulp with more than $12.7 billion in terms of exports.
Our presence in this market, let's say, we have currently $280 million in terms of assets under management. We do both planting commercial forests in clear or degraded land to supply sustainable wood to major forest-based companies with carbon credit as an upside. All of our forests are 100% FSC certified and also ecological restorations in the biomes of Cerrado and Mata Atlantica.
We have presence in 4 different states of Brazil, the largest one in Mato Grosso do Sul with more than 85, 000 hectares planted to 280,000 hectares in terms of conservation areas. Mato Grosso, 13,000 hectares planted, 5,000 hectares in conservation areas. Mato Grosso is a state where we basically plan for biomass. This is another beauty of the timber market because things have been changing a lot during the last decades, not only wood for pulp and paper or traditional products, but now for renewable energy and many other types of products.
Santa Catarina, we have been increasing the cluster there. We have more than 2,800 hectares planted, 2,400 hectares in terms of conservation areas and Sao Paulo state with 3,700 hectares planted and 1,300 hectares in terms of conservation areas. So we are kind of spread out. We don't have any plans of planting forest in the Amazon or in the Northeast of Brazil. We think there are many other different risks that are not attractive even if the region needs a lot of hedge protection in terms of not devastating areas.
Well, what is the cycle that we see ahead. Let's say, this is -- this is not more a timber agenda. This is what we call a green investment agenda. So the market -- the total addressable market has multiplied by 10,000 times. The thing about decarbonization of the world is an agenda that it is in place. Most of the developed countries that have been highly involved with this process of the climate agenda. Global investors need to align to the green standards and the European taxonomy. The investment drivers following this is rising demand for forest products, [indiscernible] as a substitute of fossil products like, for instance, plastic, carbon credits as a value creator for new product use and rising GDP for capital that will create a large demand for wood in the next decades.
Our region. Our target is, of course, LatAm as everybody talked about here. We have available land, high productivity, good governance in the sector. It's a 100% private sector in Brazil. We don't have any interferons of the public sector in the forest market, land in the terms of planted forests. And also a very good legal framework in place.
Our growth strategy is basically to position ourselves as a leading nature-based solution platform in LatAm. So it's not a timber and forest product only. This is an NBS business, and that was -- has changed a lot during the last decades. So from a traditional, what we call TIMO to a leading manager of nature-based solution become a global reference in ESG standards, continue to follow the highest sustainable credentials like Article 9 under the SFDR regulation and IS Funds under the Brazilian local [ Anbima ] regulation.
The opportunities that we see significant capital inflows towards green investments. LatAm, especially Brazil, because of Brazil's size and Brazil land availability is set to become the maker of green investments. This is already happening. Growth strategy. It's a mix of products of planted forests in terms of creating scalability and restoration for quality premium in carbon credits and biodiversity. We do believe that carbon credits, we're going to have carbon credits for gas emissions, and we're going to have carbon credits, what we call biodiversity credits. These are going to be 2 different markets.
We basically position ourselves in both what we call greenfield markets and brownfield markets. So we have both portfolios. We have carbon-focused funds, so in a way that we do believe the agenda of carbon credit, there is not enough carbon credits available for the needs of all corporations, governments, development banks and et cetera. Products that go upstream and downstream into the value chain. As I was mentioning, it can go to pulp, to paper and packaging to panels, it can go to timber construction and many other different products.
So the idea is to consolidation -- to become a consolidation platform for NBS in LatAm. So core business continues to be Brazil and the new market opportunities, mainly Chile, Uruguay, maybe Paraguay and then -- well, not -- we take a look at Argentina and Colombia as potential markets in the future, but not as a first priority now.
So positioning ourselves, as I mentioned, as a nature-based solution platform in LatAm, Brazil is well positioned to supply that solution. I mean it's just -- it's -- if you look to the numbers, well, they tell by themselves. Brazil has the potential to be the largest carbon sink in the planet, thanks to its reforestration and afforestation capabilities. So not only in terms of forest, in terms of agriculture and what we call also wetland followed by China, Indonesia, European Union and the other countries that you see here.
Well, what is the time line that we had, let's say, we launched our funds. The first one in 2012. We have been raising our force fund. We have been already trying to work hard in the Fund V and some other different types of products. But we came from a typical Brazilian TIMO institutional investor base, let's say, we have more than 45 institutional investors as LPs, probably we are the largest independent TIMO management company when we launched in terms of LP based institutional investors, 98% to 99% of our LP base institutional investors, both in Brazil and abroad. And now we are going to this, what we call this NBS phase. The client focus is the beginning just return and very low risk and very low volatility kind of decorrelated assets from other asset classes. And now it's not only return, it's also about decarbonization.
Well, the total addressable market used to be in the beginning for us just the Brazilian pension fund industry. Now it's global NBS investors, which turns the market base, well, thousands of times larger. The fundraising, we used to have local and foreign institutional investors. Now we have DFIs, corporations, institutional investors, family offices, you name it. I mean it's just a large base of LPs on the market. The pocket size, the market was approximately $3 billion when we started, and now it's really [indiscernible] with NBN's market on place -- in place.
Target region used to be Brazil, now LatAm, mainly Brazil, but we have been seeing some other opportunities in another country. So we don't want to lose them.
I guess, that's basically it. I guess I'm ahead of time, and that's good. So I'm going to call Jose Guilherme Souza that's going to speak to us about infrastructure. Jose Guilherme, please come to the stage.
Thank you very much. Thank you very much, Knoepfelmacher. Nice to be here. I'm going to talk about the infrastructure strategy. A little bit of overview. The history of investing in infrastructure of the firm is kind of as long as the firm exists. We have been invested around BRL 5 billion in 8 different vehicles. And most of this capital is already being returned to investors over time.
We have been focused in 3 sectors: energy, transportation and water and some of what we're going to present to you are related to those 3. We have 14 professionals all together dedicated to infrastructure strategy, both at the investment team and also at the company levels. We use some operating partners for that as well.
And here, it's -- we brought the selected numbers of returns for you. Going from left to right, we have a snapshot of the full portfolio of investments in infrastructure. It's on the left, up until the active funds that we have so far. And we've been able to deliver solid and consistent returns over time in all of the strategies that we had invested, both when we compare to the stock exchange return and also to our base interest rate.
As of today, we are managing basically 3 strategies within infrastructure. First one, typical private equity type investments in infrastructure, mostly core and core plus strategies. On the left is our most recent fund, Vinci Climate change last year. I spoke about it to you, we were fundraising. We just finalized fund raising in June this year, last closing. This is the USD 350 million fund that will invest in sustainable infrastructure in Brazil, mostly greenfield projects to bigger sectors, renewables and water and sanitation.
Vinci Transport and Logistics is a fund that we are dedicating to invest in a port terminal in the south of Brazil. This is a greenfield project that will be one of the key container terminals in Brazil in the next coming years. We are still in the development phase of those -- of that project.
Vinci Water and Sewage is the third one, is the one dedicated to this sector in Brazil. We have allocated 100% of that fund in a company that we now operate in Rio de Janeiro state. We are managing the water distribution and sewage collection and treatment for 18 municipalities under our states, serving roughly 2.5 million people there.
Vinci Infratransmission, this is a fund that we had just finalized divestment. Vintage of this fund is 2017. We allocated in 2 power transmission greenfield assets, and we just sold the last one in the end of last year. So those are core and core plus strategies. Then we have an evergreen fund listed at the stock exchange that provides yield to retail investors with a tax benefit. Its portfolio is basically composed of brownfield power transmission and power renewable assets.
And finally, we have an advisory business anchored in a federal government fund that aims to finance states and municipalities to structure their privatizations or concessions of infrastructure assets. We are now working in 3 different mandates; one for irrigation area, second one is for social infrastructure schools, and the third one that we are about to start is to structure the concession of several warrant surge in the state of Rio Grande do Sul. Those 3 are up and running. The pipeline is big. And also the advisory business has a bucket for structuring, collateral for our concessions and PPPs in the country.
So I mentioned about the team. So the investment team, we are all together 10 people, most of us working for more than 7 years now together. My partner, Rodrigo leads the effort on the Vinci Climate Change Fund. And we also have the presence of 4 operating partners that are today working for us in our portfolio companies.
So this chart probably you already saw, and these are for Brazil, but you can basically copy and paste for the other countries of Latin America as well. This is just to say that there is a huge gap of investment in this sector in the country. Historically, the country has been underinvesting in its infrastructure assets tremendously. You'll see that on average, we are basically investing roughly around 2% of our GDP every year. And the international average or rule of thumb is that you should have been investing at least double of that number just to cope with the depreciation of your assets. So our infrastructure inventory of assets has been depreciating over time a lot. So that creates a lot of opportunities.
And over time, what we have been seeing in the country is that given the fiscal situation, the public sector has been prevented to invest in infrastructure assets. And it's been the same case for the other countries of Latin America. So that in Brazil, over the last decade, private capital has been called to invest in these types of assets in the country so that the most recent numbers that we have roughly 3 quarters of everything that is invested in the country in infrastructure is being deployed by private capital, both PAUSE industrial players and also financial sponsors. And this is a huge opportunity investments for us in this case.
While investing in Brazil infrastructure now, 3 big drivers. A lot is being done in the energy transition space and renewables. Brazil has one of the most successful case stories of the insertion of renewable power in its matrix in the whole world. We have been a hydroelectric system forever. But over the last 20 years, the participation of wind and solar has increased a lot. So it's very important. The space to have more wind and solar is still very big. We are just beginning our history in energy storage systems, as you see in other countries as well to support the more renewable power into the system as well. And because Brazil is a huge country, we need a lot of power transmission. Basically to bring the whole renewable power from the northeast part of the country to the Southeast and South where the big consumption are.
Transportation, we have huge needs in roads, airports and ports. As of now, we have been investing in the port business, as I mentioned to you before. More recently, we have acquired the controlling stake of Rio de Janeiro International Airport, which is a very substantial and strategic asset in the country, one of the leading airports to receive international passengers. And we understand that, that could be the first step in the consolidation of this market in Brazil. Not only that, but toll roads present a huge opportunity as well. The country has a tremendous network of roads, just a small part is paved. And even in smaller part, it's [indiscernible]. So the government is in a big push to transfer toll roads assets to the private sector for them to build, expand and maintain this infrastructure.
And finally, digital infrastructure. Brazil is crowned with power, renewable and water to fulfill in this sector here. So data centers, cell towers, it's a big market for us in the future as well.
So I just mentioned to you our most recent update is in the transportation sector. We have just acquired the controlling stake of [indiscernible] International Airport in a partnership with the Singaporean Operator [ Changi ]. And this airport, some highlights in here, it has a capacity to have 37 million passengers a year. 2025, it's going to process roughly 15 million passengers 2025, with a big chunk of international passengers. In fact, 2025 will be a record high for Rio de Janeiro receiving international passengers. There will be an auction of this new concession contract of this airport in March next year, and we are going to participate in that together with our partner to eventually acquire [indiscernible] 49% stake, which is a state-owned company that has been there since the privatization in the beginning of the [indiscernible].
So finally, going forward, the prospects for growth are basically expanding our strategy to the other countries of Latin America. It will have a very interesting mix of currencies, countries that are part of the OECD that Brazil is not. So that opens room for us to tap some of the investors' pockets that are prevented from investing, for example, in non-OECD markets. So Brazil is not able to access those buckets that we know with the LatAm portfolio or fund could eventually tap. So Chile, Mexico, Colombia, especially, both in renewables and transportation are very interesting markets for infrastructure with this combination of adverse diversification in OECD markets as well to build this portfolio.
So this is exactly what I had for today. I would like to call here to the stage Rodrigo Coelho and Ilan Nigri, my partners to talk about real estate. Thank you very much.
Hello, everyone. It's a pleasure to be here today. I'm Rodrigo Coelho. I'm a partner and together with Ilan Nigri, we are co-heads of the real estate division at Vinci Partners. Today, we'll be speaking about the real estate division. So basically, it's the last real asset strategy after forest and infrastructure. So last but not least, and we are going to be speaking about what we're building at cx and the perspectives and opportunities that we see ahead of us.
We are basically one of the largest real estate managers in Brazil, currently managing BRL 6.2 billion in equity. Roughly 80% of our AUM actually more than 80% of our AUM comes from perpetual capital vehicles, which, of course, is a very interesting for our business. And we invest across all key sectors in Brazil, such as shopping malls, industrial, office and residential for sale. Altogether, our portfolio comprises about 12.8 million square feet of [indiscernible] area in 65 properties, even though most of our vehicles have long-term perpetual capital that do not require divestments, we've been very active in recycling strategies.
We've been -- we've done more than 80 transactions in total in acquisition and sale of assets. In 15 of them, we closed in the full cycle of the divestment achieving an IRR of 18% in those transactions in average. We've been a pioneer in the REIT market in Brazil, and we have a differentiated investor relations platform that kind of brings us to have now 460,000 investors in our client base. That number means that 1 out of the 5 investors that invest in the real estate market in Brazil has at least 1 code of 1 fund from Vinci.
One of our great strengths, it's our team. We have 14 fully dedicated investment professionals with the skill sets that are very complementary, allowing us to execute in complex and large-scale transactions across multiple segments and strategies. Our structure position us to continuously identify and capture opportunities even in challenging macro environment, such as the ones that we faced in the last couple of years with high interest rates.
We are also among the fastest organically growing real estate managers in Brazil. Our AUM grew approximately 25% CAGR since our first fund in 2013. Due to the nature of our business, as the chart shows, during the previous easing cycle from 2019 and '21, we expanded our AUM meaningfully. And it's also important to mention that we are able to sustain and even grow the AUM in a tougher macro years. So considering the expected macro scenario that [indiscernible] showed us today, pointing to the start of a new easing cycle, we believe that could open a new avenue of growth to our platform.
Our 2 largest funds, VISC, folks in the retail shopping center strategy and [indiscernible], focus in the industrial segment, mainly distribution centers have experienced consistent returns since their IPO, outperforming the Brazilian REIT benchmark index IFX. Those funds are among the largest funds in the industry and are recognized as top tier funds in their peer group. As well, they are well positioned to grow in this new easing cycle ahead of us.
With that, I turn to Ilan, who'll detail the real estate market opportunities in Brazil, where we should see growth avenues for Vinci and then I'll return at the end to detail the plans for the rest of Latin America.
Thank you, Rodrigo. Good afternoon, everyone. So let's dive into the REIT market opportunities now in Brazil. In the last easing cycle, we saw a growth of more than 40% in a compound annual growth rate in the REIT market in Brazil. This was between 2018 and 2021. During this period, we were able to grow our main funds and create new REIT strategies. However, we still see a huge gap between the REIT market in Brazil and other countries like U.S. in terms of market size and fund scale.
Brazil REIT markets represents currently 2% of the country's GDP. This number could more than triple it reaches the share of the developed country like U.S. We could drive our market cap for more than BRL 500 billion. And the [indiscernible] Brazilian REIT market has generated a vast number of subscale funds. So when we look at the REIT numbers in Brazil and the average AUM per REIT, we clearly see an opportunity for a consolidation of the industry. And that translates to a potential inorganic growth for Vinci Compass.
Considering that we are approaching a new easing cycle, Brazil interest rate could drop by 500 basis points between 2025 and 2028. With a lower interest rate, we can expect a higher valuation of our funds, a graded fundraising capacity, unlocking AUM growth, follow-on and new public offerings opportunities.
So -- and for Vinci Compass, this scenario represents a potential AUM growth of around 28% without any new public offerings, and bringing our market cap close to BRL 7 billion.
There's also opportunities on the investor side. We see that we could double the number of REIT ambassadors by exploring the stock market potential. In the past 6 years, the number of REIT investors in Brazil has increased 13-fold, reaching almost 2.8 million with a CAGR of around 28% between 2018 and 2024. And there is still room to grow. With more than 5 million individual investors in the stock market, there's an opportunity to migrate approximately 2.5 million individual investors to the REIT market. So considering tax incentives, daily liquidity and a stable cash flow, the REITs are one of the most attractive investment products to individual investors in Brazil capital market.
But there are other opportunities beyond the REIT market. Our opportunistic development funds strengthens our diversification and earnings power. With focus on the industrial and residential segments, this strategy is important because it attracts institutional investors such as pension funds and family office and also complements our income strategies, adding carry optionality with clear repeatable exits.
Now I'll pass back to Rodrigo, who will wrap up and share our broader vision across Latin America. Thank you.
[Foreign Language] So -- since the combination of business between Vinci Partners and Compass Group last year, we've been exploring the expansion of our platform beyond Brazil, leveraging both our experience in the real estate segment and Vinci Compass' strong local presence across the region. [ We identified ] 3 key markets: Mexico, Chile and Colombia. Each offers a compelling mix of scale, institutional depth, regulatory clarity and growth potential. Mexico is the second largest real estate market in Latin America. We see strong tailwinds coming from nearshoring and e-commerce. Most of these contracts are U.S. dollars denominated, which brings active participation from international investors, allowing the execution of sizable transactions in that market.
Chile offers a stable and transparent market and environment with inflation-linked lease contracts, called the [ UF ], across different segments. There is also availability of long-term debt, which is cheap for Latin America country standards. We see possibilities in Chile that closely mirrors our successful mall and logistic strategy that we are doing in Brazil, basically partnering with local players to provide them capital to their growth while we benefit from the partner's expertise, in-depth team and structure locally.
And lastly, Colombia, though a smaller market but has been improving its regulatory framework and expanding institutional participation, making it an attractive early mover opportunity for the medium term. To access those markets, we see two complementary paths, either inorganically through the acquisition of local well-established investment managers or to build small teams and to do local partnerships with the main players of each of the segments, like I mentioned in Chile as we are [ coping ] Brazil. With those strategies, we believe that we'll be able to leverage Vinci Compass reputation, investment capabilities and local relationship with investors due to our strong local presence in the region.
So with that, I would like to thank you all for your attention and interest, and I'd like to invite to the stage Gabriel Felzenszwalb and Carlos Eduardo Martins, Co-Heads of the Private Equity division.
Hello. Good afternoon to you all. I'm Gabriel Felzenszwalb. This is my partner, Carlos. We run the private equity group at Vinci. It's a pleasure to be here with you.
Well, real quick by the numbers. What is our private equity practice today? We are 41 professionals involved. The leadership has been working together for more than 20 years, very stable and cohesive team. I think it's very rare, especially in the region. We've done more than 50 investments in 8 funds with more than 100 platform add-ons subsequent to that. We've committed almost BRL 8 billion, and we have distributed back that amount to our LPs. Also, a level of DPI that is not common in the region. And we've been generating a lot of co-investment opportunities. We've generated BRL 1.5 billion in closed co-investment opportunities, and we have shown much more to our LPs. That's on the top of a very strong track record over that long period of time of a 44% net IRR to our LPs.
PE is still a very underpenetrated market in the region, okay? Wherever you see in North America, U.S., Canada, you see 10% of AUM to GP ratio. In LatAm, this is 1%, 1% in Brazil, 1% in Mexico. In Chile, it's a bit above. But it's still a market that needs to grow a lot. We see a lot of fragmented industries, a lot of family-owned businesses that can benefit from a more professional management, from better capital allocation. We see a very similar situation of what was the U.S., 30, maybe even more years ago.
And the playbook that we use in Brazil is different from what is the norm in more developed markets. We very rarely and very conservatively use leverage. So on average, LBOs in the U.S. are levered more than 5x. Our leverage is 1.4x in the latest vintages. The level of valuation is completely different. The average entry price in U.S. buyouts is north of 11x. The average enterprise in our latest buyout vintage is 4.6x.
The value creation drivers are different. We rely much more in organic growth and core earnings growth. 92% of our value creation can be attributed to EBITDA growth, and only 8% most depreciation. This is not the norm in mature markets where most depreciation pays a more important role. And as we mentioned, the growth of PE-backed companies in the U.S. is still way lower as returns rely much more on leverage pay down. We rely much more on growth, 27% is the average growth in our Fund III portfolio since inception.
What is the deals that we do? As you may understand, there are no traditional LBOs in Brazil. Leverage doesn't allow for that, and the volatility doesn't offer that. What we look for is to sponsor good businesses that are in industries that will increase in penetration in the economy and try to find the winners in those markets so we can also sponsor market share growth and also benefit from the growth in the economy. So it's a 3-pronged growth bet. So we basically target industries that are in secular growth profiles, macro-driven, behavior-driven, demographic-driven with proven business models where we can foster growth with the right capital allocation and the right people. This typically is focused on in the upper middle market in Brazil, where we have the good combination of enough critical mass to pay for talent, but also good growth opportunities.
We always buy for strong governance with either control or very strong enforcement of our governance rights and accountability for results. We are able, since [indiscernible], we are able to structure our deals quite smartly. We do -- we use a lot of seller financing. So we pay in installments, mitigating FX risk. We also mitigate downside risks a lot and align ourselves with our partners through upside sharing mechanisms. So it's very much structured.
As I mentioned before, we make very little use of leverage. And as a team, we are very hands on. We have a very concentrated portfolio and we're very hands on, helping our management teams perform, creating the opportunities for them to generate a lot of value.
We tackle this opportunity with two strategies. We have the VCP strategy, which was our flagship and core strategy, which is basically our growth and buyout strategy where we target upper middle market companies with both primary and secondary capital, essentially control and co-control deals, where we have impact guidelines, but were not driven by impact. And we also have a minority oriented strategy called Vinci Impact and Return that does much smaller equity checks. So VCP writes BRL 300 million, BRL 500 million [ equity ] checks. VIR writes BRL 50 million to BRL 150 million [ equity ] checks. Essentially cash in deals, primary deals with first-time institutional partners to entrepreneurs in minority positions with also an impact mandate where we generate also positive impacts along a clear ESG framework.
And the team that drives these two strategies is myself, Carlos and [ Pepy ], who runs the VIR strategy. We are backed as I mentioned, by a 41-strong team, including 9 senior investment professionals, 9 investment analysts who have all been working together with us for a very long period of time. The senior team has on average more than 10 years working with us. And also a very deep bench of operations team.
I'd like to call on Carlos to follow with the rest of the presentation. Thank you.
All right. Thank you, Gabriel. So having said that, 1 of the things we would like to highlight today is our competitive advantage, which are based on 5 pillars. The first one is the fact that we are 1 of the pioneers in private equity in Brazil, so raising 8 different dedicated funds to address any type opportunity in the region, invested in more than 53 platform companies and over 100 transactions that we made, including all the add-ons, the very robust experience of the team as well. So we, as a senior partner, we have been working together for more than 20 years with more than 40 dedicated professionals involved in the private equity practice.
Definitely, the track record put us in a position of a top quartile in the region, but also globally, generating over 62% gross IRR, which is 8x what public markets benchmark would have yields in the same period. And the important thing is that 98% -- as had Gabriel said here, 92% of the value creation comes from earnings growth. So the fact that we bought companies, bought business and help -- with the help of the management teams and our partners, we generated value to create those returns.
The ability to return capital, so something that is we track, of course, our numbers, but the market and competitors as well. We're one of the few managers in the region that across the 8 funds, including the very recent allocations that we did in portfolio companies, we were one of the few ones that have a DPI on aggregate that is greater than 1, considering all the funds. And on the realized investments is over 3x in U.S. dollar terms. And a strong line of interest, which is a core value of Vinci Compass. In the case of private equity, we have committed over BRL 1 billion over time in the forefront and BRL 307 million in VCP IV, our latest vintage raise December last year.
Our approach to generate that alpha that we mentioned is based on the identification of the secular trends that Gabriel also mentioned here, so things like aging population, circular economy, digitalization. So some of this themes, we have been tracking and investing from Fund II, Fund III, Fund IV, VIR as well, III and IV. We have been investing in companies that benefit from those 15, 20-plus years of important growth tailwinds. The proprietary origination being part of Vinci as a large firm that touch a diverse base of asset class generates a lot of opportunity to us. So 2/3 of all the deals we've done so far, they were proprietarily sourced.and with that comes the benefits of having a much better entry valuation levels with very relevant discount when compared to public markets of 50%.
We have been implementing more and more, especially since the early days, of Fund II mechanisms to offset, for example, the FX variation and impact in our funds as we have an important base of LPs in U.S. dollars, so the sell finance mechanism that push capital calls over the years, downside protection, upside sharing mechanism so we can avoid overpaying for assets and align ourselves with partners over time in the returns that we generate in the investment, as well as preferred dividend mechanism where we can generate early DPI in the investments that we make and return that capital to investors.
The operation and hands-on approach is another important pillar. We have been very active with the partnerships with management teams, entrepreneurs and the corporations that we partner over different investments that we made, fostering growth on those portfolio companies. The average of growth in our most recent fully invested fund, VCP III, is over 25%. The average of this strategy, including the 8 funds, it's over 20% growth of EBITDA since inception of all those funds. And all the levers that we typically touch to foster that growth, which includes helping companies implementing some strategic acquisitions, things around digital transformations, have been important, the building of the management teams are things that we touch extensively during the value creation agenda that we implement.
And finally, our experience on divestments. So mostly through sales to strategic players, but we have done a lot on selling to other sponsors, which is different from developed markets like the U.S. You have more limited options in Brazil, but we're seeing more and more, that increasing. We have also the IPO market that from time to time, we have some windows that are open for us to do listen. And we had prior track record in doing several IPOs in Brazil as well as in the U.S., which allow us to maximize sometimes, returns.
And as I mentioned, 92% of the value creation on the private equity strategy comes from earnings growth. Here, we have a table with some selected case of the portfolio, existing portfolio companies as well as companies that we have already divested. Some of the growth levers that include human capital, M&A, tech, things that we work around an expansion of the potential TAM for the Compass, where do they operate, as well as unit expansion and the results in terms of EBITDA. So we have the example of [ Agi ] that from the investment that we made in December 2020, the business has grown profit more than 10x to [ Achluach ] , which is most of the recent investments we made in Fund IV, we generated already almost 3x EBITDA growth in 2 years.
And so several examples where all these things that we touch, we -- and helping management teams to develop over the years. They turn into EBITDA growth and those returns that we have has a track record for the private equity strategy to date. And talking about track record. Here we have the two different strategies that got Gabriel presented, the Vinci Capital Partners on the left hand side and VIR on the right side. Both strategies, we have a very important outperformance when compared both to public markets in an environment which is long term here, talking about more than 20 years of track record of several vintage where not only the realized returns, they were great, but looking at the full portfolio, which includes recent investment. And we don't need a very high GDP growth to being able to deliver such results in an environment where Brazil was growing like 2%. So we think that -- we've -- our investment philosophy and the opportunity we have in the market, we can continue to generate that return for many, many vintages to come.
One important aspect is talking about our private equity business. We were able, since the inception of Vinci, started with a little less than BRL 1 billion in the AUM and multiplied to 22x, which was a growth of 23% per year to today's 16% AUM -- sorry, BRL 16 billion AUM that we have today. And the most recent milestone that we have includes the fundraising of VCP IV, which some between the fund and co-investment packet BRL 4 billion, exceeding our 2023 Investor Day guidance that was provided during our presentation.
Also, capital commitments, they were very robust between the two strategies, both VCP allocating 40% of the latest vintage in 3 deals, BRL 1.2 billion, as well as VIR IV completed its investment cycle with 9 portfolio companies and investing over BRL 300 million in the last 2 years. And distributions, even in these very challenging markets for distribution in the private equity side globally and of course, in our region as well. We have total over BRL 0.5 billion in distributions, including sale of relevant portfolio companies from VCP and the VIR strategy as well as dividends from the portfolio companies. They are growing and also generating returns to us as shareholders.
And looking ahead, we are very confident that the strategy is poised for further growth. The first thing we have as a next step is the launch of the -- and the fundraising of VIR V. So we are fully committed to work on a fundraising process in the next 18 months to have a fund kind of the same size, around 1 billion -- over BRL 1 billion in size as the next vintage for this strategy.
We -- in the case of VCP, our idea is to close the investment cycle of VCP IV by early 2027 so we can launch VCP V campaign by end of next year, start some conversations with prospects LPs and the full campaign in early 2027. Another important thing that we have been working and think we're going to -- we have planted some seeds, and we should see some results and harvest some results is the regional expansion. We're engaged in conversations with some GPs in the region and in Latin America ex-Brazil. And that will be important as our target is to have a LatAm fund in Fund V and have some allocation ex-Brazil over the years.
And of course, DPI is something as important as the results these days. And we are -- ourselves, myself and Gabriel as well as the team, fully committed in achieving a DPI greater than 1 in VCP III and IV in the coming quarters.
So having said that, I would like to invite Alessandro to talk about credit. Thank you so much.
Thank you again. It's just a brief introduction to our Credit business and our call, the presentation for our heads of the different verticals of credit. So at a glance, our platform of credit has a LatAm reach is one of the business that we already have, the presence in Latin America, not just one specific country. We have a good strategy approach and institutional team.
So the key takeaways, now we are in a new phase of growth, launching regional vehicles with a focus on private credit, access to new markets and LPs. So we are taking advantage of the Compass footprint to enable geographic expansion and a broad fundraising. Coverage across products, so public and private credit. So we are seeing opportunity and avenue for growth in both.
On the ground team, of course, we have a very deep presence in each of the countries. And a cross-selling engine leveraging Compass and Vinci capabilities to really place private credit solutions. So our credit AUM to date is very diversified in terms of breakdown, local currency, high grade and high yield, hard currency, real estate and infrastructure, opportunistic credit solutions, structured credit and confirming, diversified private credit and finally, [indiscernible] business.
We have a regional credit platform with BRL 11.3 billion in local currency high yield, [ 7.3 ] hard currency, high grade, [ circa come from ] BRL 2.7 billion and diversified private credit of [ 1.6 ], [ 3.3 ] in opportunistic capital solutions through SPS products. Agribusiness, almost BRL 1 billion. We have stayed a little bit under BRL 1 billion. And infrastructure, [ 2.6 ]. This go north from BRL 30 billion.
So with that, I would like to invite my partner, Marcelo Mifano, to talk about opportunistic credit solutions.
Thank you, all. My name is Marcelo Mifano. I'm the partner responsible for our opportunity capital solutions. It's great to be here. So the idea is to share a few updates, especially the things that I think last year, we promised and now became a reality.
The first thing is now we have 4 vintages. So we just had our first closing of Fund IV, it's the first fund that we raised since the acquisition by Vinci in 2022 of SPS. So now we currently manage BRL 3.3 billion among those 4 vintages with the same 18 professions, same core investment strategies and the same. So -- and the idea, as you may remember, is the first pillar, deliver equity-like returns with [indiscernible]. So we've been delivering mid- to high teens in dollars, even though a lot of those investments are marked at cost, very interesting DPI.
So for example, Fund II, last week, we just reached close to 1x DPI. So we keep the same investment strategy of using that instruments to achieve those equity-like returns. So we have 3 main strategies on the left, which is the corporate side is basically we have a big credit mark in Brazil, close to 75% GDP, but highly concentrated banking system, close to 80% of the loans held by 5 banks. So we focus on the niches where banks don't want to participate for regulatory restrictions, complexity, et cetera. We do both new loans and buy loans in the secondary market. But on the new loans, always with collaterals, asset-based lending. We don't do lend to own, but always with uncorrelated assets as collateral.
The second strategy, which is legal. We have a huge legal market in Brazil. So we have 20 million new lawsuits every year. And in many cases, people or a company have a lawsuit. They have a cash flow. They're going to receive a certain amount of money in a certain amount of time, and we are able to advance that cash flow given our legal expertise. And finally on the right side on the platforms is the idea that buying very small ticket assets, mainly from people, we are able to buy assets with very low, almost 0 credit risk at very interesting returns. For example, a person has either a collective savings account, which we call [ consorso ] or claiming the federal government. Instead of being 5%, 6%, 7% per month interest on a personal loan, they prefer to sell that asset to us at, let's say, 2% discount rate. We -- the average ticket is around $5,000, and we'll be investing almost $5 million per month. So imagine the number of transactions we do every month. It's like a machine platform that works every day.
Going a little bit deeper on the corporate side. As I previously mentioned, 5 banks control close to 80% of the loans. So basically, they are very strong in the high-grade market, more traditional lending, and we focus on situations where they don't want to participate. And imagine, for example, if you look on the right side, now our base rate is 15%. If the company pays 5%, 10% spread, and let's say it's 4x net debt EBITDA, almost 100% of the EBITDA is just to pay interest. So it's a situation where we've been finding a lot of opportunities.
In addition, the regulatory environment, banks in Brazil pay close to 50% income taxes, and they have incentives to sell those loans because they only have the tax shield when they sell the loans. So we've been very active in buying those loans on the secondary market. And also, banks don't want to participate in certain segments. For example, Chapter 11. They need to provision 100% if they make a loan to a company, Chapter 11. So we like Chapter 11 situations. But again, always with collateral, even though the loss stays at the dip is more senior than the other loans, even on a dip, we always do with collateral. And on the right side, it's just a number of companies filing for Chapter 11. Last year, we had over 2,000. Given the interest rate environment, we believe this year is going to be even higher, so that's a great environment for the corporate strategy.
On the legal claims, it's basically what is the seller motivation to sell us. For example, last week, we received a large state claim that we had bought from a public listed company that wasn't in great shape. But why they want it? Because first, it's not their core business, the legal department, don't want to deal with a claim. They did with a profit sharing structure. We are able to receive that money earlier than if they were alone.
So it's always with those win-win situations. And I would say most of the people -- most of the companies in Brazil, they have someone or they have in their balance sheet, a legal claim. So we are very active in buying those assets. And again, it's a cash flow business. We have -- the merits have already been defined. But you need someone to either wait to receive their money or help it to speed up the recovery. And on the platform side, these are a few examples. For example, on the consortium, which I mentioned is like a collective savings account, it's close to $60 billion issuance per year. And almost 50% of the people that hold consortia orders getting to default eventually. So we have a partnership with the largest banks and insurance companies in Brazil.
And through technology, we are integrated with them, and they originate those assets to us, the [ consign ad ], et cetera. So we love that kind of opportunity that because of small tickets, most of the asset managers don't want to participate and look at that kind of transactions. And if we look at -- in terms of growth opportunities, a few of them, I would say, are already reality. So for example, Fund IV of SPS, we can invest up to 20% in countries outside Brazil. We don't have the obligation, but we have the possibility. The idea is to look for places where there is lower competition. Given the merger with Compass, now we have offices in several markets where we didn't have. And now we are local in those places. So we are -- we're already receiving some pipeline for those -- from those countries. And the idea is to keep on finding the best risk-adjusted deals.
Second, I think that finding products and that to tailor what the demand of our LPs and also of our counterparties and the network of Vinci. So I would say that -- we have already done a few deals that have been originated by other groups of Vinci. They helped us in the due diligence, et cetera. And I think at the end of the day, doing those tailor-made products, even regional products. And on LP base, it's the first time I mentioned that we are offering this product abroad. In our first close, we already had a very important institutional investor offshore. We are starting to attract also onshore institutional investors. So this was an LP base that we didn't have access to prior to the Vinci's acquisition. And now we are able to offer this product and eventually do parts of those strategies to specific LPs in order to have something. In parts of, for example, now we're building a regional feeder in 1 of the countries where Compass is present because the clients demanded a local feeder. So now, we never expected to have so many vehicles and be able to offer a product to pillar to our LPs.
So thank you very much. And I'm going to ask my partner, Tomas, to tell a little bit about LatAm ex-Brazil.
Thank you. Thank you, Marcelo. My name is Tomas Venezian. I run the LatAm ex-Brazil grade unit, both public and private. And I promise you after this 10 minutes, you will have a coffee break, okay? So very quickly, we're running about BRL 17 million in more than 40 strategies with 25 years track record. And we basically think about it in 3 different buckets. The first one, where we have BRL 7.1 billion is the LatAm hard currency corporates, right? That is a dollarized business. Then we have BRL 7 billion in country-specific local currency funds, design local for locals, local products for local investors. And now our latest bucket is the BRL 2.7 billion in private credit. That's the one that we launched last and it has been growing very fast over the last 3 years.
So looking at the hard currency bucket. In the last 5 years, we have grown by 70% between a mix of local and international investors. But it's still mainly an institutional investor base with 63% of our investors. This is institutional. We have private wealth at 20%. And in the intermediaries business, we have around 17%. Just on the LatAm hard currency, we have basically 3 buckets. We're running LatAm corporates. Today, we have the largest UCITS, LatAm corporate debt strategy in the world. It's about $1 billion with more than 15 years' track record and a highly diversified investor base, and it's between -- it's a mix between investment grade and high-yield public bonds.
Then we have our high-yield LatAm bucket, which -- where we ran BRL 2.2 billion. We already have -- some easing, how time goes by. We already have 10 years of track record. And it's a mix between purely high-yield bonds, special situations. And also, we are able to put private credit in those buckets. It's basically an institutional investor base, pension funds out of Chile, Peru, mainly and some large family offices. And it's a semi-liquid strategy, targeting SMB, LatAm plus 300 basis points, which has done really good over the last few years.
And the newest baggage here is the LatAm fixed maturity, where we already launched 4 funds maturing in 2018 -- 2028, '29 and 2030. We already have around a little bit more than BRL 700 million, and it's designed to serve as a specific demand mainly coming from retail investors where they want to keep their bonds up to maturity. We believe this is a great asset class to be invested. If you look at against other high-yield alternatives in the world, it has done extremely well over the last 25 years. We used 25 years because it's all the data that we have in the [ semi ]. This is a relatively new asset class. So not only in absolute real, but also on a risk/return basis, it ranks extremely well in an asset class that has been growing quite significantly.
And where Latin America is not the largest one in emerging markets, but it's the most liquid one. So it's the most investable one out of emerging markets. Our second bucket is the country-specific local currency strategies. So here, basically, what we have is we have public strategies in 3 countries: in Argentina, Mexico and Chile. In Argentina, we're running today more than 20 strategies, split in 4 different buckets. And here, is the strategy is to have a very diversified product offering because, as you know, anything can happen in Argentina. So you have to have a product for each moment. Right? So our clients move from 1 strategy to the other and it has been -- we have been in Argentina since 1998, and it's 1 of our most profitable operations even measuring in dollars.
The second one is Mexico, where we have public funds and several SMAs, mandates with corporations. We're running BRL 2.7 billion there. And in Chile, we have 4 funds running BRL 1.2 billion, also through SMAs and funds. In Argentina, we still think that the opportunity is amazing. I mean whenever you look at it's a super undeveloped capital markets relative to the size. Look -- look, the capital market penetration in Argentina just compared with Brazil or Chile. So there's a lot of things to do.
And here, the key is to see if the markets are going to normalize and deregulate over [ far ], and we believe if that happens, we're extremely well positioned to take advantage of that opportunity. In Mexico, as Jaime mentioned, and I think both as mentioned, actually, the Afores growth is just going to be quite impressive. And here, we do believe that there is an opportunity, especially for private markets. I mean, the Andean countries and Chile, nonbank asset management industry has to happen. Consolidation, it has to it has to happen. And still, the public markets, both in Peru and Colombia are still very undeveloped. So we believe that eventually it would be an opportunity there.
And the third biggest bucket for us is the private credit strategies where we clearly is where we see the most growth going forward for the next few years. And here, what we currently have is 2 types of strategies, short term in confirming a [ factory ] strategy where we have, for example, the largest fund in Peru doing confirming, has been very successful with more than 15 years of track record, and we're running around BRL 1.5 billion there for you to have an idea and we have more than 10,000 suppliers, and we would like to -- we have a little bit of that business also in Brazil. But we believe that there is a huge opportunity to expand our capability in the confirming business to the other countries in the region. We're going to talk a little bit more about that in the next few minutes.
And in the corporate direct lending business, we're also running BRL 1.3 billion. Today, we have 4 funds, 1 dedicated to LatAm, 2 in Peru and 1 in Chile, targeting both dollar returns, close to 14% in the case of Latin America. And in local currency returns, double -- low double-digit type of returns. Also here, the investor base is basically local. And we have been very successful, especially this year, launching new funds.
And clearly, the private trade opportunity in LatAm, as you -- I'm sure that you have heard many times during the course of this day, is just amazing. I mean, the private credit penetration or AUM as a percentage of GDP is less than 1%. That's even lower compared to other emerging market regions and of course, lower compared to the U.S. and European markets. So we believe that there's a great opportunity going forward here. And last but not least, we're going to be focusing a lot over the next few years into this aspect. Mexico, we are about to launch our [ confirming ] fund there in the next -- in the remainder of the year, and we expect an important growth during 2026 and also look into direct lending -- corporate direct lending strategy in 2027.
In Colombia, we are also about to launch our first Colombian fund called [ Copco ], basically with institutional investors. And in Chile, for 2026, we will have our second fund, direct lending fund in [ Chico ], the first one was extremely successful and is ending the investment period now. So -- and -- well, and in Peru, we just launched this year the [ Pepco ] tools. It's one of the biggest funds in the market, BRL 150 million. And probably next more in 2027, we will be launching the third version of that fund.
So thank you very much. Now we do have, as promised, a quick coffee break. And after that, Mr. Zaremba is going to come present. Thank you very much.
[Break]
Thanks so much for the time spent here with us today in our second Investor Day. I think the idea is to go through some of the numbers. You've heard from the heads of our business units, from Alessandro, the CEO. The idea here is to combine all of those in our medium-term forecast and give some background on where you're going to and how we get to those numbers.
I'm going to start, dipping a little bit dive on this new concept, the IRE concept. We have thought about how to properly communicate the balance sheet of the firm without -- I'm talking to investors and shareholders, we felt that this is a part of the firm that probably has not been appreciated enough, and some of that likely comes back to us as the way that we have been presenting it. And looking at some peers, we saw that some of them referred to this as strategic holdings, the other ones as principal investments. So we came up with our term, which we're going to use going forward to release the results regarding the balance sheet, which is the IRE, right?
So today, at Vinci Compass, we have 3 components in our results. FRE obviously is the fees that we receive from the management of our funds and consulting fees and advisory fees, placement fees on third-party distribution, minus our operating costs and bonus associated to those fees. This is the bulk of the result today. Last number that I remember, this was around 90% of our distributable earnings in the short term. So really, the significant part of our numbers today.
Then we have PRE, which Alessandro talked about a little bit the fact that we have been, at least at this point, only recognizing PRE from our liquid strategies, which sometime I'm going to cover as well. And then we have the impact from IRE, which are the results coming from the balance sheet and also the impact on the amplification that these results imposed in both FRE and PRE.
Today, we are in the middle of this chart, right? So we started the concept of the balance sheet position in our IPO. I think this is important. Prior to our IPO, the partners allocated capital to the individual funds through their personal commitments. So we had allocating capital directly to the funds. Each partner will decide how much they would allocate and in the IPO, we decided to institutionalize this capital allocation. So this creates a situation where the commitments that we have are very young because we raised the money 5 years ago, we started to deploy this money in the funds and this money -- this capital, this money is still not in a recurring way from a seasoned standpoint, right? We're still ramping up the capital deployments.
We have gone through the initial phase which were the 2 years following the IPO where we committed the balance sheet capital. In that moment, you commit the capital, the money continues to be in our liquid funds or early results for district earnings, but has not been drawn down. It incurs the fundraising on a go-forward basis. And now we are in the second cycle here, which is when we start calling drawing down the capital into the closed-end funds.
What happens with this is that this result, it basically disappears from our distributors because we're no longer earning short-term results in these numbers because in this capital because it's no longer earning distributable earnings in the short term. And at the same time, we still don't have investment related earnings because the funds are young and they are in their J curve. So we are basically city on about today, about BRL 800 million of capital that is not earning money, but it's a temporary effect.
It's an important part of our asset base, which today is not showing up on reported numbers. And then hopefully, in the medium to long term, 5 years or so since the initial commitment. We're going to start seeing this money coming back that capital will impact cash RE. It will impact performance fees because the capital commitment will generate performance once the funds generate performance. we're going to realize that as the septal earnings once they come back.
So this is the complete cycle on a graphical standpoint, the initial 2-year phase we commit to close-end funds, disclosing funds have the GPS and community. They raise money as we have done with DCP, as we have done with the ICC with SBS and other funds. This capital raise generates more FRE and expands our offering margin. We continue to have this capital allocated to short-term funds, so they continue to generate the stub earnings. So there's no panels to our short-term results.
The second phase, which is where we are now, these funds start calling capital. So we have so far called about BRL 800 million of the capital that we have committed. This reduces temporarily our short-term cash earnings because of the liquidity draw from the from the liquid funds. This generates once the funds start appreciating, it generates unrealized IRE which is the impact of the improvement of the NAV of the funds to our balance sheet. But it does reduce short-term listings.
So we are exchanging short-term liquidity funds into long-term capital gain funds, which are going to start appreciating over time in generating net earnings. And then once these funds start realizing proceeds, we're going to have a positive impact on the ship earnings from the realized the impact from carry from performance-related earnings of this capital. They are going to be recycled again into short-term funds. So we'll start generating again short-term results. and then be reallocated into future commitments.
This year, we had an event that shows a little bit of how the mechanics is going to work. but with a very small commitment, which was a prep commitment that we had in [ Fitel ]. We're going to talk about this as a case example, but the sizes of the commitments are completely different because we are still private it was not how we used to do the commitments from the balance sheet, but it does give us an idea on how impactful this can be in the future for each compass.
So we have allocated so far BRL 1.4 billion of commitments, which is quite diversified between real assets, credit, private equity and a little bit to our secondaries strategy. We see already opportunity to start monetizing recycling part of these commitments. So I would say probably some of the real estate commitments are a little bit more mature at this point in time. some of the REIT commitments that we did, some of the closed-end commitments in real estate as well. So that money should start being returned to the balance sheet, probably starting next year.
I would say that's a pretty high probability but the closed-end funds are still drawing our capital. So we expect to have drawn down from the BRL 770 million that we have today on the that I mentioned another BRL 300 million to BRL 400 million next year, which is going to have all of the impact animation, so reducing the short-term financial income and started to compound as the NAVs of the closing funds go up. Then we have another BRL 200 million to BRL 300 million to be drawn down between '27 and '29. And by the end of 2019, we expect to have fully deployed the capital that we have committed to our funds.
The anchor of this capital, the main anchors of this capital are 3 funds. They represent a little bit less than 50% of the capital committed, which are is before, our flagship private equity fund, the fourth vintage. This fund today is 40% allocated. I think Carlos and Gabriel talked about this. We are 40% allocated, 25% drawn down. We have 3 investments in this fund or lock both hospitality company, which is the owner of Outback Steakhouse in Brazil, [ Barato ] and a logistics operator called [ AGG ]. The entry multiple of these opportunities was below 7x EBITDA.
The companies are growing nicely. We expect to continue to deploy this fund and to be 1 of the main drivers of value to IRE in the future. So the historical return of this strategy is 60%. But the target return of the strategy on a of base is 25% to 30% of -- so the idea for the simulations that we ran here is always to use the low end of the target. So in the case of BCP, 25% growth was the number that we use for the simulations. Then we have our climate transition fund we have anchored this with 100 million commitments of 1.8 billion funds. So 18x leverage in terms of third party against our mining. We have called 15%.
We just approved in the IC last week to do diligence that we raise this number to close to 50%. There are 2 big opportunities that we have in the pipe infrastructure -- the target return here of the infrastructure, these are not greenfield development. So the IR a bit lower. There's no greenfield risk. It's really core plus type of assets -- so we are talking about a little bit lower return.
In the case of the ICC, given the level of capital calls, this fund is for instance, 1 of the examples that we have where our fund is deep into the J curve. It's at the lowest point in the J curve to date. So this is impacting the unrealized IRA for us. And then finally, we have SPS for is still raising money. We are R1.3 billion, but we expect slow rate, hopefully, at least another BRL 1 billion for this fund. This fund has a very big net return historically. Mifano talked about the returns in his panel.
In the first 3 vintages, we are now at $17 net. That number was 20 net a couple of months ago. So we expect it to run in the high teens to low 20s net. It's a very good strategy from a DPI standpoint. As you also highlighted, we have given that these are mostly credit structures, the capital return is quite good. It's also pretty early in the J curve. We deployed only 8% of the capital. It should continue to draw down capital over the next few years. We have done an exercise to try to go at and quantify the size of this opportunity. And what we did here, we're using the low end of the estimates for each of the funds. with the investment of the net present value of this investment cycle.
So just as an issue, 14.4 billion without any recycling without a conversation of redeploying this capital once it comes back to the balance sheet. And we did a calculation of using those prospective returns, what would be the net present value impact to us. So the number that we're getting at is a number of about $1.20 a share. That would be the net present value of this first investment cycle without considering PRE, this is just a capital gain. And we expect to monetize this or most of it in the next 5 years. So this is just to give an idea, it's not a perpetuity math. It's not a recycling math. It's just using the first BRL 1.4 billion returning that capital to the balance sheet, that would yield 1.2 more or less dollars per share impact to us and obviously, this would be recycled after that.
So this is the case study of the [indiscernible]. We realized this GP commitment into tranches, if I'm not mistaken, the first tranche probably was in 2022. And we had the second tranche 9/25. It was a small commitment. It doesn't compare to the size that we are doing now. This was a pre-IPO commitment, but it does show the upside of this part of the business, right, that today is not appearing anywhere. So we had a 50% -- 49% net IR at 3.2x net [ Amuci ], a total capital gain of close to BRL 30 million. It was committed in 2017 before IPO in 2021, and we returned capital 5 years later and then the rest of the capital 2 years later. So it's a very good case study because it shows the potential that this BRL 1.4 billion has in the overall business.
And then when you look at our business today, and again, talking to investors and reflecting what is being priced given our current reality. Today, we have 2 parts of our business that are generating value to shareholders now. We have the FRA that I mentioned that is about 90% of our shipborne today, and we have our liquid period. So the purity of our liquid sites which was more significant to us prior to '22. We had very good years in '18, '19, 2020. Since the end of markets in the region were not as constructive and we didn't have as much contribution, right?
But when you look at our entire earnings power, we are missing, I would say, probably half of the earnings part, but not taking into account the parts that are currently not generating value. But whilst we are in a more normalized run rate should also contribute to us. One is the area that I mentioned. So once we have this BRL 1.4 billion coming back to us, that's likely going to happen until most of it until 2031. That will impact us very favorably. If returns are within the ranges that we have estimated for each of the products. And once that happens in that capital returns, we're going to have a similar impact from PRE from the private side.
So we have the BRL 49 billion of performance as for AUM, with half of it is private PRE. That should coincide with the balance sheet capital coming back. So we should have the 2 impacts at the same time, that should start picking up at some point in the next 3 to 5 years. So PRE -- sorry, I should be 1 of the main components of value for the business, the anchors fundraising after we commit. It generates LP commitments in new funds, and we're going to talk about some of those in the leverage that we're getting in a moment. We then deploy the capital harvest the returns and that impacts that the deal once we realize the capital gains, also PRE from these commitments. And then we have the liquid balance sheet again to reinvest and start the we gain, right?
So it's an important component of our business and a component that today is really not appearing anywhere. So I think it's important that we have that disclosure, and we talk about this because once we start receiving this money back, it could be very material. So I just wanted to make sure that everybody has this information. So that's the main reason for this new IRE line. Before going to the future, let's say, we wanted to touch a little bit on the past and talk a little bit about some, let's say, of the things that we do with the balance sheet and the capital and also talk about some of the things that happened since our last Investor Day a couple of years ago.
So from the capital standpoint, when we at the firm in 2021, in January '21, we were a Brazilian alternative manager with BRL 49 billion AUM. That was the picture of our IPO. And I think the game plan that we had from that point in time, was to create the IRE that I mentioned, to deploy the capital from the IPO into funds and leverage those funds into additional FRE from LPs. We had the objective of completing and continue to diversify our asset allocation capabilities in Brazil in complementary segments. And finally, we had an inspiration a target of becoming per regional.
We had the experience of raising capital to Brazilian funds with global LPs. We felt that it was a very that's an important step for us to be in a position to address more of their needs and by servicing them in a different way, which was to have Latin American products at their disposal. I think we thought that, that was very important over time. And I think in the last 5 years, I think we were able to evolve a lot in those fronts. So we did a series of M&As that complemented our business mix in Brazil and also allowed us to become an regional. Those M&As used about BRL 420 million of capital.
We returned between dividends and buybacks over BRL 1.2 billion of capital to our shareholders. So we returned BRL 900 million of capital through dividends. We returned of BRL 350 million in buybacks. We have committed the BRL 1.4 billion balance sheet capital that we had at a 15x leverage. So that means that for each real that we put in the funds, we raised 15x the same money from LPs, which was, by the way, exactly the target that we had a coincidence but it was exactly the target that we had at the IPO issued for the M&As as well. We issued 12 million shares. Those M&As, all of them had very clear strategic reasons and why we did what they were going to provide to the platform.
So SPS, we had originally a high-grade credit business. We didn't have opportunistic capital solutions business, which in Brazil and Latin America is a very big asset class. SPS from the independent manager is probably the best one that we could find from an alignment of culture values and returns. So they were our first move. Then 2 years ago to this date in the Investor Day of 2023, we announced a partnership with Ares. Ares, we had a couple of objectives. They obviously capitalize the balance sheet, which we in turn use to finalize the combination with Compass. We use half of that capital to finalize the combination with comps that allowed us to become regional.
And also, we have strategic partnership with a player that today is one of the leading GPs globally. So we have access to them to discuss anything and everything. So co-investment opportunities, investment strategies, talk about M&A, talk about bottom-up initiatives within the company, its distribution and it has been working very well. I think we have a very good fit with them also in the way that we think about the business, which are the priorities, how to develop people, how to invest capital for our clients. So the partnership has been really working very, very well so far.
Then we included Mav in the mix, which is also a complementary transaction for us in the credit side. They come in to boost our agricultural business in lending, which as in Brazil and Latin America is a very big market. Lacan, we talked about a little bit of the strategy today. And it's a vertical that within real assets, we didn't have the big market in Brazil. in a potential big, even bigger market in Latin America. It's a market that we have a global competitive advantage. So we're eager to continue to grow this platform.
And finally, the combination with Compass that raised us to pan regional stats, right? So today, we have offices across the region, distribution possibilities across the region. We brought in a very good liquid credit team in LatAm. We brought in an excellent group of partners in distribution. So it was what completed, I think this mix. With all these movements, we were able to partially neutralize the impact on the share count by the buybacks that we did. So of the 12 million shares that we issued the impact on our dilution for us in terms of dilution was only 6 million or a little bit more, 7 million in order to accomplish all of these transactions and the repositioning that we did with the company.
And then looking forward, I think the capital allocation targets are going to be similar. I think we have a priority targets to continue to develop our alternative capability in Latin America. So we have been actually -- and I think you heard from the business unit has real estate, private equity, credit, where we have a big exposure, but Tomas talked a little bit about products that we're going to raise in Colombia and Mexico. So we need to increase our content in other markets. It's probably the top priority that we have today to increase our alternative content in other markets outside of Brazil.
We want to continue to be a strong capital distributor to our shareholders. We are a business that generates a huge amount of cash flow, so we can continue to grow while returning capital to shareholders and exactly what we did. As I just showed before, we returned over BRL 1.2 billion in capital to shareholders. And in the same time we raised a lot of assets. We grew the company. We did generate excess cash flow to do other strategic initiatives. And then we want to continue to support our funds through the IR piece of the puzzle, right? So continue to have capital to all key to our funds.
At the same point, we are doing a lot of work internally to boost our platform capabilities, right? So we are going to become SOx graded by next year. We are wrapping up the work to do this and believe it's worth a lot of work. We are in the process now of doing the same SOx compliance work in Compass. This has really transformed the business. We have everything now, all the processes are all much more efficient than they were before we were imposed this challenge. It comes alongside with being listed in the United States. So it's something that we need to comply.
We have a fully integrated platform from all standpoints, operational, financial, IT, -- in IT, we were able to uncover huge synergies after the combination with Compass, several opportunities to streamline processes and systems, things that would unify and that we expect to start impacting our margins, hopefully, next year, and we talked about that, I think, in the last earnings call. And finally, a big push in AI, right? So we are and we want to lead AI deployment in the region. We have that as a very big and important agenda for the company. for portfolio companies as well.
So we have those innovations happening across the portfolio in private equity. I'd say probably the one that today has more of an advanced position. But within each within the asset management firm, we have all of the lands and all of the AI suites available to our people on a sandbox basis. We just ran a company-wide review. And we have today about 8 million of our people of the 630 people that we have already using some sort of a tool in their day to day, be it Microsoft Copilot, be it an OpenAI sandbox or a Gemini or a Notebook LLM or a combination of those included in their daily tasks and I would say probably about 2/3 of the people today already use them on a daily basis.
So it's something that also we are very, very focused, not only in heavy people use these tools, which are obviously transformational but also to explain to them why is available and how to use these to because most of the people really are trying to understand. Talking about the last 2 years, we had the Investor Day in 2023. And unfortunately, the market was very different than what were the expectations at the time. So the curve that we have, the 2 curves that we have here at the bottom is the future interest rate markets in October '23, and the one on the top is what happens.
So we had an outlook of interest rates going down to 10% single-digit percentage. And we have probably a much more, let's say, challenging scenario in which the interest rates went actually up by a few 100 basis points it stayed up for a long period of time. This impacted our outlook at the time. We were very bullish on the REIT part of the business we had actually started to raise money just alongside the Investor Day, we raised money for fees because we raised money.
I remember it was BRL 1.2 billion raise in the beginning of 2024 and we were very optimistic about raising BRL 2 billion to BRL 3 billion a year at that time for the REITs. And obviously, that prove impossible. So that was a big part of what first rated us in the past couple of years. And then obviously, on the liquid side, with a very high opportunity cost. The liquid side of the business also suffered, right? So those were 2 parts of the business that -- the local to local liquid side in Brazil specifically. Those were 2 parts of the business that suffered a little bit.
We were able to compensate somewhat. We had a very successful private market cycle fund raising. So we raised the largest private equity vintage effort. We raised a new strategy in the ICC first-time funds. We raised a first-time fund in credit and credit for BRL 2 billion BRL 2 billion. We are in the middle of fundraising SPS IV with a lot of success in a new product in figures in infrastructure as well. So the private market went very well despite high opportunity costs we were to be successful in serving different fronts. And obviously, we complement it with the combination with Compass and the 2 transactions, Mav, Lacan and finally yesterday [indiscernible].
So despite that headwind, I think we were able to deliver interesting results. Obviously, these are not reflective of the potential of the platform, we did diversify a lot to the business. We did create a much more stable and a bigger platform in the past few years, but we would have liked to do more, I would say, mainly on an per share basis than what we did. So we grew revenues on a 30% -- 39% CAGR FRE, a 15% CAGR and FRE per share, 9% CAGR. And we believe the platform can do more, obviously, with the headwind it was tougher. But I think we are positioned with a little bit better environment to grow much more than this.
And looking forward, immediate opportunities to scale the business. We are with a big platform to cover that in a second, now with competitor products, much larger number of strategies to date. We need to scale and increase the operating leverage and then take advantage of the operators of the business. We still see opportunity to launch complementary products in some markets. as we mentioned Colombia, Peru, Chile, probably the market that Mexico that we believe on the alternative side, we have opportunity.
We have as a target to increase our discretionary mix. So increase average fees and focus on high return on asset products. When you look at the evolution of the platform, the number of products that we have between 2020 and 2025 is a significant transformation, many more strategies now that we can talk to LPs about and answer their capital allocation needs. Also in terms of scale we have -- scale and development of the products, we have shown that we are able to do that over time. So push emerging and last scale products into the scaled group. We have done that in self of our products.
So the Brazil local currency high-yield infrastructure credit for products that in 2020, we're starting just to give a couple of examples. And that we have been able to scale and now obviously, with the combination of Compass and the acquisitions, the population around the products that we have to work and the operating levers that we have in the less skilled products, it increased substantially.
A slide that Alessandro and covered that we are repeating here. So revenues grew at a 20% CAGR and diversified a lot. So in 2016, we were 37% per equity now we're at 12% private equity. We added a lot of different units in the business mix that were not present a few years ago. And then now talking about the future, right? First of all, talking a little bit about numbers regarding the Verde transaction. These numbers here, they are the economic impact to us, right? So I'm going to explain a little bit and a little bit the accounting impact.
This is the economic impact of the 50.1% that we acquired. So the numbers for Verde are 50.1% of their results and the economic impact only reflects the 50.1%. So we are talking about a transaction which is immediately accretive to our FRE per share in the double digits, so 11%. We're using here the 2026 expectation for Verde, which is basically stable revenue at the current run rate that they are. So it doesn't either increase or decrease in terms of AUM at this point. And we have an impact of 2 percentage points in our FRE margin. The accounting treatment for this acquisition, given that we have the structure that we have on the shareholders agreement, et cetera, is that we're going to consolidate the company.
So we're going to impact our FRE as if we had 100% of Verde today. So the impact to our FRA per share numbers is going to be roughly double of what we have here, right? So it's a 4 percentage point impact on the FRE margin and a 20% impact in the FRA per share. And then we're going to give back before the stable earnings the dividends that are not ours. So there's going to be a minority line before the ship earnings where we're going to distribute the dividends to them and recognize a reduction in the distributable earnings line. So the distributable earnings per share, it won't change. The distributable borrowings also won't change. But the FRE, we're going to fully consolidate in the income statement. I think that's important disclosure to give.
In addition to that, these numbers, they don't include any goodwill amortization benefits. We should start to have some good amortization benefit at some point but they are not considering that amortization here. So looking forward into the model. So the model today that we're presenting today includes already the full impact of the engine. We expect the next cycle to have BRL 100 billion of fundraising disclosed until the end of 2028. About half of that will come from Global IP&S. Verde does not have any benefits nor reduction in this number. So we're considering the fundraising average to be 0. We expect the AUM to compound using fixed income rates in Brazil, but no new money in the strategy. And so the 55% that we have in Global IP&S does not include the Verde brands, products here. So that accounts for about BRL 55 billion of the fundraising.
Then we have about 20% of the fundraising that comes from credit. As Alessandro mentioned, one of our main goals is to grow our credit business, and we believe there is a huge opportunity in Latin America to do this. We haven't even touched the surface. We don't have semi-liquid in Latin America is an area that we're starting to study to see how to tropicalize this product. So we're very liquid or closed end. It's obviously an evolution that our partners areas have benefited from in the United States and other big U.S.-based and European-based GPs. We expect to bring that to Latin America at some point. The advantage is that now that we have now all of the asset classes so to build a semi liquid platform is easier because we can allocate part of the origination of each of the verticals to create that product.
Then we have 10% from the equities pocket. I think Roberto touched on this. We believe there's a huge opportunity in the Latin America usage product, the Brazil uses its product. It's an opportunity to where Compass used to have a big share, and we are planning to recover that share in the next few years. So it's something that we have been working on the use is already online. So we did that over the past 9 months. The platform is already online. Then we have 10% coming from real assets. All of the vintages and strategies reach to once again start to contribute to fundraising. We expect that to happen at some point between '26 and '27. Let's hope that it's '26. Some of our biggest REITs are already very close in [indiscernible]. So hopefully, with a real bit of appreciation, we can come back to market.
And then finally, private equity, we have 5% of the fundraising. That combination, the combination of debt fundraising with appreciation leads to a 22% CAGR in fuel-related revenues until 2028. We have a big benefit from Global IP&S and credit or the 2 asset classes that are contributing the most here. The is to raise money and higher return on asset products, use the Verde platform to launch new products that allows us to increase the discretionary mix of our product lines bring some of that nondiscretionary asset base that we have into discretionary mandates. That's 1 of the goals that we have.
We expect to have a big push in FRE margin. So the expectation is for a 10 percentage point expansion. This includes the 4 percentage points positive impact from the Verde. And on top of that, we expect to have another 6 percentage points organic expansion, and this comes basically from the operating leverage of the business. We talked about this in the past Investor Day from 2020 -- sorry, from 2015 to 2020. The cycle, the growth cycle that we had in those years when our AUM expanded from BRL 15 billion, BRL 16 billion to BRL 49 billion, our FRE margin grew 20 percentage points.
So the business has a lot of operating leverage. What we need is to grow top line a little bit quicker. And with these numbers, I think it shows that we can do that. And that will allow us to drive margins way higher, right, which is what we're expecting with these new targets. And then an absolute target of BRL 600 million for FRE consolidated 100% of Verde by 2028.
And finally, wrapping all of that up, so we have from $800 million in the last 12 months, fee-related revenues to BRL 1.6 billion. from BRL 264 million last 12 months FRA to BRL 600 million and a 10 percentage point increase in margin. That's going to be driven by BRL 100 billion of inflows, appreciation in the funds, which is mostly offset by capital returns. So the impact on a net basis is not that big. And also important to mention that this model does not include any M&A. So this is really on a fully organic basis.
So from a takeaway standpoint, going back to the current cycle, we expect to have a positive net present an impact of approximately BRL 400 million or a little bit over $1 per share. We remain very focused on growing alternative capabilities across Latin America, so growing the ability to invest in infrastructure, private credit, private equity real estate in markets outside of Brazil. We have an inflow target of BRL 100 million, which will lead us to 10 percentage point expansion in our FRE margin and an absolute FRE target in 2028 of BRL 600 million.
So with that, I'm going to call Alessandro for some closing remarks. And then we're going to open for questions.
So thank you very much. We have a very extensive day to day with a lot of information, a lot of say, perspectives. We shared our view for the firm. They see that we are today and the perspectives for the future. So in my closing remarks, I'll be very brief. Just to again remind some ideas and some concepts that we described today.
So the main growth vectors of Vinci Compass, so a private credit expansion across LatAm. One of them is very, very important. We are seeing this market picking up and a huge opportunity ahead. Then they use its platform acceleration, especially for more liquid asset class cross-sell from relationships of the products that we already have, product scaling in higher fees strategies. And this, we are converting part of our Global IP&S business in more discretionary mandates. So these are the main growth factors for us.
Then in terms of earning power, as Bruno explained in depth how we see the main factors for earning powers first, FRE that provides a predictable base for us, PRE that adds upside as we see realizations accelerating, especially in private markets and investor-related earnings that captures the embedded GP commitments and the returns as related to that, and we are to compound through the cycles that we see ahead.
Finally, we would like to highlight again the distribution advantage that we have, the 2,800 LPs with direct relationships and senior local teams in each of the countries enabled capital formation it just in the local markets, but globally, [indiscernible] explains the behind us that we see and what we see forward renewed investment side called interest rates coming down, attractive entry points in terms of multiples to Latin America that we are at historical lows and also historic lows in terms of allocation from more risky assets, including equities and of course, the private markets.
And finally, we would like to highlight that we have been very disciplined in terms of capital allocation. Bruno explained our path since the IPO. We have a clear framework. We will continue to focus on accretive M&A like we did in the past few years. And we will continue to focus on shareholder capital returns for dividends and buybacks eventually, but dividends for sure, and continue to have the invested investment-related earnings commitments moving forward that will return when we realized the investments in the cycle that we see forward.
So with that, thank you very much. And we have a break and -- no on break, sorry. And we will direct for Q&A.
Hello, everyone. So we'll start the Q&A. Thank you. And I'll ask for those who are present here with us just to raise your hand and I'll take the mic to you. And just remember to everyone that's watching us online, just submit your questions for the webcast and then at the end, I'll run them through [indiscernible].
2. Question Answer
Bruno, Alessandro, congratulations on the positive outlook and the acquisition of Verde as well. I guess on the guidance, it you showed the chart on the guidance from 2023 expectations or rates were going to go to 9%. Now obviously, we are at a higher base. Do you still expect rates to come down to around 11% over the next couple of years. So I guess, what is the risk if that doesn't happen in rates do stay more elevated. Have you contemplated that in the guidance and the ability for the -- to meet that fundraising targets?
And also , like, I guess, on the improvement in margin, right, because you had 10% improvement, very significant. What are some of the risks to get there? And maybe if there's like a time line, is that more in 2, 3 years? Or like in the shorter term, given you're still integrating with Compass, some of the shorter-term risk on the margin expansion.
Okay. Thank you, Tito. So when we look at the model, the benefit on the expansion of those more procyclical business lines, it's more down the road, right? So as I mentioned, the REITs, we are factoring in a restart of the issuances only 27. And we have very limited fundraising from IP&S. So the edge is 0. And even when you look at local to low IP&S, the numbers are not very big at this point. So those would be some more significant procyclical groups that we have. I think the equity opportunity, it really doesn't depend on operates in my view.
I think it's really recovering the historical market share that we had. I think Global IP&S, as Jaime Marti talked a little bit high market talked a little bit. We have contracted growth in pension systems in Mexico and Chile. In Chile, we are very strong. So we should participate in that growth. in Mexico, the numbers are very big and we should participate on a, let's say, a market share basis standpoint as well. So I think there is a balanced the model is a balanced situation today between risks and opportunities. I think if markets go to those levels of interest rates, I think it's possible that we believe the better.
And obviously, if they don't, we have risk in the numbers in '27 and '28. I would say mostly in recent a little bit of IP&S we have in the model, right? Those are the things that I believe. And from the 600 basis points that we have as a stand-alone, we mentioned in the last call, we have been acting on opportunities as a combined company over the past 12 months. on things that we have not adjusted in the FRE. They are flowing through the FRE. So we have some head count redundancies. We have a lot of IT costs. We have corporate restructurings, so things that were moving around a little bit to optimize the structure of the company.
And when you add that all up, we are talking about at least 2 points of margin, which hopefully we're going to get that benefit next year. So we have 4 points of margin, which will come from operating leverage from the growth of AUM. So that's really the risk that we're talking about. So I think it's a balanced model. It's a doable number. The interest rates do impact us. But hopefully, this time, we're going to get a little bit more at least less headwinds. I think that would be more than enough than we had in the past 2 years.
Just to add on top of what Bruno said, one thing that I suspect and I have this view is that the global location coming from Brazil will not be so dependent on the level of interest rates, the base is so low that we see the, I would say, the internationalization of part of the assets from both the institutional investors, family office. And the general investor say, universe in Brazil moving up since it's very small. So our market share that to date is not very important because the market is not so big. I think, will not depend on the level of interest at directly because the base is so low. So this is something that we're seeing growing and becoming more reality. So in the next few years, we believe that also on that front, we will capture some part of this flow moving forward.
I have a couple of questions. So first, can you provide more details on the plan to increase the penetration on discretionary mandates for IP&S and talk a little bit about the difference in terms of ROA and for margins from the discretionary and the nondiscretionary?
And for my second question, about the IRE, how should we expect also the evolution in terms of and realize I should be like every year type of adjustment that you reassess and how do you reach those calculations per year that affect the accounting earnings?
Okay. So starting with the IRE, the Brazilian closing funds, the equity funds, so looking at the ICC and DCP, which are the largest ones, they are audited once a year. So that's when we should have the impact on the earnings, right? So they are audited for the year-end statements. And obviously, once they are out of the J curve, we should expect those 2 to impact the earnings in the fourth quarter. The other funds like SPS is different because they accrue it's correct, right? So they accrue all the time. It's not a single mark. So you should have that over time impacting the numbers.
We are, as I mentioned, in the case of CP IV, we are already 40% committed. So that fund is already with enough asset power to start appreciating more than the costs or be out of the J curve. So we should start seeing that impacting our numbers in the unrealized area number. And in the case we need the investments to increase a little bit, right? We are 50% invested now. That's a level where there's not enough assets in the portfolio to carry the NAV. We need a little bit more but I mentioned that we have 2 big operations in the pipe. We expect to push that percentage quicker to a number close to 50%. So if that happens in late '27, we should start having an impact on the unrealized IRE as well.
And then other things that impact our unrealized from a quarter-to-quarter basis, we have the listed REITs that impacted the unrealized ROE from a quarter-to-quarter basis. We have some private credit fund that we account within IRE like credit info for instance, which also compounds over time because the credit products. But the 2 big ones a year events would be VCP and the ICC, which should happen at the audit number at the end of the year.
Yes. The other question relates to the focus on getting more ROE regarding the discretionary mandates of IP&S, Global IP&S. Today, we have a big portion of our business that's TPD, of course, and IP&S, Global IP&S discretionary mandates. We are seeing more and more interest from players to trust us to not just introduce them to global managers but also to do their asset allocation as a whole. And this create just a more sticky and long-term relationships, but also we can grow the fees related to this.
Just to give you a perspective, from a typical TPD, we could have like for the same dollar allocation, we can grow almost double the fees related from one type nondiscretionary investment to another one that will create a discretionary mandate. Just could be even larger than that -- but I would say, will not go wrong doubling the fees related to that. And we have this steepness because they will continue to pay. Sometimes the TPD is just paid upfront like you see in our numbers. But we will cut over time, and this will translate in different type of approaches like rolling the mandates moving forward, just a specific allocation.
Yes, I think you can have from separate mandates that would charge a 30 to 40 bps on up to a VSP like funds, which would charge 1%. So if we're able to structure a fund of funds for private credit, for instance that we do the asset allocation as a coming vehicle, we're going to raise money from different investors like we could charge 5, 6x more than allocation into a passive figure.
Yes. And the mandate that he mentioned, it's exactly the 1 that's just to double from 15 to 30 bps or 40 bps. But if you have really a fund like VSP, you could have almost 100 basis points.
It's [ Rodrigo Pereira ] for Bank of America. You commented a little bit about the different gateways to your products for LPs. Can you talk a little bit about how the demand for country-specific funds compare versus the LatAm funds? And how do you expect that to change over the next couple of years? And if I can ask a second one. I know it's earlier on for the semiliquid opportunity for you guys, but can you talk about how you think about growing the sales force there to deal with financial advisers? Do you feel like you have this in place already? Or could you leverage, for example, your relationship with Ares to mirror what they've done there in that channel?
I think the demand on the products, it's local to local to LATAM. It caters to different clients. So what we see is that the cross demand from countries to other countries in Latin America is not necessarily very big. There are some opportunities like Brazil, you see its equities, for instance, that's a big opportunity. or you should have a fund like SPS, which is it's already a regional strategy and the dollar-based returns are very competitive. So in that case, you might see like a local to regional demands. But the main demand for the regional products, it comes from international investors, right? So we are in a position today that we have to competitive disadvantages, let's say.
One competitive advantage that we have is that the LP that comes to the region looking for an investment opportunity. In most cases, we are only able to answer the data opportunity for Brazil. So let's say, there is an LP that wants to do climate transition but we want to check the block for the entire Latin America continent. Today, we are not checking that box, right? And this is a competitive disadvantage because it's much more trouble for this to potentially look at Brazil and then to solve the rest of the continent with someone else with a different GP.
In some cases, there is not a different GP. But this is the first competitive message that we have. So being able to check the LatAm box has a lot of value because you simplify the life of the LP. He only has to deal with you. It doesn't have to -- have to do with a lot of different GPs. So that simplifies a lot.
And the other competitive advantage is that the size of our funds on a country-specific basis, it creates limitations to some of the largest LPs. So we have like large or very large LPs that have minimum checks of $100 million, $150 million. And you funnel just in China. I'll give you an example, funnel was in China. The guy looked at his return, he said, "Oh, I want to invest." The problem is that my medium check is $150 million, and I cannot be more than 10% of the funds. So we are in a position where we need to be able to have a little bit bigger funds, right? If we do the idea behind the regionalization strategy, is a combination of providing better service to our LPs. So allowing them to check the box with just 1 GP potentially, if that's what they want.
And the second one is to upsize the strategies to a point where we can have these big check investors as LPs of the funds. So these are 2 things that are affecting our capabilities in the, let's say, the LatAm marketplace, and that we see that addressing that by having the track record in LatAm, we're able to check those 2 points. But I do not expect that a big part of the demand from that -- for that local -- sorry, for that regional mandate is going to come from within Latin America. It's more likely that the inflators in Latin America, they're going to focus more in the local to local markets. So the Colombias investing in Colombia, the Mexico invest in Mexico, the Chilean vesting, the Brazilian investor Brazil either that or long-term savings in hard currency, right? That -- those are the 2 big pockets of flows for the regional piece.
Do you have any more questions here?
Okay. So I'll go for the webcast questions in just a moment. We have a question on Guilherme Grespan from JPMorgan. So congratulations on the event. Actually, 2 questions. First question, is the FRE and the fundraising targets organic? Or if not, how much M&A accounts for it? And the second question will be in this context, how should we think about distributable earnings CAGR until 2028?
So the first is M&A. I think I made this comment that we are not including M&A in the those are just organic. Yes, it's 100% organic. And the second question, sorry.
How should I think about distributable earnings CAGR in 2028?
Distributable earnings? Okay. So distributable earnings has more impact, right? So we need to think about basically 3 triggers for distributable earnings in addition to FRE. We have a reduction of our cash IRE from the deployment into the funds. I mentioned that we're going to deploy the BRL 1.4 billion by 2029. So that's going to drain liquid funds from earnings short term distributable earnings, so cash IRE. So that's one impact.
And then we have 2 potential positive impacts. We have cash IRE from realizations, which by the end of this forecasting period, it's likely that we're going to start seeing. If I'm not mistaken, there is expectation of capital returns from VCP. SPS, there is no expectation, but I think the team is being conservative, I would expect SPS to return capital as well by 2028. So we might have some cash carry from SPS as well. And then on top of that, we have a PRE from the privates. So we have funds that are as Alison showed with accrued carry. We with the group carrier, we have SBS II with a group carry. We have other products with a crude carrier that should start realizing in returning capital.
And that's not also in the short-term numbers that we are releasing, right? So I would say we have the headwind of the cash from liquids in from the liquid part of the balance sheet being invested in closing funds earlier in the model. And then towards the end, we have cash vary from private and cash are from realizations of this first cycle. And the foreseeable future, I would say that the distributable earnings is really something that we should expect PRE in, I'd say, '26, '27. BCP III has one asset that some of the analysts that covers this segment, which is financial asset.
We have an asset in [ Asian Bank ]. And Asian Bank, since our entrance in the cap table, the earnings number multiplied by 10x. So it's a transaction that's very, very optimistic about the outcome. And with markets at the state that they are now, there is a short-term opportunity window for us eventually to start monetizing that asset. And at relatively conservative level of valuation, that asset alone would amortize in entire BCP III funds. So that's an asset that we are very optimistic about for the next sort let's say, next 12 months. hopefully, we're going to have market conditions to start realizing that return.
Okay. So I see no further questions. So I think we're good to wrap up. Thank you all for participating for the line for supporting us, and see you next Investor Day. Thank you.
Vinci Partners Investments Ltd - Ordinary Shares - Class A — Analyst/Investor Day - Vinci Compass Investments Ltd.
Financial data from Vinci Partners Investments Ltd - Ordinary Shares - Class A
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 204 204 |
26%
26%
100%
|
|
| - Direct Costs | - - |
-
-
|
|
| Gross Profit | - - |
-
-
|
|
| - Selling and Administrative Expenses | 134 134 |
20%
20%
66%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 70 70 |
40%
40%
34%
|
|
| - Depreciation and Amortization | 12 12 |
37%
37%
6%
|
|
| EBIT (Operating Income) EBIT | 57 57 |
40%
40%
28%
|
|
| Net Profit | 47 47 |
46%
46%
23%
|
|
In millions USD.
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Company Profile
Vinci Partners Investments Ltd. is an investments platform that offers a complete portfolio of strategies and solutions in alternative investments. The firm operates through the following business segments: Private Equity, Public Equities, Infrastructure, Real Estate, Credit, Hedge Funds, Financial Advisory Services, and Investment Products and Solutions. The Private Equity segment is focused on growth equity investments in Brazil. The Public Equities segment manages long-term positions based on fundamental analysis of Brazilian publicly-traded companies. The Infrastructure segment has exposure to real assets through equity and debt instruments, with active in the following sub-segments: power, oil & gas, transportation & logistic and water & sewage. The Real Estate segment focused on mature assets and co-investment alongside a large global pension fund seeking returns from investments in various segments, such as malls and logistics. The Credit segment is focused on fundamental credit analysis, consistency, and long-term value creation to investors. The Hedge Funds segment manages funds though Brazilian and international financial instruments such as stock, credit, interest, foreign exchange and commodities. The Financial Advisory Services segment is focused on providing value-added financial and strategic advisory services to entrepreneurs, corporate management teams and/or boards of directors, focusing primarily on IPO advisory and M&A transactions, either on the sell side or the buy side. The Investment Products and Solutions segments offer financial products on an open platform basis providing portfolio and management services. The company was founded on September 21, 2020 and is headquartered in Rio de Janeiro, Brazil.
StocksGuide Premium
| Head office | Cayman Islands |
| CEO | Mr. Horta |
| Employees | 283 |
| Founded | 2009 |
| Website | www.vincicompass.com |


