Vinci Compass Investments Ltd 6-K, filed Feb 7, 2024
Vinci Compass Investments Ltd. (VINP)
About this 6-K
Vinci Compass Investments Ltd filed this 6-K on February 7, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2024
Commission File Number: 001-39938
Vinci Partners Investments Ltd.
(Exact name of registrant as specified in its charter)
Av. Bartolomeu Mitre, 336
Leblon – Rio de Janeiro
Brazil 22431-002
+55 (21) 2159-6240
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| Form 20-F |
X |
Form 40-F |
TABLE OF CONTENTS
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Vinci Partners Investments Ltd. | |||||
| By: | /s/ Sergio Passos Ribeiro | ||||
| Name: | Sergio Passos Ribeiro | ||||
| Title: | Chief Financial Officer | ||||
Date: February 7, 2024
Fourth Quarter & Full Year 2023 Earnings Presentation February 07, 2024
Disclaimer This presentation contains forward - looking statements that can be identified by the use of words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others . By their nature, forward - looking statements are necessarily subject to a high degree of uncertainty and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside of our control . Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward - looking statements and there can be no assurance that such forward - looking statements will prove to be correct . Accordingly, you should not place undue reliance on forward - looking statements . The forward - looking statements included herein speak only as at the date of this presentation and we do not undertake any obligation to update these forward - looking statements . Past performance does not guarantee or predict future performance . Moreover, neither we nor our affiliates, officers, employees and agents undertake any obligation to review, update or confirm expectations or estimates or to release any revisions to any forward - looking statements to reflect events that occur or circumstances that arise in relation to the content of the presentation . Further information on these and other factors that could affect our financial results is included in filings we have made and will make with the U . S . Securities and Exchange Commission (the “SEC”) from time to time, including in the section titled “Risk Factors” in our latest fillings with the SEC . These documents are available on the SEC Filings section of the investor relations section of our website at : https : //ir . vincipartners . com/financials/sec - filings . We have prepared this presentation solely for informational purposes . The information in this presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any of our securities or securities of our subsidiaries or affiliates, not should it or any part of it form the basis of, or be relied on, in connection with any contract to purchase or subscribe for any of our securities or securities of any of our subsidiaries or affiliates, nor shall it or any part of it form the basis of, or be relied on, in connection with any contract or commitment whatsoever . This presentation also includes certain non - GAAP financial information . We believe that such information is meaningful and useful in understanding the activities and business metrics of our operations . We also believe that these non - GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our International Financial Reporting Standards (“IFRS”) results, as issued by the International Accounting Standards Board, provide a more complete understanding of factors and trends affecting our business . Further, investors regularly rely on non - GAAP financial measures to assess operating performance and such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with IFRS . We also believe that certain non - GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of public companies in our industry, many of which present these measures when reporting their results . The non - GAAP financial information is presented for informational purposes and to enhance understanding of the IFRS financial statements . The non - GAAP measures should be considered in addition to results prepared in accordance with IFRS, but not as a substitute for, or superior to, IFRS results . As other companies may determine or calculate this non - GAAP financial information differently, the usefulness of these measures for comparative purposes is limited . A reconciliation of such non - GAAP financial measures to the nearest GAAP measure is included in this presentation . 2
3 Presenters Alessandro Horta Chief Executive Officer Sergio Passos Chief Operating Officer & Chief Financial Officer Bruno Zaremba Private Equity Chairman & Head of Investor Relations
Opening Remarks
5 6 6 6 6 6 Vinci Partners Fourth Quarter & Full Year 2023 Highlights See notes and definitions at end of document R$ 69 bn AUM¹ 4Q23 Vinci Partners ended 2023 with R$69 bn in AUM¹, a 9% growth year - over - year, pushed by R$4.2 billion in capital subscriptions in 2023 across Private Markets funds. FRE per share totaled R$1.07 and Adjusted Distributable Earnings per share reached R$1.18 , reflecting increases of 14% and 17% year - over - year , respectively. Vinci announced a quarterly distribution of US$0.20 per common share. US$ 0.20 Quarterly Dividend R$ 57.3 mm FRE² 4Q23 R$ 4.2 bn Capital Subscriptions FY23 Vinci achieved several important milestones over the year: Vinci Partners and Ares Management announced a strategic partnership and a US$100 million investment to accelerate the growth of Vinci’s platform in LatAm and collaborate on distribution, new products and other strategic areas. VISC, our listed shopping mall REIT, raised R$1.2 billion in a short span during the 2H’23 through two consecutive offerings, leading to a year - to - date increase of over 70% in AUM. Vinci’s Infrastructure team officially closed the mandate to manage the Sustainable Regional Development Fund, FDIRS, activating close to R$1 billion in AUM to develop sustainable projects in Brazil. VICC, our Climate Transaction fund , now Article 9 compliant, reached 75% of its fundraising target . The fourth vintage in our Private Equity flagship strategy, VCP IV, gained substantial traction with local investors and is officially the vintage with the most local capital since we started the VCP strategy. + 9 % YoY R$ 63.6 mm Adj. DE³ 4Q23 (R$1.18/Share)
6 Private Markets’ Fundraising Cycle See notes and definitions at end of document 8.2 6.8 15 2022 - 2023 YE2024 Total Fundraising PM (2022 - YE24) Year - end 2024 Target 55% Raised until 4Q23 Vinci entered a new cycle for capital raising within Private Markets funds, ending 2023 with R$8.2 billion in new capital subscriptions across Private Equity, Infrastructure, Real Estate and Private Credit. VCP IV Private Markets’ Fundraising Cycle (R$ bn) … and rely on a robust fundraising pipeline to advance efforts into 2024 , driven by ongoing fundraisings and additional commitments coming from new and existing strategies. VICC Vinci Credit Infra Listed Products SPS IV VIR V VFDL II R$8.2 bn Capital Subscriptions 2022 - 2023 VCP IV VICC Vinci Credit Infra Listed Products FDIRS Others We reached 55% of our R$15 billion target fundraising in the 4Q’23… … New products in pipeline for 2024 Existing strategies still fundraising
Financial Highlights
8 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY(%) FY'22 FY'23 ∆ YoY(%) Net revenue from management fees 99,640 104,745 99,976 0% 371,501 393,367 6% Net revenue from advisory fees 4,394 2,283 18,998 332% 21,994 39,799 81% Total Fee Related Revenues 104,034 107,028 118,974 14% 393,495 433,166 10% Segment personnel expenses (6,163) (7,483) (7,462) 21% (25,454) (29,686) 17% Other G&A expenses (4,977) (5,356) (6,573) 32% (18,383) (20,423) 11% Corporate center expenses (22,592) (24,110) (21,499) (5)% (84,770) (90,625) 7% Bonus compensation related to management and advisory (18,981) (18,746) (26,143) 38% (73,318) (84,000) 15% Total Fee Related Expenses (52,713) (55,695) (61,677) 17% (201,925) (224,733) 11% FEE RELATED EARNINGS (FRE) 51,321 51,333 57,297 12% 191,570 208,433 9% FRE Margin (%) 49.3% 48.0% 48.2% 48.7% 48.1% FRE per share¹ (R$/share) 0.93 0.95 1.07 14% 3.46 3.85 11% Net revenue from performance fees 7,558 2,058 6,468 (14)% 14,600 21,254 46% Performance based compensation (3,558) (925) (3,614) 2% (6,554) (10,640) 62% PERFORMANCE RELATED EARNINGS (PRE) 4,000 1,133 2,854 (29)% 8,046 10,614 32% PRE Margin (%) 52.9% 55.1% 44.1% 55.1% 49.9% ( - ) Unrealized performance fees 1,683 – 1,042 (38)% 3,618 1,042 (71)% (+) Unrealized performance compensation (593) – (369) (38)% (1,278) (369) (71)% (+) Realized GP investment income 7,462 4,699 4,451 (40)% 20,171 19,210 (5)% SEGMENT DISTRIBUTABLE EARNINGS 63,873 57,165 65,275 2% 222,127 238,930 8% Segment DE Margin (%) 52.9% 50.2% 49.9% 51.4% 50.3% (+) Depreciation and amortization 1,803 1,646 1,858 3% 4,986 7,310 47% (+) Realized financial income 10,235 12,027 22,046 115% 86,958 84,345 (3)% ( - ) Leasing expenses (2,190) (2,394) (2,267) 4% (9,359) (9,809) 5% ( - ) Other financial results² (3,537) (2,933) (6,446) 82% (5,718) (18,819) 229% ( - ) Non - operational expenses³ – – (1,924) N/A (6,594) (1,924) N/A ( - ) Income taxes (excluding related to unrealized fees and income) (14,392) (13,691) (16,532) 15% (50,077) (55,828) 11% DISTRIBUTABLE EARNINGS (DE) 55,792 51,820 62,010 11% 242,324 244,205 1% DE Margin (%) 42.6% 41.2% 40.5% 46.7% 43.7% DE per share (R$/share) 4 1.01 0.96 1.15 14% 4.37 4.51 3% (+) Non - operational expenses³ (including Income Tax effect) – – 1,631 N/A 5,425 1,631 (70)% ADJUSTED DISTRIBUTABLE EARNINGS 55,792 51,820 63,641 14% 247,748 245,836 (1)% Adjusted DE Margin (%) 42.6% 41.2% 41.6% 47.8% 44.0% Adjusted DE per share (R$/share) 1.01 0.96 1.18 17% 4.47 4.54 2% Fourth Quarter & Full Year 2023 Segment Earnings See notes and definitions at end of document
9 ▪ Fee - related revenues of R$119.0 million in the fourth quarter, up 14% year - over - year, driven by stronger advisory fees in the quarter. x Fee - related revenues of R$433.2 million in the FY’23, up 10% year - over - year. Management fees were R$393.4 million in the FY’23, up 6% year - over - year, with Private Markets segment substantially increasing its relevance in the revenues’ mix. ▪ FRE was R$ 57 .3 (R$1.07/share) million in the 4Q’23, up 12% year - over - year on an absolute basis and 14% year - over - year on an FRE per share basis. ▪ Adjusted Distributable Earnings (“Adjusted DE”) of R$63.6 million (R$1.18/share) in the quarter, up 14% year - over - year on an absolute basis and 17% year - over - year on an Adjusted DE per share basis. ▪ Total assets under management (“AUM”) of R$68.5 billion, up 9% year - over - year. x Fee - Earning AUM (“FEAUM”) of R$65.0 billion, up 9% year - over - year. ▪ Capital Subscriptions of R$2.3 billion in the quarter and R$4.2 billion in the FY’23. ▪ Capital Return of R$ 447 million in the quarter and R$1.6 billion in the FY’23. ▪ Appreciation of R$2.8 billion in the quarter and R$5.6 billion in the FY’23. ▪ Performance fee - eligible AUM (“PEAUM”) of R$39.9 billion at the end of the quarter. ▪ Net cash and investments of R$1.3 billion (R$23.86/share) at the end of the quarter. Fourth Quarter & Full Year 2023 Highlights Financial Measures Capital Metrics Capital Returned to Shareholders ▪ Quarterly dividend of US$0.20 per common share payable on March 07, 2024. ▪ Total capital used for share repurchases of R$5.0 million in the 4Q’23.
10 22 25 3 3 7 9 32 37 4Q'22 4Q'23 5-10 Years 10+ Years Perpetual or quasi-perpetual 25 30 24 23 10 12 59 65 4Q'22 4Q'23 Private Markets IP&S Liquid Strategies 29 33 24 23 10 12 63 69 4Q'22 4Q'23 Private Markets IP&S Liquid Strategies We continue to see AUM expansion across the platform, with highlight to long - term products ▪ Total assets under management (AUM) of R$69 billion, up 9% year - over - year. AUM growth in the full year 2023 was driven by R$4.2 billion of new capital subscriptions in Private Markets funds alongside R$5.6 billion of overall AUM appreciation. This growth was partially offset by R$2.8 billion in outflows from ou r IP&S segment. ▪ Total Fee - Earning AUM (FEAUM) of R$65.0 billion, up 9% year - over - year. ▪ Total Long - Term AUM of R$37.1 billion in the 4Q’23, up 16% year - over - year. Long - term AUM has been growing and a faster pace, pus hed by fundraisings across private market funds with longer lockups, and now represent 54% of Vinci ´ s total AUM. Fee - Earning AUM 4Q’23 vs 4Q’22 ( R$bn ) Long - Term AUM¹ 4Q’23 vs 4Q’22 ( R$bn ) + 9% + 9% + 16% See notes and definitions at end of document AUM 4Q’23 vs 4Q’22 ( R$bn )
11 38% 20% 20% 11% 10% Local Institutional³ HNWI Institutional Offshore Allocators & Distributors Public market vehicles 57% 16% 18% 8% 48% 34% 18% Our AUM base favors alpha - driven strategies, while our revenue profile is management fee - centric Our platform is highly diversified across different strategies and clients 57 % of net revenues come from private market strategies ² 54 % of AUM is in long term products ¹ AUM diversified across five different distribution channels AUM 4Q’23 Net Revenues 4Q’23 LTM See notes and definitions at end of document AUM 4Q’23 4 5 6 7
12 92% 8% Private Equity Infrastructure Vinci holds a strong long - term upside from realization of performance fees in private market funds Gross Accrued Performance Fees – Private Market Funds ▪ Accrued performance fees receivable of R$278.6 million in the 4Q’23, up 39% quarter - over - quarter, driven mostly by appreciation in the VCP III strategy. ▪ The VCP strategy¹ in Private Equity accounted for R$254.6 million in accrued performance fees, or 91% of total performance fe es. ▪ Vinci Partners had, as of 4Q’23, R$8 billion in performance eligible AUM coming from Private Markets’ funds still within inve stm ent period. ▪ Accrued performance fees coming from the Infrastructure strategy are the only fees booked as unrealized in the company's bala nce sheet as of the fourth quarter of 2023, following IFRS 15 rules. The outstanding accrued performance fees balance reflects the funds' most recent mark and are not booked in the company's bal anc e sheet yet. R$278.6 mm Accrued Performance Fees (R$ mm) Accrued Performance Fees by Strategy (%) Vinci Partners recognizes the performance revenue according to IFRS 15 . Unrealized performance fees are recognized only when is highly probable that the revenue will not be reversed in the Income Statement . The fund FIP Infra Transmissão in Infrastructure had R $ 14 . 4 million as of the end of the fourth quarter of 2023 booked as unrealized performance fees in the company ´ s balance sheet . Accrued performance fees shown for Private Equity funds of R $ 255 . 9 million and for the Infrastructure fund VIAS, of R $ 8 . 1 million, as of the end of the fourth quarter of 2023 have not been booked as unrealized performance fees in the company ´ s balance sheet . See notes and definitions at end of document
13 100 100 4 19 104 119 4Q'22 4Q'23 Management fees Advisory fees 372 393 22 40 393 433 FY'22 FY'23 Management fees Advisory fees Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 87% of total revenues in FY’23 ▪ Fee related revenues totaled R$119.0 million in the quarter, up 14% year - over - year, driven by higher advisory fees charged in th e 4Q’23. Management fees remained stable in the quarter, while private markets revenues grew, both liquid strategies and IP&S suffered headwinds caused by tougher macro conditions. ▪ Fee related revenues accounted for R$433.2 million over the FY’23, up 10% when compared to the FY’22, a solid growth in both man agement and advisory fees. Fee Related Revenues 4Q’23 vs. 4Q’22 ( R$mm ) Fee Related Revenues FY’23 vs. FY’22 ( R$mm ) + 10% + 14%
14 23 30 23 21 6 7 5 7 56 65 4Q'22 4Q'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A 80 95 85 91 25 30 18 20 208 235 FY'22 FY'23 Bonus compensation Corporate center Segment Personnel expenses Other G&A Operating Expenses ▪ Total operating expenses of R$65.3 million in the quarter, up 16% year - over - year. Disregarding bonus compensation, total operati ng expenses totaled R$35.5 million, up 5% year - over - year, following our cost efficiency orientation to contain expenses growth. ▪ Total operating expenses of R$235.7 million during the FY’23, an increase of 13% when compared to the FY’22. The incorporatio n o f Vinci SPS into our platform, occurred in the latter part of 2022 and for the full year 2023, contributed significantly to the overall increase in expenses. Total Expenses FY’23 vs. FY’22 ( R$mm ) + 13% + 16% Total Expenses 4Q’23 vs. 4Q’22 ( R$mm )
15 51 57 4Q'22 4Q'23 192 208 FY'22 FY'23 Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE) of R$57.3 million (R$1.07/share) in the quarter, up 12% year - over - year on an absolute basis and 14% y ear - over - year on an FRE per share¹ basis. This growth was propelled by a strong quarter for the Corporate Advisory segment. ▪ FRE of R$208.4 million (R$3.85/share) in the FY’23, up 9% when compared to the FY’22, driven by stronger management and advis ory fees. ▪ FRE Margin was 48% for the 4Q’23, a decrease of 1.2 percentage point year - over - year. See notes and definitions at end of document FRE per share ¹ R$1.07 R$0.93 R$3.85 R$3.46 48 % 49% Fee Related Earnings 4Q’23 vs. 4Q’22 ( R$mm ) Fee Related Earnings FY ’23 vs. FY’22 ( R$mm ) % FRE margin + 12% 48 % 49% + 9% + 14% Per share + 11% Per share
16 4 3 4Q'22 4Q'23 8 11 FY'22 FY'23 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE) of R$2.9 million in the quarter, down 29% year - over - year. ▪ PRE¹ was R$10.6 million (R$0.20/share) in the FY’23, up 32% when compared to the FY’22. ▪ Performance fees are still at a very modest level, driven by the turmoil in global and local markets over the past quarters t hat resulted in the volatility of our liquid funds’ performance. Global markets have already started to signal stability going forward, which can put us in a privileged position considering our R$17 billion performance - eligible AUM across IP&S and Liquid Strategies. Performance Related Earnings 4Q’23 vs. 4Q’22 ( R$mm ) Performance Related Earnings FY’23 vs. FY’22 ( R$mm ) % PRE margin 50 % 55% R$0.07 R$0.05 R$0.15 R$0.20 See notes and definitions at end of document 44% 53% (27)% Per share + 35% Per share PRE per share¹ (29)% + 32%
17 10 22 7 4 18 26 4Q'22 4Q'23 Realized Financial Income Realized GP Investment Income 87 84 20 19 107 104 FY'22 FY'23 Realized Financial Income Realized GP Investment Income Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$26.5 million in the 4Q’23, up 50% year - over - year, driven by realized gains in our liquid funds' portfolio. ▪ Realized GP Investment income of R$4.5 million in the quarter, coming primarily from dividend distributions of the company’s pro prietary stake in listed REITs. ▪ Realized GP Investment¹ and Financial income² accounted for R$103.6 million over the FY’23, down 3% when compared to the FY’2 2. See notes and definitions at end of document Realized GP Investment¹ and Financial income² 4Q’23 vs 4Q’22 ( R$mm ) (3)% Realized GP Investment¹ and Financial income² FY’23 vs FY’22 ( R$mm ) + 50%
18 56 64 4Q'22 4Q'23 248 246 FY'22 FY'23 Adjusted Distributable Earnings (DE) ▪ Adjusted Distributable Earnings (DE)¹ of R$63.6 million (R$1.18/share) in the quarter, up 14% year - over - year on an absolute basi s and 17% year - over - year on an Adjusted DE per share² basis. This growth was driven by stronger advisory fees, alongside with additional upside from our liquid portfolio this quar ter . ▪ Adjusted DE was R$245.8 million (R$4.54/share) in the FY’23, down 1% when compared to the FY’22 and up 2% on an Adjusted DE p er share² basis. The growth seen across management, advisory and performance fees for the full year 2023 was offset on a DE basis by a weaker year for contributions from financi al result. Adjusted Distributable Earnings (DE) 4Q’23 vs. 4Q’22 ( R$mm ) Adjusted Distributable Earnings (DE) FY’23 vs. FY’22 ( R$mm ) + 14% % Adjusted DE margin R$1.01 R$1.18 (1)% 44 % 48% R$4.47 R$4.54 See notes and definitions at end of document 42 % 43% + 17% Per share + 2% Per share Adjusted DE per share²
19 22.36 23.86 3Q'23 4Q'23 Net Cash and Investments per share 4 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 3Q'23 4Q'23 Total Shares Repurchased (number of shares) 705,518 93,249 Total Capital Used for Share Repurchases 34.9 5.0 Remaining Share Repurchase Plan Authorization 12.5 0.0 Average Price Paid Per Share (US$) 10.1 10.5 (in R$ million, unless mentioned) 3Q'23 4Q'23 Cash and cash equivalents¹ 184.2 660.3 Investments 1,138.2 1,175.5 Liquid funds² 740.2 748.5 GP Fund Investments³ 398.0 427.0 Debt Obligations 4 (117.7) (552.7) Net Cash and Investments 1,204.7 1,283.1 Net Cash and Investments per share 5 (R$/share) 22.36 23.86 Balance Sheet Highlights ▪ As of December 29, 2023, Vinci Partners had R$1.3 billion (R$23.86/share) in total net cash and investments, that comprise ca sh, cash equivalents and investments (liquid funds and GP fund investments at fair value) net of debt obligations. ▪ Vinci Partners repurchased 93,249 shares in the quarter with an average share price of US$10.5. The share repurchase plan lim it was reached in the fourth quarter, concluding the third buyback program. See notes and definitions at end of document
Segment Highlights
21 63% 14% 16% 7% Private Markets IP&S Liquid Strategies Corporate Advisory 61% 15% 16% 8% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$218.1 million in the FY’23, with 61% of FR E c oming from Private Markets, followed by Liquid Strategies with 16%, IP&S accounting for 15% and Corporate Advisory for 8%. ▪ Segment Distributable Earnings, disregarding Vinci Retirement Services segment, were R$248.6 million in the FY’23, with 63% c omi ng from Private Markets’ strategies, followed by Liquid Strategies accounting for 16%, IP&S for 14% and Corporate Advisory for 7%. Segment Distributable Earnings FY’23 by Segment Fee Related Earnings (FRE) FY’23 by Segment R$218 mm R$249 mm
22 Private Equity 44% Real Estate 21% Credit 17% Infrastructure 12% Vinci SPS 6% Private Markets' AUM (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees 59,699 68,323 66,363 11% 207,061 250,960 21% Net revenue from advisory fees 1,756 275 1,648 (6)% 3,057 2,471 (19)% Total Fee Related Revenues 61,455 68,597 68,011 11% 210,118 253,431 21% Segment personnel expenses (3,050) (3,685) (3,616) 19% (11,857) (14,529) 23% Other G&A expenses (2,194) (2,835) (2,378) 8% (9,909) (9,191) (7)% Corporate center expenses (12,790) (14,867) (13,502) 6% (44,458) (54,592) 23% Bonus compensation related to management and advisory (9,756) (10,109) (12,963) 33% (34,151) (41,001) 20% Total Fee Related Expenses (27,790) (31,496) (32,459) 17% (100,375) (119,312) 19% FEE RELATED EARNINGS (FRE) 33,664 37,102 35,552 6% 109,743 134,119 22% FRE Margin (%) 54.8% 54.1% 52.3% 52.2% 52.9% Net revenue from performance fees 3,660 464 1,983 (46)% 3,459 4,982 44% Realized performance fees 5,343 464 3,025 (43)% 7,077 6,024 (15)% Unrealized performance fees (1,683) – (1,042) (38)% (3,618) (1,042) (71)% Performance based compensation (1,459) (205) (970) (34)% (1,389) (2,296) 65% PERFORMANCE RELATED EARNINGS (PRE) 2,201 259 1,014 (54)% 2,070 2,686 30% PRE Margin (%) 60.1% 55.8% 51.1% 59.8% 53.9% ( - ) Unrealized performance fees 1,683 – 1,042 (38)% 3,618 1,042 (71)% (+) Unrealized performance compensation (593) – (369) (38)% (1,278) (369) (71)% (+) Realized GP investment income 7,462 4,699 4,451 (40)% 20,171 19,210 (5)% SEGMENT DISTRIBUTABLE EARNINGS 44,418 42,059 41,689 (6)% 134,324 156,689 17% Segment DE Margin (%) 59.8% 57.0% 55.2% 56.6% 56.2% ASSETS UNDER MANAGEMENT (AUM R$million) 28,685 30,347 32,956 15% 28,685 32,956 15% FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ million) 25,259 27,060 29,706 18% 25,259 29,706 18% AVERAGE MANAGEMENT FEE RATE (%) 0.90% 0.98% 0.89% 0.89% 0.90% Private Markets R$33 bn AUM ▪ Fee related earnings (FRE) of R$35.6 million in the quarter, up 6% year - over - year, a result of the strong fundraising in the seg ment during 2023 combined with catch - up fees for VCP IV and VICC, that closed additional capital subscriptions this quarter. ▪ FRE was R$134.1 million in the FY’23, a 22% increase comparing to the FY’22. ▪ Segment Distributable Earnings of R$41.7 million in the quarter, down 6% year - over - year, driven mostly by a realization in the 4 Q’22, that boosted the GP Investment income. Segment DE was R$156.7 million in the FY’23, an increase of 17% comparing to the FY’22, driven by growth in FRE. ▪ Total AUM of R$33.0 billion in the quarter, a 15% year - over - year increase propelled by robust fundraising across Infrastructure, Real Estate and Private Equity. In the latter part of the year, our Real Estate team concluded a R$875 million follow - on offering for VISC, and our Infrastructure team closed the mandate to ma nage the Sustainable Regional Development Fund, activating close to R$1 billion in AUM. Both will start to positively impact revenues from the 1Q’24 onwards.
23 Separate Mandates 72% Pension Plans 13% International 6% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees 20,119 17,435 16,448 (18)% 83,114 70,462 (15)% Net revenue from advisory fees 7 8 8 11% 28 31 10% Total Fee Related Revenues 20,126 17,443 16,456 (18)% 83,142 70,493 (15)% Segment personnel expenses (987) (1,397) (1,400) 42% (4,967) (5,526) 11% Other G&A expenses (992) (611) (1,436) 45% (2,664) (3,489) 31% Corporate center expenses (4,310) (3,794) (3,346) (22)% (18,162) (15,386) (15)% Bonus compensation related to management and advisory (4,184) (3,645) (2,940) (30)% (16,021) (13,995) (13)% Total Fee Related Expenses (10,473) (9,447) (9,123) (13)% (41,815) (38,397) (8)% FEE RELATED EARNINGS (FRE) 9,653 7,996 7,333 (24)% 41,328 32,096 (22)% FRE Margin (%) 48.0% 45.8% 44.6% 49.7% 45.5% Net revenue from performance fees 961 13 1,976 106% 3,156 4,268 35% Realized performance fees 961 13 1,976 106% 3,156 4,268 35% Unrealized performance fees – – – N/A – – N/A Performance based compensation (338) (6) (988) 192% (1,480) (2,055) 39% PERFORMANCE RELATED EARNINGS (PRE) 623 6 988 59% 1,676 2,213 32% PRE Margin (%) 64.8% 50.0% 50.0% 53.1% 51.8% ( - ) Unrealized performance fees – – – N/A – – N/A (+) Unrealized performance compensation – – – N/A – – N/A SEGMENT DISTRIBUTABLE EARNINGS 10,276 8,003 8,320 (19)% 43,003 34,309 (20)% Segment DE Margin (%) 48.7% 45.8% 45.1% 49.8% 45.9% ASSETS UNDER MANAGEMENT (AUM R$million) 24,187 23,560 23,150 (4)% 24,187 23,150 (4)% FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ million) 24,085 23,458 23,044 (4)% 24,085 23,044 (4)% AVERAGE MANAGEMENT FEE RATE (%) 0.36% 0.33% 0.31% 0.37% 0.33% Investment Products & Solutions ▪ Fee related earnings (FRE) of R$7.3 million in the quarter, down 24% year - over - year. This decline resulted from a shift in the A UM mix within the IP&S segment, that has experienced redemptions specially within our pension funds strategy, which carries higher fees. The Separate Mandates strategy, that carr ies lower fees, has been gaining relevance, contributing to the decrease in the average management fee rate. FRE was R$32.1 million in the FY’23, a 22% decrease comparing to the FY’22. ▪ Performance related earnings (PRE) of R$0.9 million in the quarter, up 59% year - over - year. PRE in the FY’23 was R$2.2 million, a n increase of 32% when compared to the FY22. ▪ Segment Distributable Earnings of R$8.3 million in the quarter, down 19% year - over - year. Segment DE was R$34.3 million in the FY ’23, a decrease of 20% when compared to the FY’22, that posted higher contributions from FRE. ▪ Total AUM of R$23.1 billion, down 4% year - over - year. R$23 bn AUM
24 Public Equities 77% Hedge Funds 23% Liquid Strategies' AUM (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees 19,823 18,950 17,046 (14)% 81,325 71,780 (12)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues 19,823 18,950 17,046 (14)% 81,325 71,780 (12)% Segment personnel expenses (1,320) (1,328) (1,276) (3)% (5,496) (5,540) 1% Other G&A expenses (1,189) (867) (694) (42)% (3,654) (3,131) (14)% Corporate center expenses (4,247) (4,123) (3,468) (18)% (17,685) (15,660) (11)% Bonus compensation related to management and advisory (4,227) (3,431) (2,868) (32)% (16,232) (13,013) (20)% Total Fee Related Expenses (10,983) (9,749) (8,306) (24)% (43,068) (37,345) (13)% FEE RELATED EARNINGS (FRE) 8,840 9,202 8,740 (1)% 38,258 34,436 (10)% FRE Margin (%) 44.6% 48.6% 51.3% 47.0% 48.0% Net revenue from performance fees 2,937 1,582 2,509 (15)% 7,986 12,005 50% Realized performance fees 2,937 1,582 2,509 (15)% 7,986 12,005 50% Unrealized performance fees – – – N/A – – N/A Performance based compensation (1,761) (713) (1,657) (6)% (3,685) (6,290) 71% PERFORMANCE RELATED EARNINGS (PRE) 1,176 869 852 (28)% 4,301 5,715 33% PRE Margin (%) 40.0% 54.9% 34.0% 53.9% 47.6% ( - ) Unrealized performance fees – – – N/A – – N/A (+) Unrealized performance compensation – – – N/A – – N/A SEGMENT DISTRIBUTABLE EARNINGS 10,016 10,070 9,592 (4)% 42,559 40,151 (6)% Segment DE Margin (%) 44.0% 49.0% 49.1% 47.7% 47.9% ASSETS UNDER MANAGEMENT (AUM R$million) 10,209 11,288 12,332 21% 10,209 12,332 21% FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ million) 10,053 11,089 12,129 21% 10,053 12,129 21% AVERAGE MANAGEMENT FEE RATE (%) 0.81% 0.71% 0.62% 0.79% 0.70% Liquid Strategies ▪ Fee related earnings (FRE) of R$8.7 million in the quarter, down 1% year - over - year. FRE was R$34.4 million in the FY’23, a decre ase of 10% compared to the FY’22. This decline can be attributed to the impact of outflows in funds with higher fees, which were not offset by the fundraising across the Exclusive Ma ndates strategy and the overall appreciation of AUM, concentrated in the latter part of the year. ▪ Performance related earnings (PRE) of R$0.9 million in the quarter, down 28% year - over - year. PRE was R$5.7 million in the FY’23, a 33% increase comparing to the FY’22. ▪ Segment Distributable Earnings of R$9.6 million in the quarter, down 4% year - over - year. Segment Distributable Earnings was R$40. 2 million in the FY’23, a decrease of 6% when compared to the FY’22, driven by a reduction in contributions from FRE. ▪ AUM was R$12.3 billion in the quarter, up 21% year - over - year. R$12 bn AUM
25 Corporate Advisory ▪ Fee related earnings (FRE) of R$9.4 million in the quarter. ▪ FRE was R$17.5 million in the FY’23, a 113% increase comparing to the FY’22. ▪ Segment Distributable Earnings in the FY’23 were R$17.5 million in the FY’23, a 113% increase comparing to the FY’22. ▪ Solid results posted in the latter part of 2023 are a combination of the declining interest rate trend, enhancing liquidity a nd allowing increased M&A opportunities, alongside a broader sector diversification, which is helping to dilute risk across different economic cycles and asset profiles. (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees – – – N/A – – N/A Net revenue from advisory fees 2,630 2,000 17,343 559% 18,908 37,297 97% Total Fee Related Revenues 2,630 2,000 17,343 559% 18,908 37,297 97% Segment personnel expenses (472) (491) (574) 21% (2,009) (2,061) 3% Other G&A expenses (87) (229) (723) 733% (543) (1,267) 133% Corporate center expenses (1,130) (1,206) (1,075) (5)% (4,256) (4,531) 6% Bonus compensation related to management and advisory (302) (623) (5,598) 1,752% (3,889) (11,979) 208% Total Fee Related Expenses (1,991) (2,548) (7,970) 300% (10,697) (19,838) 85% FEE RELATED EARNINGS (FRE) 639 (548) 9,373 1,366% 8,211 17,458 113% FRE Margin (%) 24.3% N/A 54.0% 43.4% 46.8% SEGMENT DISTRIBUTABLE EARNINGS 639 (548) 9,373 1,366% 8,211 17,458 113% Segment DE Margin (%) 24.3% N/A 54.0% 43.4% 46.8%
26 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) Net revenue from management fees – 38 119 N/A – 166 N/A Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues – 38 119 N/A – 166 N/A Segment personnel expenses (334) (582) (596) 78% (1,125) (2,029) 80% Other G&A expenses (515) (815) (1,341) 161% (1,613) (3,344) 107% Corporate center expenses (115) (121) (107) (7)% (207) (455) 120% Bonus compensation related to management and advisory (513) (939) (1,773) 246% (3,027) (4,013) 33% Total Fee Related Expenses (1,476) (2,456) (3,818) 159% (5,972) (9,841) 65% FEE RELATED EARNINGS (FRE) (1,476) (2,418) (3,699) 151% (5,972) (9,675) 62% FRE Margin (%) N/A N/A N/A N/A N/A Net revenue from performance fees – – – N/A – – N/A Realized performance fees – – – N/A – – N/A Unrealized performance fees – – – N/A – – N/A Performance based compensation – – – N/A – – N/A PERFORMANCE RELATED EARNINGS (PRE) – – – N/A – – N/A PRE Margin (%) N/A N/A N/A N/A N/A ( - ) Unrealized performance fees – – – N/A – – N/A (+) Unrealized performance compensation – – – N/A – – N/A SEGMENT DISTRIBUTABLE EARNINGS (1,476) (2,418) (3,699) 151% (5,972) (9,675) 62% Segment DE Margin (%) N/A N/A N/A N/A N/A ASSETS UNDER MANAGEMENT (AUM R$million) – 37 88 N/A – 88 N/A AVERAGE MANAGEMENT FEE RATE (%) – 0.60% 0.72% N/A – 0.72% N/A Retirement Services ▪ Fee Related Earnings (FRE) of negative R$3.7 million in the quarter. FRE was negative R$9.7 million in the FY’23. ▪ VRS started to contribute to AUM numbers and management fee revenues in the 2Q’23.
Supplement Details
28 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ million Fee - Earning Assets Under Management (FEAUM) – R$ million For the Three Months Ended December 29, 2023 For the Three Months Ended December 29, 2023 For the Twelve Months Ended December 29 , 2023 For the Twelve Months Ended December 29 , 2023 Private Public IP&S Infrastructure Real Estate Private Credit Hedge VRS Vinci SPS Total Equity Equities Funds Beginning balance 13,971 8,445 23,560 2,731 6,220 5,335 2,843 37 2,091 65,231 (+/ - ) Capital Subscription / (capital return) 76 – – 1,145 752 (39) – – (75) 1,859 (+) Capital Subscription 266 – – 1,165 875 – – – 0 2,306 ( - ) Capital Return (190) – – (21) (123) (39) – – (75) (447) (+/ - ) Net Inflow / (outflow) – (46) (1,104) – 5 (65) (166) 48 – (1,328) (+/ - ) Appreciation / (depreciation) 546 1,139 694 67 72 176 118 2 (52) 2,762 Ending Balance 14,593 9,537 23,149 3,943 7,049 5,406 2,795 88 1,964 68,525 Private Public IP&S Infrastructure Real Estate Private Credit Hedge VRS Vinci SPS Total Equity Equities Funds Beginning balance 13,781 7,397 24,187 2,055 5,649 5,056 2,812 – 2,144 63,081 (+/ - ) Capital Subscription / (capital return) 827 – 55 1,658 727 (283) – – (333) 2,650 (+) Capital Subscription 1,188 – 55 1,781 1,180 – – – 3 4,207 ( - ) Capital Return (361) – – (124) (453) (283) – – (336) (1,557) (+/ - ) Net Inflow / (outflow) – 164 (2,829) – (51) 167 (389) 85 – (2,854) (+/ - ) Appreciation / (depreciation) (15) 1,976 1,736 230 725 468 372 3 153 5,647 Ending Balance 14,593 9,537 23,149 3,943 7,049 5,406 2,795 88 1,964 68,525 Private Public IP&S Infrastructure Real Estate Private Credit Hedge VRS Vinci SPS Total Equity Equities Funds Beginning balance 10,733 8,395 23,458 2,682 6,220 5,335 2,694 37 2,091 61,644 (+/ - ) Capital Subscription / (capital return) 96 – – 1,145 752 (39) – – (75) 1,879 (+) Capital Subscription 216 – – 1,165 875 – – – 0 2,256 ( - ) Capital Return (119) – – (21) (123) (39) – – (75) (377) (+/ - ) Net Inflow / (outflow) – (46) (1,097) – 5 (65) (166) 48 – (1,321) (+/ - ) Appreciation / (depreciation) 563 1,138 694 67 72 176 114 2 (52) 2,775 Ending Balance 11,392 9,487 23,055 3,894 7,049 5,406 2,642 88 1,964 64,977 Private Public IP&S Infrastructure Real Estate Private Credit Hedge VRS Vinci SPS Total Equity Equities Funds Beginning balance 10,407 7,334 24,085 2,003 5,649 5,056 2,718 – 2,144 59,397 (+/ - ) Capital Subscription / (capital return) 822 – 55 1,658 727 (283) – – (333) 2,646 (+) Capital Subscription 1,138 – 55 1,781 1,180 – – – 3 4,157 ( - ) Capital Return (315) – – (124) (453) (283) – – (336) (1,512) (+/ - ) Net Inflow / (outflow) – 171 (2,766) – (51) 167 (431) 85 – (2,826) (+/ - ) Appreciation / (depreciation) 162 1,982 1,682 233 725 468 354 3 153 5,761 Ending Balance 11,392 9,487 23,055 3,894 7,049 5,406 2,642 88 1,964 64,977
29 Fund Segment NAV¹ (R$ million) 4Q’23 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 290.3 2.8% 12.6% 12.6% 25.9% CDI 7 CDI 7 Atlas Strategy² Hedge Funds 383.5 3.4% 9.2% 9.2% 18.3% CDI 7 CDI 7 Total Return Strategy³ Hedge Funds 367.3 11.2% 26.7% 26.7% 30.6% IPCA 9 + Yield IMA - B 10 IPCA 9 + Yield IMA - B 10 Mosaico Strategy 4 Public Equities 988.2 12.3% 24.1% 24.1% 18.4% IBOV 8 IBOV 8 Vinci Gas Dividendos FIA Public Equities 603.3 14.1% 20.8% 20.8% 30.4% IBOV 8 IBOV 8 Valorem Strategy 5 IP&S 1,588.0 2.6% 11.8% 11.8% 22.8% IMA - B 5 10 IMA - B 5 10 Equilibrio Strategy 6 IP&S 2,305.6 2.4% 11.4% 11.4% 21.5% IPCA 9 - Vinci Retorno Real FIM IP&S 187.7 3.3% 12.1% 12.1% 27.8% IMA - B 10 IMA - B 10 Vinci Crédito Imobiliário I Private Credit 113.9 2.4% 11.3% 11.3% 24.9% IPCA 9 IPCA 6 +7.785% Vinci Crédito Imobiliário II Private Credit 831.4 4.4% 16.0% 16.0% 26.3% IPCA 9 IPCA 6 + 6% Vinci Crédito Estruturado Mult . Plus FIC FIM Private Credit 110.4 3.5% 12.9% 12.9% 28.6% CDI 7 CDI 7 Vinci Energia Sustentável Private Credit 606.5 3.8% 14.2% 14.2% 21.2% IPCA 9 IPCA 9 + 6% Vinci Crédito Multiestratégia Private Credit 365.5 3.8% 10.9% 10.9% 22.6% CDI 7 IPCA 9 + 5% VISC11 Real Estate (listed REIT) 2,630.6 7.6% 29.1% 29.1% 44.0% IFIX 11 IPCA 9 + 6% VILG11 Real Estate (listed REIT) 1,488.8 (5.4)% 7.8% 7.8% 10.9% IFIX 11 IPCA 9 + 6% VINO11 Real Estate (listed REIT) 126.6 (7.9)% (12.5)% (12.5)% (20.0)% IFIX 11 IPCA 9 + 6% VIFI11 Real Estate / Private Credit (listed REIT) 67.1 1.6% 32.2% 32.2% 33.7% IFIX 11 IFIX 8 VIUR11 Real Estate (listed REIT) 215.6 1.8% 13.2% 13.2% 28.8% IFIX 11 IPCA 9 + 6% VCRI11 Real Estate / Private Credit (listed REIT) 149.3 3.6% 6.7% 6.7% 7.6% IFIX 11 IPCA 9 + X 12 % VICA11 Real Estate / Private Credit (REIT) 374.9 (0.2)% (0.2)% (0.2)% 1.3% IFIX 11 CDI 7 + 1% VINCI FOF IMOBILIARIO FIM CP Real Estate (REIT) 71.7 2.9% 19.4% 19.4% 26.5% IFIX 11 IFIX 11 VIGT11 Infrastructure (listed) 669.3 5.6% 25.9% 25.9% 27.3% - - Investment records – IP&S, Liquid Strategies, Private Credit and Listed Funds Benchmark 4Q’23 YTD 12 M 24 M IBOV 5 15.1% 22.3% 22.3% 28.0% CDI 7 2.8% 13.0% 13.0% 27.0% IMA - B 5 7 3.0% 12.1% 12.1% 23.1% IPCA 9 + Yield IMA - B 10 2.3% 10.7% 10.7% 24.4% IPCA 9 1.1% 4.6% 4.6% 10.7% IFIX 11 2.9% 15.5% 15.5% 18.1% See notes and definitions at end of document
30 Fund Segment Vintage year Committed Capital Invested Capital Realized or Unrealized Total Value Gross MOIC Gross MOIC Gross IRR Gross IRR Partially Realized (R$mm) (R$mm) (R$mm) (R$mm) (R$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 137 5,202 4.3x 4.0x 71.5% 77.2% VCP II Private Equity 2011 2,200 2,063 1,935 2,259 4,194 2.0x 1.1x 10.4% 1.6% VCP III Private Equity 2018 4,000 2,316 54 4,373 4,427 1.8x 1.8x 33.7% 30.5% VCP IV Private Equity 2022 2,205 – – – – – – – – VCP Strategy² Private Equity 9,820 5,585 7,053 6,770 13,823 2.4x 2.2x 64.6% 70.2% NE Empreendedor Private Equity 2003 36 13 26 – 26 2.1x 2.6x 22.0% 30.5% Nordeste III Private Equity 2017 240 135 93 144 237 1.8x 1.5x 18.6% 11.9% VIR IV Private Equity 2020 1,000 403 154 379 533 1.3x 1.4x 25.5% 30.7% VIR Strategy³ Private Equity 1,276 550 272 524 796 1.4x 1.5x 21.7% 27.9% SPS I Vinci SPS 2018 128 191 207 126 333 1.7x 1.6x 26.0% 20.1% SPS II Vinci SPS 2020 671 1,004 759 702 1,460 1.5x 1.5x 24.4% 28.0% SPS III Vinci SPS 2021 1,070 692 131 739 870 1.3x 1.5x 30.2% 38.6% Vinci SPS Strategy 4 Vinci SPS 1,869 1,887 1,097 1,567 2,664 1.4x 1.5x 25.7% 27.6% FIP Transmissão 5 Infrastructure 2017 211 104 261 115 376 3.6x 2.7x 59.0% 43.9% VIAS 6 Infrastructure 2021 386 350 – 409 409 1.2x 1.2x 17.8% 19.4% VICC 7 Infrastructure 2023 1,500 – – – – – – – – VFDL 8 Real Estate 2021 422 221 8 264 272 1.2x 1.3x 21.4% 26.9% Vinci Credit Infra 9 Private Credit 2022 1,400 438 – 448 448 1.1x 1.1x NM NM Pro Forma Historical Portfolio Performance - Excluding PIPE Investments¹ Investment records – Closed End Private Markets funds See notes and definitions at end of document
31 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 1Q’23 2Q’23 3Q'23 4Q’23 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 60,006 70,369 51,820 62,010 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 11,994 14,290 10,647 12,740 DE per Common Share (US$)² 0.34 0.20 0.24 0.19 0.21 0.26 0.19 0.22 0.26 0.20 0.24 Actual Dividend per Common Share³ 0.30 0.16 0.20 0.17 0.17 0.20 0.17 0.16 0.20 0.17 0.20 Record Date Sep 01, 2021 Dec 01, 2021 Mar 10, 2022 May 24, 2022 Aug 25, 2022 Nov 23, 2022 Mar 01, 2023 May 25, 2023 Aug 24, 2023 Nov 22, 2023 Feb 22, 2024 Payable Date Sep 16, 2021 Dec 16, 2021 Mar 24, 2022 Jun 08, 2022 Sep 09, 2022 Dec 08, 2022 Mar 15, 2023 Jun 09, 2023 Sep 08, 2023 Dec 07, 2023 Mar 07, 2024 ▪ Vinci Partners generated R$1.15 or US$0.24¹ of Distributable Earnings per common share for the fourth quarter of 2023. ▪ The company declared a quarterly dividend of US$0.20² per common share to record holders as of February 22, 2024; payable on Mar ch 07 , 2024. See notes and definitions at end of document
32 Share Summary ▪ Common Shares Outstanding as of quarter end of 53,778,817 shares. x Repurchased 93,249 common shares in the quarter, with an average share price of US$10.5. x Repurchased 3,557,004 common shares since the announcement of the first share repurchase plan, with an average share price of US $10.7. x The share repurchase plan limit was reached in the fourth quarter, concluding the third buyback program. VINP Shares 1Q ' 21 2Q ' 21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q23 2Q’23 3Q'23 4Q’23 Class B 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 Class A¹ 42,447,349 42,270,694 42,097,179 41,689,338 41,363,077 41,112,717 40,892,619 40,614,497 40,247,461 39,730,720 39,405,827 39,312,578 Common Shares 56,913,588 56,736,933 56,563,418 56,155,577 55,829,316 55,578,956 55,358,858 55,080,736 54,713,700 54,196,959 53,872,066 53,778,817 See notes and definitions at end of document
33 (R$ million, unless mentioned) Segment 4Q’23 Commitments Total Capital Committed 4Q’23 Capital Called Total Capital Called Capital Returned/Dividends Paid (4Q’23) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 0.0 3.2 – 1.6 2.9 VCP III Private Equity – 3.1 – 2.8 – – 4.3 VIR IV Private Equity – 11.1 – 5.4 – 1.7 4.7 VCP IV Private Equity – 350.0 – – – – – FIP Infra Transmissão ( co - investment)¹ Infrastructure – 29.5 – 8.9 – 20.9 10.3 FIP Infra Transmissão¹ Infrastructure – 10.5 – 3.4 – 6.6 2.9 VIAS Infrastructure – 50.0 – 37.5 – – 50.7 Vinci Transporte e Logística II Infrastructure – 15.0 – – – – – Vinci Transporte e Logística I Infrastructure – 11.4 – 11.3 – – 10.5 VICC Infrastructure – 100.0 – – – – – VFDL Real Estate – 70.0 7.1 46.0 – – 52.8 VIUR Real Estate – 67.3 – 67.3 1.5 14.8 53.9 VINO Real Estate – 50.0 – 50.0 0.8 6.7 34.6 Vinci FOF Imobiliário Real Estate – 16.9 – 16.9 – 0.5 22.0 VCRI Real Estate/Private Credit – 80.0 – 80.0 1.9 18.4 70.0 VICA Real Estate/Private Credit – 23.0 – 23.0 0.8 4.2 22.8 Vinci Crédito Infra Institucional Private Credit – 100.0 8.0 44.2 – – 46.8 VSP FIM IP&S – 50.0 3.5 12.4 – – 12.9 VINCI PIPE Public Equities – 25.0 – 25.0 – – 24.8 Total – 1,067.8 18.6 437.3 5.0 75.5 427.0 GP Commitment in Vinci Partners funds ▪ As of December 29, 2023, the company had R$1.1 billion in capital commitments signed to proprietary funds. ▪ Total GP Investments marked at fair value of R$427.0 million as of December 29, 2023. See notes and definitions at end of document
34 57% 18% 25% Private Markets IP&S Liquid Strategies PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Segment/Fund AUM R$mm Index type Index Rate Status VCP III - Onshore 1,349 Preferred Return w/ Catch - Up² IPCA 5 + 8% Currently generating performance VCP III - Offshore 3,720 Preferred Return w/ Catch - Up² USD + 8% Currently generating performance Other PE Onshore Vehicles 2,681 Preferred Return w/ Catch - Up² IPCA 5 + 8% Within investment period Other PE Offshore Vehicles 388 Preferred Return w/ Catch - Up² USD + 8% Within investment period Nordeste III 229 Preferred Return w/ Catch - Up² IPCA 5 + 8.5% Currently generating performance Teman Pier 151 Preferred Return w/ Catch - Up² IPCA 5 + 5% Within investment period VIAS 477 Preferred Return 4 IPCA 5 + 6% Within investment period Transportation and Logistics strategy 151 Preferred Return 4 IPCA 5 + 6% Within investment period FIP Infra Transmissão 58 Preferred Return 4 IPCA 5 + 8% Currently generating performance VICC 1,188 Preferred Return 4 IPCA 5 Within investment period FDIRS 969 Hurdle Within investment period Listed REITs 2,337 Hurdle³ IPCA 5 + 6% Currently generating performance VFDL 454 Preferred Return 4 IPCA 5 + 6% Within investment period FOF Strategy 357 Hurdle³ IFIX 9 Currently generating performance VCI II 831 Preferred Return 4 IPCA 5 + 6% Within investment period VES 606 Preferred Return 4 IPCA 5 + 6% Within investment period VCM FIM 388 Preferred Return 4 IPCA 5 + 5% Within investment period Energia FIM 163 Hurdle³ CDI 10 Currently generating performance VCS 105 Hurdle³ IPCA 5 + 5% Within investment period VCI I 114 Not expected to pay performance VCE 342 Hurdle³ CDI 10 Currently generating performance SPS III 1,165 Preferred Return 4 CDI 10 Within investment period Others 1,243 Currently generating performance Others 3,142 Not expected to pay performance Total Private Markets 22,607 Vinci Valorem 1,588 Hurdle³ IMAB 5 6 Currently generating performance Separate Mandates 1,601 Hurdle³ IBOV 7 + alpha Currently generating performance International¹ 1,000 Currently generating performance Commingled Funds 678 Hurdle³ IBOV 7 + alpha Currently generating performance VSP 209 Preferred Return w/ Catch - Up² IPCA 5 + 8% Currently generating performance Others 2,319 Currently generating performance Total IP&S 7,395 SWF 5,048 Hurdle³ Currently generating performance Mosaico Strategy 989 Hurdle³ IBOV 7 Currently generating performance Vinci Gas Dividendos 603 Hurdle³ IBOV 7 Currently generating performance Atlas Strategy 384 Hurdle³ CDI 10 Currently generating performance Vinci Multiestratégia 290 Hurdle³ CDI 10 Currently generating performance Vinci Total Return 518 Hurdle³ IPCA 5 + Yield IMAB 11 Currently generating performance Others 2,071 Currently generating performance Total Liquid Strategies 9,903 PEAUM TOTAL 39,905 Significant exposure to performance fee - eligible AUM ▪ Total Performance fee eligible AUM (PEAUM) of R$39.9 billion. ▪ Hurdle rate funds charge performance based on the fund’s return over its benchmark, generally with a high - watermark clause, except for the SWF mandate in Public Equities. ▪ Within our Private Market strategies, R$8 billion in AUM comes from “preferred return” funds with carried interest, that are still in investment period. PEAUM R$40 bn See notes and definitions at end of document
Reconciliations and Disclosures
36 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 ∆ YoY (%) FY'22 FY'23 ∆ YoY (%) REVENUES Net revenue from management fees 99,640 104,745 99,976 0% 371,501 393,367 6% Net revenue from performance fees 7,558 2,058 6,468 (14)% 14,600 21,254 46% Realized performance fees 9,241 2,058 7,510 (19)% 18,218 22,296 22% Unrealized performance fees (1,683) – (1,042) (38)% (3,618) (1,042) (71)% Net revenue from advisory 4,394 2,283 18,998 332% 21,994 39,799 81% Total net revenues from services rendered 111,592 109,086 125,442 12% 408,095 454,420 11% EXPENSES Bonus related to management and advisory (18,981) (18,746) (26,143) 38% (73,318) (84,000) 15% Performance based compensation (3,558) (925) (3,614) 2% (6,554) (10,640) 62% Realized (4,151) (925) (3,983) (4)% (7,833) (11,009) 41% Unrealized 593 – 369 (38)% 1,278 369 (71)% Total compensation and benefits (22,539) (19,671) (29,757) 32% (79,871) (94,640) 18% Segment personnel expenses (6,163) (7,483) (7,462) 21% (25,454) (29,686) 17% Other general and administrative expenses (4,977) (5,356) (6,573) 32% (18,383) (20,423) 11% Corporate center expenses (22,592) (24,110) (21,499) (5)% (84,770) (90,625) 7% Total expenses (56,271) (56,620) (65,291) 16% (208,479) (235,373) 13% Operating profit 55,321 52,466 60,151 9% 199,616 219,047 10% OTHER ITEMS GP Investment income 8,011 (3,347) 14,914 86% 6,304 26,018 313% Realized gain from GP investment income 7,462 4,699 4,451 (40)% 20,171 19,210 (5)% Unrealized gain from GP investment income 549 (8,046) 10,463 1,806% (13,867) 6,808 N/A Financial income 10,268 12,027 22,046 115% 87,870 84,345 (4)% Realized gain from financial income 10,235 12,027 22,046 115% 86,958 84,345 (3)% Unrealized gain from financial income 33 (0) – N/A 912 (0) N/A Leasing expenses (2,190) (2,394) (2,267) 4% (9,359) (9,809) 5% Other items¹ 10,434 (11,442) (10,461) N/A 8,253 (33,325) N/A Share Based Plan (5,463) (5,118) (4,249) (22)% (14,276) (14,967) 5% Non - operational expenses² – – (1,924) N/A (6,594) (1,924) (71)% Total Other Items 21,060 (10,274) 18,059 (14)% 72,198 50,338 (30)% Profit before income taxes 76,381 42,192 78,210 2% 271,813 269,385 (1)% ( - ) Income taxes ³ (17,891) (10,375) (14,826) (17)% (52,413) (49,926) (5)% NET INCOME 58,490 31,817 63,384 8% 219,401 219,459 0% (+) Non - operational expenses² including income tax related to realized expense – – 1,631 N/A 5,425 1,631 (70)% ( - ) Contingent consideration adjustment related to acquisitions 4 (9,221) 5,655 2,691 N/A (9,221) 10,476 N/A ADJUSTED NET INCOME 49,269 37,472 67,706 37% 215,604 231,566 7% Financials - Income Statement See notes and definitions at end of document
37 (R$ thousands, unless mentioned) 4Q'22 3Q'23 4Q'23 FY'22 FY'23 OPERATING PROFIT 55,321 52,466 60,151 199,616 219,047 ( - ) Net revenue from realized performance fees (9,241) (2,058) (7,510) (18,218) (22,296) ( - ) Net revenue from unrealized performance fees 1,683 – 1,042 3,618 1,042 (+) Compensation allocated in relation to performance fees 3,558 925 3,614 6,554 10,640 FEE RELATED EARNINGS (FRE) 51,321 51,333 57,297 191,570 208,433 OPERATING PROFIT 55,321 52,466 60,151 199,616 219,047 ( - ) Net revenue from management fees (99,640) (104,745) (99,976) (371,501) (393,367) ( - ) Net revenue from advisory (4,394) (2,283) (18,998) (21,994) (39,799) (+) Bonus related to management and advisory 18,981 18,746 26,143 73,318 84,000 (+) Personnel expenses 6,163 7,483 7,462 25,454 29,686 (+) Other general and administrative expenses 4,977 5,356 6,573 18,383 20,423 (+) Corporate center expenses 22,592 24,110 21,499 84,770 90,625 PERFORMANCE RELATED EARNINGS (PRE) 4,000 1,133 2,854 8,046 10,614 OPERATING PROFIT 55,321 52,466 60,151 199,616 219,047 ( - ) Net revenue from unrealized performance fees 1,683 – 1,042 3,618 1,042 (+) Compensation allocated in relation to unrealized performance fees (593) – (369) (1,278) (369) (+) Realized gain from GP investment income 7,462 4,699 4,451 20,171 19,210 SEGMENT DISTRIBUTABLE EARNINGS 63,873 57,165 65,275 222,127 238,930 NET INCOME 58,490 31,817 63,384 219,401 219,459 ( - ) Net revenue from unrealized performance fees 1,683 – 1,042 3,618 1,042 (+) Income tax from unrealized performance fees (194) – (120) (417) (120) (+) Compensation allocated in relation to unrealized performance fees (593) – (369) (1,278) (369) ( - ) Unrealized gain from GP investment income (549) 8,046 (10,463) 13,867 (6,808) (+) Income tax on unrealized gain from GP investment income (321) 46 119 (369) 175 ( - ) Unrealized gain from financial income (33) 0 (0) (912) – ( - ) Income tax on unrealized gain from financial income – – – – – ( - ) Contingent consideration (earn - out) gain (loss), after - tax (9,221) 5,655 2,691 (9,221) 10,476 (+) Depreciation and amortization 1,803 1,646 1,858 4,986 7,310 (+) Share Based Plan 5,463 5,058 4,188 14,276 13,601 ( - ) Income Taxes on Share Based Plan (736) (448) (320) (1,628) (561) (+) Non - operational expenses including income tax related to realized expense – – 1,631 5,425 1,631 ADJUSTED DISTRIBUTABLE EARNINGS 55,792 51,820 63,641 247,749 245,836 TOTAL NET REVENUE FROM SERVICES RENDERED 111,592 109,086 125,442 408,095 454,420 ( - ) Net revenue from realized performance fees (9,241) (2,058) (7,510) (18,218) (22,296) ( - ) Net revenue from unrealized performance fees 1,683 – 1,042 3,618 1,042 NET REVENUE FROM MANAGEMENT FEES AND ADVISORY 104,034 107,028 118,974 393,495 433,166 Financials - Non - GAAP Reconciliation
38 (R$ thousands, unless mentioned) 4Q'22 4Q'23 FY'22 FY'23 Profit (loss) before income taxes, not - including Dividends to partners 76,381 78,210 271,814 269,385 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at statutory rates (25,970) (26,591) (92,417) (91,591) Reconciliation adjustments: Expenses not deductible (159) (274) (214) (880) Tax benefits 185 17 282 190 Share based payments (70) (187) (297) (516) Tax loss - (2,055) - (2,055) Effect of presumed profit of subsidiaries¹ and offshore subsidiaries 8,097 14,263 40,220 44,833 Other additions (exclusions), net 26 1 13 93 Income taxes expenses (17,891) (14,826) (52,413) (49,926) Current (15,086) (17,074) (53,144) (58,566) Deferred (2,805) 2,248 731 8,640 Effective tax rate 23% 19% 19% 19% Effective tax rate reconciliation See notes and definitions at end of document
39 16.0 19.0 3.6 8.1 1.8 3.8 3.9 General and Administrative Expenses 4Q 2022 (R$mm) 4Q 2023 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$56.3 mm Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A Lease and condominium Other R$65.3 mm + 16% 17.7 26.1 3.6 8.2 2.8 2.9 4.0
40 Assets 9/29/2023 12/29/2023 Current assets Cash and cash equivalents 184,215 660,305 Cash and bank deposits 38,042 15,896 Financial instruments at fair value through profit or loss 146,173 173,300 Financial instruments at amortized cost - 471,109 Financial instruments at fair value through profit or loss 1,131,389 1,168,355 Accounts receivable 66,456 101,523 Sub - leases receivable 4,071 4,071 Taxes recoverable 2,631 2,219 Other assets 19,163 19,109 Total current assets 1,407,925 1,955,582 Non - current assets Financial instruments at fair value through profit or loss 6,776 7,146 Accounts receivable 35,227 16,638 Sub - leases receivable 2,352 1,467 Taxes recoverable 433 325 Deferred taxes 11,923 13,487 Other assets 633 19,427 57,344 58,490 Property and equipment 13,116 12,591 Right of use - Leases 57,849 58,308 Intangible assets 206,035 214,748 Total non - current assets 334,344 344,137 Total Assets 1,742,269 2,299,719 Liabilities and equity 9/29/2023 12/29/2023 Current liabilities Trade payables 563 1,869 Deferred Revenue 12,498 – Leases 24,381 24,381 Accounts payable 7,601 6,020 Labor and social security obligations 73,763 101,506 Loans and obligations 66,081 76,722 Taxes and contributions payable 18,880 24,853 Total current liabilities 203,767 235,351 Non - current liabilities Accounts payable – – Leases 50,035 48,431 Labor and social security obligations 4,439 5,357 Loans and Obligations 111,878 540,369 Deferred taxes 4,630 3,883 Retirement plans liabilities 34,701 85,554 205,683 683,594 Total liabilities 409,450 918,945 Equity Share capital 15 15 Additional paid - in capital 1,376,255 1,408,438 Treasury shares (167,872) (172,863) Retained Earnings 91,815 111,444 Other reserves 30,001 31,876 1,330,214 1,378,910 Non - controlling interests in the equity of subsidiaries 2,605 1,864 Total equity 1,332,819 1,380,774 Total liabilities and equity 1,742,269 2,299,719 Balance Sheet
41 Notes and Definitions ▪ Notes to page 5 (1) AUM is calculated as consolidated with double counting, due to funds from one segment investing in other segments and it ´ s eliminated on consolidation and excluding double counting from co - managed funds between our segments. (2) FRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full - year values are calculated as the sum of the last four quarters. (3) Adjusted Distributable Earnings per share is calculated as Distributable Earnings excluding non - operational expenses, consid ering the number of outstanding shares at the end of each quarter. Full - year values are calculated as the sum of the last four quarters. ▪ Notes to page 8 (1) FRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full - year values are calculated as the sum of the last four quarters. (2) Other financial results include financial income and expenses related to strategic transactions. Interest expenses relate d t o Vinci SPS acquisition of R$3.7 million in the quarter and R$15.5 million for the full year 2023. Net financial expenses related to Ares ´ investment income and coupon payment of its preferred shares of R$8.2 million in the quarter and R$8.2 million for the full y ea r 2023. (3) Non - operational expenses are comprised of expenses related to professional services rendered in connection with acquisitions . (4) DE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full - year values are calculated as the sum of the last four quarters. ▪ Notes to page 10 (1) Long - term AUM includes funds with lockups for at least five years to quasi - perpetual capital commitments. ▪ Notes to page 11 (1) Long term products include funds with former lockups superior to five years. (2) Private markets strategies include Private Equity, Real Estate, Private Credit, Infrastructure and Vinci SPS. (3) Local Institutional covers Brazilian pension funds (public and private), insurance companies, large and mid - size corporation s and the government. (4) HNWI is comprised of clients which we consider to have potential to invest at least R$30 million. (5) Institutional Offshore covers offshore pension funds, endowments, sovereign funds, fund of funds, asset managers, family off ices, and others. (6) Allocators & Distributors include banks (private, mass affluent and retail sectors), multi - family offices, or MFOs, and dist ribution platforms. (7) Public Market Vehicles of our listed funds. ▪ Notes to page 12 (1) Accrued performance fees for the VCP offshore are as of 3Q’23. This occurs due to the 60 days timeline of the quarterly m ark up to be disclosed by the fund’s administrator. ▪ Notes to page 15 (1) FRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full - year values are calculated as the sum of the last four quarters.
42 Notes and Definitions (cont’d.) ▪ Notes to page 16 (1) PRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full - year values are calculated as the sum of the last four quarters. ▪ Notes to page 17 (1) GP investment income comes from proprietary investments made by Vinci Partners in its own Private Markets’ funds and othe r c losed - end funds across Liquid Strategies and IP&S segments with long - term lockups. (2) Financial income is income generated through investments made with our cash and cash equivalents in cash and bank deposit s, certificate of deposits and proprietary investments in Vinci Partners’ Liquid Funds, including funds from Public Equities, Hedge Funds, Real Estate and Private Credit. ▪ Notes to page 18 (1) Adjusted Distributable Earnings is calculated as Distributable Earnings excluding non - operational expenses. (2) Adjusted DE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full - yea r values are calculated as the sum of the last four quarters. ▪ Notes to page 19 (1) Cash and cash equivalents include cash on hand, bank deposits held with financial institutions, other short - term, highly liq uid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (2) Liquid funds’ value are calculated as investment at fair value as of December 29, 2023, in liquid funds from Vinci Partne rs’ public equities, hedge funds, private credit segments and listed REITs. It also comprises the cash and certificate of deposits and federal bonds from Vinci Monalisa FIM. For more detail, see 4Q’23 Fin ancial Statements filed within the SEC on February 07, 2024. (3) GP Fund Investments include Vinci Partners’ GP investments in private market funds and other closed - end funds across Liquid Strategies and IP&S segments with long - term lockups, calculated at fair value as of December 29, 2023. For more detail, please see slide 33 and the Financial Statements filed within the SEC on February 07, 2024. (4) Debt obligations include commercial notes, consideration payable and convertible preferred shares. For more detail, see 4 Q’2 3 Financial Statements filed within the SEC on February 07, 2024. (5) Net Cash and Investments per share were calculated considering the number of outstanding shares at the end of each quarte r. ▪ Notes to page 29 (1) NAV is the net asset value of each fund. For listed vehicles, the NAV represents the Market valuation of the fund. (2) Atlas strategy includes the funds Atlas FIC FIM, Atlas Institucional FIC FIM and Vinci Potenza. (3) Total Return Strategy includes the funds Total Return FIC FIM and Total Return Institucional FIA. (4) Mosaico Strategy includes the funds Mosaico, Mosaico Institucional and Mosaico Advisory FIA. (5) Valorem Strategy includes the funds Valorem FIM and Valorem Advisory. (6) Equilibrio Strategy incudes the IP&S Family of pension plans.
43 Notes and Definitions (cont’d.) (7) CDI is an average of interbank overnight rates in Brazil (daily average for the period). (8) Brazil stock market most relevant index. (9) IPCA is a broad consumer price index measured by the IBGE. (10) IMAB is composed by government bonds indexed to IPCA. IMAB 5 also includes government bonds indexed to IPCA with up to 5 Ye ars in duration. (11) IFIX is an index composed by listed REITs in the Brazilian stock Market. (12) If IMAB 5 Average is: i . less or equal to 2%, X=3% per year; ii. between 2% - 4%, X= Average IMAB 5+1% per year; iii. Between 4% - 5%, X=5% per year; IV. g reater or equal to 5%, X= IMAB 5 Average ▪ Notes to page 30 (1) Track record information is presented throughout this presentation on a pro forma basis and in local currency, excluding PIP E investments, a strategy that will be discontinued in VCP III. (2) Total commitments for VCP III include R$1.3 billion in co - investments. Track record presented for the VCP strategy as of 3Q’ 23, due to fund’s administrator timeline to disclose the quarterly markup of the fund, with the exception of total commitments for VCP IV, which are presented as of 4Q’23. (3) Track record for VIR strategy is presented as of 3Q’23, due to fund’s administrator timeline to disclose the quarterly ma rku p of the fund. (4) Track record for Vinci SPS strategy is presented as of 4Q’23. (5) Track record for FIP Infra is presented as of 3Q’23. (6) Track record for VIAS is presented as of 3Q’23. (7) Total commitments for VICC are presented as of 4Q’23. (8) Track record for VFDL is presented as of 4Q’23. (9) Track record for Vinci Credit Infra is presented as of 4Q’23. ▪ Notes to page 31 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 4.8673 , as of February 07, 2024, when dividends were approved by our Board of Directors. (2) Per Share calculations are based on end of period Participating Common Shares. (3) Actual dividends per common share are calculated considering the share count as of the applicable record date. ▪ Notes to page 32 (1) As of December 29, 2023, Public Float was comprised of 12,510,083 Class A common shares. ▪ Notes to page 33 (1) The remaining capital committed in FIP Infra Transmissão and FIP Infra Transmissão co - investment will not be called by the fund, which is already in divestment period.
44 Notes and Definitions (cont’d.) ▪ Notes to page 34 (1) International mandates have several different benchmarks across its vehicles. (2) The preferred return w/ catch - up rule applies to funds for which the vehicle must pay back its limited partners 100% of the invested capital corrected by the preferred return rate so it can charge performance fees. Once the preferred return rate is achieved, due to the catch - up clause, performance fees are charged over the absolute return of the fund instead of the excess return over the preferred rate. (3) Hurdle Rate is the minimum return the fund must achieve before it can charge performance fees. In most cases, funds with hur dle rate also are under a high - water mark clause . (4) Funds with preferred return must return 100% of invested capital corrected by the preferred return rate to its limited pa rtn ers in order to charge performance fees. (5) IPCA is a broad consumer price index measured by the IBGE. (6) IMAB 5 is composed by government bonds indexed to IPCA with up to 5 years in duration. (7) IBOV is the Brazilian stock market's most relevant index; (8) FTSE is London's stock market most relevant index; (9) IFIX is an index composed by listed REITs in the Brazilian stock exchange. (10) The CDI rate is a result of the average interbank overnight rates in Brazil (daily average for the period). (11) IMAB is composed by government bonds indexed to IPCA (inflation rate) plus a fixed interest rate. ▪ Notes to page 36 (1) Other items comprise the income/(loss) generated by contingent consideration adjustment and financial income/(expenses) r ela ted to SPS acquisition and Ares investment. (2) Non - operational expenses are comprised of expenses related to professional services rendered in connection with acquisitions . (3) Income taxes are comprised of taxes calculated over our corporate income tax and social contribution taxes. We are taxed on an actual taxable profit regime, while part of our subsidiaries are taxed based on deemed profit. (4) Contingent consideration adjustment (after - tax) related to Vinci SPS’ acquisition, reflects the change in the earn out’s fai r value to be paid in 2027. On December 29, 2023, Vinci revaluated the fair value of the obligation based on the economic conditions at the date, resulting in an increase of the contingent consideratio n f air value. The variation was recognized as a loss in the financial result. ▪ Notes to page 38 (1) Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000.00 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's subsidiaries adopted this tax regime and the effect of the presumed profit of su bsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries.
45 Notes and Definitions (cont’d.) ▪ “Fee related earnings”, or “FRE”, is a metric to monitor the baseline performance of, and trends in, our business, in a manne r t hat does not include performance fees or investment income. We calculate FRE as operating profit less (a) net revenue from realized performance fees, less (b) net revenue from unrealized p erf ormance fees, plus (c) compensation allocated in relation to performance fees. ▪ “FRE Margin” is calculated as FRE over total net management and advisory fees. ▪ “Distributable Earnings”, or “DE”, is used as a reference point by our board of directors for determining the amount of earni ngs available to distribute to shareholders as dividends. Distributable Earnings is calculated as profit for the year, less (a) net revenue from unrealized performance fees, plus (b) inc ome taxes from unrealized performance fees, plus (c) compensation allocated in relation to unrealized performance fees, less (d) unrealized gain from GP investment income, less (e) unrealized ga in from financial income, plus (f) income taxes on unrealized gain from GP investment income, plus (g) income taxes on unrealized gain from financial income, less (h) contingent considera tio n (earn - out) gain or loss, plus ( i ) income taxes on contingent consideration, plus (j) Depreciation and Amortization, plus (k) Stock compensation plan, less (l) income taxes on stock compe nsa tion plan, plus (m) non - operational expenses including income tax related to realized expense. ▪ “DE Margin” is calculated as DE over the sum of management and advisory fee related revenues, realized performance revenue, r eal ized GP investment income and realized financial income, net of revenue tax. ▪ “Performance Related Earnings”, or “PRE”, is a performance measure that we use to assess our ability to generate profits from re venue that relies on outcome from funds above their respective benchmarks. We calculate PRE as operating profit, less (a) net revenue from fund management and advisory, less (b) operating exp enses, such as segment personnel, G&A, corporate center and bonus related to management and advisory. ▪ “Segment Distributable Earnings” is Vinci Partners’ segment profitability measure used to make operating decisions and assess pe rformance across the company’s five segments (Private Markets, Liquid Strategies, Investment Products and Solutions, Retirement Services and Corporate Advisory). Segment Distribut abl e Earnings is calculated as operating profit less (a) net revenue from unrealized performance fees, plus (b) compensation allocated in relation to unrealized performance fees, plus (c ) r ealized gain from GP investment income. ▪ “AUM” refers to assets under management. Our assets under management equal the sum of: (1) the fair market value of the inves tme nts held by funds plus the capital that we are entitled to call from investors in those funds pursuant to the terms of their capital commitments to those funds (plus the fair market va lue of co - investments arranged by us that were made or could be made by limited partners of our corporate private equity funds and portfolio companies of such funds); (2) the net asset valu e o f our public equity funds, hedge funds and closed - end mutual funds; and (3) the amount of capital raised for our credit funds. AUM includes double counting related to funds from one segm ent that invest in funds from another segment. Those cases occur mainly due to (a) fund of funds of investment products and solutions segment, and (b) investment funds in general that inv est part of their cash in credit segment and hedge fund segment funds in order to maintain liquidity and provide for returns on cash. Such amounts are eliminated on consolidation. T he bylaws of the relevant funds prohibit double - charging fees on AUM across segments. Therefore, while our AUM by segment may double - count funds from one segment that invest in funds from anoth er segment, the revenues for any given segment do not include revenue in respect of assets managed by another segment, which means there are no intercompany eliminations on re ven ues in our results of operations. ▪ Net Cash and Investments include cash and cash equivalents and the fair value of investments in liquid funds and GP Fund Inve stm ents. Cash and cash equivalents include cash, certificate of deposits, which are issued by Banco Bradesco (credit rating AAA evaluated by Fitch Ratings) with interest rates from 99.5% to 10 1% of CDI.
46 Notes and Definitions (cont’d.) ▪ “Net revenue from Fund Management and Advisory” is a measure that we use to assess our ability to generate profits from our f und management and advisory business without measuring for the outcomes from funds above their respective benchmarks. We calculate Net Revenue from Fund Management and Advisory as net revenue from services rendered less (a) net revenue from realized performance fees and less (b) net revenue from unrealized performance fees. ▪ “Total compensation and benefits” is the result of the profit sharing paid to our employees as (a) bonus compensation related to management and advisory and (b) performance - based compensation. ▪ “Segment personnel expenses” are composed of the salary - part compensation paid to employees and partners of our funds’ managemen t teams. ▪ “Corporate center expenses” are composed by the salary - compensation paid to employees and other general and administrative expen ses related to our support teams, such as research, risk, legal & compliance, investor relations, operations and ESG. ▪ “Other general and administrative expenses” is made up of third - party expenses, depreciation and amortization, travel and repres entation, marketing expenses, administrative fees, non - operating taxes, third - party consultants’ fees, such as legal and accounting, and office consumables. ▪ “GP investment income” is income from proprietary investments made by us in our own Private Markets’ funds, used as GP Commit men ts. ▪ “Financial income” is income generated through the investments made with our cash and cash equivalents in cash and bank depos its , certificate of deposits and proprietary investments in our Liquid Funds from our public equities and hedge funds’ segments. ▪ “Leasing expenses” include costs from the company’s sub - leasing activities. ▪ “Income taxes” is comprised of taxes on our corporate income tax and social contribution taxes. We are taxed on an actual tax abl e profit regime, while our subsidiaries are taxed based on deemed profit. ▪ “Capital Subscription / (capital return)” represents the net capital commitments and capital returns from our Private Markets ’ c losed end and listed funds. ▪ “Net Inflows / (outflows)” represent the net inflows and outflows from our liquid funds from our liquid strategies, IP&S and pri vate credit segments. ▪ “Appreciation / (depreciation)” represents the net capital appreciation/depreciation from our funds, which refers to the incr eas e or decrease of the funds’ investment’s value. ▪ “MOIC” means multiple on invested capital, a ratio intended to represent how much value an investment has returned, and is ca lcu lated as realized value plus unrealized value, divided by the total amount invested, gross of expenses and fees. ▪ “IRR” means the internal rate of return, which is a discount rate that makes the net present value of all cash flows equal to ze ro in a discounted cash flow analysis.
47 Funds/strategies’ descriptions ▪ Vinci Multiestratégia : The fund seeks to achieve long - term returns by investing in fixed income assets, through strategies that imply interest rates and currency risks. ▪ Vinci Atlas: The fund seeks to achieve long - term returns by investing across all strategies within fixed income, equities, curre ncy, derivatives, commodities and other investment funds with no obligation of any class concentration. ▪ Vinci Mosaico FIA: Public Equities’ long only flagship strategy. The strategy seeks to achieve long - term returns above Brazilian equities mar ket ( Ibovespa ) based on a fundamental analysis. ▪ Vinci Gas Dividendos : Public Equities’ dividends flagship strategy. The strategy seeks to achieve long - term returns by investing in companies with a consistent history of paying dividends in the Brazilian stock market. ▪ Vinci Total Return: The fund seeks to achieve medium and long - term returns by investing most of its capital in the Brazilian sto ck market, through bottom up and top - down strategies. ▪ Vinci Valorem: IP&S flagship commingled fund with exposure to fixed income assets, foreign exchange currency and derivatives. ▪ Equilibrio Strategy: IP&S family of pension plan funds. The strategy seeks to achieve long - term returns by investing across all strategies within fixed income, equities, currency, derivatives, commodities and other investment funds, respecting limitations in regulation. ▪ Vinci Selection Equities: The fund seeks to beat the Brazilian stock market index by investing in other funds that invest in Bra zilian public equities. ▪ Vinci Crédito Imobiliário I: The fund seeks to achieve long - term returns by investing in real estate mortgage - backed credit security bonds. ▪ Vinci Crédito Estruturado Multiestratégia PLUS FIC FIM: The fund seeks to achieve consistent returns by investing in private structured credit bonds. ▪ VISC11: Shopping malls listed REIT, focused on acquiring income - generating shopping malls in Brazil. ▪ VILG11: Industrial listed REIT focused on acquiring mature income - generating industrial properties in Brazil. ▪ VINO11: Listed REIT focused on acquiring mature income - generating boutique office real estate assets in Brazil. ▪ VIFI11: Listed REIT that invests in other listed REITs and real estate mortgage - backed credit security bonds. ▪ VIUR11: perpetual capital listed REIT, focused on income generation to its quota holders through the acquisition of urban com mer cial properties in Brazil, such as street retail, grocery, healthcare, and educational focused real estate properties. ▪ VCRI11: Listed REIT that aims to invest in MBS, while also being able to invest in listed REITs with similar investment strat egi es. ▪ VICA11: VICA is a perpetual capital fund that shall invest in a diversified credit portfolio within the Agri sector in Brazil . ▪ Vinci FOF Imobiliário : Fund of Funds that invests in other listed REITs, combining income with capital gain.
Rio de Janeiro 55 21 2159 6000 Av. Bartolomeu Mitre, 336 Leblon - 22431 - 002 São Paulo 55 11 3572 3700 Av. Brigadeiro Faria Lima, 2.277 14 o andar Jardim Paulistano - 01452 - 000 Recife 55 81 3204 6811 Av. República do Líbano, 251 - Sala 301 Torre A - Pina - 51110 - 160 Nova York 1 646 559 8000 780 Third Avenue, 25 th Floor - 10017 New York
Exhibit 99.2
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Vinci Partners Reports Fourth Quarter & Full Year 2023 Results
Alessandro Horta, Chief Executive Officer, stated, "Vinci delivered strong results, with FRE and DE increasing respectively 14 and 17% year-over-year on a per share basis. We ended the year with R$69 billion in assets under management, with more than R$4 billion in capital subscriptions in our Private Markets funds throughout the year. Momentum is great as we enter 2024, our pipeline is full of opportunities to reach our R$15 billion target fundraising, with 55% already in-house."
Dividend
Vinci Partners has declared a quarterly dividend of US$0.20 per share to record holders of common stock at the close of business on February 22, 2024. This dividend will be paid on March 07, 2024.
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IR.VINCIPARTNERS.COM SHAREHOLDERRELATIONS@VINCIPARTNERS.COM
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Fourth Quarter & Full Year 2023 Highlights
About Vinci Partners
Vinci Partners is a leading alternative investment platform in Brazil, established in 2009.
Vinci Partners’ business segments include Private Markets (Private Equity, Real Estate, Infrastructure, Special Situations and Private Credit), Liquid Strategies (Public Equities and Hedge Funds), Investment products and Solutions, Corporate Advisory and Retirement Services. As of December 29, 2023, the firm had R$69 billion of assets under management.
Webcast and Earnings Conference Call
Vinci Partners will host a conference call at 5:00pm ET on Wednesday, February 07, 2024, to announce its fourth quarter and full year 2023 results.
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To access the webcast please visit the Events & Presentations’ section of the Company's website at:
https://ir.vincipartners.com/news-and-events/events-and-presentations.
For those unable to listen to the live broadcast, there will be a webcast replay on the same section of the website.
To access the conference call through dial in, please register at 4Q23 VINP Earnings Dial In to obtain the conference number and access code.
Investor Contact
ShareholderRelations@vincipartners.com
NY: +1 (646) 559-8040
RJ: +55 (21) 2159-6240
USA Media Contact
Joele Frank, Wilkinson Brimmer Katcher
Kate Thompson
+1 (212) 355-4449
Brazil Media Contact
Danthi Comunicações
Carla Azevedo (carla@danthicomunicacoes.com.br)+55 (21) 3114-0779
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Segment Earnings
| (R$ thousands, unless mentioned) | 4Q'22 | 3Q'23 | 4Q'23 | ∆ YoY(%) | FY'22 | FY'23 | ∆ YoY(%) |
| Net revenue from management fees | 99,640 | 104,745 | 99,976 | 0% | 371,501 | 393,367 | 6% |
| Net revenue from advisory fees | 4,394 | 2,283 | 18,998 | 332% | 21,994 | 39,799 | 81% |
| Total Fee Related Revenues | 104,034 | 107,028 | 118,974 | 14% | 393,495 | 433,166 | 10% |
| Segment personnel expenses | (6,163) | (7,483) | (7,462) | 21% | (25,454) | (29,686) | 17% |
| Other G&A expenses | (4,977) | (5,356) | (6,573) | 32% | (18,383) | (20,423) | 11% |
| Corporate center expenses | (22,592) | (24,110) | (21,499) | (5)% | (84,770) | (90,625) | 7% |
| Bonus compensation related to management and advisory | (18,981) | (18,746) | (26,143) | 38% | (73,318) | (84,000) | 15% |
| Total Fee Related Expenses | (52,713) | (55,695) | (61,677) | 17% | (201,925) | (224,733) | 11% |
| FEE RELATED EARNINGS (FRE)i | 51,321 | 51,333 | 57,297 | 12% | 191,570 | 208,433 | 9% |
| FRE Margin (%) | 49.3% | 48.0% | 48.2% | 48.7% | 48.1% | ||
| FRE per shareii (R$/share) | 0.93 | 0.95 | 1.07 | 14% | 3.46 | 3.85 | 11% |
| Net revenue from performance fees | 7,558 | 2,058 | 6,468 | (14)% | 14,600 | 21,254 | 46% |
| Performance based compensation | (3,558) | (925) | (3,614) | 2% | (6,554) | (10,640) | 62% |
| PERFORMANCE RELATED EARNINGS (PRE) | 4,000 | 1,133 | 2,854 | (29)% | 8,046 | 10,614 | 32% |
| PRE Margin (%) | 52.9% | 55.1% | 44.1% | 55.1% | 49.9% | ||
| (-) Unrealized performance fees | 1,683 | – | 1,042 | (38)% | 3,618 | 1,042 | (71)% |
| (+) Unrealized performance compensation | (593) | – | (369) | (38)% | (1,278) | (369) | (71)% |
| (+) Realized GP investment income | 7,462 | 4,699 | 4,451 | (40)% | 20,171 | 19,210 | (5)% |
| SEGMENT DISTRIBUTABLE EARNINGS | 63,873 | 57,165 | 65,275 | 2% | 222,127 | 238,930 | 8% |
| Segment DE Margin (%) | 52.9% | 50.2% | 49.9% | 51.4% | 50.3% | ||
| (+) Depreciation and amortization | 1,803 | 1,646 | 1,858 | 3% | 4,986 | 7,310 | 47% |
| (+) Realized financial income | 10,235 | 12,027 | 22,046 | 115% | 86,958 | 84,345 | (3)% |
| (-) Leasing expenses | (2,190) | (2,394) | (2,267) | 4% | (9,359) | (9,809) | 5% |
| (-) Other financial resultsiii | (3,537) | (2,933) | (6,446) | 82% | (5,718) | (18,819) | 229% |
| (-) Non-operational expenses | – | – | (1,924) | N/A | (6,594) | (1,924) | N/A |
| (-) Income taxes (excluding related to unrealized fees and income) | (14,392) | (13,691) | (16,532) | 15% | (50,077) | (55,828) | 11% |
| DISTRIBUTABLE EARNINGS (DE)iv | 55,792 | 51,820 | 62,010 | 11% | 242,324 | 244,205 | 1% |
| DE Margin (%) | 42.6% | 41.2% | 40.5% | 46.7% | 43.7% | ||
| DE per share (R$/share) | 1.01 | 0.96 | 1.15 | 14% | 4.37 | 4.51 | 3% |
| (+) Non-operational expensesv (including Income Tax effect) | – | – | 1,631 | N/A | 5,425 | 1,631 | (70)% |
| ADJUSTED DISTRIBUTABLE EARNINGS | 55,792 | 51,820 | 63,641 | 14% | 247,748 | 245,836 | (1)% |
| Adjusted DE Margin (%) | 42.6% | 41.2% | 41.6% | 47.8% | 44.0% | ||
| Adjusted DE per share (R$/share) vi | 1.01 | 0.96 | 1.18 | 17% | 4.47 | 4.54 | 2% |
Total Fee-Related Revenuesvii of R$119.0 million for the quarter ended December 29, 2023, compared to R$104.0 million for the quarter ended December 30, 2022, an increase of 14% year-over year, driven by higher advisory fees charged in the 4Q’23. Management fees remained stable in the quarter, while private markets revenues grew, both liquid strategies and IP&S suffered headwinds caused by tougher macro conditions. Fee-related revenues were R$433.2 million for the full year ended December 29, 2023, up 10% when compared to the full year ended December 30, 2022. This growth was driven by higher levels of both management and advisory fees.
Fee Related Earnings (“FRE”) of R$57.3 million (R$1.07/share) for the quarter ended December 29, 2023, up 12% year-over-year on an absolute basis and 14%-year-over-year on an FRE per share basis when compared the quarter ended December 30, 2022. This growth was propelled by a strong quarter for the Corporate Advisory segment. FRE of R$208.4 million (R$3.85/share) for the full year ended December 29, 2023, up 9% when compared to the full year ended December 30, 2022, on an absolute basis and 11% on an FRE per share basis, driven by stronger management and advisory fees.
FRE Marginviii was 48.1% for the full year ended December 29, 2023, remaining flat when compared to the full year ended December 30, 2022. Although inflation in 2023 was under control, the inflationary pressure on expenses during the year reflected upon inflation levels from 2022. Our cost control proved its efficiency, maintaining margin stability.
Performance Related Earnings (“PRE”)ix of R$2.9 million for the quarter ended December 29, 2023, down 29% year-
over-year. PRE was R$10.6 million (R$0.20/share) for the full year ended December 29, 2023, an increase of 32% when compared to the full year ended December 30, 2022. Performance fees are still at a very modest level, driven by the turmoil in global and local markets over the past quarters that resulted in the volatility of our liquid funds’ performance. Global markets have already started to signal stability going forward, which can put us in a privileged position considering our R$17 billion performance-eligible AUM across IP&S and Liquid Strategies.
Segment Distributable Earningsx of R$65.3 million for the quarter ended December 29, 2023, compared to R$63.9 million for the quarter ended December 30, 2022, up 2% year-over-year. Segment Distributable Earnings were R$238.9 million for the full year ended December 29, 2023, up 8% year-over-year, when compared to the full year ended December 30, 2022.
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Adjusted Distributable Earnings (“DE”) of R$63.6 million (R$1.18/share) for the quarter ended December 29, 2023, compared to R$55.8 million (R$1.01/share) for the quarter ended December 30, 2022, up 14% year-over-year on an absolute basis and 17% year-over-year on an Adjusted DE per share basis. This growth was driven by stronger advisory fees, alongside with additional upside from our liquid portfolio this quarter. Adjusted DE was R$245.8 million (R$4.54/share) for the full year ended December 29, 2023, down 1% when compared to the full year ended December 30, 2022, on an absolute basis and up 2% on an Adjusted DE per share basis. The growth seen across management, advisory and performance fees for the full year 2023 was offset on a DE basis by a weaker year for contributions from financial result.
Adjusted DE Marginxi was 41.6% for the quarter ended December 29, 2023, a 1.0 percentage point decrease compared to 42.6% for the quarter ended December 30, 2022. For the full year ended December 29, 2023, Adjusted DE Margin reached 44.0%, a decrease of 3.8 percentage points compared to the full year ended December 30, 2022.
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Segment Highlights
Private Market Strategies
| (R$ thousands, unless mentioned) | 4Q'22 | 3Q'23 | 4Q'23 | ∆ YoY (%) | FY'22 | FY'23 | ∆ YoY (%) |
| Net revenue from management fees | 59,699 | 68,323 | 66,363 | 11% | 207,061 | 250,960 | 21% |
| Net revenue from advisory fees | 1,756 | 275 | 1,648 | (6)% | 3,057 | 2,471 | (19)% |
| Total Fee Related Revenues | 61,455 | 68,597 | 68,011 | 11% | 210,118 | 253,431 | 21% |
| Segment personnel expenses | (3,050) | (3,685) | (3,616) | 19% | (11,857) | (14,529) | 23% |
| Other G&A expenses | (2,194) | (2,835) | (2,378) | 8% | (9,909) | (9,191) | (7)% |
| Corporate center expenses | (12,790) | (14,867) | (13,502) | 6% | (44,458) | (54,592) | 23% |
| Bonus compensation related to management and advisory | (9,756) | (10,109) | (12,963) | 33% | (34,151) | (41,001) | 20% |
| Total Fee Related Expenses | (27,790) | (31,496) | (32,459) | 17% | (100,375) | (119,312) | 19% |
| FEE RELATED EARNINGS (FRE) | 33,664 | 37,102 | 35,552 | 6% | 109,743 | 134,119 | 22% |
| FRE Margin (%) | 54.8% | 54.1% | 52.3% | 52.2% | 52.9% | ||
| Net revenue from performance fees | 3,660 | 464 | 1,983 | (46)% | 3,459 | 4,982 | 44% |
| Realized performance fees | 5,343 | 464 | 3,025 | (43)% | 7,077 | 6,024 | (15)% |
| Unrealized performance fees | (1,683) | – | (1,042) | (38)% | (3,618) | (1,042) | (71)% |
| Performance based compensation | (1,459) | (205) | (970) | (34)% | (1,389) | (2,296) | 65% |
| PERFORMANCE RELATED EARNINGS (PRE) | 2,201 | 259 | 1,014 | (54)% | 2,070 | 2,686 | 30% |
| PRE Margin (%) | 60.1% | 55.8% | 51.1% | 59.8% | 53.9% | ||
| (-) Unrealized performance fees | 1,683 | – | 1,042 | (38)% | 3,618 | 1,042 | (71)% |
| (+) Unrealized performance compensation | (593) | – | (369) | (38)% | (1,278) | (369) | (71)% |
| (+) Realized GP investment income | 7,462 | 4,699 | 4,451 | (40)% | 20,171 | 19,210 | (5)% |
| SEGMENT DISTRIBUTABLE EARNINGS | 44,418 | 42,059 | 41,689 | (6)% | 134,324 | 156,689 | 17% |
| Segment DE Margin (%) | 59.8% | 57.0% | 55.2% | 56.6% | 56.2% | ||
| ASSETS UNDER MANAGEMENT (AUM R$ millions) | 28,685 | 30,347 | 32,956 | 15% | 28,685 | 32,956 | 15% |
| FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) | 25,259 | 27,060 | 29,706 | 18% | 25,259 | 29,706 | 18% |
| AVERAGE MANAGEMENT FEE RATE (%) | 0.90% | 0.98% | 0.89% | 0.89% | 0.90% |
Fee related earnings (FRE) of R$35.6 million for the quarter ended December 29, 2023, up 6% year-over-year, a result of the strong fundraising in the segment during 2023 combined with catch-up fees for VCP IV and VICC, that closed additional capital subscriptions this quarter. FRE was R$134.1 million for the full year ended December 29, 2023, an increase of 22% when compared to the full year ended December 30, 2022.
Segment Distributable Earnings of R$41.7 million for the quarter ended December 29, 2023, down 6% when compared to the quarter ended December 30, 2022, driven mostly by a realization in the 4Q’22, that boosted the GP Investment income. Segment DE was R$156.7 million in the full year ended December 29, 2023, up 17% when compared to the full year ended December 30, 2022, boosted by growth in FRE.
AUM of R$33.0 billion at the end of the fourth quarter, a 15% year-over-year increase propelled by robust fundraising across Infrastructure, Real Estate and Private Equity. In the latter part of the year, our Real Estate team concluded a R$875 million follow-on offering for VISC, and our Infrastructure team closed the mandate to manage the Sustainable Regional Development Fund, activating close to R$1 billion in AUM. Both will start to positively impact revenues from the 1Q’24 onwards.
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Investment Products and Solutions
| (R$ thousands, unless mentioned) | 4Q'22 | 3Q'23 | 4Q'23 | ∆ YoY (%) | FY'22 | FY'23 | ∆ YoY (%) |
| Net revenue from management fees | 20,119 | 17,435 | 16,448 | (18)% | 83,114 | 70,462 | (15)% |
| Net revenue from advisory fees | 7 | 8 | 8 | 11% | 28 | 31 | 10% |
| Total Fee Related Revenues | 20,126 | 17,443 | 16,456 | (18)% | 83,142 | 70,493 | (15)% |
| Segment personnel expenses | (987) | (1,397) | (1,400) | 42% | (4,967) | (5,526) | 11% |
| Other G&A expenses | (992) | (611) | (1,436) | 45% | (2,664) | (3,489) | 31% |
| Corporate center expenses | (4,310) | (3,794) | (3,346) | (22)% | (18,162) | (15,386) | (15)% |
| Bonus compensation related to management and advisory | (4,184) | (3,645) | (2,940) | (30)% | (16,021) | (13,995) | (13)% |
| Total Fee Related Expenses | (10,473) | (9,447) | (9,123) | (13)% | (41,815) | (38,397) | (8)% |
| FEE RELATED EARNINGS (FRE) | 9,653 | 7,996 | 7,333 | (24)% | 41,328 | 32,096 | (22)% |
| FRE Margin (%) | 48.0% | 45.8% | 44.6% | 49.7% | 45.5% | ||
| Net revenue from performance fees | 961 | 13 | 1,976 | 106% | 3,156 | 4,268 | 35% |
| Realized performance fees | 961 | 13 | 1,976 | 106% | 3,156 | 4,268 | 35% |
| Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| Performance based compensation | (338) | (6) | (988) | 192% | (1,480) | (2,055) | 39% |
| PERFORMANCE RELATED EARNINGS (PRE) | 623 | 6 | 988 | 59% | 1,676 | 2,213 | 32% |
| PRE Margin (%) | 64.8% | 50.0% | 50.0% | 53.1% | 51.8% | ||
| (-) Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| (+) Unrealized performance compensation | – | – | – | N/A | – | – | N/A |
| SEGMENT DISTRIBUTABLE EARNINGS | 10,276 | 8,003 | 8,320 | (19)% | 43,003 | 34,309 | (20)% |
| Segment DE Margin (%) | 48.7% | 45.8% | 45.1% | 49.8% | 45.9% | ||
| ASSETS UNDER MANAGEMENT (AUM R$ millions) | 24,187 | 23,560 | 23,150 | (4)% | 24,187 | 23,150 | (4)% |
| FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) | 24,085 | 23,458 | 23,044 | (4)% | 24,085 | 23,044 | (4)% |
| AVERAGE MANAGEMENT FEE RATE (%) | 0.36% | 0.33% | 0.31% | 0.37% | 0.33% |
Fee related earnings (FRE) of R$7.3 million for the quarter ended December 29, 2023, down 24% year-over-year. This decline resulted from a shift in the AUM mix within the IP&S segment, that has experienced redemptions specially within our pension funds strategy, which carries higher fees. The Separate Mandates strategy, that carries lower fees, has been gaining relevance, contributing to the decrease in the average management fee rate. FRE was R$32.1 million in the full year ended December 29, 2023, a decrease of 22% when compared to the full year ended December 30, 2022.
Performance related earnings (PRE) of R$0.9 million for the quarter ended December 29, 2023, up 59% year-over-year. PRE was R$2.2 million in the full year ended December 29, 2023, an increase of 32% when compared to the full year ended December 30, 2022.
Segment Distributable Earnings of R$8.3 million for the quarter ended December 29, 2023, down 19% year-over-year. Segment DE was R$34.3 million in the full year ended December 29, 2023, a decrease of 20% when compared to the full year ended December 30, 2022, that posted higher contribution from FRE.
AUM of R$23.1 billion, down 4% year-over-year.
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Liquid Strategies
| (R$ thousands, unless mentioned) | 4Q'22 | 3Q'23 | 4Q'23 | ∆ YoY (%) | FY'22 | FY'23 | ∆ YoY (%) |
| Net revenue from management fees | 19,823 | 18,950 | 17,046 | (14)% | 81,325 | 71,780 | (12)% |
| Net revenue from advisory fees | – | – | – | N/A | – | – | N/A |
| Total Fee Related Revenues | 19,823 | 18,950 | 17,046 | (14)% | 81,325 | 71,780 | (12)% |
| Segment personnel expenses | (1,320) | (1,328) | (1,276) | (3)% | (5,496) | (5,540) | 1% |
| Other G&A expenses | (1,189) | (867) | (694) | (42)% | (3,654) | (3,131) | (14)% |
| Corporate center expenses | (4,247) | (4,123) | (3,468) | (18)% | (17,685) | (15,660) | (11)% |
| Bonus compensation related to management and advisory | (4,227) | (3,431) | (2,868) | (32)% | (16,232) | (13,013) | (20)% |
| Total Fee Related Expenses | (10,983) | (9,749) | (8,306) | (24)% | (43,068) | (37,345) | (13)% |
| FEE RELATED EARNINGS (FRE) | 8,840 | 9,202 | 8,740 | (1)% | 38,258 | 34,436 | (10)% |
| FRE Margin (%) | 44.6% | 48.6% | 51.3% | 47.0% | 48.0% | ||
| Net revenue from performance fees | 2,937 | 1,582 | 2,509 | (15)% | 7,986 | 12,005 | 50% |
| Realized performance fees | 2,937 | 1,582 | 2,509 | (15)% | 7,986 | 12,005 | 50% |
| Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| Performance based compensation | (1,761) | (713) | (1,657) | (6)% | (3,685) | (6,290) | 71% |
| PERFORMANCE RELATED EARNINGS (PRE) | 1,176 | 869 | 852 | (28)% | 4,301 | 5,715 | 33% |
| PRE Margin (%) | 40.0% | 54.9% | 34.0% | 53.9% | 47.6% | ||
| (-) Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| (+) Unrealized performance compensation | – | – | – | N/A | – | – | N/A |
| SEGMENT DISTRIBUTABLE EARNINGS | 10,016 | 10,070 | 9,592 | (4)% | 42,559 | 40,151 | (6)% |
| Segment DE Margin (%) | 44.0% | 49.0% | 49.1% | 47.7% | 47.9% | ||
| ASSETS UNDER MANAGEMENT (AUM R$ millions) | 10,209 | 11,288 | 12,332 | 21% | 10,209 | 12,332 | 21% |
| FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) | 10,053 | 11,089 | 12,129 | 21% | 10,053 | 12,129 | 21% |
| AVERAGE MANAGEMENT FEE RATE (%) | 0.81% | 0.71% | 0.62% | 0.79% | 0.70% |
Fee related earnings (FRE) of R$8.7 million for the quarter ended December 29, 2023, down 1% year-over-year. FRE was R$34.4 million in the full year ended December 29, 2023, a decrease of 10% when compared to the full year ended December 30, 2022.
Performance related earnings (PRE) of R$0.9 million for the quarter ended December 29, 2023, down 28% year-over-year. PRE was R$5.7 million in the full year ended December 29, 2023, an increase of 33% when compared to the full year ended December 30, 2022.
Segment Distributable Earnings of R$9.6 million for the quarter ended December 29, 2023, down 4% year-over-year. Segment DE was R$40.2 million in the full year ended December 29, 2023, a decrease of 6% when compared to the full year ended December 30, 2022, as consequence of reduction in contributions from FRE.
AUM was R$12.3 billion at the end of the fourth quarter, up 21% year-over-year.
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Corporate Advisory
| (R$ thousands, unless mentioned) | 4Q'22 | 3Q'23 | 4Q'23 | ∆ YoY (%) | FY'22 | FY'23 | ∆ YoY (%) |
| Net revenue from management fees | – | – | – | N/A | – | – | N/A |
| Net revenue from advisory fees | 2,630 | 2,000 | 17,343 | 559% | 18,908 | 37,297 | 97% |
| Total Fee Related Revenues | 2,630 | 2,000 | 17,343 | 559% | 18,908 | 37,297 | 97% |
| Segment personnel expenses | (472) | (491) | (574) | 21% | (2,009) | (2,061) | 3% |
| Other G&A expenses | (87) | (229) | (723) | 733% | (543) | (1,267) | 133% |
| Corporate center expenses | (1,130) | (1,206) | (1,075) | (5)% | (4,256) | (4,531) | 6% |
| Bonus compensation related to management and advisory | (302) | (623) | (5,598) | 1,752% | (3,889) | (11,979) | 208% |
| Total Fee Related Expenses | (1,991) | (2,548) | (7,970) | 300% | (10,697) | (19,838) | 85% |
| FEE RELATED EARNINGS (FRE) | 639 | (548) | 9,373 | 1,366% | 8,211 | 17,458 | 113% |
| FRE Margin (%) | 24.3% | N/A | 54.0% | 43.4% | 46.8% | ||
| SEGMENT DISTRIBUTABLE EARNINGS | 639 | (548) | 9,373 | 1,366% | 8,211 | 17,458 | 113% |
| Segment DE Margin (%) | 24.3% | N/A | 54.0% | 43.4% | 46.8% |
Fee related earnings (FRE) of R$9.4 million for the quarter ended December 29, 2023. FRE was R$17.5 million in the full year ended December 29, 2023, an increase of 113% when compared to the full year ended December 30, 2022.
Segment Distributable Earnings in the full year ended December 29, 2023, were R$17.5 million, an increase of 113% year-over-year when compared to the full year ended December 30, 2022.
Solid results posted in the latter part of 2023 are a combination of the declining interest rate trend, enhancing liquidity and allowing increased M&A opportunities, alongside a broader sector diversification, which is helping to dilute risk across different economic cycles and asset profiles.
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Retirement Services
| (R$ thousands, unless mentioned)/ | 4Q'22 | 3Q'23 | 4Q'23 | ∆ YoY (%) | FY'22 | FY'23 | ∆ YoY (%) |
| Net revenue from management fees | – | 38 | 119 | N/A | – | 166 | N/A |
| Net revenue from advisory fees | – | – | – | N/A | – | – | N/A |
| Total Fee Related Revenues | – | 38 | 119 | N/A | – | 166 | N/A |
| Segment personnel expenses | (334) | (582) | (596) | 78% | (1,125) | (2,029) | 80% |
| Other G&A expenses | (515) | (815) | (1,341) | 161% | (1,613) | (3,344) | 107% |
| Corporate center expenses | (115) | (121) | (107) | (7)% | (207) | (455) | 120% |
| Bonus compensation related to management and advisory | (513) | (939) | (1,773) | 246% | (3,027) | (4,013) | 33% |
| Total Fee Related Expenses | (1,476) | (2,456) | (3,818) | 159% | (5,972) | (9,841) | 65% |
| FEE RELATED EARNINGS (FRE) | (1,476) | (2,418) | (3,699) | 151% | (5,972) | (9,675) | 62% |
| FRE Margin (%) | N/A | N/A | N/A | N/A | N/A | ||
| Net revenue from performance fees | – | – | – | N/A | – | – | N/A |
| Realized performance fees | – | – | – | N/A | – | – | N/A |
| Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| Performance based compensation | – | – | – | N/A | – | – | N/A |
| PERFORMANCE RELATED EARNINGS (PRE) | – | – | – | N/A | – | – | N/A |
| PRE Margin (%) | N/A | N/A | N/A | N/A | N/A | ||
| (-) Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| (+) Unrealized performance compensation | – | – | – | N/A | – | – | N/A |
| SEGMENT DISTRIBUTABLE EARNINGS | (1,476) | (2,418) | (3,699) | 151% | (5,972) | (9,675) | 62% |
| Segment DE Margin (%) | N/A | N/A | N/A | N/A | N/A | ||
| ASSETS UNDER MANAGEMENT (AUM R$millions) | – | 37 | 88 | N/A | – | 88 | N/A |
| AVERAGE MANAGEMENT FEE RATE (%) | – | 0.60% | 0.72% | N/A | – | 0.72% | N/A |
Fee Related Earnings (FRE) of negative R$3.7 million for the quarter ended December 29, 2023. FRE was negative R$9.7 million in the full year ended December 29, 2023.
VRS started to contribute to AUM numbers and management fee revenues in the 2Q’23.
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Income Statement
| (R$ thousands, unless mentioned) | 4Q'22 | 3Q'23 | 4Q'23 | ∆ YoY (%) | FY'22 | FY'23 | ∆ YoY (%) |
| REVENUES | |||||||
| Net revenue from management fees | 99,640 | 104,745 | 99,976 | 0% | 371,501 | 393,367 | 6% |
| Net revenue from performance fees | 7,558 | 2,058 | 6,468 | (14)% | 14,600 | 21,254 | 46% |
| Realized performance fees | 9,241 | 2,058 | 7,510 | (19)% | 18,218 | 22,296 | 22% |
| Unrealized performance fees | (1,683) | – | (1,042) | (38)% | (3,618) | (1,042) | (71)% |
| Net revenue from advisory | 4,394 | 2,283 | 18,998 | 332% | 21,994 | 39,799 | 81% |
| Total net revenues from services rendered | 111,592 | 109,086 | 125,442 | 12% | 408,095 | 454,420 | 11% |
| EXPENSES | |||||||
| Bonus related to management and advisory | (18,981) | (18,746) | (26,143) | 38% | (73,318) | (84,000) | 15% |
| Performance based compensation | (3,558) | (925) | (3,614) | 2% | (6,554) | (10,640) | 62% |
| Realized | (4,151) | (925) | (3,983) | (4)% | (7,833) | (11,009) | 41% |
| Unrealized | 593 | – | 369 | (38)% | 1,278 | 369 | (71)% |
| Total compensation and benefitsxii | (22,539) | (19,671) | (29,757) | 32% | (79,871) | (94,640) | 18% |
| Segment personnel expenses | (6,163) | (7,483) | (7,462) | 21% | (25,454) | (29,686) | 17% |
| Other general and administrative expenses | (4,977) | (5,356) | (6,573) | 32% | (18,383) | (20,423) | 11% |
| Corporate center expenses | (22,592) | (24,110) | (21,499) | (5)% | (84,770) | (90,625) | 7% |
| Total expenses | (56,271) | (56,620) | (65,291) | 16% | (208,479) | (235,373) | 13% |
| Operating profit | 55,321 | 52,466 | 60,151 | 9% | 199,616 | 219,047 | 10% |
| OTHER ITEMS | |||||||
| GP Investment income | 8,011 | (3,347) | 14,914 | 86% | 6,304 | 26,018 | 313% |
| Realized gain from GP investment income | 7,462 | 4,699 | 4,451 | (40)% | 20,171 | 19,210 | (5)% |
| Unrealized gain from GP investment income | 549 | (8,046) | 10,463 | 1,806% | (13,867) | 6,808 | N/A |
| Financial income | 10,268 | 12,027 | 22,046 | 115% | 87,870 | 84,345 | (4)% |
| Realized gain from financial income | 10,235 | 12,027 | 22,046 | 115% | 86,958 | 84,345 | (3)% |
| Unrealized gain from financial income | 33 | (0) | – | N/A | 912 | (0) | N/A |
| Leasing expenses | (2,190) | (2,394) | (2,267) | 4% | (9,359) | (9,809) | 5% |
| Other itemsxiii | 10,434 | (11,442) | (10,461) | N/A | 8,253 | (33,325) | N/A |
| Share Based Plan | (5,463) | (5,118) | (4,249) | (22)% | (14,276) | (14,967) | 5% |
| Non-operational expenses | – | – | (1,924) | N/A | (6,594) | (1,924) | (71)% |
| Total Other Items | 21,060 | (10,274) | 18,059 | (14)% | 72,198 | 50,338 | (30)% |
| Profit before income taxes | 76,381 | 42,192 | 78,210 | 2% | 271,813 | 269,385 | (1)% |
| (-) Income taxes | (17,891) | (10,375) | (14,826) | (17)% | (52,413) | (49,926) | (5)% |
| NET INCOME | 58,490 | 31,817 | 63,384 | 8% | 219,401 | 219,459 | 0% |
| (+) Non-operational expenses including income tax related to realized expense | – | – | 1,631 | N/A | 5,425 | 1,631 | (70)% |
| (-) Contingent consideration adjustment related to acquisitionsxiv | (9,221) | 5,655 | 2,691 | N/A | (9,221) | 10,476 | N/A |
| ADJUSTED NET INCOME | 49,269 | 37,472 | 67,706 | 37% | 215,604 | 231,566 | 7% |
Total net revenues from services rendered of R$125.4 million for the quarter ended December 29, 2023, up 12% year-over-year. This growth was driven by stronger advisory fees in the period. Net revenues for the full year ended December 29, 2023, were R$454.4 million, representing a 11% increase when compared to the full year ended December 30, 2022.
| · | Management fee revenues of R$100.0 million for the quarter ended December 29, 2023, flat year-over-year, while private markets revenues grew, both liquid strategies and IP&S suffered headwinds caused by tougher macro conditions. Management fees of R$393.4 million in the full year ended December 29, 2023, up 6% when compared to the full year ended December 30, 2022. |
| · | Performance fee revenues of R$6.5 million for the quarter ended December 29, 2023, down 14% year-over-year. Performance fee revenues of R$21.3 for the full year ended December 29, 2023, an increase of 46% when |
compared to the full year ended December 30, 2022.
| · | Advisory fee revenues of R$19.0 million for the quarter ended December 29, 2023, compared to R$4.4 million for the quarter ended December 30, 2022, an increase of 332% year-over-year. Advisory revenues for the full year ended December 29, 2023, were R$39.8 million, up 81% when compared to the full year ended December 30, 2022. |
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Total expenses for the quarter ended December 29, 2023, of R$65.3 million, compared to R$56.3 million for the quarter ended December 30, 2022, an increase of 16% year-over-year. Disregarding bonus compensation, total expenses totaled R$35.5 million, up 5% year-over-year, following our cost efficiency orientation to contain expenses growth. Total expenses for the full year ended December 29, 2023, were R$235.7 million, up 13% when compared to the full year ended December 30, 2022.
| · | Bonus related to management and advisory fees of R$26.1 million for the quarter ended December 29, 2023, compared to R$19.0 million for the quarter ended December 30, 2022, a 38% increase year-over-year. Bonus related to management and advisory was R$84.0 million for the full year ended December 29, 2023, up 15% year-over-year, when compared to the full year ended December 30, 2022. |
| · | Performance based compensation of R$3.6 million for the quarter ended December 29, 2023, compared to R$3.6 million for the quarter ended December 30, 2022, an increase of 2% year-over-year. Performance based compensation for the full year ended December 29, 2023, was R$10.6 million, an increase of 62% when compared to the full year ended December 30, 2022. |
| · | Segment personnel expensesxv of R$7.5 million for the quarter ended December 29, 2023, compared to R$6.2 million for the quarter ended December 30, 2022, an increase of 21% year-over-year. Segment personnel expenses for the full year ended December 29, 2023, was R$29.7 million, up 17% when compared to the full year ended December 30, 2022. |
| · | Corporate center expensesxvi of R$21.5 million for the quarter ended December 29, 2023, compared to R$22.6 million for the quarter ended December 30, 2022, a decrease of 5% year-over-year. Corporate center expenses for the full year ended December 29, 2023, were R$90.6 million, up 7% year-over-year, when compared to the full year ended December 30, 2022. |
| · | Other general and administrative expensesxvii of R$6.6 million for the quarter ended December 29, 2023, compared to R$5.0 million for the quarter ended December 30, 2022, an increase of 32% year-over-year. Other G&A expenses for the full year ended December 29, 2023, were R$20.4 million, up 11% when compared to the full year ended December 30, 2022. |
Operating Profit of R$60.2 million for the quarter ended December 29, 2023, compared to R$55.3 million for the quarter ended December 30, 2022, an increase of 9% year-over-year. Operating profit for the full year ended December 29, 2023, was R$219.0 million, up 10% when compared to the full year ended December 30, 2022.
GP Investment incomexviii, a result of the company’s GP investments in its proprietary private market funds, was R$14.9 million for the quarter ended December 29, 2023, compared to R$8.0 million for the quarter ended December 30,
2022, following the appreciation of our proprietary position in private markets funds, a result of mark-to-market appreciation of REITs and annual mark-up of closed-end funds. Investment income for the full year ended December 29, 2023, was R$26.0 million compared to R$6.3 million for the full year ended December 30, 2022.
Financial Incomexix of R$22.0 million for the quarter ended December 29, 2023, compared to R$10.3 million for the quarter ended December 30, 2022. Financial income for the full year ended December 29, 2023, was R$84.3 million, down 4% when compared to the full year ended December 30, 2022.
Leasing Expensesxx of R$2.3 million for the quarter ended December 29, 2023, compared to R$2.2 million for the quarter ended December 30, 2022, up 4% year-over-year.
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Other Items of negative R$10.5 million for the quarter ended December 29, 2023. Other items comprise the income/(loss) generated by contingent consideration adjustment and financial income/(expenses) related to SPS acquisition and Ares investment.
Share Based Plan expensesxxi of R$4.2 million for the quarter ended December 29, 2023. In the full year ended December 29, 2023, share based plan expenses accounted for R$15.0 million.
Profit before income taxes of R$78.2 million for the quarter ended December 29, 2023, compared to R$76.4 million for the quarter ended December 30, 2022, an increase of 2% year-over-year. Profit before income taxes for the full year ended December 29, 2023, was R$269.4 million, a decrease of 1% when compared to the full year ended December 30, 2022.
Income Taxesxxii of R$14.8 million for the quarter ended December 29, 2023, which represented an effective tax rate for the quarter of 19%, compared to R$17.9 million for the quarter ended December 30, 2022, which represented an effective tax rate of 23%, representing a decrease of 4.5 percentage points year-over-year.
Non-operational expenses of R$1.9 million for the quarter ended December 29, 2023. Non-operational expenses are comprised of expenses related to professional services rendered in connection with acquisitions.
Contingent consideration adjustment related to acquisitions, after tax, of R$2.7 million for the quarter ended December 29, 2023. Contingent consideration adjustment related to Vinci SPS’ acquisition reflects the change in earn out’s fair value to be paid in 2027.
Adjusted Net Income of R$67.7 million for the quarter ended December 29, 2023, compared to R$49.3 million for the quarter ended December 30, 2022, an increase of 37% year-over-year. Adjusted Net Income was R$231.6 million for the full year ended December 29, 2023, up 7% when compared to the full year ended December 30, 2022.
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Supplement Details
Assets Under Management (AUM)xxiii Rollforward – R$ millions
For the Three Months Ended December 29, 2023
|
Private Equity |
Public Equities |
IP&S | Infrastructure | Real Estate | Private Credit |
Hedge Funds |
VRS | Vinci SPS | Total | |
| Beginning balance | 13,971 | 8,445 | 23,560 | 2,731 | 6,220 | 5,335 | 2,843 | 37 | 2,091 | 65,231 |
| (+/-) Capital Subscription / (capital return) | 76 | – | – | 1,145 | 752 | (39) | – | – | (75) | 1,859 |
| (+) Capital Subscription | 266 | – | – | 1,165 | 875 | – | – | – | 0 | 2,306 |
| (-) Capital Return | (190) | – | – | (21) | (123) | (39) | – | – | (75) | (447) |
| (+/-) Net Inflow / (outflow) | – | (46) | (1,104) | – | 5 | (65) | (166) | 48 | – | (1,328) |
| (+/-) Appreciation / (depreciation) | 546 | 1,139 | 694 | 67 | 72 | 176 | 118 | 2 | (52) | 2,762 |
| Ending Balance | 14,593 | 9,537 | 23,149 | 3,943 | 7,049 | 5,406 | 2,795 | 88 | 1,964 | 68,525 |
For the Twelve months Ended December 29, 2023
|
Private Equity |
Public Equities |
IP&S | Infrastructure |
Real Estate |
Private Credit |
Hedge Funds |
VRS | Vinci SPS | Total | |
| Beginning balance | 13,781 | 7,397 | 24,187 | 2,055 | 5,649 | 5,056 | 2,812 | – | 2,144 | 63,081 |
| (+/-) Capital Subscription / (capital return) | 827 | – | 55 | 1,658 | 727 | (283) | – | – | (333) | 2,650 |
| (+) Capital Subscription | 1,188 | – | 55 | 1,781 | 1,180 | – | – | – | 3 | 4,207 |
| (-) Capital Return | (361) | – | – | (124) | (453) | (283) | – | – | (336) | (1,557) |
| (+/-) Net Inflow / (outflow) | – | 164 | (2,829) | – | (51) | 167 | (389) | 85 | – | (2,854) |
| (+/-) Appreciation / (depreciation) | (15) | 1,976 | 1,736 | 230 | 725 | 468 | 372 | 3 | 153 | 5,647 |
| Ending Balance | 14,593 | 9,537 | 23,149 | 3,943 | 7,049 | 5,406 | 2,795 | 88 | 1,964 | 68,525 |
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Fee Earning Assets Under Management (FEAUM) Rollforward – R$ millions
For the Three Months Ended December 29, 2023
|
Private Equity |
Public Equities |
IP&S | nfrastructure | Real Estate | Private Credit |
Hedge Funds |
VRS | Vinci SPS | Total | |
| Beginning balance | 10,733 | 8,395 | 23,458 | 2,682 | 6,220 | 5,335 | 2,694 | 37 | 2,091 | 61,644 |
| (+/-) Capital Subscription / (capital return) | 96 | – | – | 1,145 | 752 | (39) | – | – | (75) | 1,879 |
| (+) Capital Subscription | 216 | – | – | 1,165 | 875 | – | – | – | 0 | 2,256 |
| (-) Capital Return | (119) | – | – | (21) | (123) | (39) | – | – | (75) | (377) |
| (+/-) Net Inflow / (outflow) | – | (46) | (1,097) | – | 5 | (65) | (166) | 48 | – | (1,321) |
| (+/-) Appreciation / (depreciation) | 563 | 1,138 | 694 | 67 | 72 | 176 | 114 | 2 | (52) | 2,775 |
| Ending Balance | 11,392 | 9,487 | 23,055 | 3,894 | 7,049 | 5,406 | 2,642 | 88 | 1,964 | 64,977 |
For the Twelve months Ended December 29, 2023
|
Private Equity |
Public Equities |
IP&S | Infrastructure |
Real Estate |
Private Credit |
Hedge Funds |
VRS | Vinci SPS | Total | |
| Beginning balance | 10,407 | 7,334 | 24,085 | 2,003 | 5,649 | 5,056 | 2,718 | – | 2,144 | 59,397 |
| (+/-) Capital Subscription / (capital return) | 822 | – | 55 | 1,658 | 727 | (283) | – | – | (333) | 2,646 |
| (+) Capital Subscription | 1,138 | – | 55 | 1,781 | 1,180 | – | – | – | 3 | 4,157 |
| (-) Capital Return | (315) | – | – | (124) | (453) | (283) | – | – | (336) | (1,512) |
| (+/-) Net Inflow / (outflow) | – | 171 | (2,766) | – | (51) | 167 | (431) | 85 | – | (2,826) |
| (+/-) Appreciation / (depreciation) | 162 | 1,982 | 1,682 | 233 | 725 | 468 | 354 | 3 | 153 | 5,761 |
| Ending Balance | 11,392 | 9,487 | 23,055 | 3,894 | 7,049 | 5,406 | 2,642 | 88 | 1,964 | 64,977 |
Accrued Performance Fees – Private Market Funds
| (R$ mm) | 3Q’23 | Unrealized Performance Fees | Realized Distributions | 4Q’23 |
| Private Equity | 184.8 | 71.1 | - | 255.9 |
| Infrastructure | 16.1 | 6.4 | - | 22.5 |
| Total | 201.0 | 77.6 | - | 278.6 |
Vinci Partners recognizes the performance revenue according to IFRS 15. Unrealized performance fees are recognized only when is highly probable that the revenue will not be reversed in the Income Statement.
The fund FIP Infra Transmissão in Infrastructure had R$14.4 million as of the end of the fourth quarter of 2023 booked as unrealized performance fees in the company´s balance sheet.
Accrued performance fees shown for Private Equity funds of R$255.9 million and for the Infrastructure fund VIAS of R$8.1 million as of the end of the fourth quarter of 2023 have not been booked as unrealized performance fees in the company´s balance sheet.
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Investment Records – IP&S, Liquid Strategies, Private Credit and Listed REIT
| Fund | Segment |
NAVxxiv (R$ millions) |
4Q23 | YTD | 12 M | 24 M | Market Comparison | Index Rate |
| Vinci Multiestratégia FIM | Hedge Funds | 290.3 | 2.8% | 12.6% | 12.6% | 25.9% | CDIxxv | CDI |
| Atlas Strategyxxvi | Hedge Funds | 383.5 | 3.4% | 9.2% | 9.2% | 18.3% | CDI | CDI |
| Total Return Strategyxxvii | Hedge Funds | 367.3 | 11.2% | 26.7% | 26.7% | 30.6% | IPCAxxviii+ Yield IMA-Bxxix | IPCA + Yield IMA-B |
| Mosaico Strategyxxx | Public Equities | 988.2 | 12.3% | 24.1% | 24.1% | 18.4% | IBOVxxxi | IBOV |
| Vinci Gas Dividendos FIA | Public Equities | 603.3 | 14.1% | 20.8% | 20.8% | 30.4% | IBOV | IBOV |
| Valorem Strategyxxxii | IP&S | 1,588.0 | 2.6% | 11.8% | 11.8% | 22.8% | IMA-B 5 | IMA-B 5 |
| Equilibrio Strategyxxxiii | IP&S | 2,305.6 | 2.4% | 11.4% | 11.4% | 21.5% | IPCA | - |
| Vinci Retorno Real FIM | IP&S | 187.7 | 3.3% | 12.1% | 12.1% | 27.8% | IMA-B | IMA-B |
| Vinci Crédito Imobiliário I | Private Credit | 113.9 | 2.4% | 11.3% | 11.3% | 24.9% | IPCA | IPCA + 7.785% |
| Vinci Crédito Imobiliário II | Private Credit | 831.4 | 4.4% | 16.0% | 16.0% | 26.3% | IPCA | IPCA + 6% |
| Vinci Crédito Estruturado Multiestrategia Plus FIC FIM | Private Credit | 110.4 | 3.5% | 12.9% | 12.9% | 28.6% | CDI | CDI |
| Vinci Energia Sustentável | Private Credit | 606.5 | 3.8% | 14.2% | 14.2% | 21.2% | IPCA | IPCA + 6% |
| Vinci Crédito Multiestratégia | Private Credit | 365.5 | 3.8% | 10.9% | 10.9% | 22.6% | CDI | IPCA + 5% |
| VISC11 | Real Estate (listed REIT) | 2,609.4 | 7.6% | 29.1% | 29.1% | 44.0% | IFIXxxxiv | IPCA + 6% |
| VILG11 | Real Estate (listed REIT) | 1,479.2 | (5.4)% | 7.8% | 7.8% | 10.9% | IFIX | IPCA + 6% |
| VINO11 | Real Estate (listed REIT) | 125.6 | (7.9)% | (12.5)% | (12.5)% | (20.0)% | IFIX | IPCA + 6% |
| VIFI11 | Real Estate / Private Credit (listed REIT) | 66.6 | 1.6% | 32.2% | 32.2% | 33.7% | IFIX | IFIX |
| VIUR11 | Real Estate (listed REIT) | 213.6 | 1.8% | 13.2% | 13.2% | 28.8% | IFIX | IPCA + 6% |
| VCRI11 | Real Estate / Private Credit (listed REIT) | 147.8 | 3.6% | 6.7% | 6.7% | 7.6% | IFIX | IPCA + Xxxxv% |
| VICA11 | Real Estate / Private Credit (REIT) | 374.7 | (0.2)% | (0.2)% | (0.2)% | 1.3% | IFIX | CDI + 1% |
| VINCI FOF IMOBILIARIO FIM CP | Real Estate (REIT) | 71.7 | 2.9% | 19.4% | 19.4% | 26.5% | IFIX | IFIX |
| VIGT11 | Infrastructure (listed) | 669.3 | 5.6% | 25.9% | 25.9% | 27.3% | - | - |
| Benchmark | 4Q23 | YTD | 12 M | 24 M |
| IBOV | 15.1% | 22.3% | 22.3% | 28.0% |
| CDI | 2.8% | 13.0% | 13.0% | 27.0% |
| IMA-B 5 | 3.0% | 12.1% | 12.1% | 23.1% |
| IPCA + Yield IMA-B | 2.3% | 10.7% | 10.7% | 24.4% |
| IPCA | 1.1% | 4.6% | 4.6% | 10.7% |
| IFIX | 2.9% | 15.5% | 15.5% | 18.1% |
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Investment Records – Closed End Private Markets fundsxxxvi
| Fund |
Segment |
Vintage year |
Committed Capital (R$mm) |
Invested Capital (R$mm) |
Realized or Partially Realized (R$mm) |
Unrealized (R$mm) |
Total Value (R$mm) |
Gross MOICxxxvii (BRL) |
Gross MOIC (USD) |
Gross IRRxxxviii (BRL) |
Gross IRR (USD) |
| Fund 1 | Private Equity | 2004 | 1,415 | 1,206 | 5,065 | 137 | 5,202 | 4.3x | 4.0x | 71.5% | 77.2% |
| VCP II | Private Equity | 2011 | 2,200 | 2,063 | 1,935 | 2,259 | 4,194 | 2.0x | 1.1x | 10.4% | 1.6% |
| VCP III | Private Equity | 2018 | 4,000 | 2,316 | 54 | 4,373 | 4,427 | 1.8x | 1.8x | 33.7% | 30.5% |
| VCP IV | Private Equity | 2022 | 2,205 | – | – | – | – | – | – | – | – |
| VCP Strategyxxxix | Private Equity | 9,820 | 5,585 | 7,053 | 6,770 | 13,823 | 2.4x | 2.2x | 64.6% | 70.2% | |
| NE Empreendedor | Private Equity | 2003 | 36 | 13 | 26 | – | 26 | 2.1x | 2.6x | 22.0% | 30.5% |
| Nordeste III | Private Equity | 2017 | 240 | 135 | 93 | 144 | 237 | 1.8x | 1.5x | 18.6% | 11.9% |
| VIR IV | Private Equity | 2020 | 1,000 | 403 | 154 | 379 | 533 | 1.3x | 1.4x | 25.5% | 30.7% |
| VIR Strategyxl | Private Equity | 1,276 | 550 | 272 | 524 | 796 | 1.4x | 1.5x | 21.7% | 27.9% | |
| SPS I | Vinci SPS | 2018 | 128 | 191 | 207 | 126 | 333 | 1.7x | 1.6x | 26.0% | 20.1% |
| SPS II | Vinci SPS | 2020 | 671 | 1,004 | 759 | 702 | 1,460 | 1.5x | 1.5x | 24.4% | 28.0% |
| SPS III | Vinci SPS | 2021 | 1,070 | 692 | 131 | 739 | 870 | 1.3x | 1.5x | 30.2% | 38.6% |
| SPS Strategyxli | Vinci SPS | 1,869 | 1,887 | 1,097 | 1,567 | 2,664 | 1.4x | 1.5x | 25.7% | 27.6% | |
| FIP Transmissãoxlii | Infrastructure | 2017 | 211 | 104 | 261 | 115 | 376 | 3.6x | 2.7x | 59.0% | 43.9% |
| VIASxliii | Infrastructure | 2021 | 386 | 350 | – | 409 | 409 | 1.2x | 1.2x | 17.8% | 19.4% |
| VICCxliv | Infrastructure | 2023 | 1,500 | – | – | – | – | – | – | – | – |
| VFDLxlv | Real Estate | 2021 | 422 | 221 | 8 | 264 | 272 | 1.2x | 1.3x | 21.4% | 26.9% |
| Vinci Credit Infraxlvi | Private Credit | 2022 | 1,400 | 438 | – | 448 | 448 | 1.1x | 1.1x | NM | NM |
Shareholder Dividends
| ($ in thousands) | 1H21 | 3Q'21 | 4Q'21 | 1Q’22 | 2Q’22 | 3Q'22 | 4Q’22 |
| Distributable Earnings (R$) | 101,976 | 61,743 | 68,515 | 53,255 | 60,435 | 72,842 | 55,792 |
| Distributable Earnings (US$)xlvii | 19,397 | 11,377 | 13,637 | 10,615 | 11,795 | 14,281 | 10,618 |
| DE per Common Share (US$)xlviii | 0.34 | 0.20 | 0.24 | 0.19 | 0.21 | 0.26 | 0.19 |
| Actual Dividend per Common Sharexlix | 0.30 | 0.16 | 0.20 | 0.17 | 0.17 | 0.20 | 0.17 |
| Record Date | Sep 01, 2021 | Dec 01, 2021 | Mar 10, 2022 | May 24, 2022 | Aug 25, 2022 | Nov 23, 2022 | Mar 01, 2023 |
| Payable Date | Sep 16, 2021 | Dec 16, 2021 | Mar 24, 2022 | Jun 08, 2022 | Sep 09,2022 | Dec 08, 2022 | Mar 15, 2023 |
| ($ in thousands) | 1Q’23 | 2Q'23 | 3Q’23 | 4Q’23 |
| Distributable Earnings (R$) | 60,006 | 70,369 | 51,820 | 62,010 |
| Distributable Earnings (US$) | 11,994 | 14,290 | 10,647 | 12,500 |
| DE per Common Share (US$)l | 0.22 | 0.26 | 0.20 | 0.23 |
| Actual Dividend per Common Share | 0.16 | 0.20 | 0.17 | 0.20 |
| Record Date | May 25, 2023 | Aug 24, 2023 | Nov 22, 2023 | Feb 22, 2024 |
| Payable Date | Jun 09, 2023 | Sep 08, 2023 | Dec 07, 2023 | Mar 07, 2024 |
Vinci Partners generated R$1.15 or US$0.23 of Distributable Earnings per common share for the fourth quarter of 2023. The company declared a quarterly dividend of US$0.20 per common share to record holders as of February 22, 2024; payable on March 07, 2024.
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Share Summary
| VINP Shares | 1Q'21 | 2Q'21 | 3Q'21 | 4Q'21 | 1Q'22 | 2Q'22 | 3Q'22 | 4Q'22 | 1Q23 | 2Q’23 | 3Q'23 | 4Q’23 |
| Class B | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 | 14,466,239 |
| Class Ali | 42,447,349 | 42,270,694 | 42,097,179 | 41,689,338 | 41,363,077 | 41,112,717 | 40,892,619 | 40,614,497 | 40,247,461 | 39,730,720 | 39,405,827 | 39,312,578 |
| Common Shares Outstanding | 56,913,588 | 56,736,933 | 56,563,418 | 56,155,577 | 55,829,316 | 55,578,956 | 55,358,858 | 55,080,736 | 54,713,700 | 54,196,959 | 53,872,066 | 53,778,817 |
Common Shares Outstanding as of quarter end of 53,778,817 shares.
| · | Repurchased 93,249 common shares in the quarter, with an average share price of US$10.5. |
| · | Repurchased 3,557,004 common shares since the announcement of the first share repurchase plan, with an average share price of US$10.7. |
| · | The share repurchase plan limit was reached in the fourth quarter, concluding the third buyback program. |
| · | A new share repurchase plan was approved on February 07, 2024, to buy back up to R$60.0 million of the company’s outstanding shares. |
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| |
GP Commitment in Vinci Partners funds
|
(R$ millions, unless mentioned) Fund sdc |
Segment | 4Q23 Commitments | Total Capital Committed | 4Q23 Capital Called |
Total Capital Called |
Capital Returned/ Dividends Paid (4Q23) |
Accumulated Capital Returned/ Dividends Paid |
Fair value of investments |
| sdcNordeste III | Private Equity | – | 5.0 | 0.0 | 3.2 | – | 1.6 | 2.9 |
| VCP III | Private Equity | – | 3.1 | – | 2.8 | – | – | 4.3 |
| VIR IV | Private Equity | – | 11.1 | – | 5.4 | – | 1.7 | 4.7 |
| VCP IV | Private Equity | – | 350.0 | – | – | – | – | – |
| FIP Infra Transmissão (co- investment)[i] | Infrastructure | – | 29.5 | – | 8.9 | – | 20.9 | 10.3 |
| FIP Infra Transmissão[ii] | Infrastructure | – | 10.5 | – | 3.4 | – | 6.6 | 2.9 |
| VIAS | Infrastructure | – | 50.0 | – | 37.5 | – | – | 50.7 |
| Vinci Transporte e Logística II | Infrastructure | – | 15.0 | – | – | – | – | – |
| Vinci Transporte e Logística I | Infrastructure | – | 11.4 | – | 11.3 | – | – | 10.5 |
| VICC | Infrastructure | – | 100.0 | – | – | – | – | – |
| VFDL | Real Estate | – | 70.0 | 7.1 | 46.0 | – | – | 52.8 |
| VIUR | Real Estate | – | 67.3 | – | 67.3 | 1.5 | 14.8 | 53.9 |
| VINO | Real Estate | – | 50.0 | – | 50.0 | 0.8 | 6.7 | 34.6 |
| Vinci FOF Imobiliário | Real Estate | – | 16.9 | – | 16.9 | – | 0.5 | 22.0 |
| VCS (VCRI) | Real Estate / Private Credit | – | 80.0 | – | 80.0 | 1.9 | 18.4 | 70.0 |
| Vinci Crédito Agro Fiagro-Imobiliário | Real Estate / Private Credit | – | 23.0 | – | 23.0 | 0.8 | 4.2 | 22.8 |
| Vinci Crédito Infra Institucional | Private Credit | – | 100.0 | 8.0 | 44.2 | – | – | 46.8 |
| VSP FIM | IP&S | – | 50.0 | 3.5 | 12.4 | – | – | 12.9 |
| Vinci PIPE FIA | Public Equities | – | 25.0 | – | 25.0 | – | – | 24.8 |
| Total | – | 1,067.8 | 18.6 | 437.3 | 5.0 | 75.5 | 427.0 |
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Reconciliation and Disclosures
Non-GAAP Reconciliation
| (R$ thousands, unless mentioned) | 4Q'22 | 3Q'23 | 4Q'23 | FY'22 | FY'23 |
| OPERATING PROFIT | 55,321 | 52,466 | 60,151 | 199,616 | 219,047 |
| (-) Net revenue from realized performance fees | (9,241) | (2,058) | (7,510) | (18,218) | (22,296) |
| (-) Net revenue from unrealized performance fees | 1,683 | – | 1,042 | 3,618 | 1,042 |
| (+) Compensation allocated in relation to performance fees | 3,558 | 925 | 3,614 | 6,554 | 10,640 |
| FEE RELATED EARNINGS (FRE) | 51,321 | 51,333 | 57,297 | 191,570 | 208,433 |
| OPERATING PROFIT | 55,321 | 52,466 | 60,151 | 199,616 | 219,047 |
| (-) Net revenue from management fees | (99,640) | (104,745) | (99,976) | (371,501) | (393,367) |
| (-) Net revenue from advisory | (4,394) | (2,283) | (18,998) | (21,994) | (39,799) |
| (+) Bonus related to management and advisory | 18,981 | 18,746 | 26,143 | 73,318 | 84,000 |
| (+) Personnel expenses | 6,163 | 7,483 | 7,462 | 25,454 | 29,686 |
| (+) Other general and administrative expenses | 4,977 | 5,356 | 6,573 | 18,383 | 20,423 |
| (+) Corporate center expenses | 22,592 | 24,110 | 21,499 | 84,770 | 90,625 |
| PERFORMANCE RELATED EARNINGS (PRE) | 4,000 | 1,133 | 2,854 | 8,046 | 10,614 |
| OPERATING PROFIT | 55,321 | 52,466 | 60,151 | 199,616 | 219,047 |
| (-) Net revenue from unrealized performance fees | 1,683 | – | 1,042 | 3,618 | 1,042 |
| (+) Compensation allocated in relation to unrealized performance fees | (593) | – | (369) | (1,278) | (369) |
| (+) Realized gain from GP investment income | 7,462 | 4,699 | 4,451 | 20,171 | 19,210 |
| SEGMENT DISTRIBUTABLE EARNINGS | 63,873 | 57,165 | 65,275 | 222,127 | 238,930 |
| NET INCOME | 58,490 | 31,817 | 63,384 | 219,401 | 219,459 |
| (-) Net revenue from unrealized performance fees | 1,683 | – | 1,042 | 3,618 | 1,042 |
| (+) Income tax from unrealized performance fees | (194) | – | (120) | (417) | (120) |
| (+) Compensation allocated in relation to unrealized performance fees | (593) | – | (369) | (1,278) | (369) |
| (-) Unrealized gain from GP investment income | (549) | 8,046 | (10,463) | 13,867 | (6,808) |
| (+) Income tax on unrealized gain from GP investment income | (321) | 46 | 119 | (369) | 175 |
| (-) Unrealized gain from financial income | (33) | 0 | (0) | (912) | – |
| (+) Income tax on unrealized gain from financial income | – | – | – | – | – |
| (-) Contingent consideration (earn-out) gain (loss), after-tax | (9,221) | 5,655 | 2,691 | (9,221) | 10,476 |
| (+) Depreciation and amortization³ | 1,803 | 1,646 | 1,858 | 4,986 | 7,310 |
| (+) Share Based Plan | 5,463 | 5,058 | 4,188 | 14,276 | 13,601 |
| (-) Income Taxes on Share Based Plan | (736) | (448) | (320) | (1,628) | (561) |
| (+) Non-operational expenses including income tax related to realized expense | – | – | 1,631 | 5,425 | 1,631 |
| ADJUSTED DISTRIBUTABLE EARNINGS | 55,792 | 51,820 | 63,641 | 247,749 | 245,836 |
| TOTAL NET REVENUE FROM SERVICES RENDERED | 111,592 | 109,086 | 125,442 | 408,095 | 454,420 |
| (-) Net revenue from realized performance fees | (9,241) | (2,058) | (7,510) | (18,218) | (22,296) |
| (-) Net revenue from unrealized performance fees | 1,683 | – | 1,042 | 3,618 | 1,042 |
| NET REVENUE FROM MANAGEMENT FEES AND ADVISORY | 104,034 | 107,028 | 118,974 | 393,495 | 433,166 |
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Effective Tax Rate Reconciliation
| (R$ thousands, unless mentioned) | 4Q'22 | 4Q'23 | FY'22 | FY'23 |
| Profit (loss) before income taxes | 76,381 | 78,210 | 271,814 | 269,385 |
| Combined statutory income taxes rate - % | 34% | 34% | 34% | 34% |
| Income tax benefit (Expense) at statutory rates | (25,970) | (26,591) | (92,417) | (91,591) |
| Reconciliation adjustments: | ||||
| Expenses not deductible | (159) | (274) | (214) | (880) |
| Tax benefits | 185 | 17 | 282 | 190 |
| Share based payments | (70) | (187) | (297) | (516) |
| Tax loss | - | (2,055) | - | (2,055) |
| Effect of presumed profit of subsidiaries¹ and offshore subsidiariesliv | 8,097 | 14,263 | 40,220 | 44,833 |
| Other additions (exclusions), net | 26 | 1 | 13 | 93 |
| Income taxes expenses | (17,891) | (14,826) | (52,413) | (49,926) |
| Current | (15,086) | (17,074) | (53,144) | (58,566) |
| Deferred | (2,805) | 2,248 | 731 | 8,640 |
| Effective tax rate | 23% | 19% | 19% | 19% |
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Balance Sheet Results
| Assets | 9/29/2023 | 12/29/2023 |
| Current assets | ||
| Cash and cash equivalents | 184,215 | 660,305 |
| Cash and bank deposits | 38,042 | 15,896 |
| Financial instruments at fair value through profit or loss | 146,173 | 173,300 |
| Financial instruments at amortized cost | - | 471,109 |
| Financial instruments at fair value through profit or loss | 1,131,389 | 1,168,355 |
| Accounts receivable | 66,456 | 101,523 |
| Sub-leases receivable | 4,071 | 4,071 |
| Taxes recoverable | 2,631 | 2,219 |
| Other assets | 19,163 | 19,109 |
| Total current assets | 1,407,925 | 1,955,582 |
| Non-current assets | ||
| Financial instruments at fair value through profit or loss | 6,776 | 7,146 |
| Accounts receivable | 35,227 | 16,638 |
| Sub-leases receivable | 2,352 | 1,467 |
| Taxes recoverable | 433 | 325 |
| Deferred taxes | 11,923 | 13,487 |
| Other assets | 633 | 19,427 |
| 57,344 | 58,490 | |
| Property and equipment | 13,116 | 12,591 |
| Right of use - Leases | 57,849 | 58,308 |
| Intangible assets | 206,035 | 214,748 |
| Total non-current assets | 334,344 | 344,137 |
| Total Assets | 1,742,269 | 2,299,719 |
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| |
| Liabilities and equity | 9/29/2023 | 12/29/2023 |
| Current liabilities | ||
| Trade payables | 563 | 1,869 |
| Deferred Revenue | 12,498 | – |
| Leases | 24,381 | 24,381 |
| Accounts payable | 7,601 | 6,020 |
| Labor and social security obligations | 73,763 | 101,506 |
| Loans and obligations | 66,081 | 76,722 |
| Taxes and contributions payable | 18,880 | 24,853 |
| Total current liabilities | 203,767 | 235,351 |
| Non-current liabilities | ||
| Accounts payable | – | – |
| Leases | 50,035 | 48,431 |
| Labor and social security obligations | 4,439 | 5,357 |
| Loans and Obligations | 111,878 | 540,369 |
| Deferred taxes | 4,630 | 3,883 |
| Retirement plans liabilities | 34,701 | 85,554 |
| 205,683 | 683,594 | |
| Total liabilities | 409,450 | 918,945 |
| Equity | ||
| Share capital | 15 | 15 |
| Additional paid-in capital | 1,376,255 | 1,408,438 |
| Treasury shares | (167,872) | (172,863) |
| Retained Earnings | 91,815 | 111,444 |
| Other reserves | 30,001 | 31,876 |
| 1,330,214 | 1,378,910 | |
| Non-controlling interests in the equity of subsidiaries | 2,605 | 1,864 |
| Total equity | 1,332,819 | 1,380,774 |
| Total liabilities and equity | 1,742,269 | 2,299,719 |
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Forward-Looking Statements
This earnings release contains forward-looking statements that can be identified by the use of words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. By their nature, forward-looking statements are necessarily subject to a high degree of uncertainty and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside of our control. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements and there can be no assurance that such forward-looking statements will prove to be correct. The forward-looking statements included herein speak only as at the date of this press release and we do not undertake any obligation to update these forward-looking statements. Past performance does not guarantee or predict future performance. Moreover, neither we nor our affiliates, officers, employees and agents undertake any obligation to review, update or confirm expectations or estimates or to release any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release. Further information on these and other factors that could affect our financial results is included in filings we have made and will make with the U.S. Securities and Exchange Commission from time to time.
i Fee related earnings, or FRE, is a metric to monitor the baseline performance of, and trends in, our business, in a manner that does not include performance fees or investment income. We calculate FRE as operating profit less (a) net revenue from realized performance fees, less (b) net revenue from unrealized performance fees, plus (c) compensation allocated in relation to performance fees.
ii FRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full year values are calculated as the sum of the last three quarters.
iii Other financial results include financial income and expenses related to strategic transactions. Interest expenses related to Vinci SPS acquisition of R$3.7 million in the quarter and R$15.5 million for the full year 2023. Net financial expenses related to Ares´ investment income and coupon payment of its preferred shares of R$8.2 million in the quarter and R$8.2 million for the full year 2023.
iv Distributable Earnings is used as a reference point by our board of directors for determining the amount of earnings available to distribute to shareholders as dividends. Distributable Earnings is calculated as profit for the year, less (a) net revenue from unrealized performance fees, plus (b) income taxes from unrealized performance fees, plus (c) compensation allocated in relation to unrealized performance fees, less (d) unrealized gain from GP investment income, less (e) unrealized gain from financial income, plus (f) income taxes on unrealized gain from GP investment income, plus (g) income taxes on unrealized gain from financial income, less (h) contingent consideration (earn-out) gain or loss, plus (i) income taxes on contingent consideration, plus (j) Depreciation and Amortization, plus (k) Stock compensation plan, less (l) income taxes on stock compensation plan, plus (m) non-operational expenses including income tax related to realized expense.
v Non-operational expenses are composed by expenses related to professional services to matters related to acquisitions.
vi Adjusted DE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full year values are calculated as the sum of the last three quarters.
vii Net revenue from Fund Management and Advisory is a measure that we use to assess our ability to generate profits from our fund management and advisory business without measuring for the outcomes from funds above their respective benchmarks. We calculate Net Revenue from Fund Management and Advisory as net revenue from services rendered less (a) net revenue from realized performance fees and less (b) net revenue from unrealized performance fees.
viii FRE Margin is calculated as FRE over total net management and advisory fees.
ix “Performance Related Earnings”, or “PRE”, is a performance measure that we use to assess our ability to generate profits from revenue that relies on outcome from funds above their respective benchmarks. We calculate PRE as operating profit, less (a) net revenue from fund management and advisory, less (b) operating expenses, such as segment personnel, G&A, corporate center and bonus related to management and advisory.
x Segment Distributable Earnings is Vinci Partners’ segment profitability measure used to make operating decisions and assess performance across the company’s five segments (Private Markets, Liquid Strategies, Investment Products and Solutions, Retirement Services and Corporate Advisory). Segment Distributable Earnings is calculated as operating profit less (a) net revenue from unrealized performance fees, plus (b) compensation allocated in relation to unrealized performance fees, plus (c) realized gain from GP investment income.
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xi Adjusted DE Margin is calculated as adjusted DE over the sum of management and advisory fee related revenues, realized performance revenue, realized GP investment income and realized financial income, net of revenue tax.
xii “Total compensation and benefits” are the result of the profit sharing paid to our employees as (a) bonus compensation related to management advisory and (b) performance-based compensation.
xiii “Other Items” comprise the income/(loss) generated by contingent consideration adjustment and financial expenses related to acquisitions.
xiv “Contingent consideration adjustment related to acquisitions”, after-tax, reflects the change in the earn out’s fair value to be paid in 2027. On December 29, 2023, Vinci revaluated the fair value of the obligation based on the economic conditions at the date, resulting in an increase of the contingent consideration fair value. The variation was recognized as a loss in the financial result.
xv “Segment personnel expenses” are composed of the salary-part compensation paid to employees and partners of our funds’ management teams.
xvi “Corporate center expenses” are composed by the salary-compensation paid to employees and partners of our support teams and other expenses, such as research, risk, legal & compliance, investor relations, operations and ESG.
xvii “Other general and administrative expenses” is made up of third-party expenses, depreciation and amortization, travel and representation, marketing expenses, administrative fees, non-operating taxes, third-party consultants’ fees, such as legal and accounting, and office consumables.
xviii “GP investment income” is income from proprietary investments made by us in our own Private Markets’ funds, used as GP Commitments.
xix “Financial income” is income generated through the investments made with our cash and cash equivalents in cash and bank deposits, certificate of deposits and proprietary investments in our Liquid Funds from our public equities and hedge funds’ segments.
xx “Leasing expenses” include costs from the company’s sub-leasing activities.
xxi “Share Based Plan” is the composition of two benefit programs: SOP (Stok Option Plan) and RSU (Restricted Stock Units). In Stock Option Plan the company concedes to an employee the option to buy stock in the company with stated fixed price. The Restricted Stock Units concedes company shares to an employee through a vesting plan in which RSUs are assigned a fair market value.
xxii Income taxes is comprised of taxes on our corporate income tax and social contribution taxes. We are taxed on an actual taxable profit regime, while part of our subsidiaries is taxed based on deemed profit.
xxiii AUM” refers to assets under management. Our assets under management equal the sum of: (1) the fair market value of the investments held by funds plus the capital that we are entitled to call from investors in those funds pursuant to the terms of their capital commitments to those funds (plus the fair market value of co-investments arranged by us that were made or could be made by limited partners of our corporate private equity funds and portfolio companies of such funds); (2) the net asset value of our public equity funds, hedge funds and closed-end mutual funds; and (3) the amount of capital raised for our credit funds. AUM includes double counting related to funds from one segment that invest in funds from another segment. Those cases occur mainly due to (a) fund of funds of investment products and solutions segment, and (b) investment funds in general that invest part of their cash in credit segment and hedge fund segment funds to maintain liquidity and provide for returns on cash. Such amounts are eliminated on consolidation. The bylaws of the relevant funds prohibit double-charging fees on AUM across segments. Therefore, while our AUM by segment may double-count funds from one segment that invest in funds from another segment, the revenues for any given segment do not include revenue in respect of assets managed by another segment, which means there are no intercompany eliminations on revenues in our results of operations.
xxiv NAV is the net asset value of each fund. For listed vehicles, the NAV represents the Market valuation of the fund ex-dividends.
xxv CDI is an average of interbank overnight rates in Brazil (daily average for the period).
xxvi Atlas strategy includes the funds Atlas FIC FIM, Atlas Institucional FIC FIM and Vinci Potenza.
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xxvii Total Return Strategy includes the funds Total Return FIC FIM and Total Return Institucional FIA.
xxviii IPCA is a broad consumer price index measured by the IBGE.
xxix IMAB is composed by government bonds indexed to IPCA. IMAB 5 also comprises government bonds indexed to IPCA but only the one´s with up to 5 Years duration.
xxx Mosaico Strategy includes the funds Mosaico, Mosaico Institucional and Mosaico Advisory FIA.
xxxi IBOV is the Brazilian stock market most relevant index.
xxxii Valorem Strategy includes the funds Valorem FIM and Valorem Advisory.
xxxiii Equilibrio Strategy comprises IP&S Family of pension plans.
xxxiv IFIX is an index composed by listed REITs in the brazilian stock exchange.
xxxv If IMAB 5 Average is: a) less or equal to 2%, X=3% per year; b) between 2%-4%, X= Average IMAB 5+1% per year; c) Between 4%-5%, X=5% per year; d) greater or equal to 5%, X= IMAB 5 Average.
xxxvi Track record information is presented throughout this release on a pro forma basis and in local currency, excluding PIPE investments, a strategy that will be discontinued in VCP III.
xxxvii “MOIC” means multiple on invested capital, a ratio intended to represent how much value an investment has returned, and is calculated as realized value plus unrealized value, divided by the total amount invested, gross of expenses and fees.
xxxviii “IRR” means the internal rate of return, which is a discount rate that makes the net present value of all cash flows equal to zero in a discounted cash flow analysis.
xxxix Total commitments for VCP III include R$1.3 billion in co-investments. Track record presented for the VCP strategy as of 3Q’23, due to fund’s administrator timeline to disclose the quarterly markup of the fund, which are presented as of 4Q’23.
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xl Track record for VIR strategy is presented as of 3Q’23, due to fund’s administrator timeline to disclose the quarterly markup of the fund.
xli Track record for Vinci SPS strategy is presented as of 4Q’23.
xlii Track record for FIP Infra is presented as of 3Q’23.
xliii Track record for VIAS is presented as of 3Q’23.
xliv Total Commitments for VICC are presented as of 4Q’23.
xlv Track record for VFDL is presented as of 4Q’23.
xlvi Track record for Vinci Credit Infra is presented as of 4Q’23.
xlvii US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 4.9608 as of February 07, 2024, when dividends were approved by our Board of Directors.
xlviii Per Share calculations are based on end of period Participating Common Shares.
xlix Actual dividends per common share are calculated considering the share count as of the applicable record date.
l Per Share calculations are based on end of period Participating Common Shares.
li As of December 29, 2023, Public Float was comprised of 12,510,083 Class A common shares.
lii The remaining capital committed in FIP Infra Transmissão co-investment will not be called by the fund, which is already in divestment period.
liii The remaining capital committed in FIP Infra Transmissão will not be called by the fund, which is already in divestment period.
liv Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000.00 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's subsidiaries adopted this tax regime and the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries.
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Exhibit 99.3
Vinci Partners Investments Ltd.
Consolidated Financial Statements as of December 31, 2023
Report of Independent Registered Public Accounting Firm
To
the Shareholders and Board of Directors of
Vinci Partners Investments Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vinci Partners Investments Ltd. and its subsidiaries (the "Company") as of December 31, 2023 and December 31, 2022, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and December 31, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Rio de Janeiro, February 7, 2024
/s/PricewaterhouseCoopers
Auditores Independentes Ltda.
We have served as the Company's auditor since 2010.
F-2
Vinci Partners Investments Ltd.
Consolidated balance sheets
All amounts in thousands of reais unless otherwise stated
| Assets | Note | 12/31/2023 | 12/31/2022 | |||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 5 | (c) | 660,305 | 136,581 | ||||||||
| Cash and bank deposits | 5 | (c) | 15,896 | 30,108 | ||||||||
| Financial instruments at fair value through profit or loss | 5 | (c) | 173,300 | 106,473 | ||||||||
| Financial instruments at amortized cost | 5 | (c) | 471,109 | - | ||||||||
| Financial instruments at fair value through profit or loss | 5 | (d) | 1,168,355 | 1,243,764 | ||||||||
| Accounts receivable | 5 | (a) | 101,523 | 57,675 | ||||||||
| Sub-leases receivable | 10 | 4,071 | 1,500 | |||||||||
| Taxes recoverable | 2,219 | 1,555 | ||||||||||
| Other assets | 6 | 19,109 | 16,481 | |||||||||
| Total current assets | 1,955,582 | 1,457,556 | ||||||||||
| Non-current assets | ||||||||||||
| Financial instruments at fair value through profit or loss | 5 | (c) | 7,146 | 5,985 | ||||||||
| Accounts receivable | 5 | (a) | 16,638 | 17,298 | ||||||||
| Sub-leases receivable | 10 | 1,467 | 1,343 | |||||||||
| Taxes recoverable | 325 | 3,141 | ||||||||||
| Deferred taxes | 20 | 13,487 | 9,241 | |||||||||
| Other assets | 6 | 19,427 | 1,065 | |||||||||
| 58,490 | 38,073 | |||||||||||
| Property and equipment | 8 | 12,591 | 11,951 | |||||||||
| Right of use – Leases | 10 | 58,308 | 70,136 | |||||||||
| Intangible assets | 9 | 214,748 | 189,238 | |||||||||
| Total non-current assets | 344,137 | 309,398 | ||||||||||
| Total assets | 2,299,719 | 1,766,954 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Vinci Partners Investments Ltd.
Consolidated balance sheet
All amounts in thousands of reais unless otherwise stated
| Liabilities and equity | Note | 12/31/2023 | 12/31/2022 | |||||||||
| Current liabilities | ||||||||||||
| Trade payables | 1,869 | 1,247 | ||||||||||
| Leases | 10 and 5(e) | 24,381 | 24,147 | |||||||||
| Accounts payable | 11 | 6,020 | 7,328 | |||||||||
| Labor and social security obligations | 12 | 101,506 | 87,732 | |||||||||
| Loans and obligations | 14 | 76,722 | 13,168 | |||||||||
| Taxes and contributions payable | 13 | 24,853 | 22,291 | |||||||||
| Total current liabilities | 235,351 | 155,913 | ||||||||||
| Non-current liabilities | ||||||||||||
| Leases | 10 and 5(e) | 48,431 | 62,064 | |||||||||
| Labor and social security obligations | 12 | 5,357 | 2,968 | |||||||||
| Loans and obligations | 14 | 540,369 | 162,122 | |||||||||
| Deferred taxes | 20 | 3,883 | 8,340 | |||||||||
| Retirement plans liabilities | 15 | 85,554 | - | |||||||||
| Total non-current liabilities | 683,594 | 235,494 | ||||||||||
| Total liabilities | 918,946 | 391,407 | ||||||||||
| Equity | 16 | |||||||||||
| Share capital | 15 | 15 | ||||||||||
| Additional paid-in capital | 1,408,438 | 1,382,038 | ||||||||||
| Treasury shares | 16 | (f) | (172,863 | ) | (114,978 | ) | ||||||
| Retained earnings | 111,444 | 81,310 | ||||||||||
| Other reserves | 31,876 | 24,149 | ||||||||||
| 1,378,910 | 1,372,534 | |||||||||||
| Non-controlling interests in the equity of subsidiaries | 7 | (b) | 1,864 | 3,013 | ||||||||
| Total equity | 1,380,774 | 1,375,547 | ||||||||||
| Total liabilities and equity | 2,299,719 | 1,766,954 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Vinci Partners Investments Ltd.
Consolidated statement of income
Years ended December 31
All amounts in thousands of reais unless otherwise stated
| Statements of Income | Note | 2023 | 2022 | 2021 | ||||||||||||
| Net revenue from services rendered | 17 | 454,420 | 408,095 | 465,458 | ||||||||||||
| General and administrative expenses | 18 | (252,264 | ) | (229,349 | ) | (222,998 | ) | |||||||||
| Operating profit | 202,156 | 178,746 | 242,460 | |||||||||||||
| Finance income | 19 | 121,809 | 112,133 | 28,511 | ||||||||||||
| Finance expenses | 19 | (54,580 | ) | (19,065 | ) | (13,129 | ) | |||||||||
| Finance profit, net | 67,229 | 93,068 | 15,382 | |||||||||||||
| Profit before income taxes | 269,385 | 271,814 | 257,842 | |||||||||||||
| Income taxes | 20 | (49,926 | ) | (52,413 | ) | (49,227 | ) | |||||||||
| Profit for the year | 219,459 | 219,401 | 208,615 | |||||||||||||
| Attributable to the shareholders of the parent company | 220,608 | 219,417 | 208,615 | |||||||||||||
| Attributable to non-controlling interests | (1,149 | ) | (16 | ) | - | |||||||||||
| Basic earnings per share/quota in Brazilian Reais | 16 | (g) | 4.02 | 3.89 | 3.77 | |||||||||||
| Diluted earnings per share/quota in Brazilian Reais | 16 | (g) | 3.85 | 3.84 | 3.77 | |||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Vinci Partners Investments Ltd.
Consolidated statement of comprehensive income
Years ended December 31
All amounts in thousands of reais unless otherwise stated
| 2023 | 2022 | 2021 | ||||||||||
| Profit for the year | 219,459 | 219,401 | 208,615 | |||||||||
| Other comprehensive income | ||||||||||||
| Items that may be reclassified to profit or loss: | ||||||||||||
| Foreign exchange variance of investees | ||||||||||||
| Vinci Capital Partners GP Limited | (10 | ) | 2 | 14 | ||||||||
| Vinci USA LLC | (2,352 | ) | (781 | ) | 988 | |||||||
| Vinci Capital Partners F III GP Limited | (60 | ) | (20 | ) | 5 | |||||||
| GGN GP LLC | (7 | ) | (9 | ) | 13 | |||||||
| VICC Infra GP LLC | (27 | ) | 15 | - | ||||||||
| Vinci Capital Partners IV GP LLC | (147 | ) | (34 | ) | - | |||||||
| Total comprehensive income for the year | 216,856 | 218,574 | 209,635 | |||||||||
| Attributable to: | ||||||||||||
| Shareholders of the parent company | 218,005 | 218,590 | 209,635 | |||||||||
| Non-controlling interests | (1,149 | ) | (16 | ) | - | |||||||
| 216,856 | 218,574 | 209,635 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Vinci Partners Investments Ltd.
Consolidated statement of changes in equity
All amounts in thousands of Brazilian Reais, unless otherwise stated
| Share | Additional | Retained | Other | Treasury | Non-controlling | Total | ||||||||||||||||||||||||||
| capital | Paid-in capital | earnings | reserves | shares | Total | interests | equity | |||||||||||||||||||||||||
| At December 31, 2020 | 8,730 | 0 | 0 | 10,491 | 0 | 19,221 | 15 | 19,236 | ||||||||||||||||||||||||
| Profit for the year | 208,615 | 208,615 | 0 | 208,615 | ||||||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||
| Foreign exchange variation of investee located abroad | 1,021 | 1,021 | (1 | ) | 1,020 | |||||||||||||||||||||||||||
| Corporate Reorganization | (8,719 | ) | 8,719 | 0 | 0 | |||||||||||||||||||||||||||
| Proceeds from the issuance of shares | 4 | 1,392,370 | 1,392,374 | 29 | 1,392,403 | |||||||||||||||||||||||||||
| Transactions costs from proceeds from the issuance of shares | (19,051 | ) | (19,051 | ) | (19,051 | ) | ||||||||||||||||||||||||||
| Share based payments | 3,670 | 3,670 | 3,670 | |||||||||||||||||||||||||||||
| Treasury quotas bought | (52,585 | ) | (52,585 | ) | (52,585 | ) | ||||||||||||||||||||||||||
| Treasury quotas canceled | 0 | 0 | ||||||||||||||||||||||||||||||
| Allocation of profit: | ||||||||||||||||||||||||||||||||
| Dividends | (138,432 | ) | (138,432 | ) | (138,432 | ) | ||||||||||||||||||||||||||
| At December 31, 2021 | 15 | 1,382,038 | 70,183 | 15,182 | (52,585 | ) | 1,414,833 | 43 | 1,414,876 | |||||||||||||||||||||||
| Profit for the year | 219,417 | 219,417 | (16 | ) | 219,401 | |||||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||
| Foreign exchange variation of investee located abroad | (827 | ) | (827 | ) | (2 | ) | (829 | ) | ||||||||||||||||||||||||
| Proceeds from the issuance of shares, net from capital returned | 0 | 2,988 | 2,988 | |||||||||||||||||||||||||||||
| Share based payments | 9,794 | 9,794 | 9,794 | |||||||||||||||||||||||||||||
| Treasury quotas bought | (62,393 | ) | (62,393 | ) | (62,393 | ) | ||||||||||||||||||||||||||
| Allocation of profit: | ||||||||||||||||||||||||||||||||
| Dividends | (208,290 | ) | (208,290 | ) | (208,290 | ) | ||||||||||||||||||||||||||
| At December 31, 2022 | 15 | 1,382,038 | 81,310 | 24,149 | (114,978 | ) | 1,372,534 | 3,013 | 1,375,547 | |||||||||||||||||||||||
| Profit for the year | - | 220,608 | - | - | 220,608 | (1,149 | ) | 219,459 | ||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||
| Foreign exchange variation of investee located abroad | - | - | (2,603 | ) | - | (2,603 | ) | - | (2,603 | ) | ||||||||||||||||||||||
| Fair value option of convertible preferred shares | - | 34,141 | - | - | - | 34,141 | - | 34,141 | ||||||||||||||||||||||||
| Transactions costs from the issuance of preferred shares | - | (1,958 | ) | - | - | - | (1,958 | ) | - | (1,958 | ) | |||||||||||||||||||||
| Share based payments | - | (2,783 | ) | - | 10,330 | 2,783 | 10,330 | - | 10,330 | |||||||||||||||||||||||
| Treasury shares bought, net of shares sold | - | (3,000 | ) | - | - | (60,668 | ) | (63,668 | ) | - | (63,668 | ) | ||||||||||||||||||||
| Allocation of profit: | ||||||||||||||||||||||||||||||||
| Dividends | - | (190,474 | ) | - | - | (190,474 | ) | - | (190,474 | ) | ||||||||||||||||||||||
| At December 31, 2023 | 15 | 1,408,438 | 111,444 | 31,876 | (172,863 | ) | 1,378,910 | 1,864 | 1,380,774 | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
Vinci Partners Investments Ltd.
Consolidated statement of cash flows
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| Notes | 2023 | 2022 | 2021 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||||
| Profit before taxation | 269,385 | 271,814 | 257,842 | |||||||||||||
| Adjustments to reconcile net income to cash flows from operations: | ||||||||||||||||
| Depreciation and amortization | 18 | 19,780 | 15,786 | 13,729 | ||||||||||||
| Investment income of financial instruments at fair value through profit or loss | (97,703 | ) | (86,047 | ) | (24,787 | ) | ||||||||||
| Net foreign exchange on liabilities at amortized cost | 14 | (i) | (16,513 | ) | - | - | ||||||||||
| Interest expense on loans and obligations | 19 | 23,654 | 5,804 | - | ||||||||||||
| Gain/loss on remeasurement of contingent consideration | 19 | 15,872 | (13,971 | ) | - | |||||||||||
| Allowance for expected credit loss | 18 | - | (4 | ) | 21 | |||||||||||
| Share based payments | 18 | 14,967 | 14,276 | 3,670 | ||||||||||||
| Financial result on lease agreements | 19 | 9,109 | 8,969 | 12,084 | ||||||||||||
| 238,551 | 216,627 | 262,559 | ||||||||||||||
| Changes in assets and liabilities | ||||||||||||||||
| Accounts receivables | (43,187 | ) | (10,064 | ) | 11,819 | |||||||||||
| Taxes recoverable | 2,152 | (1,389 | ) | (1,992 | ) | |||||||||||
| Other assets | (20,990 | ) | (11,286 | ) | 7,716 | |||||||||||
| Trade payables | 622 | 392 | (208 | ) | ||||||||||||
| Accounts payable | (1,575 | ) | 156 | (667 | ) | |||||||||||
| Labor and social security obligations | 11,527 | (21,349 | ) | 65,575 | ||||||||||||
| Taxes and contributions payable | (780 | ) | (1,705 | ) | 1,105 | |||||||||||
| Contribution for retirements plans | 82,734 | - | - | |||||||||||||
| 30,503 | (45,245 | ) | 83,348 | |||||||||||||
| Cash generated from operations | 269,054 | 171,382 | 345,907 | |||||||||||||
| Income tax paid | (54,875 | ) | (53,482 | ) | (57,215 | ) | ||||||||||
| Net cash inflow from operating activities | 214,179 | 117,900 | 288,692 | |||||||||||||
| Cash flows from investing activities | ||||||||||||||||
| Payment for acquisition of subsidiary | 7 | - | (80,000 | ) | - | |||||||||||
| Cash and cash equivalent increased from business combination | 7 | - | 497 | - | ||||||||||||
| Purchases of property and equipment and additions to intangible assets | (36,738 | ) | (6,476 | ) | (3,091 | ) | ||||||||||
| Acquisition of non-controlling quotas | - | - | - | |||||||||||||
| Purchase of financial instruments at fair value through profit or loss | (281,012 | ) | (341,157 | ) | (1,420,834 | ) | ||||||||||
| Sales of financial instruments at fair value through profit or loss | 455,781 | 558,974 | 103,953 | |||||||||||||
| Net cash (outflow) from investing activities | 138,031 | 131,838 | (1,319,972 | ) | ||||||||||||
| Cash flows from financing activities | ||||||||||||||||
| Proceeds from the issuance of shares/quotas | 16 | (a) | - | - | 1,319,403 | |||||||||||
| Capital increase (decrease) of non-controlling interests in the equity of subsidiaries | - | 2,988 | - | |||||||||||||
| Interest payments of loans and obligations | 14 | (ii) | (11,975 | ) | - | - | ||||||||||
| Principal payments of loans and obligations | 14 | (ii) | (8,889 | ) | - | - | ||||||||||
| Transactions costs paid | 16 | (d) | - | - | (19,051 | ) | ||||||||||
| Treasury shares acquisition paid, net of treasury shares sold | 16 | (f) | (62,769 | ) | (63,353 | ) | (50,831 | ) | ||||||||
| Lease payments, net of sublease received | (23,044 | ) | (22,848 | ) | (18,534 | ) | ||||||||||
| Loans and obligations acquisitions | - | 79,026 | - | |||||||||||||
| Issuance of convertible preferred shares | 16 | (d) | 471,835 | |||||||||||||
| Dividends paid | 16 | (e) | (190,138 | ) | (211,320 | ) | (255,963 | ) | ||||||||
| Net cash (outflow) from financing activities | 175,020 | (215,507 | ) | 1,048,024 | ||||||||||||
| Net increase in cash and cash equivalents | 527,230 | 34,231 | 16,744 | |||||||||||||
| Cash and cash equivalents at the beginning of the year | 5 | (c) | 136,581 | 102,569 | 83,449 | |||||||||||
| Foreign exchange variation of cash and cash equivalents in subsidiary | (3,506 | ) | (219 | ) | 2,376 | |||||||||||
| Cash and cash equivalents at the end of the year | 5 | (c) | 660,305 | 136,581 | 102,569 | |||||||||||
Non-cash financing activities
Dividends declared and not yet paid until December 31, 2023 and 2022 were R$ 3.791 (Note 11) and R$ 4,363, respectively.
Consideration payable and contingent consideration (earn-out) as of December 31, 2023 and 2022 were 64,370 and 48,499 (Note 14), respectively. Vinci expects to pay the contingent consideration through its equity instruments. However, accordingly to IAS 32, the earn-out obligation was classified as a financial liability.
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 1 | Operations |
Vinci Partners Investments Ltd. is an exempted company incorporated in the Cayman Islands (referred to herein as "Entity", "Group" or "Vinci"). The Group started its activities in September 2009. Its objective is to hold investments in the capital of other companies as partner (shareholder). The investees are specialized in rendering alternative investment management, asset allocation, financial advisory services and retirement services. The actual shareholders of the Entity are disclosed in Note 16.
The registered office of the Entity is at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands.
Corporate reorganization
Prior to the consummation of the initial public offering, on January 15, 2021, the individual partners of Vinci Partners Investimentos Ltda. (“Vinci Investimentos”) contributed the entirety of their quotas into the Entity.
In return for this contribution the Entity issued (1) new Class B common shares to Gilberto Sayão da Silva and (2) new Class A common shares to all other shareholders of Vinci Investimentos in exchange for the quotas of Vinci Investimentos contributed to the Entity, or the Contribution, exchanging 1 quota into 4.77 common shares. Until the Contribution, the Entity did not commence operations and had only nominal assets and liabilities and no material contingent liabilities or commitments.
Initial Public Offering (IPO)
On January 28, 2021, Vinci announced the price of its public offering of the Class A common shares being offered 13,873,474 Class A common shares. Prior to this offering, there has been no public market for our Class A common shares. The initial public offering price per Class A common share was US$18.00.
The Class A common shares have been approved for listing on the Nasdaq Global Select Market, or Nasdaq, under the symbol "VINP." Vinci has two classes of common shares: Class A common shares and Class B common shares.
Class B common shares carry rights that are identical to the Class A common shares, except that (1) holders of Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share; (2) holders of Class B common shares may convert Class B common shares at any time into Class A common shares on a share-for-share basis; (3) holders of Class B common shares are entitled to preemptive rights in the event that additional Class A common shares are issued in order to maintain their proportional ownership interest; and (4) Class B common shares shall not be listed on any stock exchange and will not be publicly traded.
On February 1, 2021, Vinci announced the closing of its initial public offering. The net proceeds from the offering were US$ 232 million (R$ 1,266,926), after deducting underwriting discounts and commissions. The Class A common shares began trading on the Nasdaq Global Select Market on January 28, 2021, under the ticker symbol "VINP."
In connection with the offering, Vinci has granted the underwriters a 30-day option to purchase up to an additional 2,081,021 Class A common shares at the initial public offering price, less underwriting discounts and commissions. On February 8, 2021, Vinci received net proceeds of US$ 23 million (R$ 125,448) in respect of the additional 1,398,014 Class A common shares issued.
Vinci Partners Ltd used the net proceeds from the offering to fund investments in its own products alongside its investors. The Entity continues to pursue opportunities for strategic transactions and for other general corporate purposes.
F-9
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 2 | Summary of significant accounting policies |
| 2.1 | Basis of preparation and presentation |
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards).
The consolidated financial statements have been prepared on a historical cost basis, except for the financial instruments assets that have been measured at fair value.
The consolidated financial statements are presented in Brazilian reais (“R$”), and all amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand currency units unless otherwise stated.
As mentioned in the Note 1, the Group carried out a corporate reorganization in order to prepare the structure for the Initial Public Offering of its shares. As result, the partners of Vinci Partners Investimentos Ltda. contributed their quotas to Vinci Partners Investments Ltd in January 2021. Vinci Partners Investments Ltd is currently the entity which is registered with the Securities Exchange Commission and for which these financial statements are presented. The comparative historical figures presented in these consolidated financial statements are the ones of the predecessor entity, Vinci Partners Investimentos Ltda.
New and revised accounting standards
The Group has not changed its accounting policies as a result of new standards and amendments effective for the first time for periods commencing on or after 1 January 2023.
The issuance of these consolidated financial statements was authorized by the Entity's management on February 7th, 2024.
| (a) | Consolidated financial statements |
Vinci operates as an asset management firm. The Group focuses on private markets, liquid strategies, financial advisory, investment products and solutions, and retirement services, which comprise the main activity of the Group.
The Group controls an entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Also, the Entity holds interest in subsidiaries whose main purpose and activities are providing services that relate to the Entity’s activities. Therefore, the Entity consolidates these subsidiaries.
Ownership interest in subsidiaries on December 31, 2023 and 2022 are as follows:
F-10
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| Interest - % | ||||||||
| 12/31/2023 | 12/31/2022 | |||||||
| Subsidiaries | ||||||||
| Vinci Partners Investimentos Ltda. | 100 | 100 | ||||||
| Vinci Assessoria financeira Ltda. (1) | 100 | 100 | ||||||
| Vinci Equities Gestora de Recursos Ltda. (1) | 100 | 100 | ||||||
| Vinci Gestora de Recursos Ltda. (1) | 100 | 100 | ||||||
| Vinci Capital Gestora de Recursos Ltda. (1) | 100 | 100 | ||||||
| Vinci Soluções de Investimentos Ltda. | 100 | 100 | ||||||
| Vinci Real Estate Gestora de Recursos Ltda. (1) | 100 | 100 | ||||||
| Vinci Capital Partners GP Limited. | 100 | 100 | ||||||
| Vinci Partners USA LLC | 100 | 100 | ||||||
| Vinci GGN Gestão de Recursos Ltda. (1) | 100 | 100 | ||||||
| Vinci Infraestrutura Gestora de Recursos Ltda. | 100 | 100 | ||||||
| Vinci Capital Partners GP III Limited. | 100 | 100 | ||||||
| GGN GP LLC | 100 | 100 | ||||||
| Amalfi Empreendimentos e Participações S.A. | - | 100 | ||||||
| Vinci APM Ltda. (1) | 100 | 100 | ||||||
| Vinci Monalisa FIM Crédito Privado IE (2) | 100 | 100 | ||||||
| Vinci Asset Allocation Ltda. | 75 | 75 | ||||||
| VICC Infra GP LLC | 100 | 100 | ||||||
| Vinci Capital Partners IV GP LLC | 100 | 100 | ||||||
| Vinci Holding Securitária Ltda. | 85 | 85 | ||||||
| Vinci Vida e Previdência S.A. (3) | 85 | 85 | ||||||
| SPS Capital Gestão de Recursos Ltda. (4) | 100 | 100 | ||||||
| VICC Infra GP (Lux), S.A.R.L. | 100 | - | ||||||
| (1) | Minority interest represents less than 0.001%. |
| (2) | Under the terms of IFRS 10, the Entity does not consolidate its investment in Vinci Monalisa FIM Crédito Privado IE and measures at fair value through profit or loss in accordance with IFRS 9. |
| (3) | Vinci has an indirect interest at Vinci Vida e Previdência of 85% through its subsidiary Vinci Holding Securitária Ltda., which holds 100% of ownership interest at Vinci Vida e Previdência. Vinci Vida e Previdência commenced its operations in April 2023. |
| (4) | On 16 August 2022, Vinci Soluções de Investimentos Ltda. acquired 90% of the issued share capital of SPS Capital Gestão de Recursos Ltda. The acquisition gives to Vinci Soluções de Investimentos the right of 100% on the economic interest of SPS Gestão de Recursos Ltda. |
Subsidiaries are all entities (including structured entities) over which the Group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated balance sheet respectively.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in another reserve within equity attributable to owners of Entity.
When the Group ceases to consolidate an investment or account for it under equity method because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
| 2.2 | Segment reporting |
In 2021, the members of the Board of Directors of Vinci Partners Investments Ltd were appointed. Under the supervision of the Board of Directors, the CEO is responsible for the decision-making process related to executive themes, resources allocation and strategic decisions of Vinci.
The strategic decisions of the Group comprise five distinct business segments: (i) Private market strategies, (ii) Liquid strategies, (iii) Investment products and solutions; (iv) Financial advisory and (v) Vinci retirement services (Note 20).
Strategies were sorted out within business segments following technical and strategic similarities among funds’ attributes, such as management and performance fee structures, liquidity constraints, targeted returns and investor profile.
F-11
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 2.3 | Foreign currency translation |
Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The financial statements are presented in thousands of Brazilian reais, which is the Entity's functional currency and also its presentation currency. All amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand currency units unless otherwise stated.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are recognized in profit or loss.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
| ● | assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; |
| ● | income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and |
| ● | all resulting exchange differences are recognized in other comprehensive income. |
| 2.4 | Cash and cash equivalents |
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, bank deposits held with financial institutions, other short-term, highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
| 2.5 | Financial assets |
(i) Classification
The Group classifies its financial assets in the following measurement categories:
∙ those to be measured subsequently at fair value (either through OCI or through profit or loss), and
∙ those to be measured at amortized cost.
The classification depends on the Entity's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). Vinci has no financial assets classified as FVOCI as of December 31, 2023, and 2022.
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognized on trade date, being the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
F-12
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
(iv) Impairment
The group assesses on a forward-looking basis the expected credit loss associated with its debt instruments carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For accounts receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
| 2.6 | Accounts receivables |
Receivables are amounts due for financial advisory services and for investment fund management services rendered in the ordinary course of Group's business. Except for unrealized performance fee, collection is expected in less than one year; therefore, they are classified as current assets.
Accounts receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. They are subsequently measured at amortized cost using the effective interest method, less allowance for expected credit losses. See note 5 for further information about the Group's accounting for accounts receivables.
The Group uses a provision matrix to calculate expected credit losses, for accounts receivables When applicable, the Group calibrates the matrix to adjust the historical credit loss experience with forward-looking information. The assessment of the correlation between historical observed default rates, forecast economic conditions and expected credit losses is a significant estimate. The amount of expected credit losses is sensitive to changes in circumstances and of forecast economic conditions. Our historical credit loss experience and forecast of economic conditions may also not be representative of customer's actual default in the future. The information about the expected credit losses on our accounts receivables and contract assets is disclosed in note 5.
| 2.7 | Intangible assets |
Goodwill
Goodwill is measured as described in note 2.16. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes.
Management Contracts
Management contracts acquired in a business combination are recognized at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortization and impairment losses. Refer to note 9(c) for further details.
Placement Agent
Placement Agent comprises costs incurred by Vinci in connection to agreements with investments placement agents, relating to funds raised from investors in funds managed by the Group.
These amounts are amortized based on the estimated duration of the related funds. When a Fund has an undefined useful life (Perpetual funds), Placement agent costs are amortized within 10 years. In case of an early liquidation of the funds, the
F-13
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
amortization period is adjusted, or if there is an indication of impairment, an impairment evaluation is performed and recognized, if necessary.
Placement Agent costs will generate future economic benefits to Vinci through the Funds managed by the Group.
Computer software
Computer software licenses purchased are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives of five years.
Costs associated with maintaining computer software programs are recognized as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognized as intangible assets when the following criteria are met:
| ● | It is technically feasible to complete the software product so that it will be available for use. |
| ● | Management intends to complete the software product and use or sell it. |
| ● | There is an ability to use or sell the software product. |
| ● | It can be demonstrated how the software product will generate probable future economic benefits. |
| ● | Adequate technical, financial and other resources to complete the development and to use or sell the software product are available. |
| ● | The expenditure attributable to the software product during its development can be reliably measured. |
Directly attributable costs that are capitalized as part of the software product include the software development employee costs and an appropriate portion of applicable overheads.
Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use. Refer to note 9 for details about amortization methods and periods used by the Group for intangible assets.
Other development expenditures that do not meet these criteria are recognized as an expense as incurred.
Development costs previously recorded as an expense are not recognized as an asset in a subsequent period.
Intangible assets with definite life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. During the years ended December 31, 2023 and 2022 management do not identify any event that could impact the recoverable value of the intangible assets.
| 2.8 | Property and equipment |
Property and equipment are stated at cost, less depreciation calculated on the straight-line method, based on the estimated economic useful lives of the assets, using the following annual rates: furniture and fixtures, telephony equipment and facilities have a useful life of 10 years; IT equipment has a useful life 5 years.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets to retained earnings.
F-14
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 2.9 | Leases |
The Group leases various offices. Rental contracts are typically made for fixed periods of 5 years to 10 years but may have extension options.
Extension and termination options are included in a number of property leases across the Group. These are used to maximize operational flexibility in terms of managing the assets used in the Group's operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The following factors are normally the most relevant:
| - | If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not terminate). |
| - | If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain to extend (or not terminate). |
| - | Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset. |
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
| 2.10 | Accounts payables |
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
| 2.11 | Provisions |
Provisions for legal claims are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.
| 2.12 | Profit-sharing and bonus plans |
The Group recognizes a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the profit attributable to the company's shareholders after certain adjustments. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation. The provision is recognized in labor and social security obligations and the related expense in general and administrative expense.
| 2.13 | Income taxes |
The income tax and social contribution expenses for the year comprise current taxes. Taxes on income are recognized in the
F-15
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
statement of income.
The current income tax and social contribution are calculated on the basis of the tax laws enacted by the balance sheet date. Management periodically evaluates positions taken by the Entity in income tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
The Entity recognizes liabilities for situations where it is probable that additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax assets and liabilities in the period in which such determination is made.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
As permitted by tax legislation, certain of the Entity's investees opted for the deemed profit regime, according to which the income tax calculation basis is 32% of revenues from service rendering and 100% of finance income, on which regular rates of 15% are levied, plus an additional 10% for income tax over a certain limit and 9% for social contribution. The Entity opted for the actual taxable profit regime. The entities that opted for the deemed profit regime evaluates their income tax and social contribution expenses based on the services revenue and realized investment income recognized on monthly basis.
| 2.14 | Capital |
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Entity;
F-16
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
• by the weighted average number of shares outstanding during the financial year, adjusted for bonus elements in shares issued during the year and excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
• the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and;
• the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
| 2.15 | Revenue recognition |
According to IFRS 15, revenue is recognized when the performance obligation is satisfied. Revenue comprises the fair value of the consideration received or receivable for financial advisory and investment fund management services rendered in the ordinary course of the Group's activities. Revenue is shown net of taxes, returns, rebates and discounts.
Management fees and performance fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an Entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. See Note 22 "Segment Reporting" for a disaggregated presentation of revenues from contracts with customers, as follows:
| (a) | Management fees |
Management fees are recognized in the period when the corresponding services are rendered, which generally consist of a percentage on the net asset value of each investment fund being managed. These customer contracts require Vinci to provide investment management services, which represents a performance obligation that the Group satisfies over time. Management fee percentages currently range between 0.05% and 2.93% (2022: between 0.05% and 2.93%).
| (b) | Performance fees |
Brazilian regulation set forth certain minimum criteria for the performance fee structures of fund managed by Vinci, as described below:
• Performance fee must be assessed based on a verifiable index, the benchmark, obtained from an independent source, and compatible with the corresponding fund investment policy.
• Performance fee may not be calculated at a percentage lower than 100.0% of the index.
• The performance fee cannot be charged in a period less than 6 months (except for private asset funds).
• The performance fee shall be calculated based on net asset value, including management fees and all other expenses and may consider any distribution for shareholders in the calculation.
As a multi-asset-class asset management firm, Vinci manages a number of funds with different performance fee structures that may be classified in three main categories: (1) liquid funds, (2) closed-ended funds focused on value generation, and (3) closed-ended funds focused on income generation.
For liquid funds such as equity funds, credit funds and hedge funds, we charge performance fees usually every semester based on the performance of the fund above the benchmark or when the customer makes a redemption and a performance fee is due. For hedge funds and credit funds, performance fees are generally benchmarked to the Interbank Deposit Certificate index, or CDI, and for inflation-indexed funds, performance fees are generally indexed to the Amplified Consumer Price Index, or IPCA, plus a fixed real interest rate or a market index such as the Market Index Sub-Index B from the Brazilian Financial and Capital Markets Association, or IMA-B. For equity funds, the benchmark varies according to the strategy. For our "long only" and "long-biased" strategies, performance fees are assessed mainly to the IBOVESPA index. Other funds and strategies can be addressed to other index, as for example, IDIV index, SMLL index and Brazil ETF Index.
For closed-ended funds focused on value generation, such as the private equity and infrastructure funds, we follow a European-style waterfall structure and the threshold and carry is different between the Brazilian funds and the foreign investor funds. For
F-17
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
the Brazilian funds we use a threshold generally indexed to IPCA plus an interest rate, which can vary from 6% to 8%. For the foreign investor funds, the threshold is an 8% return in U.S. dollars and the carried interest is on excess return over the capital contribution.
For the closed-ended funds focused on income such as real estate funds, we charge a performance fee every semester over the excess return between the amount distributed to investors and the benchmark of the relevant fund, which can vary according to the fund strategy.
The performance revenue is determined and recorded at the end of the reporting period and are not subject to clawback once paid.
The Entity recognizes the performance revenue according to IFRS 15. Unrealized performance fees are recognized only when is highly probable that the revenue will not be reversed in the income statement.
| (c) | Financial advisory services |
Financial advisory fees are related to the service provided by the Group mainly on the support of mergers and acquisitions transactions. Substantially, the fees are recognized when the transaction is concluded, based on success fees.
| 2.16 | Business Combinations |
Business combinations are accounted for using the acquisition method of accounting. The acquisition date is the date on which the Group effectively obtains control of the acquiree. The purchase consideration of the acquisition of a subsidiary as of its relevant acquisition date, comprises of fair values of the assets transferred, liabilities incurred to the former owners of the acquired business, and fair value of any assets or liability resulting from a contingent consideration arrangement.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. The excess of the consideration transferred, the amount of any non-controlling interest in the acquired entity, and the identifiable net assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase.
Any goodwill that arises is tested annually for impairment. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (shall not exceed one year from the acquisition date) about facts and circumstances which existed at the acquisition date.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured, and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
| 2.17 | Loans and obligations |
Loans and obligations are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
Convertible preferred shares, which are redeemable on a specific date, are classified as liabilities. The dividends on these preference shares are recognized in profit or loss as finance expenses.
The fair value of the liability portion of a convertible preferred share is determined using a market interest rate for an equivalent non-convertible financial instrument. This amount is recorded as a liability on an amortized cost basis until extinguished on conversion or maturity of the instrument. The remainder of the proceeds is allocated to the conversion option. This is recognized and included in shareholders’ equity.
F-18
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 3 | Accounting estimates and judgments |
The Entity makes estimates and assumptions concerning the future, based on historical experience and other factors, including expectations of future events. The resulting accounting estimates will, by definition, seldom equal the related actual results. The main estimations and assumptions made by the Entity is included as follow:
• Allowance of expected credit losses of accounts receivable.
• Provision for profit sharing.
• Consolidation of subsidiaries.
• Fair value measurement of financial assets.
• Provision for contingent liabilities.
• Impairment for goodwill and other intangible assets.
• Fair value measurement of contingent consideration.
• Fair value of share-based payments.
• Financial evaluation of compound instruments.
| 4 | Financial risk management |
The main risks related to the financial instruments are credit risk, market risk, and liquidity risk, as defined below. The management of such risks involves various levels in the Entity and comprehends a number of policies and strategies. The Group's risk management focuses on the unpredictability of financial markets and seeks to mitigate potential adverse impacts on the Group's financial performance.
| 4.1 | Financial risk factors |
This note explains the Group's exposure to financial risks and how these risks could affect the Group's future financial performance. Current year profit and loss information has been included where relevant to add further context.
The Group's risk management is predominantly controlled by a risk assessment department under process and controls approved by the management. The management provides written process and controls for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
| (a) | Credit risk |
Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortized cost, at fair value through profit or loss (FVTPL), and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables.
(i) Risk management
As of December 31, 2023, and 2022 the expected credit losses are considered immaterial due to the short maturities of the deposits and the credit quality of the main counterparty, which have a credit rating AAA evaluated by Fitch Ratings. The Entity has not suffered any losses from cash and cash equivalents since inception. Vinci's treasury review expected credit losses on a regular basis.
(ii) Impairment of financial assets
The Group has the following types of financial assets that are subject to the expected credit loss model:
• Accounts receivable.
• Debt investments carried at amortized cost.
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the expected impairment loss was immaterial.
| (b) | Market risk |
(i) Foreign exchange risk
F-19
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
At the reporting date, the carrying amount value of the Group’s financial assets and liabilities exposed to US Dollars were as follows:
| Balance sheet | 12/31/2023 | 12/31/2022 | ||||||
| Cash and cash equivalents | 486,977 | 30,087 | ||||||
| Financial instruments at fair value through profit or loss | 606 | - | ||||||
| Accounts receivable | 5,927 | 13,823 | ||||||
| Other receivables | 2,381 | 1,618 | ||||||
| Current assets | 495,891 | 45,528 | ||||||
| Other receivables | (29 | ) | - | |||||
| Leases, property and equipment | 2,684 | 3,596 | ||||||
| Non-current assets | 2,655 | 3,596 | ||||||
| Trade payables | 589 | 1,657 | ||||||
| Loans and obligations | 6,993 | - | ||||||
| Labor and social security obligations | 5,485 | 7,295 | ||||||
| Current liabilities | 13,067 | 8,952 | ||||||
| Payables to related parties | - | 608 | ||||||
| Other payables | 242 | - | ||||||
| Loans and obligations | 424,340 | - | ||||||
| Lease | 940 | 1,973 | ||||||
| Non-current liabilities | 425,522 | 2,581 | ||||||
| Net Equity | 59,957 | 37,591 | ||||||
The aggregate net foreign exchange gains/losses recognized in profit or loss were:
| Net foreign exchange result | 12/31/2023 | 12/31/2022 | 12/31/2021 | |||||||||
| Financial revenue | 742 | 2,514 | - | |||||||||
| Financial expense | (775 | ) | (2,986 | ) | (372 | ) | ||||||
| Net foreign exchange result, net | (33 | ) | (472 | ) | (372 | ) | ||||||
The Group operates internationally and is exposed to foreign exchange risk, exclusively the US dollar.
Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the functional currency of the Group.
(ii) Interest rate risk
The Group's profit or loss is sensitive to higher/lower interest income from cash equivalents and fixed income funds as a result of changes in interest rates.
(iii) Price risk
The Group's exposure to investment securities price risk arises from investments held by the group and classified in the balance sheet at fair value through profit or loss (note 5).
To manage its price risk arising from investments in investment securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
The majority of the Group's financial investments that are exposed to significant price risk are the private equity investments and investments held by Monalisa FIM. Note 5(d) demonstrates the sensitivity analyses of impact for the assets held by the Group.
| (c) | Liquidity risk |
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. At the end of the reporting period the Group held bank deposits and certificates of deposits of R$ 189,196 (12/31/2022 – R$ 136,581) that are expected to readily generate cash inflows for managing liquidity risk.
F-20
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the years presented.
| 12/31/2023 | 12/31/2022 | |||||||
| Cash and cash equivalents | 660,305 | 136,581 | ||||||
| Financial instruments at fair value through profit or loss (i) | 1,168,355 | 1,243,764 | ||||||
| Trade payables | (1,869 | ) | (1,247 | ) | ||||
| Labor and social security obligations | (106,863 | ) | (90,700 | ) | ||||
| Accounts payable | (6,020 | ) | (7,328 | ) | ||||
| Lease liabilities | (72,812 | ) | (86,211 | ) | ||||
| Convertible preferred shares | (431,334 | ) | - | |||||
| Commercial notes | (73,189 | ) | (83,212 | ) | ||||
| Consideration payable | (48,199 | ) | (43,579 | ) | ||||
| Contingent consideration | (64,370 | ) | (48,499 | ) | ||||
| Retirement plans liabilities | (85,554 | ) | - | |||||
| Net debt | 938,450 | 1,019,569 | ||||||
| (i) | Comprised of liquid and illiquid investments. Liquid investments are current assets that are traded in an active market. Illiquid investments are comprised of assets that trade infrequently. |
| Financial liabilities | Other assets | |||||||||||||||||||||||
| Payables | Loans and obligations | Retirement plans | Lease liabilities | Cash and cash equivalents | Financial instruments at fair value through profit or loss | |||||||||||||||||||
| Net debt as at | ||||||||||||||||||||||||
| December 31, 2021 | (117,807 | ) | - | - | (85,544 | ) | 102,569 | 1,372,926 | ||||||||||||||||
| Cash flow and dividends provision | 18,532 | - | - | 24,440 | 26,599 | (215,046 | ) | |||||||||||||||||
| Fair value adjustment | - | - | - | - | 7,413 | 85,884 | ||||||||||||||||||
| Addition and finance expenses accrual | - | (175,290 | ) | - | (25,197 | ) | - | - | ||||||||||||||||
| Foreign exchange adjustments | - | - | - | - | - | - | ||||||||||||||||||
| Other changes (i) | - | - | - | 90 | - | - | ||||||||||||||||||
| December 31, 2022 | (99,275 | ) | (175,290 | ) | - | (86,211 | ) | 136,581 | 1,243,764 | |||||||||||||||
| Cash flow and dividends provision | (15,477 | ) | 20,864 | (82,734 | ) | 25,830 | 522,328 | (172,629 | ) | |||||||||||||||
| Fair value adjustment | - | (28,686 | ) | (2,820 | ) | (2,737 | ) | 1,396 | 97,220 | |||||||||||||||
| Addition and finance expenses accrual | - | (450,493 | ) | - | - | - | ||||||||||||||||||
| Foreign exchange adjustments | - | 16,513 | - | - | - | |||||||||||||||||||
| Other changes (i) | - | - | (9,694 | ) | - | - | ||||||||||||||||||
| December 31, 2023 | (114,752 | ) | (617,092 | ) | (85,554 | ) | (72,812 | ) | 660,305 | 1,168,355 | ||||||||||||||
| (i) | Other changes include non-cash movements, including Cumulative Translation Adjustments (“CTA”) which are being presented as in other comprehensive income statements. |
F-21
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
Maturities of financial liabilities
Except for the retirement plans liabilities, the tables below analyze the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for significant financial liabilities.
| Contractual maturities of financial liabilities at December 31, 2023 | Less than 1 year | Between 1 and 3 years | Over 3 years | Total | Carrying amount | |||||||||||||||
| Trade payables | (1,869 | ) | - | - | (1,869 | ) | (1,869 | ) | ||||||||||||
| Labor and social security obligations | (101,505 | ) | (2,458 | ) | (2,900 | ) | (106,863 | ) | (106,863 | ) | ||||||||||
| Lease liabilities | (24,381 | ) | (32,786 | ) | (36,017 | ) | (93,184 | ) | (72,812 | ) | ||||||||||
| Accounts payable | (6,020 | ) | - | - | (6,020 | ) | (6,020 | ) | ||||||||||||
| Loans and financing | (114,390 | ) | (182,178 | ) | (783,572 | ) | (1,080,140 | ) | (617,092 | ) | ||||||||||
| Total | (248,165 | ) | (217,422 | ) | (822,489 | ) | (1,288,076 | ) | (804,656 | ) | ||||||||||
| Contractual maturities of financial liabilities at December 31, 2022 | Less than 1 year | Between 1 and 3 years | Over 3 years | Total | Carrying amount | |||||||||||||||
| Trade payables | (1,247 | ) | - | - | (1,247 | ) | (1,247 | ) | ||||||||||||
| Labor and social security obligations | (87,732 | ) | (2,968 | ) | - | (90,700 | ) | (90,700 | ) | |||||||||||
| Lease liabilities | (24,147 | ) | (45,878 | ) | (43,356 | ) | (113,381 | ) | (86,211 | ) | ||||||||||
| Accounts payable | (7,328 | ) | - | - | (7,328 | ) | (7,328 | ) | ||||||||||||
| Loans and financing | (20,876 | ) | (104,761 | ) | (90,890 | ) | (216,527 | ) | (175,290 | ) | ||||||||||
| Total | (141,330 | ) | (153,607 | ) | (134,246 | ) | (429,183 | ) | (360,776 | ) | ||||||||||
The amounts disclosed in the table below are the lease liabilities contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
| Contractual maturities of | Total | Carrying amount | ||||||||||||||||||||
| financial liabilities | Rio de Janeiro | São Paulo | NY Office | contractual | non-current | |||||||||||||||||
| At 31 December 2023 | Office (BM336) | Office | (3rd Avenue) | cash flows | liabilities | |||||||||||||||||
| 2025 | (16,549 | ) | (5,013 | ) | - | (21,532 | ) | (18,764 | ) | |||||||||||||
| 2026 | (10,051 | ) | (1,253 | ) | - | (11,304 | ) | (9,510 | ) | |||||||||||||
| 2027 | (10,051 | ) | - | - | (10,051 | ) | (6,535 | ) | ||||||||||||||
| 2028 | (10,051 | ) | - | - | (10,051 | ) | (5,786 | ) | ||||||||||||||
| 2029 | (10,051 | ) | - | - | (10,051 | ) | (5,123 | ) | ||||||||||||||
| 2030 | (5,863 | ) | - | - | (5,863 | ) | (2,713 | ) | ||||||||||||||
| Total | (62,616 | ) | (6,266 | ) | (68,852 | ) | (48,431 | ) | ||||||||||||||
| Contractual maturities of | Total | Carrying amount | ||||||||||||||||||||
| financial liabilities | Rio de Janeiro | São Paulo | NY Office | contractual | non-current | |||||||||||||||||
| At 31 December 2022 | Office (BM336) | Office | (3rd Avenue) | cash flows | liabilities | |||||||||||||||||
| 2024 | (20,110 | ) | (5,013 | ) | (1,044 | ) | (26,167 | ) | (21,681 | ) | ||||||||||||
| 2025 | (15,742 | ) | (5,013 | ) | - | (20,755 | ) | (15,186 | ) | |||||||||||||
| 2026 | (9,625 | ) | (1,253 | ) | - | (10,878 | ) | (8,108 | ) | |||||||||||||
| 2027 | (9,625 | ) | - | - | (9,625 | ) | (5,541 | ) | ||||||||||||||
| 2028 | (9,625 | ) | - | - | (9,625 | ) | (4,905 | ) | ||||||||||||||
| 2029 | (9,625 | ) | - | - | (9,625 | ) | (4,343 | ) | ||||||||||||||
| 2030 | (5,615 | ) | - | - | (5,615 | ) | (2,300 | ) | ||||||||||||||
| Total | (79,967 | ) | (11,279 | ) | (1,044 | ) | (92,290 | ) | (62,064 | ) | ||||||||||||
F-22
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| (d) | Sensitivity analysis |
The Group monitors and evaluates the market risk related to its financial investments portfolio periodically to assess its volatility, through changes that can significantly impact its financial results. Considering a period of one day and the historical results over the past year, the following Value at Risk (VAR) parameters were used:
| ● | 0.26% (or R$ 3.2 million) of the financial investment portfolio for a confidence interval of 95% on December 31, 2023 (0.18% or R$ 2.4 million on December 31, 2022). |
| ● | 0.53% (or R$ 6.8 million) of the financial investment portfolio for a confidence interval of 99% on December 31, 2023 (0.30% or R$ 3.95 million on December 31, 2022). |
Additionally, the Group evaluated the financial investment portfolio on December 31, 2023 and 2022, through stress scenarios according to the main risk factors related to its investments, as presented in the table below:
| Financial Impact (**) | |||||
| Risk Factor | Variation in | Stress Scenario (*) | 12/31/2023 | 12/31/2022 | |
| Current inflation | Inflation index | -100bps | 12.3 | 1.6 | |
| Exchange traded real estate funds | Share prices | -10% | (14.4) | (17.9) | |
| Brazilian stock prices | Share prices | -10% | (9.3) | (5.8) | |
| Fixed-rate offshore rates | US yield curve | -100bps | (34.9) | (1.8) | |
| Foreign exchange rate | Foreign exchange rates | 10% (***) | (0.4) | 4.1 | |
| Domestic base overnight rate | Domestic base overnight rate | -100bps | (6.0) | (6.9) | |
(*) bps - basis point (1bps = 0,01%)
(**) In millions of Brazilian reais
(***) Brazilian reais devaluation against US Dollars
An equal change in the opposite direction of the stress scenario would have affected the financial investment portfolio by a similar amount, on the basis that all other variables remain constant.
| 5 | Financial instruments |
This note provides information about the group's financial instruments, including:
- an overview of all financial instruments held by the Group
- specific information about each type of financial instrument
- accounting policies
- information about determining the fair value of the instruments, including judgements and estimation uncertainty involved.
The Group classifies its financial assets in the following measurement categories:
| ● | those measured at fair value or through profit or loss, and |
| ● | those measured at amortized cost. |
The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded in profit or loss.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognized on trade date, being the date on which the group commits to
F-23
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
The Group holds the following financial instruments:
| Financial assets | Section | 12/31/2023 | 12/31/2022 | |||||||||
| Accounts receivable | (a) | 118,161 | 74,973 | |||||||||
| Other financial assets at amortized cost | (b) | 5,519 | 6,356 | |||||||||
| Cash and cash equivalents | (c) | 660,305 | 136,581 | |||||||||
| Financial assets at fair value through profit or loss (FVPL) | (d) | 1,175,501 | 1,249,749 | |||||||||
| 1,959,486 | 1,467,659 | |||||||||||
| Financial liabilities | ||||||||||||
| Liabilities at amortized cost | (e) | 114,752 | 99,275 | |||||||||
| Lease liabilities | (e) | 72,812 | 86,211 | |||||||||
| Loans and financing | (e) | 617,091 | 175,290 | |||||||||
| 804,655 | 360,776 | |||||||||||
The Group's exposure to risks associated with the financial instruments is discussed in Note 4. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.
| a) | Accounts receivable |
| Current assets | 12/31/2023 | 12/31/2022 | ||||||
| Accounts receivable from contracts with customers | 101,673 | 57,841 | ||||||
| Loss allowance | (150 | ) | (166 | ) | ||||
| Non-current assets | ||||||||
| Accounts receivable from contracts with customers | 16,638 | 17,298 | ||||||
| 118,161 | 74,973 | |||||||
Accounts receivables are recognized initially at the amount of consideration that is unconditional and are not submitted to any financial components. They are subsequently measured at amortized cost, less loss allowance.
Current accounts receivable are amounts due from customers for services performed in the ordinary course of business. They are generally due for settlement within 30 days and are therefore classified as current in its entirety. Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.
Non-current accounts receivable comprised by unrealized performance fees and other receivables. Unrealized performance fees are recognized when the management, with accumulated experience, estimate that it is highly probable that a significant reversal will not occur. Vinci expects the unrealized performance fees will be received during 2024. However, since its realization is subject to uncertainty, the balance is presented as a non-current receivable.
Monthly, the Entity evaluates the revenues and receipts for each customer (Funds). Additionally, on quarterly basis Vinci analyzes the outstanding balances to calculate expected credit losses and the exposure to credit risk from receivables are reviewed. Accounts receivable allowance for expected credit losses are presented in general and administrative expense.
F-24
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
The loss allowances for accounts receivable as of December 31, 2023 and 2022 reconcile to the opening loss allowances as follows:
| 12/31/2023 | 12/31/2022 | |||||||
| Opening loss allowance on January 1 | (166 | ) | (170 | ) | ||||
| Decrease in accounts receivable allowance recognized in profit or loss | 16 | 4 | ||||||
| Closing loss allowance on December 31 | (150 | ) | (166 | ) | ||||
Accounts receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments. The Entity has not written any amount of accounts receivable during 2023 and 2022. Subsequent recoveries of amounts previously written off are credited against the same line item.
| b) | Other financial assets at amortized cost |
Financial assets at amortized cost refer to the following debt instruments:
| 12/31/2023 | 12/31/2022 | |||||||
| Employees loans (Note 6 (i)) | 5,519 | 6,356 | ||||||
These amounts generally arise from transactions outside the usual operating activities of the group. Interest may be charged at commercial rates and collateral is not normally obtained.
All the financial assets at amortized cost are denominated in Brazilian currency units. As a result, there is no exposure to foreign currency risk. There is also no exposure to price risk as the investments will be held to maturity.
See note 6 for more details.
| c) | Cash and cash equivalents |
| 12/31/2023 | 12/31/2022 | |||||||
| Cash and bank deposits | 15,896 | 30,108 | ||||||
| Financial instruments at fair value through profit or loss (i) | 173,300 | 106,473 | ||||||
| Financial instruments at amortized cost (ii) | 471,109 | - | ||||||
| 660,305 | 136,581 | |||||||
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, bank deposits held at financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(i) Comprises certificates of deposits issued by Banco Bradesco (credit rating AAA evaluated by Fitch Ratings) with an interest rate of 100.5% of CDI (interbank deposit rate). The certificates are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
| (ii) | Comprised of US Treasury Bills with maturity date in March 2024. |
| d) | Financial assets at fair value through profit or loss |
The group classifies the following financial assets at fair value through profit or loss (FVPL):
| - | Mutual funds; |
| - | Private markets funds. |
F-25
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
Financial assets measured at FVPL include the following categories:
| 12/31/2023 | 12/31/2022 | |||||||
| Current assets | 1,168,355 | 1,243,764 | ||||||
| Mutual funds | 1,168,355 | 1,243,764 | ||||||
| Non-current assets | 7,146 | 5,985 | ||||||
| Private markets funds | 7,146 | 5,985 | ||||||
The following table demonstrate the funds invested included in each category mentioned above.
| Mutual funds | ||||||||
| 12/31/2023 | 12/31/2022 | |||||||
| Vinci Monalisa FIM Crédito Privado IE (2) | 991,470 | 1,057,547 | ||||||
| Vinci Multiestratégia FIM | 11,642 | 165,339 | ||||||
| Vinci International Master Portfolio SPC - Reflation SP | 606 | 12,824 | ||||||
| Vinci Institucional FI RF Referenciado DI | 62,687 | - | ||||||
| Vinci Reservas Técnicas FI RF DI | 2,199 | - | ||||||
| Retirement services investment funds (1) | 85,554 | - | ||||||
| FI Vinci Renda Fixa CP | 14,197 | 8,054 | ||||||
| 1,168,355 | 1,243,764 | |||||||
| Private markets | ||||||||
| 12/31/2023 | 12/31/2022 | |||||||
| Vinci Capital Partners III Feeder FIP Multiestratégia | 4,262 | 3,351 | ||||||
| Nordeste III FIP Multiestratégia | 2,884 | 2,634 | ||||||
| Total Private markets funds | 7,146 | 5,985 | ||||||
(1) These funds refer to the financial products as part of the Company's retirement plans services. See Note 15 for further information.
(2) Vinci Monalisa FIM Crédito Privado IE (“Vinci Monalisa”) is a mutual fund incorporated in Brazil and wholly owned by the Company. Vinci Monalisa’s balances are the following:
| 12/31/2023 | 12/31/2022 | |||||||
| Net Asset Value | 991,470 | 1,057,547 | ||||||
| Real estate funds | 234,245 | 220,617 | ||||||
| Mutual funds | 535,430 | 743,479 | ||||||
| Private equity funds | 136,810 | 70,367 | ||||||
| Other assets/liabilities | 84,985 | 23,084 | ||||||
The Vinci Monalisa’s portfolio is comprised of liquid and illiquid investee funds with different redemption criteria. Over 76% of its investments are liquid and may be redeemed and 24% are non-redeemable investments. The following tables demonstrate the funds invested by Vinci Monalisa:
Mutual funds
Vinci Monalisa holds investments in several mutual funds to seek profitability through investments in various classes of financial assets such as fixed income assets, Brazilian government bonds, public equities, derivatives financial instruments, investment funds and other short-term liquid securities. As December 31, 2023 and 2022, Vinci Monalisa holds R$ 535,430 and R$ 743,479 of investments in mutual funds, respectively, which are distributed in the following classification:
F-26
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 12/31/2023 | 12/31/2022 | |||||||
| Mutual Funds’ classification | ||||||||
| Interest and foreign exchange (a) | 84.93 | % | 72.79 | % | ||||
| Unrestricted investments (b) | - | 11.83 | % | |||||
| Foreign investments (c) | 4.56 | % | 6.20 | % | ||||
| Macro (d) | 3.96 | % | 3.16 | % | ||||
| Specific strategy (e) | 6.55 | % | 6.02 | % | ||||
| 100.00 | % | 100.00 | % | |||||
| (a) | Funds that seek long-term returns via investments in fixed-income assets, admitting strategies that imply interest risk, price index risk and foreign currency risk. |
| (b) | Funds without commitment to concentration in any specific strategy. |
| (c) | Funds that invest in financial assets abroad in a portion greater than 40% of their net asset values. |
| (d) | Funds that operate in various asset classes (fixed income, variable income, foreign exchange, etc.), with investment strategies based on medium and long-term macroeconomic scenarios. |
| (e) | Funds that adopt an investment strategy that involves specific risks, such as commodities, futures of index, etc. |
| Real Estate funds | ||||||||
| 12/31/2023 | 12/31/2022 | |||||||
| Vinci Credit Securities FII (i) | 70,049 | 75,720 | ||||||
| Vinci Imóveis Urbanos FII (ii) | 53,884 | 53,346 | ||||||
| Vinci Offices FII (iii) | 34,639 | 43,163 | ||||||
| Vinci Fulwood DL FII (iv) | 52,849 | 25,521 | ||||||
| Other real estate funds (v) | 22,824 | 22,867 | ||||||
| 234,245 | 220,617 | |||||||
(i) The fund invests in real estate receivable certificates, bonds and other real estate assets;
(ii) The fund’s investment strategy is to acquire properties in the retail, general markets, health and education sectors located in large urban centers that, in the Manager's view, generate long-term value;
(iii) The fund invests in controlling corporate buildings, mostly leased, which, in the Manager's view, generate value for the properties.
(iv) The fund’s strategy is to provide its shareholders with profitability resulting from the sale of properties, as well as the eventual commercial exploitation of properties. The Fund may carry out renovations or improvements to properties with the aim of enhancing the returns arising from their commercial exploitation or eventual commercialization.
(v) Comprised of funds that allocate their capital in diversified portfolios of shares of real estate funds, real estate receivable certificates, bonds, securities and other real estate assets.
| Private markets funds | ||||||||
| 12/31/2023 | 12/31/2022 | |||||||
| Vinci Impacto Ret IV FIP Multiestratégia | 4,687 | 2,925 | ||||||
| Vinci Infra Coinvestimento I FIP - Infraestrutura (i) | 10,290 | 10,924 | ||||||
| Vinci Infra Água e Saneamento Strategy FIP - Infraestrutura | 50,698 | 33,946 | ||||||
| Vinci Crédito Infra Institucional Fundo Incentivado - Infraestrutura | 46,844 | 7,584 | ||||||
| Other funds | 24,291 | 14,988 | ||||||
| Total private markets funds | 136,810 | 70,367 | ||||||
(i) Fund focused on the acquisition of shares, share bonuses subscriptions, debentures convertible or not into shares, or other securities issued by publicly-held, publicly-traded or private corporations that develop new projects of infrastructure in the development sector and operations of electric power transmission lines, participating in the decision-making process of the investee, with effective influence. As December 31, 2023 and 2022, the fund held investment in Água Vermelha Transmissora de Energia S.A.
During the year, the following gains were recognized in profit or loss:
| 12/31/2023 | 12/31/2022 | 12/31/2021 | ||||||||||
| Fair value gains on investments at FVPL recognized in finance income | 110,363 | 94,174 | 27,982 | |||||||||
F-27
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| e) | Financial liabilities |
| 12/31/2023 | 12/31/2022 | |||||||
| Current | 210,498 | 133,622 | ||||||
| Trade payables | 1,869 | 1,247 | ||||||
| Labor and social security obligations (Note 12) | 101,506 | 87,732 | ||||||
| Loans and obligations (Note 14) | 76,722 | 13,168 | ||||||
| Lease liabilities | 24,381 | 24,147 | ||||||
| Accounts payable (Note 11) | 6,020 | 7,328 | ||||||
| Non-current | 594,157 | 227,154 | ||||||
| Lease liabilities | 48,431 | 62,064 | ||||||
| Labor and social security obligations (Note 12) | 5,357 | 2,968 | ||||||
| Loans and obligations (Note 14) | 540,369 | 162,122 | ||||||
| 804,655 | 360,776 | |||||||
| (a) | Fair value hierarchy |
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are recognized and measured at fair value through profit or loss in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level follows underneath the table.
| On December 31, 2023 | ||||||||||||||||
| Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Financial Assets | ||||||||||||||||
| Certificate of deposits | - | 173,300 | - | 173,300 | ||||||||||||
| Mutual funds | - | 1,168,355 | - | 1,168,355 | ||||||||||||
| Private equity funds | - | - | 7,146 | 7,146 | ||||||||||||
| Total Financial Assets | - | 1,341,655 | 7,146 | 1,348,801 | ||||||||||||
| On December 31, 2022 | ||||||||||||||||
| Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Financial Assets | ||||||||||||||||
| Certificate of deposits | - | 106,473 | - | 106,473 | ||||||||||||
| Mutual funds | - | 1,243,764 | - | 1,243,764 | ||||||||||||
| Private equity funds | - | - | 5,985 | 5,985 | ||||||||||||
| Total Financial Assets | - | 1,350,237 | 5,985 | 1,356,222 | ||||||||||||
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded real estate funds) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Vinci Monalisa is a financial instrument classified as level 2. Its portfolio is comprised of items that could be classified as level 1, level 2 and level 3, in the amount of R$ 151,645, R$ 542,358 and R$ 212,482, respectively (2022: R$ 172,228, R$ 743,479 and R$ 111,623, respectively).
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
| (b) | Valuation techniques used to determine fair values |
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices
- for level 3 financial instruments – discounted cash flow analysis.
All non-listed assets fair value estimates are included in level 2, except for private equity funds, where the fair values have been determined based on fair value appraisals for fund's investments, performed by the fund's management (Vinci Capital and Vinci Infra) or a third party hired by the Fund’s Administrator. The most part of the level 3 financial instruments evaluation uses discount cash flows techniques to evaluate the fair value of the Fund's investments. The appraisals performed by a third party are reviewed by Vinci or its subsidiaries (fund's management).
F-28
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| (c) | Fair value measurements using significant unobservable inputs (level 3) |
The following table presents the changes in level 3 items for the period/year ended December 31, 2023 and December 31, 2022:
| Fair Value | ||||
| Opening balance January 1, 2022 | 8,593 | |||
| Capital deployment | 1,229 | |||
| Sales and distributions (a) | (4,008 | ) | ||
| Gain recognized in finance income | 171 | |||
| Closing balance December 31, 2022 | 5,985 | |||
| Capital deployment | 947 | |||
| Sales and distributions | (247 | ) | ||
| Gain recognized in finance income | 461 | |||
| Closing balance December 31, 2023 | 7,146 | |||
| (a) | In 2022, Vinci Infra Transmissão FIP – Infraestrutura was transferred to Vinci Monalisa. |
F-29
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 6 | Other assets |
| 12/31/2023 | 12/31/2022 | |||||||
| Employees loans (i) | 5,519 | 6,356 | ||||||
| Sundry advances | 152 | 192 | ||||||
| Advances to projects in progress (ii) | 12,771 | 9,774 | ||||||
| Other prepayments | 319 | 155 | ||||||
| Related parties’ receivables (iii) | 4 | 253 | ||||||
| Guarantee deposits (iv) | 494 | 523 | ||||||
| Receivables from employees (v) | 18,820 | - | ||||||
| Sublease receivables | 224 | - | ||||||
| Others | 233 | 293 | ||||||
| 38,536 | 17,546 | |||||||
| Current | 19,109 | 16,481 | ||||||
| Non-current | 19,427 | 1,065 | ||||||
| 38,536 | 17,546 | |||||||
| (i) | Refers to amounts receivable from employees. |
| (ii) | Refers to costs incurred by projects related to funds administered by Vinci, that are initially paid by the Group and subsequently reimbursed. |
| (iii) | Refers to an intercompany transaction. See Note 21 (b) for more details. |
| (iv) | Refers to the security deposit of a lease. |
| (v) | Refers to an intercompany transaction. See Note 21 (d) for more details. |
F-30
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 7 | Investments |
| (a) | Business Combination |
| (i) | Summary of acquisition |
On 16 August 2022, Vinci Soluções de Investimentos Ltda., a wholly owned subsidiary of Vinci, acquired 90% of the issued share capital of SPS Capital Gestão de Recursos Ltda (“SPS”), a leading independent alternative asset manager focused on the Special Situations segment in Brazil.
Details of the purchase consideration, the net assets acquired, and goodwill are as follows:
| Cash paid | 80,000 | |||
| Consideration payable – Note 14 (iii) | 41,962 | |||
| Contingent consideration (Earn-out) – Note 14 (iv) | 62,470 | |||
| Total purchase consideration | 184,432 |
The assets and liabilities evaluated at fair value at the acquisition date was recognized as follows:
| Cash and cash equivalents | 497 | |||
| Accounts receivable | 1,222 | |||
| Taxes recoverable | 27 | |||
| Other assets | 56 | |||
| Property and equipment | 170 | |||
| Trade payables | (24 | ) | ||
| Labor and social security obligations | (1,267 | ) | ||
| Taxes and contributions payable | (588 | ) | ||
| Management contracts (*) | 22,049 | |||
| Net identifiable assets acquired | 22,142 | |||
| Goodwill | 162,290 | |||
| Net assets acquired | 184,432 |
(*)The valuation technique used for measuring the fair value of Management contracts, as a separately identified intangible assets, was MEEM (Multi-Period Excess Earnings).
Contingent Consideration (Earn-out)
F-31
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
In the event that certain pre-determined fundraising and incremental management fee is achieved for the years ended until December 31, 2026, an additional consideration in VINP’s Class A common shares through an earnout structure will be paid in 2027, up to a maximum number of 1.7 million shares.
| (b) | Non-controlling interests (NCI) |
Set out below is summarized financial information for each subsidiary that has non-controlling interests. The amounts disclosed for each subsidiary are before inter-company eliminations.
| Vinci Asset Allocation | Vinci Holding Securitária | Total | ||||||||||||||||||||||
| 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | |||||||||||||||||||
| Summarized Balance Sheet | ||||||||||||||||||||||||
| Current assets | 232 | - | 100,873 | 18,322 | 101,105 | 18,322 | ||||||||||||||||||
| Current liabilities | (707 | ) | (1 | ) | (2,816 | ) | (601 | ) | (3,523 | ) | (602 | ) | ||||||||||||
| Current net assets | (475 | ) | (1 | ) | 98,057 | 17,721 | 97,582 | 17,720 | ||||||||||||||||
| Non-current assets | 601 | 601 | 13,549 | 3,345 | 14,150 | 3,946 | ||||||||||||||||||
| Non-current liabilities | (1,550 | ) | (732 | ) | (96,805 | ) | (759 | ) | (98,355 | ) | (1,491 | ) | ||||||||||||
| Non-current net assets | (949 | ) | (131 | ) | (83,256 | ) | 2,586 | (84,205 | ) | 2,455 | ||||||||||||||
| Net assets | (1,424 | ) | (132 | ) | 14,801 | 20,307 | 13,377 | 20,175 | ||||||||||||||||
| Accumulated NCI | (356 | ) | (33 | ) | 2,220 | 3,046 | 1,864 | 3,013 | ||||||||||||||||
F-32
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| Summarized statement | Vinci Asset Allocation | Vinci Holding Securitária | Vinci Int'l Real Estate | Total | ||||||||||||||||||||||||
| of comprehensive income | 12/31/2023 | 12/31/2022 | 12/31/2023 | 12/31/2022 | 12/31/2022 | 12/31/2023 | 12/31/2022 | |||||||||||||||||||||
| Revenue | 90 | - | 74 | - | 90 | 164 | 90 | |||||||||||||||||||||
| Profit for the period | (1,292 | ) | (131 | ) | (5,505 | ) | 107 | - | (6,797 | ) | 69 | |||||||||||||||||
| Total comprehensive income | (1,292 | ) | (131 | ) | (5,505 | ) | 107 | - | (6,797 | ) | 69 | |||||||||||||||||
| Profit/(loss) allocated to NCI | (323 | ) | (32 | ) | (826 | ) | 16 | - | (1,149 | ) | (16 | ) | ||||||||||||||||
F-33
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 8 | Property and equipment |
| 12/31/2023 | ||||||||||||||||||||||||
Furniture and fittings stuffs | Improvements in properties of third parties | Computers and peripherals - improvements | Equipment and tools | Work of arts and others | Total | |||||||||||||||||||
| Cost | ||||||||||||||||||||||||
| At January 1, 2023 | 11,782 | 47,824 | 7,113 | 10,241 | 873 | 77,833 | ||||||||||||||||||
| Acquisitions, net of disposals | 1,076 | 2,574 | 521 | 496 | (82 | ) | 4,585 | |||||||||||||||||
| Foreign Exchange variations of property and equipment abroad | - | (1,435 | ) | - | (412 | ) | - | (1,847 | ) | |||||||||||||||
| At December 31, 2023 | 12,858 | 48,963 | 7,634 | 10,325 | 791 | 80,571 | ||||||||||||||||||
| Accumulated depreciation At January 1, 2023 | (8,473 | ) | (42,188 | ) | (5,707 | ) | (9,514 | ) | - | (65,882 | ) | |||||||||||||
| Depreciation | (830 | ) | (2,447 | ) | (421 | ) | (229 | ) | - | (3,927 | ) | |||||||||||||
| Foreign Exchange variations of property and equipment abroad | 1,430 | - | 399 | - | 1,829 | |||||||||||||||||||
| At December 31, 2023 | (9,303 | ) | (43,205 | ) | (6,128 | ) | (9,344 | ) | - | (67,980 | ) | |||||||||||||
| Net book value | ||||||||||||||||||||||||
| At January 1, 2023 | 3,309 | 5,636 | 1,406 | 727 | 873 | 11,951 | ||||||||||||||||||
| At December 31, 2023 | 3,555 | 5,758 | 1,506 | 981 | 791 | 12,591 | ||||||||||||||||||
| Annual depreciation rate - % | 10 | From 10 to 20 | 20 | 10 | - | - | ||||||||||||||||||
F-34
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 12/31/2022 | ||||||||||||||||||||||||
Furniture and fittings stuffs | Improvements in properties of third parties | Computers and peripherals - improvements | Equipment and tools | Work of arts and others | Total | |||||||||||||||||||
| Cost | ||||||||||||||||||||||||
| At January 1, 2022 | 11,620 | 49,024 | 6,379 | 10,532 | 789 | 78,344 | ||||||||||||||||||
| Aquisitions | 143 | 183 | 586 | 103 | 84 | 1,099 | ||||||||||||||||||
| Assets recognized as a result of SPS acquisition | 19 | - | 148 | 3 | - | 170 | ||||||||||||||||||
| Foreign Exchange variations of property and equipment abroad | - | (1,383 | ) | - | (397 | ) | - | (1,780 | ) | |||||||||||||||
| At December 31, 2022 | 11,782 | 47,824 | 7,113 | 10,241 | 873 | 77,833 | ||||||||||||||||||
| Accumulated depreciation At January 1, 2022 | (7,644 | ) | (41,389 | ) | (5,323 | ) | (9,694 | ) | - | (64,050 | ) | |||||||||||||
| Depreciation | (829 | ) | (2,166 | ) | (384 | ) | (199 | ) | - | (3,578 | ) | |||||||||||||
| Foreign Exchange variations of property and equipment abroad | - | 1,367 | - | 379 | - | 1,746 | ||||||||||||||||||
| At December 31, 2022 | (8,473 | ) | (42,188 | ) | (5,707 | ) | (9,514 | ) | - | (65,882 | ) | |||||||||||||
| Net book value | ||||||||||||||||||||||||
| At January 1, 2022 | 3,976 | 7,635 | 1,056 | 838 | 789 | 14,294 | ||||||||||||||||||
| At December 31, 2022 | 3,309 | 5,636 | 1,406 | 727 | 873 | 11,951 | ||||||||||||||||||
| Annual depreciation rate - % | 10 | From 10 to 20 | 20 | 10 | - | - | ||||||||||||||||||
F-35
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 9 | Intangible assets |
Intangible assets include expenditures with the development of the software, placement agent, management contracts and the goodwill generated by the acquisition of SPS.
The software development comprises mainly products for Risk System and Portfolio Allocation, whose purpose is to evaluate the risk of the funds and to allocate the clients' portfolio and systems and applications which are being developed to support retirement services applications.
The Entity assesses at each reporting date whether there is an indication that an intangible asset may be impaired. If any indication exists, the Entity estimates the asset's recoverable amount. There were no indications of impairment of intangible assets for the year ended December 31, 2023 and 2022.
| 12/31/2023 | ||||||||||||||||||||
| Software development | Placement Agent (a) | Goodwill (b) | Management Contracts (c) | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| At January 1, 2023 | 28,250 | 1,359 | 162,290 | 22,049 | 213,948 | |||||||||||||||
| Additions | 12,684 | 19,469 | - | - | 32,153 | |||||||||||||||
| Foreign exchange variation of intangible assets abroad | (601 | ) | (106 | ) | - | - | (707 | ) | ||||||||||||
| At December 31, 2023 | 40,333 | 20,722 | 162,290 | 22,049 | 245,394 | |||||||||||||||
| Accumulated amortization | ||||||||||||||||||||
| At January 1, 2023 | (23,629 | ) | (65 | ) | - | (1,016 | ) | (24,710 | ) | |||||||||||
| Amortization | (1,636 | ) | (1,863 | ) | - | (3,048 | ) | (6,547 | ) | |||||||||||
| Foreign exchange variation of intangible assets abroad | 579 | 32 | - | 611 | ||||||||||||||||
| At December 31, 2023 | (24,686 | ) | (1,896 | ) | - | (4,064 | ) | (30,646 | ) | |||||||||||
| At January 1, 2023 | 4,621 | 1,294 | 162,290 | 21,033 | 189,238 | |||||||||||||||
| At December 31, 2023 | 15,647 | 18,826 | 162,290 | 17,985 | 214,748 | |||||||||||||||
| Amortization rate (per year) - % | 20 | % | (a) | (b) | (c) | - | ||||||||||||||
(a) Refers to amounts capitalized relating to agreements with investments placement agents relating to funds raised from investors in funds managed by the Group. These amounts are amortized based on the estimated duration of the related funds. When a Fund has an undefined useful life (Perpetual funds), Placement agent costs are amortized
F-36
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
within 10 years. In case of an early liquidation of the funds, the amortization period is adjusted, or if there is an indication of impairment, an impairment evaluation is performed and recognized, if necessary.
(b) Goodwill has an indefinite useful life and are not subject to amortization. Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. At December 31, 2023, goodwill was tested and no provision for impairment losses was identified by Vinci.
Key assumptions to determine the fair value of goodwill include discounted cash flow calculations based on current performance and considering current market indicators listed below. There were no significant changes to assumptions between acquisition and reporting date.
Inputs to determine fair value of Goodwill:
| Annual inflation rate – Brazil | 4% | |
| Discount Rate | 12.5% |
(c) Refers to the purchase price allocated to Fund’s Management Contracts as a result of SPS acquisition. These amounts are amortized based on the duration of the related funds, from September 2022 to December 2030.
Other assets than Goodwill are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
F-37
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 12/31/2022 | ||||||||||||||||||||
| Software development | Placement Agent (a) | Goodwill (b) | Management Contracts (c) | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| At January 1, 2022 | 24,790 | - | - | - | 24,790 | |||||||||||||||
| Additions | 4,018 | 1,359 | - | - | 5,377 | |||||||||||||||
| Assets recognized as a result of SPS acquisition | - | - | 162,290 | 22,049 | 184,339 | |||||||||||||||
| Foreign exchange variation of intangible assets abroad | (558 | ) | - | - | - | (558 | ) | |||||||||||||
| At December 31, 2022 | 28,250 | 1,359 | 162,290 | 22,049 | 213,948 | |||||||||||||||
| Accumulated amortization | ||||||||||||||||||||
| At January 1, 2022 | (23,633 | ) | - | - | - | (23,633 | ) | |||||||||||||
| Annual amortization | (559 | ) | (65 | ) | - | (1,016 | ) | (1,640 | ) | |||||||||||
| Foreign exchange variation of intangible assets abroad | 563 | - | - | - | 563 | |||||||||||||||
| At December 31, 2022 | (23,629 | ) | (65 | ) | - | (1,016 | ) | (24,710 | ) | |||||||||||
| At January 1, 2022 | 1,157 | - | - | - | 1,157 | |||||||||||||||
| At December 30, 2022 | 4,621 | 1,294 | 162,290 | 21,033 | 189,238 | |||||||||||||||
| Amortization rate (per year) - % | 20 | % | (a) | (b) | (c) | - | ||||||||||||||
F-38
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 10 | Leases |
This note provides information for leases where the Group is a lessee. The notes also provide the information of subleases agreements where the Group is a lessor, once part of the assets leased by the Group is subleased to third parties.
| (i) | Amount recognized in the balance sheet |
The balance sheet shows the following amounts relating to leases:
| 12/31/2023 | 12/31/2022 | |||||||
| Sub-lease receivable | ||||||||
| Rio de Janeiro Office - BM 336 | 5,538 | 2,843 | ||||||
| Total | 5,538 | 2,843 | ||||||
| Current | 4,071 | 1,500 | ||||||
| Non-current | 1,467 | 1,343 | ||||||
| Total | 5,538 | 2,843 | ||||||
| Right of use assets | ||||||||
| Rio de Janeiro Office - BM 336 | 48,741 | 55,758 | ||||||
| São Paulo Office – JRA | 8,780 | 12,682 | ||||||
| NY Office - Third Avenue | 787 | 1,696 | ||||||
| Total | 58,308 | 70,136 | ||||||
| Lease liabilities | ||||||||
| Rio de Janeiro Office - BM 336 | (61,051 | ) | (70,538 | ) | ||||
| São Paulo Office – JRA | (10,821 | ) | (13,701 | ) | ||||
| NY Office - Third Avenue | (940 | ) | (1,972 | ) | ||||
| Total | (72,812 | ) | (86,211 | ) | ||||
| Current | (24,381 | ) | (24,147 | ) | ||||
| Non-current | (48,431 | ) | (62,064 | ) | ||||
| Total | (72,812 | ) | (86,211 | ) | ||||
Reductions to the right-of-use assets until December 31, 2023 were R$ 2,045 (additions of R$ 15,838 during 2022 financial year).
F-39
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| (ii) | Amount recorded in the statement of profit or loss |
The statement of profit or loss shows the following amounts relating to leases:
| 2023 | 2022 | 2021 | ||||||||||
| Right of use assets depreciation | (9,686 | ) | (10,800 | ) | (9,812 | ) | ||||||
| Financial expense | (9,809 | ) | (9,359 | ) | (12,281 | ) | ||||||
| (19,495 | ) | (20,159 | ) | (22,093 | ) | |||||||
The total cash outflow for leases in 2023 was R$ 25,830 (R$ 24,440 in 2022 and 21,790 in 2021).
| (i) | The Group’s leasing activities and how these are accounted for. |
The Group leases various offices. Rental contracts are typically made for fixed periods of 5 years to 10 years, but may have extension options as described in (iv) below.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.
For all years presented, the sub-leases were classified as finance leases on a lessor perspective. Therefore, the Group accounts the sub-leases on a lease-by-lease basis, subtracting the right of use assets and recognizing a receivable related to the present value of the receivables of the sub-lease.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
- fixed payments (including in-substance fixed payments), less any lease incentives receivable
- variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
- amounts expected to be payable by the group under residual value guarantees
- the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
- payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
- if possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received
- uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases, which does not have recent third party financing, and
- make adjustments specific to the lease, e.g. term, country, currency and security.
F-40
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
The Group is exposed to potential future increases in variable lease payments based on an index, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
- the amount of the initial measurement of lease liability
- any lease payments made at or before the commencement date less any lease incentives received
- any initial direct costs, and
- restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
| (ii) | Extension and termination options |
Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximize operational flexibility in terms of managing the assets used in the group’s operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.
| 11 | Accounts payable |
| 12/31/2023 | 12/31/2022 | |||||||
| Dividends payable | 3,791 | 4,363 | ||||||
| Treasury shares acquisition | - | 839 | ||||||
| Lease payable – prior month expense | 2,161 | 2,056 | ||||||
| Other payables | 68 | 70 | ||||||
| 6,020 | 7,328 | |||||||
|
12 | Labor and social security obligations |
| 12/31/2023 | 12/31/2022 | |||||||
| Profit sharing | 93,611 | 80,840 | ||||||
| Labor provisions | 13,252 | 9,860 | ||||||
| 106,863 | 90,700 | |||||||
| Current | 101,506 | 87,732 | ||||||
| Non-current | 5,357 | 2,968 | ||||||
Except for the profit sharing related to the unrealized performance fees, the accrual for profits sharing payable on December 31, 2023 was paid in January 2024. Profit sharing is calculated based on the performance review
F-41
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
of each employee plus the area performance, in accordance with an Entity policy. Vinci Management estimated the profit sharing as of December 31, 2023 based on the management and advisory net revenue recognized and the realized performance fee up to December 31, 2023.
Since the second quarter of 2022 labor provisions are being impacted by provisions and social charges related to Restricted Share Units Plan (RSUs). The non-current amount comprises the provisions and social charges for the RSUs which the vesting dates are over than 1 year. Please see note 24 for more details.
| 13 | Taxes and contributions payable |
| 12/31/2023 | 12/31/2022 | |||||||
| Income tax | 14,467 | 13,746 | ||||||
| Social contribution | 5,061 | 4,847 | ||||||
| Social Contribution on revenues (COFINS) | 2,780 | 2,128 | ||||||
| Social Integration Program (PIS) | 606 | 460 | ||||||
| Service tax (ISS) on billing | 1,742 | 856 | ||||||
| Withholding Income Tax (IRRF) deducted from third parties | 103 | 143 | ||||||
| Others | 94 | 111 | ||||||
| 24,853 | 22,291 | |||||||
F-42
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 14 | Loans and obligations |
| 12/31/2023 | 12/31/2022 | |||||||
| Convertible Preferred Shares (i) | 431,333 | - | ||||||
| Commercial Notes (ii) | 73,189 | 83,212 | ||||||
| Consideration payable (iii) | 48,199 | 43,579 | ||||||
| Contingent consideration (iv) | 64,370 | 48,499 | ||||||
| 617,091 | 175,290 | |||||||
| Current | 76,722 | 13,168 | ||||||
| Non-current | 540,369 | 162,122 | ||||||
| (i) | Convertible Preferred Shares |
On October 10, 2023, Vinci and Ares Management Corporation (“Ares”) announced an agreement to form a strategic partnership to accelerate the growth of Vinci's platform in Latin America and to collaborate on distribution, product development and other business opportunities. In connection with the formation of the strategic partnership, an affiliate of Ares invested US$100 million (R$ 500,550) in new Series A Convertible Preferred Shares issued by Vinci.
The Series A Convertible Preferred Shares will be entitled to cumulative dividends payable quarterly in cash at a rate of 8.00% per annum. The dividend rate is subject to increase to 10.00% per annum in the case of certain breaches by the Company of its obligations under the Certificate of Designations.
The Series A Convertible Preferred Shares will be convertible at the option of the holders at any time after the closing of the issuance into Class A Common Shares at an initial conversion rate of 73.5402 Class A Common Shares for each Series A Convertible Preferred Share, which represents an initial conversion price of approximately $13.60 per Class A Common Share.
Under certain conditions, Vinci may redeem, following the dissolution or termination of the strategic partnership with Ares, and prior to the one-year anniversary of such dissolution or termination, for cash all, or, if Ares no longer holds all Series A Convertible Preferred Shares, all of the Series A Convertible Preferred Shares held by Ares and any whole number of Series A Convertible Preferred Shares held by such other holders. On or around October 1, 2033, if not earlier repurchased, redeemed or converted, the Company will redeem, in whole but not in part, all of the outstanding Series A Convertible Preferred Shares for an amount in cash equal to the stated value of the Series A Convertible Preferred Shares
Under the terms of IAS 32, this agreement was evaluated by the Management and classified as a compound instrument, having both a liability and an equity component from the issuer's perspective. Based on it, the component parts were accounted for and presented separately according to their substance. The split was made at issuance and not revised for subsequent changes in market interest rates, share prices, or other event that changes the likelihood that the conversion option will be exercised.
F-43
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
The following table presents the changes in the Convertible Preferred Shares up the year ended December 31, 2023:
| Fair value of the convertible preferred shares, net of transaction costs | 439,651 | |||
| Net foreign exchange loss/(gain) | (16,513 | ) | ||
| Interest expense | 8,195 | |||
| Closing balance December 31, 2023 | 431,333 |
| Current | 6,993 | |||
| Non-current | 424,340 |
On January 1, 2024, the Entity paid the total amount of R$ 6,993 related to the dividends of the series A convertible preferred shares.
| (ii) | Commercial notes |
On August 15, 2022, Vinci Soluções de Investimentos Ltda,. a subsidiary of Vinci, issued 80,000 commercial notes in the total amount of R$ 80,000 (R$ 1,000.00 reais for each commercial note). The commercial notes were subject to public distribution 90 days after the issuing date. The main characteristics of the financial instrument are indicated below:
Term and expiration date: 5 (five) years, ending on August 15, 2027.
Interest rate: 100% of the daily rates of interbank deposits (“DI”) plus a spread of 2.15% on an annual basis.
Amortization: On semi-annually basis, beginning on February 15, 2023.
Commercial Notes comprises a financial liability evaluated at amortized cost. Interest expense is calculated using the effective interest method and is recognized in profit or loss as part of financial expense.
Accordingly, to the terms of the agreement, the Group is committed to be compliant with financial covenants, on an annual basis and beginning on December 31, 2022. The entity was in compliance with the covenants as of December 31, 2023 and 2022.
The following table presents the changes in the Commercial Notes up the period ended December 31, 2023 and December 31, 2022:
| Face value of the notes issued | 80,000 | |||
| (-) Transaction costs | (974 | ) | ||
| Interest expense | 4,186 | |||
| Closing balance December 31, 2022 | 83,212 | |||
| Interest expense | 10,841 | |||
| Interest paid | (11,975 | ) | ||
| Principal paid | (8,889 | ) | ||
| Closing balance December 31, 2023 | 73,189 | |||
| Current | 21,530 | |||
| Non-current | 51,659 |
| (iii) | Consideration payable |
According to Note 7(a), Vinci acquired SPS Capital Gestão de Recursos Ltda on August 16, 2022. As part of the deal, Vinci assumed a financial obligation to be paid on the second anniversary of the closing date. The amount as of December 31, 2023 and December 31, 2022 is R$ 48,199 and R$ 43,579, respectively.
Consideration payable is financial liability evaluated at amortized cost. Interest expense is calculated using the effective interest method and is recognized in profit or loss as part of financial expense.
F-44
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| (iv) | Contingent consideration |
Vinci shall pay an additional consideration in VINP’s Class A shares through an earnout structure to be paid in 2027, up to a maximum number of 1.7 million shares, subject to the achievement of certain fundraising and incremental management fee revenue targets. The amount reflects the fair value of the obligation, based on the terms of the purchase agreement and how the current economic environment is likely to impact it, accordingly to Vinci’s best estimate.
On December 31, 2023, Vinci reevaluated the fair value of the obligation based on the economic conditions at that date, resulting in an increase of the contingent consideration fair value. The variation was recognized as an expense in the financial result in the amount of R$ 15,872 for the year ended December 31, 2023 (revenue of R$ 13,971 for the year ended December 31, 2022).
| 15 | Retirement plans liabilities |
During the year of 2023, the subsidiary Vinci Vida e Previdência S.A. started its retirement services operations. As of December, 2023, active plans are principally accumulation of financial resources through products PGBL (Free Benefit Generator Plan) and VGBL (Free Benefit Generator Life) structured in the form of variable contribution, for the purpose of granting participants with returns based on the accumulated capital in the form of monthly withdraws for a certain term or temporary monthly withdraws.
In this respect, such financial products represent investment contracts that have the legal form of retirement plans, but which do not transfer insurance risk to the Group. Therefore, contributions received from participants are accounted for as liabilities and balance consists of the balance of the participant in the linked Specially Constituted Investment Fund (“FIE”) at the reporting date (Note 5). On December 31, 2023 the Retirement plan liabilities are 85,554.
| 16 | Equity |
| (a) | Capital |
The capital comprises 42,447,349 Class A shares and 14,466,239 Class B shares with a par value of US$ 0.00005 each.
The Class A common shares have been approved for listing on the Nasdaq Global Select Market, or Nasdaq, under the symbol "VINP." Vinci has two classes of common shares: Class A common shares and our Class B common shares.
Class B common shares carry rights that are identical to the Class A common shares, except that (1) holders of Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share; (2) holders of Class B common shares have certain conversion rights; (3) holders of Class B common shares are entitled to preemptive rights in the event that additional Class A common shares are issued in order to maintain their proportional ownership interest; and (4) Class B common shares shall not be listed on any stock exchange and will not be publicly traded.
F-45
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
The Entity’s shareholders as of December 31, 2023 and 2022 are presented in the table below:
| Shareholders | 12/31/2022 Quantity | Subscribed | Transferred | Repurchased | 12/31/2023 Quantity | |||||||||||||||
| Gilberto Sayão da Silva (Class B Common shares) | 14,466,239 | - | - | - | 14,466,239 | |||||||||||||||
| Alessandro Monteiro Morgado Horta (Class A common shares) | 8,226,422 | - | - | - | 8,226,422 | |||||||||||||||
| Public Float (Class A common shares) | 13,438,636 | - | 753,991 | (1,724,152 | ) | 12,468,475 | ||||||||||||||
| Other Shareholders (Class A common shares) | 18,949,439 | - | (331,758 | ) | - | 18,617,681 | ||||||||||||||
| Treasury shares (Class A common shares) | 1,832,852 | - | (422,233 | ) | 1,724,152 | 3,134,771 | ||||||||||||||
| Total | 56,913,588 | - | - | - | 56,913,588 | |||||||||||||||
| Series A Convertible preferred shares (*) | - | 100,000 | - | - | 100,000 | |||||||||||||||
| Total | - | 100,000 | - | - | 100,000 | |||||||||||||||
(*) The Series A Convertible Preferred Shares will be convertible at the option of the holders at any time after the closing of the issuance into Class A Common Shares at an initial conversion rate of 73.5402 Class A Common Shares for each Series A Convertible Preferred Share, which represents an initial conversion price of approximately $13.60 per Class A Common Share.
Fair value option of convertible preferred shares
As informed on note 14 (i), when the initial carrying amount of a compound financial instrument is allocated to its equity and liability components, the equity component is assigned the residual amount after deducting from the fair value of the instrument determined for the liability component. As of December 31, 2023, the fair value of the stock option and the amount of transaction cost that are allocated to the equity are R$ 34,141 and 1,958, respectively.
| (b) | Transactions costs |
Transactions costs comprises the expenses incurred by the Entity in connection with the IPO.
| (c) | Retained earnings |
Retained earnings comprises the net profit generated by the Entity which were not distributed to their shareholders or approved to be distributed by the Entity management.
| (d) | Other reserves |
Other reserves are comprised by the following operations:
| (i) | Exchange variation on investees |
Comprises the exchange variation in investments made on investees which have a functional currency other than Brazilian Reais, the Entity functional currency. When a foreign operation is sold, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
| (ii) | Share-based payments |
Benefits to its employees through a share-based incentive.
F-46
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| (e) | Dividends |
On February 10, 2023, Vinci declared a quarterly dividend distribution of US$ 0.17 per common share to shareholders as of February 28, 2023, totalizing US$ 9,328 (R$ 49,015), paid on March 9, 2023.
On May 11, 2023, Vinci declared a quarterly dividend distribution of US$ 0.16 per common share to shareholders as of May 25, 2023, totalizing US$ 8,729 (R$ 43,651), paid on June 9, 2023.
On August 10, 2023, Vinci declared a quarterly dividend distribution of US$ 0.20 per common share to shareholders as of August 24, 2023, totalizing US$ 10,826 (R$ 53,312), paid on September 5, 2023.
On November 7, 2023, Vinci declared a quarterly dividend distribution of US$ 0.17 per common share to shareholders as of November 22, 2023, totalizing US$ 9,142 (R$ 44,496), paid on December 6, 2023.
Once dividends are declared and approved by the board of directors, they will be paid on proportional basis to the owners of the common shares.
| (f) | Treasury shares |
When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within the additional paid-in capital.
On May 6, 2021, the Company announced the adoption of its share repurchase program in an aggregate amount of up to R$ 85 million (the “Repurchase Program”). The Repurchase Program may be executed in compliance with Rule 10b-18 under the Exchange Act. The program shall be permitted to commence after the date it is publicly disclosed and does not have a specified expiration date. Buybacks shall be made from time-to-time in the open market and negotiated purchases. The specific prices, numbers of shares and timing of purchase transactions shall be determined by the Company from time to time in its sole discretion.
On September 14, 2021, the Company intended to benefit from the affirmative defense provided by Rule 10b5-1 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Repurchase Program previously approved comply with the requirements of Rule 10b5-1 and will be carried out exclusively by J.P. Morgan Securities LLC (“JPMS”). JPMS acts as agent on behalf of Vinci and in accordance with the following terms:
● The program is permitted to commence on October 1, 2021 and does not have a specified expiration date.
● Buybacks shall be made in compliance with Rule 10b5-1(c)(1) under the Exchange Act;
● The Repurchase Program respects the total amount of up to R$85 million, as previously approved.
On June 16, 2022, the Company announced a share buyback plan and a share repurchase plan to buy back up to R$60.0 million of the Company's outstanding Class A common shares across both plans. These plans were approved to replace the share repurchase plans approved by our board of directors on May 6, 2021 and September 15, 2021, which expired on May 31st, 2022. The plans commenced immediately and did not have a specific expiration date (other than when the R$60.0 million buyback limit is reached).
Under the share buyback plan, buybacks may be made from time-to-time in an open market and negotiated purchases, effective immediately, in compliance with SEC Rule 10b-18. The specific prices, numbers of shares and timing of purchase transactions will be determined by the Company from time to time in its sole discretion. Additionally, repurchases will be carried out by the agent of the Company from time-to-time in open market and negotiated purchases, in compliance with SEC Rule 10b5-1.
F-47
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
On February 14, 2023, the Company announced a new share buyback plan and a share repurchase plan to buy back up to R$60.0 million of the Company's outstanding Class A common shares across both plans. The new buyback and repurchase plans will commence on the expiration date of the legacy plans and will not have specified expiration dates (other than when the R$60.0 million buyback limit is reached).
From January 1, 2023, to October 23, 2023, 1,724,152 Class A common shares were repurchased, in the amount of R$ 81,951. As detailed in Note 24, 57,413 shares were vested as part of the Restricted Shares Unit Plan. In December 2023 the Company holds 3,134,771 Class A common shares in treasury.
In October 2023, the Company suspended for undetermined time the Repurchase Program, in compliance with SEC Rule 10b5-1.
| (g) | Basic and diluted earnings per share |
| a) Basic earning per share | 2023 | 2022 | 2021 | |||||||||
| From continuing operations attributable to the ordinary equity holders of the Entity | 4.02 | 3.89 | 3.77 | |||||||||
| Total basic earning per share attributable to the ordinary equity holders of the Entity | 4.02 | 3.89 | 3.77 | |||||||||
| b) Diluted earning per share | 2023 | 2022 | 2021 | |||||||||
| From continuing operations attributable to the ordinary equity holders of the Entity | 3.85 | 3.84 | 3.77 | |||||||||
| Total basic earning per share attributable to the ordinary equity holders of the Entity | 3.85 | 3.84 | 3.77 | |||||||||
c) Reconciliations of earnings used in calculating earnings per share
| Basic earnings per share: | 2023 | 2022 | 2021 | |||||||||
| Profit attributable to the ordinary equity holders of the Entity used in calculating basic earnings per share: | ||||||||||||
| From continuing operations | 220,608 | 219,417 | 208,615 | |||||||||
| 220,608 | 219,417 | 208,615 | ||||||||||
| Diluted earnings per share | 2023 | 2022 | 2021 | |||||||||
| Profit from continuing operations attributable to the ordinary equity holders of the Entity | ||||||||||||
| Used in calculating basic earnings per share | 220,608 | 219,417 | 208,615 | |||||||||
| Used in calculating diluted earnings per share | 220,608 | 219,417 | 208,615 | |||||||||
| d) Weighted average number of share used as the denominator | 2023 | 2022 | 2021 |
| Weighted average number of ordinary share/quotas used as the denominator in calculating basic earnings per share: | 54,903,764 | 56,356,293 | 55,387,859 |
| Adjustments for calculation of diluted earnings per share: | 501,807 | 792,815 | - |
| Weighted average number of ordinary shares/quotas and potential ordinary shares used as the denominator in calculating diluted earnings per share | 55,405,572 | 57,149,108 | 55,387,859 |
F-48
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 17 | Revenue from services rendered |
| 2023 | 2022 | 2021 | ||||||||||
| Gross revenue from fund management | 420,879 | 396,532 | 384,321 | |||||||||
| Gross revenue from performance fees | 22,628 | 15,343 | 38,649 | |||||||||
| Gross revenue from financial advisory services | 43,480 | 24,072 | 73,066 | |||||||||
| Gross revenue from services rendered | 486,987 | 435,947 | 496,036 | |||||||||
| In Brazil | 397,092 | 338,937 | 378,147 | |||||||||
| Abroad | 89,895 | 97,010 | 117,889 | |||||||||
| Taxes and contributions | ||||||||||||
| COFINS | (17,931 | ) | (15,352 | ) | (15,438 | ) | ||||||
| PIS | (3,890 | ) | (3,330 | ) | (3,348 | ) | ||||||
| ISS | (10,746 | ) | (9,170 | ) | (11,792 | ) | ||||||
| Net revenue from services rendered | 454,420 | 408,095 | 465,458 | |||||||||
| Net revenue from fund management | 393,367 | 371,501 | 361,070 | |||||||||
| Net revenue from performance fees | 21,254 | 14,600 | 37,633 | |||||||||
| Net revenue from advisory services | 39,799 | 21,994 | 66,755 | |||||||||
| 18 | General and administrative expenses |
| 2023 | 2022 | 2021 | ||||||||||
| Personnel and profit-sharing (a) | (70,860 | ) | (63,665 | ) | (55,057 | ) | ||||||
| Share Based Plans (b) | (14,967 | ) | (14,276 | ) | (3,670 | ) | ||||||
| Profit sharing (a) | (94,640 | ) | (79,872 | ) | (98,970 | ) | ||||||
| (180,467 | ) | (157,813 | ) | (157,697 | ) | |||||||
| Third party expense (c) | (33,318 | ) | (38,836 | ) | (38,891 | ) | ||||||
| Right of use depreciation (d) | (9,686 | ) | (10,800 | ) | (9,812 | ) | ||||||
| Depreciation and amortization (e) | (10,094 | ) | (4,986 | ) | (3,917 | ) | ||||||
| Travel and representations | (3,928 | ) | (4,535 | ) | (1,271 | ) | ||||||
| Condominium expenses | (3,041 | ) | (3,315 | ) | (2,598 | ) | ||||||
| Other operating expenses (f) | (11,730 | ) | (9,064 | ) | (8,812 | ) | ||||||
| (252,264 | ) | (229,349 | ) | (222,998 | ) | |||||||
| (a) | Personnel and profit-sharing |
According to the profit-sharing program and based on Law 10,101 of December 19, 2000 and on objectives established at the beginning of each year, management estimated the payment of profit sharing in the amount of R$ 94,640 (R$ 79,872 in 2022 and 98,970 in 2021) for the year ended December 31, 2023.
| (b) | Share-based payments |
See Note 22 for more details.
| (c) | Third party expense |
Third party expenses are composed for accounting, advisory, information technology, marketing, and other contracted services.
| (d) | Right of use depreciation |
See Note 10 for more details.
F-49
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| (e) | Depreciation and amortization |
The amount is mainly comprised by property and equipment depreciation and intangible amortization.
| (f) | Other operating expenses |
The amount is mainly comprised of office expenses, including energy, cleaning, maintenance and conservation, among others several expenses.
| 19 | Finance profit/(loss) |
| 2023 | 2022 | 2021 | ||||||||||
| Investment income (i) | 110,474 | 94,728 | 27,982 | |||||||||
| Financial revenue through amortized cost | 4,571 | - | - | |||||||||
| Foreign currency variation income | 742 | 2,514 | - | |||||||||
| Financial revenue on sublease agreements | 700 | 390 | 197 | |||||||||
| Contingent consideration variation (iii) | 4,051 | 13,971 | - | |||||||||
| Other finance income | 1,271 | 530 | 332 | |||||||||
| Finance income | 121,809 | 112,133 | 28,511 | |||||||||
| Financial expense on lease agreements | (9,809 | ) | (9,359 | ) | (12,281 | ) | ||||||
| Interest expense on loans and financing (ii) | (23,654 | ) | (5,804 | ) | - | |||||||
| Bank fees | (141 | ) | (354 | ) | (119 | ) | ||||||
| Interest and arrears | - | (4 | ) | (80 | ) | |||||||
| Investment losses (i) | (111 | ) | (554 | ) | - | |||||||
| Fines on taxes | (1 | ) | (4 | ) | (65 | ) | ||||||
| Foreign currency variation on liabilities at amortized cost | (775 | ) | (2,986 | ) | (372 | ) | ||||||
| Interest on taxes | (79 | ) | - | (208 | ) | |||||||
| Contingent consideration variation (iii) | (19,923 | ) | - | - | ||||||||
| Other financial expenses | (87 | ) | - | (4 | ) | |||||||
| Finance costs | (54,580 | ) | (19,065 | ) | (13,129 | ) | ||||||
| Finance profit/(loss), net | 67,229 | 93,068 | 15,382 | |||||||||
| (i) | Investment income and losses comprises the fair value changes on the financial instruments at fair value through profit or loss. Segregated investment income result is demonstrated below. |
| 2023 | 2022 | 2021 | ||||||||||
| Mutual funds and fixed income investments (a) | 109,657 | 94,489 | 25,620 | |||||||||
| Private equity funds | 817 | 239 | 2,362 | |||||||||
| 110,474 | 94,728 | 27,982 | ||||||||||
| Mutual funds | - | (486 | ) | - | ||||||||
| Private equity funds | (111 | ) | (68 | ) | - | |||||||
| (111 | ) | (554 | ) | - | ||||||||
| (a) | Vinci Monalisa corresponds to the most part of the Group’s investment income. |
| (ii) | Interest expense on loans and financing comprises the financial result on the Commercial notes, the consideration payable related to SPS acquisition and interest expense on the convertible preferred shares. Please see note 14 for more detail. |
| (iii) | Variation on contingent consideration comprises the financial result of the fair value evaluation. Please see note 14 (iii) for more detail. |
F-50
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 20 | Income tax and social contribution |
As an exempted company incorporated in the Cayman Islands, Vinci Partners Ltd is subject to Cayman Islands laws, which currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty or withholding tax applicable to us.
Vinci Partners Ltd subsidiaries, except for Vinci Partners Ltda, Vinci Capital Gestora Ltda, Vinci Soluções de Investimentos Ltda and Vinci Vida e Previdência S.A., are taxed based on the deemed profit.
Vinci has tax losses and negative basis resulting from previous years and deferred income tax and social contribution credits are recognized since there is expectation of future tax results for these companies. The tax credit arising from the tax loss and negative basis under the taxable profit regime in December, 2023 is R$ 6,066 (R$ 4,912 on December 31, 2022).
No foreign subsidiaries presented net income for taxation of income and social contribution taxes until December 31, 2023 and 2022.
The income tax and social contribution charge on the results for the year can be summarized as follows:
| 2023 | 2022 | 2021 | ||||||||||
| Current income tax | (42,961 | ) | (38,945 | ) | (41,510 | ) | ||||||
| Current social contribution | (15,605 | ) | (14,199 | ) | (15,260 | ) | ||||||
| (58,566 | ) | (53,144 | ) | (56,770 | ) | |||||||
| Deferred income tax | 6,455 | 683 | 5,546 | |||||||||
| Deferred social contribution | 2,185 | 48 | 1,997 | |||||||||
| 8,640 | 731 | 7,543 | ||||||||||
Deferred tax balances
| 12/31/2023 | 12/31/2022 | |||||||
| Deferred tax assets | ||||||||
| Tax losses | 6,066 | 4,912 | ||||||
| Leases | 1,084 | 1,805 | ||||||
| RSU | 2,188 | 1,628 | ||||||
| Interest expense on obligation for acquisition | 2,121 | 550 | ||||||
| Amortization on management Contracts | 1,382 | 346 | ||||||
| Contingent consideration | 646 | - | ||||||
| Total | 13,487 | 9,241 | ||||||
| Deferred tax liabilities | ||||||||
| Financial revenue | (1,147 | ) | (973 | ) | ||||
| Estimated revenue | (1,570 | ) | (1,690 | ) | ||||
| Leases | (351 | ) | (49 | ) | ||||
| Contingent consideration | - | (4,750 | ) | |||||
| Total Income Tax | (3,068 | ) | (7,462 | ) | ||||
| Estimated revenue | (815 | ) | (878 | ) | ||||
| Total (Taxes and contribution) | (815 | ) | (878 | ) | ||||
| Total deferred tax liabilities | (3,883 | ) | (8,340 | ) | ||||
F-51
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| Movements | Tax losses | Leases | RSU | Other (*) | Total | |||||||||||||||
| Deferred tax assets | ||||||||||||||||||||
| As at December 31, 2021 | 2,494 | 2,476 | - | - | 4,970 | |||||||||||||||
| to profit and loss | 2,418 | (671 | ) | 1,628 | 896 | 4,271 | ||||||||||||||
| As at December 31, 2022 | 4,912 | 1,805 | 1,628 | 896 | 9,241 | |||||||||||||||
| to profit and loss | 1,154 | (721 | ) | 560 | 3,253 | 4,246 | ||||||||||||||
| As at December 31, 2023 | 6,066 | 1,084 | 2,188 | 4,149 | 13,487 | |||||||||||||||
(*) Comprises deferred taxes related to interest expense on obligation for ownership acquisition, amortization on management contracts and contingent consideration.
| Movements | Financial Revenue | Estimated Revenue | Leases | Contingent consideration | Total | |||||||||||||||
| Deferred tax liabilities | ||||||||||||||||||||
| As at December 31, 2021 | (1,815 | ) | (3,201 | ) | - | - | (5,016 | ) | ||||||||||||
| to profit and loss | 842 | 633 | (49 | ) | (4,750 | ) | (3,324 | ) | ||||||||||||
| As at December 31, 2022 | (973 | ) | (2,568 | ) | (49 | ) | (4,750 | ) | (8,340 | ) | ||||||||||
| to profit and loss | (174 | ) | 183 | (302 | ) | 4,750 | 4,457 | |||||||||||||
| As at December 31, 2023 | (1,147 | ) | (2,385 | ) | (351 | ) | - | (3,883 | ) | |||||||||||
F-52
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| (a) | Tax effective rate |
| 2023 | 2022 | 2021 | ||||||||||
| Profit (loss) before income taxes | 269,385 | 271,814 | 257,842 | |||||||||
| Combined statutory income taxes rate - % | 34 | % | 34 | % | 34 | % | ||||||
| Income tax benefit (expense) at statutory rates | (91,591 | ) | (92,417 | ) | (87,666 | ) | ||||||
| Reconciliation adjustments: | ||||||||||||
| Expenses not deductible | (880 | ) | (214 | ) | (392 | ) | ||||||
| Tax benefits | 190 | 282 | 825 | |||||||||
| Share based payments | (516 | ) | (297 | ) | (371 | ) | ||||||
| Unrecognized tax loss credits | (2,055 | ) | - | - | ||||||||
| Effect of presumed profit of subsidiaries (i) and offshore subsidiaries | 44,833 | 40,220 | 38,279 | |||||||||
| Other additions (exclusions), net | 93 | 13 | 98 | |||||||||
| Income taxes expenses | (49,926 | ) | (52,413 | ) | (49,227 | ) | ||||||
| Current | (58,566 | ) | (53,144 | ) | (56,770 | ) | ||||||
| Deferred | 8,640 | 731 | 7,543 | |||||||||
| Effective rate | 19 | % | 19 | % | 19 | % | ||||||
| (i) | Brazilian tax law establishes that companies that generate gross revenues of up to R$ 78,000 in the prior fiscal year may calculate income taxes as a percentage of gross revenue, using the presumed profit income tax regime. The Entity's subsidiaries adopted this tax regime and the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries. |
F-53
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 21 | Related parties |
| (a) | Key management remuneration |
The total remuneration (salaries and benefits) of key management personnel, including the Executive Committee, amounted to R$ 16,672, including profit-sharing compensation for the year ended December 31, 2023 (2022 - R$ 16,781).
According to Vinci internal policy, the key management is entitled to receive a profit-sharing compensation for the current year, which was paid in January 2024, after the Management approval. As informed in Note 12, Vinci accrued a provision for profit sharing for the Group as of December 31, 2023.
| (b) | Receivables from related parties |
The Entity receivables from related parties as of December 31, 2023 and 2022, as shown in the table below:
| 12/31/2023 | 12/31/2022 | |||||||
| Vinci Infra Investimentos V2I S.A. | - | 79 | ||||||
| Cagliari Participações S.A. | 4 | 4 | ||||||
| Accadia Participações AS | - | 91 | ||||||
| Norcia Participações SA | - | 56 | ||||||
| Laguna Participações S.A. | - | 11 | ||||||
| VFDL 4 Empreendimentos Imobiliários LTDA | - | 3 | ||||||
| Vias Participações I S.A. | - | 1 | ||||||
| Verona Participações Societarias S.A. | - | 8 | ||||||
| 4 | 253 | |||||||
(c) | Employees loans |
As presented in Note 6(i), Vinci may advance payments to its employees.
| (d) | Receivables from employees |
During 2023, Vinci sold part of its treasury shares to employees. The amount will be received from January 31, 2025, in annual installments until January 31, 2029, and a monetary variation will be charged by inflation index.
| 22 | Segment reporting |
The Entity's reportable segments are those business units which provide different services and are separately managed since each business demands different market strategies.
The main information used by management for assessment of the performance of each segment is the profit by segment for the analysis of the return of these investments.
The information on assets and liabilities by segment is not disclosed in these financial statements because it is not used by management when managing segments. Management does not make an analysis by geographical areas for the management of the Entity's business.
Segments are independently managed, with professionals specifically skilled allocated in each segment.
The Entity's operations are segmented according to the organization and management model approved by management, and they are divided as follows:
F-54
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
Private Market Strategies
Comprises the investments in illiquid funds, as described below:
| (i) | Private Equity |
The private equity segment has a generalist and control-oriented approach, focusing on growth and turnaround. The primary strategy is value creation pursuing transformation of invested companies, with changes in the growth of revenue, productivity, profitability and management profile, using a proprietary methodology ("Value from the Core").
Another strategy of the segment is focused on sectors resilient to different investment cycles and minority holdings in small and medium enterprises with business models that exhibit high growth potential and clear, mensurable ESG (Environmental, Social and Governance) goals.
| (ii) | Real Estate |
The Real Estate Investment Funds segment are focused on shopping centers, logistics, offices, urban real estate and funds of funds, and seek to achieve differentiated returns through an active management of a diversified and quality portfolio. The segment’s objective is also the development of real estate properties, following up to five key steps: origination of opportunities, analysis, execution, monitoring and asset sale.
| (iii) | Infrastructure |
The infrastructure segment has exposure to real assets through equity and debt instruments, active in the following sub-segments: power, oil & gas, transportation & logistic and water & sewage. The strategy invests across two sub-strategies: sector-focused funds and structured credit. The fund’s investments are periodically monitored, including the evolution of ESG metrics, financial and operational metrics.
| (iv) | Credit |
This credit segment is focused on fundamental credit analysis, consistency, and long-term value creation to investors. The area dynamic approach is to tactically allocate capital between asset classes and adapt to different cycles. It is also sourcing of credit instruments with resilient structures and sound collateral packages. The credit strategy investments include for core sub-strategies: infrastructure debt, real estate debt, structured credit and exclusive mandates, following four key steps: origination, analysis, structuring and monitoring.
| (v) | Special situations (SPS) |
This Special situation segment is focused in complex situations in which financial and human capital are employed to generate superior returns, maintaining adequate risk levels and preserving the interests of all parties involved.
Liquid Strategies
This segment seeks return through operations in public markets, as trading bonds, public stocks and derivatives, among other assets. It is comprised by the investments in liquid funds, as described below:
| (i) | Hedge Funds |
The hedge fund segment manages funds through Brazilian and international financial instruments such as stock, credit, interest, foreign exchange and commodities. Monitoring and risk control are based on
F-55
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
different techniques such as: use of options for high conviction trades, monitoring liquidity conditions for each position, VaR monitoring, scenarios simulations (including stress test), stop loss rules on individual positions and on the portfolio level.
| (ii) | Public equities |
The public equities segment manages long-term positions based on fundamental analysis of Brazilian publicly traded companies. The mains strategy is through absolute return, dividends, and small caps.
Investment products and solutions
Investment products and solutions segments offer financial products on an open platform basis providing portfolio and management services considering medium/long term risk allocation. The strategy aims to provide an advanced investment strategy with alpha generation according to the clients’ targets. The strategy is divided in four sub-strategies: separate exclusive mandates, commingled funds, international allocation and pension plans.
Financial advisory services
The financial advisory services objective is including high value-added to financial and strategic advisory services to entrepreneurs, corporate senior management teams and boards of directors, focusing primarily on IPO advisory and M&A transactions for Brazilian middle-market companies. The financial advisory services team serves as trusted advisors to clients targeting local and/or product expertise in the Brazilian marketplace.
Vinci retirement services
The retirement services focus on planning and building long-term investment portfolios that assist investors to achieve their retirement goals. The retirement services segment started its operations during the first semester of 2023.
F-56
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 2023 | ||||||||||||||||||||||||||||
| Private Market Strategies | Liquid Strategies | Investment Products and solutions | Financial Advisory | Vinci Retirement Services | Corporate Center | Total | ||||||||||||||||||||||
| In Brazil | 202,296 | 83,622 | 72,361 | 38,639 | 174 | - | 397,092 | |||||||||||||||||||||
| Abroad | 71,925 | 5,643 | 10,222 | 2,105 | - | - | 89,895 | |||||||||||||||||||||
| Gross revenue from services rendered | 274,221 | 89,265 | 82,583 | 40,744 | 174 | - | 486,987 | |||||||||||||||||||||
| Fund Advisory fee | 2,700 | - | 36 | 40,744 | - | - | 43,480 | |||||||||||||||||||||
| Fund Management fee | 266,245 | 76,711 | 77,749 | - | 174 | - | 420,879 | |||||||||||||||||||||
| Fund Performance fee | 5,276 | 12,554 | 4,798 | - | - | - | 22,628 | |||||||||||||||||||||
| Taxes and contributions | (15,808 | ) | (5,480 | ) | (7,822 | ) | (3,448 | ) | (9 | ) | - | (32,567 | ) | |||||||||||||||
| Net revenue from services rendered | 258,413 | 83,785 | 74,761 | 37,296 | 165 | - | 454,420 | |||||||||||||||||||||
| (-) General and administrative expenses | (48,864 | ) | (24,293 | ) | (20,257 | ) | (9,700 | ) | (9,256 | ) | (124,928 | ) | (237,297 | ) | ||||||||||||||
| Share-based payments | (788 | ) | (181 | ) | 96 | - | - | (14,094 | ) | (14,967 | ) | |||||||||||||||||
| Operating profit | 208,762 | 59,312 | 54,600 | 27,596 | (9,091 | ) | (139,022 | ) | 202,156 | |||||||||||||||||||
| Finance income | 121,809 | |||||||||||||||||||||||||||
| Finance cost | (54,580 | ) | ||||||||||||||||||||||||||
| Finance result, net | 67,229 | |||||||||||||||||||||||||||
| Profit before income taxes | 269,385 | |||||||||||||||||||||||||||
| Income taxes | (49,926 | ) | ||||||||||||||||||||||||||
| Profit for the period | 219,459 | |||||||||||||||||||||||||||
F-57
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 2022 | ||||||||||||||||||||||||||||
| Private Market Strategies | Liquid Strategies | Investment Products and solutions | Financial Advisory | Vinci Retirement Services | Corporate Center | Total | ||||||||||||||||||||||
| In Brazil | 151,660 | 86,690 | 79,888 | 20,699 | - | - | 338,937 | |||||||||||||||||||||
| Abroad | 73,731 | 8,305 | 14,974 | - | - | - | 97,010 | |||||||||||||||||||||
| Gross revenue from services rendered | 225,391 | 94,995 | 94,862 | 20,699 | - | - | 435,947 | |||||||||||||||||||||
| Fund Advisory fee | 3,341 | - | 32 | 20,699 | - | - | 24,072 | |||||||||||||||||||||
| Fund Management fee | 218,393 | 86,838 | 91,301 | - | - | - | 396,532 | |||||||||||||||||||||
| Fund Performance fee | 3,659 | 8,158 | 3,526 | - | - | - | 15,343 | |||||||||||||||||||||
| Taxes and contributions | (11,816 | ) | (5,684 | ) | (8,561 | ) | (1,791 | ) | - | - | (27,852 | ) | ||||||||||||||||
| Net revenue from services rendered | 213,577 | 89,312 | 86,298 | 18,908 | - | - | 408,095 | |||||||||||||||||||||
| (-) General and administrative expenses | (40,919 | ) | (24,686 | ) | (18,947 | ) | (5,021 | ) | (5,733 | ) | (119,767 | ) | (215,073 | ) | ||||||||||||||
| Share-based payments | (1,150 | ) | (230 | ) | (414 | ) | - | - | (12,482 | ) | (14,276 | ) | ||||||||||||||||
| Operating profit | 171,508 | 64,396 | 66,937 | 13,887 | (5,733 | ) | (132,249 | ) | 178,746 | |||||||||||||||||||
| Finance income | 112,133 | |||||||||||||||||||||||||||
| Finance cost | (19,065 | ) | ||||||||||||||||||||||||||
| Finance result, net | 93,068 | |||||||||||||||||||||||||||
| Profit before income taxes | 271,814 | |||||||||||||||||||||||||||
| Income taxes | (52,413 | ) | ||||||||||||||||||||||||||
| Profit for the period | 219,401 | |||||||||||||||||||||||||||
F-58
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 2021 | ||||||||||||||||||||||||
| Private Market Strategies | Liquid Strategies | Investment Products and solutions | Financial Advisory | Corporate Center | Total | |||||||||||||||||||
| In Brazil | 138,403 | 98,542 | 74,373 | 66,829 | - | 378,147 | ||||||||||||||||||
| Abroad | 78,206 | 7,766 | 31,917 | - | - | 117,889 | ||||||||||||||||||
| Gross revenue from services rendered | 216,609 | 106,308 | 106,290 | 66,829 | - | 496,036 | ||||||||||||||||||
| Fund Advisory fee | 6,178 | - | 59 | 66,829 | - | 73,066 | ||||||||||||||||||
| Fund Management fee | 205,162 | 95,441 | 83,718 | - | - | 384,321 | ||||||||||||||||||
| Fund Performance fee | 5,269 | 10,867 | 22,513 | - | - | 38,649 | ||||||||||||||||||
| Taxes and contributions | (11,488 | ) | (9,108 | ) | (4,202 | ) | (5,780 | ) | - | (30,578 | ) | |||||||||||||
| Net revenue from services rendered | 205,121 | 97,200 | 102,088 | 61,049 | - | 465,458 | ||||||||||||||||||
| (-) General and administrative expenses | (45,118 | ) | (26,313 | ) | (28,258 | ) | (12,513 | ) | (110,796 | ) | (222,998 | ) | ||||||||||||
| Operating profit | 160,003 | 70,887 | 73,830 | 48,536 | (110,796 | ) | 242,460 | |||||||||||||||||
| Finance income | 28,511 | |||||||||||||||||||||||
| Finance cost | (13,129 | ) | ||||||||||||||||||||||
| Finance result, net | 15,382 | |||||||||||||||||||||||
| Profit before income taxes | 257,842 | |||||||||||||||||||||||
| Income taxes | (49,227 | ) | ||||||||||||||||||||||
| Profit for the year | 208,615 | |||||||||||||||||||||||
F-59
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| 23 | Legal Claims |
As December 31, 2023 and 2022, the Entity is not aware of disputes classified as probable chance of loss.
Find below the disputes classified as possible chance of loss segregated into labor, tax and civil.
| 12/31/2023 | 12/31/2022 | |||||||
| Tax | 22,095 | 20,452 | ||||||
| Labor | 780 | 1,967 | ||||||
| Total | 22,875 | 22,419 | ||||||
Tax Claims
Vinci Gestora de Recursos Ltda. is a party to a tax administrative proceeding in course arising from the payment of social security contributions (employer's portion and Work Accident Insurance (SAT)) in 2011, charged on amounts paid by virtue of quota of profits and results, totaling R$ 3,652 (2022: R$ 3,441).
Vinci Equities Gestora de Recursos Ltda. has one proceeding related to the requirement of ISS (excise tax) under rendered services to investment funds located abroad in the amount of R$ 266 (2022: R$ 220). Supported by the opinion of its legal advisors, management classified these proceedings as having a possible risk of loss and did not record a provision for contingencies related to these proceedings.
On March 21, 2018, the Brazilian federal revenue opened a tax assessment against Vinci Equities for the collection of open debts of IRPJ, CSLL, PIS and COFINS in the amount of R$ 18,154 (2022: R$ 16,791) for the calendar year of 2013.
| 24 | Share-based payments |
The Entity provides benefits to its employees through a share-based incentive. The following item refers to the outstanding plan on December 31, 2023.
Stock Options
May 2021
On May 6, 2021, the Entity launched a Stock Option Plan (“SOP” or “Plan”) in order to grant stock options to certain key employees (“Participants”) to incentivize and reward such individuals. These awards are scheduled to vest over a three-year period and the holders of vested options are entitled to purchase shares at the market price of the shares at grant date. This right may be subject to certain conditions to be imposed by the Entity and aims at aligning the interests of the Entity's shareholders with those of the Participants. Each option will entitle the Participant to acquire 1 Class A common shares issued by the Company. The key terms and conditions related to the grants under the SOP are as follows:
| # Tranche | Period in months when options will become potentially suitable for exercise (“Grace Period”) | Limit per tranche | |
| (percentage of the number of options granted) | (quantity of the number of options granted) | ||
| 1st tranche | 12 | 20% | 332,498 |
| 2nd tranche | 24 | 20% | 332,498 |
| 3rd tranche | 36 | 60% | 997,485 |
The initial date of Grace Period for the options granted will be February 1st, 2021, the Company’s Initial Public Offer settlement day. The Participant will have the right to exercise their vested options from the third anniversary of the date of execution of the program up to 1 year, after which the referred options will be automatically forfeited, in full, regardless of prior notice or notification, and without the right to any indemnity. No Participant will have any of the rights and privileges of the Company's shareholders until the options are duly exercised and the shares under the options are acquired by the Participant.
The issue or purchase price of the shares to be subscribed or purchased by the Participants (“Exercise Price”) will be US$18.00. The Exercise Price will be reduced by the amount in dollars per share distributed to its shareholders from the date of execution of this Plan, whether as dividends, interest on equity, redemption, capital reduction or other events defined by the Board of Directors.
F-60
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
The maximum number of shares available for the exercise of options under this plan is limited to 5% of the total share capital of the Company at any time, on a fully diluted basis, taking into account also the options granted under this Plan.
As of December 31, 2023, there are stock options outstanding with respect to 1,482,753 Class A common shares (1,572,616 as of December 31, 2022).
The total expense recognized for the programs for the year ended December 31, 2023 was R$ 1,147 (December 31, 2022 was R$ 2,555).
February 2023
In February 2023, the Board of Directors approved a second Stock Option Plan, which aims to grant up to 1,150,000 options, each entitling the beneficiary to purchase one Class A common share. Such options have an exercise price per share equal to US$9.96; provided that, unless otherwise provided for in an option agreement, this exercise price will be reduced by the amount per share distributed to our shareholders from the date of the grant of the option, whether as dividends, interest on capital, redemption, capital reduction or others. Options will become eligible to be exercised in May 2026. During the second quarter of 2023 the Entity and its subsidiaries issued stock option in connection to the related Plan.
As of December 2023, there are stock options outstanding with respect to 1,116,884 Class A common shares.
The total expense recognized for the programs for the period ended December 2023 was R$ 2,470.
Restricted Share Unit (RSU)
| a) | Restricted Shares Units Plan |
On April 04, 2022, the Entity announced its Restricted Share Unit Award Plan (“Plan”). The purpose of this Plan is to provide the opportunity for officers and employees of Vinci and its Subsidiaries, as elected by the Executive Compensation Committee, to receive restricted Shares (“RSU”). Shares representing up to 1.65% of the total amount of the capital stock of the Company, which equals, on this date, approximately 950.000 shares.
Under the Plan, stocks are awarded to the recipient upon their grant date. Subject to the terms of the Plan, each RSU shall grant the beneficiary the right to receive one (1) share, subject to the satisfaction of the conditions for acquisition of the shares. The RSUs awarded to the beneficiary shall be vested in different tranches, as long as the service condition is fulfilled and verified. The vesting dates may vary from 1 to 6 years after the granted date, accordingly to the dates defined in each Restricted Share Unit Award Agreement.
If an eligible participant
ceases its relationship with the Group, within the vesting period, the rights will be forfeited, except in limited
circumstances.
| b) | Fair value of shares granted. |
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model and underlying assumptions, which depends on the terms and conditions of the grant and the information available at the grant date.
The Company uses certain assumptions to determine the RSUs fair value at the granted date, including the following:
| • | Market value of the shares at the granted date. |
| • | Estimative of dividend yield and the US interest rate for the years comprised from the granted date until the vesting dates. |
These estimates also require determination of the most appropriate inputs to the valuation models including assumptions.
regarding the expected life of a share-based payment.
| c) | Outstanding shares granted and valuation inputs |
The total RSUs awarded for this Plan was 781,881. The table below summarize the activity for the year ended December 31, 2023.
| 2023 | 2022 | |||||||
| RSU outstanding on January 1st | 781,881 | - | ||||||
| Granted | - | 781,881 | ||||||
| Forfeited | (35,689 | ) | - | |||||
| Vested | (57,413 | ) | - | |||||
| RSU outstanding on December 31 | 688,779 | 781,881 | ||||||
F-61
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
Years ended December 31
All amounts in thousands of Brazilian Reais, unless otherwise stated
| d) | As of December 31, 2023, total compensation expense of the plans was R$ 11,350 (R$ 11,721 as of December 31, 2022), including R$ 4,007 (R$ 4,483 as of December 31, 2022) of social charges provisions. |
| 25 | Subsequent Events |
In January 2024, the Board of Directors approved a third Stock Option Plan, which aims to grant up to 1,274,000 options, each entitling the beneficiary to purchase one Class A common share. Such options have an exercise price per share equal to US$11.04; provided that, unless otherwise provided for in an option agreement, this exercise price will be reduced by the amount per share distributed to our shareholders from the date of the grant of the option, whether as dividends, interest on capital, redemption, capital reduction or others. Options will become eligible to be exercised in January 2027.
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