Vinci Compass Investments Ltd 6-K, filed Feb 14, 2023
Vinci Compass Investments Ltd. (VINP)
About this 6-K
Vinci Compass Investments Ltd filed this 6-K on February 14, 2023.
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 2023
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 |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
| Yes | No |
X |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
| Yes | No |
X |
TABLE OF CONTENTS
| EXHIBIT | |
| 99.1 | Vinci Partners Investments Ltd. Fourth Quarter 2022 Earnings Presentation |
| 99.2 | Press release dated February 14, 2023 – Vinci Partners Reports Fourth Quarter 2022 Results |
| 99.3 | Vinci Partners Investments Ltd. Consolidated Financial Statements as of December 31, 2022 |
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 14, 2023
Fourth Quarter and Full Year 2022 Earnings Presentation February 14, 2022
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 Vinci Partners ends 2022 with solid growth against local markets, pushed by fundraising across Private Market strategies DEPS² FY22 R$4.47 R$ 63 bn AUM¹ Vinci Partners ended the fourth quarter of 2022 with R$63 bn in AUM¹ , a 10% growth year - over - year. Our business has proven to be profitable even in tougher macro scenarios, with increasingly amounts of free cash flow driving attractive quarterly dividend distribution to shareholders. Quarterly Dividend US$0.17 Per share Vinci achieved several important milestones across Private Market strategies over the year: 6.5 % LTM Dividend Yield ³ +9 % YoY +10 % YoY R$7.8 bn Additional AUM across Private Markets funds FY’22 New Capital Subs.: R$5.8 bn Acquisitions: R$2.0 bn Roughly 40% of Vinci’s new capital subscriptions came from our local institutional investor base, with highlights to the activation of Anchor Investments such as BNDES across new strategies (VICC and Vinci Credit Infra), configuring up to R$1.9 billion in capital commitments. The fourth vintage in the Private Equity flagship strategy, VCP IV, activated in June 2022, has already closed its first investment in Arklok , a leading Hardware - as - a - Service company in Brazil. Vinci closed its first M&A transaction since the IPO, with the acquisition of Vinci SPS , which added R$2 billion in AUM and filled a strategic gap within our Private Markets product offering. Vinci raised close to R$800 million across REITs over the year , with the launch of new strategies in the Credit segment and stock transactions in Real Estate. See notes and definitions at end of document
6 Why VRS? VRS launch to increase Vinci's exposure to the growing Pension Plan industry Brazilian complementary open - ended pension plan industry represents over R$1 trillion in total addressable market , growing at a double - digit rate in the last few years Secular trend of decentralization from incumbent banks, that currently hold 90% of total market share which is gradually shifting to independent insurers Lack of independent alternative players offering open - ended pension plans in Brazil , due to the market's sharp entry barriers such as expertise and structuring requirements Why expand into Open - Ended Pension Plans? ▪ Digital, simplified and tailor - made allocation ▪ Best - in - class technological set up ▪ Experience designed to customize full life cycle and pension retirement goals according to risk tolerance metrics ▪ Superior cost efficiency to the beneficiary by using low - cost passive funds as part of the asset allocation matrix
7 Vinci Retirement Services is expected to launch in early 2023 ▪ VRS will offer tailor made solutions designed to fit every investor profile and help individuals reach their retirement goals ▪ Costumers will have easy access to information to enhance the user experience and quick responses regarding plans’ approval, customization and portability ▪ Individualized advisory assistance for costumers, backed by a tech advisor mechanism and specialists in asset allocation ▪ An innovative and 100% digital product, with a user - friendly navigation and singular design Product Overview ▪ VRS is in final stages of beta testing, and it is expected to launch in the first quarter of 2023 Product Launch ▪ First pool of users will come from Vinci’s High - Net - Worth individual investor base, followed by corporate clients
Financial Highlights
9 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY(%) FY’21 FY’22 ∆ YoY(%) Net revenue from management fees 91,594 95,361 99,640 9% 361,070 371,501 3% Net revenue from advisory fees 20,148 7,267 4,394 (78)% 66,755 21,994 (67)% Total Fee Related Revenues 111,742 102,628 104,034 (7)% 427,825 393,495 (8)% Segment personnel expenses (6,021) (6,509) (6,163) 2% (22,246) (25,454) 14% Other G&A expenses (4,717) (4,725) (4,977) 6% (17,512) (18,383) 5% Corporate center expenses (23,642) (22,067) (22,592) (4)% (80,599) (84,770) 5% Bonus compensation related to management and advisory (23,367) (19,798) (18,981) (19)% (84,969) (73,318) (14)% Total Fee Related Expenses (57,747) (53,099) (52,713) (9)% (205,327) (201,925) (2)% FEE RELATED EARNINGS (FRE) 53,995 49,529 51,321 (5)% 222,498 191,570 (14)% FRE Margin (%) 48.3% 48.3% 49.3% 52.0% 48.7% FRE per share¹ (R$/share) 0.96 0.89 0.93 3.94 3.45 Net revenue from performance fees 3,448 31 7,558 119% 37,633 14,600 (61)% Performance based compensation (1,094) (537) (3,558) 225% (14,001) (6,554) (53)% PERFORMANCE RELATED EARNINGS (PRE) 2,354 (506) 4,000 70% 23,632 8,046 (66)% PRE Margin (%) 68.3% N/A 52.9% 62.8% 55.1% ( - ) Unrealized performance fees 10,166 2,571 1,683 (83)% 7,715 3,618 (53)% (+) Unrealized performance compensation (3,605) (910) (593) (84)% (2,733) (1,278) (53)% (+) Realized GP investment income 11,973 5,738 7,462 (38)% 13,851 20,171 46% SEGMENT DISTRIBUTABLE EARNINGS 74,883 56,422 63,873 (15)% 264,964 222,127 (16)% Segment DE Margin (%) 54.5% 50.8% 52.9% 54.4% 51.4% (+) Depreciation and amortization 1,127 1,223 1,803 60% 3,917 4,986 27% (+) Realized financial income 9,531 31,726 10,235 7% 28,729 86,958 203% ( - ) Leasing expenses (2,953) (2,297) (2,190) (26)% (12,281) (9,359) (24)% ( - ) Other financial expenses² 140 (1,689) (3,537) N/A (319) (5,718) 1,692% ( - ) Non - recurring expenses³ – (523) – N/A – (6,594) N/A ( - ) Income taxes (excluding related to unrealized fees and income) (14,213) (12,020) (14,392) 1% (52,775) (50,077) (5)% DISTRIBUTABLE EARNINGS (DE) 68,515 72,842 55,792 (19)% 232,234 242,323 4% DE Margin (%) 46.7% 51.0% 42.6% 45.0% 46.7% DE per share (R$/share) 4 1.22 1.32 1.01 4.10 4.37 (+) Non - recurring expenses³ (including Income Tax effect) – 353 – N/A – 5,425 N/A ADJUSTED DISTRIBUTABLE EARNINGS 68,515 73,195 55,792 (19)% 232,234 247,747 7% Adjusted DE Margin (%) 46.7% 51.3% 42.6% 45.0% 47.8% Adjusted DE per share (R$/share) 1.22 1.32 1.01 4.10 4.47 Fourth Quarter and Full Year 2022 Segment Earnings See notes and definitions at end of document
10 ▪ Total assets under management (“AUM”) of R$63.1 billion, up 10% year - over - year. ▪ Fee - Earning AUM (“FEAUM”) of R$59.4 billion, up 8% year - over - year. ▪ New capital subscriptions of R$ 1.7 billion in the quarter and R$5.8 billion over the FY’22 . ▪ Capital Return of R$ 338 million in the quarter and R$1.9 billion over the FY’22. ▪ Performance fee - eligible AUM (“PEAUM”) of R$35.9 billion at the end of the quarter. ▪ Net cash and net investments of R$1.2 billion (R$22.63/share) at the end of the quarter. Fourth Quarter and Full Year 2022 Highlights ▪ Fee - related revenues of R$104.0 million in the fourth quarter, up 1% quarter - over - quarter and down 7 % year - over - year. x Management fees were R$99.6 million in the fourth quarter, up 4% quarter - over - quarter and 9% year - over - year. ▪ FRE was R$ 51 .3 million in the 4Q'22 , up 4% quarter - over - quarter and down 5% year - over - year, given higher contributions from advisory fees in 2021. ▪ Distributable Earnings (“DE”) of R$ 55 .8 million (R$1.01/share) in the quarter, down 19% year - over - year. x Adjusted DE was R$ 247.7 million (R$ 4.47 /share) over the FY’22, up 7 % year - over - year. Financial Measures Capital Metrics Capital Returned to Shareholders ▪ Quarterly dividend of US$0.17 per common share payable on March 15, 2023. ▪ Total capital used for share repurchases of R$14.7 million in the 4Q'22.
11 18 22 2 3 7 7 27 32 4Q'21 4Q'22 5-10 Years 10+ Years Perpetual or quasi-perpetual 20 25 11 10 24 24 55 59 4Q'21 4Q'22 Private Markets Liquid Strategies IP&S 22 29 12 10 24 24 57 63 4Q'21 4Q'22 Private Markets Liquid Strategies IP&S We continue to see AUM expansion across the platform, with highlight to long - term products ▪ Total assets under management (AUM) of R$63.1 billion, up 10% year - over - year, driven primarily by strong fundraising coming from Private Markets funds and the acquisition of Vinci SPS. ▪ Total Fee - Earning AUM (FEAUM) of R$59.4 billion, up 8% year - over - year. ▪ Total Long - Term AUM of R$31.9 billion in the 4Q’22, up 20% year - over - year. Long - Term AUM currently represents 51% of Vinci Partn ers’ total AUM, which translates into more predictable and recurring revenues. AUM 4Q'22 vs 4Q'21 ( R$bn ) Fee - Earning AUM 4Q'22 vs 4Q'21 ( R$bn ) Long - Term AUM¹ 4Q'22 vs 4Q'21 ( R$bn ) + 10% + 8% +20% See notes and definitions at end of document
12 34% 24% 23% 11% 8% Local Institutional HNWI Institutional Offshore Allocators & Distributors Public market vehicles 27% 13% 7% 2% 4% 21% 15% 6% 5% Private Equity Real Estate Credit Vinci SPS Infrastructure IP&S Public Equities Hedge Funds Advisory 22% 9% 8% 3% 3% 38% 12% 5% 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 53 % of net revenues come from private market strategies ² 51 % of AUM is in long term products ¹ AUM diversified across five different distribution channels AUM 4Q'22 Net Revenues FY'22 See notes and definitions at end of document AUM 4Q'22
13 89% 11% 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 ▪ Performance fee receivable increased to R$167.5 million in the 4Q'22, an 8% increase quarter - over - quarter, driven mostly by appr eciation in the VCP III strategy. ▪ The VCP strategy¹ in Private Equity accounted for R$149.0 million in accrued performance fees, or 89% of total performance fe es. ▪ Vinci Partners had, as of 4Q'22, R$11 billion in performance eligible AUM coming from Private Markets’ funds still within inv est ment 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 2022, following IFRS 15 rules. Private Equity accrued performance fees reflect the funds' most recent mark and are not booked in the company's balance sheet ye t. R$167.5 mm Accrued Performance Fees (R$ 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 $ 15 . 5 million as of the end of the fourth quarter of 2022 booked as unrealized performance fees in the company ´ s balance sheet . Accrued performance fees shown for Private Equity funds of R $ 149 . 0 million and for the Infrastructure fund VIAS, of R $ 2 . 7 million, as of the end of the fourth quarter of 2022 have not been booked as unrealized performance fees in the company ´ s balance sheet . See notes and definitions at end of document
14 361 372 67 22 428 393 FY'21 FY'22 Management fees Advisory fees 92 100 20 4 112 104 4Q'21 4Q'22 Management fees Advisory fees Fee Related Revenues Management fees remain the main contributor to revenues, accounting for 91% of total revenues over the FY’22 ▪ Fee related revenues totaled R$104.0 million in the quarter, up 1% quarter - over - quarter. Management fees accounted for R$99.6 mi llion in the quarter, an increase of 4% quarter - over - quarter, fueled by a complete quarter of revenues for Vinci SPS, which impacted partially third quarter numbers. ▪ Fee related revenues were down 7% year - over - year due to a higher contribution from advisory fees in the 4Q'21. Management fees w ere up 9% year - over - year. ▪ Fee related revenues accounted for R$393.5 million over the FY’22, down 8% when compared to the FY’21, driven by stronger dea l a ctivity in 2021, resulting in higher advisory fees in the period. Management fees were up 3% year - over - year. (78)% YoY + 9% YoY (67)% YoY + 3% YoY Fee Related Revenues 4Q'22 vs. 4Q'21 ( R$mm ) Fee Related Revenues FY’22 vs. FY’21 ( R$mm )
15 Operating Expenses ▪ Total operating expenses of R$56.3 million in the quarter, down 4% year - over - year. ▪ Total operating expenses of R$208.5 million during the FY'22, a decrease of 5% when compared to the FY’21. ▪ Disregarding bonus compensation, Personnel, Corporate center and G&A expenses were up 7% year - over - year, consistent with inflati on in the period. Total Expenses FY'22 vs. FY'21 YTD (R$mm) (5)% (4)% 24 23 24 23 6 6 5 5 59 56 4Q'21 4Q'22 Bonus compensation Corporate center Segment Personnel expenses Other G&A 99 80 81 85 22 25 18 18 219 208 FY'21 FY'22 Bonus compensation Corporate center Segment Personnel expenses Other G&A Total Expenses 4Q'22 vs. 4Q'21 ( R$mm )
16 43 52 11 1 (1) 54 51 4Q'21 4Q'22 FRE Asset Management FRE Advisory FRE VRS Fee Related Earnings (FRE) ▪ Fee Related Earnings (FRE)¹ of R$51.3 million (R$0.93/share) in the quarter, up 4% quarter - over - quarter, driven by fundraising a cross Private Markets in the quarter, combined with the full impact from the Vinci SPS acquisition². ▪ FRE in the 4Q'22 was down 5% year - over - year. This decrease comes primarily from the Financial Advisory segment, following record revenues posted in the 4Q'21. Considering only the asset management segments³, FRE would be up 22% year - over - year. ▪ FRE Margin was 49% for the 4Q'22, an increase of 1.0 percentage point when compared to the 4Q'21. On a comparable basis, FRE mar gin disregarding our investments into the VRS segment, would be 51%. See notes and definitions at end of document FRE per share ¹ R$0.93 R$0.96 186 189 36 8 (6) 222 192 FY'21 FY'22 49 % 48% R$3.45 R$3.94 49 % 52% (77)% YoY + 2% YoY Fee Related Earnings 4Q'22 vs. 4Q'21 (R$mm) Fee Related Earnings FY’22 vs. FY’21 (R$mm) (94)% YoY + 22% YoY % FRE margin N/A N/A
17 24 8 FY'21 FY'22 2 4 4Q'21 4Q'22 Performance Related Earnings (PRE) ▪ Performance related earnings (PRE)¹ of R$4.0 million in the quarter, up 70% year - over - year. ▪ PRE¹ was R$8.0 million (R$0.07/share) over the FY’22, down 66% when compared to the FY’21, that posted higher contributions c omi ng from international exclusive mandates in IP&S, which did not occur in 2022. Performance Related Earnings 4Q'22 vs. 4Q'21 (R$mm) Performance Related Earnings FY'22 vs. FY'21 (R$mm) % PRE margin 55 % 63 % PRE per share¹ R$0.04 R$0.07 R$0.42 R$0.15 See notes and definitions at end of document 53% 68 % (66)% +70%
18 Realized GP Investment and Financial income ▪ Realized GP Investment¹ and Financial income² of R$17.7 million in the 4Q'22, down 18% year - over - year, driven by realizations in FIP Infra Transmissão, which occurred in the 4Q’21. ▪ Realized GP Investment income of R$7.5 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$107.1 million over the FY’22 , up 152% when compared to the FY’ 21, driven mostly by the hike in interest rates over the year. See notes and definitions at end of document Realized GP Investment¹ and Financial income² 4Q'22 vs 4Q'21 ( R$mm ) (18)% + 152% 10 10 12 7 22 18 4Q'21 4Q'22 Realized Financial Income Realized GP Investment Income 29 87 14 20 43 107 FY'21 FY'22 Realized Financial Income Realized GP Investment Income Realized GP Investment¹ and Financial income² FY '22 vs FY'21 ( R$mm )
19 Adjusted Distributable Earnings (DE) ▪ Distributable Earnings (DE)¹ of R$55.8 million (R$1.01/share) in the quarter, down 19% year - over - year, due to higher advisory fe es and higher realized GP investment income in the fourth quarter of 2021. ▪ DE margin for the quarter was 43%, down 4.1 percentage points when compared to the 4Q'21. Adjusted DE margin was 48% in the F Y'2 2, an increase of 2.7 percentage points compared to the FY'21. ▪ Adjusted DE was R$247.7 million (R$4.47/share) in the FY'22, up 7% when compared to the FY'21. Adjusted Distributable Earnings (DE) 4Q'22 vs. 4Q'21 ( R$mm ) Adjusted Distributable Earnings (DE) FY'22 vs. FY'21 (R$mm) Adjusted DE per share² (19)% % Adjusted DE margin R$1.22 R$1.01 + 7% 48 % 45% R$4.10 R$4.47 See notes and definitions at end of document 43 % 47% 232 248 FY'21 FY'22 69 56 4Q'21 4Q'22
20 23.16 22.63 3Q'22 4Q'22 Net Cash and Net Investments per share 5 (R$/share) Share Repurchase Activity (in R$ million, unless mentioned) 3Q'22 4Q'22 Total Shares Repurchased (number of shares) 220,098 278,122 Total Capital Used for Share Repurchases 11.9 14.7 Remaining Share Repurchase Plan Authorization 44.5 29.8 Average Price Paid Per Share (US$) 10.3 10.0 (in R$ millions, unless mentioned) 3Q'22 4Q'22 Cash and cash equivalents¹ 97.4 123.4 Net Investments 1,307.8 1,249.7 Liquid funds² 984.5 918.8 GP Fund Investments³ 323.3 330.9 Debt Obligations 4 (122.9) (126.8) Net Cash and Net Investments 1,282.3 1,246.4 Net Cash and Net Investments per share 5 (R$/share) 23.16 22.63 Balance Sheet Highlights ▪ As of December 30, 2022, Vinci Partners had R$1.2 billion (R$22.63/share) in total net cash and net investments, that compris e c ash, cash equivalents, net investments (liquid funds and GP fund investments at fair value) and debt obligations. ▪ Vinci Partners repurchased 278,122 shares in the quarter with an average share price of US$10.0. As of December 30, 2022, the co mpany had R$29.8 million remaining in its current authorized share repurchase plan. See notes and definitions at end of document
Segment Highlights
22 59% 19% 19% 3% Private Markets Liquid Strategies IP&S Financial Advisory 56% 19% 21% 4% Financials by segment ▪ Fee Related Earnings (FRE), disregarding Vinci Retirement Services segment, were R$197.6 million over the FY'22, with 56% of FRE coming from Private Markets, followed by IP&S accounting for 21%, Liquid Strategies for 19% and Financial Advisory for 4%. ▪ Segment Distributable Earnings, disregarding Vinci Retirement Services segment, were R$228.1 million over the FY'22, with 59% co ming from Private Markets’ strategies, followed by IP&S and Liquid Strategies both accounting for 19% and Financial Advisory for 3%. Segment Distributable Earnings FY'22 by Segment Fee Related Earnings (FRE) FY'22 by Segment R$198 mm R$228 mm
23 Private Equity 48% Real Estate 20% Credit 18% Vinci SPS 7% Infrastructure 7% Private Markets' AUM (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ YoY (%) Net revenue from management fees 49,439 52,949 59,699 21% 194,483 207,061 6% Net revenue from advisory fees 1,684 560 1,756 4% 5,653 3,057 (46)% Total Fee Related Revenues 51,123 53,509 61,455 20% 200,136 210,118 5% Segment personnel expenses (2,672) (3,148) (3,050) 14% (10,571) (11,857) 12% Other G&A expenses (2,470) (2,549) (2,194) (11)% (11,373) (9,909) (13)% Corporate center expenses (10,639) (11,287) (12,790) 20% (38,456) (44,458) 16% Bonus compensation related to management and advisory (8,410) (9,662) (9,756) 16% (33,762) (34,151) 1% Total Fee Related Expenses (24,191) (26,646) (27,790) 15% (94,163) (100,375) 7% FEE RELATED EARNINGS (FRE) 26,932 26,863 33,664 25% 105,973 109,743 4% FRE Margin (%) 52.7% 50.2% 54.8% 53.0% 52.2% Net revenue from performance fees 1,768 (2,559) 3,660 107% 4,984 3,459 (31)% Realized performance fees 11,934 11 5,343 (55)% 12,699 7,077 (44)% Unrealized performance fees (10,166) (2,571) (1,683) (83)% (7,715) (3,618) (53)% Performance based compensation (476) 905 (1,459) 207% (1,547) (1,389) (10)% PERFORMANCE RELATED EARNINGS (PRE) 1,292 (1,654) 2,201 70% 3,437 2,070 (40)% PRE Margin (%) 73.1% 64.6% 60.1% 69.0% 59.8% ( - ) Unrealized performance fees 10,166 2,571 1,683 (83)% 7,715 3,618 (53)% (+) Unrealized performance compensation (3,602) (910) (593) (84)% (2,733) (1,278) (53)% (+) Realized GP investment income 11,973 5,738 7,462 (38)% 13,851 20,171 46% SEGMENT DISTRIBUTABLE EARNINGS 46,761 32,607 44,418 (5)% 128,244 134,324 5% Segment DE Margin (%) 62.3% 55.0% 64.5% 59.9% 58.3% ASSETS UNDER MANAGEMENT (AUM R$millions) 21,991 27,603 28,685 30% 21,991 28,685 30% FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) 20,007 24,183 25,259 26% 20,007 25,259 26% AVERAGE MANAGEMENT FEE RATE (%) 0.97% 0.87% 0.90% 0.97% 0.89% FULL TIME EMPLOYEES 49 62 65 33% 49 65 33% Private Markets R$29 bn AUM ▪ Fee related earnings (FRE) of R$33.7 million in the quarter, up 25% year - over - year, driven by a combination of the strong fundra ising over the year and the acquisition of Vinci SPS. ▪ FRE was R$109.7 million over the FY’22, an increase of 4% when compared to the FY’21. ▪ Segment Distributable Earnings of R$44.4 million in the quarter, down 5% year - over - year, due to higher realized performance fees and GP investment income in the 4Q’21, following realizations in FIP Infra Transmissão. Segment DE was R$134.3 million over the FY'22, an increase of 5% when compared to the FY’ 21, boosted by growth in FRE. ▪ Total AUM of R$28.7 billion at the end of the year, an increase of 30% year - over - year, driven by strong fundraising across Priva te Equity, Credit, Infrastructure and the acquisition of Vinci SPS. In the fourth quarter, previously announced commitments from BNDES to Vinci Credit Infra and VICC were activated in AUM num bers and will start to have a positive effect on management fees starting 2023.
24 Public Equities 72% Hedge Funds 28% Liquid Strategies' AUM (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ YoY (%) Net revenue from management fees 20,510 20,720 19,823 (3)% 86,786 81,325 (6)% Net revenue from advisory fees – – – N/A – – N/A Total Fee Related Revenues 20,510 20,720 19,823 (3)% 86,786 81,325 (6)% Segment personnel expenses (1,457) (1,398) (1,320) (9)% (5,568) (5,496) (1)% Other G&A expenses (903) (1,009) (1,189) 32% (2,806) (3,654) 30% Corporate center expenses (5,911) (4,643) (4,247) (28)% (17,684) (17,685) 0% Bonus compensation related to management and advisory (4,854) (4,134) (4,227) (13)% (18,031) (16,232) (10)% Total Fee Related Expenses (13,125) (11,185) (10,983) (16)% (44,089) (43,068) (2)% FEE RELATED EARNINGS (FRE) 7,385 9,535 8,840 20% 42,697 38,258 (10)% FRE Margin (%) 36.0% 46.0% 44.6% 49.2% 47.0% Net revenue from performance fees 265 1,424 2,937 1,008% 10,413 7,986 (23)% Realized performance fees 265 1,424 2,937 1,008% 10,413 7,986 (23)% Unrealized performance fees – – – N/A – – N/A Performance based compensation (225) (743) (1,761) 683% (5,512) (3,685) (33)% PERFORMANCE RELATED EARNINGS (PRE) 40 681 1,176 2,835% 4,901 4,301 (12)% PRE Margin (%) 15.1% 47.8% 40.0% 47.1% 53.9% ( - ) Unrealized performance fees – – – N/A – – N/A (+) Unrealized performance compensation – – – N/A – – N/A SEGMENT DISTRIBUTABLE EARNINGS 7,425 10,216 10,016 35% 47,599 42,559 (11)% Segment DE Margin (%) 35.7% 46.1% 44.0% 49.0% 47.7% ASSETS UNDER MANAGEMENT (AUM R$millions) 11,573 10,760 10,209 (12)% 11,573 10,209 (12)% FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) 11,440 10,606 10,053 (12)% 11,440 10,053 (12)% AVERAGE MANAGEMENT FEE RATE (%) 0.75% 0.86% 0.81% 0.73% 0.79% FULL TIME EMPLOYEES 24 23 23 (4)% 24 23 (4)% R$10 bn AUM Liquid Strategies ▪ Fee related earnings (FRE) of R$8.8 million in the quarter, up 20% year - over - year. FRE was R$38.3 million over the FY'22, a dec rease of 10% compared to the FY'21, driven by a combination of modest outflows in the beginning of the year and intra - quarter depreciation effects. ▪ Performance related earnings (PRE) of R$1.2 million in the quarter, up 2,835% year - over - year. PRE was R$4.3 million over the FY' 22, a decrease of 12% when compared to the FY’21. ▪ Segment Distributable Earnings of R$10.0 million in the quarter, up 35% year - over - year, following higher contributions from perf ormance fees and FRE. Segment Distributable Earnings was R$42.6 million over the FY'22, a decrease of 11% when compared to FY'21. ▪ AUM was R$10.2 billion at the end of the year. Liquid strategies' AUM has posted resilient numbers when compared to the Brazi lia n landscape for liquid funds, having suffered a modest outflow early in 2022, which did not reverberate within the following quarters. Nevertheless, liquid funds have been impacted by market - to - market effects intra - quarters and in the latter part of 2022, that negatively affected Liquid strategies’ AUM.
25 Separate Mandates 66% Pension Plans 14% International 11% Commingled Funds 9% IP&S AUM (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ YoY (%) Net revenue from management fees 21,645 21,692 20,119 (7)% 79,799 83,114 4% Net revenue from advisory fees 7 7 7 3% 54 28 (48)% Total Fee Related Revenues 21,652 21,699 20,126 (7)% 79,853 83,142 4% Segment personnel expenses (1,408) (1,075) (987) (30)% (4,419) (4,967) 12% Other G&A expenses (791) (622) (992) 25% (2,091) (2,664) 27% Corporate center expenses (3,783) (4,923) (4,310) 14% (15,558) (18,162) 17% Bonus compensation related to management and advisory (7,239) (4,125) (4,184) (42)% (20,212) (16,021) (21)% Total Fee Related Expenses (13,221) (10,745) (10,473) (21)% (42,280) (41,815) (1)% FEE RELATED EARNINGS (FRE) 8,431 10,954 9,653 14% 37,573 41,328 10% FRE Margin (%) 38.9% 50.5% 48.0% 47.1% 49.7% Net revenue from performance fees 1,415 1,167 961 (32)% 22,237 3,156 (86)% Realized performance fees 1,415 1,167 961 (32)% 22,237 3,156 (86)% Unrealized performance fees – – – N/A – – N/A Performance based compensation (393) (698) (338) (14)% (6,942) (1,480) (79)% PERFORMANCE RELATED EARNINGS (PRE) 1,022 469 623 (39)% 15,295 1,676 (89)% PRE Margin (%) 72.2% 40.2% 64.8% 68.8% 53.1% ( - ) Unrealized performance fees – – – N/A – – N/A (+) Unrealized performance compensation (3) – – N/A 0 – N/A SEGMENT DISTRIBUTABLE EARNINGS 9,451 11,422 10,276 9% 52,868 43,003 (19)% Segment DE Margin (%) 41.0% 50.0% 48.7% 51.8% 49.8% ASSETS UNDER MANAGEMENT (AUM R$millions) 23,664 25,029 24,187 2% 23,664 24,187 2% FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) 23,528 24,911 24,085 2% 23,528 24,085 2% AVERAGE MANAGEMENT FEE RATE (%) 0.38% 0.38% 0.36% 0.39% 0.37% FULL TIME EMPLOYEES 18 16 15 (17)% 18 15 (17)% Investment Products & Solutions ▪ Fee related earnings (FRE) of R$9.7 million in the quarter, up 14% year - over - year. FRE was R$41.3 million over the FY'22, an inc rease of 10% when compared to the FY'21. ▪ Performance related earnings (PRE) of R$0.6 million, down 39% year - over - year. PRE over the FY'22 was R$1.7 million, a decrease o f 89% when compared to the FY’21, following a strong year for international exclusive mandates in 2021. ▪ Segment Distributable Earnings of R$10.3 million in the quarter, up 9% year - over - year. Segment DE was R$43.0 million over the FY '22, a decrease of 19% when compared to the FY’21, due to a higher contribution from PRE in 2021. ▪ Total AUM of R$24.2 billion, up 2% year - over - year. R$24 bn AUM
26 Financial Advisory ▪ Fee related earnings (FRE) of R$0.6 million in the quarter, down 94% year - over - year. ▪ FRE was R$8.2 million over the FY'22, a decrease of 77% when compared to the FY'21, due to a stronger deal environment in 202 1. ▪ Segment Distributable Earnings over the FY'22 were R$8.2 million, a decrease of 77% year - over - year when compared to the FY'21. (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ YoY (%) Net revenue from management fees – – – N/A – – N/A Net revenue from advisory fees 18,457 6,700 2,630 (86)% 61,047 18,908 (69)% Total Fee Related Revenues 18,457 6,700 2,630 (86)% 61,047 18,908 (69)% Segment personnel expenses (484) (502) (472) (2)% (1,688) (2,009) 19% Other G&A expenses (553) (82) (87) (84)% (1,263) (543) (57)% Corporate center expenses (3,310) (1,121) (1,130) (66)% (8,879) (4,256) (52)% Bonus compensation related to management and advisory (2,863) (1,379) (302) (89)% (12,965) (3,889) (70)% Total Fee Related Expenses (7,210) (3,084) (1,991) (72)% (24,796) (10,697) (57)% FEE RELATED EARNINGS (FRE) 11,247 3,616 639 (94)% 36,251 8,211 (77)% FRE Margin (%) 60.9% 54.0% 24.3% 59.4% 43.4% SEGMENT DISTRIBUTABLE EARNINGS 11,247 3,616 639 (94)% 36,251 8,211 (77)% Segment DE Margin (%) 60.9% 54.0% 24.3% 59.4% 43.4% FULL TIME EMPLOYEES 10 10 10 0% 10 10 0%
27 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) 4Q'21 YTD 4Q'22 YTD ∆ (%) Net revenue from management fees – – – – – – – Net revenue from advisory fees – – – – – – – Total Fee Related Revenues – – – – – – – Segment personnel expenses – (386) (334) N/A – (1,125) N/A Other G&A expenses – (463) (515) N/A – (1,613) N/A Corporate center expenses – (92) (115) N/A – (207) N/A Bonus compensation related to management and advisory – (500) (513) N/A – (3,027) N/A Total Fee Related Expenses – (1,441) (1,476) N/A – (5,972) N/A FEE RELATED EARNINGS (FRE) – (1,441) (1,476) N/A – (5,972) N/A FRE Margin (%) N/A N/A N/A N/A N/A Net revenue from performance fees – – – – – – – Realized performance fees – – – – – – – Unrealized performance fees – – – – – – – Performance based compensation – – – – – – – PERFORMANCE RELATED EARNINGS (PRE) – – – – – – – PRE Margin (%) N/A N/A N/A N/A N/A ( - ) Unrealized performance fees – – – – – – – (+) Unrealized performance compensation – – – – – – – SEGMENT DISTRIBUTABLE EARNINGS – (1,441) (1,476) N/A – (5,972) N/A Segment DE Margin (%) N/A N/A N/A N/A N/A ASSETS UNDER MANAGEMENT (AUM R$millions) – – – – – – – FULL TIME EMPLOYEES – 6 7 N/A – 7 N/A Retirement Services ▪ Fee Related Earnings (FRE) of negative R$1.5 million in the quarter. FRE was negative R$6.0 million in the FY’22. ▪ VRS is in the final stages of beta testing and is expected to launch in early 2023, starting to contribute to AUM numbers and ma nagement fee revenues.
Supplement Details
29 AUM and Fee - Earning AUM Rollforward Assets Under Management (AUM) – R$ millions Fee - Earning Assets Under Management (FEAUM) – R$ millions For the Three Months Ended December 30, 2022 For the Three Months Ended December 30, 2022 For the Twelve Months Ended December 30, 2022 For the Twelve Months Ended December 30, 2022 Private Public IP&S Infrastructure Real Estate Credit Hedge Vinci SPS Total Equity Equities Funds Beginning balance 13,650 7,868 25,029 1,505 5,888 4,465 2,892 2,096 63,392 (+/ - ) Capital Subscription / (capital return) 275 – – 626 (4) 482 – (42) 1,336 (+) Capital Subscription 364 – 0 659 104 500 – 47 1,673 ( - ) Capital Return (90) – (0) (33) (109) (18) – (89) (338) (+) Acquisitions – – – – – – – – – (+/ - ) Net Inflow / (outflow) – (87) (548) – (44) 46 (95) – (728) (+/ - ) Appreciation / (depreciation) (144) (384) (293) (76) (189) 62 15 90 (918) Ending Balance 13,781 7,397 24,187 2,055 5,649 5,056 2,812 2,144 63,081 Private Public IP&S Infrastructure Real Estate Credit Hedge Vinci SPS Total Equity Equities Funds Beginning balance 11,223 8,493 23,664 2,421 5,399 2,948 3,080 – 57,229 (+/ - ) Capital Subscription / (capital return) 2,410 – 142 (280) 71 1,594 – (42) 3,895 (+) Capital Subscription 2,527 – 142 821 498 1,745 – 47 5,780 ( - ) Capital Return (117) – (0) (1,101) (428) (152) – (89) (1,886) (+) Acquisitions – – – – – – – 2,055 2,055 (+/ - ) Net Inflow / (outflow) – (1,019) (146) – (74) 264 (533) – (1,509) (+/ - ) Appreciation / (depreciation) 148 (76) 527 (86) 255 250 265 131 1,412 Ending Balance 13,781 7,397 24,187 2,055 5,649 5,056 2,812 2,144 63,081 Private Public IP&S Infrastructure Real Estate Credit Hedge Vinci SPS Total Equity Equities Funds Beginning balance 10,288 7,805 24,911 1,447 5,888 4,465 2,801 2,096 59,700 (+/ - ) Capital Subscription / (capital return) 275 – – 632 (4) 482 – (42) 1,342 (+) Capital Subscription 352 – 0 659 104 500 – 47 1,661 ( - ) Capital Return (77) – (0) (27) (109) (18) – (89) (320) (+) Acquisitions – – – – – – – – – (+/ - ) Net Inflow / (outflow) – (87) (548) – (44) 46 (95) – (728) (+/ - ) Appreciation / (depreciation) (155) (384) (278) (76) (189) 62 12 90 (917) Ending Balance 10,407 7,334 24,085 2,003 5,649 5,056 2,718 2,144 59,397 Private Public IP&S Infrastructure Real Estate Credit Hedge Vinci SPS Total Equity Equities Funds Beginning balance 9,299 8,427 23,528 2,362 5,399 2,948 3,013 – 54,975 (+/ - ) Capital Subscription / (capital return) 1,115 – 142 (274) 71 1,594 – (42) 2,606 (+) Capital Subscription 1,219 – 142 821 498 1,745 – 47 4,473 ( - ) Capital Return (104) – (0) (1,095) (428) (152) – (89) (1,868) (+) Acquisitions – – – – – – – 2,055 2,055 (+/ - ) Net Inflow / (outflow) – (1,016) (126) – (74) 264 (546) – (1,498) (+/ - ) Appreciation / (depreciation) (6) (77) 540 (85) 255 250 252 131 1,260 Ending Balance 10,407 7,334 24,085 2,003 5,649 5,056 2,718 2,144 59,397
30 Fund Segment NAV¹ (R$ millions) 4Q’22 YTD 12 M 24 M Market Comparison Index Rate Vinci Multiestratégia FIM Hedge Funds 468.5 2.5% 11.8% 11.8% 14.8% CDI 4 CDI 4 Atlas Strategy² Hedge Funds 438.7 (1.5)% 8.2% 8.2% 3.9% CDI 4 CDI 4 Vinci Total Return Hedge Funds 218.0 (5.3)% 3.3% 3.3% 20.9% IPCA 6 + Yield IMA - B 7 IPCA 6 + Yield IMA - B 7 Mosaico Strategy Public Equities 978.7 (6.1)% (4.6)% (4.6)% (16.9)% IBOV 5 IBOV 5 Vinci Gas Dividendos FIA Public Equities 526.3 (1.3)% 7.9% 7.9% (4.5)% IBOV 5 IBOV 5 Vinci Valorem FIM IP&S 3,066.5 1.6% 9.8% 9.8% 13.9% IMA - B 5 7 IMA - B 5 7 Equilibrio Strategy³ IP&S 2,070.7 1.3% 9.7% 9.7% 13.3% IPCA 6 - Vinci Retorno Real FIM IP&S 168.0 0.9% 13.9% 13.9% 24.3% IMA - B 7 IMA - B 7 Vinci Crédito Imobiliário I Credit 242.4 3.9% 12.2% 12.2% 14.3% IPCA 6 IPCA 6 +7.785% Vinci Crédito Imobiliário II Credit 698.5 0.8% 8.8% 8.8% 12.3% IPCA 6 IPCA 6 + 6% Vinci Crédito Estruturado Mult . Plus FIC FIM Credit 123.6 3.5% 13.9% 13.9% 22.4% CDI 4 CDI 4 Vinci Energia Sustentável Credit 585.6 (0.1)% 5.8% 5.8% 9.2% IPCA 6 IPCA 6 + 6% Vinci Crédito Multiestratégia Credit 329.6 1.7% 10.5% 10.5% 0.0% CDI 4 IPCA 6 + 5% VISC11 Real Estate (listed REIT) 2,302.9 (2.7)% 11.5% 11.5% 5.4% IFIX 8 IPCA 6 + 6% VILG11 Real Estate (listed REIT) 1,683.8 (7.6)% 2.9% 2.9% (7.7)% IFIX 8 IPCA 6 + 6% VINO11 Real Estate (listed REIT) 906.9 (2.8)% (8.5)% (8.5)% (8.8)% IFIX 8 IPCA 6 + 6% VIFI11 Real Estate / Credit (listed REIT) 71.6 (6.6)% 1.1% 1.1% (11.6)% IFIX 8 IFIX 8 VIUR11 Real Estate (listed REIT) 247.9 (0.1)% 13.8% 13.8% - IFIX 8 IPCA 6 + 6% VCRI11 Real Estate / Credit (listed REIT) 168.0 5.0% 0.9% - - IFIX 8 IPCA 6 + X 9 % VICA11 Real Estate / Credit (REIT) 375.7 1.5% - - - IFIX 8 CDI 4 + 1% VINCI FOF IMOBILIARIO FIM CP Real Estate (REIT) 58.0 (3.1)% 5.9% 5.9% - IFIX 8 IFIX 8 VIGT11 Infrastructure (listed) 604.9 (3.6)% 1.1% 1.1% (11.1)% - - Investment records – IP&S, Liquid Strategies, Credit and Listed Funds Benchmark 4Q’22 YTD 12 M 24 M IBOV 5 (0.3)% 4.7% 4.7% (7.8)% CDI 4 3.2% 12.4% 12.4% 17.3% IMA - B 5 7 2.5% 9.8% 9.8% 14.8% IPCA 6 + Yield IMA - B 7 2.7% 11.3% 11.3% 27.0% IPCA 6 1.6% 5.8% 5.8% 16.5% IFIX 8 (4.1)% 2.2% 2.2% (0.1)% See notes and definitions at end of document
31 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$mm) (BRL) (USD) (BRL) (USD) Fund 1 Private Equity 2004 1,415 1,206 5,065 213 5,278 4.4x 4.0x 71.5% 77.2% VCP II Private Equity 2011 2,200 1,880 2,019 2,241 4,260 2.3x 1.1x 12.0% 1.8% VCP III Private Equity 2018 4,000 2,118 34 3,564 3,598 1.6x 1.5x 42.7% 32.3% VCP Strategy² Private Equity 7,615 5,204 7,118 6,018 13,136 2.5x 2.2x 64.7% 70.2% NE Empreendedor Private Equity 2003 36 13 26 – 26 2.1x 2.6x 22.0% 30.5% Nordeste III Private Equity 2017 240 134 91 124 216 1.6x 1.3x 18.8% 9.5% VIR IV Private Equity 2020 1,000 277 92 229 321 1.2x 1.1x 18.6% 20.8% VIR Strategy³ Private Equity 1,276 424 210 353 563 1.3x 1.3x 20.6% 27.3% SPS I Vinci SPS 2018 128 172 131 150 281 1.6x 1.6x 26.8% 18.2% SPS II Vinci SPS 2020 671 984 475 880 1,355 1.4x 1.5x 30.1% 30.8% SPS III Vinci SPS 2021 1,070 358 53 365 417 1.2x 1.3x 39.0% 44.0% Vinci SPS Strategy 4 Vinci SPS 1,869 1,514 659 1,395 2,054 1.4x 1.5x 29.8% 27.6% FIP Transmissão 5 Infrastructure 2017 211 104 240 143 383 3.7x 2.7x 64.0% 47.2% VIAS 6 Infrastructure 2021 386 350 – 350 350 1.0x 1.0x NM NM VFDL 7 Real Estate 2021 422 89 – 111 111 1.2x 1.3x 26.4% 28.0% Vinci Credit Infra 8 Credit 2022 1,400 60 – 59 59 1.0x 1.0x NM NM Pro Forma Historical Portfolio Performance - Excluding PIPE Investments¹ Investment records – Closed End Private Markets funds See notes and definitions at end of document
32 Shareholder Dividends ($ in thousands) 1H21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q’22 4Q’22 Distributable Earnings (R$) 101,976 61,743 68,515 53,255 60,435 72,842 55,792 Distributable Earnings (US$)¹ 19,397 11,377 13,637 10,615 11,795 14,281 10,618 DE per Common Share (US$)² 0.34 0.20 0.24 0.19 0.21 0.26 0.19 Actual Dividend per Common Share³ 0.30 0.16 0.20 0.17 0.17 0.20 0.17 Record Date September 01,2021 December 01,2021 March 10, 2022 May 24, 2022 August 25, 2022 November 23, 2022 March 01, 2023 Payable Date September 16, 2021 December 16,2021 March 24, 2022 June 08, 2022 September 09,2022 December 08,2022 March 15, 2023 ▪ Vinci Partners generated R$1.01 or US$0.19¹ of Distributable Earnings per common share for the fourth quarter of 2022. ▪ The company declared a quarterly dividend of US$0.17² per common share to record holders as of March 01, 2023; payable on Mar ch 15 , 2023. See notes and definitions at end of document
33 Share Summary ▪ Common Shares Outstanding as of quarter end of 55,080,736 shares. x Repurchased 278,122 common shares in the quarter, with an average share price of US$10.0. x Repurchased 1,832,852 common shares since the announcement of the first share repurchase plan, with an average share price of US $11.9. x The first share repurchase plan expired on May 31, 2022 and was replaced by a new share repurchase plan initiated on June 17 th , 2022, limited to R$60 million. x Available authorization remaining was R$29.8 million on December 30, 2022. VINP Shares 1Q ' 21 2Q ' 21 3Q ' 21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 Class B 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 14,466,239 Class A – Partnership Units 27,175,861 27,175,861 27,175,861 27,175,861 27,175,861 27,175,861 27,175,861 27,175,861 Class A - Public Float 15,271,488 15,094,833 14,921,318 14,513,477 14,187,216 13,936,856 13,716,758 13,438,636 Common Shares 56,913,588 56,736,933 56,563,418 56,155,577 55,829,316 55,578,956 55,358,858 55,080,736
34 (R$ millions, unless mentioned) Segment 4Q’22 Commitments Total Capital Committed 4Q’22 Capital Called Total Capital Called Capital Returned/Dividends Paid (4Q'22) Accumulated Capital Returned/Dividends Paid Fair value of investments Nordeste III Private Equity – 5.0 0.0 3.1 – 1.6 2.4 VCP III Private Equity – 3.1 0.0 2.4 – – 3.4 VIR IV Private Equity – 11.1 0.2 3.9 0.8 1.0 2.9 VCP IV Private Equity – 350.0 – – – – – FIP Infra Transmissão ( co - investment)¹ Infrastructure – 29.5 – 8.9 1.3 20.9 10.9 FIP Infra Transmissão¹ Infrastructure – 10.5 – 3.4 0.4 6.6 3.1 VIAS Infrastructure – 50.0 – 27.8 – – 33.9 Vinci Transporte e Logística II Infrastructure – 15.0 – – – – – Vinci Transporte e Logística I Infrastructure – 11.4 – 6.3 – – 5.6 VICC Infrastructure 100.0 100.0 – – – – – VFDL Real Estate – 70.0 – 22.8 – – 25.5 VIUR Real Estate – 67.3 – 67.3 1.5 9.0 53.3 VINO Real Estate – 50.0 – 50.0 0.9 3.4 43.2 Vinci FOF Imobiliário Real Estate – 16.9 – 16.9 – 0.5 18.4 VCS Real Estate/Credit – 80.0 – 80.0 3.0 8.8 75.7 Vinci Crédito Agro Fiagro - Imobiliário Real Estate/Credit – 23.0 – 23.0 – – 22.9 Vinci Crédito Infra Institucional Credit – 100.0 7.7 7.7 – – 7.6 VSP FIM IP&S – 50.0 2.4 6.8 – – 7.3 VINCI PIPE Public Equities 5.0 25.0 5.0 25.0 – – 21.9 Total 105.0 1,067.8 15.3 355.1 7.9 51.9 338.0 GP Commitment in Vinci Partners funds ▪ As of December 30, 2022, the company had R$1.1 billion in capital commitments signed to proprietary funds. ▪ During the fourth quarter of 2022, the company signed R$105.0 million in capital commitments to proprietary funds. ▪ Total GP Investments marked at fair value of R$338.0 million as of December 30, 2022. See notes and definitions at end of document
35 30% 21% 16% 9% 10% 7% 4% 3% Private Equity IP&S Public Equities Real Estate Credit Hedge Funds Infrastructure Vinci SPS PERFORMANCE FEE ELIGIBLE AUM (PEAUM) Strategy/Fund AUM R$mm Index type Index Rate Status Offshore Vehicles 3,737 Preferred Return w/ Catch - Up² USD + 8% Within investment period Onshore Vehicles 3,031 Preferred Return w/ Catch - Up² IPCA 5 + 8% Within investment period Nordeste III 219 Preferred Return w/ Catch - Up² IPCA 5 + 8.5% Currently generating performance Teman Pier 140 Preferred Return w/ Catch - Up² IPCA 5 + 5% Within investment period Others 3,574 Not expected to pay performance Total Private Equity 10,700 Vinci Valorem 1,868 Hurdle³ IMAB 5 6 Currently generating performance Separate Mandates 1,694 Hurdle³ IBOV 7 + alpha Currently generating performance International¹ 1,521 Currently generating performance Commingled Funds 747 Hurdle³ IBOV 7 + alpha Currently generating performance VSP 207 Preferred Return w/ Catch - Up² IPCA 5 + 8% Currently generating performance Others 1,628 Currently generating performance Total IP&S 7,665 SWF 3,895 Hurdle³ FTSE 8 Currently generating performance Mosaico Strategy 1,031 Hurdle³ IBOV 7 Currently generating performance Vinci Gas Dividendos 526 Hurdle³ IBOV 7 Currently generating performance Others 304 Currently generating performance Total Public Equities 5,757 Listed REITs 2,501 Hurdle³ IPCA 5 + 6% Currently generating performance VFDL 435 Preferred Return 4 IPCA 5 + 6% Within investment period FOF Strategy 92 Hurdle³ IFIX 9 Currently generating performance Others 236 Currently generating performance Total Real Estate 3,264 VCI II 758 Preferred Return 4 IPCA 5 + 6% Within investment period VES 586 Preferred Return 4 IPCA 5 + 6% Within investment period VCM FIM 352 Preferred Return 4 IPCA 5 + 5% Within investment period Energia FIM 344 Hurdle³ CDI 10 Currently generating performance VCS 113 Hurdle³ IPCA 5 + 5% Within investment period VCI I 242 Not expected to pay performance FOF Strategy 23 Hurdle³ IFIX 9 Currently generating performance Others 1,131 Currently generating performance Total Credit 3,549 Atlas Strategy 439 Hurdle³ CDI 10 Currently generating performance Vinci Multiestratégia 468 Hurdle³ CDI 10 Currently generating performance Vinci Total Return 354 Hurdle³ IPCA 5 + Yield IMAB 11 Currently generating performance Others 1,232 Currently generating performance Total Hedge Funds 2,493 VIAS 369 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 62 Preferred Return 4 IPCA 5 + 8% Currently generating performance VICC 659 Preferred Return 4 IPCA 5 Within investment period Others 147 Not expected to pay performance Total Infrastructure 1,388 Special Situations 1,095 Preferred Return 4 CDI 10 Within investment period Total Vinci SPS 1,095 PEAUM TOTAL 35,910 Significant exposure to performance fee - eligible AUM ▪ Total Performance fee eligible AUM (PEAUM) of R$35.9 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$11 billion in AUM comes from “preferred return” funds with carried interest, that are still in investment period. PEAUM R$36 bn See notes and definitions at end of document
Reconciliations and Disclosures
37 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 ∆ YoY (%) FY'21 FY'22 ∆ (%) REVENUES Net revenue from management fees 91,594 95,361 99,640 9% 361,070 371,501 3% Net revenue from performance fees 3,448 31 7,558 119% 37,633 14,600 (61)% Realized performance fees 13,614 2,602 9,241 (32)% 45,348 18,218 (60)% Unrealized performance fees (10,166) (2,571) (1,683) (83)% (7,715) (3,618) (53)% Net revenue from advisory 20,148 7,267 4,394 (78)% 66,755 21,994 (67)% Total net revenues from services rendered 115,190 102,659 111,592 (3)% 465,458 408,095 (12)% EXPENSES Bonus related to management and advisory (23,367) (19,798) (18,981) (19)% (84,969) (73,318) (14)% Performance based compensation (1,094) (537) (3,558) 225% (14,001) (6,554) (53)% Realized (4,699) (1,448) (4,151) (12)% (16,734) (7,833) (53)% Unrealized 3,605 910 593 (84)% 2,733 1,278 (53)% Total compensation and benefits (24,461) (20,335) (22,539) (8)% (98,970) (79,872) (19)% Segment personnel expenses (6,021) (6,509) (6,163) 2% (22,246) (25,454) 14% Other general and administrative expenses (4,717) (4,725) (4,977) 6% (17,512) (18,383) 5% Corporate center expenses (23,642) (22,067) (22,592) (4)% (80,599) (84,770) 5% Total expenses (58,841) (53,636) (56,271) (4)% (219,328) (208,480) (5)% Operating profit 56,349 49,023 55,321 (2)% 246,130 199,616 (19)% OTHER ITEMS GP Investment income 4,415 9,673 8,011 81% 80 6,304 7,780% Realized gain from GP investment income 11,973 5,738 7,462 (38)% 13,851 20,171 46% Unrealized gain from GP investment income (7,558) 3,935 549 N/A (13,771) (13,867) 1% Financial income 9,579 31,701 10,268 7% 27,902 87,870 215% Realized gain from financial income 9,531 31,726 10,235 7% 28,729 86,958 203% Unrealized gain from financial income 48 (25) 33 (31)% (827) 912 N/A Leasing expenses (2,953) (2,297) (2,190) (26)% (12,281) (9,359) (24)% Other items¹ 140 (1,689) 10,434 7,353% (319) 8,253 N/A Share Based Plan (1,014) (5,609) (5,463) 439% (3,670) (14,276) 289% Non - recurring expenses² – (523) – N/A – (6,594) N/A Total Other Items 10,167 31,256 21,060 107% 11,712 72,198 516% Profit before income taxes 66,516 80,279 76,381 15% 257,842 271,814 5% ( - ) Income taxes ³ (9,923) (11,072) (17,891) 80% (49,227) (52,413) 6% NET INCOME 56,593 69,207 58,490 3% 208,615 219,401 5% (+) Non - recurring expenses² including income tax related to realized expense – 353 – N/A – 5,425 N/A ( - ) Contingent consideration adjustment related to acquisitions 4 – – (9,221) N/A – (9,221) ADJUSTED NET INCOME 56,593 69,560 49,269 (13)% 208,615 215,604 3% Financials - Income Statement See notes and definitions at end of document
38 (R$ thousands, unless mentioned) 4Q'21 3Q'22 4Q'22 FY'21 FY'22 OPERATING PROFIT 56,349 49,023 55,321 246,130 199,616 ( - ) Net revenue from realized performance fees (13,614) (2,602) (9,241) (45,348) (18,218) ( - ) Net revenue from unrealized performance fees 10,166 2,571 1,683 7,715 3,618 (+) Compensation allocated in relation to performance fees 1,094 537 3,558 14,001 6,554 FEE RELATED EARNINGS (FRE) 53,995 49,529 51,321 222,498 191,570 OPERATING PROFIT 56,349 49,023 55,321 246,130 199,616 ( - ) Net revenue from management fees (91,594) (95,361) (99,640) (361,070) (371,501) ( - ) Net revenue from advisory (20,148) (7,267) (4,394) (66,755) (21,994) (+) Bonus related to management and advisory 23,367 19,798 18,981 84,969 73,318 (+) Personnel expenses 6,021 6,509 6,163 22,246 25,454 (+) Other general and administrative expenses 4,717 4,725 4,977 17,512 18,383 (+) Corporate center expenses 23,642 22,067 22,592 80,599 84,770 PERFORMANCE RELATED EARNINGS (PRE) 2,354 (506) 4,000 23,632 8,046 OPERATING PROFIT 56,349 49,023 55,321 246,130 199,616 ( - ) Net revenue from unrealized performance fees 10,166 2,571 1,683 7,715 3,618 (+) Compensation allocated in relation to unrealized performance fees (3,605) (910) (593) (2,733) (1,278) (+) Realized gain from GP investment income 11,973 5,738 7,462 13,851 20,171 SEGMENT DISTRIBUTABLE EARNINGS 74,883 56,422 63,873 264,964 222,127 NET INCOME 56,593 69,207 58,490 208,615 219,402 ( - ) Net revenue from unrealized performance fees 10,166 2,571 1,683 7,715 3,618 (+) Income tax from unrealized performance fees (1,173) (296) (194) (890) (417) (+) Compensation allocated in relation to unrealized performance fees (3,605) (910) (593) (2,733) (1,278) ( - ) Unrealized gain from GP investment income 7,558 (3,935) (549) 13,771 13,867 (+) Income tax on unrealized gain from GP investment income – 7 (321) 757 (369) ( - ) Unrealized gain from financial income (48) 25 (33) 827 (912) ( - ) Income tax on unrealized gain from financial income (3,117) – – (3,415) – ( - ) Contingent consideration (earn - out) gain (loss), after - tax – – (9,221) – (9,221) (+) Depreciation and amortization 1,127 1,223 1,803 3,917 4,986 (+) Share Based Plan 1,014 5,609 5,463 3,670 14,276 ( - ) Income Taxes on Share Based Plan – (659) (736) – (1,628) (+) Non - recurring expenses including income tax related to realized expense – 353 – – 5,425 ADJUSTED DISTRIBUTABLE EARNINGS 68,515 73,195 55,792 232,234 247,748 TOTAL NET REVENUE FROM SERVICES RENDERED 115,190 102,659 111,592 465,458 408,095 ( - ) Net revenue from realized performance fees (13,614) (2,602) (9,241) (45,348) (18,218) ( - ) Net revenue from unrealized performance fees 10,166 2,571 1,683 7,715 3,618 NET REVENUE FROM MANAGEMENT FEES AND ADVISORY 111,742 102,628 104,034 427,825 393,495 Financials - Non - GAAP Reconciliation
39 Effective tax rate reconciliation See notes and definitions at end of document (R$ thousands, unless mentioned) 4Q'21 4Q'22 FY21 FY'22 Profit (loss) before income taxes 66,516 76,381 257,842 271,814 Combined statutory income taxes rate - % 34% 34% 34% 34% Income tax benefit (Expense) at statutory rates (22,615) (25,970) (87,666) (92,417) Reconciliation adjustments: Expenses not deductible (330) (159) (392) (214) Tax benefits 445 185 825 282 Share based payments (102) (70) (371) (297) Effect of presumed profit of subsidiaries¹ and offshore subsidiaries 12,589 8,097 38,279 40,220 Other additions (exclusions), net 90 26 98 13 Income taxes expenses (9,923) (17,891) (49,227) (52,413) Current (12,251) (15,086) (56,770) (53,144) Deferred 2,328 (2,805) 7,543 731 Effective tax rate 15% 23% 19% 19%
40 General and Administrative Expenses 4Q 2021 (R$mm) 4Q 2022 (R$mm) Lease and condominium Other Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A R$58.8 mm Personnel Bonus related to Mgmt. and Adv. fees Performance based compensation Third party expenses D&A Lease and condominium Other R$56.3 mm (4)% 16.0 19.0 3.6 8.1 1.8 3.8 3.9 14.5 23.4 1.1 12.2 1.1 3.1 3.4
41 Liabilities and equity 9/30/2022 12/30/2022 Current liabilities Trade payables 768 1,247 Deferred Revenue 16,713 – Leases 22,293 24,147 Accounts payable 6,761 7,328 Labor and social security obligations 66,208 87,732 Loans and Obligations 10,171 13,168 Taxes and contributions payable 19,474 22,291 Total current liabilities 142,388 155,913 Non - current liabilities Accounts payable – – Leases 52,965 62,064 Labor and social security obligations 2,048 2,968 Loans and Obligations 175,238 162,122 Deferred taxes 3,770 8,340 234,021 235,494 Total liabilities 376,409 391,407 Equity Share capital 15 15 Additional paid - in capital 1,382,038 1,382,038 Treasury shares (100,323) (114,978) Retained Earnings 79,135 81,310 Other reserves 21,705 24,149 1,382,570 1,372,534 Non - controlling interests in the equity of subsidiaries 1,575 3,013 Total equity 1,384,145 1,375,547 Total liabilities and equity 1,760,554 1,766,954 Balance Sheet Assets 9/30/2022 12/30/2022 Current assets Cash and cash equivalents 97,383 136,581 Cash and bank deposits 13,981 30,108 Financial instruments at fair value through profit or loss 83,402 106,473 Financial instruments at fair value through profit or loss 1,302,167 1,243,764 Trade receivables 50,467 57,675 Sub - leases receivable 1,500 1,500 Taxes recoverable 654 1,555 Other assets 13,852 16,481 Total current assets 1,466,023 1,457,556 Non - current assets Financial instruments at fair value through profit or loss 5,646 5,985 Trade receivables 17,317 17,298 Sub - leases receivable 1,656 1,343 Taxes recoverable 4,316 3,141 Deferred taxes 7,376 9,241 Other receivables 1,041 1,065 37,352 38,073 Property and equipment 12,578 11,951 Right of use - Leases 57,943 70,136 Intangible assets 186,658 189,238 Total non - current assets 294,531 309,398 Total Assets 1,760,554 1,766,954
42 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) Adjusted Distributable Earnings per share is calculated as Distributable Earnings excluding non - recurring expenses, consider ing the number of outstanding shares at the end of each quarter. Full year value is calculated as the sum of the last four quarters. (3) LTM Dividend Yield is calculated considering 0.71 dividend/share for LTM and US$10.90/share as of February 13 th ,2023. ▪ Notes to page 9 (1) FRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full year val ues are calculated as the sum of the last four quarters. (2) Other financial expenses include the interest related to Vinci SPS’ acquisition. (3) Non - recurring expenses for 2022 are composed by expenses related to professional services to matters related to acquisitions and to our international corporate organization. (4) DE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full year valu es are calculated as the sum of the last four quarters. Notes to page 11 (1) Long - term AUM includes funds with lockups for at least five years to quasi - perpetual capital commitments. ▪ Notes to page 12 (1) Long term products include funds with former lockups superior to five years. (2) Private markets strategies include Private Equity, Real Estate, Credit, Infrastructure and Vinci SPS. ▪ Notes to page 13 (1) Accrued performance fees for the VCP offshore are as of 3Q'22. 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 16 (1) FRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full year val ues are calculated as the sum of the last four quarters. (2) FRE results present an upside from this quarter onwards, a result of the impact from management fees from Vinci SPS in a ful l quarter - basis, combined with the increase in average mgmt. fee rate recently raised and/or incorporated funds deploy capital. Certain funds present a positive upside to average management fee rates as these products charge higher fees as they deploy capital (highlights to Vinci SPS' third vintage and Vinci Credit Infra). (3) Asset management segments are: Private Equity, Real Estate, Credit, Infrastructure, Vinci SPS, Public Equities, Hedge Fun ds and IP&S. ▪ Notes to page 17 (1) PRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full year val ues are calculated as the sum of the last four quarters.
43 Notes and Definitions (cont’d.) ▪ Notes to page 18 (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 Credit. ▪ Notes to page 19 (1) Adjusted Distributable Earnings is calculated as Distributable Earnings excluding non - recurring expenses. (2) DE per share is calculated considering the number of outstanding shares at the end of the current quarter. Full year valu es are calculated as the sum of the last four quarters. ▪ Notes to page 20 (1) Cash and cash equivalents include certificate of deposits and federal bonds. Certificate of deposits are issued by Banco Bra desco (credit rating AAA evaluated by Fitch Ratings) with interest rates variable from 99.5% to 101% of CDI (interbank deposit rate). The certificates are readily convertible to known amounts of cas h a nd 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 30, 2022, in liquid funds from Vinci Partne rs’ public equities, hedge funds, 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'22 Financia l S tatements filed within the SEC on February 14, 2023. (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 30, 2022. For more detail, please see slide 33 and the Financial Statements filed within the SEC on February 14, 2022. (4) Debt obligations include commercial notes and consideration payable. For more detail, see 4Q'22 Financial Statements file d w ithin the SEC on February 14, 2023. (5) Net Cash and Net Investments per share were calculated considering the number of outstanding shares at the end of each qu art er. ▪ Notes to page 30 (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 and Atlas Institucional FIC FIM. (3) Equilibrio Strategy incudes the IP&S Family of pension plans. (4) CDI is an average of interbank overnight rates in Brazil (daily average for the period). (5) Brazil stock market most relevant index. (6) IPCA is a broad consumer price index measured by the IBGE. (7) IMAB is composed by government bonds indexed to IPCA. IMAB 5 also includes government bonds indexed to IPCA with up to 5 Yea rs in duration.
44 Notes and Definitions (cont’d.) (8) IFIX is an index composed by listed REITs in the Brazilian stock Market. (9) 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 31 (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$1.3 billion in co - investments. Track record presented for the VCP strategy as of 3Q' 22, due to fund’s administrator timeline to disclose the quarterly markup of the fund. (3) Track record for VIR strategy is presented as of 3Q'22, due to fund’s administrator timeline to disclose the quarterly ma rku p of the fund. (4) Track record for Vinci SPS strategy is presented as of 4Q'22. (5) Track record for FIP Infra is presented as of 3Q'22. (6) Track record for VIAS is presented as of 3Q'22. (7) Track record for VFDL is presented as of 4Q’22. (8) Track record for Vinci Credit Infra is presented as of 4Q’22. ▪ Notes to page 32 (1) US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 5.2546, as of February 10, 202 3, 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 34 (1) The remaining capital committed in FIP Infra Transmissão and FIP Infra Transmissão co - investment will not be called by the f und, which is already in divestment period. ▪ Notes to page 35 (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.
45 Notes and Definitions (cont’d.) (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 37 (1) Other items comprise the income/(loss) generated by contingent consideration adjustment and financial expenses related to ac quisitions. (2) Non - recurring expenses for 2022 are composed by expenses related to professional services to matters related to M&A and to o ur international corporate organization. (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 30, 2022, Vinci revaluated the fair value of the obligation based on the economic conditions at the year end, resulting in a decrease of the contingent considera tio n fair value. The variation was recognized as an income in the financial result. ▪ Notes to page 39 (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.
46 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. ▪ “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 four segments (Private Markets, Liquid Strategies, Investment Products and Solutions and Financial Advisory). Segment Distributable Earnings is calc ula ted 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 inv estment 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.
47 Notes and Definitions (cont’d.) ▪ “Net revenue from Fund Management and Advisory” is a performance measure that we use to assess our ability to generate profit s f rom 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 Ad vis ory 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 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 and listed REITs from our real estate segment. ▪ “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 cre dit 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.
48 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 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 55 11 3230 2541 | Vinci SPS Rua Iguatemi , 448 – CJ 601 Itaim Bibi – 01451 - 010 55 16 2101 4641 | Ribeirão Preto Av. Presidente Vargas, 2.121 – Sala 106 Jardim América – 14020 - 260 Recife 55 81 3204 6811 Av. República do Libano , 251 – Sala 301 – Torre A Pina – 51110 - 160 New York 1 646 559 8000 780 Third Avenue, 25 th Floor 10017
Exhibit 99.2
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Vinci Partners Reports Fourth Quarter and Full Year 2022 Results
Alessandro Horta, Chief Executive Officer, stated, “Vinci Partners ended 2022 with solid growth against local markets, pushed by fundraising across Private Market strategies, that will continue to drive expansion in 2023. In 2022, we started a fundraising cycle for Private Markets products, with close to R$6 billion in new capital subscriptions over the year, which alongside the acquisition of Vinci SPS, represented roughly R$8 billion in additional AUM. Vinci posted an Adjusted Distributable Earningsi of R$4.47 per common share for the full year, an increase of 9% when compared to the prior year, translating into an attractive quarterly dividend distribution of US$0.17 per common share. Vinci was able to generate substantial amount of cash flow, backed by an extremely secured FRE, with significant upside coming from our liquid investment portfolio.”
Dividend
Vinci Partners has declared a quarterly dividend of US$0.17 per share to record holders of common stock at the close of business on March 01, 2023. This dividend will be paid on March 15, 2023.
Fourth Quarter and Full Year 2022 Highlights
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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 Credit), Liquid Strategies (Public Equities and Hedge Funds), Investment products and Solutions, Financial Advisory and Retirement Services. As of December 30, 2022, the firm had R$63 billion of assets under management.
Webcast and Earnings Conference Call
Vinci Partners will host a conference call at 5:00pm EST on Tuesday, February 14, 2023, to announce its fourth quarter and full year 2022 results.
To access the webcast please visit the Events & Presentations’ section of the Company's website at:
https://ir.vincipartners.com/news-and-events/events-and-presentations.
For those unable to listen to the live broadcast, there will be a webcast replay on the same section of the website.
To access the conference call through dial in, please register at 4Q22 VINP Earnings Dial In to obtain the conference number and access code.
Investor
Contact
ShareholderRelations@vincipartners.com
NY: +1 (646) 559-8040
RJ: +55 (21) 2159-6240
USA
Media Contact
Joele Frank, Wilkinson Brimmer Katcher
Nick Lamplough / Kate Thompson / Katie Villany
+1 (212) 355-4449
Brazil
Media Contact
Danthi Comunicações
Carla Azevedo (carla@danthicomunicacoes.com.br)+55 (21) 3114-0779
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Segment Earnings
| (R$ thousands, unless mentioned) | 4Q'21 | 3Q'22 | 4Q'22 | ∆ YoY (%) | FY’21 | FY’22 | ∆ YoY (%) |
| Net revenue from management fees | 91,594 | 95,361 | 99,640 | 9% | 361,070 | 371,501 | 3% |
| Net revenue from advisory fees | 20,148 | 7,267 | 4,394 | (78)% | 66,755 | 21,994 | (67)% |
| Total Fee Related Revenues | 111,742 | 102,628 | 104,034 | (7)% | 427,825 | 393,495 | (8)% |
| Segment personnel expenses | (6,021) | (6,509) | (6,163) | 2% | (22,246) | (25,454) | 14% |
| Other G&A expenses | (4,717) | (4,725) | (4,977) | 6% | (17,512) | (18,383) | 5% |
| Corporate center expenses | (23,642) | (22,067) | (22,592) | (4)% | (80,599) | (84,770) | 5% |
| Bonus compensation related to management and advisory | (23,367) | (19,798) | (18,981) | (19)% | (84,969) | (73,318) | (14)% |
| Total Fee Related Expenses | (57,747) | (53,099) | (52,713) | (9)% | (205,327) | (201,925) | (2)% |
| FEE RELATED EARNINGS (FRE) ii | 53,995 | 49,529 | 51,321 | (5)% | 222,498 | 191,570 | (14)% |
| FRE Margin (%) | 48.3% | 48.3% | 49.3% | 52.0% | 48.7% | ||
| FRE per share iii (R$/share) | 0.96 | 0.89 | 0.93 | 3.94 | 3.45 | ||
| Net revenue from performance fees | 3,448 | 31 | 7,558 | 119% | 37,633 | 14,600 | (61)% |
| Performance based compensation | (1,094) | (537) | (3,558) | 225% | (14,001) | (6,554) | (53)% |
| PERFORMANCE RELATED EARNINGS (PRE) | 2,354 | (506) | 4,000 | 70% | 23,632 | 8,046 | (66)% |
| PRE Margin (%) | 68.3% | N/A | 52.9% | 62.8% | 55.1% | ||
| (-) Unrealized performance fees | 10,166 | 2,571 | 1,683 | (83)% | 7,715 | 3,618 | (53)% |
| (+) Unrealized performance compensation | (3,605) | (910) | (593) | (84)% | (2,733) | (1,278) | (53)% |
| (+) Realized GP investment income | 11,973 | 5,738 | 7,462 | (38)% | 13,851 | 20,171 | 46% |
| SEGMENT DISTRIBUTABLE EARNINGS | 74,883 | 56,422 | 63,873 | (15)% | 264,964 | 222,127 | (16)% |
| Segment DE Margin (%) | 54.5% | 50.8% | 52.9% | 54.4% | 51.4% | ||
| (+) Depreciation and amortization | 1,127 | 1,223 | 1,803 | 60% | 3,917 | 4,986 | 27% |
| (+) Realized financial income | 9,531 | 31,726 | 10,235 | 7% | 28,729 | 86,958 | 203% |
| (-) Leasing expenses | (2,953) | (2,297) | (2,190) | (26)% | (12,281) | (9,359) | (24)% |
| (-) Other financial expenses iv | 140 | (1,689) | (3,537) | N/A | (319) | (5,718) | 1692% |
| (-) Non-recurring expenses | – | (523) | – | N/A | – | (6,594) | N/A |
| (-) Income taxes (excluding related to unrealized fees and income) | (14,213) | (12,020) | (14,392) | 1% | (52,775) | (50,077) | (5)% |
| DISTRIBUTABLE EARNINGS (DE) v | 68,515 | 72,842 | 55,792 | (19)% | 232,234 | 242,323 | 4% |
| DE Margin (%) | 46.7% | 51.0% | 42.6% | 45.0% | 46.7% | ||
| DE per share (R$/share) vi | 1.22 | 1.32 | 1.01 | 4.10 | 4.37 | ||
| (+) Non-recurring expenses vii (including Income Tax effect) | – | 353 | – | N/A | – | 5,425 | N/A |
| ADJUSTED DISTRIBUTABLE EARNINGS | 68,515 | 73,195 | 55,792 | (19)% | 232,234 | 247,747 | 7% |
| Adjusted DE Margin (%) | 46.7% | 51.3% | 42.6% | 45.0% | 47.8% | ||
| Adjusted DE per share (R$/share) | 1.22 | 1.32 | 1.01 | 4.10 | 4.47 |
Total Fee-Related Revenues viii of R$104.0 million for the quarter ended December 30, 2022, compared to R$111.7 million for the quarter ended December 30, 2021, a decrease of 7% year-over year, due to a higher contribution from advisory fees in the 4Q'21. Management fees were up 9% year-over-year. Fee-related revenues were R$393.5 million for the full year ended December 30, 2022, a decrease of 8% when compared to the full year ended December 30, 2021, driven by stronger deal activity in 2021, resulting in higher advisory fees in the period. Management fees were up 3% year-over-year. Management fees for the full year ended December 30, 2022, were up 3% year-over-year, when compared to the full year ended December 30, 2021.
Fee Related Earnings (“FRE”) of R$51.3 million (R$0.93/share) for the quarter ended December 30, 2022, up 4% quarter-over-quarter, driven by fundraising across Private Markets in the quarter, combined with the full impact from the Vinci SPS acquisition. FRE for the quarter ended December 30, 2022, represented a decrease of 5% year-over-year when compared to FRE for the quarter ended December 30, 2021. This decrease comes primarily from the Financial Advisory segment, following record revenues posted in the 4Q'21. Additionally, in 2022 FRE has been negatively impacted by investments made in our new segment, still in development, VRS. Considering only the asset management segments ix , FRE would be up 22% year-over-year.
FRE Margin x was 49.3% for the quarter ended December 30, 2022, an increase of 1.0 percentage point when compared to the quarter ended December 30, 2021. On a comparable basis, FRE margin disregarding our investments into the VRS segment, would be 50.7% for the 4Q’22 and 50.2% for the year ended December 30, 2022.
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Performance Related Earnings (“PRE”) xi of R$4.0 million for the quarter ended December 30, 2022, compared to R$2.4 million for the quarter ended December 30, 2021, up 70% year-over-year. PRE was R$8.0 million for the full year ended December 30, 2022, a decrease of 66% when compared to the full year ended December 30, 2021, that posted higher contributions coming from international exclusive mandates in IP&S, which did not occur in 2022.
Segment Distributable Earnings xii of R$63.9 million for the quarter ended December 30, 2022, compared to R$74.9 million for the quarter ended December 30, 2021, a decrease of 15% year-over-year. Segment Distributable Earnings were R$222.1 million for the full year ended December 30, 2022, down 16% year-over-year, when compared to the full year ended December 30, 2021.
Adjusted Distributable Earnings (“DE”) of R$55.8 million (R$1.01/share) for the quarter ended December 30, 2022, compared to R$68.5 million for the quarter ended December 30, 2021, a decrease of 19% year-over-year, due to higher advisory fees and higher realized GP investment income in the fourth quarter of 2021. Adjusted DE was R$247.7 million for the full year ended December 30, 2022, an increase of 7% when compared to the full year ended December 30, 2021.
Adjusted DE Margin xiii was 42.6% for the quarter ended December 30, 2022, a 4.1 percentage point decrease compared to 46.7% for the quarter ended December 30, 2021. For the full year ended December 2022, Adjusted DE Margin reached 47.8%, an increase of 2.8 percentage points.
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Segment Highlights
Private Market Strategies
| (R$ thousands, unless mentioned) | 4Q'21 | 3Q'22 | 4Q'22 | ∆ YoY (%) | FY'21 | FY'22 | ∆ YoY (%) |
| Net revenue from management fees | 49,439 | 52,949 | 59,699 | 21% | 194,483 | 207,061 | 6% |
| Net revenue from advisory fees | 1,684 | 560 | 1,756 | 4% | 5,653 | 3,057 | (46)% |
| Total Fee Related Revenues | 51,123 | 53,509 | 61,455 | 20% | 200,136 | 210,118 | 5% |
| Segment personnel expenses | (2,672) | (3,148) | (3,050) | 14% | (10,571) | (11,857) | 12% |
| Other G&A expenses | (2,470) | (2,549) | (2,194) | (11)% | (11,373) | (9,909) | (13)% |
| Corporate center expenses | (10,639) | (11,287) | (12,790) | 20% | (38,456) | (44,458) | 16% |
| Bonus compensation related to management and advisory | (8,410) | (9,662) | (9,756) | 16% | (33,762) | (34,151) | 1% |
| Total Fee Related Expenses | (24,191) | (26,646) | (27,790) | 15% | (94,163) | (100,375) | 7% |
| FEE RELATED EARNINGS (FRE) | 26,932 | 26,863 | 33,664 | 25% | 105,973 | 109,743 | 4% |
| FRE Margin (%) | 52.7% | 50.2% | 54.8% | 53.0% | 52.2% | ||
| Net revenue from performance fees | 1,768 | (2,559) | 3,660 | 107% | 4,984 | 3,459 | (31)% |
| Realized performance fees | 11,934 | 11 | 5,343 | (55)% | 12,699 | 7,077 | (44)% |
| Unrealized performance fees | (10,166) | (2,571) | (1,683) | (83)% | (7,715) | (3,618) | (53)% |
| Performance based compensation | (476) | 905 | (1,459) | 207% | (1,547) | (1,389) | (10)% |
| PERFORMANCE RELATED EARNINGS (PRE) | 1,292 | (1,654) | 2,201 | 70% | 3,437 | 2,070 | (40)% |
| PRE Margin (%) | 73.1% | 64.6% | 60.1% | 69.0% | 59.8% | ||
| (-) Unrealized performance fees | 10,166 | 2,571 | 1,683 | (83)% | 7,715 | 3,618 | (53)% |
| (+) Unrealized performance compensation | (3,602) | (910) | (593) | (84)% | (2,733) | (1,278) | (53)% |
| (+) Realized GP investment income | 11,973 | 5,738 | 7,462 | (38)% | 13,851 | 20,171 | 46% |
| SEGMENT DISTRIBUTABLE EARNINGS | 46,761 | 32,607 | 44,418 | (5)% | 128,244 | 134,324 | 5% |
| Segment DE Margin (%) | 62.3% | 55.0% | 64.5% | 59.9% | 58.3% | ||
| ASSETS UNDER MANAGEMENT (AUM R$ millions) | 21,991 | 27,603 | 28,685 | 30% | 21,991 | 28,685 | 30% |
| FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) | 20,007 | 24,183 | 25,259 | 26% | 20,007 | 25,259 | 26% |
| AVERAGE MANAGEMENT FEE RATE (%) | 0.97% | 0.87% | 0.90% | 0.97% | 0.89% | ||
| FULL TIME EMPLOYEES | 49 | 62 | 65 | 33% | 49 | 65 | 33% |
Fee related earnings (FRE) of R$33.7 million for the quarter ended December 30, 2022, up 25% year-over-year, driven by a combination of the strong fundraising over the year and the acquisition of Vinci SPS. FRE was R$109.7 million for the full year ended December 30, 2022, an increase of 4% when compared to the full year ended December 30, 2021.
Average Management fee Rate of 0.90% for the quarter ended December 30, 2022, representing an increase of 3 basis points quarter-over-quarter and a decrease of 7 basis points year-over-year.
Segment Distributable Earnings of R$44.4 million for the quarter ended December 30, 2022, down 5% year-over-year due to a higher level of realized performance fees and GP investment income in the 4Q’21, following realizations in FIP Infra Transmissão. Segment DE was R$134.3 million over the full year ended December 30, 2022, up 5% when compared to the full year ended December 30, 2021, boosted by growth in FRE.
AUM of R$28.7 billion at the end of the 4Q’22, an increase of 30% year-over-year, driven by strong fundraising across Private Equity, Credit, Infrastructure, Real Estate and the acquisition of Vinci SPS. In the fourth quarter, previously announced commitments from BNDES to Vinci Credit Infra and VICC were activated in AUM numbers and will start to have a positive effect on management fees starting 2023.
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Liquid Strategies
| (R$ thousands, unless mentioned) | 4Q'21 | 3Q'22 | 4Q'22 | ∆ YoY (%) | FY'21 | FY'22 | ∆ YoY (%) |
| Net revenue from management fees | 20,510 | 20,720 | 19,823 | (3)% | 86,786 | 81,325 | (6)% |
| Net revenue from advisory fees | – | – | – | N/A | – | – | N/A |
| Total Fee Related Revenues | 20,510 | 20,720 | 19,823 | (3)% | 86,786 | 81,325 | (6)% |
| Segment personnel expenses | (1,457) | (1,398) | (1,320) | (9)% | (5,568) | (5,496) | (1)% |
| Other G&A expenses | (903) | (1,009) | (1,189) | 32% | (2,806) | (3,654) | 30% |
| Corporate center expenses | (5,911) | (4,643) | (4,247) | (28)% | (17,684) | (17,685) | 0% |
| Bonus compensation related to management and advisory | (4,854) | (4,134) | (4,227) | (13)% | (18,031) | (16,232) | (10)% |
| Total Fee Related Expenses | (13,125) | (11,185) | (10,983) | (16)% | (44,089) | (43,068) | (2)% |
| FEE RELATED EARNINGS (FRE) | 7,385 | 9,535 | 8,840 | 20% | 42,697 | 38,258 | (10)% |
| FRE Margin (%) | 36.0% | 46.0% | 44.6% | 49.2% | 47.0% | ||
| Net revenue from performance fees | 265 | 1,424 | 2,937 | 1,008% | 10,413 | 7,986 | (23)% |
| Realized performance fees | 265 | 1,424 | 2,937 | 1,008% | 10,413 | 7,986 | (23)% |
| Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| Performance based compensation | (225) | (743) | (1,761) | 683% | (5,512) | (3,685) | (33)% |
| PERFORMANCE RELATED EARNINGS (PRE) | 40 | 681 | 1,176 | 2,835% | 4,901 | 4,301 | (12)% |
| PRE Margin (%) | 15.1% | 47.8% | 40.0% | 47.1% | 53.9% | ||
| (-) Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| (+) Unrealized performance compensation | – | – | – | N/A | – | – | N/A |
| SEGMENT DISTRIBUTABLE EARNINGS | 7,425 | 10,216 | 10,016 | 35% | 47,599 | 42,559 | (11)% |
| Segment DE Margin (%) | 35.7% | 46.1% | 44.0% | 49.0% | 47.7% | ||
| ASSETS UNDER MANAGEMENT (AUM R$ millions) | 11,573 | 10,760 | 10,209 | (12)% | 11,573 | 10,209 | (12)% |
| FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) | 11,440 | 10,606 | 10,053 | (12)% | 11,440 | 10,053 | (12)% |
| AVERAGE MANAGEMENT FEE RATE (%) | 0.75% | 0.86% | 0.81% | 0.73% | 0.79% | ||
| FULL TIME EMPLOYEES | 24 | 23 | 23 | (4)% | 24 | 23 | (4)% |
Fee related earnings (FRE) of R$8.8 million for the quarter ended December 30, 2022, up 20% year-over-year. FRE was R$38.3 million over the full year ended December 30, 2022, a decrease of 10% when compared to the full year ended December 30, 2021, driven by a combination of modest outflows in the beginning of the year and intra-quarter depreciation effects.
Performance related earnings (PRE) of R$1.2 million for the quarter ended December 30, 2022, up 2,835% year-over-year. PRE was R$4.3 million over the full year ended December 30, 2022, a decrease of 12% when compared to the full year ended December 30, 2021.
Segment Distributable Earnings of R$10.0 million for the quarter ended December 30, 2022, up 35% year-over-year. Segment DE was R$42.6 million over the full year ended December 30, 2022, a decrease of 11% when compared to the full year ended December 30, 2021.
AUM was R$10.2 billion at the end of the 4Q’22. Liquid strategies' AUM has posted resilient numbers when compared to the Brazilian landscape for liquid funds, having suffered a modest outflow early in 2022, which did not reverberate within the following quarters. Nevertheless, liquid funds have been impacted by market-to-market effects intra-quarters and in the latter part of 2022, that negatively affected Liquid strategies’ AUM.
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Investment Products and Solutions
| (R$ thousands, unless mentioned) | 4Q'21 | 3Q'22 | 4Q'22 | ∆ YoY (%) | FY'21 | FY'22 | ∆ YoY (%) |
| Net revenue from management fees | 21,645 | 21,692 | 20,119 | (7)% | 79,799 | 83,114 | 4% |
| Net revenue from advisory fees | 7 | 7 | 7 | 3% | 54 | 28 | (48)% |
| Total Fee Related Revenues | 21,652 | 21,699 | 20,126 | (7)% | 79,853 | 83,142 | 4% |
| Segment personnel expenses | (1,408) | (1,075) | (987) | (30)% | (4,419) | (4,967) | 12% |
| Other G&A expenses | (791) | (622) | (992) | 25% | (2,091) | (2,664) | 27% |
| Corporate center expenses | (3,783) | (4,923) | (4,310) | 14% | (15,558) | (18,162) | 17% |
| Bonus compensation related to management and advisory | (7,239) | (4,125) | (4,184) | (42)% | (20,212) | (16,021) | (21)% |
| Total Fee Related Expenses | (13,221) | (10,745) | (10,473) | (21)% | (42,280) | (41,815) | (1)% |
| FEE RELATED EARNINGS (FRE) | 8,431 | 10,954 | 9,653 | 14% | 37,573 | 41,328 | 10% |
| FRE Margin (%) | 38.9% | 50.5% | 48.0% | 47.1% | 49.7% | ||
| Net revenue from performance fees | 1,415 | 1,167 | 961 | (32)% | 22,237 | 3,156 | (86)% |
| Realized performance fees | 1,415 | 1,167 | 961 | (32)% | 22,237 | 3,156 | (86)% |
| Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| Performance based compensation | (393) | (698) | (338) | (14)% | (6,942) | (1,480) | (79)% |
| PERFORMANCE RELATED EARNINGS (PRE) | 1,022 | 469 | 623 | (39)% | 15,295 | 1,676 | (89)% |
| PRE Margin (%) | 72.2% | 40.2% | 64.8% | 68.8% | 53.1% | ||
| (-) Unrealized performance fees | – | – | – | N/A | – | – | N/A |
| (+) Unrealized performance compensation | (3) | – | – | N/A | 0 | – | N/A |
| SEGMENT DISTRIBUTABLE EARNINGS | 9,451 | 11,422 | 10,276 | 9% | 52,868 | 43,003 | (19)% |
| Segment DE Margin (%) | 41.0% | 50.0% | 48.7% | 51.8% | 49.8% | ||
| ASSETS UNDER MANAGEMENT (AUM R$ millions) | 23,664 | 25,029 | 24,187 | 2% | 23,664 | 24,187 | 2% |
| FEE EARNING ASSETS UNDER MANAGEMENT (FEAUM R$ millions) | 23,528 | 24,911 | 24,085 | 2% | 23,528 | 24,085 | 2% |
| AVERAGE MANAGEMENT FEE RATE (%) | 0.38% | 0.38% | 0.36% | 0.39% | 0.37% | ||
| FULL TIME EMPLOYEES | 18 | 16 | 15 | (17)% | 18 | 15 | (17)% |
Fee related earnings (FRE) of R$9.7 million for the quarter ended December 30, 2022, up 14% year-over-year. FRE was R$41.3 million over the full year ended December 30, 2022, an increase of 10% when compared to the full year ended December 30, 2021.
Performance related earnings (PRE) of R$0.6 million for the quarter ended December 30, 2022, down 39% year-over-year. PRE over the full year ended December 30, 2022, was R$1.7 million, a decrease of 89% when compared to the full year ended December 30, 2021, following a strong year for international exclusive mandates in 2021.
Segment Distributable Earnings of R$10.3 million for the quarter ended December 30, 2022, up 9% year-over-year due to higher FRE contribution. Segment DE was R$43.0 million over the full year ended December 30, 2022, a decrease of 19% when compared to the full year ended December 30, 2021, due to a higher contribution from PRE in 2021.
AUM of R$24.2 billion, up 2% year-over-year.
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Financial Advisory
| (R$ thousands, unless mentioned) | 4Q'21 | 3Q'22 | 4Q'22 | ∆ YoY (%) | FY'21 | FY'22 | ∆ YoY (%) |
| Net revenue from management fees | – | – | – | N/A | – | – | N/A |
| Net revenue from advisory fees | 18,457 | 6,700 | 2,630 | (86)% | 61,047 | 18,908 | (69)% |
| Total Fee Related Revenues | 18,457 | 6,700 | 2,630 | (86)% | 61,047 | 18,908 | (69)% |
| Segment personnel expenses | (484) | (502) | (472) | (2)% | (1,688) | (2,009) | 19% |
| Other G&A expenses | (553) | (82) | (87) | (84)% | (1,263) | (543) | (57)% |
| Corporate center expenses | (3,310) | (1,121) | (1,130) | (66)% | (8,879) | (4,256) | (52)% |
| Bonus compensation related to management and advisory | (2,863) | (1,379) | (302) | (89)% | (12,965) | (3,889) | (70)% |
| Total Fee Related Expenses | (7,210) | (3,084) | (1,991) | (72)% | (24,796) | (10,697) | (57)% |
| FEE RELATED EARNINGS (FRE) | 11,247 | 3,616 | 639 | (94)% | 36,251 | 8,211 | (77)% |
| FRE Margin (%) | 60.9% | 54.0% | 24.3% | 59.4% | 43.4% | ||
| SEGMENT DISTRIBUTABLE EARNINGS | 11,247 | 3,616 | 639 | (94)% | 36,251 | 8,211 | (77)% |
| Segment DE Margin (%) | 60.9% | 54.0% | 24.3% | 59.4% | 43.4% | ||
| FULL TIME EMPLOYEES | 10 | 10 | 10 | 0% | 10 | 10 | 0% |
Fee related earnings (FRE) of R$0.6 million for the quarter ended December 30, 2022, down 94% year-over-year. FRE was R$8.2 million over the full year ended December 30, 2022, a decrease of 77% when compared to the full year ended December 30, 2021, due to a stronger deal environment in 2021.
Segment Distributable Earnings over the full year ended December 30, 2022, were R$8.2 million, a decrease of 77% year-over-year when compared to the full year ended December 30, 2021.
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Retirement Services
| (R$ thousands, unless mentioned)/ | 4Q'21 | 3Q'22 | 4Q'22 | ∆ YoY (%) | FY'21 | FY'22 | ∆ YoY (%) |
| Net revenue from management fees | – | – | – | – | – | – | – |
| Net revenue from advisory fees | – | – | – | – | – | – | – |
| Total Fee Related Revenues | – | – | – | – | – | – | – |
| Segment personnel expenses | – | (386) | (334) | – | – | (1,125) | – |
| Other G&A expenses | – | (463) | (515) | – | – | (1,613) | – |
| Corporate center expenses | – | (92) | (115) | – | – | (207) | – |
| Bonus compensation related to management and advisory | – | (500) | (513) | – | – | (3,027) | – |
| Total Fee Related Expenses | – | (1,441) | (1,476) | – | – | (5,972) | – |
| FEE RELATED EARNINGS (FRE) | – | (1,441) | (1,476) | – | – | (5,972) | – |
| FRE Margin (%) | – | – | – | – | – | ||
| Net revenue from performance fees | – | – | – | – | – | – | – |
| Realized performance fees | – | – | – | – | – | – | – |
| Unrealized performance fees | – | – | – | – | – | – | – |
| Performance based compensation | – | – | – | – | – | – | – |
| PERFORMANCE RELATED EARNINGS (PRE) | – | – | – | – | – | – | – |
| PRE Margin (%) | – | – | – | – | – | ||
| (-) Unrealized performance fees | – | – | – | – | – | – | – |
| (+) Unrealized performance compensation | – | – | – | – | – | – | – |
| SEGMENT DISTRIBUTABLE EARNINGS | – | (1,441) | (1,476) | N/A | – | (5,972) | – |
| Segment DE Margin (%) | – | – | – | – | – | ||
| ASSETS UNDER MANAGEMENT (AUM R$millions) | – | – | – | – | – | – | – |
| FULL TIME EMPLOYEES | – | 6 | 7 | – | – | 7 | – |
Fee Related Earnings (FRE) of negative R$1.5 million for the quarter ended December 30, 2022. FRE was negative R$6.0 million to the full year ended December 30, 2022.
VRS is in the final stages of beta testing and is expected to launch in early 2023, starting to contribute to AUM numbers and management fee revenues.
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Income Statement
| (R$ thousands, unless mentioned) | 4Q'21 | 3Q'22 | 4Q'22 | ∆ YoY (%) | FY'21 | FY'22 | ∆ YoY (%) |
| REVENUES | |||||||
| Net revenue from management fees | 91,594 | 95,361 | 99,640 | 9% | 361,070 | 371,501 | 3% |
| Net revenue from performance fees | 3,448 | 31 | 7,558 | 119% | 37,633 | 14,600 | (61)% |
| Realized performance fees | 13,614 | 2,602 | 9,241 | (32)% | 45,348 | 18,218 | (60)% |
| Unrealized performance fees | (10,166) | (2,571) | (1,683) | (83)% | (7,715) | (3,618) | (53)% |
| Net revenue from advisory | 20,148 | 7,267 | 4,394 | (78)% | 66,755 | 21,994 | (67)% |
| Total net revenues from services rendered | 115,190 | 102,659 | 111,592 | (3)% | 465,458 | 408,095 | (12)% |
| EXPENSES | |||||||
| Bonus related to management and advisory | (23,367) | (19,798) | (18,981) | (19)% | (84,969) | (73,318) | (14)% |
| Performance based compensation | (1,094) | (537) | (3,558) | 225% | (14,001) | (6,554) | (53)% |
| Realized | (4,699) | (1,448) | (4,151) | (12)% | (16,734) | (7,833) | (53)% |
| Unrealized | 3,605 | 910 | 593 | (84)% | 2,733 | 1,278 | (53)% |
| Total compensation and benefits xiv | (24,461) | (20,335) | (22,539) | (8)% | (98,970) | (79,872) | (19)% |
| Segment personnel expenses | (6,021) | (6,509) | (6,163) | 2% | (22,246) | (25,454) | 14% |
| Other general and administrative expenses | (4,717) | (4,725) | (4,977) | 6% | (17,512) | (18,383) | 5% |
| Corporate center expenses | (23,642) | (22,067) | (22,592) | (4)% | (80,599) | (84,770) | 5% |
| Total expenses | (58,841) | (53,636) | (56,271) | (4)% | (219,328) | (208,480) | (5)% |
| Operating profit | 56,349 | 49,023 | 55,321 | (2)% | 246,130 | 199,616 | (19)% |
| OTHER ITEMS | |||||||
| GP Investment income | 4,415 | 9,673 | 8,011 | 81% | 80 | 6,304 | 7780% |
| Realized gain from GP investment income | 11,973 | 5,738 | 7,462 | (38)% | 13,851 | 20,171 | 46% |
| Unrealized gain from GP investment income | (7,558) | 3,935 | 549 | N/A | (13,771) | (13,867) | 1% |
| Financial income | 9,579 | 31,701 | 10,268 | 7% | 27,902 | 87,870 | 215% |
| Realized gain from financial income | 9,531 | 31,726 | 10,235 | 7% | 28,729 | 86,958 | 203% |
| Unrealized gain from financial income | 48 | (25) | 33 | (31)% | (827) | 912 | N/A |
| Leasing expenses | (2,953) | (2,297) | (2,190) | (26)% | (12,281) | (9,359) | (24)% |
| Other items xv | 140 | (1,689) | 10,434 | 7.353% | (319) | 8,253 | N/A |
| Share Based Plan | (1,014) | (5,609) | (5,463) | 439% | (3,670) | (14,276) | 289% |
| Non-recurring expenses | – | (523) | – | N/A | – | (6,594) | N/A |
| Total Other Items | 10,167 | 31,256 | 21,060 | 107% | 11,712 | 72,198 | 516% |
| Profit before income taxes | 66,516 | 80,279 | 76,381 | 15% | 257,842 | 271,814 | 5% |
| (-) Income taxes | (9,923) | (11,072) | (17,891) | 80% | (49,227) | (52,413) | 6% |
| NET INCOME | 56,593 | 69,207 | 58,490 | 3% | 208,615 | 219,401 | 5% |
| (+) Non-recurring expenses including income tax related to realized expense | – | 353 | – | N/A | – | 5,425 | N/A |
| (-) Contingent consideration adjustment related to acquisitions xvi | – | – | (9,221) | – | (9,221) | ||
| ADJUSTED NET INCOME | 56,593 | 69,560 | 49,269 | (13)% | 208,615 | 215,604 | 3% |
Total net revenues from services rendered of R$111.6 million for the quarter ended December 30, 2022, up 9% quarter-over-quarter, following strong fundraising across Private Market funds combined with the full effect coming from the acquisition of Vinci SPS. Total net revenues in the fourth quarter of 2022 were down 3% year-over-year, due to a higher contribution from advisory fees in the 4Q'21. Net revenues for the full year ended December 30, 2022, were R$408.1 million, represented a 12% decrease when compared to the full year ended December 30, 2021, a result from higher advisory and performances fees in the same period of the prior year.
| · | Management fee revenues of R$99.6 million for the quarter ended December 30, 2022, up 4% quarter-over-quarter and up 9% year-over-year, following the strong fundraising across Private Markets over the year and the acquisition of Vinci SPS. |
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| · | Performance fee revenues of R$7.6 million for the quarter ended December 30, 2022, compared to R$3.4 million for the quarter ended December 30, 2021, an increase of 119% year-over-year. Performance fee revenues of R$14.6 for the full year ended December 30, 2022, a decrease of 61% when compared to the full year ended December 30, 2021. The platform was positively impacted by higher contributions coming from international exclusive mandates in IP&S in the prior year, which did not take place in 2022. |
| · | Advisory fee revenues of R$4.4 million for the quarter ended December 30, 2022, compared to R$20.1 million for the quarter ended December 30, 2021, a decrease of 78% year-over-year. Advisory revenues for the full year ended December 30, 2022, were R$22.0 million, down 67% when compared to the full year ended December 30, 2021, due to a stronger deal activity in 2021. |
Total expenses for the quarter ended December 30, 2022, of R$56.3 million, compared to R$58.8 million for the quarter ended December 30, 2021, a decrease of 4% year-over-year. Total expenses for the full year ended December 30, 2022, were R$208.5 million, down 5% when compared to the full year ended December 30, 2021.
| · | Bonus related to management and advisory fees of R$19.0 million for the quarter ended December 30, 2022, compared to R$23.4 million for the quarter ended December 30, 2021, a decrease of 19% year-over-year. Bonus related to management and advisory was R$73.3 million for the full year ended December 30, 2022, down 14% year-over-year, when compared to the full year ended December 30, 2021. |
| · | Performance based compensation of R$3.6 million for the quarter ended December 30,2022, compared to R$1.1 million for the quarter ended December 30, 2021, an increase of 225% year-over-year. Performance based compensation for the full year ended December 30, 2022, was R$6.6 million, a decrease of 53% year-over-year, when compared to the full year ended December 30, 2021. |
| · | Segment personnel expenses xvii of R$6.2 million for the quarter ended December 30, 2022, compared to R$6.0 million for the quarter ended December 30, 2021, an increase of 2% year-over-year. Segment personnel expenses for the full year ended December 30, 2022, was R$25.5 million, up 14% year-over-year, when compared to the full year ended December 30, 2021, primarily due to Vinci SPS’ incorporation and our recently launched vertical, VRS. |
| · | Corporate center expenses xviii of R$22.6 million for the quarter ended December 30, 2022, compared to R$23.6 million for the quarter ended December 30, 2021, a decrease of 4% year-over-year. Corporate center expenses for the full year ended December 30, 2022, were R$84.8 million, up 5% year-over-year, when compared to the full year ended December 30, 2021. |
| · | Other general and administrative expenses xix of R$5.0 million for the quarter ended December 30, 2022, compared to R$4.7 million for the quarter ended December 30, 2021, an increase of 6% year-over-year. Other G&A expenses for the full year ended December 30, 2022, were R$18.4 million, up 5% year-over-year, when compared to the full year ended December 30, 2021. |
Operating Profit of R$55.3 million for the quarter ended December 30, 2022, compared to R$56.3 million for the quarter ended December 30, 2021, a decrease of 2% year-over-year. Operating profit for the full year ended December 30, 2022, was R$200.0 million, down 19% year-over-year, when compared to the full year ended December 30, 2021.
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GP Investment income xx , a result of the company’s GP investments in its proprietary private market funds, was R$8.0 million for the quarter ended December 30, 2022, compared to R$4.4 million for the quarter ended December 30, 2021. GP Investment income for the full year ended December 30, 2022, was R$6.3 million compared to R$0.1 million for the full year ended December 30, 2021, following an increase of realized income coming from REITs’ dividend distributions.
Financial Income xxi of R$10.3 million for the quarter ended December 30, 2022, compared to R$9.6 million for the quarter ended December 30, 2021. Financial income for the full year ended December 30, 2022, was R$87.9 million, up 215% year-over-year, when compared to the full year ended December 30, 2021, a result of financial gains from the company’s cash position, primarily allocated to funds exposed to federal fixed-income bonds.
Leasing Expenses xxii of R$2.2 million for the quarter ended December 30, 2022, compared to R$3.0 million for the quarter ended December 30, 2021, a decrease of 26% year-over-year.
Other Items of R$10.4 million for the quarter ended December 30, 2022. Other items comprise the income/(loss) generated by contingent consideration adjustment and financial expenses related to acquisitions.
Share Based Plan expenses xxiii of R$5.5 million for the quarter ended December 30, 2022. In the full year ended December 30, 2022, share based plan expenses accounted for R$14.3 million.
Non-recurring expenses of R$6.6 million for the full year ended December 30, 2022. Non-recurring expenses are composed by expenses related to professional services to matters related to acquisitions and to our international corporate organization.
Profit before income taxes of R$76.4 million for the quarter ended December 30, 2022, compared to R$66.5 million for the quarter ended December 30, 2021, an increase of 15% year-over-year. Profit before income taxes for the full year ended December 30, 2022, was R$271.8 million, an increase of 5% when compared to the full year ended December 30, 2021.
Income Taxes xxiv of R$17.9 million for the quarter ended December 30, 2022, which represented an effective tax rate for the quarter of 23%, compared to R$9.9 million for the quarter ended December 30, 2021, which represented an effective tax rate of 15%, representing an increase of 8.5 percentage points year-over-year, driven by the recognition of interest rates regarding the earn-out obligation from Vinci SPS’ acquisition.
Contingent consideration adjustment related to acquisitions of negative R$9.2 million for the quarter ended December 30, 2022, after-tax. 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$49.3 million for the quarter ended December 30, 2022, compared to R$56.6 million for the quarter ended December 30, 2021, a decrease of 13% year-over-year. Adjusted Net Income was R$215.6 million for the full year ended December 30, 2022, up 3% year-over-year, when compared to the full year ended December 30, 2021.
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Supplement Details
Assets Under Management (AUM) xxv Rollforward – R$ millions
For the Three Months Ended December 30, 2022
|
Private Equity |
Public Equities |
IP&S | Infrastructure | Real Estate | Credit |
Hedge Funds |
Vinci SPS | Total | |
| Beginning balance | 13,650 | 7,868 | 25,029 | 1,505 | 5,888 | 4,465 | 2,892 | 2,096 | 63,392 |
| (+/-) Capital Subscription / (capital return) | 275 | – | – | 626 | (5) | 482 | – | (42) | 1,336 |
| (+) Capital Subscription | 364 | – | 0 | 659 | 104 | 500 | – | 47 | 1,673 |
| (-) Capital Return | (90) | – | (0) | (33) | (109) | (18) | – | (89) | (338) |
| (+) Acquisitions | – | – | – | – | – | – | – | – | – |
| (+/-) Net Inflow / (outflow) | – | (87) | (548) | – | (44) | 46 | (95) | – | (728) |
| (+/-) Appreciation / (depreciation) | (144) | (384) | (293) | (76) | (189) | 62 | 15 | 90 | (918) |
| Ending Balance | 13,781 | 7,397 | 24,187 | 2,055 | 5,649 | 5,056 | 2,812 | 2,144 | 63,081 |
For the Twelve Months Ended December 30, 2022
|
Private Equity |
Public Equities |
IP&S | Infrastructure |
Real Estate |
Credit |
Hedge Fund |
Vinci SPS | Total | |
| Beginning balance | 11,223 | 8,493 | 23,664 | 2,421 | 5,399 | 2,948 | 3,080 | – | 57,229 |
| (+/-) Capital Subscription / (capital return) | 2,410 | – | 142 | (280) | 71 | 1,594 | – | (42) | 3,895 |
| (+) Capital Subscription | 2,527 | – | 142 | 821 | 498 | 1,745 | – | 47 | 5,780 |
| (-) Capital Return | (117) | – | (0) | (1,101) | (428) | (152) | – | (89) | (1,886) |
| (+) Acquisitions | – | – | – | – | – | – | – | 2,055 | 2,055 |
| (+/-) Net Inflow / (outflow) | – | (1,019) | (146) | – | (74) | 264 | (533) | – | (1,509) |
| (+/-) Appreciation / (depreciation) | 148 | (76) | 527 | (86) | 254 | 250 | 265 | 131 | 1,412 |
| Ending Balance | 13,781 | 7,397 | 24,187 | 2,055 | 5,649 | 5,056 | 2,812 | 2,144 | 63,081 |
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Fee Earning Assets Under Management (FEAUM) Rollforward – R$ millions
For the Three Months Ended December 30, 2022
|
Privte Equity |
Public Equities |
IP&S | Infrastructure | Real Estate | Credit |
Hedge Funds |
Vinci SPS | Total | |
| Beginning balance | 10,288 | 7,805 | 24,911 | 1,447 | 5,888 | 4,465 | 2,801 | 2,096 | 59,700 |
| (+/-) Capital Subscription / (capital return) | 275 | – | – | 632 | (5) | 482 | – | (42) | 1,342 |
| (+) Capital Subscription | 352 | – | 0 | 659 | 104 | 500 | – | 47 | 1,661 |
| (-) Capital Return | (77) | – | (0) | (27) | (109) | (18) | – | (89) | (320) |
| (+) Acquisitions | – | – | – | – | – | – | – | – | – |
| (+/-) Net Inflow / (outflow) | – | (87) | (548) | – | (44) | 46 | (95) | – | (728) |
| (+/-) Appreciation / (depreciation) | (155) | (384) | (278) | (76) | (189) | 62 | 12 | 90 | (917) |
| Ending Balance | 10,407 | 7,334 | 24,085 | 2,003 | 5,649 | 5,056 | 2,718 | 2,144 | 59,397 |
For the Twelve Months Ended December 30, 2022
|
Private Equity |
Public Equities |
IP&S | Infrastructure |
Real Estate |
Credit |
Hedge Funds |
Vinci SPS | Total | |
| Beginning balance | 9,299 | 8,427 | 23,528 | 2,362 | 5,399 | 2,948 | 3,013 | – | 54,975 |
| (+/-) Capital Subscription / (capital return) | 1,115 | – | 142 | (274) | 70 | 1,594 | – | (42) | 2,605 |
| (+) Capital Subscription | 1,219 | – | 142 | 821 | 498 | 1,745 | – | 47 | 4,473 |
| (-) Capital Return | (104) | – | (0) | (1,095) | (428) | (152) | – | (89) | (1,868) |
| (+) Acquisitions | – | – | – | – | – | – | – | 2,055 | 2,055 |
| (+/-) Net Inflow / (outflow) | – | (1,016) | (126) | – | (74) | 264 | (546) | – | (1,498) |
| (+/-) Appreciation / (depreciation) | (6) | (77) | 540 | (85) | 255 | 250 | 252 | 131 | 1,260 |
| Ending Balance | 10,407 | 7,334 | 24,085 | 2,003 | 5,649 | 5,056 | 2,718 | 2,144 | 59,397 |
Accrued Performance Fees – Private Market Funds
| (R$ mm) | 3Q’22 | Unrealized Performance Fees | Realized Distributions | 4Q’22 |
| Private Equity | 137.3 | 11.7 | - | 149.0 |
| Infrastructure | 17.3 | 2.7 | (1.8) | 18.3 |
| Real Estate | 0.0 | 0.1 | - | 0.2 |
| Credit | 0.1 | (0.1) | - | 0.1 |
| Total | 154.8 | 14.5 | (1.8) | 167.5 |
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$15.5 million as of the end of the fourth quarter of 2022 booked as unrealized performance fees in the company´s balance sheet.
Accrued performance fees shown for Private Equity funds of R$149.0 million, for others Infrastructure funds of R$2.7 million, for Real Estate funds of R$0.2 million and for Credit funds of R$0.1 million as of the end of the fourth quarter of 2022 have not been booked as unrealized performance fees in the company´s balance sheet.
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Investment Records – IP&S, Liquid Strategies, Credit and Listed REIT
| Fund | Segment | NAV xxvi (R$ millions) |
4Q22 | YTD | 12 M | 24 M | Market Comparison | Index Rate |
| Vinci Multiestratégia FIM | Hedge Funds | 468.5 | 2.5% | 11.8% | 11.8% | 14.8% | CDI xxvii | CDI |
| Atlas Strategy xxviii | Hedge Funds | 438.7 | (1.5)% | 8.2% | 8.2% | 3.9% | CDI | CDI |
| Vinci Total Return | Hedge Funds | 218.0 | (5.3)% | 3.3% | 3.3% | 20.9% | IPCA xxix + Yield IMA-B xxx | IPCA + Yield IMA-B |
| Mosaico Strategy xxxi | Public Equities | 978.7 | (6.1)% | (4.6)% | (4.6)% | (16.9)% | IBOV xxxii | IBOV |
| Vinci Gas Dividendos FIA | Public Equities | 526.3 | (1.3)% | 7.9% | 7.9% | (4.5)% | IBOV | IBOV |
| Vinci Valorem FIM | IP&S | 3,066.5 | 1.6% | 9.8% | 9.8% | 13.9% | IMA-B 5 | IMA-B 5 |
| Equilibrio Strategy xxxiii | IP&S | 2,070.7 | 1.3% | 9.7% | 9.7% | 13.3% | IPCA | - |
| Vinci Retorno Real FIM | IP&S | 168.0 | 0.9% | 13.9% | 13.9% | 24.3% | IMA-B | IMA-B |
| Vinci Crédito Imobiliário I | Credit | 242.4 | 3.9% | 12.2% | 12.2% | 14.3% | IPCA | IPCA + 7.785% |
| Vinci Crédito Imobiliário II | Credit | 698.5 | 0.8% | 8.8% | 8.8% | 12.3% | IPCA | IPCA + 6% |
| Vinci Crédito Estruturado Multiestrategia Plus FIC FIM | Credit | 123.6 | 3.5% | 13.9% | 13.9% | 22.4% | CDI | CDI |
| Vinci Energia Sustentável | Credit | 585.6 | (0.1)% | 5.8% | 5.8% | 9.2% | IPCA | IPCA + 6% |
| Vinci Crédito Multiestratégia | Credit | 329.6 | 1.7% | 10.5% | 10.5% | - | CDI | IPCA + 5% |
| VISC11 | Real Estate (listed REIT) | 2,302.9 | (2.7)% | 11.5% | 11.5% | 5.4% | IFIX xxxiv | IPCA + 6% |
| VILG11 | Real Estate (listed REIT) | 1,683.8 | (7.6)% | 2.9% | 2.9% | (7.7)% | IFIX | IPCA + 6% |
| VINO11 | Real Estate (listed REIT) | 906.9 | (2.8)% | (8.5)% | (8.5)% | (8.8)% | IFIX | IPCA + 6% |
| VIFI11 | Real Estate / Credit (listed REIT) | 71.6 | (6.6)% | 1.1% | 1.1% | (11.6)% | IFIX | IFIX |
| VIUR11 | Real Estate (listed REIT) | 247.9 | (0.1)% | 13.8% | 13.8% | - | IFIX | IPCA + 6% |
| VCRI11 | Real Estate / Credit (listed REIT) | 168.0 | 5.0% | 0.9% | - | - | IFIX | IPCA + X xxxv % |
| VICA11 | Real Estate / Credit (REIT) | 375.7 | 1.5% | - | - | - | IFIX | CDI + 1% |
| VINCI FOF IMOBILIARIO FIM CP | Real Estate (REIT) | 58.0 | (3.1)% | 5.9% | 5.9% | - | IFIX | IFIX |
| VIGT11 | Infrastructure (listed) | 604.9 | (3.6)% | 1.1% | 1.1% | (11.1)% | - | - |
| Benchmark | 4Q22 | YTD | 12 M | 24 M |
| IBOV | (0.3)% | 4.7% | 4.7% | (7.8)% |
| CDI | 3.2% | 12.4% | 12.4% | 17.3% |
| IMA-B 5 | 2.5% | 9.8% | 9.8% | 14.8% |
| IPCA + Yield IMA-B | 2.7% | 11.3% | 11.3% | 27.0% |
| IPCA | 1.6% | 5.8% | 5.8% | 16.5% |
| IFIX | (4.1)% | 2.2% | 2.2% | (0.1)% |
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Investment Records – Closed End Private Markets funds xxxvi
| Fund | Segment |
Vintage year | Committed Capital (R$mm) |
Invested Capital (R$mm) |
Realized or Partially Realized (R$mm) |
Unrealized (R$mm) |
Total Value (R$mm) |
Gross MOIC xxxvii (BRL) |
Gross MOIC (USD) |
Gross IRR xxxviii (BRL) |
Gross IRR (USD) |
| Fund 1 | Private Equity | 2004 | 1,415 | 1,206 | 5,065 | 213 | 5,278 | 4.4x | 4.0x | 71.5% | 77.2% |
| VCP II | Private Equity | 2011 | 2,200 | 1,880 | 2,019 | 2,241 | 4,260 | 2.3x | 1.1x | 12.0% | 1.8% |
| VCP III | Private Equity | 2018 | 4,000 | 2,118 | 34 | 3,564 | 3,598 | 1.6x | 1.5x | 42.7% | 32.3% |
| VCP Strategy xxxix | Private Equity | 7,615 | 5,204 | 7,118 | 6,018 | 13,136 | 2.5x | 2.2x | 64.7% | 70.2% | |
| NE Empreendedor | Private Equity | 2003 | 36 | 13 | 26 | – | 26 | 2.1x | 2.6x | 22.0% | 30.5% |
| Nordeste III | Private Equity | 2017 | 240 | 134 | 91 | 124 | 216 | 1.6x | 1.3x | 18.8% | 9.5% |
| VIR IV | Private Equity | 2020 | 1,000 | 277 | 92 | 229 | 321 | 1.2x | 1.1x | 18.6% | 20.8% |
| VIR Strategy xl | Private Equity | 1,276 | 424 | 210 | 353 | 563 | 1.3x | 1.3x | 20.6% | 27.3% | |
| SPS I | Vinci SPS | 2018 | 128 | 172 | 131 | 150 | 281 | 1.6x | 1.6x | 26.8% | 18.2% |
| SPS II | Vinci SPS | 2020 | 671 | 984 | 475 | 880 | 1,355 | 1.4x | 1.5x | 30.1% | 30.8% |
| SPS III | Vinci SPS | 2021 | 1,070 | 358 | 53 | 365 | 417 | 1.2x | 1.3x | 39.0% | 44.0% |
| SPS Strategy xli | Vinci SPS | 1,869 | 1,514 | 659 | 1,395 | 2,054 | 1.4x | 1.5x | 29.8% | 27.6% | |
| FIP Transmissão xlii | Infrastructure | 2017 | 211 | 104 | 240 | 143 | 383 | 3.7x | 2.7x | 64.0% | 47.2% |
| VIAS xliii | Infrastructure | 2021 | 386 | 350 | – | 350 | 350 | 1.0x | 1.0x | NM | NM |
| VFDL xliv | Real Estate | 2021 | 422 | 89 | – | 111 | 111 | 1.2x | 1.3x | 26.4% | 28.0% |
| Vinci Credit Infra xlv | Credit | 2022 | 1,400 | 60 | – | 59 | 59 | 1.0x | 1.0x | NM | NM |
Shareholder Dividends
| ($ in thousands) | 1H21 | 3Q'21 | 4Q'21 | 1Q’22 | 2Q’22 | 3Q'22 | 4Q’22 |
| Distributable Earnings (R$) | 101,976 | 61,743 | 68,515 | 53,255 | 60,435 | 72,842 | 55,792 |
| Distributable Earnings (US$) xlvi | 19,397 | 11,377 | 13,637 | 10,615 | 11,795 | 14,281 | 10,618 |
| DE per Common Share (US$) xlvii | 0.34 | 0.20 | 0.24 | 0.19 | 0.21 | 0.26 | 0.19 |
| Actual Dividend per Common Share xlviii | 0.30 | 0.16 | 0.20 | 0.17 | 0.17 | 0.20 | 0.17 |
| Record Date | September 01,2021 | December 01,2021 | March 10, 2022 | May 24, 2022 | August 25, 2022 | November 23, 2022 | March 01, 2023 |
| Payable Date | September 16, 2021 | December 16,2021 | March 24, 2022 | June 08, 2022 | September 09,2022 | December 08, 2022 | March 15, 2023 |
Vinci Partners generated R$1.01 or US$0.19 of Distributable Earnings per common share for the fourth quarter of 2022. The company declared a quarterly dividend of US$0.17 per common share to record holders as of March 01, 2023; payable on March 15, 2023.
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Share Summary
| VINP Shares | 1Q'21 | 2Q'21 | 3Q'21 | 4Q'21 | 1Q’22 | 2Q'22 | 3Q'22 | 4Q'22 |
| 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 |
| Class A – Partnership Units | 27,175,861 | 27,175,861 | 27,175,861 | 27,175,861 | 27,175,861 | 27,175,861 | 27,175,861 | 27,175,861 |
| Class A - Public Float | 15,271,488 | 15,094,833 | 14,921,318 | 14,513,477 | 14,187,216 | 13,936,856 | 13,716,758 | 13,438,636 |
| 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 |
Common Shares Outstanding as of quarter end of 55,080,736 shares.
| · | Repurchased 278,122 common shares in the quarter, with an average share price of US$10.0. |
| · | Repurchased 1,832,852 common shares since the announcement of the first share repurchase plan, with an average share price of US$11.9. |
| · | Available authorization remaining was R$29.8 million on December 30, 2022. |
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GP Commitment in Private Market funds
(R$ millions, unless mentioned) Fund |
Segment | 4Q22 Commitments |
Total Capital Committed |
4Q22 Capital Called | Total Capital Called | Capital Returned/ Dividends Paid (4Q22) |
Accumulated Capital Returned/ Dividends Paid |
Fair value of investments |
| Nordeste III | Private Equity | – | 5.0 | 0.0 | 3.1 | – | 1.6 | 2.4 |
| VCP III | Private Equity | – | 3.1 | 0.0 | 2.4 | – | – | 3.4 |
| VIR IV | Private Equity | – | 11.1 | 0.2 | 3.9 | 0.8 | 1.0 | 2.9 |
| VCP IV | Private Equity | – | 350.0 | – | – | – | – | – |
| FIP Infra Transmissão (co- investment) xlix | Infrastructure | – | 29.5 | – | 8.9 | 1.3 | 20.9 | 10.9 |
| FIP Infra Transmissão1 | Infrastructure | – | 10.5 | – | 3.4 | 0.4 | 6.6 | 3.1 |
| VIAS | Infrastructure | – | 50.0 | – | 27.8 | – | – | 33.9 |
| Vinci Transporte e Logística II | Infrastructure | – | 15.0 | – | – | – | – | – |
| Vinci Transporte e Logística I | Infrastructure | – | 11.4 | – | 6.3 | – | – | 5.6 |
| VICC | Infrastructure | 100.0 | 100.0 | – | – | – | – | – |
| VFDL | Real Estate | – | 70.0 | – | 22.8 | – | – | 25.5 |
| VIUR | Real Estate | – | 67.3 | – | 67.3 | 1.5 | 9.0 | 53.3 |
| VINO | Real Estate | – | 50.0 | – | 50.0 | 0.9 | 3.4 | 43.2 |
| Vinci FOF Imobiliário | Real Estate | – | 16.9 | – | 16.9 | – | 0.5 | 18.4 |
| VCS (VCRI) | Real Estate/Credit | – | 80.0 | – | 80.0 | 3.0 | 8.8 | 75.7 |
| Vinci Crédito Agro Fiagro-Imobiliário | Real Estate/Credit | – | 23.0 | – | 23.0 | – | – | 22.9 |
| Vinci Crédito Infra Institucional | Credit | – | 100.0 | 7.7 | 7.7 | – | – | 7.6 |
| VSP FIM | IP&S | – | 50.0 | 2.4 | 6.8 | – | – | 7.3 |
| Vinci PIPE FIA | Public Equities | 5.0 | 25.0 | 5.0 | 25.0 | – | – | 21.9 |
| Total | 105.0 | 1,067.8 | 15.3 | 355.1 | 7.9 | 51.9 | 338.0 |
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Reconciliation and Disclosures
Non-GAAP Reconciliation
| (R$ thousands, unless mentioned) | 4Q'21 | 3Q'22 | 4Q'22 | FY'21 | FY'22 |
| OPERATING PROFIT | 56,349 | 49,023 | 55,321 | 246,130 | 199,616 |
| (-) Net revenue from realized performance fees | (13,614) | (2,602) | (9,241) | (45,348) | (18,218) |
| (-) Net revenue from unrealized performance fees | 10,166 | 2,571 | 1,683 | 7,715 | 3,618 |
| (+) Compensation allocated in relation to performance fees | 1,094 | 537 | 3,558 | 14,001 | 6,554 |
| FEE RELATED EARNINGS (FRE) | 53,995 | 49,529 | 51,321 | 222,498 | 191,570 |
| OPERATING PROFIT | 56,349 | 49,023 | 55,321 | 246,130 | 199,616 |
| (-) Net revenue from management fees | (91,594) | (95,361) | (99,640) | (361,070) | (371,501) |
| (-) Net revenue from advisory | (20,148) | (7,267) | (4,394) | (66,755) | (21,994) |
| (+) Bonus related to management and advisory | 23,367 | 19,798 | 18,981 | 84,969 | 73,318 |
| (+) Personnel expenses | 6,021 | 6,509 | 6,163 | 22,246 | 25,454 |
| (+) Other general and administrative expenses | 4,717 | 4,725 | 4,977 | 17,512 | 18,383 |
| (+) Corporate center expenses | 23,642 | 22,067 | 22,592 | 80,599 | 84,770 |
| PERFORMANCE RELATED EARNINGS (PRE) | 2,354 | (506) | 4,000 | 23,632 | 8,046 |
| OPERATING PROFIT | 56,349 | 49,023 | 55,321 | 246,130 | 199,616 |
| (-) Net revenue from unrealized performance fees | 10,166 | 2,571 | 1,683 | 7,715 | 3,618 |
| (+) Compensation allocated in relation to unrealized performance fees | (3,605) | (910) | (593) | (2,733) | (1,278) |
| (+) Realized gain from GP investment income | 11,973 | 5,738 | 7,462 | 13,851 | 20,171 |
| SEGMENT DISTRIBUTABLE EARNINGS | 74,883 | 56,422 | 63,873 | 264,964 | 222,127 |
| NET INCOME | 56,593 | 69,207 | 58,490 | 208,615 | 219,402 |
| (-) Net revenue from unrealized performance fees | 10,166 | 2,571 | 1,683 | 7,715 | 3,618 |
| (+) Income tax from unrealized performance fees | (1,173) | (296) | (194) | (890) | (417) |
| (+) Compensation allocated in relation to unrealized performance fees | (3,605) | (910) | (593) | (2,733) | (1,278) |
| (-) Unrealized gain from GP investment income | 7,558 | (3,935) | (549) | 13,771 | 13,867 |
| (+) Income tax on unrealized gain from GP investment income | (3,415) | 7 | (321) | (2,658) | (369) |
| (-) Unrealized gain from financial income | (48) | 25 | (33) | 827 | (912) |
| (+) Income tax on unrealized gain from financial income | 298 | – | – | – | – |
| (-) Contingent consideration (earn-out) gain (loss), after-tax | – | – | (9,221) | – | (9,221) |
| (+) Depreciation and amortization³ | 1,127 | 1,223 | 1,803 | 3,917 | 4,986 |
| (+) Share Based Plan | 1,014 | 5,609 | 5,463 | 3,670 | 14,276 |
| (-) Income Taxes on Share Based Plan | – | (659) | (736) | – | (1,628) |
| (+) Non-recurring expenses including income tax related to realized expense | – | 353 | – | – | 5,425 |
| ADJUSTED DISTRIBUTABLE EARNINGS | 68,515 | 73,195 | 55,792 | 232,234 | 247,748 |
| TOTAL NET REVENUE FROM SERVICES RENDERED | 115,190 | 102,659 | 111,592 | 465,458 | 408,095 |
| (-) Net revenue from realized performance fees | (13,614) | (2,602) | (9,241) | (45,348) | (18,218) |
| (-) Net revenue from unrealized performance fees | 10,166 | 2,571 | 1,683 | 7,715 | 3,618 |
| NET REVENUE FROM MANAGEMENT FEES AND ADVISORY | 111,742 | 102,628 | 104,034 | 427,825 | 393,495 |
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Effective Tax Rate Reconciliation
| (R$ thousands, unless mentioned) | 4Q'21 | 4Q'22 | FY'21 | FY'22 | |
| Profit (loss) before income taxes | 66,516 | 76,381 | 257,842 | 271,814 | |
| Combined statutory income taxes rate - % | 34% | 34% | 34% | 34% | |
| Income tax benefit (Expense) at statutory rates | (22,615) | (25,970) | (87,666) | (92,417) | |
| Reconciliation adjustments: | |||||
| Expenses not deductible | (330) | (159) | (392) | (214) | |
| Tax benefits | 445 | 185 | 825 | 282 | |
| Share based payments | (102) | (70) | (371) | (297) | |
| Effect of presumed profit of subsidiaries¹ and offshore subsidiaries li | 12,589 | 8,097 | 38,279 | 40,220 | |
| Other additions (exclusions), net | 90 | 26 | 98 | 13 | |
| Income taxes expenses | (9,923) | (17,891) | (49,227) | (52,413) | |
| Current | (12,251) | (15,086) | (56,770) | (53,144) | |
| Deferred | 2,328 | (2,805) | 7,543 | 731 | |
| Effective tax rate | 15% | 23% | 19% | 19% |
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Balance Sheet Results
| Assets | 9/30/2022 | 12/30/2022 |
| Current assets | ||
| Cash and cash equivalents | 97,383 | 136,581 |
| Cash and bank deposits | 13,981 | 30,108 |
| Financial instruments at fair value through profit or loss | 83,402 | 106,473 |
| Financial instruments at fair value through profit or loss | 1,302,167 | 1,243,764 |
| Trade receivables | 50,467 | 57,675 |
| Sub-leases receivable | 1,500 | 1,500 |
| Taxes recoverable | 654 | 1,555 |
| Other assets | 13,852 | 16,481 |
| Total current assets | 1,466,023 | 1,457,556 |
| Non-current assets | ||
| Financial instruments at fair value through profit or loss | 5,646 | 5,985 |
| Trade receivables | 17,317 | 17,298 |
| Sub-leases receivable | 1,656 | 1,343 |
| Taxes recoverable | 4,316 | 3,141 |
| Deferred taxes | 7,376 | 9,241 |
| Other receivables | 1,041 | 1,065 |
| 37,352 | 38,073 | |
| Property and equipment | 12,578 | 11,951 |
| Right of use - Leases | 57,943 | 70,136 |
| Intangible assets | 186,658 | 189,238 |
| Total non-current assets | 294,531 | 309,398 |
| TOTAL | 1,760,554 | 1,766,954 |
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| Liabilities and equity | 9/30/2022 | 12/30/2022 |
| Current liabilities | ||
| Trade payables | 768 | 1,247 |
| Deferred Revenue | 16,713 | – |
| Leases | 22,293 | 24,147 |
| Accounts payable | 6,761 | 7,328 |
| Labor and social security obligations | 66,208 | 87,732 |
| Loans and Obligations | 10,171 | 13,168 |
| Taxes and contributions payable | 19,474 | 22,291 |
| Total current liabilities | 142,388 | 155,913 |
| Non-current liabilities | ||
| Accounts payable | – | – |
| Leases | 52,965 | 62,064 |
| Labor and social security obligations | 2,048 | 2,968 |
| Loans and Obligations | 175,238 | 162,122 |
| Deferred taxes | 3,770 | 8,340 |
| 234,021 | 235,494 | |
| Total liabilities | 376,409 | 391,407 |
| Equity | ||
| Share capital | 15 | 15 |
| Additional paid-in capital | 1,382,038 | 1,382,038 |
| Treasury shares | (100,323) | (114,978) |
| Retained Earnings | 79,135 | 81,310 |
| Other reserves | 21,705 | 24,149 |
| 1,382,570 | 1,372,534 | |
| Non-controlling interests in the equity of subsidiaries | 1,575 | 3,013 |
| Total equity | 1,384,145 | 1,375,547 |
| Total liabilities and equity | 1,760,554 | 1,766,954 |
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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.
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i Adjusted Distributable Earnings is calculated as Distributable Earnings less non-recuring expenses.
ii 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.
iii FRE per share is calculated considering the number of outstanding shares at the end of the current quarter. Last full year values are calculated as the sum of the last three quarters.
iv Other financial expenses include the interest related to Vinci SPS’ acquisition.
v 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.
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 four quarters.
vii For the full year ended December 30, 2022, non-recurring expenses are composed by expenses related to professional services to matters related to acquisitions and our international corporate organization.
viii Net revenue from Fund Management and Advisory is a performance 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.
ix Asset management segments are: Private Equity, Real Estate, Credit, Infrastructure, Vinci SPS, Public Equities, Hedge Funds and IP&S.
x FRE Margin is calculated as FRE over total net management and advisory fees.
xi “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.
xii Segment Distributable Earnings is Vinci Partners’ segment profitability measure used to make operating decisions and assess performance across the company’s four segments (Private Markets, Liquid Strategies, Investment Products and Solutions and Financial 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.
xiii 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.
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xiv “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.
xv “Other Items” include interest expenses related to acquisitions and the earn-out’s variation.
xvi “Contingent consideration adjustment related to acquisitions” reflects the change in the earn out’s fair value to be paid in 2027. On December 30, 2022, Vinci revaluated the fair value of the obligation based on the economic conditions at the year end, resulting in a decrease of the contingent consideration fair value. The variation was recognized as an income in the financial result.
xvii “Segment personnel expenses” are composed of the salary-part compensation paid to employees and partners of our funds’ management teams.
xviii “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.
xix “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.
xx “GP investment income” is income from proprietary investments made by us in our own Private Markets’ funds, used as GP Commitments.
xxi “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 and listed REITs from our real estate segment.
xxii “Leasing expenses” include costs from the company’s sub-leasing activities.
xxiii “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.
xxiv 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 are taxed based on deemed profit.
xxv 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.
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xxvi NAV is the net asset value of each fund. For listed vehicles, the NAV represents the Market valuation of the fund.
xxvii CDI is an average of interbank overnight rates in Brazil (daily average for the period).
xxviii Atlas strategy comprises Atlas FIC FIM and Atlas Institucional FIC FIM.
xxix IPCA is a broad consumer price index measured by the IBGE.
xxx 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.
xxxi Mosaico strategy comprises Vinci Mosaico FIA, Vinci Mosaico Institucional FIA and Vinci Mosaico Advisory FIA.
xxxii IBOV is the Brazilian stock market most relevant index.
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$1.3 billion in co-investments. Track record presented for the VCP strategy as of 3Q’22, due to fund’s administrator timeline to disclose the quarterly markup of the fund.
xl Track record for VIR strategy is presented as of 3Q’22, due to fund’s administrator timeline to disclose the quarterly markup of the fund.
xli Track record for Vinci SPS strategy is presented as of 4Q’22.
xlii Track record for FIP Infra is presented as of 3Q’22.
xliii Track record for VIAS is presented as of 3Q’22.
xliv Track record for VFDL is presented as of 4Q’22.
xlv Track record for Vinci Credit Infra is presented as of 4Q’22.
xlvi US$ Distributable Earnings was calculated considering the exchange rate from USD to BRL of 5.2546 as of February 10, 2023, when dividends were approved by our Board of Directors.
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xlvii Per Share calculations are based on end of period Participating Common Shares.
xlviii Actual dividends per common share are calculated considering the share count as of the applicable record date.
xlix The remaining capital committed in FIP Infra Transmissão co-investment will not be called by the fund, which is
already in divestment period.
l The remaining capital committed in FIP Infra Transmissão will not be called by the fund, which is already in
divestment period.
li 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, 2022
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, 2022 and December 31, 2021, 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, 2022, 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, 2022 and December 31, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 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 14, 2023
/s/PricewaterhouseCoopers
Auditores Independentes Ltda.
We have served as the Company's auditor since 2010.
F-2
Vinci Partners Investments Ltd.
Consolidated balance sheet
All amounts in thousands of Brazilian Reais, unless otherwise stated
| Assets | Note | 12/31/2022 | 12/31/2021 | |||||||
| Current assets | ||||||||||
| Cash and cash equivalents | 5(d) | 136,581 | 102,569 | |||||||
| Cash and bank deposits | 5(d) | 30,108 | 21,679 | |||||||
| Financial instruments at fair value through profit or loss | 5(d) | 106,473 | 80,890 | |||||||
| Financial instruments at fair value through profit or loss | 5(c) | 1,243,764 | 1,372,926 | |||||||
| Accounts receivable | 5(a) | 57,675 | 44,316 | |||||||
| Sub-leases receivable | 10 | 1,500 | — | |||||||
| Taxes recoverable | 1,555 | 3,199 | ||||||||
| Other assets | 6 | 16,481 | 4,193 | |||||||
| Total current assets | 1,457,556 | 1,527,203 | ||||||||
| Non-current assets | ||||||||||
| Financial instruments at fair value through profit or loss | 5(c) | 5,985 | 8,593 | |||||||
| Accounts receivable | 5(a) | 17,298 | 19,368 | |||||||
| Sub-leases receivable | 10 | 1,343 | — | |||||||
| Taxes recoverable | 3,141 | 80 | ||||||||
| Deferred taxes | 18 | 9,241 | 4,970 | |||||||
| Other assets | 6 | 1,065 | 2,011 | |||||||
| 38,073 | 35,022 | |||||||||
| Property and equipment | 8 | 11,951 | 14,294 | |||||||
| Right of use - Leases | 10 | 70,136 | 69,329 | |||||||
| Intangible assets | 9 | 189,238 | 1,157 | |||||||
| Total non-current assets | 309,398 | 119,802 | ||||||||
| Total assets | 1,766,954 | 1,647,005 | ||||||||
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 Brazilian Reais, unless otherwise stated
| Liabilities and equity | Note | 12/31/2022 | 12/31/2021 | |||||||
| Current liabilities | ||||||||||
| Trade payables | 1,247 | 831 | ||||||||
| Leases | 10 and 5(e) | 24,147 | 22,304 | |||||||
| Accounts payable | 11 | 7,328 | 10,677 | |||||||
| Labor and social security obligations | 12 | 87,732 | 106,299 | |||||||
| Loans and obligations | 14 | 13,168 | — | |||||||
| Taxes and contributions payable | 13 | 22,291 | 23,762 | |||||||
| Total current liabilities | 155,913 | 163,873 | ||||||||
| Non-current liabilities | ||||||||||
| Leases | 10 and 5(e) | 62,064 | 63,240 | |||||||
| Labor and social security obligations | 12 | 2,968 | — | |||||||
| Loans and obligations | 14 | 162,122 | — | |||||||
| Deferred taxes | 19 | 8,340 | 5,016 | |||||||
| Total non-current liabilities | 235,494 | 68,256 | ||||||||
| Total liabilities | 391,407 | 232,129 | ||||||||
| Equity | 15 | |||||||||
| Share capital | 15 | 15 | ||||||||
| Additional paid-in capital | 1,382,038 | 1,382,038 | ||||||||
| Treasury shares | 15(f) | (114,978 | ) | (52,585 | ) | |||||
| Retained earnings | 81,310 | 70,183 | ||||||||
| Other reserves | 24,149 | 15,182 | ||||||||
| 1,372,534 | 1,414,833 | |||||||||
| Non-controlling interests in the equity of subsidiaries | 7 | 3,013 | 43 | |||||||
| Total equity | 1,375,547 | 1,414,876 | ||||||||
| Total liabilities and equity | 1,766,954 | 1,647,005 | ||||||||
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 Brazilian Reais, unless otherwise stated
| Statements of Income | Note | 2022 | 2021 | 2020 | ||||||||||
| Net revenue from services rendered | 16 | 408,095 | 465,458 | 339,892 | ||||||||||
| General and administrative expenses | 17 | (229,349 | ) | (222,998 | ) | (124,245 | ) | |||||||
| Operating profit | 178,746 | 242,460 | 215,647 | |||||||||||
| Finance income | 18 | 112,133 | 28,511 | 10,050 | ||||||||||
| Finance expenses | 18 | (19,065 | ) | (13,129 | ) | (13,097 | ) | |||||||
| Finance profit/(loss), net | 93,068 | 15,382 | (3,047 | ) | ||||||||||
| Profit before income taxes | 271,814 | 257,842 | 212,600 | |||||||||||
| Income taxes | 19 | (52,413 | ) | (49,227 | ) | (43,446 | ) | |||||||
| Profit for the year | 219,401 | 208,615 | 169,154 | |||||||||||
| Attributable to the shareholders of the parent company | 219,417 | 208,615 | 170,199 | |||||||||||
| Attributable to non-controlling interests | (16 | ) | — | (1,045 | ) | |||||||||
| Basic earnings per share/quota in Brazilian Reais | 15(g) | 3.89 | 3.77 | 19.60 | ||||||||||
| Diluted earnings per share/quota in Brazilian Reais | 15(g) | 3.84 | 3.77 | 19.60 | ||||||||||
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 Brazilian Reais, unless otherwise stated
| 2022 | 2021 | 2020 | ||||||||||
| Profit for the year | 219,401 | 208,615 | 169,154 | |||||||||
| Other comprehensive income | ||||||||||||
| Items that may be reclassified to profit or loss: | ||||||||||||
| Foreign exchange variance of investees | ||||||||||||
| Vinci Capital Partners GP Limited | 2 | 14 | 69 | |||||||||
| Vinci USA LLC | (781 | ) | 988 | 2,284 | ||||||||
| Vinci Capital Partners F III GP Limited | (20 | ) | 5 | 19 | ||||||||
| GGN GP LLC | (9 | ) | 13 | — | ||||||||
| VICC Infra GP LLC | 15 | — | — | |||||||||
| Vinci Capital Partners IV GP LLC | (34 | ) | — | — | ||||||||
| Total comprehensive income for the year | 218,574 | 209,635 | 171,526 | |||||||||
| Attributable to: | ||||||||||||
| Shareholders of the parent company | 218,590 | 209,635 | 172,571 | |||||||||
| Non-controlling interests | (16 | ) | — | (1,045 | ) | |||||||
| 218,574 | 209,635 | 171,526 | ||||||||||
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
| Notes | Share capital |
Additional paid-in capital |
Retained earnings |
Other reserves |
Treasury shares |
Total | Non-controlling interests |
Total equity |
|||||||||||
| At January 01, 2020 | 8,595 | - | 91,430 | 8,119 | - | 108,144 | 6,581 | 114,725 | |||||||||||
| Profit for the year | - | - | 170,199 | - | - | 170,199 | (1,045) | 169,154 | |||||||||||
| Other comprehensive income: | |||||||||||||||||||
| Foreign exchange variance of investee located abroad | - | - | - | 2,372 | - | 2,372 | - | 2,372 | |||||||||||
| Capital increase (decrease) | 135 | - | - | - | - | 135 | (900) | (765) | |||||||||||
| Acquisition of non-controlling quotas | - | - | (261,629) | - | - | (261,629) | (3,438) | (265,067) | |||||||||||
| Allocation of profit: | - | - | 170,199 | - | - | 170,199 | (1,045) | 169,154 | |||||||||||
| Dividends | |||||||||||||||||||
| At December 31, 2020 | 8,730 | - | - | 10,491 | - | 19,221 | 15 | 19,236 | |||||||||||
| Corporate reorganization | 15(a) | (8,719) | 8,719 | - | - | - | - | - | - | ||||||||||
| Profit for the year | - | - | 208,615 | - | - | 208,615 | - | 208,615 | |||||||||||
| Other comprehensive income: | |||||||||||||||||||
| Foreign exchange variance of investee located abroad | 15(d) | - | - | - | 1,021 | - | 1,021 | (1) | 1,020 | ||||||||||
| Capital increase | 15(a) | 4 | 1,392,370 | - | - | 1,392,374 | 29 | 1,392,403 | |||||||||||
| Share based payments | 23 | - | - | - | 3,670 | - | 3,670 | - | 3,670 | ||||||||||
| Treasury shares | 15(f) | - | - | - | - | (52,585) | (52,585) | - | (52,585) | ||||||||||
| Transaction costs from capital increase | 15(b) | - | (19,051) | - | - | - | (19,051) | - | (19,051) | ||||||||||
| Allocation of profit: | |||||||||||||||||||
| Dividends | 15(e) | - | - | (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 variance of investee located abroad | 15(d) | - | - | - | (827) | - | (827) | (2) | (829) | ||||||||||
| Capital increase | - | - | - | - | - | - | 2,988 | 2,988 | |||||||||||
| Share based payments | 23 | - | - | - | 9,794 | - | 9,794 | - | 9,794 | ||||||||||
| Treasury shares | 15(f) | - | - | - | - | (62,393) | (62,393) | - | (62,393) | ||||||||||
| Allocation of profit: | |||||||||||||||||||
| Dividends | 15(e) | - | - | (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 |
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 | 2022 | 2021 | 2020 | |||||||||||
| Cash flows from operating activities | ||||||||||||||
| Profit before taxation | 271,814 | 257,842 | 212,600 | |||||||||||
| Adjustments to reconcile net income to cash flows from operations: | ||||||||||||||
| Depreciation and amortization | 17 | 15,786 | 13,729 | 13,228 | ||||||||||
| Investment income of financial instruments at fair value through profit or loss | (86,047 | ) | (24,787 | ) | (8,251 | ) | ||||||||
| Finance expense on liabilities at amortized cost | - | — | 203 | |||||||||||
| Interest expense on loans and obligations | 18 | 5,804 | — | — | ||||||||||
| Interest on contingent consideration | 18 | (13,971 | ) | — | — | |||||||||
| Allowance for expected credit loss | 17 | (4 | ) | 21 | 59 | |||||||||
| Share based payments | 17 | 14,276 | 3,670 | — | ||||||||||
| Financial result on lease agreements | 18 | 8,969 | 12,084 | 11,691 | ||||||||||
| 216,627 | 262,559 | 229,530 | ||||||||||||
| Changes in assets and liabilities | ||||||||||||||
| Accounts receivables | (10,064 | ) | 11,819 | (813 | ) | |||||||||
| Taxes recoverable | (1,389 | ) | (1,992 | ) | 15 | |||||||||
| Other assets | (11,286 | ) | 7,716 | (7,549 | ) | |||||||||
| Trade payables | 392 | (208 | ) | 713 | ||||||||||
| Accounts payable | 156 | (667 | ) | (858 | ) | |||||||||
| Labor and social security obligations | (21,349 | ) | 65,575 | 9,776 | ||||||||||
| Taxes and contributions payable | (1,705 | ) | 1,105 | (5,246 | ) | |||||||||
| (45,245 | ) | 83,348 | (3,962 | ) | ||||||||||
| Cash generated from operations | 171,382 | 345,907 | 225,568 | |||||||||||
| Income tax paid | (53,482 | ) | (57,215 | ) | (30,242 | ) | ||||||||
| Net cash inflow from operating activities | 117,900 | 288,692 | 195,326 | |||||||||||
| 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 | (6,476 | ) | (3,091 | ) | (2,016 | ) | ||||||||
| Acquisition of non-controlling quotas | - | — | (1,183 | ) | ||||||||||
| Purchase of financial instruments at fair value through profit or loss | (341,157 | ) | (1,420,834 | ) | (375,006 | ) | ||||||||
| Sales of financial instruments at fair value through profit or loss | 558,974 | 103,953 | 453,517 | |||||||||||
| Net cash (outflow) from investing activities | 131,838 | (1,319,972 | ) | 75,312 | ||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from the issuance of shares/quotas | 15(a) | — | 1,392,403 | 135 | ||||||||||
| Capital increase (decrease) of non-controlling interests in the equity of subsidiaries | 2,988 | — | (900 | ) | ||||||||||
| Transactions costs paid | 15(d) | — | (19,051 | ) | — | |||||||||
| Treasury shares acquisition paid | 15(f) | (63,353 | ) | (50,831 | ) | — | ||||||||
| Lease payments, net of sublease received | (22,848 | ) | (18,534 | ) | (16,497 | ) | ||||||||
| Borrowings acquisitions (payments) | 79,026 | — | — | |||||||||||
| Dividends paid | 15(e) | (211,320 | ) | (255,963 | ) | (176,287 | ) | |||||||
| Net cash (outflow) from financing activities | (215,507 | ) | 1,048,024 | (193,549 | ) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 34,231 | 16,744 | 77,089 | |||||||||||
| Cash and cash equivalents at the beginning of the year | 5(d) | 102,569 | 83,449 | 3,896 | ||||||||||
| Foreign exchange variation of cash and cash equivalents in subsidiary | (219 | ) | 2,376 | 2,464 | ||||||||||
| Cash and cash equivalents at the end of the year | 5(d) | 136,581 | 102,569 | 83,449 | ||||||||||
Non-cash financing activities
Dividends declared and not yet paid until December 31, 2022 and 2021 were R$ 4,363 (Note 11) and R$ 6,833, respectively.
Consideration payable and contingent consideration (earn-out) as of December 31, 2022 were 43,579 and 48,499, 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
All amounts in thousands of 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 14.
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
All amounts in thousands of reais, unless otherwise stated
Impacts of the coronavirus pandemic (COVID-19)
The COVID-19 pandemic has resulted in the temporary or permanent closure of many businesses and has required adjustments in how many businesses operate. For example, certain funds in our real estate segment were impacted as a result of shopping mall closures in Brazil for some months during the pandemic. In addition, there is uncertainty surrounding real estate funds with concentrated investments in office space as the real estate market adjusts to shifts in office space demand in response to changes in economic activity and remote working arrangements. Significant market fluctuations driven by the COVID-19 pandemic have resulted in fluctuations in the fair value component of our Assets Under Management. However, despite the adverse impact, Vinci expanded its operations during the pandemic and increased its total assets, net revenue, profits since the beginning of the pandemic and did not record any impairment in 2022 and 2021 as result of COVID-19.
Impacts of the conflict between Russia and Ukraine
As a result of the current geopolitical tensions and conflict between Russia and Ukraine, the governments of the United States, the European Union, Japan and other jurisdictions have announced the imposition of sanctions on certain industry sectors and parties in Russia, as well as enhanced export controls on certain products and industries. Geopolitical instability adversely arising from such conflict (including additional conflicts that could arise from such conflict), the imposition of sanctions, taxes and/or tariffs against Russia and Russia’s response to such sanctions could adversely affect the global economy or specific international, regional and domestic markets, including the Brazilian market.
As of December 31, 2022, the consequences of such conflict have not adversely impacted Vinci’s operations.
| 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 (IFRS) as issued by the International Accounting Standards Board (IASB).
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 2022.
F-10
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
Standards and interpretations issued but not yet effective
IFRS 17 Insurance Contract
IFRS 17 was issued in May 2017 as replacement for IFRS 4 Insurance Contracts. It requires a current measurement model where estimates are remeasured in each reporting period. Contracts are measured using the building blocks of:
• discounted probability-weighted
• cash flows an explicit risk adjustment, and
• a contractual service margin (CSM) representing the unearned profit of the contract which is recognized as revenue over the coverage period.
As a result of the new segment Vinci Retirement Services, IFRS 17 may be applicable for Vinci from 2023. The Management is evaluating possible impacts of IFRS 17 according to the main characteristics of each product, which expect to be commercialized by this new segment in the first semester of 2023.
The issuance of these consolidated financial statements was authorized by the Entity's management on February 10th, 2023.
| (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, 2022 and 2021 are as follows:
| Interest - % | ||||||||
| 12/31/2022 | 12/31/2021 | |||||||
| Subsidiaries | ||||||||
| Vinci Partners Investimentos Ltda. (1) | 100 | 100 | ||||||
| Vinci Assessoria financeira Ltda. (2) | 100 | 100 | ||||||
| Vinci Equities Gestora de Recursos Ltda. (2) | 100 | 100 | ||||||
| Vinci Gestora de Recursos Ltda. (2) | 100 | 100 | ||||||
| Vinci Capital Gestora de Recursos Ltda. (2) | 100 | 100 | ||||||
| Vinci Soluções de Investimentos Ltda. (3) | 100 | 100 | ||||||
| Vinci Real Estate Gestora de Recursos Ltda. (2) | 100 | 100 | ||||||
| Vinci Capital Partners GP Limited. | 100 | 100 | ||||||
| Vinci Partners USA LLC | 100 | 100 | ||||||
| Vinci GGN Gestão de Recursos Ltda. (2) | 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 | 100 | ||||||
| Vinci APM Ltda. (2) | 100 | 100 | ||||||
| Vinci Monalisa FIM Crédito Privado IE (4) | 100 | 100 | ||||||
| Vinci Asset Allocation Ltda. | 75 | 65 | ||||||
| VICC Infra GP LLC | 100 | — | ||||||
| Vinci Capital Partners IV GP LLC | 100 | — | ||||||
| Vinci Holding Securitária Ltda. | 85 | — | ||||||
| Vinci Vida e Previdência S.A. (5) | 85 | — | ||||||
| SPS Capital Gestão de Recursos Ltda. (6) | 100 | — | ||||||
| (1) | Prior to the consummation of the initial public offering, on January 15, 2021, the consolidated financial statements were prepared on behalf of Vinci Partners Investimentos Ltda. |
| (2) | Minority interest represents less than 0.001%. |
| (3) | On February 18, 2021, Vinci Gestão de Patrimônio Ltda changed its name to Vinci Soluções de Investimentos Ltda. Minority interest represents less than 0.001%. |
| (4) | Under the terms of IFRS10, 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. |
| (5) | 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. |
| (6) | 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. |
F-11
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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 amount 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 |
During January 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.
F-12
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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) Retirement services (Note 20).
In 2022, a new segment Vinci Retirement Services was created in order to assist investors to achieve retirement goals with long-term investment portfolios. As of December 31, 2022, this new segment has not been operational yet.
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.
| 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
F-13
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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).
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.
(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 use a provision matrix to calculate expected credit losses, for accounts receivables When applicable, the Group calibrate 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.
F-14
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 2.7 | Intangible assets |
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, 2022 and 2021 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.
F-15
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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.
| 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 | Trade 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.
F-16
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 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 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.
F-17
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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;
• 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 21 "Segment Reporting" for a disaggregated presentation of revenues from contracts with customers, as follows:
F-18
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| (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%.
| (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 the Brazilian funds we use a threshold generally indexed to IPCA plus 8%, 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.
F-19
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| (c) | Financial advisory services |
Financial advisory fees are related to the service provided by the Group 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. 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.
| 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.
| 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.
F-20
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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
Vinci's treasury manages credit risk on a group basis. As of December 31, 2022, and 2021 the expected credit losses are considered immaterial due to the short maturities of the deposits and the credit quality of the 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 identified impairment loss was immaterial.
| (b) | Market risk |
(i) Foreign exchange risk
The Group's exposure to foreign currency risk at the end of the reporting period, expressed in functional currency units, was as follows:
At the reporting date, the carrying amount value of the Group’s assets and liabilities held in US Dollars were as follows:
| Balance sheet | 12/31/2022 | 12/31/2021 | ||||||
| Cash and cash equivalents | 30,087 | 20,990 | ||||||
| Accounts receivable | 13,823 | 9,477 | ||||||
| Other receivables | 1,618 | 15,411 | ||||||
| Current assets | 45,528 | 45,878 | ||||||
| Leases, property and equipment | 3,596 | 3,216 | ||||||
| Non-current assets | 3,596 | 3,216 | ||||||
| Trade payables | 1,657 | 2,011 | ||||||
| Labor and social security obligations | 7,295 | 9,521 | ||||||
| Current liabilities | 8,952 | 11,532 | ||||||
| Payables to related parties | 608 | 282 | ||||||
| Lease | 1,973 | 3,104 | ||||||
| Non-current liabilities | 2,581 | 3,386 | ||||||
| Net Equity | 37,591 | 34,176 | ||||||
F-21
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
The aggregate net foreign exchange gains/losses recognized in profit or loss were:
| Net foreign exchange result | 12/31/2022 | 12/31/2021 | 12/31/2020 | |||||||||
| Financial revenue | 2,514 | — | 416 | |||||||||
| Financial expense | (2,986 | ) | (372 | ) | (193 | ) | ||||||
| Net foreign exchange result, net | (472 | ) | (372 | ) | 223 | |||||||
The Group operates internationally and is exposed to foreign exchange risk, exclusively the US dollar.
Foreign exchange risk arises from 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 certificate of deposits of R$ 136,581 (12/31/2021 – R$ 102,569) that are expected to readily generate cash inflows for managing liquidity risk.
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the years presented.
| 12/31/2022 | 12/31/2021 | |||||||
| Cash and cash equivalents | 136,581 | 102,569 | ||||||
| Financial instruments at fair value through profit or loss (i) | 1,243,764 | 1,372,926 | ||||||
| Trade payables | (1,247 | ) | (831 | ) | ||||
| Labor and social security obligations | (90,700 | ) | (106,299 | ) | ||||
| Accounts payable | (7,328 | ) | (10,677 | ) | ||||
| Lease liabilities | (86,211 | ) | (85,544 | ) | ||||
| Commercial Notes | (83,212 | ) | — | |||||
| Consideration payable | (43,579 | ) | — | |||||
| Contingent consideration | (48,499 | ) | — | |||||
| Net debt | 1,019,569 | 1,272,144 | ||||||
| (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. |
F-22
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| Financial liabilities | Other assets | |||||||||||||||||||
| Payables | Loans and obligations | Lease liabilities | Cash and cash equivalents | Financial instruments at fair value through profit or loss | ||||||||||||||||
| Net debt as at | ||||||||||||||||||||
| December 31, 2020 | (167,591 | ) | — | (106,199 | ) | 83,449 | 8,253 | |||||||||||||
| Cash flow and dividends provision | 49,784 | — | 21,790 | 15,999 | 1,340,393 | |||||||||||||||
| Fair value adjustment | — | — | — | 3,121 | 24,280 | |||||||||||||||
| Addition and finance expenses accrual | — | — | (823 | ) | — | — | ||||||||||||||
| Foreign exchange adjustments | — | — | — | — | — | |||||||||||||||
| Other changes (i) | — | — | (312 | ) | — | — | ||||||||||||||
| 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 | ||||||||||||
(i) Other changes include non-cash movements, including Cumulative Translation Adjustments (“CTA”) which are presented as in other comprehensive income statement.
Maturities of financial 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, 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 | ) | ||||||||||
F-23
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| Contractual maturities of financial liabilities at December 31, 2021 | Less than 1 year | Between 1 and 3 years | Over 3 years | Total | Carrying amount | |||||||||||||||
| Trade payables | (831 | ) | — | — | (831 | ) | (831 | ) | ||||||||||||
| Labor and social security obligations | (106,299 | ) | — | — | (106,299 | ) | (106,299 | ) | ||||||||||||
| Lease liabilities | (22,304 | ) | (41,452 | ) | (57,008 | ) | (120,764 | ) | (85,544 | ) | ||||||||||
| Accounts payable | (10,677 | ) | — | — | (10,677 | ) | (10,677 | ) | ||||||||||||
| Total | (140,111 | ) | (41,452 | ) | (57,008 | ) | (238,571 | ) | (203,351 | ) | ||||||||||
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 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 | ) | ||||||||||
| Contractual maturities of | Total | Carrying amount | ||||||||||||||||||
| financial liabilities | Rio de Janeiro | São Paulo | NY Office | contractual | non-current | |||||||||||||||
| At 31 December 2021 | Office (BM336) | Office | (3rd Avenue) | cash flows | liabilities | |||||||||||||||
| 2023 | (18,990 | ) | (1,216 | ) | (1,116 | ) | (21,322 | ) | (18,788 | ) | ||||||||||
| 2024 | (18,990 | ) | — | (1,140 | ) | (20,130 | ) | (14,940 | ) | |||||||||||
| 2025 | (14,905 | ) | — | — | (14,905 | ) | (9,784 | ) | ||||||||||||
| 2026 | (9,186 | ) | — | — | (9,186 | ) | (5,288 | ) | ||||||||||||
| 2027 | (9,186 | ) | — | — | (9,186 | ) | (4,682 | ) | ||||||||||||
| 2028 | (9,186 | ) | — | — | (9,186 | ) | (4,145 | ) | ||||||||||||
| 2029 | (9,186 | ) | — | — | (9,186 | ) | (3,670 | ) | ||||||||||||
| 2030 | (5,359 | ) | — | — | (5,359 | ) | (1,943 | ) | ||||||||||||
| Total | (94,988 | ) | (1,216 | ) | (2,256 | ) | (98,460 | ) | (63,240 | ) | ||||||||||
F-24
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of 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:
| ● | 0.18% (or R$ 2.4 million) of the financial investment portfolio for a confidence interval of 95% on December 31, 2022 (0.16% or R$ 2.26 million on December 31, 2021). |
| ● | 0.30% (or R$ 3.95 million) of the financial investment portfolio for a confidence interval of 99% on December 31, 2022 (0.23% or R$ 3.31 million on December 31, 2021). |
Additionally, the Group evaluated the financial investment portfolio on December 31, 2022 and 2021, 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 (*) | 12/31/2022 | 12/31/2021 |
| Current inflation | Inflation index | -100bps | 1.6 | 15.3 |
| Exchange traded real estate funds | Share prices | -10% | (17.9) | (10.9) |
| Brazilian stock prices | Share prices | -10% | (5.8) | (7.4) |
| Fixed-rate offshore rates | US yield curve | -100bps | (1.8) | (7.7) |
| Foreign exchange rate | Foreign exchange rates | 10% (***) | 4.1 | 5.0 |
| Domestic base overnight rate | Domestic base overnight rate | -100bps | (6.9) | (8.0) |
(*) 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.
F-25
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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 are 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 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 | 12/31/2022 | 12/31/2021 | |||||||||
| Accounts receivable | (a) | 74,973 | 63,684 | |||||||||
| Other financial assets at amortized cost | (b) | 6,356 | 638 | |||||||||
| Cash and cash equivalents | (d) | 136,581 | 102,569 | |||||||||
| Financial assets at fair value through profit or loss (FVPL) | (c) | 1,249,749 | 1,381,519 | |||||||||
| 1,467,659 | 1,548,410 | |||||||||||
| Financial liabilities | ||||||||||||
| Liabilities at amortized cost | (e) | 99,275 | 117,807 | |||||||||
| Lease liabilities | (e) | 86,211 | 85,544 | |||||||||
| Loans and financing | (e) | 175,290 | ||||||||||
| 360,776 | 203,351 | |||||||||||
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 | 12/31/2022 | 12/31/2021 | ||||||
| Accounts receivable from contracts with customers | 57,841 | 44,486 | ||||||
| Loss allowance | (166 | ) | (170 | ) | ||||
| Non-current assets | ||||||||
| Accounts receivable from contracts with customers | 17,298 | 19,368 | ||||||
| 74,973 | 63,684 | |||||||
F-26
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
Accounts receivable 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 all classified as current. 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 are unrealized performance fees that management, with accumulated experience, estimate that it is highly probable that a significant reversal will not occur.
The Entity use a provision matrix to calculate expected credit losses and the exposure to credit risk from receivables are reviewed on a regular basis. Accounts receivable allowance for expected credit losses are presented in general and administrative expense.
The loss allowances for accounts receivable as of December 31, 2022 and 2021 reconcile to the opening loss allowances as follows:
| 12/31/2021 | 12/31/2020 | |||||||
| Opening loss allowance on January 1 | (170 | ) | (149 | ) | ||||
| Decrease/increase in accounts receivable allowance recognized in profit or loss | 4 | (21 | ) | |||||
| Closing loss allowance on December 31 | (166 | ) | (170 | ) | ||||
Accounts receivable 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 have not written any amount of accounts receivable during 2022 and 2021. 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 include the following debt instruments:
| 12/31/2022 | 12/31/2021 | |||||||
| Employees loans (Note 6 (i)) | 6,356 | 638 | ||||||
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) | 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-27
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
Financial assets measured at FVPL include the following categories:
| 12/31/2022 | 12/31/2021 | |||||||
| Current assets | 1,243,764 | 1,372,926 | ||||||
| Mutual funds | 1,243,764 | 1,372,926 | ||||||
| Non-current assets | 5,985 | 8,593 | ||||||
| Private markets funds | 5,985 | 8,593 | ||||||
The following tables demonstrate the funds invested included in each category mentioned above.
| Mutual funds | ||||||||
| 12/31/2022 | 12/31/2021 | |||||||
| Vinci Monalisa FIM Crédito Privado IE (1) | 1,057,547 | 1,233,828 | ||||||
| Vinci Multiestratégia FIM | 165,339 | 109,717 | ||||||
| Vinci International Master Portfolio SPC - Reflation SP | 12,824 | 11,161 | ||||||
| FI Vinci Renda Fixa CP | 8,054 | 18,220 | ||||||
| 1,243,764 | 1,372,926 | |||||||
| Private markets | ||||||||
| 12/31/2022 | 12/31/2021 | |||||||
| Vinci Capital Partners III Feeder FIP Multiestratégia | 3,351 | 1,891 | ||||||
| Nordeste III FIP Multiestratégia | 2,634 | 2,848 | ||||||
| Vinci Infra Transmissão FIP - Infraestrutura (i) | — | 3,854 | ||||||
| Total Private markets funds | 5,985 | 8,593 | ||||||
| 1) | Vinci Monalisa FIM Crédito Privado IE (“Vinci Monalisa”) is a mutual fund incorporated in Brazil and wholly owned by the Entity. Vinci Monalisa’s balances are the following: |
| 12/31/2022 | 12/31/2021 | |||||||
| Net Asset Value | 1,057,547 | 1,233,828 | ||||||
| Real estate funds | 220,617 | 137,519 | ||||||
| Mutual funds | 743,479 | 1,080,108 | ||||||
| Private equity funds | 70,367 | 18,768 | ||||||
| Other assets/liabilities | 23,084 | (2,567 | ) | |||||
The Vinci Monalisa’s portfolio is comprised of liquid and illiquid investee funds with different redemption criteria. Over 89% of its investments are liquid and may be redeemed and 11% are non-redeemable investments. The following tables demonstrate the funds invested by Vinci Monalisa:
F-28
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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 of December 31, 2022, and 2021, Vinci Monalisa holds R$ 743,479 and R$ 1,080,108 of investments in mutual funds, respectively, which are distributed in the following classification:
| 12/31/2022 | 12/31/2021 | |||||||
| Mutual Funds’ classification | ||||||||
| Interest and foreign exchange (a) | 72.79 | % | 46.20 | % | ||||
| Unrestricted investments (b) | 11.83 | % | 46.69 | % | ||||
| Foreign investments (c) | 6.20 | % | 5.23 | % | ||||
| Macro (d) | 3.16 | % | 1.88 | % | ||||
| Specific strategy (e) | 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 | ||||||||
| 12/31/2022 | 12/31/2021 | |||||||
| Vinci Credit Securities FII (i) | 75,720 | 61,902 | ||||||
| Vinci Imóveis Urbanos FII (ii) | 53,346 | 52,537 | ||||||
| Vinci Offices FII (iii) | 43,163 | — | ||||||
| Other real estate funds (iv) | 48,388 | 23,080 | ||||||
| 220,617 | 137,519 | |||||||
(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) 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 | ||||||||
| 12/31/2022 | 12/31/2021 | |||||||
| Vinci Impacto Ret IV FIP Multiestratégia | 2,925 | 2,042 | ||||||
| Vinci Infra Coinvestimento I FIP - Infraestrutura (i) | 10,924 | 13,446 | ||||||
| Vinci Infra Água e Saneamento Strategy FIP – Infraestrutura (ii) | 33,946 | 1,023 | ||||||
| Other funds | 22,572 | 2,257 | ||||||
| Total private markets funds | 70,367 | 18,768 | ||||||
(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. In 2021, the fund sold its investment in Linhas de Energia do Sertão Transmissora S.A. ("LEST"). As of December 31, 2022 and 2021, the fund held investment in Água Vermelha Transmissora de Energia S.A.
(ii) The Fund's investment policy is the acquisition of shares, debentures convertible or not into shares, or other securities convertible or exchangeable into shares issued by publicly-held or privately-held corporations in the water sector and sanitation.
F-29
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
During the year, the following gains were recognized in profit or loss:
| 12/31/2022 | 12/31/2021 | 12/31/2020 | ||||||||||
| Fair value gains on investments at FVPL recognized in finance income | 94,174 | 27,982 | 9,066 | |||||||||
| d) | Cash and cash equivalents |
| Current assets | 12/31/2022 | 12/31/2021 | ||||||
| Cash and bank deposits | 30,108 | 21,679 | ||||||
| Certificate of deposit (i) | 106,473 | 80,890 | ||||||
| 136,581 | 102,569 | |||||||
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 interest rates variable from 99.50% to 100.50% 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.
| e) | Financial liabilities |
| 12/31/2022 | 12/31/2021 | |||||||
| Current | 133,622 | 140,111 | ||||||
| Trade payables | 1,247 | 831 | ||||||
| Labor and social security obligations (Note 12) | 87,732 | 106,299 | ||||||
| Loans and obligations (Note 14) | 13,168 | 22,304 | ||||||
| Lease liabilities | 24,147 | 10,677 | ||||||
| Accounts payable (Note 11) | 7,328 | — | ||||||
| Non-current | 227,154 | 63,240 | ||||||
| Lease liabilities | 62,064 | 63,240 | ||||||
| Labor and social security obligations (Note 12) | 2,968 | — | ||||||
| Loans and obligations (Note 14) | 162,122 | — | ||||||
| 360,776 | 203,351 | |||||||
| (a) | Fair value hierarchy |
This section explains the judgements 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, 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 | ||||||||||||
F-30
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| On December 31, 2021 | ||||||||||||||||
| Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Financial Assets | ||||||||||||||||
| Certificate of deposits | — | 80,890 | — | 80,890 | ||||||||||||
| Mutual funds | — | 1,372,926 | — | 1,372,926 | ||||||||||||
| Private equity funds | — | — | 8,593 | 8,593 | ||||||||||||
| Total Financial Assets | — | 1,453,816 | 8,593 | 1,462,409 | ||||||||||||
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$ 172,228, R$ 743,479 and R$ 111,623, respectively (2021: R$ 57,006, R$ 1,080,108 and R$ 96,714, 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 or a third party hired by the Administration. 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).
(c) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the years ended December 31, 2022 and 2021:
| Fair Value | ||||
| Opening balance January 1, 2021 | 31,596 | |||
| Capital deployment | 932 | |||
| Transfer (a) | (22,746 | ) | ||
| Sales and distributions | (3,481 | ) | ||
| Gain recognized in finance income | 2,292 | |||
| Closing balance December 31, 2021 | 8,593 | |||
| Capital deployment | 1,229 | |||
| Sales and distributions (b) | (4,008 | ) | ||
| Gain recognized in finance income | 171 | |||
| Closing balance December 31, 2022 | 5,985 | |||
(a) In 2021, Vinci Impacto Ret IV FIP Multiestratégia and Vinci Infra Coinvestimento I FIP - Infraestrutura were transferred to Vinci Monalisa.
(b) In 2022, Vinci Infra Transmissão FIP – Infraestrutura was transferred to Vinci Monalisa.
F-31
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| (d) | Valuation inputs and relationships to fair value |
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:
|
Description
|
Fair value at |
Valuation Technique
|
Unobservable inputs
|
Reasonable |
||||||||
| 12/31/2022 | 12/31/2021 | 2022 Gain / (Losses) | 2021 Gain / (Losses) | Possible shift in Gain and losses | ||||||||
| Vinci Infra Coinvestimento I FIP – Infraestrutura (a) | - | - | Discounted cash flow | Discount rate | 0.5% / 1% | - | 559 | - | ||||
| Vinci Infra Transmissão FIP – Infraestrutura (b) | - | 3,854 | Discounted cash flow | Discount rate | 0.5% / 1% | (277) | 703 | In 2021, lower discount rate in 50 basis points would increase fair value by R$ 1,272 and higher discount rate in 100 basis points would decrease fair value by R$ 1,411. | ||||
| Nordeste III FIP Multiestratégia | 2,634 | 2,848 | Discounted cash flow | Discount rate | 0.5% / 1% | 185 | 497 | Lower discount rate in 50 basis points would increase fair value by R$ 26 (R$ 28 - 2021) and higher discount rate in 100 basis points would decrease fair value by R$ 53 (R$ 57) | ||||
| Others | 3,351 | 1,891 | NAV Valuation | NAV | 1% / 2% | 263 | 533 | Increased NAV in 100 basis points would increase fair value by R$ 34 (R$ 19 – 2021) and lower NAV in 200 basis points would decrease fair value by R$ 67 (R$ 38 – 2021) | ||||
F-32
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 6 | Other assets |
| 12/31/2022 | 12/31/2021 | |||||||
| Employees loans (i) | 6,356 | 638 | ||||||
| Sundry advances | 192 | 288 | ||||||
| Advances to projects in progress (ii) | 9,774 | 2,784 | ||||||
| Other prepayments | 155 | 365 | ||||||
| Related parties receivables (iii) | 253 | 265 | ||||||
| Guarantee deposits (iv) | 523 | 1,525 | ||||||
| Sublease receivables | 0 | 252 | ||||||
| Others | 293 | 87 | ||||||
| 17,546 | 6,204 | |||||||
| Current | 16,481 | 4,193 | ||||||
| Non-current | 1,065 | 2,011 | ||||||
| 17,546 | 6,204 | |||||||
| (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 20 for more details. |
| (iv) | Refers to the security deposit of a lease. |
F-33
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of 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 (ii) | 41,962 | |||
| Contingent consideration (Earn-out) – Note 14 (iii) | 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)
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.
F-34
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| (b) | Non-controlling interests (NCI) |
Set out below is summarized financial information for each subsidiary that has non-controlling interests that are material to the group. The amounts disclosed for each subsidiary are before inter-company eliminations.
| Vinci Int'l Real Estate | Vinci Asset Allocation | Vinci Holding Securitária | Total | |||||||||||||||||||||||||||||
| 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | |||||||||||||||||||||||||
| Summarized Balance Sheet | ||||||||||||||||||||||||||||||||
| Current assets | — | 575 | — | — | 18,322 | — | 18,322 | 575 | ||||||||||||||||||||||||
| Current liabilities | — | (401 | ) | (1 | ) | — | (601 | ) | — | (602 | ) | (401 | ) | |||||||||||||||||||
| Current net assets | — | 174 | (1 | ) | — | 17,721 | — | 17,720 | 174 | |||||||||||||||||||||||
| Non-current assets | — | — | 601 | — | 3,345 | — | 3,946 | — | ||||||||||||||||||||||||
| Non-current liabilities | — | — | (732 | ) | — | (759 | ) | — | (1,491 | ) | — | |||||||||||||||||||||
| Non-current net assets | — | — | (131 | ) | — | 2,586 | — | 2,455 | — | |||||||||||||||||||||||
| Net assets | — | 174 | (132 | ) | — | 20,307 | — | 20,175 | 174 | |||||||||||||||||||||||
| Accumulated NCI | — | 43 | (33 | ) | — | 3,046 | — | 3,013 | 43 | |||||||||||||||||||||||
F-35
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| Summarized statement | Vinci Int'l Real Estate | Vinci Asset Allocation | Vinci Holding Securitária | Total | ||||||||||||||||||||||||||||
| of comprehensive income | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||
| Revenue | 90 | 190 | — | — | — | — | 90 | 190 | ||||||||||||||||||||||||
| Profit for the period | — | — | (131 | ) | — | 107 | — | 69 | — | |||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Total comprehensive income | — | — | — | — | 107 | — | — | — | ||||||||||||||||||||||||
| Profit allocated to NCI before dividends | — | — | (32 | ) | — | 16 | — | (16 | ) | — | ||||||||||||||||||||||
| Disproportionate dividends distributions | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Profit/(loss) allocated to NCI | — | — | (32 | ) | — | 16 | — | (16 | ) | — | ||||||||||||||||||||||
F-36
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 8 | Property and equipment |
| 12/31/2022 | ||||||||||||||||||||||||
| Furniture and fittings stuffs | Improvements in properties of third parties | Computers and peripherals - improvements | Equipment’s and tools | Work of arts and others | Total | |||||||||||||||||||
| Cost | ||||||||||||||||||||||||
| At January 1, 2022 | 11,620 | 49,024 | 6,379 | 10,532 | 789 | 78,344 | ||||||||||||||||||
| Acquisitions | 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 | ) | |||||||||||||
| Annual 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 | ||||||||||||||||||||
Extension options in offices leases have not been included in the lease liability, because the Group could replace the assets without significant cost or business disruption.
F-37
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 12/31/2021 | ||||||||||||||||||||||||
| Furniture and fittings stuffs | Improvements in properties of third parties | Computers and peripherals - improvements | Equipment’s and tools | Work of arts and others | Total | |||||||||||||||||||
| Cost | ||||||||||||||||||||||||
| At January 1, 2021 | 10,465 | 46,895 | 5,802 | 9,985 | 861 | 74,008 | ||||||||||||||||||
| Acquisitions, net of disposals | 1,155 | 666 | 577 | 127 | (72 | ) | 2,453 | |||||||||||||||||
| Foreign Exchange variations of property and equipment abroad | — | 1,463 | — | 420 | — | 1,883 | ||||||||||||||||||
| At December 31, 2021 | 11,620 | 49,024 | 6,379 | 10,532 | 789 | 78,344 | ||||||||||||||||||
| Accumulated depreciation | ||||||||||||||||||||||||
| At January 1, 2021 | (6,795 | ) | (37,831 | ) | (5,264 | ) | (9,075 | ) | — | (58,965 | ) | |||||||||||||
| Annual depreciation | (849 | ) | (2,119 | ) | (227 | ) | (222 | ) | — | (3,417 | ) | |||||||||||||
| Disposals | — | — | 168 | — | — | 168 | ||||||||||||||||||
| Foreign Exchange variations of property and equipment abroad | — | (1,439 | ) | — | (397 | ) | — | (1,839 | ) | |||||||||||||||
| At December 31, 2021 | (7,644 | ) | (41,839 | ) | (5,323 | ) | (9,694 | ) | — | (64,050 | ) | |||||||||||||
| Net book value | ||||||||||||||||||||||||
| At January 1, 2021 | 3,670 | 9,064 | 538 | 910 | 861 | 15,043 | ||||||||||||||||||
| At December 31, 2021 | 3,976 | 7,635 | 1,056 | 838 | 789 | 14,294 | ||||||||||||||||||
| Annual depreciation rate - % | 10 | From 10 to 20 | 20 | 10 | ||||||||||||||||||||
F-38
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
9 Intangible assets
Intangible assets include expenditures with the development of the software product for Risk System and Portfolio Allocation, whose purpose is to evaluate the risk of the funds and to allocate the clients' portfolio, and the goodwill generated by the acquisition of SPS.
Economic benefits will flow to the Group from the service fees charged to the clients for the sale of advisory services on market risks or through a service which the Vinci's managers named Wealth Management. 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 period ended December 31, 2022 and 2021.
| 12/31/2022 | ||||||||||||||||||||
| Software development | Placement Agent (a) | Goodwill (b) | Management Contracts (c) | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| At January 1, 2022 | 24,790 | — | — | — | 24,790 | |||||||||||||||
| Purchases | 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 31, 2022 | 4,621 | 1,294 | 162,290 | 21,033 | 189,238 | |||||||||||||||
| Amortization rate (per year) - % | 20 | % | (a) | (b) | (c) | |||||||||||||||
F-39
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
(a) Refers to amounts capitalized relating to agreements with investments placement agents relating to funds raised from foreign investor in offshore funds. These amounts are amortized based on the estimated duration of the related funds. 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, 2022, goodwill was tested and any provision for impairment losses was identified by Vinci.
(c) Refers to the purchase and 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.
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).
| 12/31/2021 | ||||||||
| Software development | Total | |||||||
| Cost | ||||||||
| At January 1, 2021 | 23,723 | 23,723 | ||||||
| Purchases | 470 | 470 | ||||||
| Foreign exchange variation of intangible assets abroad | 597 | 597 | ||||||
| At December 31, 2021 | 24,790 | 24,790 | ||||||
| Accumulated amortization | ||||||||
| At January 1, 2021 | (22,282 | ) | (22,282 | ) | ||||
| Annual amortization | (740 | ) | (740 | ) | ||||
| Foreign exchange variation of intangible assets abroad | (611 | ) | (611 | ) | ||||
| At December 31, 2021 | (23,633 | ) | (23,633 | ) | ||||
| At January 1, 2021 | 1,441 | 1,441 | ||||||
| At December 31, 2021 | 1,157 | 1,157 | ||||||
| Amortization rate (per year) - % | 20 | % | ||||||
F-40
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of 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:
| 12/31/2022 | 12/31/2021 | |||||||
| Sub-lease receivable | ||||||||
| Rio de Janeiro Office – BM 336 | 2,843 | — | ||||||
| Total | 2,843 | — | ||||||
| Current | 1,500 | — | ||||||
| Non-current | 1,343 | |||||||
| Total | 2,843 | — | ||||||
| Right of use assets | ||||||||
| Rio de Janeiro Office – BM 336 | 55,758 | 61,907 | ||||||
| São Paulo Office – JRA | 12,682 | 4,700 | ||||||
| NY Office – third Avenue | 1,696 | 2,722 | ||||||
| Total | 70,136 | 69,329 | ||||||
| Lease liabilities | ||||||||
| Rio de Janeiro Office – BM 336 | (70,538 | ) | (76,996 | ) | ||||
| São Paulo Office – JRA | (13,701 | ) | (5,444 | ) | ||||
| NY Office – third Avenue | (1,972 | ) | (3,104 | ) | ||||
| Total | (86,211 | ) | (85,544 | ) | ||||
| Current | (24,147 | ) | (22,304 | ) | ||||
| Non-current | (62,064 | ) | (63,240 | ) | ||||
| Total | (86,211 | ) | (85,544 | ) | ||||
Additions to the right-of-use assets until December 31, 2022 were R$ 15,838 (deductions of R$ 11,555 during 2021 financial year).
F-41
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of 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:
| 2022 | 2021 | 2020 | ||||||||||
| Right of use assets depreciation | (10,800 | ) | (9,812 | ) | (8,586 | ) | ||||||
| Financial expense | (9,359 | ) | (12,281 | ) | (12,209 | ) | ||||||
| (20,159 | ) | (22,093 | ) | (20,795 | ) | |||||||
The total cash outflow for leases in 2022 was R$ 24,440 (R$ 21,790 in 2021 and R$ 20,141 in 2020).
| (iii) | 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 periods presented, the sub-leases were classified as finance leases on a lessor perspective. Therefore, the Group account 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.
F-42
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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.
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.
| (iv) | 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 |
| 12/31/2022 | 12/31/2021 | |||||||
| Dividends payable (i) | 4,363 | 6,833 | ||||||
| Treasury shares acquired (ii) | 839 | 1,874 | ||||||
| Rent payable – prior month expense | 2,056 | 1,887 | ||||||
| Other payables | 70 | 83 | ||||||
| 7,328 | 10,677 | |||||||
| Current | 7,328 | 10,677 | ||||||
| Non-current | — | — | ||||||
| (i) | On December 31, 2020, the partners approved a distribution of dividends for the results of the current month. Based on the balance until the available data, Vinci settled a provision for dividends payable of R$ 27,423. As of December 3, 2021, the amount of R$ 20,590 was paid, with an outstanding balance of R$ 6,833 remaining. On January 21, 2022, the amount of R$ 2,470 was paid, remaining outstanding the amount of R$ 4,363. |
| (ii) | As informed in Note 14(f), on May 6, 2021, Vinci started its share repurchase program. The shares repurchased were totally settled on January 04, 2023. |
F-43
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 12 | Labor and social security obligations |
| 12/31/2022 | 12/31/2021 | |||||||
| Profit sharing | 80,840 | 101,880 | ||||||
| Labor provisions | 9,860 | 4,419 | ||||||
| 90,700 | 106,299 | |||||||
| Current | 87,732 | 106,299 | ||||||
| Non-current | 2,968 | — | ||||||
Except for the profit sharing related to the unrealized performance fees, the accrual for profits sharing payable on December 31, 2022 was paid in January 2023. Profit sharing is calculated based on the performance review of each employee plus the area performance, in accordance with an Entity policy. Vinci Management estimated the profit sharing as of December 31, 2022 based on the management and advisory net revenue recognized and the realized performance fee up to December 31, 2022.
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 23 for more detail.
| 13 | Taxes and contributions payable |
| 12/31/2022 | 12/31/2021 | |||||||
| Income tax | 13,746 | 14,375 | ||||||
| Social contribution | 4,847 | 5,128 | ||||||
| Social Contribution on revenues (COFINS) | 2,128 | 2,280 | ||||||
| Social Integration Program (PIS) | 460 | 489 | ||||||
| Service tax (ISS) on billing | 856 | 1,348 | ||||||
| Withholding Income Tax (IRRF) deducted from third parties | 143 | 40 | ||||||
| Others | 111 | 102 | ||||||
| 22,291 | 23,762 | |||||||
F-44
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 14 | Loans and obligations |
| 12/31/2022 | 12/31/2021 | |||||||
| Commercial Notes (i) | 83,212 | — | ||||||
| Consideration payable (ii) | 43,579 | — | ||||||
| Contingent consideration (iii) | 48,499 | — | ||||||
| 175,290 | — | |||||||
| Current | 13,168 | — | ||||||
| Non-current | 162,122 | — | ||||||
| (i) | 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 will be subject to public distribution 90 days after de 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 annually 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, 2022.
The following table presents the changes in the Commercial Notes up the period ended 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 | |||
| Current | 13,168 | |||
| Non-current | 70,044 |
| (ii) | Consideration payable |
Accordingly, 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 in the second anniversary of the closing date. The amount as at December 31, 2022 is R$ 43,579.
F-45
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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.
| (iii) | 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 estimative. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
On December 31, 2022 Vinci revaluated the fair value of the obligation based on the economic conditions at the year end, resulting in a decrease of the contingent consideration fair value. The variation was recognized as an income in the financial result in the amount of R$ 13,971.
| 15 | Equity |
| a) | Capital |
The capital comprises 42,447,349 Class A shares and 14,446,239 Class B shares with a par value of US$ 0.00005 each.
On January 15, 2021, the individual partners of Vinci Partners Investimentos Ltda. 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 quotaholders of Vinci Partners Investimentos Ltda. in exchange for the quotas, in each case in a one-to-4.77 exchange for the quotas, of Vinci Partners Investimentos Ltda. contributed to the Entity, or the Contribution.
On January 28, 2021, Vinci issued 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$18.00, resulting in net proceeds of US$ 232,243 thousand (or R$ 1,266,926), after the deducting of underwriting discounts and commissions to Vinci.
On February 8, 2021, Vinci issued additional 1,398,014 Class A common shares. The price of the additional shares was US$18.00, resulting in net proceeds of US$ 28,636 thousand (or R$ 125,448), after the deducting of underwriting discounts and commissions to Vinci.
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-46
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
The Entity’s shareholders as of December 31, 2022 and 2021 are presented in the table below:
| Shareholders | 12/31/2021 Quantity | Subscribed | Transferred | Repurchased | 12/31/2022 Quantity | |||||||||||||||
| Gilberto Sayão da Silva (Class B) | 14,466,239 | — | — | — | 14,466,239 | |||||||||||||||
| Alessandro Monteiro Morgado Horta (Class A) | 8,226,422 | — | — | — | 8,226,422 | |||||||||||||||
| Paulo Fernando Carvalho de Oliveira (Class A) | 2,066,605 | — | — | — | 2,066,605 | |||||||||||||||
| Bruno Augusto Sacchi Zaremba (Class A) | 1,446,624 | — | — | — | 1,446,624 | |||||||||||||||
| Sergio Passos Ribeiro (Class A) | 1,239,963 | — | — | — | 1,239,963 | |||||||||||||||
| Lywal Salles Filho (Class A) | 206,661 | — | — | — | 206,661 | |||||||||||||||
| Public Float (Class A) | 14,513,477 | — | — | (1,074,841 | ) | 13,438,636 | ||||||||||||||
| Other Shareholders (Class A) | 13,989,586 | — | — | — | 13,989,586 | |||||||||||||||
| Treasury shares (Class A) | 758,011 | — | — | 1,074,841 | 1,832,852 | |||||||||||||||
| Total | 56,913,588 | — | — | — | 56,913,588 | |||||||||||||||
(*) All of the quotaholders of Vinci Partners Investimentos Ltda contributed the entirety of their quotas to Vinci Partners Investments Ltd. In return for this contribution, the Entity issued 14,466,239 new Class B common shares and 27,175,861 new Class A common shares, in each case in a one-to-4.77 exchange for the quotas of Vinci Partners Investimentos Ltda to the quotas of Vinci Partners Investments Ltd.
| b) | Transactions costs |
Transactions costs comprises the expenses incurred by the Entity in connection with the IPO.
| c) | Retained earnings |
Earning reserves 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 |
Comprises the shares based payments programs and 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.
| e) | Dividends |
On August 18, 2021, Vinci declared a semiannual dividend distribution of US$ 0.30 per common share to shareholders as of September 01, 2021, totalizing US$ 17,021 thousand (R$ 89,487), paid on September 16, 2021.
On November 17, 2021, Vinci declared a quarterly dividend distribution of US$ 0.16 per common share to shareholders as of December 1, 2021, totalizing US$ 9,019 thousand (R$ 48,945), paid on December 16, 2021.
On February 23, 2022, Vinci declared a quarterly dividend distribution of US$ 0.20 per common share to shareholders as of March 10, 2022, totalizing US$ 11,181 thousand (R$ 56,176), paid on March 24, 2022.
F-47
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
On May 10, 2022, Vinci declared a quarterly dividend distribution of US$ 0.17 per common share to shareholders as of May 20, 2022, totalizing US$ 9,465 thousand (R$ 47,488), paid on June 2, 2022.
On August 11, 2022, Vinci declared a quarterly dividend distribution of US$ 0.17 per common share to shareholders as of August 23, 2022, totalizing US$ 9,425 (R$ 48,291), paid on September 9, 2022.
On November 9, 2022, Vinci declared a quarterly dividend distribution of US$ 0.20 per common share to shareholders as of November 23, 2022, totalizing US$ 11,045 (R$ 56,334), paid on December 12, 2022.
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.
In 2022, dividends were paid in the amount of R$ 211,320, being R$ 70,183 to the profit earned in 2021 and the remaining amount related to the profit earned in the first semester of 2022. In 2021, dividends were paid in the amount of R$ 255,963, being R$ 116,358 related to the net profit earned until 2020 and the remaining amount of R$ 139,605 related to the net profit for the current year.
| 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 share premium.
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 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 was prepared under 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 are 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 will not have specified expiration date (other than when the R$60.0 million buyback limit is reached).
F-48
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
Under the share buyback plan, buybacks may be made from time-to-time in open market and negotiated purchases, effective immediately, in compliance with SEC Rule 10b-18. The specific prices, numbers of shares and timing of purchase transactions will be determined by the Company from time to time in its sole discretion. Additionally, repurchases will be carried out by the agent of the Company from time-to-time in open market and negotiated purchases, in compliance with SEC Rule 10b5-1.
From January 1, 2022, to December 31, 2022, 1,074,841 Class A common shares were repurchased, in the amount of R$ 62,393. In December 2022 the Company holds 1,832,852 Class A common shares in treasury.
| g) | Basic and diluted earnings per share/quota |
| a) Basic earning per share/quota | 2022 | 2021 | 2020 | |||||||||
| From continuing operations attributable to the ordinary equity holders of the Entity | 3.89 | 3.77 | 19.60 | |||||||||
| Total basic earning per share/quota attributable to the ordinary equity holders of the Entity | 3.89 | 3.77 | 19.60 |
| b) Diluted earning per share/quota | 2022 | 2021 | 2020 | |||||||||
| From continuing operations attributable to the ordinary equity holders of the Entity | 3.84 | 3.77 | 19.60 | |||||||||
| Total basic earning per share/quota attributable to the ordinary equity holders of the Entity | 3.84 | 3.77 | 19.60 |
| c) Reconciliations of earnings used in calculating earnings per share/quota |
| Basic earnings per share/quota: | 2022 | 2021 | 2020 | |||||||||
| Profit attributable to the ordinary equity holders of the Entity used in calculating basic earnings per share/quota: | ||||||||||||
| From continuing operations | 219,417 | 208,615 | 170,199 | |||||||||
| 219,417 | 208,615 | 170,199 |
| Diluted earnings per share/quota: | 2022 | 2021 | 2020 | |||||||||
| Profit from continuing operations attributable to the ordinary equity holders of the Entity | ||||||||||||
| Used in calculating basic earnings per share/quota | 219,417 | 208,615 | 170,199 | |||||||||
| Used in calculating diluted earnings per share/quota | 219,417 | 208,615 | 170,199 | |||||||||
| d) Weighted average number of share/quotas used as the denominator |
| 2022 | 2021 | 2020 | ||||||||||
| Weighted average number of ordinary share/quotas used as the denominator in calculating basic earnings per share/quota: | 56,356,293 | 55,387,859 | 8,683,893 | |||||||||
| Adjustments for calculation of diluted earnings per share/quota: | 792,815 | — | — | |||||||||
| Weighted average number of ordinary share/quotas and potential ordinary share/quotas used as the denominator in calculating diluted earnings per share/quota | 57,149,108 | 55,387,859 | 8,683,893 |
F-49
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 16 | Revenue from services rendered |
| 2022 | 2021 | 2020 | ||||||||||
| Gross revenue from fund management | 396,532 | 384,321 | 285,798 | |||||||||
| Gross revenue from performance fees | 15,343 | 38,649 | 41,869 | |||||||||
| Gross revenue from financial advisory services | 24,072 | 73,066 | 31,569 | |||||||||
| Gross revenue from services rendered | 435,947 | 496,036 | 359,236 | |||||||||
| In Brazil | 338,937 | 378,147 | 264,493 | |||||||||
| Abroad | 97,010 | 117,889 | 94,743 | |||||||||
| Taxes and contributions | ||||||||||||
| COFINS | (15,352 | ) | (15,438 | ) | (9,488 | ) | ||||||
| PIS | (3,330 | ) | (3,348 | ) | (2,057 | ) | ||||||
| ISS | (9,170 | ) | (11,792 | ) | (7,799 | ) | ||||||
| Net revenue from services rendered | 408,095 | 465,458 | 339,892 | |||||||||
| Net revenue from fund management | 371,501 | 361,070 | 271,266 | |||||||||
| Net revenue from performance fees | 14,600 | 37,633 | 39,784 | |||||||||
| Net revenue from advisory | 21,994 | 66,755 | 28,842 | |||||||||
F-50
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 17 | General and administrative expenses |
| 2022 | 2021 | 2020 | ||||||||||
| Personnel (a) | (63,665 | ) | (55,057 | ) | (37,175 | ) | ||||||
| Share Based Plans (b) | (14,276 | ) | (3,670 | ) | — | |||||||
| Profit sharing (a) | (79,872 | ) | (98,970 | ) | (37,198 | ) | ||||||
| (157,813 | ) | (157,697 | ) | (74,373 | ) | |||||||
| Third party expense (c) | (38,836 | ) | (38,891 | ) | (24,651 | ) | ||||||
| Right of use depreciation (d) | (10,800 | ) | (9,812 | ) | (8,586 | ) | ||||||
| Depreciation and amortization (e) | (4,986 | ) | (3,917 | ) | (4,642 | ) | ||||||
| Other operating expenses (f) | (6,630 | ) | (4,240 | ) | (5,199 | ) | ||||||
| Travel and representations | (4,535 | ) | (1,271 | ) | (933 | ) | ||||||
| Condominium expenses | (3,315 | ) | (2,598 | ) | (2,818 | ) | ||||||
| Payroll taxes | (1,850 | ) | (3,669 | ) | (2,132 | ) | ||||||
| Rental expense | (174 | ) | (540 | ) | (428 | ) | ||||||
| Telephony services | (243 | ) | (242 | ) | (278 | ) | ||||||
| Legal | (171 | ) | (99 | ) | (146 | ) | ||||||
| Accounts receivables allowance | 4 | (21 | ) | (59 | ) | |||||||
| Office consumables | — | (1 | ) | — | ||||||||
| (229,349 | ) | (222,998 | ) | (124,245 | ) | |||||||
| (a) | Personnel and profit-sharing |
According to the profit-sharing program and based on Brazilian 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$ 79,872 (R$ 98,970 in 2021 and R$ 37,198 in 2020) for the year ended December 31, 2022.
| (b) | Share-based payments |
See note 23 for more details.
(c) Third party expense
Third party expense is composed for legal, accounting, advisory, information technology, marketing, and other contracted services.
(d) Right of use depreciation
See note 10 for more details.
(e) Depreciation and amortization
The amount is mainly comprised by property and equipment depreciation and since SPS acquisition, by the management contracts amortization.
F-51
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
(f) Other operating expenses
The amount is mainly comprised by office expenses, including energy, cleaning, maintenance and conservation, among others several expenses.
| 18 | Finance profit/(loss) |
| 2022 | 2021 | 2020 | ||||||||||
| Investment income (i) | 94,728 | 27,982 | 9,066 | |||||||||
| Foreign currency variation income | 2,514 | — | 416 | |||||||||
| Financial revenue on sublease agreements | 390 | 197 | 519 | |||||||||
| Contingent consideration variance (Note 14 (iii)) | 13,971 | — | — | |||||||||
| Other finance income | 530 | 332 | 49 | |||||||||
| Finance income | 112,133 | 28,511 | 10,050 | |||||||||
| Financial expense on lease agreements | (9,359 | ) | (12,281 | ) | (12,209 | ) | ||||||
| Interest expense on loans and financing (ii) | (5,804 | ) | — | — | ||||||||
| Bank fees | (354 | ) | (119 | ) | (258 | ) | ||||||
| Interest and arrears | (4 | ) | (80 | ) | — | |||||||
| Investment losses (i) | (554 | ) | — | (234 | ) | |||||||
| Fines on taxes | (4 | ) | (65 | ) | — | |||||||
| Financial expense on liabilities at amortized cost | — | — | (203 | ) | ||||||||
| Interest on taxes | — | (208 | ) | — | ||||||||
| Foreign currency variation expense | (2,986 | ) | (372 | ) | (193 | ) | ||||||
| Other financial expenses | — | (4 | ) | — | ||||||||
| Finance costs | (19,065 | ) | (13,129 | ) | (13,097 | ) | ||||||
| Finance profit/(loss), net | 93,068 | 15,382 | (3,047 | ) | ||||||||
| (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: |
| (ii) | Interest expense on loans and financing comprises the financial result on the Commercial notes and contingent consideration related to SPS acquisition. Please see note 14 for more detail. |
| 2022 | 2021 | 2020 | ||||||||||
| Mutual funds and fixed income investments | 94,489 | 25,620 | 2,604 | |||||||||
| Private equity funds | 239 | 2,362 | 6,462 | |||||||||
| 94,728 | 27,982 | 9,066 | ||||||||||
| Mutual funds | (486 | ) | — | — | ||||||||
| Private equity funds | (68 | ) | — | (71 | ) | |||||||
| Real Estate listed funds | — | — | (77 | ) | ||||||||
| Public equities funds | — | — | (86 | ) | ||||||||
| (554 | ) | — | (234 | ) | ||||||||
F-52
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 19 | 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 and Vinci Soluções de Investimentos Ltda,. 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 on December 31, 2022 is R$ 4,912 (R$ 2,494 on December 31, 2021).
No foreign subsidiaries presented net income for taxation of income and social contribution taxes in 2022, 2021 and 2020.
The income tax and social contribution charge on the results for the year can be summarized as follows:
| 2022 | 2021 | 2020 | ||||||||||
| Current income tax | (38,945 | ) | (41,510 | ) | (11,462 | ) | ||||||
| Current social contribution | (14,199 | ) | (15,260 | ) | (31,204 | ) | ||||||
| (53,144 | ) | (56,770 | ) | (42,666 | ) | |||||||
| Deferred income tax | 683 | 5,546 | (206 | ) | ||||||||
| Deferred social contribution | 48 | 1,997 | (574 | ) | ||||||||
| 731 | 7,543 | (780 | ) | |||||||||
F-53
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
Deferred tax balances
| 12/31/2022 | 12/31/2021 | |||||||
| Deferred tax assets | ||||||||
| Tax losses | 4,912 | 2,494 | ||||||
| Leases | 1,805 | 2,476 | ||||||
| RSU | 1,628 | — | ||||||
| Interest expense on obligation for acquisition | 550 | — | ||||||
| Amortization on management Contracts | 346 | — | ||||||
| Total | 9,241 | 4,970 | ||||||
| Deferred tax liabilities | ||||||||
| Financial revenue | (973 | ) | (1,815 | ) | ||||
| Estimated revenue | (1,690 | ) | (2,107 | ) | ||||
| Leases | (49 | ) | — | |||||
| Contingent consideration | (4,750 | ) | — | |||||
| Total Income Tax | (7,462 | ) | (3,922 | ) | ||||
| Estimated revenue | (878 | ) | (1,094 | ) | ||||
| Total (Taxes and contribution) | (878 | ) | (1,094 | ) | ||||
| Total deferred tax liabilities | (8,340 | ) | (5,016 | ) | ||||
F-54
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| Movements | Tax losses | Leases | RSU | Other (*) | Total | |||||||||||||||
| Deferred tax assets | ||||||||||||||||||||
| As at December 31, 2020 | 2,769 | 1,799 | — | — | 4,568 | |||||||||||||||
| to profit and loss | (275 | ) | 677 | — | — | 402 | ||||||||||||||
| 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 | |||||||||||||||
(*) Comprises deferred taxes related to interest expense on obligation for ownership acquisition and amortization on management Contracts
| Movements | Financial Revenue | Estimated Revenue | Leases | Contingent consideration | Total | |||||||||||||||
| Deferred tax liabilities | ||||||||||||||||||||
| As at December 31, 2020 | (7,842 | ) | (4,554 | ) | (224 | ) | — | (12,620 | ) | |||||||||||
| to profit and loss | 6,027 | 1,353 | 224 | — | 7,604 | |||||||||||||||
| 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 | ) | ||||||||||
F-55
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| (a) | Tax effective rate |
| 2022 | 2021 | 2020 | ||||||||||
| Profit (loss) before income taxes | 271,814 | 257,842 | 212,600 | |||||||||
| Combined statutory income taxes rate - % | 34 | % | 34 | % | 34 | % | ||||||
| Income tax benefit (expense) at statutory rates | (92,417 | ) | (87,666 | ) | (72,284 | ) | ||||||
| Reconciliation adjustments: | ||||||||||||
| Expenses not deductible | (214 | ) | (392 | ) | (93 | ) | ||||||
| Tax benefits | 282 | 825 | 440 | |||||||||
| Share based payments | (297 | ) | (371 | ) | — | |||||||
| Effect of presumed profit of subsidiaries (i) and offshore subsidiaries | 40,220 | 38,279 | 28,435 | |||||||||
| Other additions (exclusions), net | 13 | 98 | 56 | |||||||||
| Income taxes expenses | (52,413 | ) | (49,227 | ) | (43,446 | ) | ||||||
| Current | (53,144 | ) | (56,770 | ) | (42,666 | ) | ||||||
| Deferred | 731 | 7,543 | (780 | ) | ||||||||
| Effective rate | 19 | % | 19 | % | 20 | % | ||||||
| (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. |
| 20 | Related parties |
| (a) | Key management remuneration |
The total remuneration (salaries and benefits) of key management personnel, including the Executive Committee, amounted to R$ 16,781, including profit-sharing compensation for the year ended December 31, 2022 (2021 - R$ 21,003).
Accordingly, to Vinci internal policy, the key management is entitled to receive a profit-sharing compensation for the current year, which was paid in January 2023, after the Management approval. As informed in Note 12, Vinci accrued a provision for profit sharing for the Group as of December 31, 2022.
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Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| (b) | Receivables from related parties |
The Entity receivables from related parties as of December 31, 2022 and 2021, as shown in the table below:
| 12/31/2022 | 12/31/2021 | |||||||
| Telecom Investimentos S.A. | — | 80 | ||||||
| Vinci Infra Investimentos V2I S.A. | 79 | 64 | ||||||
| Maranello Empreend. e Participações S.A. | — | 1 | ||||||
| Cagliari Participações S.A. | 4 | 4 | ||||||
| Accadia Participações AS | 91 | 75 | ||||||
| Norcia Participações SA | 56 | 39 | ||||||
| Personal Care Participações SA | — | 1 | ||||||
| Mental Health Participacões SA | — | 1 | ||||||
| Laguna Participações S.A. | 11 | — | ||||||
| VFDL 4 Empreendimentos Imobiliários LTDA | 3 | — | ||||||
| Vias Participações I S.A. | 1 | — | ||||||
| Verona Participações Societarias S.A. | 8 | — | ||||||
| 253 | 265 | |||||||
| (c) | Employees loans |
As presented in note 6(i), Vinci may advance payments to its employees.
| 21 | 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:
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.
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Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| (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, with 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 assets classes and adapt to different cycles. It is also sourcing of credit instruments with resilient structures and sound collateral packages. The credit strategy invests 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 (Vinci 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 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.
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Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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. As of December 31, 2022, the retirement services have not been operational yet
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Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of 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 year | 219,401 | |||||||||||||||||||||||||||
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Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of 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-61
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 2020 | ||||||||||||||||||||||||
| Private Market Strategies | Liquid Strategies | Investment Products and solutions | Financial Advisory | Corporate Center | Total | |||||||||||||||||||
| In Brazil | 117,566 | 62,411 | 54,178 | 30,338 | — | 264,493 | ||||||||||||||||||
| Abroad | 71,786 | 14,167 | 8,790 | — | — | 94,743 | ||||||||||||||||||
| Gross revenue from services rendered | 189,352 | 76,578 | 62,968 | 30,338 | — | 359,236 | ||||||||||||||||||
| Fund Advisory fee | 1,096 | — | 135 | 30,338 | — | 31,569 | ||||||||||||||||||
| Fund Management fee | 172,573 | 64,736 | 48,489 | — | — | 285,798 | ||||||||||||||||||
| Fund Performance fee | 15,683 | 11,842 | 14,344 | — | — | 41,869 | ||||||||||||||||||
| Taxes and contributions | (9,859 | ) | (3,821 | ) | (3,040 | ) | (2,624 | ) | — | (19,344 | ) | |||||||||||||
| Net revenue from services rendered | 179,493 | 72,757 | 59,928 | 27,714 | — | 339,892 | ||||||||||||||||||
| (-) General and administrative expenses | (22,603 | ) | (9,309 | ) | (10,789 | ) | (3,012 | ) | (78,532 | ) | (124,245 | ) | ||||||||||||
| Operating profit | 156,890 | 63,448 | 49,139 | 24,702 | (78,532 | ) | 215,647 | |||||||||||||||||
| Finance income | 10,050 | |||||||||||||||||||||||
| Finance cost | (13,097 | ) | ||||||||||||||||||||||
| Finance result, net | (3,047 | ) | ||||||||||||||||||||||
| Profit before income taxes | 212,600 | |||||||||||||||||||||||
| Income taxes | (43,446 | ) | ||||||||||||||||||||||
| Profit for the year | 169,154 | |||||||||||||||||||||||
F-62
Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
| 22 | Legal Claim |
As of December 31, 2022 and 2021, 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.
| 12/31/2022 | 12/31/2021 | |||||||
| Tax | 20,452 | 18,753 | ||||||
| Civil | — | — | ||||||
| Labor | 1,967 | 1,817 | ||||||
| Total | 22,419 | 20,570 | ||||||
Tax Claims
Vinci Gestora 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$ 3,441.
Vinci Equities has one proceeding related to the requirement of ISS under rendered services to investment funds located abroad in the amount of 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 an act of infraction against Vinci Equities for the collection of open debts of IRPJ, CSLL, PIS and COFINS in the amount of R$ 16,791 for the calendar year of 2013.
| 23 | 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, 2022.
Stock Options
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 fair value of each stock option granted was estimated at the grant date based on the Black-Scholes-Merton pricing model.
| 12/31/2021 | ||||
| Dividend yield (%) | 5 | |||
| Expected volatility (%) | 35 | |||
| Risk-free rate of return (%) | 0.40 | |||
| Vesting period of options (years) | 3 | |||
| Strike price | US$ 18.00 | |||
| Spot price | US$ 11.22 | |||
| Pricing model | Black-Scholes-Merton | |||
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Vinci Partners Investments Ltd.
Notes to the consolidated financial statements
All amounts in thousands of reais, unless otherwise stated
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$18.00. The Exercise Price will be reduced by the amount in dollars per share distributed to its shareholders from the date of execution of this Plan, whether as dividends, interest on equity, redemption, capital reduction or other events defined by the Board of Directors.
The maximum number of shares available for the exercise of options under this plan is limited to 5% of the total share capital of the Company at any time, on a fully diluted basis, taking into account also the options granted under this Plan.
As of December 31, 2022, there are stock options outstanding with respect to 1,572,616 Class A common shares (1,662,481 as of December 31, 2021).
The total expense recognized for the programs for the year ended December 31, 2022 and 2021 was R$ 2,555 and R$ 3,670, respectively.
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 ate the granted date.
• Estimative of dividend yield and the US interest date 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 during period ended December 31, 2022 was 781,881, with all of them remain outstanding on December 31, 2022.
As of December 31, 2022, total compensation expense of the plans was R$ 11,721, including R$ 4,483 of social charges provisions.
| 24 | Subsequent events |
Accordingly, to the Repurchase Program (Note 14 (f)), from January 01, 2023 to January 31, 2023, 105,623 Class A common shares were repurchased by the Entity, in the amount of R$ 5,048.
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