Patria Investments Limited (PAX) Earnings Call Transcript & Summary

All right. Good morning, everyone. I'm Josh Wood, Head of Shareholder Relations at Patria. Welcome to our first Investor Day event. We're excited to have all of you here, and we appreciate your interest and your time. Before we get started, I have the privilege, as always, of sharing some important disclaimers with you. Today's presentation will include forward-looking statements, which are uncertain and do not guarantee future performance. Patria does not intend to update any such forward-looking statements. These statements are based on current management expectations and involve inherent risks, including those discussed in the Risk Factors section of our latest Form 20-F annual report. Also note that no statements today constitute an offer to sell or a solicitation of an offer to purchase an interest in any Patria fund. Patria reports financial results using International Financial Reporting Standards, or IFRS, as opposed to U.S. GAAP. Additionally, we'll refer to certain non-GAAP industry measures, which should not be considered in isolation from or as a substitute for measures prepared in accordance with IFRS. Reconciliations of these measures to the most comparable IFRS measures are included in the appendix of our presentation. Now with that out of the way, we're here nearly 2 years from Patria's IPO, which was celebrated right here at the NASDAQ market site. A lot's happened in those 2 years. The world looks different in many ways. The alternative asset management industry continues to evolve. And Patria has taken some major steps in its journey, but those are only the first steps. And today, we've gathered and invited you here to talk about the next chapter. Here in person, I see investors and analysts that we've gotten to know very well over the last few years and also some who are just getting started on our story. And I know that we have a similar mix on the webcast tuning in from around the world. And I love having that mix here today. And I think this program will be very engaging for all of you, as we reinforce the major themes that we talked about at the time of our IPO and also give you a comprehensive deep dive into our platform as we look forward from today. Today, you'll hear from a full spectrum of Patria's leadership. You'll hear about the incredible opportunity that we see for alternative investments in Latin America. You'll hear why we believe that Patria is uniquely positioned to seize that opportunity. And hopefully, you'll come away with a conviction that we can deliver some attractive shareholder value as that story unfolds. For those who are here in person, please note that we do not intend to take questions during the program, but rather we're going to have a condensed Q&A session at the end during lunch. For those of you on the webcast, we welcome you to submit your questions via the platform, and we'll try to answer as many of those as we can during the session as well. So we thank you all for being here. And with that, we'll get things started with a short video to kick off the day. [Presentation]

All right. I'll now welcome to the stage our Chief Executive Officer, Alex Saigh. Alex?

All right. Thank you very much for being here. Good morning to you all. I think I already talked to most of you. It's real honor and pleasure to be here today, and hope you enjoy the first part of the event here. All of us are going to present to you, as I think we have the most senior officers of Patria here and that you're going to be able to interact also during the break, at lunch, during the Brazilian soccer game. I hope we also have a positive outcome out of that game. It does affect what Luis Fernando said this morning, okay? So our Head Economist. So it does change things. No, I'm joking here. But yes, I think we have all of us here, most senior officers of Patria, to interact with you. So welcome from us all, and I'm going to actually present all of them here in some of the future slides that I have in this presentation. Well, as Josh mentioned, I think that we have a tremendous opportunity ahead of us in Latin America. There is a consolidation going on, a financial deepening going on that all of you know about. And I think we are uniquely positioned to lead the future of alternative asset management in the region, not only growing organically but inorganically, and we'll mention some of the very interesting add-ons, acquisitions that we did over the last years, and we will continue doing that as we move ahead. Now delivering such a leadership will drive very attractive shareholder value along the way. We'll show you what we have accomplished until now, and I think we're very excited and very positive with what we have ahead of us in the next coming years. What drives our business? People, people and people. Like in real estate, you have location, location, location. In our business, we have people, people, people. And we do work relentlessly to attract, to develop and retain the best talent, and we have succeeded in doing that. I think you're going to see today several of our leaderships here presenting to you. And we have been able to do the dream team scenario, and I think we have the best-in-class in our industry, in real estate, in private equity, in infrastructure, public equities, credit, you name it, in our corporate functions, in our commercial and sales functions. And if we have the best and we continue to attract the best as we have been succeeding, we will then deliver whatever numbers that we're going to show you here today. It is a people business. We have more than 30 years of experience in investing in Latin America with boots on the ground, as we mentioned during the video. In private equity infrastructure credit, look how many vintages and years that we have been actually investing and successfully returning capital to investors at very, very attractive rates and returns generating alpha at scale with $27 billion of AUM, 6 asset classes, more than 30 products. And we will continue doing that: attracting talent, expanding our footprint, expanding our menu of products and our, also, geographic exposure. We have more than twofold, 2.3x, to the exact, fee-related earnings from the pre-IPO levels, and we will show you that in more detail during the morning here. Well, just taking a step back, what we have accomplished here since the IPO. We were -- we went public beginning of last year, as you guys know, and we were managing at that time approximately $14 billion. We're now managing approximately [ $26 billion ]. Under these asset classes that you can see, we're #1 in private equity, #1 in infrastructure, #1 in credit, not only in size but in returns. We have second-to-none returns in private equity, in infrastructure, in credit and in public equities, mainly small caps, Chilean equities, in real estate as well. VBI, our partner now in real estate in Brazil, have the best returns in the business, second to none as well. So we're extremely proud. And I go back to my message here. People make a difference in our business. We have the best talent, and we continue to attract the best, and that's going to lead us to continue delivering exceptional results. We have grown also through associations and M&A. We associate ourselves with Moneda, as you guys know, on the credit and public equity side. We also did buy a participation in a growth equity firm called Kamaroopin. Pedro Faria, the founder of that firm, is here today, if you also want to interact with him. Recently, we announced also the acquisition of a venture capital firm called [ Igah ]. Pedro [ Melzer ] is also here today. If you call us, Pedro, you're going to get 50% chance to get it right. And Andre, another 50%. So Pedro [ Melzer ] is here with us today, and he is the founder of [ Igah ], the venture capital firm that we did announce that we associate ourselves with them last week. Also, we have here with us Ken Wainer that is going to be speaking here this morning. He is our partner at VBI, the real estate firm that we did also partnered with, that has been expanding tremendously the permanent capital structure REITs in Brazil. So all of us here available for you, for your questions and your doubts. Now turning to hard numbers here, and I'm very proud to show you here, on the top left, you can see that we actually increased the fee earnings assets under management by more than twofold from $8 billion to $19 billion as of the third quarter of 2022. We also increased the fee earnings, fee-related earnings by more than twofold to $130 million. That's the guidance for this year, which -- we gave the guidance that we were going to increase fee-related earnings by 50%, and we're going to deliver on that. Again, as Josh mentioned in the beginning of his speech, a different year when we were actually projecting these numbers late last year. We didn't know the war, we didn't know about the extension of interest rate hikes and potential recession in the U.S. and other markets and -- but nevertheless, I think we managed to deliver, and we're very proud that we've been able to accomplish this. And you're going to see that the numbers for '23 onwards look extremely promising as well. On net accrued performance fees, we increased it by over 50% to $428 million. And we have to take into account that we did actually realize $58 million in '21. So this number would be greater than that. We're pursuing relentlessly our performance fees still in '22 and '23. Of course, it's hard to predict specifically. 1 day, 1 week, 1 quarter might slip here or there, but you're going to see that the amount of performance fee that we have in total, $428 million, is very significant, and we do anticipate, of course, realizing a good portion of that over the next few years as you're going to see the numbers as we go along during the day here. On distributable earnings, we did accumulate $1.66 DE per share, dividends of $1.41. If you do the math here, at the $17 per share, which is the value of the share when we went public, it's approximately a 5% dividend yield. At the current prices that we have, our stock trading is more than 5%, it's over 6% dividend yield. So we do actually distribute, as you know, 85% of our distributable earnings, so extremely healthy company. Not only we grow, as you can see, the numbers here will grow significantly, but we don't need the capital in order to finance our growth. We are growing, and we are distributing dividends, which is a very, very good position to be in. And we're still just in the beginning of this journey. I think we started this journey so many years ago, my Co-Founder and Executive Chairman is here with me. We started this in '88. I joined the firm in '94, so it's been a while. And -- but we're still in the beginning. We started with a $230 million fund in '97, now we're $26 billion and joining forces with the best of the best in the industry as I will show you guys here, our partners from Moneda, they joined us and others, extremely proud to be here. I know also, we have our Board members here with us today, Otavio in the back seat there and -- that founded our infrastructure efforts. We have also Glen, Sabrina. We have Jennifer also here in the back. So you can also reach out to our Board members if you guys want to. But we're still in the beginning, and that's what's very exciting. And we wake up every day feeling that we are just in such an interesting series of events that are happening, favoring us as you will see, hopefully, during this presentation. And how are we looking into this and how do we transform this major financial deepening opportunity into a strategy. First and foremost, I think we are the gateway to Latin America for global institutional investors investing in the alternative investment space in Latin America. So we became that since we started, as I mentioned, our first fund, the Private Equity Fund I, in '97, 80% of that capital was raised with global institutional investors, investors that were willing to expand their exposure to other parts of the world, Latin America specifically. So they started investing in alternatives. Private equity was the #1 product that actually -- the region started actually raising capital with global international investors, and we -- all the way to today, over 80% of our capital is still being funded, being raised with global institutional capital. And we definitely became their knowledge partner, as we expanded to other products, infrastructure, real estate, credit, et cetera, these global institutional investors saw, at Patria, a partner of choice. So not only I feel comfortable that actually they can help me invest in private equity, they can also help me invest in other asset classes in the alternative space. You know that the number of relationships of these mega global institutional investors that are willing to entertain are getting smaller and smaller. And we are the #1 relationship for them to LATAM. So we are the gateway or the conduit of capital, and we will continue to be. More even so, I think we're now also raising money and -- with other institutional investors or the size of institutional -- which are the global wealthy families around the world. Another amazing opportunity that in absolute numbers invest in alternatives the same as the global institutional guys. So we have another huge opportunity to continue raising money with global clients. What happened over the years as the economies in the region stabilized, local investors, local institutional investors started looking for alternatives also to enhance the returns of their portfolio. And we became also this conduit of capital in local products to local investors. What we saw that these local institutional investors became more comfortable investing in entry-level alternative products in their local currencies. You're going to listen from Ken Wainer today, real estate is definitely the REITs, definitely an entry-level product here for alternative investments in the region. So Brazilian reals in Brazilian reals, Chilean pesos with Chilean pesos exposure. That's how the investors actually -- local investors, institutional investors started getting exposed to the asset class. And I think that we also became a conduit of capital most so in Chile. In Chile, we have an amazing relationship with the Chilean institutional clients, as you will listen from my partners from Chile. And we continue to do the same in Brazil. We did that in Chile through an association with Moneda. We want to do the same in Colombia, the same in Mexico to have this deep relationship with the local institutional investors and, of course, the wealthy individuals that are willing to get exposed through the alternative asset class through Patria. And finally, what's also going on, which is the third vector of our strategy here, once these local investors, they get acquainted with the asset class, they want to invest outside of the region, and we are also becoming a conduit of capital for local institutional investors, are now accessing global alternative asset managers. And you also listen here that we call it the advisory business. We have today, $1.7 billion of feeders structured to cater to the local institutional investors, mainly Chileans that have been doing this for a while longer because of the Chilean economy, have stabilized for a while longer in the region, looking for global institutional investors to allocate some of their capital, and we also became the conduit of capital for these investors. All of these different vectors of our strategy actually deepen, strengthened the relationship with the global investors, be it them international, be it them local investors. And then we can sell more products to these investors. And that's why we're expanding our product offering. Well, as a macro drop -- backdrop, you guys know these numbers. You did also go through the presentation here today by Luis Fernando and [indiscernible]. It's an amazing space to invest. Latin America as a whole, a very -- one of the highest middle-class regions in the world, with 47%, believe it or not, higher percentage-wise in China, 658 million people, it's scale. It is, though, very underpenetrated on -- as far as allocation to private markets is concerned, just 1% allocated to private -- of the private markets investments are allocated to Latin America versus the region that represents 6% of global GDP. So this underallocation is we're -- exactly where we try to play by attracting more capital from global investors in the region and attracting capital from the local institutional investors also to the asset class. As you also saw during this morning, the low correlation with the G7 economies, that's very important when you diversify. If you're a global institutional investor, you want to diversify, you want the high sharp ratio, absolute returns with very low correlation, high sharp ratios that's good for your portfolio. That's what we actually tell investors and show investors as Luis Fernando, our Head Economist, will show to you guys here today. And also, I think we are anchored in these very strong secular trends that are happening in the alternative asset space worldwide, you guys know this upside down. Private equity, year after year after year, do perform better than public equities. And you see the -- that's why you have, in the middle of the graph here, increasing allocations from institutional investors to the asset class from 14% in 2010 to 19% in 2020 and growing. And also a GP consolidation, 73% of the capital raised in the last -- in the first quarter of '22, whereby funds of over $1 billion in size. That's exactly what I said a couple of minutes ago. This concentration in few GPs like us and in larger funds, and that's exactly where we are [ inserted ]. These global trends, they reflect also in Latin America, and Patria is largely and readily to lead this consolidation and to become even more so the partner of choice for private market allocations in the region. So how do we do this, right? If this is the opportunity set, this is what we want to do, we want to be this conduit of capital, we have to then increase our product offering, as I mentioned. We have this amazing relationships with global and local institutional clients; with global and local, high net worth individuals or wealthy individuals, we have to offer them more products as they seek from us a deeper relationship. I think you're going to also listen throughout the day today that we are also giving clients options to invest in other kind of structure, not only the typical fund structure but SMAs, special managed accounts, or continuation funds or et cetera, et cetera. And that's the very dynamic relationship that we have with these global institutional clients and local to understand their demands and then offer products that cater their needs. And of course, expanding their geographic footprint as they also look into the region for Patria to give them exposure to other countries in Latin America. Besides Brazil and Chile, mainly Colombia and Mexico, that's where we want to expand. Of course, trying to extend our client base, I mentioned global wealthy individuals is one of them. And strengthening our platform, we did invest tremendously in our platform over the last years, even before the IPO. And you're going to see today here from our Human Resources' Head what we have been doing in attracting, I think, the best of the best talents for our corporate functions. So as we do develop this and start executing this strategy, of course, we are an investment firm, and this is what we have to do and very, very, very well. Our main pillar and -- we have 4 career paths in -- at Patria. And one of the main career paths, of course, is the investment career path. So we are based on a very deep sector expertise. You will probably see during the morning here how do we actually get to understand the sector very deeply. I think you did watch and notice during the video that we were on and on mentioning that we know -- I know very well this sector in that sector, that's why we feel very comfortable in actually owning assets in these specific industries. And this is what actually guides our investment approach. For a culture of collaboration, and you're going to see here today that we have partners from our association with Moneda, leading several asset classes here. And we know we are together on this culture of collaboration, understanding exactly what they think also about not only Brazil, us about Chile, but other asset classes. So everybody together in the investment committee exchanging idea. And our investment committee became a lot better, to be honest. When we bring diversification, we bring different cultures, we bring different mindsets to give us different optics how we look at that investment. And local presence, of course, boots on the ground is part of our investment approach. No, it's our DNA, it's more than a part of our investment approach. Without that, it's very hard for us to do what we do, like construct a new thermal plant, I don't where, and build a toll road in Colombia, whatever you need to be exactly with those boots on the ground there to do the job that we do very well. And talking about the 4 career paths that I mentioned, starting with investments, and this is how we're organizing our firm. Again, 4 career paths that you're going to see here: Investments, portfolio management, then with value creation and sales, commercial and our corporate functions. And I think we have the best of the best leaders running our asset classes, our main asset classes, private equity, infrastructure, credit, public equities and real estate. They're going to be presenting to you here today. Ricardo has been with us for 23 years. Ricardo started as an intern at Patria, 1/3 of our partners started as interns at Patria. We have a renowned Patria academy that actually picks and selects trainees from college, and they start working with us as trainees. And 1/3 of our partners actually came from that program. And today, Ricardo runs our buyout growth in SPAC within the private active vertical. Then Andre Sales, you saw also in our video, he runs Infrastructure, 25 years' experience. Then Fernando Tisne, when we associate ourselves with Moneda, we invited Fernando and Pablo that were the founding partners of Moneda to join forces and lead our verticals in credit and public equities. Very important for us to recognize and have the -- and that's why we looked for Moneda because we wanted to have Fernando and Pablo with us leading these asset classes because they are the best in the industry in Latin America. So we have today the best in credit with Fernando leading the team. You're going to see the track record, second to none, amazing. Same with public equities with Pablo, been running [indiscernible] small caps, Chilean equities fund since 1994, with just amazing returns, and you're going to see here. And then Ken Wainer, again, bringing Ken from VBI as we mentioned, our acquisition in the real estate space in Brazil, and Ken also then leading our real estate space. So interesting to see that from the 5 asset classes, we have 2 partners that were Patria partners, 2 partners that were Moneda partners and 1 partner which was a VBI partner. So actually having the humbleness and humility to call all of these best of the best as we go through acquisitions and associations to run very important businesses and for us here at Patria. And of course, in there, you see that we are looking for more permanent capital and drawdown funds as we move into these asset classes. Also, portfolio management for us is key. We do take on development risk in our infrastructure funds. We do own companies and consolidate sectors all over Latin America. So value creation capabilities under the leadership of Peter [indiscernible] that is here today if you guys want to talk to him. Peter has 40 years of experience, and he has under him, as you can see, a very deep and broad team of functional specialists and sector specialists, again, going back to the sector specialization. This team actually works for the portfolio of companies like an internal consulting company, helping the portfolio companies reach the desired results and budgets. Then the commercial team. We do have over 58 people working for sales and commercial, the best of the best. Again, we -- I couldn't have -- if I wanted to pick in the region the best officers and leaders in the commercial area, I would pick them if I could have the dream team. For the soccer team today, you have the dream team. For my commercial team, these are the guys that I would pick, the Neymars and [indiscernible] of the commercial area in Latin America. And they're going to be speaking to you here today. You did also -- did already interact with Fernando this morning. And they are -- they did build this very strong relationship with institutional clients. And when someone -- when a client writes you a $300 million check for your private equity or infrastructure or credit fund or when they have an exposure of $1 billion with you, you have to have very deep relationships with these clients. They -- as we do nurture this and through their leadership, we managed to fundraise what we have been fundraising, which are now very, very positive numbers that you saw in the beginning of year in the AUM, growing significantly. And managing the firm, we have our -- as I mentioned, our Executive Chairman here and Co-Founder, together with me, Olimpio. Hopefully, you can be able to talk to them. I mentioned that we have our Board members as well, myself, and we have been adding a lot of top-tier corporate leaders like Ana Russo, our CFO, that's taking on Marco's role, as Marco moves on to lead corporate development to find other interesting associations or acquisition opportunities for us. Ana Santos leading human resources. She is also going to present here today; and Pedro Rufino, our Legal and Compliance Officer, is also here today. Hopefully, we're not going to need much of Pedro as we go forward. But yes, it's very, very important to have him with us here, not only on the legal side, but also, of course, very importantly on the compliance side. And finally, our ambition, $50 billion of AUM by 2025. Doubling is a lot easier than actually going from the $230 million Private Equity Fund 1 to [ $27 billion ] as we are managing today. And you're going to see and get very comfortable, hopefully, you're going to get very comfortable, how we're going to do this. I am extremely comfortable whether we can get there, step-by-step, process-by-process. And hopefully, you enjoy the rest of the morning. Thank you very much. We're going to go straight on to the first business unity presentation of the day. So I'll call here to the stage Ricardo Scavazza.

Thank you. Good morning, everyone. I'm going to give you an overview of our private equity platform and the opportunities that we see for private equity in Latin America. I'm Ricardo Scavazza, Head of Private Equity, as Alex already introduced. So the themes that we're highlighting here is, first, the opportunity. One thing that you're going to find very interesting is the low penetration of private equity currently in Latin America and the size of the opportunity versus the current low level of competition. So the figures we're showing here, we're going to give you more detail about this, is our estimate of the potential investments that we have through the specific sectors that we focus in Latin America. And this is a study that we did with McKinsey with a lot of filters, taking the type of a company that we invest on, so filtering for size of company and filtering for the sectors. We got to an estimate of near $200 billion of investments, of which for the next vintage, we are engaged with a pipeline of $8 billion. So we are currently working on developing less than 5% of this pipeline. And it's very interesting to see how low the competition is on these situations. We get to engage with these companies on one-on-one negotiations. And this is purely a function of how low the penetration of the market is. Through the years, applying exactly the same framework that we apply today, we have been delivering 450 basis points above global benchmarks of private equity. That is a very large alpha. Comparing through the world, you'll find a very selected list of funds that have been able to outperform for so long in such a magnitude. We have been top quartile funds in Latin America for all our 5 vintages. That's also very unique. When you look at emerging markets, you don't have funds that have such a long streak of top quartile performance. And I believe that this is a function of the framework that we have developed, which focus on being sector-oriented, having a framework which, for buyout, focuses on consolidation. For the other verticals that we are adding venture and growth, I'm going to give you also some highlights of the framework. And always focus on the hands-on approach and value creation. In terms of the team, it's a very mature and solid team. Professionals have more than 20 years of work experience on private equity, which, for Latin America, is unique. You don't have vast supply of professionals with such long private equity experience. And especially for Patria, on average, our partners have been working together for 15 years. So the team that I work with today is basically the team that I was working with Fund IV. All of our partners came from Fund IV. We're raising Fund VII now. So it's a team that is very well coordinated and mature. Our platform has more than $10 billion under management, which is, by far, the largest platform in Latin America. So in terms of the sizing of the market, here's a breakdown of the opportunity. This is a study, again, that we did with McKinsey, sizing the opportunity for each of these target industries, filtering for profile of company, filtering for size, and we got to $80 billion for food and beverage, $40 billion for healthcare, $40 billion for agribusiness and $27 billion for food and beverage. I think the message here is not to be specific about what these numbers are. But just for you to get an idea that it is a very large opportunity. Latin America is 5% of the world GDP. We're not just the largest private equity fund, but you basically have 2 funds of scale, some scale present in Latin America. It's us an advent. And you don't have other funds of over $1 billion. That's pretty amazing when you think about the size of the market and the lack of competition. And these numbers, you could argue if they are a little bigger or smaller, but the message here is that we can be very focused and selective. Inside these buckets, we're prioritizing a subset, and we're on one-on-one negotiations. So that's the uniqueness of the opportunity. Looking at the returns. Here, we compare ourselves to all benchmarks across regions, global benchmark, U.S. benchmark and LATAM. It's amazing to see how big the gap is between us and LATAM, which I think was driven by the unique approach that we have developed for the region and also the maturation of our returns over time. The Latin market, there was a lot of turnover of teams that got assembled and are not present in the market anymore. And we are, frankly, the survivors. We survived the cycles. We found a framework that worked. Obviously, we developed it over the years, and we were able to deliver this very strong returns across the very long haul. The most important pillars of our strategies are listed here on the right of the page. The first, sector selection. When you're investing in emerging markets, it's very important to be thematic because there are certain teams that have a very big gap in terms of performance versus others. I'm going to elaborate more on that. And to my previous point on low competition, you can allow ourselves to be selected because you don't have all that competition, so you can pick your spots and you can really play white spaces, and you don't have to be all over the place. So be selective. The framework that we found the most successful for buyout has been consolidations, which is a very classic approach to private equity that has been extensively deployed, notably in the U.S. But you find less and less space to play consolidations, as industries have consolidated to a large extent. So a lot of the plays that we do in Latin America, currently, are plays that were done in the '90s in the U.S. So we get to take this experience. A lot of what we do is really study cases and replicate these cases in Latin America. Strong value creation and hands-on approach. I think this is not just something that fuels our performance, but also an enabler of the strategy. Frankly, you don't have that many all the platforms in Latin America. So the value creation is an important enabler. And stage capital deployment on the consolidations. We get to pace the deployments, and that's very important. And associative approach, meaning we partner with families through the consolidation that we execute. In terms of the sectors that we focus, and this is a very interesting statistics, here, we show the growth of the GDP of our target sectors, namely the ones on the left: healthcare, agribusiness, food and beverage and business services versus the GDP of LATAM and the GDP of the G7. And what you see is an amazing outperformance. So really, these sectors, they have very strong drivers of growth over the long haul. They have largely outperformed LATAM, largely outperformed the G7. And in the last 5 years, which had been challenging for Latin America, these sectors have been very resilient. And that includes the pandemic, where they've shown strong growth, and includes all of the global crisis that we've come across the years. Agribusiness has been stellar. Healthcare; through 28 years that we have invested in healthcare in Latin America, we have never seen a negative year of growth. So this is a very reliable growth source. I would say, even on the current shape of the global economy, where certainly growth is a factor, Latin America, these sectors, they are going to continue to grow healthily, as we see them growing today. So that's a very important element. In terms of the consolidations, through the add-on consolidation strategy, we've been able to consistently build market leaders, and that is a key element of our strategy. We buy smaller companies, combine them into larger companies and also market leaders that creates uniqueness, that creates franchise value, that increases multiples. So by that process of consolidation, we've been able to build value not just through the consolidations and synergies but also expanding the multiples of the companies from the small company multiple to the market leader multiple. And you see how consistent this process has been across time. In terms of value creation, we have really a very sizable and mature platform. This has been evolving over the years. Today, we have a group of sector specialists, which are former CEOs of companies in our target sectors, that assist our investment team and also the Boards of our companies. They are the Chairmans of the Boards of the companies, and they help us execute these consolidation strategies. We have a very sizable team of functional specialists that help us build the platforms. And we always have in-company teams that also assist us our C-level executives that assist us execute on the companies. By function of this platform, we had these amazing figures in terms of growth. It's 18% last 12 months growth on an EBITDA -- I mean, in the current environment. As I mentioned, our sectors are growing. But considering everything that's happening in the world, growing at 18% is pretty amazing. And that has been the type of growth that we've seen on the portfolio across the years. And that, with acquisitions, gets to 31%. In terms of the potential for growth in the future, we believe that this platform has a tremendous potential for future growth. First is just plainly the opportunity for growing penetration of private equity in Latin America. I mentioned the 1% current penetration of private equity in LATAM. On the world, the average is 7; in North America, is 14. So there you can see how important the opportunity for growing private equity is in the region. Specifically, the sectors that we invest on, they are growing sustainably. I've shown you the growth of the GDP, and these are driven by the very strong fundamentals of each of these sectors. One easy to explain trend is healthcare. The expenses in healthcare in Latin America, they are undersized, there's substantial bottlenecks, the population is aging, and that pushes the growth of healthcare. The other sectors, similarly, they have very strong fundamentals. You look another highlight, the agricultural inputs market in the U.S. is growing 1%; in Latin America, it's growing 16%. So that is -- these are all markets where Latin America compares very favorably to developed markets. Another very important route of expansion for us has been the expansion from an originally Brazil-based firm, where we were founded. But over many years, we've been investing more and more and getting more Latin and expanding our presence through Latin America. And we've learned to build regional platforms. That is a key asset that we have and a competence that we have. It started more notably with SmartFit, an investment from 2010, where we really built a LATAM leader, a company that is a leading company in -- this is fitness clubs, leading company in Brazil, Colombia, Mexico, Chile, all major economies in Latin America, we achieved leadership with SmartFit. And we are replicating this approach. We highlight another case here [ SuperFrio ]. And in other sectors, we're taking the same route, creating a regional platform and doing the consolidation, not just in Brazil but across Latin America. And also, not just we're expanding regionally, but we're also looking at the process of development of companies in private equity as a cycle. Our view starts with venture on the A/B Series. And exactly to be present in that segment, we've recently announced our association with [ Igah ]. My friend, Pedro [ Melzer ], here. He is the founder of [ Igah ] Capital, leading venture capital firm, and he's going to lead this effort. Then we evolved to growth equity, which would be C Series and forward, that's led by Pedro Faria, where we acquired Kamaroopin. And for the larger-scale private equity, we already have the [indiscernible] franchise. I think it's very important for us to be connected throughout the cycle, especially in our sector view. So healthcare is a sector that we focus in all of these segments. So Pedro [ Melzer], [ Igah ], Kamaroopin, they all have a presence, so we can have a complete view of the ecosystem across the phases and really be a dominant player in these sectors for all this parts. And naturally, as the companies evolve to a listed company, we have Moneda, that's a leading manager of listed equities. And in between, we have our SPAC and PIPE strategies. Our team is really second to none. I think it's in proportion to our market share. We also have a concentration of the best talent in the industry. Here, I list my partners averaging 15 years working for us. We already have Pedro Faria here for Kamaroopin. We didn't update to include Pedro [ Melzer ] that's also here. A very strong sector expertise, a very strong 65-people team and the value creation team that I have already described. So with that, I'm going to share with you highlights of two cases. First, a small video of Lavoro. [Presentation]

So this is a case from our Fund V. The reason we highlight this case is, well, it's very successful. You see here, we've been growing the revenues of this company at 90% a year. This is with acquisitions. But the organic growth of each company that we buy is topping 20% CAGR, driven by the strong fundamentals of the input market in Latin America. This is the leading company in Brazil, Colombia, Chile, also with the presence already in Paraguay and Uruguay, have 7% market share, 23 acquisitions. And interestingly, this is a company that we expect to be listing on the NASDAQ on January of this year. We have signed a transaction with a SPAC, listed on the NASDAQ, the production board, and we're very excited about also being listed on the NASDAQ. So with that, I conclude the presentation, and I'm going to call Andre Sales for the next segment on infrastructure. Thank you very much.

All right. Hello, everyone. Happy to be here. I am Andre Sales, Head of the Infrastructure practice within Patria. I've been with the firm for 20 years now. And -- so let's share some of the infrastructure experience with you. So we managed $5.7 billion, that's the AUM. On our major funds, the infra development fund, each of funds II, III and IV were the largest funds ever raised for the region. So we're very, very proud of that. And we operate in a very attractive and large addressable market. So we're talking about $100 billion of equity opportunities. So if you look at our fund sizes, those are really a drop in the ocean of this really giant addressable market in the region, $100 billion. We have been delivering a strong performance. So you'll see the figure in the screen, it's a 12.9% net U.S. dollar return. And again, that is with a good downside protection. Remember that we're doing infrastructure. So we have as a base of real assets. So if you look at the performance figures, it's -- again, it's an interesting and nice performance with real assets as a base, a strong downside protection, and again, way above benchmarks. We're going to cover that in a minute. Patria -- in infrastructure, we do have a competitive edge. If you take one message from this discussion here on infrastructure, take this one here. We have this competitive edge of doing development. We have a team, structure, track record to do new infrastructure, to do new things, new assets, creating platforms, running the execution risks. And by doing so, this is the competitive edge that we have in infrastructure. We sell once the asset is fully operational. So that's our competitive edge. The team is a very technical team. We are -- of course, we have a financial background, that's the nature of Patria as a manager. But within infrastructure, we have specialists throughout the areas of the infra, development, execution, operating assets, but also in the sectors. So people are specialists in power, in logistics, in telecom. We are engineers with technical people. We have the engineering mindset. So that is, again, another competitive edge that we have in Patria, in infrastructure. And we do have a diversified platform. So we started doing what I call the development funds, which is, again, doing execution, running the execution risk. This is the more complex part of the investment within infra, doing the assets. We moved from greenfields to core assets. We do have core funds from 10-year funds to permanent capital, from equity also to credit. So we now have in infrastructure in Patria, a very well-diversified platform. So let me zoom in each of the aspects here for you to get the messages. So on addressable market, this is the size of it. We split between here among the sector. So $25 billion for power; $35 billion for logistics and transportation; $10 billion in data infrastructure, that's telecom-related sectors; $30 billion in environmental services. So a message from this page here, if you think about infra, you're looking at some other, let's say, managers being more creative, going to, let's say, infra-related sectors, we don't need to do that in LATAM. The bottleneck is so big. Whatever sector you look at, there's bottlenecks, that even in traditional sectors like those ones here, those are the sectors that we've been investing in, again, with the giant addressable market ahead of us and the size of the funds still a drop in the ocean. With respect to performance, so you see the figures here in the page. Again, this is net U.S. dollar performance of the last 10 years of the last 2 vintages, way above benchmarks, 4.7% above benchmarks. If you compare to publicly traded benchmarks, even larger difference, so 15% above the publicly traded benchmark. So very healthy benchmarks. Again, remember that we have, as a base, real assets, so with a strong downside protection as well. On our competitive edge here, what we do, and we've been discussing this -- those days, it's very hard to execute, I can tell you. But hopefully, it's simple to explain. What we do is develop, derisk and then sell. Develop the assets, derisk them and then sell. And we've been doing so for the last 6 to 17 years, $13 billion of assets of CapEx, of CapEx expenditures, capital deployed, again, developing, derisking and then being able to sell once the assets are fully operational. That's very much the model. And let me give you a real example. So in power, 10 investments, 17 years doing power. We've done thermoelectric power plants using natural gas, by the way, coming from the [ pre-salt ] reserves. We have in that specific project Shell as a minority shareholder. They are a minority. We are operating. So they selected Patria to be the operator. We were proud to have a giant energy global player selecting Patria to be the operator. So that's thermoelectric. You see some pictures here of small hydro plants. We're doing that since Fund I, since 2006. Wind farms, solar power plants, this picture of the solar power plant is a project developed by us in the Northeast of Brazil, now fully operational, contracted 3 years from zero. It was a blank piece of paper. 3 years after, we are now positioning this platform, this asset for a sale. In transmission line, this is another example of our case here. We entered this auction in 2016 with nothing. There was a blank piece of paper. We developed from that until a fully operational asset. We did the environmental licensing, regulatory approvals, all the project finance, all dealing with local communities, dealing with indigenous people. We bought the land. It was 2,000 lands that we bought, passing through 50 municipalities, 4 different states in Brazil, 1,500 kilometers of transmission line, done by a team of Patria. People came from Patria. CEO, COO, CFO, Regulatory Director, those are people that are doing -- different companies within our team. So very interesting and real case of developing, derisking and then selling. We sold that platform 2 years ago to a large strategic player. They didn't want to go through all this process, they wanted to buy fully operational. So that's what we did. Invested around $120 million, sold for more than $500 million, this asset here. So if you think about transmission line, this is a boring thing, no, no, not boring thing. So we invested $120 million, sold for more than $500 million, very much proving the concept what we have as a competitive edge. In logistics, 9 investments, 13 years doing logistics. This is a real picture of a water waste platform that we also created from scratch. This company has shares traded in the stock exchange. We already sold a portion of that, collected all capital back in U.S. dollars, still have a big portion of the company controlled by Patria. In toll roads, also part of the logistics. We are one of the largest operators of toll roads in LATAM. We entered in 2006, 5 concessions, 3 in Brazil, 2 in Colombia. This picture that you see here, we recently sold this company that was announced last week. Again, very similar to the model. We entered the auction. It was BRL 2 billion CapEx, duplications, enhancements, installation of toll plazas, a number of things. Three or 4 years after, we then sold the company to a large strategic player. This group is giant global group called [ VNC ]. Those that are -- follow the infra sector, it's a global infrastructure player that was looking at LATAM, saying, who has the best assets here? And we're very proud that they negotiated and bought from us. $300 million back to investors just with that one. And by the way, we still hold 45% of that company. In data infrastructure, we did towers. Third time that we're doing towers, 9,000 towers. We did it once, sold. Did it twice, sold to another player. And doing it for the third time. In data center, we created the largest and fastest-growing independent platform for data centers in Latin America. This is a company, again, created by us. This company is called [ Odata ], developed from zero until where we are as of now -- please think about this name [ Odata ] here. By being the leader, we attracted -- really attracted the interest of large global players. At some point, this company will be also positioned for sale. In environmental services, also another sector, we're doing this big project in Chile, desalination project and a 100-kilometer pipeline in Chile, all developed by us. Again, CEO, COO, all Directors coming from Patria developing that project. So I gave you real examples. I think some of the images help you understand what is the competitive edge that we have in infrastructure. In talking about team, everybody says they have the best team. We believe -- we do believe we have the best team in private equity. You saw Ricardo speaking about it. Let me speak about the infra team. Take this message here, again, a technical team. I'm an engineer, of course, I'm not on the day to day, but again, I have this mindset. So when we interact with suppliers, with counterparties, with project finance, with the ones that -- from whom we're buying the companies or the projects, the ones that we're selling the projects, we have the technical expertise. So people in power, in logistics, in environmental, in telecom, they know what they're talking about, they're really technical, they're really sectorial team. And as private equity, we have also been working for years together. So the faces don't mean that much to you, mean to us here. And the faces of the partners, we have been working for more than 11 years. So in the case of taking Marcelo, for example, since Fund I, we're now in Fund IV, going to Fund V, Felipe, Roberto, the same. So we're working together for years, not only a strong but very cohesive team that we have. And finally, we expanded the platform. Remember that we started with this development funds. We're now in vintage -- going to vintage 5 of the development fund. So then we move. So those are the, let's say, the riskier and the higher returns. Then we moved to core, already 2 funds in core, and now credit, starting infra credit. So in terms of investors, if you look at the right of this page, from institutional to retail, from high to low sophistication of type of investors, in terms of terms from 10 year to permanent capital, so we're doing permanent capital now. International to local investors, ticket size from large to small. We have ticket sizes of $300 million in our development fund. We have ticket sizes for a Brazilian individual in the core funds of $30,000. So that's very much, let's say, the expanded product offering that we did. And by the way, after the IPO, very much after the IPO. So we're very happy and proud with that. And again, to make it real, you see the images, you saw some of the pictures, but I think the ideal dynamics here is for you to see a 3-minute video that I'm showing now, explaining a little bit of the competitive edge, the team, the structure, the track record. So again, it's 3 minutes only. And please note that all of the scenes, all of them, 100% of the assets are assets of Patria. So assets of Patria. So assets of Patria, Funds I, II, III and IV and the core funds I in II. So with that, I hope you like this video. [Presentation]

Okay. Thank you very much, guys.

Okay. So you heard about private equity, you heard about infrastructure. Let me call Fernando Tisne to talk about credit now.

Okay. So thanks, Andre, for passing me the responsibility to follow the show here. It's -- I'm very pleased to be here. I mean it's very challenging to be here after hearing Alex, Ricardo and Andre. I am a great guy, so I am the boring guy. And after this very impressive presentation, I want to take 10 or 15 minutes of your time, yes? So thank you, first of all, for having us here. We at Moneda are very happy to be part of this platform, Patria, Moneda. Since -- it's almost 1 year since we are together, and we are very, very, very happy. So I'm Fernando Tisne. I've been with Moneda, now Patria, for the last 28 years of my career, doing credit, I would say, almost all my life. So that's me, and I have the responsibility of being the head of the CIO of this vertical. Let me tell you a little bit about our platform. We have had an amazing ride since we started the -- on the great funds over the last 22 years. We have been one of the largest and more experienced team dedicated to credit in the region, and we have delivered outstanding performance in our main strategies and grow our business, and today, we're managing $4.5 billion in 7 different strategies. Our addressable market, where we -- where are we in? I would say, there's 3 main pockets where we are. We are inside and where we started, it's $580 billion U.S. dollar bonds issued by Latin American companies. This size has grown more than 7x over the last 10 years. On the local currency side, that means bonds, public bonds issued by Latin American corporates in local currencies, BRL, Mexican peso, Chilean peso, Colombian peso, the stock of bonds is around $400 billion. So on the public side of the fixed income market in LATAM, the credit, we're talking about roughly $1 trillion. In those 2 pockets, we have developed our two main strategies that I'm going to tell you a little bit more about them later and represent 3/4 of our AUM. And on the private market side, Latin America is a little behind. On a worldwide basis, there is around $1 trillion of AUM invested in private credit. LATAM is behind for -- accounting for just 0.5% but growing 32% over the last 2 to 3 years. And the private trade market is a natural step for us to jump in, I hope, soon. How -- let me [ talk ] a little bit of our main strategy and our track record. It's important to understand the route of our credit platform and how we became what we are today. We are -- since our beginning, we are niche -- we tried to strip and to add value to our investors by looking for niche and at the right opportunities, where we can have a niche to provide true value to our investors. After launching in Moneda, last century, our small capital equity that my partner, Pablo, is going to tell you a little bit more about, we launched our first credit fund invested in LATAM U.S. dollar-denominated high-yield companies. To put this into perspective, while the high-yield market in the U.S. was highly recognized since the '80s, in Latin America, there were no dedicated fund investing in this asset class. In 2000 and with only $50 million, we launched our high-yield strategy, becoming the first dedicated LATAM high-yield fund and pioneering the asset class. It was only until 2007, 7 years after we launched, that JPMorgan create the CEMBI index, indices that today are very familiar and track corporate bonds in emerging markets and Latin America. Throughout the history of our funds, we have been able to deliver consistent outperformance in different trade cycles and macroeconomic environment. Our flagship strategy, the LATAM Corporate High Yield, has delivered 350 basis points of alpha in the last 10 years and 410 since inception. On our local currency strategy that invest in a portfolio of companies in different currencies throughout the region, we have been able to deliver close to 200 basis points of outperformance in different times. This performance has enabled us to rank at the top of more than 200 funds in the emerging market that invest in U.S. dollars over the last 10 years and in our local currency funds, #1 since inception. I can't stay behind of the real and great performance of our -- my former partners that present, they show tremendous numbers. But this is our numbers, our total return numbers. Our flagship fund, the Moneda [indiscernible], over the last 20 years, has outperformed all the major high-yield asset classes in the world, global, U.S., emerging market. It has also beat the S&P 500 over the last 20 years. So it's really impressive. Every time I show this graph, it's really, really impressive. And another finding that is very interesting, at least to me, in this chart is that LATAM high yield, even though all the crises that maybe you have heard over the last 20 years, has outperformed the U.S. high yield by more than 50 basis point over 20 years. So it's impressive. It's really, really impressive. Our success is not just under our regional funds. Our youngest and single currency funds in CLP and BRL, Chilean pesos and Brazilian reals, that targets the local money in Chile and Brazil, have also succeed, and they have started to build their own names in the portfolios of local investors. So how do we do it? How -- what's our competitive advantage? Why we have done so well over such a long period of time? I would say, there is 4 main things that I would like to highlight. First is a dedication. We have been doing -- and myself and my team, we have been doing just LATAM, just credit in LATAM for 20 years. And that repeating one and -- year after year doing the same, give us an edge. All of us in all of our strategies, we do have the boots on the ground. What does it mean for us? It's, I mean, knowing the companies, knowing the environment where they are, knowing the management, knowing the owners of the companies, knowing the cultures, knowing how the companies have behaved in good times and bad times. And that is very, very, very important. Also, we have a deep knowledge about our issue. Our research team will cover more than 200 companies, and that's an important number. And also, our -- the way we do invest. We are completely benchmark-agnostic. We do not build our portfolio tracking indices. We have a very, very large active share. And in order to do that, we need to combine what I've told you before, we need to combine knowledge, dedication and the experience of our team. Everyone here has a great team, but this is our -- my team, the team that I lead. We have the PMs and co-PM, the people leading this. We have more than 100 years of experience doing credit. Our team is 39 people. I would say, this must be one of the largest team dedicated to credit in LATAM. With an amount of years of experience, that is incredible. We are spread all across the region. How our platform look like? We tried to put in one single slide. We have a very diversified platform and funds. Today, we have 7. $4.5 billion, $3.2 billion of them are in U.S. -- in assets, underlying asset of U.S. dollars and $1.3 billion in local currencies. We have regional funds, that's mean regional that invest all across the region from Mexico to Patagonia and target global investors, not just only locals, but also global investors. And then we have our, I would say, onshore funds or funds dedicated in single currencies, like Chilean pesos and Brazilian reals, that target the local markets, the onshore market, the local investor. And in there, we have 3 different funds in Chile in this high-yield space, in the high-grade space and in the factoring type of fund. And in Brazil, we have our high-yield private credit. What are we working on and the things that we are working in the credit team is two things, as I was mentioning to you. We're working in a corporate private debt fund in U.S. dollar to invest all across the region in LATAM. And that is going to be funded with international or global investors. And also, we're working on 2 local funds in Brazil to invest and to provide financing for the huge demand that there is in infrastructure and agribusiness. What is on our future, and how do we see our pillars of growth? We put in this slide basically -- I mean, how do we see it? We have our current products, new product, current markets and new market. At the bottom left is what we have today, the $4.5 billion that we're managing in 7 strategies. As new product in our current market is the one that we discussed, private credit, agri in Brazil and infrastructure in Brazil. So those funds can be put it in that box. On new markets and current products, what are we doing? We -- today, we do have flagship funds with of 10, 20 years of tremendous track record that are listed in Chile in the local market in Chile. We need to give to those tremendous product more visibility. We need to make it easy for global investors to invest in them. So we are looking for opportunities to list our main and flagship funds into global exchanges in order to facilitate the access for global investors to our funds. And looking beyond and in the medium term is the new products and new market. What does it mean? When you look at the industry of asset management in the region, the amount of money that is invested in fixed income funds, Brazil is huge, $600 million; Mexico, $136 billion; Chile, $36 billion; Colombia $20 billion. Today, we have a small operation in Chile that accounts for roughly 1% of the market share. So -- and we are starting in Brazil. So if we can grow -- our goal is to grow our Chilean operation and also to expand and replicate what we have done in Chile all across the region and the opportunity is huge. That is close to, I mean, $750 billion in the industry in fixed -- invested in fixed income. And we should be a player in that market. That's it. Thank you very much. And I would like to introduce my partner Pablo. Let us go to his turn to talk about equity.

Hello. Good morning, and thanks for being with us in our first Patria Day here in New York and being interesting in the development of our firm. One year ago, we were merging Patria with Moneda, and I am very excited about the future. I am Pablo Echeverria. I'm the founding partner of Moneda, the Chairman of the company. I'm the Head of Lat Am Equities. And currently, I'm partner and Board member at Patria. Before to go through the presentation, let me tell you about our investment philosophy. We have 5 pillars. One is our only focus is Lat Am equities. Second, we are long-term and fundamental investors. Third, our investment process is reserve driven. We do company by company, bottom up. In that sense, we're agnostic about indexes. And the active share of most of our funds is higher than 50%, and we have some funds that are 70% and 80% active share compared to the index. And finally, we are friendly actives in the companies where we invest. We don't buy stocks, we invest in companies. Let's go through our platform. As a firm, we have a big opportunity to continue growing the business in Lat Am. The addressable market, measured by the free float of the MSCI Lat Am is $650 billion. And currently, we are managing less than 0.5% of that amount. By other side, we have delivered more than 550 basis points of overperformance since inception of the company 28 years ago in 1994. We can be long-term investors because our main clients are institutional and long-term investors like pension funds, life insurance companies, sovereign wealth funds, among others. Our senior investment team has more than 20 years average experience in the business, and most of us have been to weather as a team for more than 10 years. our Pan Lat Am and country-focused strategy, despite the cycles, we have grown the business 19% compounds since 1984 to reach $2.3 billion. This is our currently strategies that we are handling. We do Lat Am and small caps, Lat Am, all caps, Lat Am large caps. We see some interest on Lat Am all-cash ex Brazil. We are running a mandate that is not here. Then we have Chile, small caps Chile large cap and the pipe in Brazil. Despite the very pessimistic atmosphere in the markets over the last 2 years or during this year on what's going on in fixed income and what's going on in global equities, our funds have shown a very, very strong performance. In all caps Lat Am, we are 10% up. In small caps, Chile, we are 29% up during the year. And in large cap Chile, we’re 33% up during the year. We have built a differentiated platform in a competitive space. We have a long-term client base. As I mentioned before, we have a deep bottom up research capability with our own proprietary business with a large team of analysts. We have a constructive expertise in -- at a local level. Examples are our pipe in Brazil and in Pionero in Chile that have been invested in small and mid-cap companies since 1984. In both funds, we nominate board members in major of our investments. Our holding period is very long, over 7 to 8 years. If you look more or less the clients that we have, 80% of our clients have been investing with us for more than 12 years. Currently, 56% of our AUMs are from Latin American clients and 44% of the UMs are from foreign clients abroad the region. Let's talk about -- a little bit about the team. This is our senior team. As I mentioned, more than 20 years, our experience investing in Lat Am. We have a very -- a group of very -- we have a young analyst and unit analysts then senior analysts. There are some analysts that have been working and that have been in the business and analysts that are not common in Latin America for more than 15 years, analyzes the same sectors, et cetera. And you can see here, well, by the way, [indiscernible] is over there. He’s our Lat Am portfolio manager, 20 years' experience. But I would like to highlight here, in every of the strategies that we manage, we have a core portfolio manager or an assistant portfolio manager. This is a strategy to be consistent in delivering returns over the time and keep the knowledge in Moneda and in Patria. We -- now, as I mentioned, 1 year before we integrate both the companies, and we're now we are in an early stage to integrate both TIM Moneda and Patria team. Currently, the research team is run by Camilla, we have 8 analysts that are based in Santiago de Chile and 5 panelists that are lead by [indiscernible] that are based in Brazil. Here is the performance of our strategies. On the left side, we have Pionero in CLP and the compound annual return of the fund have been 13% since inception in 1984. And in that sense, the people that invest in the beginning of the fund have multiplied their money for 33x compared to the MSCI Chile small cap that you have multiplied your money for a little more than 6.4x. If we look at Lat Am equities, we are 51% up since inception compared to the MCI LatAm that is 27% down. This is in [indiscernible] terms. And our pipe in Brazil is 260% up compared to the Bovespa, that is 13% up. And in the bottom of the slide, you can see the overperformance over the time of the different strategies. In returns and in this instance, it's not just to have a good year. You have to show your investors that you can consistently deliver alpha. You can consistently beat the markets and your peers. And here, we did an exercise that shows the rolling -- the 3-year rolling average period over -- since inception of every strategy. And you can see that in the case of Pionero, in 96% of the period, we bet the index. In the case of Lat Am equities, 85% of the period, we overperformed as the benchmark. And in the pipe, in 84% of the period, we overperformed as the benchmark. Let's talk about -- a little bit about the opportunity. Let's go to growth, go to the future. Lat Am is fully underpenetrated in the stock market. You can see it here in this chart, and Luis Fernando mentioned this morning some topics about this. Lat Am represents 12% of the land in the world. 8% of the productive land in the world, Lat Am represents 8% of the population in the world and 12% of the growing middle class around the world. The region is capturing 9% of the FDI in the world. However, if we look at the bottom part of the slide, Lat Am represents 4% of the market capital world, and it is barely 1% of the MSCI equity. I think the huge for Lat Am is quite, quite impressive. And we can see it, that the region, despite all of the political turmoil, et cetera, is in quite good shape. Latin America is going to take advantage of what's going on in commodities. And if you look at the commodity industries, all around the world, there is a big lack of CapEx and in that sense, the supply is going to be very, very tight over the next 10 years. And I'm very sure that prices of commodities are going to be higher than the average of the last 10 years. But it was mentioned in the morning, the low geopolitical risk that the region has. From one side, we have a very strong trade relationships with U.S. and China, and we have been neutral in all of the geopolitical problems around the world. And I think our main very biggest trends in Latin America is our independent central banks. They have done a terrific job running inflation, and they were ahead of the curve on inflation, raising interest rates. I'm quite optimistic that inflation next year is going to reduce. I think that they have done much better than the ECB, that much better than the fed. Let's go -- this is another way to see the opportunity to raise money, a very good entry point for the investors. If you look here in this chart in the left side, Latin America used to trade at 15x earnings since the year 2000. However, now it's trading at below 7x earnings forecast for 2023. And if we compare Lat Am in the right side of the chart against the emerging markets, Lat Am used to trade with 10% premium against the emerging markets and now is trading with 40% discount. The addressable market that I mentioned in the beginning -- sorry. The addressable market that I mentioned in the beginning, is if we take the free float of the asset class in Latin America, it's 650 basis points. Currently, Brazil is around 64% of the free float; Mexico, 27%; and Chile, around 6% of the pre-float. In the right side, in the blue box is the asset class that we are working and playing today. Lat Am -- large cap Lat Am, small caps Lat Am, I mentioned all cap Lat Am and I mentioned all caps Lat Am ex Brazil, we don't have any pipe in Lat Am. And I think with the infrastructure that we have in Patria, I think it's a very addressable product that we can develop. I'm talking about thinking not in next year, probably over the next 3 years. I think there is an opportunity for creating pipes in the region. If we were to Chile, we have large caps and small caps, as I mentioned before. If we go to Brazil, we don't have any -- many products, any product that's focused on large cap or small caps or long bias in Brazil. We have just -- the pipe that is quite small today. In terms of the demand, there is demand from regional. There is regional to global we have developed, sorry, regional products to global and local investors in LatAm. In the case of Chile, local to local and local to global. This is the same case of Brazil. I think there is some opportunities in the near future to develop products in other countries, country-specific products for local investors. And just to finish, the key issue here before all of these goals is to keep performance and is to continue delivering alpha to our clients in a long-term basis. That's the key. Then I think we can continue growing in our current products. We have opportunities to increase our market share, to continue growing in local products to local clients, local products to global clients. I think we have a big challenge that is continue growing around outside Latin America. There are many sovereign wealth funds, pension funds. We have some of them. We are working to bring more of that kind of investor, long-term investor, that fit very well with our investment strategy to bring to our platform. Then develop new products, as I mentioned before, Brazil, I think, is the most obvious in the short term. And then Moneda was -- it had been an institutional shop. And in that sense, most of our relations are direct with the clients because they are institutions. I think it's similar to the history of Patria. Many of the clients of Patria are institutions. And we want to bring our products to new retail investors or family office or multifamily office. And I think in terms of the commercial side, we have a very important goal that is develop the products to being part of global distribution and local distribution platforms. Thank you very much. Josh?

Okay. We're going to take a very quick break. Aim for 10 minutes, and we'll be back to start with our real estate presentation. Thanks, guys. [Break]

Okay. We’re going to resume now with our presentation on real estate. I’d like to welcome Ken Wainer to this stage. Ken’s a founding partner of VBI, which is Patria’s real estate platform in Brazil. Ken?

Thank you, Josh. Good morning. My name is Ken Wainer. I'm a founding partner of VBI Real Estate. VBI is the real estate investment management platform of Patria Group. It's a pleasure to be here at my first PAX Investor Day. We became part of Patria in Q3 of 2022 this year. I'd like to just give you a little bit of background on our real estate investment platform, what we see as our trajectories of growth and how we fit into Patria Group. To start, the Brazilian real estate market, when we look at it just as a proxy for the market, the listed REIT market, it's $28 billion market cap total market, roughly BRL 150 billion. It's a large addressable market. And as we'll explain a little bit later in the presentation, highly fragmented in terms of the number of investment managers. VBI as a platform. We started in 2006. Today, we manage USD 1.4 billion. We have a 16-year track record. Our performance speaks to the success of the platform we built. Looking at 2 of our flagship products, our office REIT and our credit REIT have outperformed their respective indices by 8.8% and 14.2% since inception. At the end of the day, our competitive edge comes from our people and our strong sector specialization. So we're real estate people. We're organized by sector verticals, sector specialization. We began our business as real estate developers at a time when global institutions were interested in building their exposure to Brazilian institutional real estate, where there is a limited amount of institutional real estate available to invest in. So we became developers as a consequence of that. And today, we retain that tooling as a developer, but we have investment programs based in development, based on core and based on real estate credit. As the origin of our firm has been focused on institutional investors, we've built the investment process, risk management and reporting systems required by global sophisticated investors. And that stood us in good stead as we've made a pivot, as you'll see in some of the following slides. We pivoted our business to focus more on local permanent capital. And we stand out from our peer group because of those institutional processes that we developed accommodating sophisticated global investors over the years. Our team today is 50 people. The senior team has roughly 20 years on average of Brazilian real estate investment management experience. And our platform is diversified. So we manage 7 listed REITs listed on the B3. These are permanent capital vehicles, vehicles without redemption provisions. Investors who require or seek, desire liquidity, achieve liquidity through the sale of shares in an organized stock market environment. But we also manage multiple joint ventures as well as private equity real estate drawdown funds. Total AUM of USD 1.4 billion, of which 77% is permanent capital. Let's talk a little bit about the market. We like to use the REIT market as a proxy. Of course, the REIT market is just the tip of the iceberg, but we like to use it as a proxy. Its growth is very relevant to the growth of our platform. Looking out over the past 5 years, the REIT market has grown at a 34% 5-year compound annual growth rate. So today, roughly market capital of BRL 150 billion. Just 5 years ago, it was BRL 50 billion or BRL 45 billion, BRL 50 billion. We see this growth continuing, as we'll show you in a few slides, how underpenetrated the market is relative to, for example, the United States REIT market. Now real estate is very interesting in how it fits into Patria Group as a whole, primarily because it's the first and primary beneficiary of the financial deepening that we're seeing that's been a trend occurring over Latin America for the past decade or more. So real estate tends to be, in particular, listed real estate products, REITs, an entry-level alternative investment product for individuals who are taking capital out of fixed income and looking for other kinds of exposure. And generally, over time, what happens is as they become comfortable with their exposure in the REIT market, they expand their exposure to private equity, infrastructure and other alternative investments. Just look at the number of investors. Over the past 5 years, in 2018, just 5 years ago, there are roughly 200,000 people participating in this market. Today, there are roughly 2 million people participating in this market. So we've seen 10x growth over 5 years in the number of participants in this market. And again, this capital in the local REIT market is permanent capital. So investors who invest, they can achieve liquidity through the sale of shares, not through redemption of shares. So it's truly permanent capital. From an investment manager's point of view, from Patria’s point of view, from VBI's point of view, this is an extremely attractive source of capital because it generates a perpetual management fee revenue stream for us. Now today, the primary focus at the start of the market has been retail investors, and we're seeing a migration slowly for retail investors to institutional investors. As this market picks up scale, we're going to see increasing migration, not just of individuals, but also the large local pensions into the sector. This market is supported by strong tax incentives, so inspired by the U.S. REIT rules, rental income of a Brazilian REIT is not subject to taxation. And today, the dividend distributions made by REITs are also not subject to taxation. So it's a very attractive tax-free product for individual investors. To give a little comparison, I want to point out how much room there is for growth, not only in the size of the REIT market, but also for potential for consolidation for the larger managers that can grow through acquisitions. So let's just look at U.S. versus Brazil. The population of Brazil is roughly 2/3 of the United States. GDP is roughly 7% of the United States. Despite that, there's about double the number of REITs in Brazil as they are in the U.S. despite that the market cap of the Brazilian REIT segment is only about 2% of the U.S. REIT market. And the number of investors in the Brazilian REIT market is 170th of the number of investors in the U.S. REIT market. So when we step back and we look at our market, we see a certainly fragmented and structurally underdeveloped market that's poised for consolidation. As another point of reference, when we think about our growth prospects, the inorganic growth prospects, our ability to grow through either acquiring other managers are taking over their investment vehicles. We see 143 real estate investment management firms, which represent 20% of the REIT market. All of them might have very interesting businesses on a stand-alone basis, but probably aren't very profitable and which fit very nicely into the VBI Patria Group structure. Our culture is a primary driver of our success. We built our business purely as real estate people. We are real state people. Our initial core competencies were in the 5 primary real estate groups. And we started off, as I mentioned, in developers -- as developers. So development was our primary focus as global institutions sought to take access to institutional real estate in Brazil and found there was not a lot of it, so we built it. So we've done more than 40 real estate developments, commercial, industrial and residential since inception in 2006. But not only that, but we've built the business not only in bricks-and-mortar real estate investment, but also in real estate lending. So today, we have exposure to BRL 1.4 billion of real estate credit. We've become vertically integrated real estate lenders from origination, structuring, syndication as appropriate in asset management. We're a process-oriented firm. As I mentioned earlier, our institutional -- our first investor base was primarily pensions foundations, endowments, family offices that had very specific standards and requirements as pertains investment process, risk management and reporting. We retained that standard of care for our investors, and it stood us in very good stead as we began to pivot toward the local market, serving retail investors, individual investors in Brazil, but standing out as a firm that had extraordinary capacity to service that investor, basing to communicate with that investor base and probably most importantly, to educate and to bring that investor base to a level of comfort that they can increase their exposure to the sector. Now of late, our primary focus has been on the REIT market. So primarily, as we started out, our focus was on drawdown funds, 7- to 10-year capital with institutions. We've pivoted, over the past several years, to focus on the burgeoning REIT market. Today, we manage 7 REITs listed in the B3 with roughly BRL 3.3 billion of aggregate market cap, and we continue to grow in that sector. Just talk about when we say we're real estate people, I just want to give a few examples. Here you have photos of the leadership. These are the people who run the investment management verticals of VBI today. Then I'll give you a few examples, just to give an idea what it means when we say we are real estate people. Let's talk about Alexandre. Alexandre runs our Industrial & Logistics vertical. So he's developing warehouses. He's managing LVBI, which is a listed REIT that owns warehouses in Greater Sao Paulo. Alexandre has 21 years of experience, but he started his career -- 12 years of VBI. When he started his career, he was one of the first research analysts at Richard Ellis in Sao Paulo, going around Greater Sao Paulo, Greater Rio, knocking on doors, looking at warehouses, trying to figure out who the tenants are, how much occupancy there is measuring floors and creating the first database of, well, what’s this market look like? What's the total supply of Class A industrial logistics real estate? Who are the tenants? What's the occupancy rate? What's the supply? And he continued now. He joined VBI 12 years ago. He runs our development effort. He runs our asset management effort. He runs the external property management efforts. He's exclusively focused on industrial and logistics real estate. Just to give you another example, Rodrigo, my founding partner, we founded VBI together. Rodrigo started at Richard Ellis 27 years ago, very similar story. Around the time when he graduated from university, there was the rail plan. And what we saw was a tremendous interest in multinational companies to add to their headcount in Sao Paulo and Rio elsewhere in Brazil. So they were coming to Brazil, but they didn't have the office space with the specifications that they required elsewhere. So one of our Rodrigo’s first tasks when he joined Richard Ellis 20-something years ago was to go to Chicago, London and New York and just have a look and try to understand what top quality leading-edge office buildings look like and to come back to Brazil so that he could advise, with a Richard Ellis business card, advise local developers on exactly how they can develop their developments to attend to this new demand for global multinationals looking to increase their headcount in Brazil. Certainly, the culture of VBI expresses itself best in returns. So I'll give you an example of 3 of our flagship products. First is our industrial and logistics REIT. This is listed in the B3, BRL 1.3 billion market cap. Since inception, it has outperformed the overall [indiscernible] REIT index by roughly 10%, generating 40% total return versus 31% for the index. Over the past 12 and 24 months, it's also outperformed its respective index. Our office REIT, which is called PVBI, also listed in the B3, has roughly BRL 1 billion market cap, roughly at the index over the past -- since inception, but has outperformed 15.5% versus 11.8% for the index over the past 12 months and 12% versus 8% over the past 24 months. Our credit REIT, were also roughly BRL 1 billion in market cap, has outperformed the IFIX Index performing at 28% total return since inception versus 14% for the overall index. So we believe that certainly, our returns are critical, but our returns reflect a process, a culture, ad attitude and a team of excellence. Now a big priority for VBI and I think Patria Group as well as to make the increasing migration to permanent capital. And we can see that VBI has made a pivot over the past 5 years in 2017. Really, all of our capital came from global institutions and drawdown funds, roughly 7 to 10-year money. We have grown, as our AUM grew from BRL 1.9 billion to BRL 6.2 billion roughly today. We went from 0% permanent capital to 77% permanent capital. And of that 77% permanent capital, roughly 70% comes from Brazilian individuals that are accessed through wealth managers or specific specialized distribution channels and roughly 30% comes from local pensions and institutions and funds of funds that also provide permanent capital for this sector. So we see the permanent capital is an extremely attractive source of revenues. It generates a perpetual revenue stream for VBI. And again, this is truly permanent capital. There's no redemption provisions or any other ability for an investor to achieve liquidity other than by selling shares in the secondary market. And of course, we're seeing increasing liquidity in the secondary market, which is what gives comfort for investors to allocate to a product where the only way they can generate liquidity is by selling in the stock exchange. Our path to growth has 3 pillars. And number one, certainly, is to enhance the critical mass in our core real estate products, specifically through follow-on offerings of our office, logistics, retail and credit REITs, so that basically entails accessing local individual capital through wealth managers and through distributors through follow-on offerings of those vehicles. And that's the primary organic path to growth. Secondly, we've been pioneers in real estate sectors that exhibit secular growth trends that are present in Brazil. And a very good example. We were a pioneer in the purpose-built student housing sector. So that's a sector where over the past 5 years, there have been $10 billion, $15 billion of global capital invested in the space. Brazil has the fourth largest university student population on the globe, but universities don't provide housing and there was no purpose-built student accommodation player. So we used their knowledge as a global firm, as a firm of the global view to understand that this was a sector with potential that we could see in other markets in North America, particularly Europe and the U.K. And we've partnered with a local operator that understood that view, and we're now the largest player in the purpose-built student accommodation sector. So that's an example of how we can grow, not just through the primary real estate groups, but by being innovators and understanding unmet demand for the Brazilian context. And then thirdly, as I pointed out earlier, we see an opportunity in inorganic growth, meaning to acquire either other managers or acquire their management contracts. So this sector is very fragmented. There's roughly double the number of REITs as there are in Brazil, as there are in the United States, despite a much smaller market capitalization. There's 143 real estate investment managers that manage 20% of the entire market. And many of those businesses are not extraordinarily viable on their own, but could make a lot of sense inside the structure of VBI Patria. So we have an intention and a systematic process to work with Patria to identify targets to filter through those targets and to work through a process of acquiring other managers to increase our assets under management. So today, real estate is roughly 5% of Patria’s total assets under management. We see a tremendous room to grow this AUM and to grow as a percentage of total Patria AUM and we're very excited about this opportunity to work with Patria to realize this. We think we're a much stronger firm together with Patria. We have much more market power. We have access -- better access to investors. We have much -- we're much more relevant and interesting to the distribution channels that bring us that individual and institutional local permanent capital. And that's why we made the decision in Q3 of last year to join Patria Group. Thank you very much. I'd like to now introduce Jose Teixeira, who is going to speak -- introduce the team and speak about our local distribution strategy.

Thank you very much, Ken, and thank you all of you for being here today and joining us for our first PAX Day. My name is Jose Teixeira. I'm a partner in the firm and have been here for nearly 20 years. As a matter of fact, today, exactly today, it's been 19 years since my good friend, Ricardo Scavazza, called me to invite me to join Patria. So yes, it's a coincidence today, Alex, the 19 years of Patria exactly today. Good to be here celebrating with all of you this moment personally for me as well as for PAX. So I'm after this tour de force with Ken talking about real estate and then such experienced partners as Pablo, Fernando and of course, Alexandre and Ricardo talking about our investment capabilities. I think it's well established that our investment capabilities, they do represent a core, a key strength of our Patria Investments platform. And there's certainly the big draw, right, so that investors globally and locally are attracted to invest with us. But now for the next 15 minutes or so, I want to, together with my partners, talk a little bit about how distribution and fundraising capabilities of Patria can also be a key driver of value for the firm. And so no, let me get that. To start with, I'll start with something familiar. This is something that those of you who were present and following our story during our IPO certainly have seen. I don't know if you remember, but you certainly have seen. Over the past 15 years, we've been able to raise $13 billion organically from investors, which is for a humble Brazilian Latin American company, something that we think is expressive. But maybe you do remember the $13 billion. What I think is interesting to point out about this slide is just how we've been upping the game, vintage after vintage after vintage, again, organically to the point that over the past vintage, we raised $5.8 billion from originally $600 million. What is not in this page, and I do think it's interesting to bring forth and I think it's even more interesting from a perspective standpoint, is that as we were establishing different offices throughout the world, we managed to firm up our distribution capabilities in such a way that from raising certainly more than 90% of capital with placement agents back in 2007, 2008, by the last vintage, which was our largest vintage so far, we were raising capital for up to or over 95% directly. So this ability to raise a lot of capital directly came on the back, obviously, as I said, we were opening offices throughout the globe. And today, we have 9 fundraising offices. And very much in the Patria way, as we develop these offices, we hired a team, we've promoted people internally. Andre has started, I think, as an intern as well at Patria. I started nearly as an intern. We built a team to [indiscernible] today, I think a significant large team with 58 professionals spread out through all these offices around the world. And what this 58 professionals team allows us to do is to be very close to the clients and to be very intense in the way that we cover our clients. That allows us to -- that gives us this chance to be really close to clients, the complex client institutions that we can assess at different levels of their respective organizations. And we can do so not only with intensity, but also with a lot of seniority. A lot of us have been here. I think the average is more than 15. It's certainly, Andre, 20 plus. I'm nearly 20. So -- and our Moneda friends as well have been there for a long time. So with this combination of intensity and experience, we can actually -- believe it can actually deliver on what Alex was talking about, about like this 3-pronged, 3-vector growth strategy. I think we're -- we've become very, very close to global institutional clients. And I think [indiscernible] will explain more about that. And by pleasing them, not only with the great returns that certainly our investment strategies provide, but also providing great service, being close to them, becoming thought partners to them, we keep them happy. We gain in reputation. That allows us to also invite our local allies, our local friends that start to look into alternatives. And when they start look into alternatives, where they go to? Well, they go to those investors through the asset manager that is very local, that is very close to entrepreneurs. And then that's who they want to do business with. And Daniel Sorrentino’s going to talk about how we attract Lat Am capital to invest in our own investments, in our own Lat Am products. And finally, as I think our friends from Chile have been able to do, particularly, as these local clients trust us even more as they see the results of their investments, as we become thought partners to them as we are to global investors, they start to trust us also when they look abroad or offshore or internationally to the Northern Hemisphere for global products as well. So to talk a little bit about all of these different paths to growth that we have, the different ways that we can pursue to achieve our ambition of $50 billion in AUM, we'll start out with prong #1 of our strategy, and I invite Andre Penalva to comment on that.

Thank you very much, Jose. I'm Andrew Ponalva, I'm one of the managing partners of the firm. I'm responsible for the global institutional distribution channel of the firm. I've been with the firm for the last 29 years. [indiscernible] that you know, right, used to say, and I agree with that, that we’re fully depreciated right now, which is a fact. 30 years will depreciate you. And in the last 17, I've been running exactly the development of this channel that you see here, which brought us so far. And actually, it's a pretty big asset of ours to have the relationship, the kind of relationship that we built with all these investors. Now the message that you're going to hear from me that I would like you to retain is exactly the fact that we, at the end of the day, with all of this effort that we put together, you heard it time and again in this presentation, which is we came a long way, but the future really looks right ahead. And I'm going to show you evidence of that. I'm going to use some metrics that are familiar to you. They may sound and look familiar to you because they were used in our IPO. So the first one is the penetration that we have in the market. If you look on the left-hand side, you can see the way that we look at it. This is one of the most -- I think, the best ways to look into it, which is our penetration into the top 100 global LPs. 55% of the capital that's allocated today to alternatives, it's coming from that group. And in terms of our penetration, if you look at it, we're cycle-after-cycle, growing our penetration from 3 to 13 to 20 names. So we're very proud, very happy with the efforts so far. But it really underscores the fact that we still have 80% of that list for us to work on. So it's great that we have that list because it shows the potential that we have in terms of development. But not only that, if you look at the other trend that's at the bottom, maybe you guys in the back, I'm not going to be able to see it. But at the very bottom, you have the average ticket size that investors put to work with us, growing steadily cycle after cycle, 33 way back in the beginning of our path here to 113, to 150. So growing healthily. So this is a trend that's happening in the market, and we piggyback on that, which is more exposure to alternatives, which is what investors really want to have. The other point that we explored with you in the IPO was exactly the type of investors that are with us. So if you look at the top 20 LPs that invest with Patria, you have $8 trillion of assets under management in total, so average of $400 billion. So we're talking about large influential sophisticated LPs that are with us, and they're part of a group that have an addressable market, so the total addressable market of institutional capital is $14 trillion. This is the market that we've been exploring so far, which grows a very healthy 22% per year. So large industry, grows a lot, and we've been able to penetrate that. As you can see here, 8 out of the 10 largest sovereign wealth funds are with us. Half of the 20 largest pension plans in the globe are with us, and half of the 10 largest in this country here are with us as well. So once again, highlighting that came a long way, lots for us to do, lots of opportunities. And one of the most interesting opportunities, Alex mentioned in the beginning of the presentation, is exactly the fact that we're developing a new channel, which is on the private wealth and family office side with a size that is equivalent to the size of the channel that we already explore, and it grows at even steeper rates. So another big market, another market that grows really, really well. So we're exploring these 2 and very happy with that. So talking about penetration of the markets, talking about increasing share of wallet. And when you look at it, Alex mentioned at the beginning of this presentation as well that these investors that you're looking at, they change over time. And exactly they did not only in the last years, 5 years or so, but even more so from our IPO into today. So one of the points is really how do we serve them. And in the past, what used to be is flagship strategies, primary investments in flagship strategies. Now this evolved in 2 trends, 2 big trends came along, which one is they want more products. They definitely want different ways to relate to us through not only primary commitments, which are -- continue to be important but also through SMAs, co-investments, continuation funds. We have active conversations on all of those. We've been able to actually craft SMAs with North American, Asian sovereign wealth funds, Middle Easterners as well on the credit side, on the infrastructure side. So we're very happy that not only on the primary side but on the other product side, we've been able to do that because we are the ones in Latin America that can fulfill this demand of different products. And obviously, our size as well. Our size matters because of the fact that these investors want to work $500 million or more, and we are the ones with the size to fulfill that demand from investors. And through that demand, what they really want to do is concentrate relationships. They don't want to have 5 relationships. They don't want to have 4 or 3 relationships. They want to have somebody in the region that sorts it out for them. And we're the ones exactly doing that with the capacity, not only in terms of size, but in terms of the technical capabilities. You saw on my partners here talking about the investment capabilities that we have. We are the go-to manager in the region to do that. So all in all, happy with the path so far that we trailed but really a lot of opportunities ahead of us that we want to explore. Now I'd like to hand over to the partner, Daniel Sorrentino.

Thanks, Andre. Good morning, everyone. I'm Daniel Sorrentino, one of the partners of the firm, joined the firm 20 years ago, 18 years working on the private team. Over the last 2 years, I've been responsible for leading the local strategy for Brazil. And I'll give you some highlights on what we're seeing on the market in Brazil and also in Chile. So Brazil is a sizable market with BRL 2.8 billion in total size, which represents about over USD 500 billion. It's a market that has been posting solid growth rates at 10% per annum, but still very low in terms of penetration rates. You can see here that we are averaging 4% that is very low compared to developed economies. If you look into the institutional investors, still very low 1%, and that represents a great growth opportunity for us, and we're still in the beginning of this process. In terms of the concentration of the market, you can see here that the market is concentrated into 10 basically large names. And it means for us that basically to assess the market, we have to dominate those 10 relationships. And that has been our focus since the last 2 years when I joined this effort in Patria. And how are we structured and what we are doing there? This is our client team. We have to put together, which is probably the largest and the best team in the region. We total about 15 people within the clients team. And we, of course, have the traditional kind coverage and a client service, servicing been really relevant to what we do in Brazil given the relationship that we have with those top 10 large names. But also we have put some together something that is very unique for the Brazilian market, what is the marketing and the products team. Both of these teams are supporting what we are doing on the client front, strengthening the relationship, developing new products, and that has been really key to to our growth strategy. I think that's also great to mention on the product side. I think it's not only about the flagship products. And I think the new products that we talked a lot today represents a great portion of what we have been raising over this last year. This year, we are raising about 55% of everything that we raised in Brazil for new products, which is great for us when we think about the growth perspectives of Patria in local markets. And also important to highlight the 20% number, which is the amount of capital that we've raised through permanent vehicle strategies, especially on the core assets, funds, real estate and infrastructure. The local market in Brazil posted a significant growth for us this year. We tripled the size of our local market from BRL 5.7 billion to BRL 16 billion, and we see a great opportunity for us to keep on growing this strategy, this platform, and we see that we can triple the size within the next 3 years. So that represents a great opportunity for Patria looking ahead. And Brazil is not only what we have. We still have Moneda in the Chilean market. It's very interesting that we -- through the partnership we assessed what for us is the second largest market in the region. So the Chilean market represents USD 200 billion in total size, which is approximately 40% of what we have in Brazil. Even though the GDP of the Chilean market is 20% of Brazil, the market is more developed, more sophisticated than Brazil, and it still presents a great opportunity for us. Again, the market has been growing at a solid growth rate of 9%. The penetration rate is still very low, very well compared to Brazil, 5%. And Moneda has been the #1 player within the industry, right? So Moneda is the largest, the most well known and it's 2x larger what we have in Brazil. So Moneda is really well positioned within the market, and you can see here in the clients' base, right? They basically assess 100% of the pension funds, 73% of the family offices, 1/3 of the life insurance companies. So basically, Moneda have access to the whole market with this #1 position. And here, on the client side, I think they have a great team as well with over 26 professionals working to sustain that relationship with our clients, and that has been playing a great example of what we can do in local markets. In terms of the products, we already highlighted that, but they are #1 in terms of market share on the Chilean equities market, LatAm credit and the Chilean credit. And it's also interesting to highlight what Jose and Alex mentioned earlier today that we have been able to assess Chilean investors and offer them an alternative to invest in global alternative strategies. And today, basically 20% of what we manage in Moneda, this 1.7 billion that you can see in the bottom of this page is dedicated to invest in global alternative space. So with that, I conclude and I call back to Jose for his final remarks. Thanks very much.

Thanks, Daniel. Yes. So I think all good points from Daniel and from Andre as well, I think this last point is quite interesting, right? We have already gearing towards 2 billion raised with Chilean clients investing in global products, so that's incredible. That opens up a whole avenue of growth for us throughout Latin America. Certainly, in Brazil, we haven't even started to scratch the surface on vector #3 here that you see on the page. But I think the overall message, as Andre and Daniel walked through these 3 prongs here basically is 1 of risk mitigation, right? However you look at it, from Andre's point, you can certainly see that the 20 very large top 20 institutional investors that are super representative, they have a great reputation, how they can provide us with a great growth opportunity. They can certainly increase their tickets by quite a bit. Their reputation will continue to help us do what we have done and I showed the graph, right, to penetrate more on that top 100 global investors league, so we can grow that as well, and we can enter new channels. We talked about the wealthy individuals globally. So if you start adding these opportunities up certainly, we have more there than what we need to achieve our $50 billion ambition. Just looking at that the international vector here, vector number one. Then from Daniel's point, you can see that our experience in Brazil and Chile, although different, they're both very, very valuable, very complementary as well. I think in Brazil, again, our short-term goal or medium-term goal, depending on your time horizons here in 3 years to triple after having tripled year-over-year, '22 over '21, I think it's certainly something that we think is achievable. And again, that plan might include even sort of the third prong here, which is raising local capital in Brazil to invest abroad. I think from these 2 experiences though in LatAm with local clients with Chile and Brazil, we certainly garnered from that a lot of confidence that we can replicate that model in other countries as well. So as we step into Colombia, Mexico and other such countries, we are very confident that we can replicate the model or that we can create a new model from a synthesis of some of the lessons that we have from Brazil and Chile. To wrap up, I think the message is one of both the risk mitigation and confidence. I think those things come together. We approach our investments in a lot of ways. They're risky investments, and we do a lot of things to mitigate risk and private equity and infrastructure that's in our DNA. So here as well, we try to provide you with all that -- with that view, right? To get to $50 billion, which is our ambition, it's very possible. When you add all these opportunities that we showed here in terms of a client's distribution, we certainly could add up to much more than $50 billion but that's how we are. We'll open up these opportunities and then try to execute on as many as we can with discipline to get to our targets. And because we've mitigated so much of the risk and because we have such great products and such strong investment teams and fundraising capabilities, the final message is one of confidence. We're very confident that we can get to that $50 billion in 3 years' time. And I'm more sure also that, that will create a lot of value for all of you as shareholders and investors of PAX. And so with that said, I'll invite Ana dos Santos to speak here about a theme that will be sort of the underlying power behind our investment teams and our distribution teams, which is the power of our culture and of our people, about which she can speak very properly. Ana, please.

Hi, everyone. I'm Ana Santos, Head of HR and Partner at Patria. I'm really excited to be here with you to tell you a very successful human capital story, which has been built over the years. You just heard so great achievements from my colleagues and may wonder how it was all possible. Well, it was all possible because over the years, we have assembled the best team in LatAm. We have the very best professionals in private equity, infrastructure, credit, equities and distribution. Let me show you how. [Presentation]

It all starts by building from within. 1/3 of our partners join us as intern. As Jose just said, some of them are here, Daniel, Penalva, Cavaza, that's very impressive, but also very inspiring to our young talent. We have award-winning internship program called Patria Academy. While the success in the numbers talk by themselves, I'd like to highlight the great female attractiveness from young talent in the market. And of course, we do hire the majority of them. We also have been able to attract experienced professionals as well. As market leaders, we have been able to attract senior talent. For example, in the last 2 years, we have hired 8 managing directors, 50% of them female. We do have a seasoned team of experts, functional experts as well as vertical experts. We make sure we have the right talent to run our portfolio companies by hiring our C-level. And of course, when needed, we bring in new expertise. Since the IPO, we brought in new experts and skill sets in credit, real estate, equities and most recently, in venture capital. Since we bring our talent, most of our talent as a young age, we help them grow. We have 4 career paths. We have the investment career paths, commercial career path, corporate career path as well as portfolio management career paths. We offer a robust learning platform with over 15 technical courses from the most recognizable institutions. Each young investment professional has to complete over 50 hours of technical training per year, which is a lot. Then we take our own cases and teasers and transform into business cases for people to learn and grow. We are very actively in knowledge management. Then we manage performance, right? Performance is key for our business. We value the high performers. We make sure we recognize, reward, compensate and stand out our top performers. Our top performance can make top decile compensation package within the industry. That's very robust. Our senior leader package is aligned with our long-term results. And of course, the name of the game for our investment team is a great chunk of performance fee. But at the end of the day, we are all human beings, right? We work so hard in communicating, celebrating, engaging and respecting each individual to create a strong sense of belonging great team spirit to touch people's heart according to our values. Future. We are always looking to our future as you have -- may have noticed. We've been working very hard on succession planning for a long time. We take it very seriously, and we have fully demonstrated it. For example, our CEO here is the third generation of CEO. Our business units heads are long-standing Patria professionals. We continue to make new partners every year. And we do have a robust assessment program in place. Every year, we fit in who is going to be the next generation of leaders. We continue to evolve as an institution. Since the IPO, we brought in corporate leaders in key areas, again, like to highlight great female representation. And those professionals has evolved us as systems, process and practice. Therefore, we fully believe we are prepared to grow and expand our business in a successful manner. We have the right people, the right competencies and skill sets and the culture to do it. We are a people business. Thank you very much.

I'd like to welcome a host to the stage.

Hello, everyone. I'm Marco D'Ippolito. As many of you know, after serving in the CFO and COO since 2016, we've announced my transition to focus on the growth of the firm as Chief Corporate Development Officer starting in 2023.

Hi, everyone. I'm Ana Russo. Actually, 2 month in the company in transitional -- transition with Marco, and that's the reason you're going to see both of us today.

Over the last few hours, we've heard Alex talk about our strategy, our positioning at the firm level, and you also heard our leaders talking about their strategies, the addressable market and the compelling opportunities of their businesses. So now Anna and I will give you an overview of how does that translate into numbers. Our business model is powerful. It's driven by fee-related earnings, which is highly predictable, stable and based on sticky and long-term fee-related earnings. This fee-related earnings spans across 6 vertical strategies in a variety of permanent capital, drawdown funds and open and perpetual funds. This capital is trusted to us by different type of investors from different geographies, ranging from local and global institutionals to local individuals. What makes me even more enthusiastic about the model is that FRE is consistently growing not only by our internal efforts, but also by powerful secular trends with investors increasing their allocation to alternatives. Definitely, a good industry to be exposed. We operate with an FRE margin of over 55%, which compares very well within the sector. Our management fee revenue is not only diverse but also highly insulated from currency fluctuations. Our model also allows shareholders to share the success through performance fee. Given the strong performance fee of our funds, we currently accrue $428 million, which equates to $3 per share. Together, these 2 streams account for distributable earnings, which we pay out an attractive 85% to shareholders each quarter. At our recent share price, the predictable FRE portion of our D alone would generate an annualized yield of 5% based on the most recent quarters. This is a very attractive baseline compared to the peer group. On top of that, the potential for performance fee has a tremendous upside over the course of the fund for the next cycles.

Our management fee revenues are not only predictable but also very resilient. Our quarterly fee-related earnings has consistently been progressing even as equity market in the U.S. and Brazil show significant volatility. You could replace the stock index as 8500 [indiscernible] with any economic measures like currency interest rate, but the point would be the same. The range of products and geographies in our platform give us many vectors for growth, and we believe that diversification and stickiness of capital would allow us to scale FRE in a steady and consistent manner. While our business is obviously not immune to any market condition, our earnings structure is built to remain stable during short-term market volatility and deliver value to shareholders through silos. What matters over the long term is our ability to deliver great investment performance of our client, which in turn allows us to raise larger sums of capital to scale our platform.

We've done a lot since our IPO about 2 years ago. We not only increased our AUM by 84%, but most importantly, we became a better company. We expanded our existing funds with strong support to our investors. We added new product verticals like credit, public equities and real estate. And with that, we expanded our offering to over 30 products. We brought new geographies, new clients and new distribution capabilities, and we increased our permanent capital base. As we march forward, in building the most comprehensive alternative asset management platform in the region, I feel great about our path, both to grow this, both organic and inorganic, and most importantly, I can see -- I can say with confidence that we continue to do exactly what we conveyed to you at IPO.

So let's look into the financial performance, like Alex mentioned in the beginning. Our earnings have grown significantly since the IPO as a result of our platform expansion mentioned by Marco, but also with M&As. In numbers, our fee earnings AUM has grown to approximately $19 billion or about 2.4x. With the driving fee revenues at a similar level, we expect 2022 FRE to be roughly 2.3x what we earn in 2020. Our investment performance -- our expectation to reach FRE of $130 million this year, it represents 50% increase versus last year includes a steady and a strong margin of between 55% and 60% and the crystallization of our incentive fee, which is all consistent with the guidance we gave to you throughout this year. Our investment performance has driven solid growth on the performance fee accrual, which should be indicative of the value of the future realization as we diverse our portfolio. Our net accrued performance fee of $428 million at the third quarter is up 55% pre-IPO level. And keep in mind that we already realized $58 million in 2021. And if we add up this back to the current performance accrual we are actually more on the 75%. From the distributing earnings perspective, we have generated $1.66 per share over the first 7 quarters of the IPO, which -- with our 85% payout ratio, translating to $1.41 dividend to the shareholders.

We're proud of our execution since we stood here at NASDAQ about 2 years ago, and we believe we demonstrated our ability to deliver on our targets. So that being said, where do we think the future takes us? Let's take a look. Our ambition is to reach $50 billion of total AUM by end of '25. You've seen today the compelling opportunity that is set to each of the verticals as well as some ideas of new products that can drive this growth. Across all business verticals, we believe we can identify large and growing addressable markets, often underpenetrated, which can accommodate multibillion dollars of AUM. This AUM is expected to come through a combination of scaling our existing products, new products and expanding our distribution capabilities. While organic growth is our predominant drivers, we do expect M&A to contribute to this growth, and our program remains focused on exactly what we told you, acquiring products, distribution and geographical competence, all connected with the strategy described today. The $50 billion aspiration in total AUM reflects a headline metric. But as everyone in this room knows, it is really fee earnings AUM and fee-related earnings that really drives the shareholders' value. In our outlook, we believe the $50 billion platform translates to $35 billion of fee earnings AUM and about $200 million to $225 million in fee-related earnings for '25. So let's go a little deeper on that. Starting with capital formation. We're targeting to add $20 billion of total capital inflows from '22 through '25. This is a combination of organic fundraising and M&A. Note that we included '22 in aggregation as it helps to reflect the full fundraising cycle for our flagship funds. Through the third quarter of 2022, we added about $3.8 billion, of which about $1 billion came from M&A. Permanent capital is comprised of nonredeemable, publicly traded real estate and infrastructure core products. And we see this as a significant opportunity for organic and inorganic growth, especially in local markets. The drawdown funds include our flagship private equity and infrastructure products, along with some new complementary products, some of which you heard here today. As a reminder, we indicated in our recent earnings call that we expect to raise between $6 billion and $7 billion of drawdown funds in -- by 2023, which represents a bulk of this estimate. The amount for open and perpetual strategies reflect the target inflow of products that is consistent with our recent quarters and can fund raise on a continuous basis. This includes the strategies like high yield and public equities.

So how does that translate into fee earning AUM growth? While precision looking to the next 3 years is not practical, we do think it's reasonable to offer some range of what we think the platform would trend. As you saw earlier, our fee earnings AUM of nearly $19 billion has diversified significantly since the IPO with the addition of credit and public active verticals. $35 billion of fee earning AUM of 2025 would represent more than 20% annualized growth. And as you can see, we expect the trend of diversification to continue, in particular, in the real estate. It is a clear area of opportunity where we think our platform remains subscale today and can give us an even better quality of the fee earnings AUM. Along that same theme, but now with the type of product, we believe permanent capital strategies will become more relevant and could represent approximately between 15% to 25% of fee earners AUM by 2025 in strengthening our framework.

Okay. As we look forward to '25, let's first take a moment to zoom in the next year. Given the structural predictability of our fee-related earnings, the paying AUM, our current positioning already gives us a lot of visibility for 2023. We expect to grow FRE by approximately 15% in '23, resulting in about $150 million while maintaining margins at 55% to 60%. Keep in mind that for our drawdown funds, fee earnings AUM generally increases as we deploy capital and a reasonable annual run rate for deployment is about $1.5 billion to $2 billion. Of course, this figure is also offset by any type of realizations or fee step downs or contractual aspirations. In addition to that, we have our permanent capital strategies that are driven by core infrastructure and real estate, where we see an opportunity to grow both organically and inorganically. We also feel strong about the continued success of the fundraising for the open and perpetual strategies that have demonstrated a consistent performance relative to the benchmark and where the fees are mostly based on NAV with the ability to raise capital on a more continuous basis. And finally, remember, we have the ability to add fee earnings AUM through M&A, which we will continue to pursue. As an example, just last week, we announced the acquisition of IgA Ventures, which is purely additive to our FRE. We expect to provide you with further details in the next quarter. As we look forward ahead to 2025, we indicated that we expect to grow the fee earnings AUM to around $35 billion. This will drive management fees and FRE to an annualized growth of between 15% and 20%, resulting in a range between $200 million to $225 million by 2025 keeping a similar margin. As you heard from Ana, we expect the fee earnings AUM mix to reflect the positive shift toward increasing permanent capital. This means, of course, an even higher quality of fee earnings AUM driving FRE. One outcome of that trend is that we also expect a slight reduction in the effective management fee rate, given the profile of the products. And that's explained why the implied growth rate in fee earnings AUM will be higher than the implied growth rate in the fee-related earnings. This FRE growth is very achievable, but of course, require us to execute on the different phases of the business as we succeed on: one, reaching the $20 billion in total capital formation organically and inorganically, following a similar pace with 2022; two, we deploy a large portion of the drawdown funds that are being raised in '22 and '23 at the same pace that we have been deploying; and three, we continue to perform -- outperform the same level on our permanent and perpetual funds with the fee-based NAV, the path to achieve the target fee earnings AUM looks very good. Given all we've shown today, we feel very confident we can deliver on those targets.

Our net accrued performance fees of $428 million increased 55% since the IPO, reflecting continued strong performance of our flagship private and infrastructure funds. We've always said that performance fee is hard to predict due to the exit time -- uncertainty of the time. But for that reason, I won't give you any guidance on any particular single year. It is, however, more reasonable to think about performance fee capacity over the cycle. And right now, we have 2014 and '15 vintage funds, private equity infrastructure [ 3 ] generating excellent performance and prime for the investment cycle. P5 and IPI had $363 million based on third quarter marks. That represent more than 80% on the current overall net accrual of $428 million. These 2 funds are mature. Their portfolio components have largely executed their business plan, and we're actively engaging divestment process for a number of portfolio companies. Recently, we've seen an announcement to take labor public and P5, creating a better liquidity profile. And just last week, we saw the partial exit on intrayear to global platform in the infra 3 like Andre mentioned. These first few in the funds are key steps to returning and reaching performance fee waterfall portal so that we can begin realizing the accrual. While revenue stream may be more episodic in nature compared to the FRE, our progress should keep investors excited about the nearly $3 per share represented by our current accrual, and the $363 million especially on these 2 funds, which is high potential for realization in the next 3 years.

I guess this is the most exciting phase. Putting it all together, we believe Patria is positioned to deliver a very strong earnings per share between 20 and 22, Patria will have delivered between $2.25 and and $2.50 per share, depending on the fourth quarter of 2022. Looking over the next 3 years, we believe that we are positioned to roughly double that amount to shareholders, generating somewhere in the range between $4.50 and $5 per share in aggregate. What you see here on the page is the buildup of the midpoint of the range. On fee-related earnings, we indicate a target of between $200 million and $225 million in 2025. And with steady growth to that level, this earnings stream could deliver about $3.25 per share over the next 3 years. On performance fee, we indicated about $360 million of current net accrual that are much in mature funds as Ana mentioned with a potential realization in the next 3 years. Our range here reflects the realization of between 50% and 80% of that amount, which at the midpoint would indicate $1.50 per share over the next 3 years. As we achieve that outcome, our earnings per share for shareholders over the next 3 years compared to the prior 3 years, in our view, are a tremendous value for you today. With that, I conclude and turn it over to Alex for the closing remarks.

Okay. Thank you very much for your patience to actually follow through with us for the whole morning. Of course, we're very excited to have you, and it's an honor for us to have you guys here. I'm just concluding here in my last slide, and then we go for the Q&A session and then lunch and then the game. So hopefully, you're going to continue enjoying the day with us. But as mentioned, I think throughout the day and as I started my presentation earlier today, we're all about people. I think you saw how much work we've been doing in order to attract, to retain, to engage the best talent. I truly believe, and hopefully, you guys had the same conclusion that I have that we have the best of the best talents, and that's what's going to make us succeed in the future. Now the best talents produce the best returns, the best relationships and the strongest relationships with our clients produced the best fundraising efforts. And the best talent on the corporate side produce the best process and the best compliance. And of course, together, be it investments, be it portfolio management, be it the commercial sales, be it the corporate areas, the 4 career path, we deliver amazing returns and very, very good prospects, and I feel very comfortable that we will continue delivering. Well, there's a tremendous opportunity here. I hope that you have also concluded that throughout this morning here. Private markets throughout the world is expected to threefold over this decade, and they're still very underallocated to Latin America. Latin America looks very attractive against the global backdrop and even more so if you consider the financial deepening underway in the region. And our investment strategies have large addressable markets, and they are producing amazing returns. We have the best second to none returns. Again, the best second to none investment teams. And that's going to -- with that, we will continue to prosper fundraising and growing. We are uniquely positioned to seize this opportunity. We are the gateway for alternatives in Latin America, be it for global institutional clients, global wealthy individuals, also local to local, from local institutional clients, getting into the asset class, as Ken actually pointed out today in his real estate presentation, real estate is an entry-level product. And investor will then scale up to whether more sophisticated products. Now we will hold his hand as we do the whole scaling up from less to more sophisticated, more illiquid products. So we have to be a one-stop shop platform. That's where we want to offer several products, different countries, different asset classes, to be the investor of choice, the partner of choice, the knowledge partner for global and local investors. And we are now positioned as a market leader and being a public company also gives us an edge to attract, to retain talent and to use it as a currency for our acquisitions. So we are uniquely positioned really to deliver. You saw the numbers, extremely exciting. I feel very comfortable that we can achieve the $225 million of fee-related earnings by 2025. I gave you guys the guidance that we're going to deliver next year, $150 million of fee-related earnings, and we delivered on the guidance in '21, the year that we went out as a public company. We are delivering the guidance in '22. Believe me, we will deliver the guidance on '23 onwards up to '25. we also have a stack of very good performance fees. And out of the $428 million, $363 million coming from mature funds, funds which we are already divesting from several companies. We have the 2 funds, mainly the infrastructure fee, very close to its performance, now where we deliver back to investors, the principal, the hurdle and we have full catch up. As you know, the jargon in the industry here comes to us the same way that it worked with Private Equity Fund III in 2021. We just divested from a tow roll for Fund III and we are divesting from other companies from that fund as we are from private Eqity Fund V. So throughout the next quarters, I think you're going to listen very good news coming from that front. And even if we subtract a substantial amount of those fees, Marco explained 50% to 80% chance of realizing the $363 million, that's $1.50 per share. So we go from $428 million to $363 million of the mature funds and still apply a discount on that and we got $1.50 per share over the next 3 years, summing to the equivalent of 3.25 per share is the $4.75 that Marco showed you, which is 2x larger than what we have delivered over the 2022 period, okay? Very, very excited with all that and really very comfortable we can deliver because of the team. Team is #1, #2, #3 reason. Thank you very much for your support, and thank you for all of the efforts that was made here today by the organizers of this event, our marketing team, Josh and his team, Andre Medina there all the way on the back, that's worked so hard to prepare all these presentations for you guys. I hope that you enjoyed it. And thank you, Nasdaq as well for providing this amazing venue for us. And hopefully, you will enjoy then the Q&A session headed by Josh. We're available for you guys and then lunch right afterwards. Should we go for lunch first? Or should we go the graph come back. Okay. So I think we should grab lunch and come back here for the Q&A.

Okay, we are going to quickly grab lunch next door. -- should be ready for you, come back in for Q&A. We'll have 30 to 45 minutes for a good Q&A session. Again, if you're on the webcast, we'll take a short break here. Please feel free to continue to send in your questions to the webcast and we'll try to take some of those during the session. Thanks. [Break]

Thank you, Josh. And guys, thank you very much for hosting a great Investor Day today. Craig Siegenthaler, Bank of America. I have a question on your new partnership with a -- venture and sorry for mispronounce that. But you're expanding the venture capital, and that's something we haven't seen from a lot of the American firms. There seems to be a division between buyout and and some of the buyouts upon to growth capital, but not really venture capital. So why is this opportunity sort of different? Is there may be regional differences in Brazil versus the U.S.? And what are really the strategic merits you see in that transaction?

Maybe I can take that or I can start taking that. And Ricardo is also here with us to hand private equity. He can also help with the answer. And we have also Pedoelser, the founding partner of omega, and your -- was just perfect. That can also help me here with the answer. When we look at the ecosystem there in Brazil and the way that we want to play it, I think it's very important for us to, first of all, understand everything that is going on since the VC part of the life cycle of the company all the way to the growth buyout that we have our flagship funds. Ricardo think alluded this during his presentation, if you take his example was in the health care space. Now if you go into the health care space, you have a guy investing in a company that actually can be a disruptor of 1 of our companies in the buyout on -- and we had our growth equity fund also invest in another company that can also be a disruptor. So understanding what's going on in that part of the spectrum in that part of the life cycle of the company, is extremely strategic to make us better investors in the buyout fund. So that was 1 of the key drivers for us to bring that intelligence in guys completely inserted in that ecosystem. I got receives and participates in most of the venture capital deals have in Latin America. So we know through -- now over 1,000 deals of bidder mills that was, I think, analyzing just last year, what's coming and what can be disruptive. And then we can actually judge what should we do and where should we invest Interesting that 1 of the -- using another example, 1 of the flagship investments of our growth equity fund -- e-commerce platform. We were looking at that opportunity to invest through our consolidation buyout fund. Now as you know, we do buy a small cap company with by other small cats create midcap sell to strategic in that space, which is the distributors or wholesalers of pet food in Brazil. Once we understood what Pedro was doing, we said hopes, I think that we should approach this opportunity from another angle. And so that intelligence is key actually, for us. In addition, it's a very profitable place to be. Not -- I think it's not going to move the needle on the management fee side, given the size of the funds that we can raise in that. But together, I think with the growth equity fund, I think it can be pretty sizable. I think -- I don't know if we cash, I don't think he showed this slide in his presentation here today. But over the last 3 to 5 years, there was an equivalent amount of money or even more money raised for venture capital funds in Latin America than for private equity traditional funds. So even though we see that we cannot move the needle today for us, but yes, I think we can raise larger funds, and it can be very representative and very significant for our private vertical. So for these 2 reasons, it's very strategic. It brings very important intelligence inside our proactive vertical number one. Number two, it can become very sizable not only from the performance fee point of view, which is already sizable for us. But from a management fee point of view, as the funds are getting bigger and bigger and bigger in that space. I don't know if you want to complement anything from your side if you can add. I think there's a microphone here. I want to use the podium here and.

So to Alex's point, there is -- it's just strength from heavy the presence in all the cycle from VC to growth to buy out, especially when you think about the industries, and I think 1 very notable example is health care. Our understanding of the whole value chain does build value for the buyout to understand what's happening on VC and also for DC to understand -- to have the connections and they understand that we have from having the larger companies. There is an obvious synergy there. So that's what Alex referred to the strength. But another angle to that, which I think addresses your question. So when you look at the U.S. market, the market is more segmented than the vision that we're building, I think that's true. But you need to understand that Latin America is a smaller market where Patria the opportunity to really have a market share and a dominance of the overall alternative that's not possible in the U.S. So I think naturally, when you look at through the eyes of the LPs, they see Latin America, I'm going to have an exposure to Latin America, be it private equity, VC or all the other alternative that we talk about. And the market -- the size of the relationships and the consolidation of the relationships in the market is building a level of scale that really Patria has the opportunity to be dominant in this space. I mean, we already are in most of the alternative asset class, and we think we can replicate that to other asset classes like VC and grow. So -- when we -- and even talking about the experience of Patria -- here, our partner, he has a difficult time accessing the institutional market in the U.S., Europe or the sovereigns. The platform of Patria can enable the VC fund of bill to access that market. That's easy for us to do. And by doing so, we kind of lock in this dominant market share that we have. So -- for us, this perspective of being the key and the leading platform of our alternatives in Latin America is the vision. We have the relationships. We have a dominant share on this fund raising, which is the largest share of what these alternatives in the world and for us to have these complementary products allow us to through key accounts and through relationships to lock in that capital and don't allow a space for competitors. So really, when I look at not just -- I can say for private equity, but I think it's the reality for the other asset classes as well. We can be the leading player in each 1 of these classes, because of the quality and the culture of the firm, but also because of how we can leverage this platform of fundraising. And that's definitely true for the private vertical. I even see people that who invest with us in a managed account as a program for Latin America. I think several of the large accounts will do that. They don't want to have -- handle each of the -- the more see it as a regional exposure than a product by product. And that's very common. You look at a larger market like the U.S., it's much more segmented. You look at Latin America. Latin America is the segment. I'm investing in Latin America. In the U.S. you have all these special segments of the market. It's much more broken down here in Latin America, that doesn't make as much sense.

Just 1 addition, specific addition for is that gas acquisition is accretive both from the nominal perspective as well as from the margin perspective for 2023 and onwards. We haven't given a lot of disclosure on the details of the transaction. but I wanted to have this now. And it's also a good example of an addition that it's -- that benefits from the scale of our distribution capabilities. We're adding IgA as a product to the life cycle of the private equity, but it benefits on the distribution since we have a scalable distribution platform, both from our institutional and local investors.

I want to take 1 now from the webcast. This is actually an aggregation of a question that was asked in a few different ways, but I think it's a fantastic question. We've talked a lot today about growth both through organic growth, platform expansion, new products as well as through M&A. We've also talked a lot about people and culture and our competitive advantage. So as we grow in these different vectors, how do we make sure that we maintain our competitive edge? How do we make sure that we maintain our culture as we moving forward. .

A very -- question actually. What you saw here today that from our 5 asset classes, 3 of them today are led by partners that we associated ourselves with over the last years, or recent years. So private equity and infrastructure are led by partners that were Patria partners and credit and listed equities are led by partners that founded and real estate Brazil is that by a partner that found the DBI can't. So this is already a message here now use embracing. Of course, you need to have our DNA and our major issues of our culture or characteristics of our culture. But 1 of the characteristics of our culture is to embrace other cultures. That's what we did, and that's what we do in private be it over 320 acquisitions over 25 platforms. You saw the slide there that Ricardo shown, we created all these #1 companies in their respective industries in LatAm or Brazil, 1 of them did 23 acquisitions, the other 20, the other 18, 15, what did we learn? We learned how to join the best of the best. So it's not because Patria did go public that now the partners will be Patria partners are going to lead things. No, who are the best in this case, the best for leading our credit vertical for the listed equity verticals for leading our real estate Brazil or they were not Patria partners. For leading also several of the commercial. We saw some of the faces there in our commercial and IR, Several of those faces are Moneda partners and Moneda Managing Directors. So this is us. We love diversification. We love the inclusion because that's the way that we truly believe that we're going to become better investors and a better company. So -- and we have fun and actually embracing these different cultures. That's what we do for a living. We have -- we started this so many years ago, actually also embracing different relationships on the client side, not -- I'm mentioning on the investment side, all of our investors coming from all over the world and been able to create these relationships with Asians and Middle Easterns and Europeans, and we just love doing this. Now I think we were talking over dinner last night, the opportunity to be in the Middle East and being invited by Royal family and having dinner at their home and be invited by a nation sovereign funds to spend the weekend in their houses. And we just -- we are a people we're just our people business and we love people. And I think that's 1 of our major advantages. We are great partners. And that's the culture. So what's the Patria culture? It's an embracing coach -- we just love people. We love to be with people. We love to develop relationships. We love to be partners. I think we're great partners. And you can see here, Fernando Pablo can presenting here today, and that's the whole philosophy. So it is really part of our culture. And I think we do that pretty well, to be honest.

Great. We'll go here to Marcelo.

Hello, everyone. Marcelo Telles, Credit Suisse. Thanks again for the great presentation. very thorough. I have 2 questions. They are very different from each other. I think the first 1 you mentioned during the presentation about the opportunities that can be explored in private wealth and also family offices. So if you could elaborate a little bit more how -- what will be your let's distribution strategy, right, if today, you're capable of reaching them directly or if you need to partner up, let's say, with investment platform, I take the Brazil example maybe through XP or maybe some private banks. So how should we think about reaching out that, that type of money. And my second question is regarding your international expansion. When you think about Colombia and Mexico, if you can mention a bit more detail where you see the opportunities in those markets a bit more infrastructure or which sectors you think you can have an edge. And I think Mexico, I think the near-shoring discussion has been a very hot topic lately. And we just to hear from you if you think that could be a real opportunity for Patria as well?

Do you want to take that one?

Yes, sure. So let me start with the I know the hard ones go for more -- the easy ones on. I will start with the second and then we'll go for the first, if you don't mind. So I think in terms of -- when we think about our expansion, both organic and inorganic, if we want to be a dominant player in the region, we definitely have to be with this exposure to the largest economies. Mexico being second largest in the region and definitely a focus for us. Colombia, we already have presence. We have over 25 people on the ground and more than $2 billion on the ground with significant projects going up there. And it all starts with the idea of expanding our portfolio of companies into these geographies with a successful track record doing so. So we started Colombia with the private equity program in health care, and in agribusiness more recently in infrastructure. And in Mexico, we also have an exposure through our network of -- and also through our data centers and infrastructure. So -- so the idea of expanding to these other geographies is definitely part of our strategies and also having our own operations on the ground, raising money on the ground and having our products on the ground is also part of our aspirations. As far as opportunities are set in Colombia, slightly different from Mexico. Colombia is very much a continuation of the type of opportunities that we see in Brazil and some other countries in Latin America. In Mexico, we do have an internal, a very decent internal consumption and population, which also plays an opportunity that is somehow similar to what we do. But on top of that, Mexico is an economy that is looking upward being driven by the near shoring and specifically in the current environment with the relationship between U.S. and China, we believe that Mexico will be a big beneficiary of that. So what are the opportunities that are set to -- in this scenario on the adjacencies of the topic that relates to the near shoring that relates to the -- to Mexico being a preferred partner for the U.S. Real estate is a space that we're looking closely in Mexico. We think that there's a big opportunity there, both in logistics and industrials. There are also opportunities on infrastructure, which we are closely looking at, and to the point that you mentioned, I think Mexico is also a geography where we think -- likewise, we did in Chile and working on other opportunities, partnering with locals makes a lot of sense. So for the second question about access, no distribution, I think we've let clear since we went public and more so today with the presentation delivered by Jose, Daniel and, that distribution is a key pillar of our strategy. rate got where we got. I think in a big part not it's, of course, returns is super important, but the distribution capabilities gives us access. We had a big, a big portion of our success, given the whole -- the direct distribution channel that we developed internationally. More recently, we started focusing on the local distribution with the addition of Moneda that became -- that was a super stack onward Moneda to Patria, about 1/3 of the local distribution in -- we have out of the base today, we have about 1/3 of our investors that we call local meaning Latin American investors, both on the institutional side and on the -- and down to the retail. As we develop products and the distribution capabilities locally and develop the product that suits to this local client. That's where we see our success moving forward. I think 1 example recently announced on our last quarter was the fundraising for private equity locally with XP, which for us gave us access to clients that otherwise wouldn't have access to. We don't think that there's any -- there's -- we are not -- we're definitely not against using indirect distribution capabilities to access clients that we otherwise wouldn't have access too. And we believe that this will continue to happen in each of the local geographies. And if I can add it to Marco's answer, I think when we go abroad broaden outside of Latin America, I think we're not going to use distributors in like XP as our first strategy to raise money from global wealthy individuals. I think we're going to approach it the same way that we approach global institutional clients. Andre, I think during his presentation, showed that from the top 100 clients that allocate money to alternatives that represents $5.5 billion out of the $10 billion -- trillion out of the $10 trillion industry. So we have 100 clients that represent 55% of the industry. And we -- today, we actually serve 20 of those clients, right? So the famous 80-20 rule works. And I think the famous 80-20 rule also works for a family office. I think we're going to start with a very large single and multifamily offices globally, I mean, outside of LatAm. And it's the relationship that we're going to develop with them that we are already developing as an institutional relationships. So the way that we sell our products, very similar to the way that we sell products to institutional clients as a B2B relationship. I think that's what we're going to do first, and that's what we're already doing. In the local offices, I think XP works very well. We have the investors know us. We have the brand name, but I don't think we can use the XP type in the Middle East to distribute our products yet or in Asia, I think it's a little bit far-fetched given where we are today. I think the market might develop to that financial advisers in Asia or in Indonesia or whatever in India can actually start selling a LatAm product like ours. I think it's a little bit too soon for that. So we are approaching or family offices and multifamily offices or distributors like your -- the institutions that you guys work for, the private banking side of those institutions. And then there, we have a feeder that they will, together with your institution approach to those clients. So -- and the relationship that we have with an institution like yourself, is a B2B relationship, right? Now we have 1 relationship with someone that actually runs placements for private banking in that institution. And it's very similar to the way that we run the relationship with a sovereign fund or pension fund. And behind that, we have a feeder with so many clients. So that's the way that we are approaching it. And I don't know if Andre or Jose, do you want to complement your fine?

Okay. Thank you. All right. Let's go here, Tito.

Alex, Marco, Ana, and Josh, thanks for the presentation. Very helpful. Tito Labarta from Goldman Sachs. A couple of questions also. First, you gave the guidance of around $50 billion in AUM for 2025, both M&A and organic. So any color you can provide on how much could be from M&A, how much could be organic, just to think about the different growth opportunities in each? And then my second question relates a little bit to I think, Pablo's presentation earlier, but I mentioned like LatAm is like 15% of the land, 8% of the population, but market cap is only 4%, but also GDP is only like 5%. So -- and we're going into an environment where perhaps slower GDP growth kind of more left as governments, just to think about the challenges to be able to grow in a bit of a slower growth environment and how that could potentially impact strategy?

May Okay. So I think the best way to think about the buildup of this $50 billion is thinking about fee paying a when rather than AUM because the AUM brings other elements of NAV appreciation and currency that is that it makes it harder to bridge. So the third -- think about the 35%, I think, is a good way to think about. And as I've been -- we've been telling on the presentation, the $6 billion to $7 billion coming from the drawdown funds, and this is mostly on the flagship funds, but with also important new additions there. And this is mostly organic initiatives, although we've seen some complementary acquisitions that we have just announced this week. So there is some acquisition there, but I would say mostly coming from the organic side. The second bulk coming from the permanent capital, and these are, again, nonredeemable publicly traded vehicles just for the sake of being precise here, where I do think here, we're going to see a bit more of acquisitions coming from, especially on the real estate side, in combination with the natural organic of the businesses that we already have and with the new businesses as well. And finally, on the open perpetual strategies where we're taken here as a guidance for you guys is that we are keeping sort of the same pace as we have seen on the fundraising side. For the open perpetual strategy. So if you add those up, if you remember the graph that I show you with the bubbles, that's going to take you very much to where we expect to then translate to the $50 billion. I think mostly through the -- what's very, I think, attractive for us is if we can buy managers that are managing these permanent capital structure vehicles. And then Marco mentioned real estate. They also have health managers on the infrastructure side. On the private equity flagship fund strategy that we have, our infrastructure developments and the open-ended perpetual funds. I don't think it makes sense for us to do an acquisition to increase share. I think we did associate ourselves with Moneda because we didn't have those competencies. Now that we have the confidence, I think we're going to grow organically. But on the permanent capital structure, I think, is very interesting because it does add this perpetual stream of income. And it's a moment that it's -- they are depreciated because they reflect now answering your second question, the reflect of the interest rates. So talking more tactically now, now hit if you're going to buy a permanent capital vehicle, might as well buy it now at 13%, 17% interest rate than 2 years ago at 2. You do the math, interest rates, this is the present value -- it is the present value of $13.75. This is the present value. So right now, I think that's where we should actually accelerate on that front, because if you look into the near future, and you see interest rates coming down in the region, tactically, it's very interesting if we buy it now. So more of a shorter-term tactical vision, higher interest rates, the capital vehicles, I think, are very interesting because if you are generating alpha in general, which are the other more sophisticated vehicles you generate alpha over the hurdle. I think it's even hard to price them also because of the performance fees, et cetera. So that's what we want to do. Also, when you go into -- you get into a new getting into a new country, if you go in through the perpetual kind of structures, I think it's a safer way to get into a country because clients are just there, right? And they will then learn us, we will learn about the clients and clients will learn from us and we'll develop that relationship. So also these structures, the listed funds permits us to get into the internationalization through a safer route in mining.

And just to be clear, the predominant source of growth is organic -- is organic. The inorganic is complementary, where we are adding product distribution or geographical competence. Now just on your second question, we've been able to raise capital this year in Brazil and in Chile for our size significant amount of capital even under the current situation. I think investors are looking to diversify their portfolio. And I think the whole financial deepening is there, it's happening -- I think as -- here they can complement here my answer, but we three folded our AUM in Brazil, '22 versus '21, and most of that came from organic growth and 55% of that from new products. So you get -- I don't know, take a year, 2022, we had several major things happening in Brazil, right? Interest rates went from -- so 1,375, -- we had the election, [indiscernible] you name it, and we tripled our AUM in Brazil and 55% coming from new products. So investors are really looking for alternatives. And more so, it's interesting private market securities because the volatility of the public securities are giving a huge headache for pension fund managers. Sometimes they wake up 1 day, the fund is up, they wake up another day. The fund is down. The fund is left, they fund this right. So they also enjoy the private market security because you do market like whatever, that instrument, you do mark along the curve of that instrument. You don't have that huge volatility of a public security. So for several reasons, I think investors do and this is a real case, Brazil on raising for Patria 2022, 3x bigger than last year. We three folded our AUM and it's pretty significant. So again, I think election and interest rate hikes. And hopefully, we're not going to have a presenter election every year. So yes, I think next year in '23 might be even better for fundraising. You should, please Pablo.

Thank you for the question. Let me tell you 20 years ago, more or less, Latin America was around 30% of the market cap and the weight in the MSCI Emerging Markets Index. I think that's -- and China was smaller than Latin America at that time. And since the -- after the Asian crisis, China started to do many, many follow-ons, IPOs coming to the market and all of the investors were very interesting in Asia. And I think there, for me, there is a game changer -- that is 2019 when -- has tried to do the IPO as a. And I think we saw -- we have seen since then, a very big change on the rule of law in China. And I think that's a quite important issue or fact. I see less active in China, probably China in the following years is going to reduce their weight in the emerging markets. And by the other side, you have the case of Russia. Russia is out of the emerging markets. I think currently, as I mentioned, Latin America was 30% of the MSCI, 25%, 25%, 30%. Currently, it's around 7%. And I think that the opportunity is -- when is this that is more tactical, many institutional investors, American and Europeans has some provisions to continue investing in China, they are going to be closer to the market on what's going on in terms of the developments. And coming back to the companies, in Latin America, we have a very big worldwide companies in many industries like commodities for example, [indiscernible] that is the largest producer of iron ore in the world like the lithium, Latin America is the second largest producer of lithium in the world, Latin America is the first producer of copper in the world, with Chile the first and Peru, the second one. And that is creating a lot of opportunity in terms of growth in term of -- for the middle class people, and that is helping us a lot to develop the internal markets. And we are in a point where the currencies are super depreciated as Luis Fernando show us in this morning. And this depreciation obviously affect the internal consumption. If the currencies come back, as I mentioned in the morning, I'm quite optimistic about commodity prices over the next 5 years, if currency come back, middle class is going to continue growing, and we are going to see a lot of opportunities in other industries like retail, banks, et cetera. Thank you.

Thank you. All right. I think the mic was passed 1 more Charles, right back there. Please go ahead.

I appreciate it. So just to clarify on the M&A side. You said that internal capabilities you already have, you'll not be looking for inorganic opportunities -- is that correct?

So for some of the verticals, more the -- on the credit side and on the listed equity side, I think the association with Moneda was key, and it brought into the partnership, these competencies. So most of the growth will come from organic expansion for those products. On the real estate side, as we grow into other countries, then I think an acquisition, yes, it makes sense we head into Mexico into Colombia, which are opportunities that we actually described here. And going into those countries through real estate African acquisition is key, as Marco mentioned, it's very important for us to have partners in these countries to help us guide us through Mexico and Colombia, Colombia, we feel very comfortable already. We've been there since 2014 with an office they're investing. Mexico now. We have a few portfolio companies that do business in Mexico. But yes, as we step into next we would be most probably through an association of some sort.

Okay. And would that apply within sort of private equity and infrastructure and we're talking about

Private infrastructure. I don't think it makes a lot of sense, to be honest, I think we did on the private equity side, I think Ricardo led these 2 associations, acquisitions of the growth equity and the venture capital fund -- on the infrastructure side, I think we grew a lot organically. There might be 1 or 2 opportunities that we see there, but very specific niche kind of strategies that have but the bulk is going to be organic growth, organic fundraising.

Got it. So when we think about this sort of large opportunity in Mexico and Colombia, we should expect to see that through sort of your flagship strategies rather than, say, acquiring a strategy within Mexico run by local operators?

Yes. The flagship strategies, I think they're already investing in these countries. In Colombia, we have an office, as I mentioned, since 2014. In Mexico, we -- the portfolio 1 step back. How do we expand it outside of Brazil. I think the first step was a portfolio company has expanded outside of Brazil. So a portfolio company of a certain fund started expanding to other countries in South America and Latin America, I think Ricardo described we created expand regional leaders in private equity than we did it in infrastructure in Chile, even more so through infrastructure in Colombia, more so with private equity and more recently with infrastructure. So after we got comfortable with these countries through the portfolio companies. Then we started doing our own investments in these countries through a new strategy or a new investment, again, through the flagship funds. Once we got comfortable there, we opened an office and then we said, okay, let's take a step and that was the association with Moneda. We haven't done much beside Moneda outside of Brazil, right? It was through the strategies themselves. Mexico, I think it requires something like the Moneda stay expansion because, again, I think it was mentioned here is it is a country that has different drivers that the economy in maxis more related with the U.S. economy I'm telling you guys, something that you guys already know, of course. So we are looking for local partners for us to understand better to guide us better in that specific country, which is Mexico. So Mexico was a little bit goes to your answer here. We might do an acquisition in Mexico to -- with a partner that guides us into that country. We don't feel that we have to do that in Colombia or other countries -- America.

Got it. And if I could ask 1 more. Just sort of on the cadence of distributions, the sort of presentation implied that quite a lot of those performance could be realized in the next several years, which would be sort of a pickup in pace in terms of distribution. So can you talk a little bit about that, how it sort of feeds into your estimates for fee-earning AUM in the next several years? And sort of what gives you the confidence that you'll be able to sort of distribute the level that you guys have sort of roughly guided towards?

Okay, do you want to take that?

Yes. Yes, sure. So I think what we guided you today on the on the performance fee from the numerical perspective and Alex can weigh in a little bit about the tactics of that and the strategy of that. But -- what we guided you is we have $428 million of net accrued performance fees, of which $360 million are in funds that we consider mature. What is a mature fund is a fund that has as a composition of optionalities to divest that is right for divestment, companies in which we're already making money. They are mature. They are ready to be sold. We're working on the a tactics of the sale, indeed, a big number of these companies -- of these portfolios are engaged in processes. So having said that, what we're guiding you is that between 50% and 80% of this 360, we can see that we'll be so, hence, distributed, which is the performance be equivalent, okay, because the portfolio is way bigger than that, but the performance equipment will be distributed through 2025. That's the best of our visibility, and that composes in the midrange $1.50 throughout the period.

Yes. And you asked the question as well, just maybe 1 point on that about how it impacts the fee earning AUM. Important to note that this is 1 unified model of the business, right? So to the extent we're projecting exits that drive performance fees. In turn, the forecast for fee-earning AUM and therefore, the management fees and the fee related earnings completely aligned with that as it Okay. I think that brings us to time to finish up at least our webcast portion here, of course, for those here in person, we're happy to continue to chat with you here at the event. But for those on the webcast, thank you so much for joining us today. We really appreciate, again, your time and your interest. Please reach out with other questions, happy to follow up with you about all the content presentations today, and we hope to talk to you again soon. So again, thank you.

Thank you.