Vinci Compass Investments Ltd. (VINP) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to Vinci Partners First Investor Day. My name is Anna Castro. I'm a shareholder relations manager here at Vinci. We are thrilled that you could join us today, both those present here with us in New York at NASDAQ's market site as well as the ones watching us online for the webcast. We'll start in just a moment. Before that, I have the responsibility of sharing with you some important disclaimers. So bear with me while I go through them. Today's event may include forward-looking statements, which are uncertain and outside of the firm's control and may differ from actual results materially. Except as required by applicable law, we do not undertake any duty to update these statements. For a discussion of some of the risks that could affect our results of operations and financial condition, please see the Risk Factors section of our 20-F. We will also refer to certain non-GAAP measures, and you find reconciliations at the end of the presentation. Also note that nothing on these materials constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci partner's part. Moving on, our agenda for the day begins with opening remarks from our CEO, Mr. Alessandro Horta, who will also discuss the strategic partnership with Ares. We announced yesterday after market close. Then we'll have 3 blocks of presentations. We will begin with a session on alternative market and opportunities for Vinci presented by Mr. Bruno Zaremba, Chairman of Private Equity and Head of Investor Relations. Then we'll have a session on Brazil macro outlook of José Carlos Carvalho, our Chief Economist. We'll then move on to each of our segments. We'll have presentations by the heads of each of our strategies, covering private markets, liquid strategies, IP&S and VRS. To wrap up, we'll have a financial review session and then a Q&A at the end. On a final note, for those attending in person, we will not be taking questions during the presentation. So I'll ask -- we'll have a condensed Q&A session at the end during lunch. And for those watching us online, I'll welcome you to submit your questions for the platform, and we'll answer those as well during the Q&A. With that said, and I would like to thank you again for your support and your participation event. And now I would like to welcome to the stage our CEO, Mr. Alessandro Horta to begin our presentation. Thank you.

Good morning. Welcome to our first Investor Day. So we are very glad to have you all here and have this opportunity to not just talk about the firm, the future and our most recent development, that's our strategic partnership with Ares. So we'll try to cover all the points, and we'll be glad to get your questions later. So what we'd like to convey today. So we'd like you to understand all our goals. Why we are our unique investment platform in Brazil, our growth opportunities and also our long-term strategy. So that will be the message that we have for you today. What has driven Vinci Partners success over the years. We have 5 main points that we'd like to cover in more detail. First, the platform diversification, the resilient and profitable business model, the fundraising and distribution capabilities, consistent, of course, and strong investment performance across strategies and by being a leading player in the Brazilian alternative space. Talking about platform diversification. We believe that we are well established in robust one-stop shop platform, diversified across products and service, which put us in a very privileged position to capture the expected transformation saves migration in Brazil. So we are putting ourselves in a place that we believe will take advantage of the scale and of the migration of the assets in the Brazilian market. So we divided our history in 3 different stages. First, when we started back in 2009, and we have been growing since then from BRL 2 billion. We call this first phase as a structuring, when we started creating the platform in creating the capabilities to be where we are today. Then we move it to the diversification, really being widespread in alternative space in Brazil, with also a very diversified distribution channels. And finally, when we achieved that stage, we have been able to start scaling the business, as you can see, coming from BRL 20-something billion to the BRL 65 billion that we have today. So going more detail about these phases. We started back in 2009 with just a few strategies. So we started with on private markets, private equity. That's our Genesis. We started also doing hedge funds on the liquid strategies and with financial advisory. Then the street started to grow. In 2014, we already had created a few wider capabilities, including IP&S our own liquid strategy, we already have the public equities and on private market, we established both the infrastructure and the real estate vertical. And finally, when we achieve certain diversification, as we said in 2019, we already have populated much more on the street and having complete, I would say, array of strategies on private market. IP&S developed in different subproducts and as also hedge funds and public equities. To the point that we are today that we believe that we have a complete array of alternative solutions for the Brazilian market with different strategy, both in private markets, in liquids and in the solutions business where we have inside each of the verticals, different strategies, products and approach to the market. Our idea is to really offer a complete portfolio of alternative investment products and solutions on private markets, that's the majority of our AUM we have, as we said, private equity, infrastructure, real estate, private credit and more recently, Vinci SPS, that's our special situations business. We have a complete IP&S business that have been pioneering this space in Brazil. Hedge funds and public equities in more liquid strategies, Financial Advisory business, that's the only business that we have that's not pure asset management. And finally, a more recent development that's retirement service that we'll cover later in more detail. We believe that Vinci ecosystem really is what set us apart from the competition. We really believe that our setup is unique. So we have both the sourcing and execution. I'd like to say that we have a size that we are -- really matter to the Brazilian economy. So we have a deal flow that's very relevant because of our size. And at the same time, we have a lean structure and with very confident people that's our important resource to really execute on these strategies. With the networking of the partners with more than 40 partners, we really have a very important and intense conversation with all the sectors of the Brazilian economy from different fields, and we have broadened this relationship over time. We have also an asset origination leveraging from this robust and broad strategic -- full strategies where we can maximize the investment opportunities for each of our verticals. And finally, I would say that with that, we do have a very, very strong brand recognition that with the proven track record that Vinci, we have been able to not just enhance fundraising but also attract entrepreneurs that would like to be partners with the company. And it's important to say on the synergies, we do have a lot of joint venture between the strategies where we can really cross-populate our idea repository with information coming from different sources that really can bring a unique cost structure to really take advantage of all the knowledge that we have inside Vinci to really deploy that in our investment strategies and also our long-term strategic goals. The resilient and profitable business model. We believe that our bottom was built to excel both in favorable market conditions and to be resilient during challenging ones. As you know very well, Brazil is a very cyclical market. So to succeed in this market, we believe that, of course, we should take advantage of the growth opportunities to continue growing this business but also when the market is less favorable, we should be resilient to continue to perform and be prepared to the next positive cycle. So at the same time, we need to have the ship very strong when the market is not favorable, but it should be also prepared to take advantage when we have things in our -- coming in our direction. And we have been doing that. As you can see on the last 10 years that you see here coming from the growth of our strategy on the down blocks, from 34 strategies to 81, we have been growing diversification through different cycles. So between 2013 and '15, we have a very, very strong tightening cycle. So we kept our AUM stable with a small growth. Then when we came to the easy cycle between '16 and 2020, we have been able to really grow a lot. And when we came again to the tightening cycle, as I said, the Brazilian market is cyclical. We have been able to continue to grow in a stable basis. And now as you know very well, we are starting to see a new easy cycle taking place in Brazil. So we really -- standing the beginning of the rate cycle, the easing rate cycle now. So with much more strategies in place, so we believe with the setup that we have today, we will have much more conditions to take a really strong advantage of the easing cycle that started recently. As you know too, our business model is management fee-centric with a highly visible and integrated recurring revenue. So more than 50% of our AUM is in long-term products coming from 5 years lockup to perpetual vehicles. We have more than 60% of our investor base coming from institutional investors, both local and international. So they are very resilient in their relationship with us. And more than 54% of net revenues today come from private markets. And we went public exactly to strengthen our business model. We wanted to accelerate the growth initiatives that we had at Vinci. The listed stock would help with talent retention and business perpetuity. And finally, really to support our corporate development initiatives. We have been able to leverage on the robust balance sheet position to drive FRE growth, so since the IPO, as we said, when we did the IPO, one of the main purpose of raising capital was exactly to continue seeding the products, especially in the private markets where it's necessary. And we have been able to deploy these as commitments, raising third-party money alongside the way. So since the IPO we have committed BRL 1 billion of our proprietary capital alongside investors to seed funds and we are multiplying our seed investments by 10x even with a not so favorable environment that we saw since the IPO. And these commitments enhance our earnings powers, leverage both our FRE and future PRE growth. So with that, we did in VCP IV, VICC, Vinci Credit Infra, VIR IV, VIAS and VFDL. Also, we have been able to expand our enduring partnership model through a very accurate driven culture. As we said, being a listed company helped us a lot in terms of talent management. So the partnership model is very strong with 10 partners since the IPO. So it's alive and kicking this partnership model. We have a long-term incentive plan with more than 85 employees with stock-based compensation between listed stock and stock options. And the talent retention is in place with more than 71% of the senior employees have been working with us for at least 5 years, including the growth that we have in recent years. Another advantage is really an opportunity to pursue inorganic growth to establish the platform as a regional leader. Being a listed stock, of course, will help really to the M&A capability that we develop inside the company and our inorganic growth can be dividing 3 main strategies: complementary business lines, increase solutions to clients with new investment strategies that was exactly the case of Vinci SPS acquisition that we did a transaction where we add a new special situation vertical, enhanced the quality of earnings with more long-term AUM and also, we have a substantial potential for fundraising in additional funds. And with a strategy that's not directly correlated with other strategy that we have in our private markets capability. So this is a good example of an acquisition of an M&A of complementary business lines. The second strategy for inorganic growth is scale existing strategy, to go deeper in the same strategy that we have today. So we are pursuing inside the strategy that I have today, how to gain scale through inorganic growth. And finally, a platform rationalization. So we have been telling you that we have been focused also in being not just a very, very strong a dominant player in Brazil. That's the main market for Latin America, but also have a more broad Latin America strategy and solution. And this also can be done through M&A, where we can really expand the regional footprint through the acquisition of operations and distribution channels abroad in other countries of Latin America. Finally, it is one on our recent developments to really force it strategic partnerships to enhance business development. And then we will come back later to talk about the recent announcement about Ares. But as a Nasdaq listed, we have opened new network channels and elevate interactions with leading international players like Ares, which led to a new announced strategic move. So that will be important by the fundraising. So we really were able to tap on incremental fundraising opportunities. Also in terms of the governance, so enhanced governance by partnering with best-in-class and experienced global player and the business development where we can really employ the partners intelligence and track record to optimize business development efforts through the best practice type of approach. What we have been done since the IPO. We have been growing the AUM from BRL 50 billion to roughly BRL 65 billion. So we grew almost 30% during dispute. As you may know, this was a very, very tough period with a very important hike in period for interest rates in Brazil, all over the world, not just Brazil, but in Brazil, we reached almost 14% of nominal interest rates. So it was a not so -- it's a challenging time in Brazil after the IPO, but we have been able to grow 30% of our AUM. Also have been able to grow the Fee related earnings around 38% from BRL 300 million to BRL 414 million. And finally, the Fee related revenue, sorry, The Fee related earnings, we have been able to grow 33% during the same period. So even though during this period since the IPO, we faced a challenging macroeconomic environment in the world and in Brazil, in particular, we have been able to deliver both in AUM in revenues and also in fee-related earnings. We have been able also to distribute almost $2 -- $1.73 dividend per share since the IPO, which represent around 20% of our current market cap just in dividend distributed since our IPO back in January 2021. So this is -- we consider that's a very important highlight to make since we have been able to deliver even in a condition to my point previously, we should have a business model that also can is resilient and can take advantage when the market comes to our -- in our favor. Also, we have been able to do the first M&A transaction with Vinci SPS that we are quite happy. And later on, we will learn more about it. We have been able to launch a new segment as a greenfield, that's our Vinci retirement service that we'll talk to you about it later on, too. We have been able to have more than BRL 12 billion of organic fundraising, BRL 1 billion that we deployed as GP commitment from the proceeds that we raised in the IPO. And finally, we have been able also to return capital to ROPs more than BRL 3 billion during this period. So we have been able to deliver since the IPO we consider even with the scenario that I explained to you that we had. How is our fundraising and distribution capabilities? We have been since the beginning of Vinci, I believe, personally, and I think all my partners will share this thought that we really have invested time and resource to build a robust and diversified distribution channel based on proprietary and long-term relationships. And this really is very unique on our space in Latin America and in Brazil. We do have our multichannel distribution capabilities with a direct face-to-face contact, as I said, proper relationships with clients ranging from the local institutional investor team, that is Brazilian pension funds, public and private insurance companies, large and mid-sized corporation with 3 partners where we see it with our largest portion in terms of AUM in this capability and where we are very proud to keep very, very long-term relationships over time. Finally, we have been able to grow this over time with the still low penetration that this type of investor has in terms of alternative assets in their portfolio. So we are very, very optimistic that this really, it's an important avenue of growth. We also have our institutional offshore distribution capability with, again, Pension Funds, Endowments, Sovereign Funds, Fund of Funds, Asset Managers and Family Offices. That's our partner, Pedro Quintella. That's -- he's the head of this distribution channel, where we have our office here in New York, where he sits to really keep the contact with this type of clients, very close. High net worth individuals. It's our VII team, where we have 4 partners that have direct relationships with single-family office and individuals that want to keep a relationship with Vinci directly. So these guys are also very long-term relationships with different products and strategies from Vinci in their portfolios. And they are also very active coinvestors for instance, with our main funds and strategies. And finally, allocators and distributors where we have a team led by our partner, Ronaldo, where we have a very close relationship with all the banks, MFOs and distribution platforms in Brazil, where we put our products to more like diversified public through investors through both distribution platforms, banks, private banks, units of large banks, multifamily office. So it's really a very, very diversified and where we have a very, very strong reach in terms of distribution channel. Finally, I would say that on the -- this cannot be possible without consistent and strong investment performance across all the strategies because at the end of the day, we should deliver return and a good performance to our investors. So this is talks with what we have established over time, there is a very strong and recognized track record of returns across all strategies. So here, it's a few examples. We have been able to generate alpha on the majority of our strategies that you can see here, comparing with all the benchmarks selected for each of the strategy. So we have been able to produce an excess return both on the public side, like public equities or even IP&S, but also on private credit, infrastructure, private equity, real estate, our special situations vertical. So we have been able to really provide alpha in terms of the -- comparing of the benchmark to all our investors, what keep us also a very important recognition, not just from the client but also from the market. And we believe we need and we are -- need to be and we are a leading player in the Brazilian alternative space. We are really a distinctive one-stop shop platform in Brazil with a superior track record across key alternative classes with access to substantially all pools of capital. And we really believe that this is very important in terms of scale, in terms of footprint. And we believe that this scale, this interaction, this synergy of being a multi-alternative asset management platform with a very deep penetration, both from the distribution side and the investment side creates a virtuous cycle to our company. And today, we have a footprint with national impact. So we have 261 full-time employees, more than 100 investment professionals, 28 IR professionals and more than 125 support professionals, where we do have between our 4 office in Brazil and the New York office, we really can have a very important impact inside Brazil with -- just to give you a few numbers, in our portfolio company, the invested portfolio companies, we reached more than a 100,000 employees. So it's really an important footprint for the Brazilian market with more than 80 portfolio companies over time, and we are operating in all major industry in Brazil, and we have a presence in all the Brazilian states. So really, we have a very strong presence. As I said, we are very relevant the Brazilian scenario to Brazilian economy as a whole. Also, I would like to say that Vinci really stands as a leader and pioneer for climate and impact-oriented investments in Brazil. This is very true since we started that in 2012. And we believe that Brazil is a perfect fit for this agenda because it's impossible to have a climate solution in the world today without Brazil in the equation. And José Guilherme our partner will go in more detail later for sure about it in our infrastructure panel. But I would like to say that Brazil is so relevant that today and climate is a global subject and a global solution that's impossible to do that without having Brazil in this equation. And with all this climate-oriented and impact oriented investments, we have been able to deploy more than BRL 5 billion in terms of AUM that we have available today between investments and Dry Powder in 6 different strategies, and we have been able to transform that in very, very understandable and direct products like our water and sewage, the climate change fund that will go in more detail later, but this is really unique in the region, where we are today, by the European standard Article 8 migrating to Article 9 fund. Or their private type of funds like VIAS -- that's our sustainable energy fund, our credit infra funding in Credit too; and finally, our private equity fund in the impact investment strategy, VIR IV and our listed vehicle for brownfield renewable and transmission yield assets. What will drive the growth of Vinci in the future? That's our focus as management for the mid and long term. First, strategic partnerships and/or acquisitions, like the one important strategic partnership that we are announcing. Grow and scale our platform organically. We are going deeper in the same strategy that we have deeper and deeper. And finally, expand our footprint internationally. So in terms of growth opportunities, the management focus are really in the 3 very clear key drivers. Strategic partnership and our acquisitions, growing scale our platform organically going deeper and finally, expand our footprint internationally. We are targeting and we will detail this number, an organic expansion without taking consideration any further M&A to BRL150 billion of AUM by year-end 2028. We really evaluate the market, our capabilities, and we have exactly this target with the organic expansion to BRL 150 billion of AUM by year-end. Starting with the point that we have today, second quarter 2023, BRL 65 billion were scaled in existing funds, launched new private market strategy. We think the strategy that we already have today and expand the distribution channels to reach this 2028 target. Of course, we have plus upsides coming from both the strategic partnerships and/or any acquisition that we do inorganically. So we have 5 main takeaways for you today, and we'll have the opportunity to see this in more detail. First, our platform is strategically positioned within the main alternative investment class, poised to benefit from tailwinds that are fueling its growth. Second, our business model is structured to drive strong growth during favorable market conditions and to remain resilient during tougher scenarios being resilient. Fundraising deployment are on strong growth trajectory and realizations are poised to accelerate in future years. So we are looking for invest and to divest to really provide a very virtual cycle to our ROPs. The alternative market is expanding on a global scale. And emerging markets is a very good specific Latin America in a very good position to capture an increasing share in the coming years with a potential focus on attracting institutional investors, international and local. The potential Fifth point, the potential for outside shareholder return is significant driven by the growing FRE and the promising upside potential from PRE and GP investments through the deployments that we have been made from [Audio Gap] I'd like to close these remarks with this point that we believe that our reputation is Vinci Partner's most important assets. Since the beginning we believe in this mantra. And we'd like to say that in Vinci, our partners, our clients really and our clients our partners. So with that, I will go in more detail about the recently announced Vinci and Ares strategic partnership. So as you may know now, yesterday, we announced a strategic partnership with Ares that, of course, I don't need to introduce. But I would like to go in a few points about the strategic relationship that we started yesterday in fact that we announced this yesterday -- sorry. We are really forming a strategic partnership to accelerate growth of Vinci platforms in Latin America and collaborate on distribution, new products and on other strategic areas. We have the history with Ares is a long-term relationship that we have in contact with other senior partners with Ares for a long time. And we believe there is a very, very strong investment [Audio Gap] alternative investment management, well recognized by everybody, but also for Vinci, for us and I believe for Ares too, we understood that to have [Audio Gap] an alliance and this strategic partnership successful in the future. One point that's very important that we have a representative of Ares to be appointed to Vinci boards to share this best practice, including related to M&A that Ares, for sure, has a very, very deep knowledge and experience. As Vinci is entering in this new growth cycle that we are highlighting to you today with this growth up to BRL 150 billion in 5 years. With this strategic partnership, we will have an investment of $100 million in preferred investment by Ares to be used for strategic initiatives and to accelerate value creation. So this is a very brief description about Ares almost $400 billion, $378 billion of AUM across 5 business groups, credit, private equity, real assets, secondaries and other business. Ares really has a global footprint in North America, Europe, Asia Pacific and Middle East. Employees of almost 3,000 employees 2,640 with almost 1,000 investment professions. So it's really, really a big player on the alternative space has been growing for the recent years a lot and deploying delivery for the LP. So it's really a very interesting and amazing story. So that make us very proud to have been able to announce this strategic partnership. And what's the strategic rationale in key areas to collaborate within this partnership that we announced yesterday. First, as I said, best practice to accelerate growth. So connectivity across senior and functional leadership supporting Vinci's goals to be leading best-in-class alternative investment manager in Latin America region, where we will drink from the source of the knowledge and the experience that Ares had in the international markets, not just in North America but all over the world. We will try to be to bring this best practice to our expansion plan in Latin America. We'll have a special care for strategic distribution where Ares and Vinci will collaborate on fundraising to seek to broaden each of the respective companies limited party relationship network within Brazil and globally. So we will tap the [Audio Gap] and on the other side, we will bring Ares, knowledgeable and knowledge and investment strategies to our base of LPs, especially in Brazil and Latin America. Also, this partnership, we believe will accelerate M&A, put additional liquidity through this instrument to further scale exiting existing investment platform in Brazil and expanding new strategies and also geographically our footprint in Latin America. And we believe that we have an opportunity to a new product development and investment collaboration where we can explore launching co-branded products and investment strategy and collaborate on new investment opportunities in Latin America. With that I would like to call my partner Bruno Zaremba, Chairman of Private Equity and Head of Investment Relations to give you his views on the alternative market and opportunity.

Thank you, Alessandro. Again, thank you all for joining us either here or remote. This first segment, I'm going to focus on positioning the opportunity that is ahead of us, right? So first, looking at what has happened globally in the alternative asset management industry, what's happening in Brazil and how we are equipped to take advantage of what we see coming our way. So in regards to the global landscape, it's very well known that there was a very, very substantial growth in alternatives over the past probably 2 decades. So we saw increase allocation to all asset classes. Expectations are that private market strategies will represent in the medium term, up to 50% of total asset management revenues globally. And the AUM in the alternative asset management space has been growing quite substantially. In the United States, to give kind of a parallel to what's happening in Brazil, and we're going to look at that in more detail, the allocation came over the past couple of decades from a single-digit number to a current number of around 34%. So that has been a tremendous tailwind for the industry globally. And we saw obviously what happened from a capital market standpoint with the growth of the alternative asset manager -- asset managers that are involved in this expansion, right? Today, in the United States, for instance, about 80% of the pension funds have 20% or more of their assets exposed to alternatives. And this has been coming over the past 2 decades from a single-digit number. In Brazil, this number has started to grow but in reality, today, we are what the U.S. was 20 years ago. So in our estimation, the allocation to alternatives in Brazil today is about 10% of the total AUM, that including all of the capital available, so not only pension plans. And on top of this increase -- slight increase in allocation our market as a whole has been growing a lot due to demographic reasons. So we're still a young country. Savings are growing. We have a very strong CAGR from a total assets under management standpoint with 15% up to 23% CAGR of about 14% today. This is expected to continue to grow. So not only we have the pie growing because of our demographics, but also the slice of the pie coming to alternatives also growing. Looking at the pension industry in Brazil, just as one of the subsets of our potential capital providers Today, we're talking about a total of BRL 2.4 trillion of assets between the open-ended pension plans and the closed-end pension plans. Our estimation is that of this amount today, about 5% is allocated to alternatives. So when you compare to the number that we just saw for the United States, it's even a lower number on the pension plan side than we saw 20 years ago in the United States. What is interesting to mention as well is that today, more than 80% of the assets are in fixed income and the definition of this fixed income really government bonds. So most of the assets is in government bonds. There's a very small allocation to corporates. And when we saw a couple of slides back in the United States fixed income for pensions are at about a mid-20s percent range today. And that fixed income definition carries a lot of probably corporate bonds in it. So we are really, really well behind the development in regards to the asset allocation of the pension industry to anything that is not government bonds at this point. This number, as I said, has been growing. We have been seeing, despite the increase in the recent high in interest rates and the high level of re-interest rates, we have seen allocations to our private products at record levels today. So one example of that is VCP IV, which we are raising now. VCP IV is going to have the highest nominal allocation from Brazil in the history of the product. So despite the fact we're still with high interest rates that allocation to our products continues to grow. So how are we positioned to take advantage of these tailwinds that we're going to probably continue to see in the future, right? In the past 6 or 7 years, we have been able to capitalize on these trends. We grew more than triple our AUM since 2017, and that was done across all of our funding lines. So we grew in our local institutional clients, we grew in our direct distribution, we grew in allocators and distributors. We grow internationally in our high net worth sleeve, all of our sleeves from a capital formation standpoint, all of them presented growth in this period, varying growth, but all of them grew in this period. So we feel we have a very well-developed distribution platform today which we built from scratch, everything was done proprietarily since our foundation. And it's an engine that we know that works and that will continue to allow us to tack on the opportunity. The depth of this distribution network is quite significant. So the number of relationships that we have today, a number of connections that we have today, both locally and also to some extent, internationally, have been developed over time and are very substantial. So in Brazil, we talk with over 140 local institutions between private pension plans, state-owned pension plans, municipality pension plans. In the United States and abroad, outside of Brazil, we have 400 relationships, of which I would say probably between 50 to 70 LPs today are active LPs for us. And obviously, this line is going to be massively boost with the partnership that we just announced with Ares. We have contact to over 700 high net worth either individual single-family offices that are also important for us from a funding standpoint and a relationship that is differentiated because we differentiate ourselves with this type of clients with content. So they are being accessed with opportunities that are not usually found in the marketplace and other service providers. We have over 80 distributors that work with us on a recurring basis to distribute our products in Brazil. So these are the high-tech distributors. These are multifamily offices people with whom we partner to have access to final clients in Brazil. And finally, a group that we feel has a huge expansion potential, which is our direct distribution business through our listed vehicles. Today, we have a little bit over BRL 6 billion in this sleeve. It's a segment that has been growing substantially for us where we have strong brand recognition. We have established already winning funds in the space, and it's a space that we feel very strongly about going forward. Today, more than 90% of the relationships that we have are direct relationship with end clients. So this is another, I think, very important point of our distribution capabilities that we have, the end client contacts and relationships. From a debt standpoint, from a market size standpoint, the addressable market is very significant. So we're talking about, as we said, BRL 2.4 trillion pension plan industry in Brazil. We're talking about at our -- at today's reach BRL 3.2 trillion potential in our international distribution side without taking into account the partnership with Ares. We have a $1 trillion addressable market in our high net worth individual side, $2.2 trillion addressable market in our distribution side and a huge addressable market, which is not factored in here in the direct distribution business in the REIT and in the MLP, which Leandro and José Guilherme are going to talk about and cover the size of the opportunity. Here is a developing market in Brazil with substantial growth opportunities in which we are very well positioned with a very strong brand and strong products. In the middle of 2022, we put out a target to raise BRL 6 billion in structured private market products until the end of 2023. It's looking like we're going to hit that target. So we are at this point at BRL 6 billion between VCP IV,our listed REITs, VICC, which we had a tremendous first close, over 70% of the target. Our private credit fund Vinci Credit Infra and other strategies. This target will likely be reached. We are well into the targets. We have very good visibility going forward with additional AUM coming to the platform over the next few quarters. So we decided to roll this target over going forward into year-end 2024 targets with the layover of products that are coming online between now and the end of next year. So on top of the remaining fundraising VCP IV, VICC and Vinci Credit Infra, we're going to have -- and we're going to talk about that today in the rest of the panels. We're going to have the fourth installment of SPS, which was our partnership with the SPS team that we announced last year with the acquisition of that platform. This is high-yield corporate funding solution with very high and very strong collaterals that are yielding today and [ Gabriel ] is going to talk about that. The returns have been above 20% and in dollars, 25% net in dollars. So we view this product very strongly in terms of funding. We have the fifth instance of our impact fund. It's actually VIR V that's going to come back to market in early 2024, and José Pano is going to talk about that. We have the second fund in our real estate development strategy of the FDL. The first fund has been doing extremely well. We're going to have probably very good news going forward. And we feel very strongly about the REIT now with interest rates coming down. We had a period of a few quarters where our REITs were trading below NAV and to raise money on that situation was very tough. Now most of them are above NAV. We actually went out with a press release, I think, a couple of weeks ago with the fundraising cycle starting to open up with VISC or shopping mall REITs, there's further potential for VISC to raise short-term money. We're exploring opportunities there. But clearly, we have most of our REITs and the MLP very close or above NAV, which will position this part of the capital of the capital raising side in much better terms going forward than was the case in the past couple of years. So that means that we expect the BRL 10 billion until the end of '23 to become BRL 15 billion by adding these other opportunities until the end of '24. And with that, looking at the midterm target, I think Alessandro mentioned our target from a total AUM standpoint of BRL 150 billion of those BRL 150 billion -- we are today at BRL 65 million. We're going to raise BRL 60 billion in addition to what we have today across all of our platforms. So this includes private market opportunities. This includes VRS, includes liquids, includes IP&S, in terms of everything that we have and the opportunity that we see going forward from a funding standpoint. And then we have a little bit of appreciation that is baked in on to that BRL 150 billion AUM target. And with this combination, we get to that medium-term target that we set for 2028. So this is the first part of what I had to say. Basically position our platform into the market situation today. We're very excited about what comes ahead with the distribution capacity that we have. And obviously, with yesterday's announcement with Ares, we think we have the best possible partner to increase the probability that we are able to fully observe and fully capture the opportunity that we have ahead of us. With that, I'm going to call José Carlos Carvalho, Strategies Chief Economist to talk about the environment and the outlook for Brazil in the region.

Thank you, Bruno. Our plan today here is -- I'm José Carlos Carvalho. I do macro research at Vinci department responsible for both macro research and the data science department. And the whole idea here is to give a brief overview of what's going on in Brazil. We think we are very optimistic. I've been doing that since 1995. And I think it's a moment where we can see where we can see a good prospect for Brazil in the years ahead. So our plan is here to give a brief overview of 15-minute overview. And well, I think there are some key points there. I think the one very important thing that we don't stop to think every day is the power balance that is going on in Brazil. We know many emerging markets, they go one way or the other extreme positions depending on who is elected for the presidency and Brazil, this thing did not happen. Actually, the presidency went to the left with President Lula, but Congress moved to the right. So we're seeing a lot of checks and balances going on there. President Lula trying to approve some of his agenda and Congress being more on the right side, not approving it, and we think this balance is very good for emerging democracy like Brazil. Brazil did a lot of important reforms like independent central bank, which is very relevant for whatever we're going to say today here about the monetary policy in Brazil, but we did also social security reform. We did labor reform. We did the clarification of the legal benchmarks for investments of the private sector in public areas. So a lot of important things that have been approved that we think that will translate into higher growth in Brazil. Also, President Lula said many times that he was against the cap on government expenditures because usually, parties on the left tend to be more willing to have bigger deficits. But at the end, although there was a constitutional amendment in the turn of the year that allowed a bigger expenditure. They ended up accepting new fiscal framework, which is something very healthy that puts a limit on government expenditures. Trade surplus is another big thing in Brazil. I'm going to talk about that. And we think that Brazil might be a good swing with some tailwinds. So I think there are 2 key things that I'd like to emphasize first. Number one, the good fiscal position of Brazil, these 2 lines here show the debt evolution in Brazil. You see the big bump is the COVID years. Everybody in the world spend more money during those years. But the different thing in Brazil, and I don't know any other country that did the same, because of this expenditure gap that Brazil has, that level in Brazil right now, you see the blue line is below before the pre-pandemic level in 2020. So Brazil did a significant nominal physical surplus primary surplus and that was very relevant. The gray line is the net debt of Brazil and the difference between the blue line and the gray line these FX reserves. Brazil has 15% of GDP in FX reserves, which is something very relevant to keep the currency within some given boundaries if there is a big crisis like the COVID crisis. The other thing in the fiscal side, so there are 2 main points. I'm still in the first on the fiscal side is that President Lula approved in Congress, a fiscal framework that put limits on government expenditures. So government expenditures can only go up by 70% of what was the increase in government revenues and that will stabilize that GDP inductor. So there is a target for the primary result, which is the chart on the left. And also on the chart on the right, you can see how much the market was expecting for the debt evolution before this fiscal framework was approved. So that's the blue line, it was exploding. Then with the proposal that Lula sent to Congress, which is the red line, and with the proposal that was approved by Congress, which is the latest, the lowest -- the -- I said the green line and now the red line. So we are even a little bit more optimistic than the market because I'm going to show you, we have a higher expectation for growth in Brazil. And also, we believe that those fiscal targets in the chart on the left will be fulfilled, will be met because of our revenues that Brazil's going to have and the government just declared that 2 days ago. So I think this leads us to be a little bit more optimistic on this side. So I mentioned the first key thing, which is the better fiscal position than we -- one would expect with Lula; and number two, the trade surplus. Brazil, you see the blue line, that's a trade surplus in Brazil. 1 year ago, we're at $50 billion in 12 months. Right now, we are $86 billion. So that's 6% of GDP. That's a lot for a country large as Brazil has usually a close country. And you can see with our peers like Mexico, Argentina, Chile, Colombia, they don't have anything like it. So Brazil really benefit from this super cycle of commodities. And when you see what are the key products, do they depend too much on what's going on in China. While China is a relevant buyer for the green bars, if you took a look at the chart on the left, which is iron ore. So we already took a hit there because you can see it 2 years ago, it was BRL 45 billion right now, it's BRL 28 billion. So we took a hit there. But what the latest bars 2023, the last 12 months and the previous bar in 2022. You can see that in 2022, the main item of export in Brazil was oil. That's something that people who don't follow Brazil very closely. They don't -- they are not aware of, but Brazil is becoming a major oil exporter. The chart on the right shows you the Brazilian production of oil. So the latest light blue line is 2022. Last year was 3 million barrels per day. And you can see that until 2029 when they grow this to 5.4 million barrels per day. So this level that exports right now at EUR 60 billion. If we stay on the average price of the last year, we're going to be talking about Brazil exporting more than $100 billion just in oil. Of course, soybean is also very relevant BRL 58 million and iron ore, I mentioned in meat is becoming also a very relevant export for Brazil. So in terms of investment, that's good not only to put some pressure down on inflation. That's a very relevant thing. But when you're thinking about long-term investment, the foreign client is thinking not only the return in BRL, but the dollar return. So we expect BRL to be relatively stable over the long term with that much supply of dollars into Brazil coming from the trade side. Well, these 2 factors that I mentioned, the trade surplus and the better fiscal numbers, I think they triggered a very positive tailwind for Brazil. So if you have a currency appreciation and you have some trust in the fiscal numbers that, that we're not going to explore, we start to see the currency to appreciate, of course, from [indiscernible]. Now we're trading close to 5%. And when the currency appreciated, if you look at the chart on the left, this is the focus survey. That's a very good survey in Brazil is held by the central bank with 150 market participants. And you can see that the inflation for this year, which is the blue line, was around 6%, and it fell all the way down to 4.86%. The gray line is at 3.5%. So 3.5%, the inflation target in Brazil is 3%. That's something that President Lula confirmed, reaffirmed. So that was also a very positive move. So we are very close to the center of demand. And in Brazil, the band is 3% plus or minus 1.5%. So if you are within 3% to 4.5%, you were within the band of the inflation target band. So with this positive outlook in inflation, we start to see lower rates in Brazil. So from 13.75% where rates were to 11.75% with market expected by the end of this year. We are already at 12.75%, but further down to 9% and then 8.5%. So why are people talking about 8.5% Basically, the long-term real interest rate in Brazil, the neutral rate in Brazil is believed to be around 4.5%. So inflation expectations are at 3.5%, you take 4.5% plus 3.5%, it's 8%. Also, you have a premium there. So you're talking about 8.5% to 9%. During this crisis last week, we know the market price for this went all the way up very close to 11%. This is a survey of expectations, not market price. But today, yesterday, at the end of the day, it was at 10%. So if it goes to 9%, 8.5%, we still have a lot of gains to have here in the market. from these new prices. And again, if you have a very good trade surplus, if you have lower rates, what is happening in Brazil is everybody is revising up their growth expectations, maybe potential GDP in Brazil is higher right now. The blue line shows the market again, from the Focus survey, the market expectations for growth in 2023. Last year, in 2022, expectations were below, almost close to zero. So as time went by, people start to revise up, you see the blue line going up. And right now, we are at 2.92%. And the puzzle here, what I think when I told you guys that we are more optimistic than the market, maybe the debt numbers, debt to GDP will be lower, is because people are expecting growth for next year, just at 1.5%, that's the gray line. So how come Brazil is going to cut rates from 13.75% to something like 8.5% to 9%? And growth, we're going to be halved from 3% to 1.5%, it doesn't make any sense. So we are still doing more estimates on the number. But I think as next year, we're going to have at least 2.5% GDP growth in Brazil. It might be higher. We have to have a little bit more detail on the agricultural side because this year, we have El Nino, which is more volatile for the agricultural sector. But I think with more lower rates and more credit, so the consumption that depends on credit, we'll do better next year. So at least 2.5%, so better growth numbers for next year. I'm going to -- the whole idea here is though how this scenario that I'm telling you benefits Vinci. How is this a good scenario for Vinci. And I think, no, there's a lot of places we can go. First, I'm just repeating here the chart that Alessandro showed in the beginning, so they have it in context. So you have lower rates. You can see that Vinci's assets under management went up during the tightening cycle. So those 13.75% interest rates translated into a 7% to 8% real interest rate. So everybody was really moving into less risk. If you could -- if you're an individual in Brazil, you could place your money in government bonds with daily liquidity, getting 13.75% or 7% to 8% real interest rate, why bother take risk. So that was a major achievement that we were able to raise assets despite this very high interest rates. And now, as I told you, we think there is an easing cycle that has just started but it can go further down. And you can see here what happens when you have this sort of easing cycles, what people will get out of the safety of overnight government bonds and go take risk again. So that could be very positive for us. The second thing, there is -- there will be a renaissance, the revival of the market in general because we were exposed -- this chart here shows the 10-year rate in Brazil in the X-axis and the small-cap index. So we put here the small cap index so that we can have an idea of assets in Brazil. But as rates start to come down, and you can see the shot, it was at 13.5% to 12%, we are here have the latest number in September. If you move to the 10% or 9.5%, we still have a lot of hikes -- reclassification of assets in Brazil. And here is the small cap, but you can do that for real estate, you can do that for private equity, liquid stuff is even more gains you could see there. So we're going to benefit a lot from there. So that's another area. Also, just showing what I just said, this blue bar is how much Brazilians having in the stock market, so risky assets. And this chart comes all the way down from 2002 until recently. So 2002 and 2003 here more to the left of the chart. When Lula was elected, Brazilians had 11% -- Lula elected in 2002, the first time. Brazil had 11% in their portfolio in equities. When Zuma was impeached, where in 2015, '16, Brazilians had 9% in FX. Those were times of crisis. And right now, Brazilians have 9%. So if you look historically, that's very low. So everybody got out of risky assets. So -- and the piece for the public market are very cheap right now, 7.1 by the end of '22, 7.9 right now. And for private equity -- you guys are going to show in a few moments, even cheaper than that. So we think, price wise, it's a good opportunity, and the market is not allocated in risk assets. And as rates come down, it's going to be much better. The FX strategy also is going to be much better. This chart shows the correlation between the number of IPOs, which is the blue line. And the CDI rate, which is the overnight rate in Brazil, which is the red line, but it's a CDI rate [indiscernible] scale. So you can see that when rates were very low -- so take a look in 2020, when rates were just 2%, the blue line, which is the number of IPOs were 42. Then rates went from 2% to 13.75%, and the number of IPOs went from 42 to 0. And now we have the dotted line here, it's the expected cutting rates from 13.75% to 12%, then 9%. So probably going to see more opportunities to get out of our investment strategies and the market is going to be more alive in the near future. And here in my last slide, we are saying Brazil that after improvement comes the upgrades, not the other way around. That shows that Brazil had investment grade in 2010 until 2014, we lost during the Dilma crisis when she had a very significant crisis in Brazil. And we start to see rating agencies giving an upgrade to Brazil. The blue line shows the feature rating, which -- where we are rated at BB. S&P, we are still BB minus, but the green dot shows that we have a positive outlook. So very likely, very soon going to have another upgrade. And then we're going to be very close to 2, not just to investment grade. So we think that's going to be a good tailwind for Brazil. And the perspective of having -- becoming investment grade again, will bring a new a bunch of investors who can only invest at investment-grade instruments, and that's a very big proud, and that can further help Brazil. So these are the key messages. And now we are going to call here the co-heads of Private Equity, Gabriel Felzenszwalb, [indiscernible] yesterday, the whole day, and Carlos Eduardo Martins.

Thank you, José. Well, good morning, everyone. Good morning, everyone. It's a pleasure to address you for the first time at the Investor Days. I'm Gabriel Felzenszwalb, and this is Carlos Eduardo, my partner and co-head. We've been heading the Private Equity. What is Private Equity at Vinci about? We are today almost 30 professionals. The leadership has been working together for more than 20 years. We've committed above $2 billion in 25 investment platforms where we have done almost 70 add-on deals on top of that. We have distributed back to our LPs almost $3 billion, out of these $2 billion committed. And we have been generating a tremendous amount of co-investments to our LPs as well, almost $600 million in co-investments in a very, very strong track record in an almost 20-year period, almost 50%, 48% net IRRs in dollars with the ups and downs of Brazil. So a very strong return that we are very proud of. And we feel this is just the beginning. The reason for that is that Private Equity is still very little penetrated in Brazil. When you compare to other markets, we see that there's an opportunity to double the footprint that Private Equity has in the Brazilian economy. We -- as Bruno mentioned, we feel that Brazil is a few decades behind the more developed markets. The availability of capital is very, very low. Competition is low. We've seen very interesting companies that we believe are subscale companies that with the right capital allocation, the right people, the right alignment can grow, consolidate fragmented markets, generate productivity, generate gains in a market that is large, a very large population, full of fragmented industries and very interested opportunities. What we see in Brazil is much more akin to growth than buyouts, okay? We don't have leverage buyouts in Brazil. Our investments are done at much lower entry multiples. So we are Fund III, the fund that we have recently done investing last year was invested at 7x EBITDA as compared to the 14x you see in the U.S. and we use very little leverage. The average leverage of our Fund II portfolio is 1.2x. So again, lower prices, thanks to lower competition and a different investment opportunity set. No financial risk. It's much more about growth and execution. And this is something that we feel very strong about. When you look at our Fund III portfolio, our companies have been growing above 40% per year since inception in terms of EBITDA. This compares to 4%, 6% on a global scale. And this is where our return drives from. Our return is 92%, driven by core earnings growth. So these are companies that are growing top line, growing their margins, being more efficient, allocating capital better and driving core fundamental growth, and we do not rely on most expansion. And this has been the case over our history so far. The current vintage, in our opinion, is the very, very welcoming one, a very appealing vintage. You see the chart on the left is the evolution of prices in the U.S. market, this is the blue line. Prices have been increasing higher and higher. In Brazil, prices have been more stable, around 8x. As I said, our Fund III was formed at 7x, and the Fund IV that we are now raising and already investing is looking even more appealing. The first investment of Fund IV was under recent at 5.5x and our active pipeline today is around 6x. So an even better entry point than what we saw for Fund III in a market where even on the public side, the -- as [indiscernible] mentioned, the average company in Brazil looks much cheaper than historical levels. And this is also passing to the private side. And we believe we can take advantage of this opportunity set, thanks to our key competitive advantages. We are pioneers, as Alessandro said. This is our fourth flagship fund, and we've already branched out to other strategies, as [indiscernible] will explain in the coming minutes. We already invested in 25 platform companies. The leadership has been working together for a very long time. I think this is quite unique in Brazil, this longevity of the leadership team. Our track record is very strong. In local currency, our returns are 64% per year. This is 8x what the local stock market benchmark did in the same period. Again, 92% of that value attribution coming from core earnings growth, and we have a very strong capital return capability. We have returned more capital than we have deployed so far, 129% of capital return. And on the capital that we have returned, in local currency, it's a 4x multiple and invested capital over a almost 20-year period of time. I think it's a very, very high track record in any market in the world. And this has allowed us to grow the business tremendously. And we think that going forward, there's still a lot of room to grow in Brazil, potentially in other markets, as Alessandro said. We started with less than BRL 1 billion in 2009. Today, we have BRL 14 billion essentially doing growth in buyouts, seldomly doing some turnaround views, more and more exposure to minority growth opportunities. And we branched out to a new strategy, our impacted term strategy. Again, that [indiscernible] will drive more. So it's really about driving transformation in the companies that we control or we partner with, with very strong influence in a market that is scalable with very attractive opportunities. And Carlos will explore a bit more how we generate this return. Thank you.

Thank you, Gabriel. So I'll explain a bit more how we do our core private equity practice. We have a history of creating and building leading companies in the sectors that we invest. So here we have some examples of companies that we invested in the past, from 1, 2 and 3 companies that have already achieved maturity, and now our market leaders and others that are in that process. And Fund IV, our first investment in North Block. So if I were to summarize in a short statement what we do, we try to find secular growth trends in industries that will benefit from them, trying to find within those sectors, companies that are prepared to benefit from, with have the right business model that will scale with capital. But [indiscernible] management team in place, systems, process and scale up those businesses over time. That happened in the case of here, I have some examples that we did in the past, and we'll keep doing it. So Equatorial, which was the first investment that we did in Fund I, we managed to grow from a company that was in a more difficult situation to a business that grew EBITDA more than 15x over the period that we were invested in a company. And Equatorial today, is one of the largest or the largest company in the energy space. The same with Burger King, growing 23x EBITDA from 100 stores to 1,000, being today is the second largest operator of QSR restaurants in Brazil. Same thing in the education space with Vitro, we became from #5 in EdTech in Brazil to today's the largest company in EdTech, with almost 1 million students and a company which is listed here in the NASDAQ. And finally, the example of Verde, our more recent investment from our Fund III, that we came from the acquisition and integration of 8 regional operations in the Fiber to the Home segment through a moment that we're going to close the year with an EBITDA, which grew 8x. And with the transformation merger that will lead this growth to double, basically to BRL 12 billion. So really, getting this business model, putting capital, the right people, process systems in place to speed up growth in proven business models. Of course, behind all of that, there is people, and we're very proud to have a senior leadership, as Gabriel mentioned, and has been working together for quite a long time, supported by fully dedicated professors more than 20 in our private equity practice, including the core buyout strategy plus the Impact Fund. And on top of that, all the C-level team that we have built over the time, that they have been working together with more than several different portfolio companies across the years. And I mean, this seem has, of course, in 20 years, have been doing that in different cycles, market cycles, economic cycles in Brazil, which we were able to weather the different storms in front of us. And the methodology, how we approach first, as I mentioned, trying to identify the secular growth trends that we see in different parts of the world and that impact Brazil as well, trying to identify the industries that will benefit from that. Second, being very active in trying to source retail transactions that will take advantage from that. Our history tells that 2/3 of all the deals that we did and in total were 26 TCs that will be invested in over almost 100 companies, they were prepared to a resource and it take advantage of that because of the conditions that we're able to enter in the companies not only talking about valuations and discount to publicly [indiscernible] peers, but also the conditions that we're able to obtain this bilateral negotiations. And after that, creating in the way that we structure our deals solutions that we try to improve a little bit of returns at the same time, protect us to the downside. So something that we've been doing long time since Fund II is having a set of finance mechanisms where we invested the company and we buy out them paying in several years -- in several yearly installments, which has been helping us to reduce the impact of the volatility of the currency in Brazil. And after buying those companies, working alongside the management teams entrepreneurs, our partners to faster growth to really generate returns by earnings growth, which is the core of our strategy. And finally, call attention from the strategic players to sell those companies. There are leading players at that point in the market through trade sale where eventually, if the company gets to a critical mass and valuations when market conditions are positive, we're able to do an IPO over time. In terms of results, I think that Gabriel touched on that. But here, we have more details across the strategy, almost 20 years. We've been able to generate a gross IRR of 17%, which places among us the first quartile globally in terms of performance for private equity, which business in dollars, which is 4x the performance of the public equity markets in Brazil. In the middle, we have the realized investments, so the ones we really sold, which the performance is even greater at 9x and the MOC in dollars 3x. And the most recent fund that is fully invested, VCP III which we are showing good results already and a good outperformance relative to our main benchmark. An important point, of course, is distribute capital and return capital back to our LPs, and maintain these days where liquidity shrinks given the market conditions. But we've been able, over time, to sell most of our assets to strategic players of financial sponsors, but also we do have experience in leasing our companies, both in Brazil and here in U.S. and we have returned -- out of the $2 billion that we invested, we returned almost $3 billion. Out of this $3 billion, they come from a base of a little less than $1 billion and multiplying that capital by 3x. And here to conclude our part, it's a little bit of a view where Gabriel touched on that point. We came all the way in 2009 when Vinci was founded from less than BRL 1 billion to close part of the year around BRL 14 billion in AUM in the strategy. We are moving forward, we see the next phase of the strategy increasing our share of minority growth transaction. So having exposure to larger companies that are greater in size and that we could have potential minority stake, but with our high governance is something that we've been doing in the past funds. We think there is an opportunity in Brazil to increase that stake and expand a little bit of our strategy in terms of size. Also another potential, and Alessandro and Bruno talked about it, the opportunity in Latin America and think that it's another thing they're going to tap, that opportunity in the next few years, and probably the following front, VCP V, and other alternatives as we see for the strategies to have dedicated thematic funds or to specific industries or opportunities that we might pursue in the coming years. So having said that, I would like to turn to José Pano, our partner responsible for impacting returning strategy. Thank you.

Thank you. I'm Pepe Pano, I'm the Head of Return Strategy. I'll give you a brief idea of what we do. We started this strategy 20 years ago. At Pactual with Alessandro [indiscernible] when we started to invest in small companies in the northeast of Brazil. Then I was part of the VCP team. I did a few investments, [indiscernible] Cecrisa, I went to manage Cecrisa and went back in 2017. And we started the strategy to invest in small and medium-sized companies. Initially from 2 and 3 in the Northeast again. We have a very good experience there. And then we raised a fund for -- that far was BRL 1 billion. It was like 4x bigger than the Fund III. So we decided to invest in all of Brazil. And that's what we have been doing over the last few years. You listen for Carlos and Gabriel, the VCP strategy. The main difference with what we do is basically focus in not only return but also impact. And I will try to explain how we do that magic, where we see impact and return coming together, and there is no really trade off almost the opposite. On the other hand, the ticket size, we do today investments between 50 million to 150 million per company. Always been a minority shareholder, and always partnering with good entrepreneur, helping to build great companies. The competitive landscape where the opportunity is huge, really thousands of companies, lack of capital. So the challenge for us is to find the right companies to invest the right entrepreneurs in the right markets, but really -- in the ticket size where we invest, we focus in health care, retailing and business services, really, they are now investors like us. So the opportunity is pretty large. Really, the challenge is to find the right companies with the model that we like, entrepreneurs that we like. What we do is pretty simple, pretty consistent. We have been doing this for many, many years now. Somebody in the previous page, 37 years of experience myself, that's things that you don't have to say. You have to say like more than 25 years, that's enough, okay. Anyway, we look for companies that have been in business for 5, 10, 15 years. So with proven business models. We don't do start-ups. We don't do venture capital. We like to invest in quality businesses to businesses that have good return on invested capital and predictable growth, all means to reduce risk. And companies that really have no access to capital and long-term support also. And if they were growing, let's say, 5%, 10% per year, they can grow at 20%, 30%, 40%. And always partnering with the right entrepreneurs. We are always a minority shareholder, as I said. And we wanted to continue running the company. We like companies owned by the founders, and they continue managing the company. Usually, our exits have been through strategic players. So we sell to companies like Ambipar, Lee, players from outside that want to come to Brazil. And we have also some tough discussions with our funds, they want to buy companies where we invest. In addition, more recent, the Fund IV, we decided to go 1 step further. And apart from the return side, also at the impact side. How we define that? 3 basic stuff. One is just investing companies. that, as I said, don't have access to capital know-how. So basically, we have competition, if somebody else can provide that capital, we don't invest. That helps -- should help to get better valuation. That's how impact and return get together. Always SMEs, again, we don't invest in large companies, probably more medium-sized companies for Brazil side. And also now in Fund IV, companies where we see that they have in their business, a clear impact. We talk about impact, we don't talk about kind of ESG and things that are more internal, really companies that can impact the society. Sample, for example, in health care, we invested in Saudi health care company, and HMO in the interior of Brazil. We invested -- that basically provide services for the middle low-income population, people that pay $30, $40 per month. They are the only company in that segment. Basically, no competition, very high, one of the best, in fact, NPS service level in Brazil. They serve like 20,000 people in 2 years with no acquisitions, organic growth, they are going to 40,000 clients. So that's real impact. I mean that part of the country to some exchange to some degree, changed because of us because we were there helping these people, growing and giving a better service. That's what we do. Huge risk, you can imagine, SMEs, not very professionalized really companies that need a lot of support. So what we did and that helps on the risk -- on the return side is to put a number of risk management tools meaning choosing some sectors, where we have more expertise to looking for proven business model, the right entrepreneurs, experienced entrepreneurs and so on. So the combination, that's where impact and return comes together. And really, we should make better return because we have impact, and the other way around. The Fund III was focused, as I said, in the Northeast, 6 investments. We already exited 3. We are in fact negotiations to sell the 3 companies, 27% IRR. Even with the pandemia, we did extremely well. We don't like leverage based on SMEs in Brazil. So we didn't suffer a lot in that front. The Fund IV, VIR 4, it's a 3-year fund now. We already allocated around half of the fund. Now we are approving 3 other investments. So in a few months, we will allocate around 70% of the fund. So far a pretty high return, that's mostly related to some good investments, and an exit. We exited the first company where we invested in less than 2 years and already with a 0.4 DPI. So pretty good standard even in this tough time. So pretty happy with both the return, and also the impact in all these companies. I think that a combination of things made us with some competitive advantages in the market. As I said, we have been doing this for many years. So we are developing tools and ways from looking for the companies to negotiate with the companies to deal and build a real relationship with entrepreneurs. The entrepreneurs are like basic to our strategy. Because of that, and the entrepreneurs play a huge role in being the player of choice, I said that if you want to know about us, just talk to the 25 entrepreneurs over the years where all our partners of us, they can tell you how we operate and how we build that and help them to build these businesses. And the consistent returns. I mean, over the years, we have been able to basically not losing money in 1 case, because also, we don't make 10x, 15x in our investments. So we need to be very careful in terms of avoiding losing money in our investments. But usually, you see a return between 1.5 to 3x MOC. Exit has been in a shorter period of time because company growth, and then you have the strategic players come to buy the companies. We have some companies selling less than a year. It's not the -- we like more, but we -- if we have opportunities to sell, we are right away willing to discuss that. And the consistency, both in the strategy, and the way that we do investments, and the way that we manage investment is very critical, and that's how we try to achieve these results. Comparing with the market, I think that comparing with our harder rate of inflation plus 8%, 8.5%, we're doing pretty good. And compared with the market, with our -- the few competitors in this market, we are in good shape. Moving forward, as I said, we are planning to complete the investment of a good portion of the capital fund for in the next few months. Even we -- during the last year or so, we didn't do any investment because we didn't find the right companies and particularly the right valuation. So we don't really care a lot about speed. This is a business of quality and not quantity. But now we have a good pipeline. And as I said, by the end of the year, probably, we allocate enough capital to start to think about raising a new fund. We are discussing with existing investors we had in the previous fund, very strong reap, more than 70%. Very happy with that. International investors and local investors, pretty diversified investor base. That is -- we plan to do a $300 million fund focusing now in the new sector also that is agribusiness that we were not doing apart from health care, retailing and business services. As I said, the reap is very critical for us. And also, we plan, and that's more recent, that's why it's not in that presentation to do some investment. We're discussing and discussing even with investors to do something outside Brazil and do initial investments in Uruguay, Paraguay and Bolivia, mostly in the agricultural space. So really a lot of space to do more -- lot of things in this area. Thank you, and I pass to José Guilherme, my partner on the infrastructure. Thank you.

Okay. Good morning. Thank you for being here. Thank you all for this time with us. We're talking about infrastructure here, and we begin with trying to compare a little bit of what's happening in the world, and then we jump into Brazil. This asset class really started to kick in the beginning of the 2000s pretty much. And if you have -- if you see the evolution of fundraising for the asset class in the last 2 decades, more than $1 trillion had been raised in infrastructure globally. Naturally, the bulk, I would say, 80% to 90% of those $1 trillion were dedicated to developed countries, especially Europe and the U.S. and parts of Asia. So Latin America, as an emerging market, had tackled a small portion of it. But as we see more and more, there's more and more appetite for the region. Brazil is not an exception in that. In the past, most of infrastructure in the country had been invested by government budget, both at the federal and state and municipality levels. But over and over again, and the story repeats itself with other countries, the states and the governments are constrained in their budget so that they start to attract private capital to help them invest in infrastructure. And the history of infrastructure investment in Brazil is a history of underinvestment over and over and over again. We see that we don't even invest the amount that is needed to cope with the depreciation of our assets. That's why you see very poor quality roles. You'll see bottlenecks in the ports. You'll see airports back with people. That's why this is underinvestment. A rule of thumb internationally is that a country should invest around 3% of GDP just to cope with depreciation, not to mention the expansion of the infrastructure. And over the last 2 decades, on average, we have been investing around 2% of our GDP. Meaning that we opened the gigantic gap of our infrastructure quality in the country. And just to close this gap in the next 2 decades, the estimation is that we should be investing around 4% of GDP every year for the next 20 years. That's around $80 billion every year for the next 20 years. Not surprisingly, over time, the private sector came to invest together with the public sector and infrastructure today, around 2/3 of what is invested in infrastructure in the country comes from private sector, companies and financial sponsors such as ourselves. And the needs of investments are gigantic in each and every sector, telecom, power, water sanitation, transportation, in each and every one. The competitive landscape because of all that is a very interesting one for financial investors because we don't see a lot of the global infrastructure GPs participating in Brazilian infrastructure market. Basically, the market is being supplied by capital from strategic companies and some small local players. On the other hand, as I showed to you, the market has a significant scale. I would say that it is one of the few countries globally that can offer global scale opportunities to investors in infrastructure. That leads to a very favorable market for us, an entry point, very interesting for a manager with 20-plus years of experience, investing in this space in Brazil, which basically gives us a very important position when we compare to the market with a full offering to investors in terms of the knowledge of the country, the track record that we have, the multi-sector approach that we have there. So we've been very active over the years in the country because of that. This is a chart that I like very much. This is just to show you what I've been telling you about the lack of the substantial amount of capital from very well-established global GPs in the country. On the X axis, you see the strategies going from the low risk on core to the more risk on turnaround. And on the Y axis in the size of the bubbles are the size of the funds. We picked some of the big GPs around the world. So GIP, I Squared, Actis, Brookfield, most -- we don't have it here, but KKR Infra, EQT, none of these guys are in Brazil with some exceptions, some notable exceptions. Brookfield has been in the country for almost 120 years. So they have been heavily investing in the country out of their global funds. And here, Actis has been active in the country with their renewable practice. Every other global GP, either they are not there, or they don't have the authorization, they don't have scope to invest in a non-OECD country. Some important direct players are there present in the country. Notably some sovereign wealth funds, as GIC, for instance, and some big Canadian pension funds as OTPP, CPPIB and AIMCo and CDPQ. Those have local presence, local teams, and they have been doing massive and gigantic deals, deploying capital locally with their local teams. Aside from that, we have several small local players that tap only the local investors, be it high networth individuals or some institutional investors. So that's why we think that for the fund that we are working on right now, which is VICC, this is a very nice entry point, and we are very nicely positioned in that scenario. So an overview of what we do in infrastructure at Vinci. We are focused in 3 sectors: power, water and sanitation, and transports. There are some funds that are active already with assets that we are already invested in companies. We are managing now, we're either divested. I call your attention for one of our most recent investments at water and sanitation sector, companies called Real+, [indiscernible]. It's a company that we incorporated last year in Brazil, and we are serving 2.5 million people in the state of Rio de Janeiro, serving a full scope of services, since distributing drinkable water to collecting and treating sewage for this whole population. This is a fund -- an investment that we did under our VS fund, the water and sewage fund. In terms of some numbers, as I told you, we have been doing that for almost 20 years in the country, have invested in 36 companies or assets. We have deployed over time around BRL 5 billion, and we had returned BRL 4.5 billion or BRL 4.6 billion to investors over these years. Those were invested under 6 closed-end funds. And we still have 1 perpetual vehicle, it's kind of an MLP in the local market. This fund we raised in 2019 was the time that we made the IPO of this fund. It invests in brownfield assets in power, renewables and power transmission. We have been generating 12% nominal dividend yield for investors net of taxes. And today, the portfolio is a nice combination of power transmission, small hydros and wind. We have a total of 15 professionals all together, working together in investments and managing the assets with an average of 20-plus years of experience. And as of today, we are active working on investing BRL 2.4 billion. The team is led by myself and Rodrigo, my partner, who is the portfolio manager of VICC. Rodrigo has got a very interesting and unique experience. He prior to go to Vinci, he was managing an infrastructure fund here in New York for Citi. So he brings for us the global perspective of several sectors that we invest as well. Well, the competitive advantages are kind of similar to the ones that you saw in prior presentations. The team is really strong. We've been there in the ground for quite some time now. We, as always, have a strong alignment of interest. This is the same case for the infrastructure funds. We usually, work together with the companies to enhance their profitability and build the assets accordingly to what we envision and what we planned since the beginning. We have developed over time a very strong and top notch E&S framework, especially for VICC fund, we went to see what was the world doing in terms of the climate framework. We took it within the Vinci. We had developed some tools for this fund that I'll touch it later. And as in the same manner as other sectors in Vinci, we have been lucky enough to tackle and have capital from a lot of local and offshore institutional investors as well together with capital from local high net worth individuals and other local investors. So in terms of track record, this strategy has really been successful over time since -- if we got the full portfolio since 2004, 2005, when we started, both MOC and IRR are very strong compared to the benchmarks. It goes all way to the right to most recent fund, which is [indiscernible] both MOC and returns very consistent and substantially above the benchmarks as well. What we are focusing now. Today, we are working basically in fundraising VICC. VICCs are sustainable infrastructure fund that has been raised since the beginning of this year. This is a $400 million fund, closed-end one, 4 years for investment, 10 years period. The idea is that we invest in sectors that are important for climate and sectors that Brazil has competitive advantage. So the pillars are renewables on 1 side to tackle the mitigation aspects of climate change and water and sanitation on the other side to tackle the adaptation part of the climate change. For that fund, we had developed 10 practical tools to make sure that we are on track to deliver what we are supposed to deliver in terms of the climate impact. We have a very strong support from our partners and the GP here. And we have been very, very strong in fundraising. We had just closed last week, the first closing of this fund with almost 75% of commitments, a strong support from the International Institutional Investors Community together with a strong support from our most important infrastructure investor in the country, which is our National Development Bank. So all together, out of the $400 million, we are pretty close to have raised around $300 million already in the first quarter. That's really strong in a market which is really tough as we understand from the whole investment community around the globe. This is a nice fund for international investors. It is an Article 8 fund, but ready to be an Article 9 fund under the SFDR regulation. That's calling the attention of several institutional investors around the globe, which are -- most of them are only allowed to invest in Article 9 funds. So this fund fits nicely into their mandates as well. Another thing that we are working on as of today is the expansion of our Core/Core Plus fund, VIGT is our listed fund that resembles an MLP. It's a perpetual capital type vehicle. We have around BRL 700 million market cap. We had done 2 capital markets follow-ons, the IPO and follow-on. We have been generating 12% nominal dividend yield, and we have around 8,000 investors in our investor base. For the future, the idea is to expand our reach especially to other geographies, there is a natural evolution for us, especially for Latin America. There is an evolution for us also to continue to explore our transportation strategy within the infrastructure, growth sectors that VICC will invest, just to give you a perspective. If we are only talking about renewables, Brazil's renewable size is at the same size of Spain, Italy and France all together. So it's a huge market. And finally, there is the expansion of our Core/Core Plus strategy with more capital into VIGT to continue to acquire equity stakes in brownfield assets. So this is what I had today for you and I ask for Leandro, my partner here to talk about the real estate strategy. Thank you.

Good morning, everybody. I'm Leandro Bousquet. I'm the Head of the Real Estate Group. I'm glad to be here. And I expect in the next 15 minutes to give more details on our real estate packets and to talk about the growth perspectives for real estate at Vinci. Today, we are 1 of the largest real estate managers in Brazil with roughly above BRL 6 billion in assets under management, and 95% of this AUM through perpetual capital through these 7 listed REITs. So we are today 1 of the leading managers of listed REITs in Brazil. Our portfolio comprises more than 10 million square feet of gross leasable area, across 54 different assets in 14 different states in Brazil. And we have been very active in M&A transactions in the past 10 years. We have close to BRL 7 billion in acquisitions or divestments in real estate assets through 70 different transactions. And the ones that we divest, we generate an average IRR of 23%. We were in this listed REIT industry, 1 of the pioneers introducing the best practice in terms of investor relations. And as a consequence, we were able to reach a very sizable number of retail investors in our base. So we are, as of this week, reaching close to 500,000 retail investors in our funds. All of that was achieved with a very experienced team. We have 14 investment professors led by myself and 2 other partners in the group [indiscernible] with the senior team working together for more than 10 years. We are also 1 of the fastest-growing real estate managers in Brazil with an average CAGR of 35% since inception. And during the last easing cycle, we were able to almost quadruple our AUM. So -- as you see -- and as Alessandro and [indiscernible] mentioned, we are entering a new easing cycle. So we expect to that to be 1 of the greatest revenue of growth for real estate in the future. Our funds are performing very well. So the 2 largest and more developed funds have outperformed the benchmarks by far. So our mall REITs has an accumulated total return of 85% compared to 44% of the real estate index benchmark. The same with our industrial property fund. So we have the leading performance to our investor consistently. As I was saying, we expect to grow a lot our funds in the next easing cycle. Even though we have grown our AUM by 35% compounded since inception. During the last easing cycle, as I mentioned, we grew 65%. And as we are entering in a new easing cycle, we believe that we'll be able to grow our funds through follow-on offerings and achieve higher growth pace compared to the recent past. And besides the interest rate cycle, I think there is a lot of room for this industry to continue to grow, because it is quite under-penetrated. So when we compare the size of the REIT industry here in the U.S. as a percentage of GDP and look to what we have in Brazil, we have potential to almost quadruple the size of the industry in the country. So this is 1 of the sources of potential growth that we see in the REIT market in Brazil. And as here in the U.S. due to the tax benefits that retail investors have, we have about 70% of the AUM in this industry are with the individual retail investors. We have been growing a lot the number of investors in the industry in the past 5 years, it came from less than 200,000 investors to more than 2 million in the last 5 years. But I think we still have a lot of room to grow when we compare the number of individual investors investing in the stock market in Brazil, it's more than the double of what we have in REITs. So we believe that this trend will continue and we see that on an almost weekly base the number of retail investors coming to the REIT market as well. And another big source of growth in these markets is definitely consolidation. Even though our size is like 65x smaller than the U.S., we have like 50% more funds in Brazil than what we have here in the U.S. So it is much more fragmented in the industry. So 1 of the biggest source of growth that we see in front of us in the next couple of years will be consolidating other managers or other funds in the industry. Even though the largest managers are growing faster than the smallest ones, there is still a lot of room for us to consolidate by other managers and other funds. I would say that probably the best opportunity that we see in terms of inorganic growth for Vinci will be to buy managers of listed REITs in Brazil. So finally, just to summarize what we see our growth perspectives, definitely, we will grow in size our existing funds through follow-on offerings. We have just announced and concluded the first follow-on offering of the year in our shopping mall REIT where we raised BRL 305 million, and we are announcing a second offering -- the same fund for November, where we expect to raise an additional BRL 700 million. So the market is reopening, and we expect to continue to grow our existing funds through follow-on offerings. Consolidation, as I mentioned. So we expect to find opportunities to buy other managers or to buy funds or assets of funds that are smaller, and have not reached the minimum level of liquidity, and we see a great opportunity on that front as well. We have an agri initiative, which is a joint venture between the real estate group and the credit group, where we have raised an agri credit fund last year of close to BRL 400 million. We expect to expand the agri segment and several other groups within Vinci are dedicating a lot to find opportunities to invest in the agri segment, and we expect to find that as well through this JV that we have internally with the credit group. Also, we expect to invest Brazilian capital in real estate opportunities outside Brazil, and in opportunistic strategies within Brazil through club deals. This is another important front that we expect to grow in the next 2 years. And we expect to launch the second VFDL fund, which is a development fund focused on industrial profits where we have a strategic partnership with 1 of the best developers of distribution centers in Brazil. We, as Bruno mentioned, we are fully allocated in the first fund in 3 projects, and we expect to start selling the assets and returning the capital to investors by the beginning of next year. So with that, we believe that we will be ready to start fundraising the second fund. The opportunities that we see continue to be great in that segment. The segment is performing quite well, levels of vacancy and rents -- the best results. So these are the main focus that we will have in the real estate group. With that, I will now turn to Marcello Almeida, our partner on the Credit Group.

Thank you, Leandro. Good morning, everyone. For me, it's a big pleasure to be here today to share with you an overview of our credit platform in Brazil. Let's begin looking how fast private credit is growing on a global scale. And the global private credit market accounts today for $1.5 trillion around 12% of the global alternative industry. Direct lending is the largest credit strategy so far with around 45% of the AUM. And investors are using private credit to increase their portfolio diversification. And at the same time, they benefit from interesting returns risk-adjusted. And borrowers are profiting from a wide range of credit strategies. They are assessing a dedicated pool of long-term capital and are realizing how efficient this underwriting process can be. And we see a very similar trend in Brazil. Brazil is already a large and scalable market for credit. And the aggregate credit in Brazil, including the total credit for companies and households represent almost BRL 9 trillion today, around 85% of Brazilian GDP. But on the other hand, our financial system is still highly concentrated after years of banking consolidation. Top 5 banks in Brazil still respond from more than 80% of the total bank loans. And our local debt capital markets, although it's growing fast, it's relatively small when you compare to the bank loan inventory. And most of the time, only those companies with better credit ratings can access. Because of that, many companies in Brazil still face some kind of credit constraint, and that creates a great opportunity for private credit in Brazil. Just to illustrate why Brazil has a promising addressable market in alternative credit, just to upgrade our current infrastructure, there's an investment gap around 3.5% of Brazilian GDP. It would be equivalent to more than $70 billion of investment per annum needed for the next 20 years. In addition to that, Brazilian Development Banks are reducing their balance sheets due to capital requirements and that creates a crowding effect leaving more space for private credit to step in. Mortgage loans in Brazil have grown from 2.5% to almost 10% of Brazilian GDP in the last 10 years. It's already BRL 1 trillion market, but when we compare to other international standards, for example, the average of the OECD countries, it become clear that a lot of space for growth. And the Agribusiness in Brazil, although it's already a relevant factor, representing 24% of Brazilian GDP, this sector in special still suffers from a lack of long-term capital supplier. Today, in our Credit Platform at Vinci has 5 core strategies: infrastructure, real estate, structured credit multi-strategy, exclusive mandates and the agribusiness. Our focus is on direct lending based on self-origination of private debt transactions. And today, our assets under management are BRL 5.3 billion distributed as follows per each vertical. Just to give more color and more details about the strategies and the funds, in infrastructure, we basically financed greenfield and brownfield projects always with a strong collateral package. Our focus is on renewable energy like wind, solar and hydro generation. Our first fund is a 15-year closed fund. It was the first Brazilian credit fund to be graded ESG based on European sustainable standards. And now we are raising our second fund, the Vinci Credit Infra. For this fund, we have already secured BRL 1.4 billion in seed capital. In real estate, we basically chase directly in the opportunities based on our long-term senior secured loans and MBS. All the transactions must have real estate assets as collateral, and we have a multi-sector approach. Our fund has a 10-year lockup period and most of our investors are the largest Brazilian pension funds. And we have also another fund, another vehicle. It's a listed fund in Brazilian Stock Exchange, and it was distributed via an IPO for retail investors. In structured credit, it's a group of multi-strategy funds with more flexible guidelines, investing in a wide range of credit assets. We're focusing on liquid instruments. We have a closed fund with 10-year lockup period adapted for institutional investors. And also an open fund distributed via retail platform. In the Agribusiness, we have a JV with our colleagues from real estate. We invest in senior secured debt, collateral always based on the land and we focus our origination in the most competitive regions for the Agribusiness in Brazil. And our fund is an 8-year closed fund distributed over the counter for retail investors. And our plan is to go for an IPO in the future. We have a unique business model. 70% of our AUM is in long-term credit funds. We have built our credit platform based on closed funds with 8- to 15-year lockup period, trying to follow the best international standards in direct lending. This is a unique approach from Vinci when you compare to the major terms of other local credit asset managers that are much more focused in short-term funds. 90% of our AUM come from institutional investors. And at the end, those terms give us the ability to be a patient investor and to deliver a superior performance mainly in periods of market turbulence. Our management team has a large track record in credit underwriting. I have 30 years dedicated to Credit. Gustavo, my partner, has 24 years of experience. He's also the portfolio manager, and we have the privilege of working together for 20 year so far as a team. We have 10 fully dedicated investors in our team, all of them with excellent track record in fundamental analysis and also credit monitoring. What I'd like to say is that we have a team capable to deliver the whole package for our investors from self-origination, analysis and deal structuring in-house. Talk about our competitive advantage. It's a combination of our business model, our long-term credit fund with significant lockup period, the long experience of our team as credit underwriters, our leverage on each platform for knowledge and network and that allow us to originate transactions that are not easily found in the marketplace. Our obsession for fundamental analysis enacted monitoring to provide capital preservation for our clients. We have been pioneered in investing and managing credit fund with superior ESG guidelines in infrastructure. And of course, our focus in direct lending with deep understanding of the debt instruments and market dynamics are also an edge. Talking about our performance. All of our flagship funds from different credit strategies have presented a very consistent performance over the years, beating all the benchmarks since inception, and despite of the different levels of interest rate and all the challenging scenarios that we had all these years in Brazil. And at the end, the consistency in capital preservation have been the key for long-term value for our investors. Looking forward, we are more positive. This new monetary business cycle in Brazil will help to unlock the demand for credit, not only for refinancing, but also for investments. The general consensus indicates that Brazil is going to a high single-digit interest rate by the end of '24. And that scenario will be still very interesting for lenders like us, but also good for borrowers because it will help companies to reduce financial expenses and enhance the balance sheet. In addition to that, Brazilian Local Pension Fund has more than BRL 2 trillion of assets under management. And we estimate that around 70% of that is still invested in liquid sovereign debt. When they decide to move this [indiscernible] to increase their stake in alternative assets, we believe that Credit would be a natural fixed income replacement. And in terms of our growth avenues, it will be a combination of the fundraising of our second funding infrastructure where we have BRL 1.4 billion in Citi Capital already. We want to increase the presence of our funds in capital markets by doing IPOs and follow-ons in Brazilian Stock Exchange. Especially in those strategies that we have already a major track record like infrastructure, real estate and the agribusiness. Launch of new funds among the existing credit strategies and the search for new exclusive mandate will be in our radar as well. A more generalistic direct lending fund is also considered. And of course, all the new possibilities that will rise from this new strategic partnership that we have just announced last night. And to finish, we continue to see a financial deepening in Brazil with growing interest for private credit from both institutional and retail investors. Since the IPO in '21, Brazil has -- Vinci has more than doubled its private credit AUM, as you can see by the chart. And we believe that credit in Brazil, we experienced the same financial disintermediation process we have seen in other countries and we believe that Vinci is very well positioned to be a leading player in this process. That was pretty much the message for today. Now I'm going to call Marcelo Mifano, our Head of Special Situations. Thank you very much.

Good morning, everyone. Thank you. My name is Marcelo Mifano, I'm Head of Vinci SPS. As Alessandro mentioned in his opening remarks, last year, Vinci acquired SPS Capital, which is the asset management firm I had previously founded. This presentation will be comprised of 3 sections. First, I'll describe what we do and the market size of those opportunities. Second, our team and track record. And finally, the synergies we've been able to achieve since we were acquired by Vinci and what we plan to do in the future. So what we do? Our investment mantra is to achieve equity-like returns with that like downside protection. We invest in complex situations that most investors avoid or have regulatory restrictions. So this demand tailor-made solutions with a lot of creativity and always with downside protection for the use of collaterals or other structures. We divided our strategy in 3 main segments: the first 1 is corporate, which is first primary market, invest in situations like capital solutions are better in possession financing. And the secondary markets achieve loans in the secondary market. The second vertical is our legal strategy. So we have a team -- a legal team that has invested for a long time in legal claims, which are mainly against the public entities, the famous precatorios and also litigation finance. And third is platforms is to solve someone's problem through the use of technology with low-ticket transactions. So the first one, primary market. We provide liquidity in situations that our contract partners can have. As Marcello and other people today mentioned, there is a lack of funding from Capital Markets in general in Brazil. Capital markets in Brazil are not able to provide funding to all situations, and we fill the gaps in those situations. So first one, we have a very highly concentrated banking system, the top 5 banks in Brazil accounts for more than 80% of the loans in Brazil. So they don't have the time our team to focus on more complex situations. They leave a few gaps. And there are a few regulatory restrictions. For example, if a bank wants to lend the money to a company in judicial recovery for regulatory reasons, have to provision have a loss right at the beginning. So those kind of situations provide the low competition environment where we fill those gaps. And given that the demand and supply of capital in these situations are very favorable, we are able to structure a transaction with a lot of downside protection. So as you can see on the graphs, below, we had a very active IPO market that basically has been new in the last 2 years. While just this year, among the largest judicial recoveries in Brazil, the total loan size is over BRL 100 billion. So we've been having huge judicial recoveries in the last year. This is a very favorable market for this primary market strategy. On the secondary market is basically acquisition of loans from banks, trading companies. Those counterparts, they sell the loans for economic and regulatory reasons. For regulatory reasons, banks all over the world, they pay high income taxes, and they can only benefit from the tax shield from the write-offs when they sell those loans. And for economic reasons, as I mentioned before, a very highly concentrated banking system. We don't have team to deal with the problems. And in many instances, they prefer to sell those loans. There are many indicators that we follow, but the many indicators is at the bottom. If you look at the loans of the top 5 banks in ratings between E and H, which are over 90 days overdue, over BRL 150 billion. So it's a huge market, and has been -- the supply has been constant. And I'll explain later a little bit about our competitive advantage. But given our close relationship with the banks, we are top of mind of them when they want to sell a loan in many instances with profit sharing structures. On the legal strategies I mentioned before about the precatorios, which are legal claims against the government. Brazil has a big -- [indiscernible] mentioned before, a big that size. And every year, there are new claims that become due, which are the precatorios. The most of them are owned by the Federal Government, which currently amount to close to BRL 140 billion. And according to the constitutional amendment approved in 2021 can be up to BRL 700 billion in 2026. And if we take into account only the state and municipal claims, close to BRL 150 billion. So it has been a very large market. And the suppliers of those precatorios are remaining. So in this year, for example, we bought from [indiscernible] that are publicly listed, they're in okay shape, but these are assets that demand time and the team to deal with. So in many instances, companies want to focus only on the core business and prefer to sell those assets to us. On the litigation finance, it's basically help people or companies that have legitimate pleas, but need help or money to achieve justice. So 1 big example you probably heard of the Mariana dam disaster. It was a huge environmental disaster, Brumadinho dam disaster. We are financing the law firm that is defending 700,000 people affected by the Mariana dam disaster. This transaction has been on the spotlight about 10 days ago, a larger credit asset management firm in the U.S. provided a new $500 million facility to the same U.K. firm. So we've been there since the beginning of those claims. And it's good, of course, it's very good to achieve good returns and even better to have -- provide good returns to our investors, defending people that need our help to promote justice. So it's a very interesting strategy with a very low correlation to the market in general. The third vertical is platform strategy as I mentioned before, again, Brazil has over 80 million lawsuits, [indiscernible] and labor lawsuits. We have a lot of lawsuits from various sites. In many instances, they are very small. So you need to create a platform -- you need to create a process to be able to buy them in size. Another example of the [ social ] market with Brazilian -- it's a Brazilian institution that basically a way for people to savings accounts to buy expensive assets like real estate and cars. This was a very formal market, a very opaque market, and we built a platform to buy those assets. We also built, for example, the financing arm of 1 of the largest car fleet companies in Brazil. As I mentioned before, the banking system is very concentrated in Brazil, in many instances, the financial institutions don't want to focus on things that are still in the beginning. So these are the kind of opportunities that come to us, and we are able to build those platforms using technology to be able to buy assets as small as, for example, $1,000 per transaction. Here about our strategy. We try to have -- we invest in situations that have a very low correlation to the economy in general. And the mix among the strategies change over time, always looking at demand and supply among the strategies. So for example, in the light blue, I mentioned before that there was a very important constitutional amendment approved between 2020 and 2021, that changed the timing of payment of precatorios. Before then the returns were very tight for precatorios, so we weren't investing a lot in precatorios. And as you may see in 2022 was our most important strategy. In 2023, given all the credit restrictions that have been happening in Brazil, I mentioned before the size of the judicial recoveries. The corporate strategies are much more active than the legal strategies. So we've been able to change the mix over time, always looking for the best risk return opportunities for our investors and building a very complementary portfolio. A little bit about history. As I mentioned, we were founded in 2017. And by Tomas Jatoba and myself. So basically, Tomas Jatoba was the head of the legal department of BTG for credit transactions, and I was the Head of BTG's Corporate Special Situations team. We've been working together since 2011. We grew a lot. We grew close to 20-fold in 5 years. It's a very high growth strategy, and we expect to keep on growing a lot since our acquisition by Vinci in 2022. We have 3 vintages similar to private equity funds or long-term funds with capital commitment from our investors and cash costs, and very -- and a lot of these, close to 90 deals. So our portfolio is very diversified. We don't like to focus on any specific risks. The team I mentioned before, Tomas Jatoba, main partner is Benjamin Citron, who used to work in special situations at Bank of America Merrill Lynch and also a lot of real estate experience. We like to have a small team of very good people, but with very complementary skills. What are our main competitive advantages. First, smart money investors. Almost 100% of our LP base currently is Brazilian. So as I mentioned before, we are currently investing in our Fund III, which was raised before the acquisition by Vinci. Those investors bring a lot of deals, a lot of knowledge to us, help us in the due diligence of the deal. So it's a unique investor base. Our relationship and reputation -- those not only investors banks bring deals to us because they know we are fair investors, creative, et cetera. So whenever a company is in distress, a person is in distress, those third parties bring the deal to us. And not only about the terms we bring, but they know that we will treat the counterparties fairly. A lot of creativity to build a good structures and provide good returns to our investors and also add value to our counterparties. And we've been having a proven ability to return capital to our investors. So for example, the SPS II that we started returning capital in December 2022, up to June, we had already returned 30% of the capital committed from our investors. So we were able, I think, to forecast how much we would return to our investors that our original forecast was 30% until at the end of this year, and we have already returned 30% up to June. So this is a little bit about our track record of our 3 funds. As I mentioned before, I think what I'd like to highlight we've been able to invest more than the commitment because during the investment period, usually our funds are 8-year funds that we can invest throughout 5 years. And during that period, we can reinvest with the same money given the ability to receive money back from principal or interest payments, et cetera, we are able to reinvest that money during investment period. So we've been able to invest more than the commitment of those funds. And the Fund III, we have already invested close to 50% of that fund. And as I mentioned, the pipeline is very hot. So we expect to invest a large portion of that fund by the end of this year. A little bit about our returns and DPIs. So as I mentioned before, we've been able to achieve equity-like returns with a lot of downside protection, either through collaterals, structures, et cetera. These are complex situations, but much less risk than other situations. And we've been able to think to return a good amount to our investors that have been keeping on investing with us. So for example, the majority of investors that invested in our Fund III are the ones that had already invested in Fund II. So always reupping and we are always able to provide a guidance of how much money we will be able to return each year. So investors, they can scale the size of their commitment based on the money they expect to receive from previous funds. And our long-term value proposition a little bit about synergies. So we've been really happy. We've been with Vinci for a little bit over 1 year. We've been able to extract a lot of synergies. For example, the knowledge base, last year, we acquired a loan from a construction company that at the end of the day, we ended up with a few assets, including equity from an oil and gas company and without the knowledge from the research team at Vinci, we have never been able to do that deal bringing a lot of deals. So other teams at Vinci bringing new deals to us. Processes in general. So now we are fully integrated into Vinci back office compliance, et cetera. So we are in the process of Vinci bringing exchanging best practices. And finally, distribution channels. As I mentioned, 100% for LP base currently is Brazilian and we expect next year to launch our SPS IV, which will be the first fund that would be raised abroad. So we are very happy at Vinci and expect I think, to show what we've been doing even in a larger scale next year with SPS firm. So I'd like to thank you for your time. And now we have Fernando Lovisotto, to present IP&S. Thank you very much.

Thank you. My name is Fernando. I will present IP&S. I'm CIO and Head of Liquid Strategies at Vinci. IP&S stands for investment, products and solutions. We currently manage BRL 24 billion divided into these 4 strategies. The largest one is the exclusive mandate. Then we have BRL 3 billion in pension plans, BRL 2.2 billion in commingled vehicles and BRL 2.1 billion in international allocation. Let's go into more detail. Exclusive mandates are tailor-made solutions that we provide our clients. Our clients give us what they want to achieve with that money, and we allocate in different asset classes. We have been doing very successfully this for local institutional clients and for high net worth individuals. Pension plans are funds dedicated to individuals where we can manage their retirement. In Brazil, they are called PGBL and VGBL. Our main clients of these products are allocators and distributors. Then commingled funds are specific funds with specific mandates that we offer all our client base. So we offer local institutional clients, locators and high net worth individuals. And then we have international allocation, where we help Brazilian clients, both high net worth individuals and local institutional clients to allocate abroad. As you could see, we manage BRL 16 billion in exclusive mandates. 2/3 of this amount belongs to pension funds. Pension funds, they are growing a lot in the last 10 years. It's a major industry, but it's still growing, has more than BRL 1.1 trillion. And as you can see here, we've been growing. We almost doubled our market share with pension funds. We are now the third alternative manager for them and the 8th independent manager with control managers. But they are still in the beginning [Audio Gap] allocation that they have, almost 8% is invested in fixed income. And when we compare to other pension funds, especially in the developed country, it's -- this number is up to 30%. So we think that during the time, they will change [Audio Gap] new interest great easing cycle. As their goals are inflation plus 5, we think that they will need to change into more complex financial products. And this will be done by external managers, and we will be able to help them to invest in this more complexity products. There are many ways for us to help them. First, they can go directly and buy and invest in our commingled vehicles, but they can also give us exclusive mandates. In this case, they can give us a specific mandate to invest, for instance, in the alternative private products or to invest in public equities or they can give us their whole plan -- their whole benefit plan for us to invest in a multi-class product. The complexity of the Brazilian market has increased a lot during the last years. We used to have almost 400 managers and now we have almost 1,000 managers. If we take into account that every manager can maybe have 3 products. We are talking about 3,000 different products. And we think that for our pension fund to decide which manager and which product should choose is very hard, is very difficult because they are not used of doing that. Because in the last years, it was very easy for them to invest because they were investing in fixed income and making the largest part in government bonds. In our -- if we do an easy calculation, we think that any pension fund that has less than BRL 2 billion, they won't be able to have an internal team to select the best managers and the best products and so on. So they will need to outsource this to experienced team. In this case, we think that for the bigger pension funds, which account for BRL 1 trillion, we think that we can offer specific mandates for them. We can help them to invest in the alternative products, in public equity products and so on. But for the smaller ones, which are 160 pension funds that have BRL 100 billion AUM, we think that we can manage all their money, and which is something that we have already been doing. And we have only still now 4% of market share and we can grow a lot. I think that this is the new trend that is happening in Brazil. Besides pension funds, in pension plans, we see a lot of room for us to grow. This industry has grown a lot during the last years. It grew almost 60% per annum and now has BRL 1.3 trillion. And depending on the regulation on the task side, maybe it will grow more. Until now, 80% of their money is managed by banks and 80% is invested in fixed income. So it has a lot of room to change looking forward with the new interest rate that we think that can go down to 9%. We think that we have a good network and expertise to allocate capital abroad and help clients doing that. The addressable market is very huge. When we look to individual investor, it's almost BRL 1.2 trillion. And when we look to institutional investor, it's almost BRL 63 billion. What happens in Brazil is that when the differential interest rate comes down, these investors, they tend to reallocate their portfolio into international assets and we can provide them the service. And the good question is why Vinci? First, because we have a very experienced team with deep knowledge on both public markets, internal markets, private markets and external offshore markets. We have 14 fully dedicated investors and all these 4 people, me, Andrea, Antonio and Tiago, we have been working together for more than 10 years during very different cycles, economic cycles and returning to the investors very good risk-adjusted returns. Our investor base is very diversified, as you can see here, BRL 11 billion out of the BRL 24 billion belongs to institutional investors, BRL 9 billion belongs to high net worth individuals and only BRL 4 billion by allocators and distributors. All these lines -- all these client segments have been growing during the last 5 years. And one important thing to say is that even though we don't have any formal lookup, our money, the money that we manage is very sticky, and our retention rate is roughly 90%. Let's talk about our advantages. First, as I just showed you, we have a very experienced team with a very good knowledge about the regulation and about the needs of our clients. Secondly, as we are in the Vinci ecosystem, we think that we have good knowledge to allocate in different asset classes. It's very unique in the Brazilian market. Third, we have access to very good managers to offer to our clients. We have been able to allocate in very customized mandates, so we can achieve the goals that the client wants following their constraints. And we are very cost efficient. All the advantages that we get from our third parties, we give them to their clients so they can have the best return. As you can see here, some of our commingled vehicles returns, we have been delivering excess returns comparing to their benchmarks. It's very important for the actual clients and for both our prospects because it's a way that they can measure the quality of our service. Then all of our products are adopted for institutional investors, which is very important for us. When we look ahead, we see that every time that the rates they are falling, it help us to grow in the future. And now as -- that have been said all the time here, as we just entered this new easing cycle, we think that our AUM will grow in the next years. Summarizing, we are very excited about our future. We think that we can gain market from the banks in both pension funds and pension plans. And we think that we can allocate the clients' money in alternative investments, just like we just started our VSP strategy in the past years. Now, I will invite Roberto Knoepfelmacher to talk about the public equity business. Thank you.

Hello, everyone. It's a pleasure to be here. I'm going to talk a bit about our public equities division and the prospects for the future. So to begin with, we'd like to say that we are pretty constructive with the prospects of the Brazilian equities for the coming years. As we can see the GDP growth of Brazil has been steadily increasing for the past years, and we expect growth to continue in an interesting pace for the coming years. Also, when we look at the Brazilian stock market, we see a very interesting valuation. We're talking about a 35% discount vis-a-vis the average of the emerging markets. And talking about our FX, we can see that there has always been a tight relationship between our trade of terms and our FX, but this correlation has been broken. So we see a discount of our currency vis-a-vis its theoretical price. And also, when we look at positioning, we can see that the share of equities in the Brazilian fund industry is in one of its lowest point in the recent past. And although the valuation of Brazilian equity is very attractive in historical terms, we think that has to do with the high interest rates that we have been seeing in the past years. But this is something that, as Jose Carlos mentioned, is about to change. And we've been witnessing in the past years, a very important trend of financial deepening in the Brazilian market with the creation of IFAs, networks and so on. But when it comes to equities, we think that we are in a pretty early stage in terms of the financial deepening, and we expect an important growth in AUM for the coming years. Some examples here, when we think about the percentage -- the market cap of the Brazilian companies as a percentage of GDP, it's a much lower ratio than we see in developed countries. Also, when we think about the population, the share of the population that invests in Brazilian stocks, there's only -- we're talking about only 2% and in the U.S., this figure is 57%. So a lot of room to grow. And we have always seen a very tight correlation between easing cycles and the increasing IPOs and follow-ons. And as we expect interest rates to come down significantly next year, we expect that there will be lots of IPOs and follow-ons which will help us have more options to invest. And how are we at Vinci positioned for this opportunity. First of all, we have a large AUM of BRL 8.7 billion, but we think that we have a very large capacity. We can almost double this amount and this AUM is divided in 2 strategies. The Mosaico all-cap strategy represents 2/3 of this AUM while the dividend strategy represents the other 1/3. And also, we have an investor base, which is one of our largest strengths that is skewed towards institutional investors, both international and local that have the ability to cope with the fluctuations in the market. So a very sticky investor base. And what are our most important competitive edges. We have a very seasoned senior team and we're going to talk a little bit about it in the next slide. And also, we have -- we leverage a lot on the Vinci ecosystem. For instance, we are able to channel check the listed companies with the investment companies of the private side of Vinci, many times those companies are perfect peers of the listed companies. Also, we have a very strong support areas, such as our macro team and data science teams due to the fact that Vinci is one of the largest alternative investors in Brazil, so we can afford to have this important support areas. And also, we've been historically investing in nonconsensus stocks that have been a very important source of alpha generation for our funds. Talking a bit about the team. We have a very seasoned team aside from our CIO, Fernando Lovisotto. We have other 3 partners in the team. The 4 of us have more than 20 years of experience. Also, we have a large research team comprised of 8 analysts that have been with us since they left college and we had the ability to forge them into our culture and philosophy -- investment philosophy. And we have been having a very low turnover in the past years. And we, as I mentioned, have also the help from our macro and research team that I'm going to explain with some examples in the next slide. When it comes to the macro team, a very interesting example of how they have been helping us is that their economic forecast have been constantly ahead of the curve. Here on the chart on the left, we can see that Jose Carlos team has been predicting that Brazil's GDP growth would be higher than what the market was expecting throughout this year. And that led us to bet on more cyclical domestic companies that have been doing very well this year. And when it comes to data science, our data science team have developed, for instance, data scrapping algorithm that has been gathering data from the rent a car companies we invest in Localiza, the largest rent a car company in Brazil. And last year, we could see that its largest competitor started increasing the sale of used cars strongly. And so we could grasp from this information that probably this competitor would step in the brakes in terms of buying new cars due to probably a higher leverage, and that would create very important tailwind for Localiza. And it turns out that, that happened. And our investment in Localiza did very well, and we added to the position due to that. Another important point in terms of competitive advantage is the fact that we've been investing in nonconsensual stocks. We try to avoid trending sectors, and we've been investing in sectors such as telecom, banking sector, oil companies. And this has led us to have a lower overlap with our main peers. And we had avoided some crowded names that had -- when they didn't deliver had very important drawdowns. And due to that, as we avoid those large drawdowns, we have been able to have a better, a lower volatility in the fund. And we've been having a very interesting risk return proposition to the clients also due to that. And all that has been translating to a robust track record. Here is the track record for Mosaico fund, which has 13 years of history. We've been able to have an annualized return of 14.5%, almost 10% higher than Ibovespa and with the great majority of the years with a positive alpha. And the same goes to our dividend strategy, which is even longer with 18 years of history and a very robust track record. And here's a bit on a new growth avenue that we are starting, which is our PIPE fund, which is a new initiative that we think we are very well positioned to do. First, what makes us excited about investing in PIPE, which is in the sector of small caps is the fact that we see that the lower the trading volume of a company, the less sell-side coverage, the less the analysts look at this company, which creates an environment where there is more inefficient pricing. So it's a better place to cherry pick stocks. Also, when we look at the size of this universe of companies, it's a large size. In the graph on the right, we can see the accumulated trading volume of the Brazilian market. And we see that the blue chip scope represents 70 companies, and they represent 85% of the trading volume. But you have a new universe of almost twice that size that is comprised of companies that have some trading volume on to BRL 5 million, USD 1 million, which is very possible for us to invest. So we are talking about a less efficient market and with lots of options. And we think we are very well positioned to tackle this market because we have all the requirements to be a good manager of PIPES as we are one of the leading private equity companies in Brazil. We have lots of experience and in-depth knowledge of execution and governance. While we are also one of the largest public equities managers in Brazil with an extensive experience in stock selection and with a long-term horizon in small caps. So we think that it's a very interesting blend. We can bring the know-how of our private equity team to the investment companies. And now I would like to call to stage Alessandro Horta to talk about the retirement services.

Thank you, Roberto. I'll take the stage again to talk about our newest development in strategy, the Vinci Retirement Service initiative. Before I start to talk about Vinci Retirement Service, I will give you just a very quick introduction about the pension industry in Brazil and how it works. It's divided basically in 2 different types of pension schemes. One is the mandatory that's the official one that by itself is dividing to the -- what we call CLT, INSS, let's pay-as-you-go type of pension scheme. And RPPS, that's the new one, also by the municipality states and the federal government, but more an accumulation scheme that's compounding over time, okay? And the main focus of VRS is the optional pension scheme. So it's the complementary. So it's private and can be into 2 types of pension schemes, open-end and closed-end. The open-end, its any individual, any legal entity can join in favor of the individual linked to them. So they can join these schemes. The closed-end normally is created by a company, so people that are employed by this company can join this closed-end pension scheme. And just talking about the size, both has relatively almost the same size. The open-end today, it's BRL 1.3 trillion and the closed-end, it's BRL 1.1 trillion. Both are dominated by the incumbent. And the open-end today, 87% are we've seen incumbent banks and just 13% by the independent players. And this is exactly both the market that Vinci Retirement Service want to attack. How is this Brazilian complementary pension industry. So it's just a part of the complementary. So it's -- there is a pension system deficit as a whole, as you know, in Brazil. That explains why people are trying to be attached to these complementary schemes. The INSS cap is low. So the maximum value that you can earn monthly by the official pension scheme is around BRL 7,000. So if you want to have a retirement amount monthly that's higher than that, you should go for any type of complementary scheme. There is no withdrawal in case of emergency on the traditional pension scheme by the government. And you cannot make any strategic tax planning and liquidity generation when you pass away and when you have your children and et cetera. So with the complementary pension scheme, you can really create this kind of treatment for your pension. And today, the pension in this allocation in the majority of them, 87% is fixed income, just 13% in other asset classes. So the idea of Vinci Retirement Service also is to provide the solution much more diversified in terms of allocation. So today, the returns of even the -- what exists today as a complementary industry. Most of the return is driven by tax benefits, normally and often leading to suboptimal portfolio asset allocation. So the majority of the assets are in fixed income with very, very high management fees charged by the incumbent banks. Tailor-made allocations, which are 2 suites of products is the target of Vinci Retirement System that we think will boost long-term return for these assets. So the idea of VRS is really creating a novel retirement service. So we see a sizable opportunity to expand penetration into pension industry. Gain market share from incumbent banks because from the complementary as you saw, it's more than 80% market share from the incumbent banks, that's very expensive and inefficient. This complementary industry as we showed in total, we have like where to fish in a pool of BRL 2.4 trillion that's the total market size of this industry today, and it's growing. There is a big decentralization trend. So the incumbent bank currently has more than 80% as I said, and is gradually shifting to independent insurance. We are already seeing this movement. There is a lack of independent players in Brazil. So it's -- there is a lot of entry barriers in this market, such as expertise, structuring requirements, regulatory issues that limited the access of new players. So there is not many new players, but the trend is for the banks to lose market share in favor of any new players that appear in this market. Solutions that are available in the market today normally, as I said, concentrate only on tax benefits and don't focus on maximizing returns. So they just use the structure of this retirement scheme to maximize the tax efficient. But they are really not focused on maximizing returns and tailoring the best solutions for each of the individuals in long-term investment plans. So the diagnosis is that pension products have a very poor historical performance. The product offer not comparable with the investor profile. So there is just one size fits all type of product, lack of knowledge and very decentralized information. So the customer, the client, they don't understand what they are buying. Clients neither monitor, not adjust the plan over the years. So it's very, very rigid and monolithic type of product. And the product is still mostly manual and not digital with legacy systems. This is very important. There is not technological. When you see inside the banks, anyone that have any kind of exposure to that, understand that a lot of legacy system technological with a lot of failures. So the client really doesn't get the information that's necessary and don't have the transparency for their own retirement savings. And there is a big desire for the investors to choose their product mix. With the democratization of the access for investment that we saw in Brazil recently with -- that was provided by a lot of different players. This is also becoming a reality on the retirement service industry in Brazil. VRS was developed exactly to address the main issues of the traditional retirement solutions. We focus in a very innovative digital and personalized solution designed to really every investor profile backed by technology and solid risk tolerance metrics. So we are using our knowledge to really provide a very good framework embedded with technology that will provide a very high level of service. So what's our solution? We have a tech adviser mechanism in specialists in asset allocation, bringing all the knowledge that you saw before in all our business and verticals to that solution, a tailor-made solution that's designed for fit every investor profile, easy access to information to enhance the user experience. So it's very -- really instantaneous information about their savings schemes for the client. Annual review for the clients with targets and goals. So we can really change and adapt the portfolio for the targets of the client. As I said, it's very digital with a very user-friendly navigation and similar design and a very simplified and tailor-made allocation that can evolve and become more sophisticated depending on the client. We are creating this retirement service with a very senior investment leadership, our partner that is responsible for this is Vinicius Albernaz, that's more than 33 years of experience and his last position was the CEO of Bradesco Seguros, that is today the largest insurance company in Brazil and one of the largest players even in the retirement services scheme. And we have 9 fully dedicated investment professionals. For sure, we can bring the knowledge of the rest of the firm, especially the investment projects and solutions that Fernando Lovisotto explained. And we built also a team with a lot of best-in-class technology know-how exactly to develop the technology tools that are important to enable the solution for the clients. So what we achieved so far. We launched VRS officially on the second quarter 2023. We had a soft opening to Vinci high net worth individuals base. We have an app minimal viable product with fully developed AI, it's already working. So you can download the app, if you want. It's already in place. But we are focused on selling the product initially to our base of high net worth individuals that are keen to have the exposure to this type of product to have a more of a soft open while we adjust the MVP for the needs of the clients. What's yet to come? We are starting to expand fundraising effort to corporate clients. We are already talking a few corporate clients that will be the early adopters of this solution. We are increasing the share within Vinci high net worth individual. There is something that came in our favor. You are probably familiar with the change that will take place, if it's approved by the Congress and regulated with the tax change in funds exclusively within Brazil, exclusive funds that will not carry any more the tax -- they cannot defer tax as they used to do. So that will, in our view, change a lot of AUM from this type of mechanism to retirement solutions. And we will expand our product offer capabilities, putting other different type of products inside this framework of retirement service. So with that, I will again call Bruno Zaremba to the financial review.

Okay. So this is the last session that we had planned for today. And the idea here is to go into a lot of detail on the building blocks of how we expect to generate shareholder value going forward. So today, we have a business model that already has very, very strong positive characteristics. As Alessandro covered in the beginning of the day to day, we have a significant portion of our AUM, which is locked in long term. This creates a very stable revenue stream from the management fee side of the business. The platform has substantially diversified over the past 10 or so years once we started the diversification effort that has been very successful. We have the tailwind from the growing market in the region, Brazil, specifically in the region in general. So this will help our business grow organically over time. We have the opportunity to drive substantial operating leverage as revenues grow. I'm going to show some slides further down on kind of a recap of what we did from an operating leverage standpoint and what we expect to be achievable going forward. And we have substantial upside from realization of future performance fees and also the impact of GP investments in our income statement as they start also generating value to us. So the combination of these characteristics, long-term lockup, proprietary relations on the capital side, as I mentioned in the beginning, our stability in management fees a very high-quality FRE stream with incremental profitability coming from GP realized investments and also our PRE creates an equation, which is, in my view, [ unbeatable in ] terms of long-term value creation for our shareholders. On top of these characteristics, we have also very strong free cash flows we grow without use of capital. So our shareholders can profit from both qualities in our business model. They can have growth driven by all of the factors that we have discussed today and also income while growth happens, right, which is something that's not usually common when you think about businesses. So creating our income statement and medium long-term projections from the top down. We start with AUM, Alessandro mentioned this in the beginning, our expectation and targets are to reach 2028 year-end with BRL 150 billion in AUM importantly and to reemphasize this. This does not include any M&A. It doesn't include the impacts from the Ares partnership and what kind of upside we can reach by working alongside with them in coming years. And it doesn't include any let's say, different product launches. So here, we are basically considering that we are scaling what we already have. So it doesn't factor in any new verticals, new business lines that we are not in today. Obviously, all of these efforts individually could be very impactful on the end number, right? If we do significant M&A if there are opportunities in the marketplace to raise additional strategies, which will not cover today and obviously, the impact of working alongside with one of the biggest alternative asset management firms in the world. . As I mentioned also in the beginning, we are rolling our forecast for near-term fundraising until the end of '24 to $15 billion. We have very good visibility on this target. The products are performing extremely well. Leandro talked a little bit about the REIT market opening up. This is a segment in our AUM, which we missed nearly over the past 2 years, not having this engine working in our favor. I think this is going to help tremendously in coming years. So we are back in this 15 million target year to year-end '24. And then again, the same slide that we showed before, we have an additional BRL 60 billion coming from now into the end of '28 across all of the verticals. So this is one of the key under pillars of the BRL 150 billion target that we have for '28. From a revenue standpoint, we believe that this AUM growth will allow the platform to reach BRL 1 billion in fee related revenues by the end of '28. We expect that contribution to be mainly driven by private market funds. Here, we have new vintages of existing strategies. We have SPS for coming. We have VCP IV coming. We have further installments of existing strategies. Several of our strategies don't have any issues allocating capital. So we have ample room to allocate more capital. The VICC, I think, is a good example of strategy that can grow multiple times when you think about next vintages. And obviously, our credit vertical, the market opportunity is huge. So today, there's no real limitation on capital allocation. So we believe private markets will be the main driver of the revenue growth in the next 5 years. We have a range of $285 million to $340 million incremental revenues by '28. IP&S, we expect BRL 60 million to BRL 70 million incremental revenues driven by more SMAs and also in the private pension plan side, on commingled funds. This is an area that we are also have been working on and have been working a lot to be able to have our products on the pension plan side to be available in all distributors. And I think we did a very good job with our A&D team over the past few years to be in that position. And we already understood what is the size of opportunity given some early successes that we're having driving those commitments into these funds. In liquid strategies, we have capacity in our equities mandate to increase the size there and also launching a new pipe strategy that we expect also could be meaningful to us medium term. That could add BRL [ 7 million to ] BRL 25 million in incremental revenues. VRS, as on just mentioned, this segment can be really any number because the size of the market is very, very big. We're talking about more than BRL 1 trillion addressable market, which today, we feel is very concentrated. So we can be very meaningful here. In our business plan, we have a $60 million to $75 million additional revenue. And then finally, organically grow our financial advisory business, which currently is running between BRL 30 million and BRL 50 million per year. That's in average terms of revenue, grow that another 50% including more mandates, bigger mandates and obviously, the knowledge and the market share of the group grow in Brazil. They have been doing a great job as well. So having talked about revenue, we'll now talk a little bit about expenses. Today, 70% of our expenses are people related. Of that, 40% of the total expenses are regarding bonus compensation. Today, we are building provisions that are around 20% of revenues for our management fee bonus and our expectation going forward is to build bonus on the performance side at about a 50% rate. There is opportunity here to gain leverage over time. But these are the levels that we're doing today. In terms of personnel expenses, these are basic salaries and benefits, so health insurance, et cetera. This is more directly linked to FTE growth without FTE growth it shouldn't grow on a real basis. So basically, here, we are going to be dependent on total FTE growth. We're going to cover that in the next slide, I believe. And then we have more fixed nature expenses, which range from service occupancy, travel, which, in general, we are well positioned. We have a very good structure today, IT structure, occupancy, rental part we are pretty well established. So this is a line of our expense that I believe is highly leverageable going forward. So I wouldn't expect this to have any like meaningful correlation with AUM. It probably has a different growth profile going forward. So we envision going forward with the targets that we're signing today to have substantial room to grow our margins. So giving a kind of a backtrack example of what we were able to do back in 2018, BRL 137 million per FTE which grew to $235 million per FTE today. And this allowed us to grow our margin by 15 percentage points. This was what we did, looking back, right? Looking forward at the stage that we are now with the visibility that we have now, we should not expect anything different if we're able to realize the targets from an AUM and revenue standpoint, we expect the margin expansion to continue. So we would expect AUM to FTE to grow to a level of $400 million to $480 million per person per FTE and then to realize further margin expansion of 650 to 1,150 basis points, ultimately reaching our FRE margin in the high 50s. So that would lead us to a number between 55% and 60%. So if you combine the 2 revenues and margin, we derive the FRE target, right? So we're talking about revenues growing from a little bit over BRL 400 million last 12 months to about BRL 1 billion in 2028 or 2.2 to 2.4x growth. We are talking about FRE margins going from the high 40s to the high 50s and that leads to an FRE number from around 200 million that we have today to $500 million to $600 million in 5 years from 2.5 to 3x growth of where we are today. Switching to PRE. Today, we are still in a position where PRE has been not a very big contributor to our numbers. There are a couple of reasons for that. Prior to IPO in '18, '19 and '20, we did have a more meaningful PRE that was driven by the liquid side of the business. Since then, and as Alessandro mentioned in the beginning, markets in Brazil have been more challenging with [indiscernible] basically flat since IPO in '21. So being able to realize performance fees from the liquid side of the business has been more challenging given that a lot of these funds carry high watermark clauses. On the other hand, we are kind of in a trough on the private market side. So our more relevant PRE aggregator from the private market side, they are currently not paying performance. They are still building the carry into the fund structure. We expect starting a couple of years from now for the PRE from the liquid side of the business to start being realized. And here, we're talking about VCP III, SPS III, water sewage funds, VES, VIR real estate development fund VFDL. Once these funds start to contribute and having liquids contributing again with a more normalized environment, we would expect our normalized PRE to look like something between $100 million to $120 million per year. Obviously, this is difficult to precisely give a number because it depends a lot on when investments, mainly on the liquids side on the private side are monetized. So it could be one year could be a little bit higher, one year could be a little bit lower, but we wanted to give a sense of what is kind of the average annual number that we should expect on a normalized basis as the private funds start to contribute to performance. And then finally, talking about the balance sheet. So since our IPO, we have used our balance sheet in 3 different ways. We have seeded new private market strategies. To date, we have invested or committed with more accuracy. We have committed BRL 1 billion, of which we have called between $300 million and $400 million. We have deployed a part of the capital in acquisitions, which for now the example is the transaction that we did with SPS, which had a cash portion in the first part of the transaction. And we also used it not substantially, but used some of the balance sheet cash to do selected stock buybacks. These were the 3 uses of the capital that we have in the balance sheet in the past few years. As I mentioned, we have committed BRL 1 billion so far in the funds, this commitment has 2 impacts to us. One is the flywheel impact on FRE and PRE. So we would expect that for each unit monetary units that we commit into our private funds, we would be able to raise an average 15x from third-party LPs, right? So this obviously creates a leverage on FRE, create leverage on the PRE going forward as we not only receive the returns on these GP commits but also create momentum to raise more asset management capital. Remember that in Brazil, there are some regulatory requirements from institutional investors of minimum scheme in the game percentages, which range from 3% to 5%, depending on the client. So we will, going forward, continue to allocate capital alongside with the LPs to be able to tap the capital pool from local institutions. We did some investments in our REITs, which are generating yield for us. These investments, they were done alongside with capital raises. And I think today, we have closer to 200 million exposure to our REIT. And finally, we have upside from a return standpoint on these commitments. So we talked about this in the prior conference call about 2 or 3 quarters ago. Our expectation from a blended average basis using the commitment that we have today and very conservative return outlook for the funds to which this capital was committed. We expect net IRRs to be around 20% for this capital, and that translate into a net MoC of about 2x over the lifetime of the funds, right? So there's obvious curve of capital allocation, then there's a curve of capital return. And in the mean time and the average of these terms, we would expect this capital to return to the investor to return on investment a number around 2x net MoC we expect this capital to start being returned to us at this level between '26 and 2030. So we're going to have a period of about 2, 3 years going forward, that's going to be the period where we're going to deploy this money. So the capital is going to be called by the funds. And then starting '25, '26, '27, this capital going to start being returned at levels of return that would expect to approach the 2x net. So building them with the FRE, the PRE, the GP potential impact to our numbers, we're going to build from the top of the earnings power of the company. That's kind of the idea of rationality now that we are building here. So from an FRE basis, we are talking about BRL 7 per share target for 2028, which will be aggregated with PRE normalized PRE of 1.4 per share. So obviously, this one year can be 2.5%, the other year can be 8.6%. So we're kind of trying to figure out kind of a normalized trend, what it would look like, which would be then added to a BRL 1.6 per share of realized financial gains from the GP commitments, which also is a normalized number over a period of time between '24 and '28, which would total BRL 10 per share of distributable earnings. So this is what we feel should be reasonable expectation for earnings power for the company by 2028. So we are talking about growing our distributable earnings per share by at least 2x from now until then with a very strong growth, a part of that growth coming from FRE, which we are targeting a growth of close to 3x, right, until 2028. Now we did also an exercise as we compare the operating leverage of the business in the prior cycle, we are also comparing these targets against our prior cycle. So how does this growth targets match with what we did in the past 4.5 years. So we came from an FRE of $166 million in 2018 -- fee-related revenues of $166 million in 2018 and FRE of 55 million in 2018. These 2 grew by 2.5x on the revenue and 3.6x on FRE. We are not $444 million FRE in the last 12 months -- fee-related revenues in the last 12 months and $201 million FRE in the last 12 months. In the meantime, we generated $857 million free cash flow which was returned most of this capital given that good part of this period of time. We were private or, let's say, half of this time were private. So most of this capital was returned through dividends initially through the partnership as a private entity. And then after that, to our shareholders once the IPO, then also mentioned that we have returned a little bit over $1.70 per share since IPO in dividends. So part of that dividend distribution is coming from here. Looking forward, we're talking about BRL 1 billion in fee-related revenues, BRL 500 million to BRL 600 million in FRE and which I think is very important until 2028, Vinci will generate on top of this growth, we are going to generate from BRL 2.2 billion to BRL 2.7 billion in free cash flow. This represents from 70% to 85% of our current market cap. So we're going to triple the size of the business from an endpoint. And on top of that, we will have the potential from a free cash flow basis to return 85% of the current market cap to investors. So this is, I think, one of the key messages. I mean, when you think about the business model, as I was mentioning in the beginning, we are able to grow the platform substantially and at the same time generated a lot of free cash, so it's really a very powerful combination. And to finalize the financial part, we did an exercise in terms of the valuation of the company and doing some of the parts comparing us with some of our peers or actually a market average of our peers. So when we prepared [ to back our ] share price was $10, $20 per share. We have currently cash on our balance sheet that is worth $4.50 per share. This cash has, as I mentioned has 2 positives for the firm. One is the flywheel impact on FRE and PRE, which levers third-party capital to increase our management fee results. On top of that, we expect a net 20% return from a higher standpoint on the capital that we have deployed. So this balance sheet capital is quite valuable to us. It has value to us generating franchise value on FRE. And it has value to us generating very, very competitive economic returns. We estimate a net present value of our PRE streams to reach $1.7 per share. We did a net present value approach here, bringing our PRE stream to present value at a 20% cost of equity. This is more or less 5x normalized multiple, which we feel is fair given the -- what kind of discount that PRE should have. So this means that our implied after value today by taking our share price and backing out the cash, which is extremely valuable to us. And by backing out the net present value of our pure year implies that stub, which is our FRE, the stub is valued today at $4 per share. So the value of our asset management business today, the long-term lockups very stable management fees, the possibility of growing margins, the tailwind from the allocation of capital in the region to alternatives, all that is priced at $4 per share. We believe the FRE stream should grow at a 20% CAGR until 2028, combining growth in revenue and margin. So it's really a very, very compelling growth trajectory for the asset management portion of the business. And this implies a price of FRE multiple after taxes and stock-based compensation of 7x. Our peer group today is trading at 24x when you do a similar math, right? This includes people that have balance sheet, people that don't have balance sheet. The fluctuations are not that relevant, at least not today. It has more to do with growth trajectory than at least today has more to do with growth trajectory than capital allocation. So the asset managers are growing faster, are trading with higher multiples and with the premium, the asset management are growing slower trading with less of a premium, right? And then the final exercise that we did was just giving a sense of the potential re-rating on the stock price if we use the same multiple that our peers are trading today. We would have an implied FRE value of $13.9 a share and then obviously keeping stable the net present value of PRE and the cash position we would get to $20 per share valuation. So that was the exercise and the top down, how we create the shareholder value that we expect to create over the next 5 years. I think as we were able to portray here the targets, they are not aggressive. They are not different than what we did in the past 5 years, neither on revenue growth nor on margin growth, these are exactly in line with what we did I think there is significant optionality to these numbers, significant M&A potential in the region, new product launches. Obviously, the strategic partnership with Ares. This is opening up a new avenue for us to discuss how to grow and leverage the platform alongside with them, the ability to distribute their products in the region as well. So there are several upside levers on the number, but we feel very comfortable that it's a very achievable target for us if you think about the platform medium to long term. So with that, calling Alessandro for some final remarks. After that, we're going to have a 10 to 15-minute break and come back with the Q&A session.

Thank you, Bruno. So it's really closing remarks very quickly and then can grab some lunch and have our Q&A session. So I will come back to the main takeaways for you today that we envisioned and that's the message that we'd like to convey to you. So first, again, the platform is strategically positioned within the main alternative investor classes and poised to benefit from tailwinds that are falling its growth. So we really believe that now we do have all the main alternative asset classes, very well positioned, and we will benefit from these tailwinds. So it's the first message. Then our business model is structured to really drive strong growth during favorable market conditions. Still the IPO, we have been facing challenging macro conditions that are starting to change in Brazil. So we believe that our business model really will benefit from that. And of course, we have a setup that makes us very resilient doing tougher scenarios like we demonstrated during the last few years, fundraising and deployment are on a very strong growth trajectory. And realizations are poised to accelerate in future years. So we are investing and divesting strongly and we expect this trend to continue. So we could generate a very, very important DPI for our clients and also invest in a very favorable conditions in terms of prices of assets in the region. The alternative market as you know very well, it's expanding on a global scale. And we believe emerging markets, particularly Latin America, are in a good position to capture an increasing share in the coming years with a potential focus on attracting institutional investors, both local and international. To recently, I would say, Latin America did not attract much of this capital. So the penetration on the portfolio of the institutional investors of alternatives in the region are very low, both for local institutional investor, international institution investors. And we think there is several reasons that we explained to you, this could be a very interesting opportunity to grow from this very low base and we will benefit a lot from this. And finally, the potential for outside shareholder return is significantly driven by the growing FRE and the promised upside potential, both from PRE and GP Investments. I think Bruno just showed exactly this point with very good exercise in terms of numbers, how we believe our investors could really benefit from all the scenario that [ ends ] strategic this year we are taking for the company. And we believe that really that will translate in very interesting returns for the shareholders. Just to finalize, I would like to talk a little bit about how we think about our business. It's like we like to say, it's a very simple but it's complicated to put everything together, but it's basically bringing together talent, capital and ideas. And what makes this stick together is basically process and culture. So we doubt that final message, I'd like to invite you all for grab some lunch, and then we'll be back for our Q&A session. Thank you very much.

Thank you, everyone. We're going to start our Q&A session. I'll ask the audience to start asking questions, and then we'll move on to the questions through the webcast.

Thanks, Anna. Thanks, Alessandro. Bruno. Good to see you. A couple of questions, I guess, to start. Maybe just a little bit more color on the use of cash, right? I mean you already have more than $200 million on the balance sheet. Now you're getting an extra $100 million from Ares. Just help us think about how you plan to use that cash? And like over what time frame? I mean, there's dividend payments, M&A, investments in your funds. Just help us think about the allocation of that cash? And then I'll have a second question after that?

Yes, of course, I can think that one. So to think for the question. Of the $200 million that we have on the balance sheet, a lot of that is already committed, right? So if you look at the numbers that we have today, I think our net cash position is about BRL 1.3 billion. We have committed about BRL 1 billion. That BRL 1 billion, we will draw down over the next, let's say, on average, 4 years. And we're seeing the environment in Brazil and in the region very favorably from an M&A standpoint, right? So there are some structural changes happening in Brazil with the change in dividend taxation. We feel that there is a significant consolidating trend to go alongside with that in several areas that, for instance, the Andre mentioned on the REIT side, other strategies that will eventually be also interesting for us from an M&A standpoint outside of Brazil, in other markets in Latin America. So what we felt was that we don't know exactly when we're going to have the need for that capital. But we felt very strongly that having the capital in the balance sheet now will put us in a relatively strong position to take advantage of those M&A opportunities. So I would expect if everything goes according to plan, most of that capital, the capital infusion from Ares to be used in M&A. And hopefully, we can apply the capital in the coming, let's say, 2 years.

Yes. I think the main point, the message is that we thought that was a perfect timing to build a war chest now that we expect the M&A activity, at least the opportunities that we are seeing for several different reasons, both to go deeper in our own strategies even in Brazil, if it's necessary, but also in Latin America, we are seeing there is a lot of opportunities. So we expect, of course, it's difficult to predict exactly, but the majority of this capital that we are receiving from Ares will be used in M&A.

Great. That's helpful. My second question was on the fundraising, right? You gave the BRL 60 billion target. And it's been a little bit low this year. I mean, obviously, you have high interest rates that are beginning to come down. Is the pickup really primarily related to lower interest rates. I think it doesn't factor in the Ares partnership either. So just help us think like what's going to ramp up that fundraising and the drivers there?

I guess it has to do with interest rates. So I'll give an example, REITs, I think is a good example. We went through the last couple of years, having to be tremendously creative on ways to raise money on REITs. So we did I think between 3 or 4 assets for shares swap transactions. We turn out to the, let's say, the more common way to raise money, right? Going forward, in a single-digit environment or at least like 10 percentage interest rate environment, we would expect to reach to contribute like BRL 2 billion per year. That just to give you an example, right? On top of that, there are families of products that we see strong growth. So VICC, I think, is one example. In that forecast, we're already going to VICC II. VICC II could be like twice the VICC I. Private credit, we had some incremental growth there. but it's not factoring in the Ares relationship. Special situations are falling the same. So we have an SPS for targeting in the AUM that I think is close to BRL 2 billion. But eventually, with Ares, given their pedigree knowledge on the space, there's no issue allocating the capital. We were being conservative on international distribution of this product, right? So I think we feel very comfortable with those targets, like very small changes can be very meaningful. I'll give an example. If we raised BRL 3 billion in a private pension commingle fund in IP&S, which is completely doable. It's half of the target for the next 5 years if we raise BRL 3 billion. So I think it's quite feasible. And of course, interest rates have a role, mainly liquids and REITs. Those are the 2 areas where we see there's a very strong correlation. So if interest rates are low and if these are -- price and if these are high, we can follow on with the REITs and with the MLP quite easily. And the flows in equities and hedge funds, they are very correlated with noninterest rates, very correlated. So once we get to that single-digit type of level, we should [indiscernible] that there is that indication. We should start to see slow pick up as was the case a couple of years ago.

So the buildup of the AUM or the fundraising, it's really by each of the strategies, analyzing each of the products that we launch. So for instance, private equity, we are looking between now and 2028. We are looking for exactly the vintage that we'll be raising by the VSP strategy or VRS strategy, the same for infrastructure. So as Bruno said, there is no any consideration about the areas partnership for that numbers. We just took into consideration what we have as capabilities today. And of course, as Bruno said, there are areas that will be more dependable on interest rates like the REITs and the more liquid stuff, but less on the more traditional private market funds.

Does anyone in the audience have a follow-up question? So I think we can move on to a few questions that we received through the webcast. We have a question from Craig from Bank of America on the strategic partnership with Ares as well. So insights on the strategic cross-sell opportunity with Ares. How can Ares help Vinci to expand its LP base outside of Brazil? And how can Ares help Vinci to sell products into the Brazilian wealth channel with a large domestic pension plans?

Okay. I can start and Bruno please complement. I think there is a clear synergy between us and Ares on that strategic distribution front. For sure, the coverage of international piece by Ares by itself, they have around 2,000 relationships, active relationships that will be very instrumental to us to reach these investors with our own products and, as we said before, projects that we can develop together. So it's very clear that we have a very big advantage to have the support and the relationships that they have with international [indiscernible] today. We don't have for obvious reasons that we are in a different scale and with a different footprint internationally. This for me, one area that we really believe that we could take a lot of advantage of this partnership. And on the other side, we believe that the exposure of Latin American and Brazilian investors, both institutions, high net worth, even distribution partners, 2 products like Ares with our already established relationship with them, we do believe too, that we'll probably be able to propose this type of products to our clients. I see, for instance, just an example, still today, the exposure to private credit products in Brazilian intuitional investor is very, very low and lower than they should be, and that could be also an opportunity for the other side of the equation to us to help Ares to distribute their products in Latin America.

So I have a follow-up as well from Craig, Bank of America. With expected declines in interest rates in Brazil, can you talk about how this will benefit most liquid and private alternative products and help us -- and help form a stronger equity investor culture in Brazil across both retail and institutional channels? Hopefully, it's something similar to what the U.S. market went through in the '80s into the '90s.