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

Good afternoon, and welcome to Vinci Compass Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call will be recorded. I would now like to turn the conference over to Anna Castro, Investor Relations Manager. Please go ahead, Anna.

Thank you, and good evening, everyone. Joining us today are Alessandro Horta, Chief Executive Officer; Bruno Zaremba, President of Finance and Operations; and Sergio Passos, Chief Financial Officer. Earlier today, we issued a press release, slide presentation, and our financial statements for the second quarter 2026, which are available on our website at ir.vincicompass.com. I'd like to remind you that, today's call may include forward-looking statements which are uncertain and outside of the firm's control, and may differ from actual results materially. We do not undertake any duty to update these statements. For discussion of some of the risks that could affect results, please see the Risk Factors section of our 20-F. We will also refer to certain non-GAAP measures and you'll find reconciliations in the release. Also note that, nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Compass' fund. Our results for the second quarter of 2026, Vinci Compass generated fee-related earnings of BRL 88.7 million, or BRL 1.35 per share, with an FRE margin of 32.5%, and adjusted distributable earnings of BRL 63.3 million, or BRL 0.96 per share. We declared a quarterly dividend of $0.17 on the dollar per common share, payable on September 9 to shareholders of record as of August 25. With that, I'll turn the call over to Alessandro.

Thank you, Anna, and good evening, everyone. Thank you for joining us today. The second quarter marked another important step in Vinci Compass' journey as the leading full-service alternative asset manager in Latin America. Over the past few years, we have consistently executed on a strategy built around 3 pillars: expanding our investment capabilities, increasing the scale of our platform, and building a more diversified and resilient business. This quarter reflects tangible progress across each of these fronts, and I am particularly pleased to announce today the signing of an agreement to acquire Navi's Real Estate funds. Navi's Real Estate platform spans 6 funds across multi-strategy and residential strategies, with 4 vehicles listed on the Brazilian stock exchange and/or the CETIP. After closing, which we expect to happen during the fourth quarter, the transaction will add approximately BRL 800 million in assets under management, concentrated primarily in perpetual and long-term lock-up vehicles. Strategically, the fit couldn't be better. The transaction deepens our presence in the Multi-strategy Real Estate segment, by adding scale to one of our smaller strategies across the REIT business spanning across Real Estate and Credit. This is significantly important in the REIT market, as larger funds tend to benefit when it comes to follow-on offerings once markets are supportive, when compared to smaller funds. The transaction also broadens the range of solutions we can offer our clients and strengthens our ability to compete in a market where scale, distribution and specialized investment expertise carry increasing weight. Together with our existing funds, this brings our pro forma Real Estate AUM for the second quarter of 2026 to approximately BRL 7 billion, of which BRL 750 million now within multi-strategy, giving us a stronger foundation from which to grow the business over time. It also reinforces Vinci Compass' role as a consolidator of high-quality investment franchises across Latin America, and it reflects the discipline we bring to every opportunity we pursue, seeking those that are strategically compelling, financially attractive and highly complementary to what we already do. Moreover, this transaction speaks to a defining characteristic of our model. Over the years, we have invested in building a scalable organization, underpinned by deep investment expertise and a robust corporate infrastructure. That foundation allows us to absorb a meaningful volume of additional assets, while leveraging the resources we already have in place. Another important milestone was the successful closing of our combination with BACS asset management in early June, adding BRL 4 billion in AUM across Credit and Equities. By combining our asset management capabilities with BACS' extensive corporate and retail distribution network, we took an important step towards building a scaled and increasingly relevant asset management platform in Argentina, one that's well positioned to benefit from the ongoing transformation of the country's financial system and the growing demand for more sophisticated investment solutions. We remain constructive on the long-term outlook for Argentina, supported by the evolving savings' dynamics in the region, rising financial penetration and a growing need for scale and efficiency. Against this backdrop, the combination enhances our ability to capture attractive growth opportunities across mutual funds, money market products, dollar-based strategies and alternative investments, while strengthening our position in a market that is still in the early stages of consolidation. Since announcing the transaction, we have been very pleased with the reception from clients and partners, and we are already seeing early signs of that enthusiasm beginning to translate into inflows, which we expect to build over the second half of the year. Taken together, BACS and Navi capture something we have consistently emphasized to investors. The strategic benefits of our platform compound as we grow, becoming more powerful with scale. Alongside these developments, our existing businesses continued to perform well, reinforcing the strength of the platform we have built over many years. In the quarter, we had BRL 13 billion in capital formation and appreciation, with close to BRL 1 billion in new commitments across our newest vintages currently in the fundraising phase, SPS IV, MAV IV, Lacan IV, and VSP II. Looking at the fundraising pipeline going forward, we are very excited about a strong and well-diversified set of flagship strategies in the market during the second half of 2026, such as COPCO, VIR V, Credit Infra and further commitments in VSP II, SPS IV and Lacan IV, spanning our Credit, Real Assets, Private Equity and Global IP&S segments. The breadth and quality of this pipeline reinforce our confidence in the growth ahead, and Bruno will walk you through it in more detail shortly. Supporting this extensive product suite, the macro environment across Latin America remains constructive in general, though still marked by volatility. Political uncertainty has started to ease in some markets, with recent market-friendly election outcomes in Peru and Colombia. Mexico, in particular, remains an important growth lever for Vinci Compass. During the quarter, we saw strong momentum in our short-duration strategies, with over BRL 440 million in inflows into our Mexican Credit funds. It also remains one of the most compelling structural opportunities in the region. Following the pension reform, mandatory contribution rates are set to rise toward 15% by 2030, and we expect the AFORE system to keep growing meaningfully over the coming years. In addition, the structural nearshoring trend, reflected in recent record foreign direct investment, reinforces our long-term conviction in the market. In Brazil, the current interest rate environment continues to create attractive conditions for disciplined capital deployment in private markets, as elevated rates support more compelling entry valuations and allow us to negotiate downside protection structures, including hybrid debt-and-equity solutions that enhance risk-adjusted return potential. At the same time, still-elevated real interest rates, a more cautious monetary easing cycle and election-related fiscal uncertainty continue to impact risk appetite, broader M&A activity and liquidity events, which may affect the timing of certain realizations and deals. In Private Equity, we had some important liquidity initiatives in early 2026 through the listing of Agi, a reverse IPO of CBO into OceanPact, and the sale of Mundo do Cabeleireiro. We continue to maintain a meaningful pipeline of potential divestment opportunities for the second half of the year. In Corporate Advisory, a constructive environment could gradually translate into higher deal activity. Against this backdrop, the team is working on an extensive pipeline of opportunities for the second half of 2026, which we expect to materialize as market conditions improve. At this point, we expect that the second half of the year will be better than the first half revenue wise, with some mandates expected to close in the next 6 months. Moreover, external fundamentals remain supportive, with strong trade flows, resilient commodity exports and a stable currency backdrop. With the Brazilian real and regional currencies continuing to benefit from these external fundamentals, we could reopen room for an improvement in domestic assets. A relevant factor during the quarter was the strong supply of IPOs and follow-on offerings tied to artificial intelligence and the broader technology sector in the U.S. Enthusiasm around AI remains one of the main drivers of the U.S. market, but the sheer size of these transactions requires meaningful capital absorption. As a result, some investors have reduced positions in other markets to participate in these deals, putting pressure on assets outside the technology sector. Encouragingly, this dynamic appears less intense going forward. The most recent AI and technology-related offerings do not seem to carry the same extraordinary volumes observed earlier, suggesting that the technical pressure from capital rotating out of other markets may begin to ease. In this context, our Equities segment could be a beneficiary of this rotation. Turning to a brief snapshot of our financial performance, this quarter we posted higher management fees, with an initial 1 month contribution from BACS, as well as organic growth across Credit and Global IP&S. Fee related earnings reached BRL 89 million in the second quarter '26, up 36% year-over-year, with an FRE margin of 33%, up 450 basis points year-over-year. In the second quarter '26 year-to-date, FRE margin reached 34%, up 580 basis points year-over-year. This profitability expansion reflects the operating leverage of our platform, as revenue growth from both recent acquisitions and organic fundraising continues to outpace the growth in our cost base. We remain firmly on track toward the 38% FRE margin target by 2028 that we laid out at our Investor Day. As we have been highlighting over the past communications, distributable earnings naturally carries more volatility and this is particularly true at this stage of our cycle, as we accelerate capital calls into our proprietary funds, which will impact our short-term financial income. During the quarter, we called approximately BRL 56 million, bringing total capital called from our IRE commitments to over BRL 960 million, or roughly 65% of our BRL 1.5 billion in total commitments. As this capital is deployed, it temporarily reduces the short-term financial income we earn on our cash, which weighs on distributable earnings in the near term. This, however, is a natural and intended feature of our model. Capital invested today into our own funds is designed to generate management fees, carry and capital gains as these funds mature and begin returning capital. In that sense, once again, I would like to highlight the long-term value embedded in our balance sheet. We currently hold approximately BRL 890 million in long-term proprietary funds on our balance sheet, which is not fully reflected in our distributable earnings, and by consequence, at this stage constitutes a hidden asset in our business. We expect this value to translate into meaningful distributable earnings in the coming years, as capital begins to flow back to us. That same focus on building durable, long-term value is evident across our funds. In Infrastructure, VICC closed the acquisition of a stake in Faro Energy, one of Brazil's leading distributed generation solar platforms. The transaction gives the fund exposure to a scaled and highly contracted portfolio, with operations across multiple Brazilian states, while also providing a meaningful pipeline for future expansion. Importantly, the investment aligns well with VICC's strategy of building exposure to essential infrastructure assets supported by long-term contracted cash flows and secular trends linked to the energy transition. We believe this deal further reinforces our team's ability to deploy capital in sectors where operational expertise and active asset management can create substantial long-term value. Another important development within our Infrastructure platform relates to the international airport of Rio de Janeiro, Galeao. As previously disclosed, Vinci Compass expects to receive between BRL 90 million and BRL 100 million, net of taxes and associated expenses, from the indemnification associated with the airport's concession process. This amount should be recognized during the second half of 2026 and will impact our distributable earnings. Beyond its financial contribution, this outcome reflects the value generated by our infrastructure team prior the auction, including involvement in the negotiation and structuring the new regulatory model. To conclude, what we find most compelling is the alignment between where our platform is today and where the structural opportunity is heading. The demand for alternatives across Latin America is accelerating, the region stands out as a stable and diversifying destination for global capital, and we have spent years building the platform, the talent and the execution capabilities required to capture it. Each transaction we complete adds scale, deepens our capabilities, broadens the solutions we can offer our clients, and reinforces our ability to compound value. Vinci Compass enters the second half of 2026 from a clear position of strength. We are executing with discipline against the priorities we laid out on our Investor Day, strengthening our regional presence, scaling our highest-growth strategies, and allocating capital with rigor. Above all, our focus remains on creating long-term value for our clients, shareholders and partners. I have never been more confident in our ability to deliver it. Thank you all for joining us today. I'll turn the call over to Bruno.

Thank you, Alessandro, and good evening, everyone. We are very encouraged by the extensive fundraising pipeline we have in place for the second half of the year, supported by the combination of an expanded distribution footprint and a more comprehensive product suite following our recent acquisitions and fund launches. Starting with Credit, the strategic combination with BACS is a great example of this. What excites me most is the highly complementary nature of the 2 platforms. Together, we now manage over BRL 8 billion in Argentine funds, mostly across Credit, with a smaller portion in Equities. Through this transaction, Vinci Compass gained access to the extensive corporate and retail distribution networks of BACS and Banco Hipotecario, meaningfully strengthening our local capabilities in Argentina. We expect this to translate into inflows over the coming quarters, supported by the positive feedback and momentum we are seeing from local investors, whose profiles are gradually shifting from defensive, wealth-preservation strategies toward more active investment positioning. The Navi Real Estate funds acquisition reinforces our full-service platform from a different angle. By expanding our footprint in the Multi-strategy Real Estate segment, we unlock a new fundraising channel for Vinci Compass through an already sizeable vehicle that gains immediate relevance in the market. Following closing, expected in the fourth quarter 2026, our Multi-strategy Real Estate vertical will hold approximately BRL 750 million in AUM. As we often say, smaller funds without scale struggle to grow and lose relevance with distribution platforms. By building vehicles with sufficient critical mass for organic growth, we gain relevance in the short term, access new pockets of capital, and position ourselves to scale further as market conditions for REITs become more favorable. On that note, we remain attentive to the potential reopening of market windows as the Brazilian easing cycle advances, which could create a more favorable environment to raise capital for REITs. As a reference, during the last easing cycle we successfully raised BRL 1.2 billion in a single quarter, and, as you know, REITs remain one of the most attractive investment vehicles for individual investors in the Brazilian capital markets. Turning now to AUM and our fundraising efforts during the quarter. We reached the milestone of $70 billion in AUM, an increase of 5% quarter-over-quarter on a dollar basis. In Brazilian reais, it represented BRL 361 billion of AUM with BRL 13 billion of capital formation and appreciation, including close to BRL 1 billion in capital subscriptions across closed-end funds. The second quarter reinforced the strength and resilience of our diversified platform, with BRL 17 billion in appreciation. This is a clear demonstration that we have reached a scale and product quality that allows the platform to compound and perform consistently on its own. In Real Assets, we continue to see capital subscriptions during the quarter, across Lacan IV and our opportunistic fund targeting the warehouse sector in Brazil. In Lacan IV, we continue to see strong engagement ahead of the fund's final closing by the end of the year. Commitments in this type of strategy tend to build at a more measured pace, reflecting the nature of institutional investor profile, the recent European summer period and the time required to finalize legal documentation. Encouragingly, the fund has already attracted strong interest from new investors, many of which have advanced in their internal processes and are now moving toward signing. This is exactly the kind of momentum we have been signaling over the past quarters. European institutional demand, in particular, has stood out. Interest has been strong enough that a group of European development finance institutions named themselves a DFI consortium and chose to advance in a coordinated manner, sharing due-diligence efforts as they progress through their approvals, which we see as a clear evidence of their conviction in the strategy. At this point, and with this overwhelming international support, there is high probability that Lacan IV will hit its hard cap. Moving on, let's turn to our Global IP&S segment. It is worth taking a step back to recall that the largest portion of our AUM comes from our Third-Party Distribution business, which is comprised of the TPD Liquid and TPD Alternative sub-strategies. While funds in TPD Alternative are structured as long-term, closed-end vehicles under a capital-subscription model, we classify them as inflows in our AUM Rollforward, rather than under capital subscriptions. As a result, the net inflow line reflects a combination of capital subscriptions and capital returns from TPD Alternative funds, together with inflows and outflows from other sub-segments, such as TPD Liquid, Global Solutions and Multi-strategy. During the quarter, we saw continued inflows into TPD Alternative, with approximately 70% coming from Chilean institutional and high-net-worth investors, and the remainder distributed across other geographies, including Brazil and Mexico. These flows reflect our ongoing efforts to provide local investors with access to top-tier global GPs in the alternatives space, with most of the capital allocated into global private equity secondaries and technology-focused growth equity strategies. These inflows were offset by capital returned from TPD Alternative funds and by some rebalancing within TPD Liquid. The capital returned was meaningful and represents a positive outcome for our clients, which we would expect to be reinvested and recycled into other products over time. On the liquid side, the movements this quarter reflected 2 main drivers: part came from our Chilean pension fund clients and relates to local regulatory limits on offshore exposure, which require them to rebalance when strong appreciation pushes their holdings above permitted thresholds; and part was related to a specific external asset manager that underperformed during the quarter. We therefore see these flows as a natural part of the business rather than a cause for concern, and we would expect this dynamic to be increasingly mitigated over time as we continue to broaden our client base and diversify our funding geographies within TPD business. Looking at TPD Alternative going forward, the fundraising environment remains quieter, with capital-raising periods for global funds extending beyond historical patterns, which naturally leads investors to defer commitments toward later closings. As a result, we would not expect meaningful alternatives flows in the third quarter. Within Multi-strategy, our Verde flagship fund is seeing meaningful engagement from a broad base of clients, including pension funds and multi-family offices, which could translate into positive inflows in the second half of the year. In fact, in July, the strategy already received an inflow from a multi-family office we had been engaging with since the beginning of the year, and we are in final discussions on the first commitments from pension funds into the flagship. This remains a key priority for the third and fourth quarters. Shifting to Equities, we saw inflows into our LatAm UCITS vehicle from clients across the region, reflecting the impact of our sustained efforts and improving performance being recognized by the market. These were offset by outflows in our Brazilian products, primarily reflecting the more cautious domestic backdrop of still-elevated real interest rates and election-related uncertainty. In addition, this was compounded by strong global demand for AI- and technology-related offerings, as Alessandro detailed, which temporarily drew capital toward that sector. We believe our Brazilian Equities funds stand to benefit as local flows return. Specifically, one of our current fundraising efforts is directed toward local pension funds, the RPPS, to raise capital for our Verde equities strategy, where we expect inflows to begin materializing by the fourth quarter. Switching gears to Credit, which continues to be one of our fastest-growing franchises, AUM surpassed BRL 42 billion, up 15% quarter-over-quarter and 40% year-over-year, supported by BRL 4 billion from the BACS acquisition and BRL 2 billion from capital formation and appreciation. This performance reflects the continued diversification of our platform across local-to-local and cross-border strategies, reinforcing our position as a one-stop-shop across Latin America. Since closing in June, we have been consolidating BACS results into our FRE, and we expect a tailwind on margins in the second half, as our Argentina operation carries a higher margin than that of the entire company, which translates into a positive mix impact to consolidated numbers. We continue to see full year FRE margins in the mid 30s range. Within our closed-end funds, we raised close to BRL 550 million across SPS IV in opportunistic capital solutions, MAV IV in agribusiness, and FAE Peru, our private credit strategy focused on confirming, factoring and trade receivables financing. SPS IV secured commitments from investors in the U.S. and Uruguay, further validating the strategy's differentiated proposition and capitalizing on its strong track record. We continue to see encouraging fundraising momentum and expect additional commitments ahead of the fund's final closing later this year. In agribusiness, we successfully launched MAV IV, and achieved the fund's fundraising target through local Brazilian intermediaries, highlighting the strength of our distribution capabilities and the continued investor demand for agribusiness products. In Peru, fundraising activity also remained solid. During the quarter, FAE Peru secured additional commitments, reflecting the continued demand for private credit solutions and further reinforcing our position in the market. Building on this momentum, we expect to launch FAE II by year-end while continuing to advance fundraising efforts for PEPCO II, our flagship senior secured lending strategy, which has been generating strong interest among institutional investors. In parallel, we are broadening access to our credit platform through new fund formats. In Chile, we have just launched VCCL, our first proprietary semi-liquid credit fund, an important milestone that brings our institutional credit capabilities to a wider client base in a very accessible format with higher liquidity. Consistent with what we have discussed in previous quarters, this launch is aligned with our strategy of expanding into semi-liquid structures, a segment that has seen growing demand globally and that we believe represents an attractive long-term opportunity across the region. We were pleased to see this thesis validated almost immediately, with the fund securing its first commitment in July, a strong early signal of the appetite we expect this format to unlock across the region. In Brazil, our co-managed credit fund with Verde continued to attract growing interest from a diversified investor base, and we expect fundraising activity to accelerate in the third quarter. More broadly, infrastructure credit remains one of the most compelling opportunities in the market, supported by resilient fundamentals, sustained demand for incentivized debentures and increasing investor interest in long-duration real asset strategies. In this context, Credit Infra, our flagship infrastructure credit strategy, remains well positioned, with a portfolio focused on high-quality infrastructure assets across sectors such as renewable energy, transmission and sanitation, supported by an ESG framework. We continue to see positive investor engagement and expect additional commitments over the coming quarters. Turning to Colombia, COPCO, our first private credit strategy in the country, focused on senior secured lending, is also advancing very well. At this point, we expect a closing to happen in the second half, with a few hundred million dollars in commitment, a sound fundraising performance given its first time fund nature. Our next generation of private credit strategies in Peru also has been generating constructive discussions with local investors. We believe this momentum reflects the strength of our regional franchise, built over many years of local presence and relationships, and it is further evidenced by our ongoing engagement with development finance institutions. Going back to COPCO, this product underlines exactly the rationale behind the Compass combination. The combination of leading commercial penetration across Latin America with Vinci's know-how and track record of structuring alternative products led to the development of a strategy that should be a meaningful contributor to the economics of our Colombian office. We expect to lean on this experience to develop additional Vinci Compass' alternative offerings across the region. Taken together, these efforts highlight the breadth and increasing relevance of our credit platform across Latin America. With fundraising progressing across liquid, semi-liquid and closed-end strategies, a growing regional footprint and multiple products gaining traction simultaneously, we believe Credit continues to stand out as one of the most attractive and scalable growth drivers within Vinci Compass. Stepping back, what this extensive pipeline truly reflects is the strength and ambition of the franchise we have built over the years. Across Private Equity, Real Assets, Equities, Credit and Global Solutions, we have created a uniquely diversified, integrated and connected platform, one that allows us to seize differentiated opportunities and to be a true partner to our clients across the full investment cycle. We therefore enter the second half of the year with a remarkable pipeline and multiple initiatives already translating into results. And what excites us most is that this is just the start. The opportunities ahead of us are the direct result of years of investment in our people, capabilities, products and distribution, and as they continue to mature, we see an exceptionally attractive runway for growth. The last point I would like to touch on is our GP commitments. At this point, we are starting to have visibility on initial capital returns from this first cycle of investments. We expect some of our closed end funds to start returning capital this year. This will not only allow the balance sheet to receive this capital back, restart earning short term returns and recycle it into new GP commitments, but also has the potential to impact favorably our realized IRE line. We are very bullish on our prospects for the second half. With a strong product lineup, tailwinds from recent acquisitions, strong distributable earnings contribution from the Galeao transaction, and the beginning of more meaningful GP commitments capital returns cycle, we have a strong outlook for the remainder of the year. With that, I will hand it over to Sergio to discuss the financial results.

Thank you, Bruno, and good evening to everyone. The second quarter of 2026 reflected continued progress in our business, with management fees growing and our FRE margin expanding year-over-year. Let me start with our AUM. We ended June with BRL 361 billion in AUM, up 19% year-over-year and 4% quarter-over-quarter. The quarterly growth was driven by portfolio appreciation across Global IP&S and Credit and by the combination with BACS, partially offset by negative FX variation and by net outflows in our Third-Party Distribution business. On this point, it is worth highlighting that, as Bruno detailed, a significant portion of the net outflows in Global IP&S corresponds to returned capital within our Third-Party Distribution Alternatives strategy, where fees had been charged upfront. As a result, this AUM no longer carries recurring fees, and the segment's management fee revenues should not be affected by these movements. In the second quarter, management fees totaled BRL 252 million, up 29% year-over-year. The increase was driven by inorganic growth from the Verde and BACS acquisitions, contributing a full quarter and 1 month, respectively, as well as by continued organic growth, reflecting our successful fundraising efforts over the last 12 months. Advisory fees totaled BRL 9 million in the quarter, a decrease of 65% year-over-year. As we have highlighted in prior calls, upfront fees in our Third-Party Distribution Alternatives business can vary significantly depending on the timing of commitments. As Bruno mentioned, the current environment for global alternatives is characterized by longer capital-raising periods, which naturally lead investors to defer commitments toward later closings. As a result, we do not expect meaningful alternatives flows in the third quarter. Our Corporate Advisory segment are also continued to reflect a slower environment for deal activity in the second quarter, amid still-elevated interest rates and election-related uncertainty in Brazil. Looking ahead, we have a meaningful pipeline of opportunities for the second half of the year and we expect a gradual pickup in deal activity by year-end. At this point, we expect a stronger second half of the year than first half for the Corporate Advisory business. Altogether, fee-related revenues reached BRL 272 million in the quarter, up 17% year-over-year, and BRL 544 million in the first half of 2026, also up 17% year-over-year. Turning to fee-related earnings, reaching BRL 89 million in the quarter, or BRL 1.35 per share, up 36% year-over-year on a nominal basis and 31% per share. Our FRE margin expanded to 33%, an improvement of approximately 450 basis points compared to the second quarter of 2025. This progression was driven by the acquisition of Verde, 1 month of BACS and the operating leverage embedded in our platform as revenues grow faster than costs, as well as the cost-efficiency initiatives we implemented over the past year. As we mentioned last quarter, the second quarter tends to carry higher seasonal costs, particularly related to third-party services, such as legal and consulting fees. As a result, the fluctuation in our FRE margin compared to the first quarter of 2026 was expected, as these seasonal costs materialized. It's also worth noting that BACS contributed only 1 month of results this quarter. Beginning in the third quarter, we will benefit from its full-period contribution, which should further support management fee growth and reinforce the operating leverage of the business going forward. Moving to performance-related earnings, or PRE, we recognized BRL 4 million in the second quarter, primarily across Credit, Equities and Global IP&S. In line with seasonality, both the second quarters of 2026 and 2025 benefited from performance fees generated by liquid funds across these strategies, though performance fees in Equities were slightly higher in the second quarter of 2025, reflecting stronger local stock market performance. Realized GP investment income totaled BRL 9 million in the quarter, supported by REIT dividends and a Real Estate closed-end fund realization. This was partially offset by mark-to-market adjustments in Real Estate funds, which weighed on unrealized GP investment income and brought IRE to BRL 1 million in the period. While IRE can fluctuate from quarter to quarter, we continue to view our proprietary commitments as an important long-term driver of value creation for Vinci Compass. Turning to realized financial income, and consistent with the capital call dynamic we have been emphasizing around our IRE commitments, this line declined 63% year-over-year in the quarter, as capital calls reduced our cash position. We expect it to keep trending lower as our proprietary funds mature toward their realization cycle. The minority interest line, introduced following the Verde transaction to reflect the portion of Verde's earnings attributable to the remaining 49.9% non-controlling interest, now also comprises the minority interest related to BACS. Before turning to adjusted distributable earnings, a quick word on non-operational expenses. This quarter included some costs related to our M&A activities, mainly attributable to BACS. As a reminder, these are added back in our adjusted distributable earnings, which provide a cleaner view of the recurring earnings power of the business. On that basis, Vinci Compass generated BRL 63 million in adjusted distributable earnings for the quarter, or BRL 0.96 per share, bringing our first half total to BRL 126 million, or BRL 1.92 per share. As anticipated, the year-over-year comparison was primarily impacted by lower realized financial income and softer advisory and PRE contributions, even as FRE continued to grow meaningfully. The growth seen in our FRE reinforces the scalability of our platform, while the successful closing of the BACS combination and the recently announced Navi acquisition underscore the selective inorganic expansion that, together with organic growth and operating leverage, remains central to how we compound earnings over time. As we look ahead to the second half of the year, we do so with fundraising visibility and additional earnings contribution expected from the acquisitions and initiatives already underway, leaving us well positioned to continue creating value for our shareholders. With that, I would like to open the call for questions. Once again, thank you for joining us this evening. Operator, please proceed.

[Operator Instructions] The first question comes from Ricardo Buchpiguel with BTG Pactual.

I have 2 here on my side. So first, could you comment on what drove the acceleration on fee-related expenses this quarter, which grew around 5%? And could you help us understand how much of this is related to one-off investment specifically this quarter? And what should drive the recovery in FRE margins to get to the mid-30s that you guys reiterated? And for my second question, how much of the BRL 5.7 billion in net outflow from IP&S was related to the capital returns you mentioned? And do you have a sense of how much of the capital returns are usually recirculated and should translate into future inflows in situations like this? Just wanting to understand, if this should be a pickup in fundraising already for the next quarter or the second half of the year or should be a longer cycle?

Okay. Ricardo, thank you for the question. This is Bruno. So in your first question, the second quarter tends to be seasonally stronger for us in terms of expenses. We have some of the payments that fall into the second quarter, some of the service payments mainly so service providers. And in the second quarter, this time, as we continue to improve the productivity of the platform and try to see whether there is opportunity for us to improve the productivity, we had some cost reduction regarding to people as well this quarter, which we do not adjust as we had not adjusted in '25. So in the second quarter, I would say probably those were the two most significant impacts, this severance costs that we had in the second quarter related to some cost reductions that we did in people and also the seasonality nature of expenses. When we look at the forecast for the second half, as we said in the prepared remarks, we continue to see FRE margins in the mid-30s range. I think now as we also made a comment, there is also this tailwind from BACS consolidation, which will add to FRE margins as well. So at this point, we see the number solidly in the mid-30s, right? It could be actually a little bit better. But that's the number that we're sticking to at this time. Regarding your second question, on the outflows, I would say approximately 1/3 of the outflows were due to capital returns from the alternative TPD funds. What we see in the industry in this case, our main clients for the line of products are in Chile and Mexico, right? Although, we also do have some exposure in Colombia, but the TPD markets, mainly the institutional investors in Chile and Mexico. These investors, they are almost all of the time fully allocated, right? They don't carry cash positions in their balance sheet. They're usually fully allocated. So although, we might have some fluctuation from quarter-to-quarter, as we did have -- if you remember, I think we did have some fluctuation in the first quarter of '25. We had some redemptions also in the first quarter of '25 in the TPD Liquid side. We are seeing those redemption flows in the second quarter now of '26. But given that they are fully allocated by nature and the growth rate of both the Chilean AFPs and the Mexican AFORE are quite high. They are growing in the low to mid-teens now given the contribution factors. Over time, the TPD line will be very positive for us. If you look at the organic growth that we had in TPD in AUM on a year-to-year basis, if you add inflows and depreciation, that organic growth is close to 20%. So we expect that to continue to be the case as these institutional investors continue to grow their basis. And we might have these fluctuations from quarter to the other, but the fundamentals for these 2 asset lines, both the TPD Liquids and the alternatives continue to be quite favorable for us.

And Ricardo, that's Alessandro. Just to add on top of Bruno said, just to complement these outflows. This is very normal, as Bruno said, like the AFPs and the authorities, we balance the portfolio, especially after the growth because of the markets going on the right direction. And the majority of these outflows that we saw came from the liquid side. Of course, we have some capital returns, as Bruno mentioned, on the alternative side. But in terms of the outflows, they came from the liquid side that is like some of these investors in a way, if you may, taking profits of a very benign market. And to Bruno's point, they will come back to rebalance the portfolios and then you see the fluctuation when the markets go in one direction or the other.

The next question comes from Fernanda Sayao with JPMorgan.

My question is on the recent acquisition of BACS and Navi. I was wondering, if you could discuss how this should impact management fee revenues, FRE margins, expenses. Anything you can share would be very helpful. And you specifically mentioned that BACS has a higher margin. Would it be possible to quantify that?

Okay Fernanda, this is Bruno. So BACS, to give you some sense in June, the impact was about BRL 4 million in revenue in the month of June. So as we consolidate the numbers going forward, I think that's a good run rate in terms of the revenue base. The margin for BACS is higher than the average of the company. It's closer to 50%. So if you do the math between the 2 and the FRE that we have, the positive impact to us should be around 50 basis points, more or less in terms of the tailwind for the second half. I think the other thing that is important to mention is even pre-BACS, Argentina was about 40% above budget for us. So the flows are very strong in the business in Argentina. Hopefully, with BACS, we have even more of that impact. But that's also another interesting information that we're seeing Argentina be very strong. In the case of Navi, we calculated -- it's a much smaller business, right? So we are talking about BRL 750 million AUM, although the fees are good, they are around 1%. And as we mentioned in the press release, we are not bringing anyone from the original team. So the Real Estate team is going to manage this money. So it's fully incremental to us. So this margin is going to be very high, probably on the FRE line, probably, I mean, in the 60%, 70%, right, after taxes and some bonus provision. So this should be also interesting for the platform, but the size is not very big. So it shouldn't move the needle as BACS will, but it's going to help. It's going to be incremental to us as well.