"Patria's Q3 2025 Earnings Call: Contradictions in Inorganic Growth Strategy, Fundraising Targets, and Capital Deployment Timelines"

Business Commentary:

* Fundraising Success: - Patria raised $1.5 billion in the third quarter of 2025, reaching $6 billion year-to-date, and is on track to exceed their full-year target of $6.6 billion. - The growth was driven by strong organic fundraising in infrastructure and credit businesses, with a significant contribution from the Infrastructure Fund V.

• Fee-Earning Assets Under Management:
• Fee-earning assets under management grew to $38.8 billion, up 4% sequentially and 14% year-on-year.

• This increase is attributed to solid organic net inflows, strong investment performance, and the acquisition of Brazilian REITs.

• Financial Performance and Dividends:

• Fee-related earnings reached $49.5 million, representing 7% sequential and 22% year-on-year growth.

• The company increased its annual dividend to $0.65 per share for 2026, reflecting increased revenue and strong financial performance.

• Strategic Acquisitions and Integration:

• The acquisition of GPMS from Aberdeen has seen significant integration and growth, with a 10% to 20% increase in its target fund size.
• This acquisition has enhanced Patria's global private market solutions, expanding its geographic footprint and product offerings.
  

Contradiction Point 1

Inorganic Growth Strategy

It highlights inconsistencies in the company's strategic focus for inorganic growth, which is crucial for expansion and financial performance.

What's your current view on inorganic growth? - Rodrigo Ferreira (Bank of America)

20251104-2025 Q3: We are focusing on real estate, credit, and infrastructure for inorganic growth. For geography, U.S. is a focus, especially for GPMS, which we aim to expand globally. - Alexandre Teixeira de Assumpção Saigh(CEO)

Are you considering expanding into Mexico? - Rodrigo Beisbier Ferreira (BofA Securities)

2025Q2: Mexico is seen as a long-term attractive market, particularly for real estate, credit, and infrastructure sectors. - Alexandre Teixeira de Assumpcao Saigh(CEO)

Contradiction Point 2

Fundraising Expectations

It involves changes in the company's fundraising guidance, which is critical for future growth and financial forecasts.

Are you on track to exceed the $6.6 billion full-year target after raising $6 billion year-to-date? - Rodrigo Ferreira (Bank of America)

20251104-2025 Q3: We feel comfortable with beating the $6.6 billion guidance as we raised $6.9 billion over the last 12 months. - Alexandre Teixeira de Assumpção Saigh(CEO)

Can you clarify your expected fundraising for the year? - Daer Labarta (Goldman Sachs)

2025Q2: The uplift in fundraising guidance includes the $600 million REIT acquisition in Brazil. - Alexandre Teixeira de Assumpcao Saigh(CEO)

Contradiction Point 3

Capital Deployment Strategy

It involves changes in the expected timeline for capital deployment, which impacts investor expectations and strategic planning.

You've raised $6 billion year to date and are exceeding the $6.6 billion annual target. Given the strong momentum, how are you planning the pacing of capital deployment, particularly with the $3.2 billion in pending fee-earning AUM? - Rodrigo Ferreira(Bank of America)

20251104-2025 Q3: Our pending fee-earning AUM will be deployed over the next 12 to 18 months, primarily through infrastructure efforts, where we raised approximately $2.9 billion in Fund V, and through GPMS and GPMS-related strategies. - Alexandre Teixeira de Assumpção Saigh(CEO)

Can you clarify the $3.5 billion pending fee-earning AUM, including expected management fees and timing? - William Barranjard(Itau BBA)

2025Q1: The $3.5 billion will be largely allocated to infrastructure and GPMS, with average management fees around 96 basis points. The money will be deployed within the next 4-6 quarters, with a focus on infrastructure deployment in 2025. - Alex Saigh(CEO)

Contradiction Point 4

Inorganic Growth Focus

It involves changes in the focus areas for inorganic growth, which impacts strategic direction and potential opportunities for expansion.

What are your current priorities for inorganic growth and which asset classes or geographies are you most focused on for potential opportunities? - Rodrigo Ferreira(Bank of America)

20251104-2025 Q3: We are focusing on real estate, credit, and infrastructure for inorganic growth. For geography, U.S. is a focus, especially for GPMS, which we aim to expand globally. We are also looking to enhance our presence in Mexico. - Alexandre Teixeira de Assumpção Saigh(CEO)

Can you provide an update on the integration of last year's M&A? - Ricardo Buchpiguel(BTG Pactual)

2025Q1: If we look at the last 18 months, we have made some very important acquisitions in Brazil, including the acquisition of the largest real estate company in Latin America, and also in the infrastructure space. - Alex Saigh(CEO)

Contradiction Point 5

Fundraising and Capital Deployment Strategy

It involves differing statements regarding the focus and strategy for fundraising and capital deployment, which are crucial for understanding the company's growth and investment plans.

You've raised $6 billion year-to-date and are on track to exceed the $6.6 billion annual target. With strong momentum, how are you planning to deploy capital, particularly regarding the $3.2 billion in pending fee-earning AUM? - Rodrigo Ferreira(Bank of America)

20251104-2025 Q3: We feel comfortable with beating the $6.6 billion guidance as we raised $6.9 billion over the last 12 months. Our pending fee-earning AUM will be deployed over the next 12 to 18 months, primarily through infrastructure efforts, where we raised approximately $2.9 billion in Fund V, and through GPMS and GPMS-related strategies. - Alexandre Teixeira de Assumpção Saigh(CEO)

What is the breakdown of the $6 billion fundraising target for 2025 and how will net debt levels be maintained until 2027? - William Barranjard(Itau BBA)

2024Q4: We maintain flexibility in the $6 billion target without specific breakdowns. The fundraising will likely focus on credit and GPMS strategies globally, with higher interest rates promoting infrastructure strategies in Latin America. - Alex Saigh(CEO)