20-F: Patria Investments Limited Files 20-F Annual Report for Fiscal Year Ended December 31, 2024

Patria Investments Limited reports its financial results and operational activities for the fiscal year ended December 31, 2024, showcasing growth in AUM and strategic acquisitions.

Summary

• Patria Investments Limited has filed its 20-F annual report, detailing its financial performance for the fiscal year ended December 31, 2024.
• The company's Assets Under Management (AUM) reached US$41.9 billion, a significant increase from US$31.8 billion in the previous year.
• Fee-earning AUM (FEAUM), which is the capital managed on which Patria derives management fees, totaled US$32.9 billion, up from US$23.9 billion in 2023.
• The company's growth strategy includes expanding its investment capabilities and geographic markets through acquisitions.
• Key acquisitions in 2024 included the private equity solutions business from abrdn and Nexus Capital Partners S.A.S.
• The company reported Fee Related Earnings (FRE) of US$170.1 million and Distributable Earnings (DE) of US$189.2 million.
• The company's net income for the year was US$75.7 million.
• The company has declared a fixed quarterly dividend of US$0.15 per share.
• The company has a share repurchase program authorizing the repurchase of up to 1.8 million Class A common shares.
• The company is focused on maintaining a strong cybersecurity infrastructure and complying with relevant regulations.
• The company is a Cayman Islands exempted company and is subject to different disclosure requirements than U.S. domestic registrants.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook with strong growth in AUM and FEAUM, but also acknowledges challenges and risks, resulting in a neutral sentiment score.

Positives

• Significant growth in AUM and FEAUM year-over-year.
• Strategic acquisitions expanding investment capabilities and geographic reach.
• Declaration of a fixed quarterly dividend, providing predictable returns to shareholders.
• Implementation of a share repurchase program, potentially increasing shareholder value.
• Strong focus on cybersecurity and regulatory compliance.

Negatives

• Net income decreased year-over-year.
• Exposure to volatile foreign exchange rates.
• Dependence on key senior executives and the ability to attract and retain qualified employees.
• Intense competition in the asset management business.
• Potential for conflicts of interest in investment activities.

Risks

• Difficult market and geopolitical conditions could adversely affect the business.
• Economic slowdown could contribute to adverse operating performance for certain fund investments.
• An increase in interest rates could negatively impact the ability of funds and their portfolio companies to obtain financing.
• Climate change and related regulations could affect investments.
• Cybersecurity threats and system failures could jeopardize operations and financial stability.
• Political and economic instability in Brazil and other Latin American countries could harm the business.
• The dual class structure of the share capital concentrates voting control with Patria Holdings.
• The company may be deemed a passive foreign investment company (PFIC), which could have adverse tax consequences for U.S. investors.

Future Outlook

The company plans to continue growing its investment businesses and expanding into new investment strategies, geographic markets, and businesses.

Industry Context

The alternative investment industry is expected to continue to grow, with assets under management projected to reach US$24.5 trillion by the end of 2028.

Comparison to Industry Standards

• Patria's 20-year pooled Net IRR for its flagship private equity buyout funds was 12.2% as of December 31, 2024 in U.S. dollars and 19.1% in local currencies.
• For infrastructure, the pooled Net IRR in U.S. dollars for its latest two fully invested vintage flagship development funds was 10.7% as of December 31, 2024, and on a local currency basis was 19.8%.
• With respect to credit, our Latin America High Yield Credit fund, our largest strategy, has outperformed its benchmark by 375 basis points (bps) as of December 31, 2024 since inception in February 4, 2000.
• With respect to real estate, of our largest REITs with assets in excess U$75 million, which totals AUM of U$4.4 billion, 14 out of 21 have beaten the related benchmark since inception.
• In our GPMS business our investments in primaries, secondaries, and co-investments have generated gross IRRs of 17%, 19% and 19%, respectively, since inception and as of September 30, 2024, the latest date for which information is available.

Stakeholder Impact

• Shareholders will receive a fixed quarterly dividend of US$0.15 per share.
• Shareholders may benefit from the share repurchase program.
• Clients will benefit from the expanded range of investment solutions and expertise.
• Employees will have opportunities for professional development and growth within the company.

Next Steps

• Continue to grow investment businesses and expand into new investment strategies, geographic markets and businesses.
• Continue to develop new product capabilities that cater to the ever evolving investment needs and objectives of clients.
• Continue to attract and retain the best talent from different investment specialties, and regions and leveraging the power of our investment approach to create attractive investment outcomes.
• Scale our operating platform to support the expansion of existing products as well as to launch new ones as we look to serve our clients' evolving needs.

Key Dates

Keywords

AUM, FEAUM, Patria, Investments, Private Equity, Infrastructure, Credit, Real Estate, Financial Results, Acquisition, Latin America, GPMS, Dividends, Share Repurchase, Cybersecurity, Compliance