Yahoo Finance

• Fundraising: Raised $5.5 billion in 2024, exceeding the target of $5 billion.

• Fee-Related Earnings (FRE): Achieved $170 million for 2024, up 15% from 2023; $55 million in Q4, up 35% from Q3 and 18% year-over-year.

• Performance-Related Earnings (PRE): Generated over $41 million in Q4, driven by the sale of a Chilean desalinization project.

• Distributable Earnings: $189 million for the full year and $89 million in Q4; $1.24 and $0.58 per share, respectively.

• Net Accrued Performance Fee Balance: $319 million or $2.08 per share, declined 30% due to realizations and dollar appreciation.

• Fee-Earning AUM: $33 billion, up 38% year-over-year, but declined 3% sequentially due to dollar appreciation.

• Operating Expenses: $37.6 million in Q4 and $128 million for the full year, driven by acquisitions and increased personnel expenses.

• Effective Tax Rate: 6.5% for 2024, up from 2023, expected to trend towards 10% by 2027.

• Dividend: Announced Q4 dividend of $0.15 per share.

• Net Debt: Approximately $190 million at year-end, expected to reduce throughout 2025.

• Warning! GuruFocus has detected 5 Warning Signs with PAX.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Patria Investments Ltd (NASDAQ:PAX) exceeded its 2024 fundraising target by raising $5.5 billion, surpassing the $5 billion goal.

• The company achieved its 2024 fee-related earnings target of $170 million, marking a 15% increase from 2023.

• Patria's diversified platform contributed to strong performance, with fee-related earnings per share rising 13% year-over-year.

• The company reported robust net organic inflows in fee-earning AUM, with a positive $380 million in the fourth quarter.

• Patria's strategy to diversify and grow its business has resulted in significant progress, with over 70% of 2024 fundraising coming from local investors in local products.

Negative Points

• The net accrued performance fee balance declined by 30%, primarily due to significant realizations and dollar appreciation.

• The appreciation of the US dollar negatively impacted CAUM, resulting in a 3% sequential decline.

• Operating expenses increased due to acquisitions, salary increases, and inflation impacts, affecting overall profitability.

• The effective tax rate rose to 6.5% in 2024, up from the previous year, due to the evolving business mix and new platforms in higher tax jurisdictions.

• The company's net debt stood at approximately $190 million, influenced by M&A-related payments and year-end obligations.

Q & A Highlights

Q: Can you clarify the performance-related earnings (PRE) from the sale of Aguas Pacifico and any other exit strategies for Infrastructure Fund 3? Also, what is the outlook for redemptions in public equities and credit strategies in Q1 2025? A: The sale of Aguas Pacifico was completed in Q1 2025, generating approximately $60 million in performance fees, with $40 million accounted for the general partner. The deal was closed in Q4 2024, and we are on track to meet our performance fee guidance. Regarding redemptions, a specific SMA saw redemptions in late 2024, but these funds were recommitted in early 2025. We expect small redemptions in credit strategies with positive net new money flows in 2025.