| Over a week ago | ||||
Patria Investments… Patria Investments confirmed today that Patria Infrastructure Fund III, through divestment activity in 6 portfolio companies and additional portfolio cash flows, has reached its return of capital and performance hurdle necessary to monetize performance fees. In December 2022, Patria announced definitive agreements for the divestment of ODATA, a Brazilian data center service provider, and partial divestment of Entrevias, a toll road operator in the state of Sao Paulo, which follows the sale of 4 additional portfolio companies in prior periods. The progress of this portfolio to date reflects Patria's commitment to investing across relevant Latin American infrastructure sectors to address structural bottlenecks and generate positive impact to the economy and population. It also illustrates the power of Patria's strategic approach to infrastructure investment in the region, demonstrating the ability to develop, de-risk and sell high-quality assets to global strategic players, and generate attractive returns for investors. Combined with the addition of incremental portfolio cash flows in December, cumulative proceeds to the Fund's investors are expected to reach approximately $2.1 billion, surpassing the Fund's performance fee realization hurdle. Distributions from recent activity are expected to generate at least $15 million in net realized performance fees to be recognized in the fourth quarter of 2022. Patria's Infrastructure Fund III is a $1.7 billion 2013 vintage fund which has invested in 10 portfolio companies. Based on valuations as of September 30, 2022, the Fund has achieved a gross multiple of invested capital of 2.1x and a net IRR of 13%, resulting in $127 million of Net Accrued Performance Fees. Following the recent activity, the Fund's remaining portfolio of 5 active investments is performing well and also positioned for divestment over the next few years. | ||||
| Over a month ago | ||||
Keefe Bruyette analyst… Keefe Bruyette analyst Michael Brown downgraded Apollo Global to Market Perform from Outperform with a $77 price target. The analyst recommends a cautious approach to the alternative managers in 2023, based on his expectation "for many of 2022's frictions to persist into 2023." Brown narrowed his Outperform recommendations, resulting in downgrades of Apollo, Blue Owl Capital (OWL) and Carlyle Group (CG) to Market Perform. KKR (KKR) is his top pick, and he continues to recommend Outperform rated Ares Management (ARES), P10 (PX), and Patria Investments (PAX). Brown also offers a pair trade recommendation of overweight KKR, underweight Blackstone (BX). Volatile macro conditions, including interest rates and spreads, "could continue to be a source of friction, impacting the alternative asset flywheel," Brown tells investors in a research note. He says this concern will likely continue to weigh on near-term stock performance. The analyst cites the recent relative outperformance in Q4 for the three downgrades. | ||||
Patria Investments… Patria Investments announced definitive agreements for the divestments of ODATA, a Brazilian data center service provider, and Entrevias, a toll road operator in the state of Sao Paulo. Together these transactions are expected to generate approximately $1.4 billion in proceeds for investors in Patria's Infrastructure Fund III. ODATA is a data center service provider offering scalable, reliable and flexible IT infrastructure. It is among the fastest growing hyperscale data center platforms in the Latin America, with operational facilities strategically located across Brazil, Colombia, Mexico and Chile, as well as additional data centers currently under development across the region. Aligned Data Centers, a leading technology infrastructure company offering innovative, sustainable and adaptive Scale Data Centers and Build-to-Scale solutions for global hyperscale and enterprise customers, has entered into a definitive agreement to acquire ODATA from Patria Infrastructure Fund III and other selling stakeholders, marking its expansion into Latin America. On December 1, 2022, Patria also announced the divestment of 55% of its stake in Entrevias Concessionaria de Rodovias to VINCI, a world leader in concessions, energy and construction. Entrevias was created by Patria in 2017, and operates a 30-year concession encompassing 570 kilometers of toll roads that cross the state of Sao Paulo. The concession entailed significant capex investment by Patria to restore, enlarge and implement new technologies throughout the existing highway to improve the transportation matrix for both passengers and cargo, and foster the connection and development of surrounding regional economic centers. Patria's Infrastructure Fund III will continue to own the remaining 45% of Entrevias. The divestment of ODATA and Entrevias will bring cumulative distributions to fund investors to approximately $2 billion, surpassing a full return of capital, and bringing the fund near to the performance hurdle threshold, beyond which it enters the "100% catch up" phase and can begin realizing the accrued performance fees. | ||||
Investor Day to be held… Investor Day to be held in New York on December 5 at 1 pm. Webcast Link | ||||
Investor Day to be held… Investor Day to be held in New York on December 5 at 1 pm. Webcast Link | ||||
Investor Day to be held… Investor Day to be held in New York on December 5 at 1 pm. Webcast Link | ||||
Patria Investments… Patria Investments launched a new Venture Capital strategy, anchored by the acquisition of Igah Ventures. Igah's business complements Patria's existing Private Equity and Growth Equity strategies, which are focused on relatively mature companies, by adding investment expertise in startups and early-stage companies. Igah Ventures has been operating since 2013 with three funds raised from local and international investors, having contributed to startups such as Infracommerce, Contabilizei, Unico, Avenue and Conexa Saude. Overall, the investment management company currently has $320M in total AUM and about $140M in fee earning AUM. Patria has acquired 100% of Igah Ventures, with the closing of the transaction also now completed. Consideration structure consists of an upfront cash payment, equity to be paid in the form of PAX Class A shares over the course of the next twelve months, as well as an earnout component contingent on meeting certain fundraising targets. Specific financial terms of the transaction are not being disclosed. Igah is expected to be profitable on an FRE basis looking forward, with the ability to scale with the raising of the upcoming fourth vintage fund. | ||||
| Over a quarter ago | ||||
Alex Saigh, Patria's… Alex Saigh, Patria's CEO, said: "Patria's results for the third quarter reflect progress in our key growth drivers and the resilience of our business model through today's challenging environment. We have raised more than $2.7 billion this year across a diverse range of products and our year-to-date Fee Related Earnings are up 67% compared to the prior year as we remain on track to reach our FRE guidance for 2022." | ||||
Patria Investments … Patria Investments announced that Ms. Ana Russo will join the firm on October 3 as incoming Chief Financial Officer and member of Patria's Management Committee. Mr. Marco Nicola D'Ippolito, who has been serving as Chief Financial Officer since January 2017, will then begin a transition process to transfer oversight of Patria's fund administration, finance, accounting, planning and technology functions to Ms. Russo, with the goal of Ms. Russo fully assuming the role of Chief Financial Officer by January 1, 2023. Mr. D'Ippolito will thereafter assume the role of Chief Corporate Development Officer and allocate his time to develop Patria's organic and inorganic growth strategies, evolving to the leadership of a new business vertical. In addition, he will continue to lead Patria's shareholder relations. To ensure a smooth handover and transition, Ms. Russo and Mr. D'Ippolito will work closely together until the end of the current year. | ||||
As previously reported,… As previously reported, BofA analyst Craig Siegenthaler reinstated coverage of Patria Investments with a Neutral rating and $17 price target. Patria is the largest private markets asset manager in Latin America and its scaled private equity, credit and infrastructure businesses focus on the major markets from Brazil to Mexico while the company raises significant capital from the largest limited partners outside of LatAm in North America, Asia and Europe, Siegenthaler said. The fundraising backdrop has become more challenging in 2022, but this is temporary and Patria is less impacted than US private equity funds, Siegenthaler added. | ||||
