Bloomberg Línea — Vinci Partners plans a new growth phase, nearing three years since its initial public offering (IPO) on the Nasdaq in January 2021. One of the country’s largest managers in alternative assets, the firm aims to accelerate organic business expansion, in addition to M&As (mergers and acquisitions) that can deepen existing verticals or expand geographic reach across Latin America, according to Alessandro Horta, Vinci Partners’ CEO, in an interview with Bloomberg Línea.
“Today, especially in Brazil, we see opportunities to deepen strategies we already have in Vinci through M&A. That is, business to aggregate managed assets and teams. That’s a vision we have. Another is from a geographical diversification perspective, mainly for Latin America, to strategically increase exposure to the region,” said Horta.
A crucial step was establishing a strategic partnership with Ares Management Corporation, an American firm also specializing in alternative assets with around $380 billion under management, announced last Tuesday (10th).
Vinci (VINP) has R$ 65 billion in assets and is one of the country’s most traditional and largest independent managers. Founded in 2009 by Alessandro Horta and Gilberto Sayão - the company’s chairman - both previously held director positions at UBS Pactual.
Per the agreement, Ares invests $100 million in Vinci through the purchase of new convertible preferred shares and becomes a partner in distributing the Brazilian manager’s products in other markets, such as North America, Europe, and Asia.
“We will access a universe of 2,000 institutional investors with whom Ares already has a relationship, like pension funds, endowments, family offices, sovereign funds. The company manages almost $400 billion, much more than any manager in Brazil, and that’s just in alternatives,” emphasized Vinci’s CEO about the partnership.
“It’s a universe of investors much larger than those we currently engage with, which is significant for a Brazilian manager, but naturally limited. Ares has an extensive investor relations team spread worldwide. As we are their partner for Latin America, our products will have a much broader reach,” Horta said.
He emphasized that currently about 25% of Vinci’s managed assets come from offshore institutional investors. “Naturally, there will be a significant consequence in our external fundraising within our AuM [assets under management].”
The expectation is that there will be interest from foreign institutional investors mainly in private market assets, i.e., in private equity, real estate, infrastructure, private credit, and special situations.
At the same time, Vinci becomes the preferred partner of the American manager in Latin America, which, according to the executive, should result in diversification for local investors.
“We believe there’s a significant space for private credit products, both for institutions and high net worth individuals, who currently have little exposure to these assets. That’s where most of the allocation of alternatives is in both Europe and the US,” he said.
Discussing deepening strategies, the Vinci Partners CEO referenced a distinct M&A profile, like the purchase of SPS Capital in June 2022. The undisclosed deal marked the firm’s entry into the “special situations” sector (investing in troubled companies, among other high-return and high-risk cases), adding about R$ 2 billion in managed assets.
The private markets segment accounts for most of Vinci’s managed assets (45% of the total) and revenues (54%), according to recent data. Next is the area defined as IP&S (Investment Products & Solutions), with shares of 37% and 19%, respectively.
The agreement with Ares Management also meets, according to Horta, the three strategic directions defined for Vinci: becoming a relevant alternative assets manager in Latin America, deepening current business lines, and expanding the global footprint, mainly in distribution.
“We aim to structure Vinci as an alternative asset manager prepared to grow in benign market moments, with a falling interest rate cycle, where there’s a flow to such assets; and with business resilience even when there are macro headwinds as was recently with rising interest rates. And we’re deepening that,” said Horta.
Since the IPO, the shares traded on the Nasdaq have decreased by about 40%. This year, on the other hand, there’s been an approximate appreciation of 20%.