Patria Investments (PAX) Q2 2024 earnings summary

Executive summary

• Fee-related earnings (FRE) reached $39.5M in Q2 2024, up 17% year-over-year and 13% sequentially, with distributable earnings (DE) at $33.8M or $0.22 per share, and a FRE margin of 56% despite integrating lower-margin acquisitions.

• Total AUM grew 43% year-over-year to $40.3B, with fee-earning AUM (FEAUM) at $31.1B, driven by organic inflows and acquisitions.

• Announced a $0.15 per share quarterly dividend, a share repurchase program for up to 1.8M shares, and updated capital management strategy.

• Completed strategic acquisitions, including abrdn's private equity solutions, Credit Suisse's Brazilian real estate business, Nexus Capital, and the remaining 50% of VBI Real Estate.

• Fundraising momentum remains strong, with $2.2B raised YTD and $5B over the last twelve months, on track to meet the $5B annual target.

Financial highlights

• Total fee revenues were $71.1M in Q2 2024, up 20% year-over-year and 17% sequentially, mainly from acquisitions and organic inflows in credit and real estate.

• Operating expenses increased 23% year-over-year to $31.6M, reflecting acquisition impacts and business investment.

• Q2 2024 FRE margin was 56%, within the 56%-58% target range, expected to trend up as synergies are realized.

• Net accrued performance fee balance at $436M ($2.87/share), declined due to FX movements.

• IFRS net income attributable was $0.8M for Q2 2024, compared to $35.7M in Q2 2023.

Outlook and guidance

• FRE per share guidance for 2024 raised to $1.10-$1.12 (from $1.09), and for 2025 to $1.26-$1.41, with a midpoint CAGR of 21% since 2021.

• FRE targets reaffirmed at over $170M for 2024 and $200–225M for 2025, with accelerating FRE and DE growth expected in 2H24 and 2025.

• Organic fundraising target of $5B for 2024 reaffirmed, with pro forma AUM expected to reach $43B.

• Recent acquisitions are expected to add over $10B in fee-earning AUM and strengthen the global private markets platform.

• DE per share, excluding performance fees, expected to accelerate in 2025 as revenue and FRE grow and M&A-related costs decline.