Patria Investments (PAX) Q3 2024 earnings summary

Executive summary

• Fee-earning AUM reached $34 billion, up 58% year-over-year and 9% sequentially, with total AUM at $44.7 billion, driven by strong fundraising and acquisitions.

• Distributable earnings for Q3 2024 were $34.9 million ($0.23 per share), up 5% year-over-year; fee-related earnings grew 13% to $40.6 million.

• Organic fundraising exceeded $2 billion in Q3 and $5.6 billion over the last twelve months, on track to surpass the $5 billion 2024 target, led by credit and GPMS platforms.

• Diversification and new product launches, especially in GPMS, credit, and real estate, are fueling growth and resilience.

• Quarterly dividend of $0.15 per share declared, payable December 9, 2024.

Financial highlights

• Management fees rose 26% year-over-year to $78 million; net fee revenue in Q3 was $75.9 million, up 28% year-over-year.

• FRE margin was 53% in Q3 2024 and 55% year-to-date; full-year 2024 FRE margin guidance is 56%-58%.

• No performance fees realized in Q3, but net accrued performance fee balance increased to $455 million.

• Operating expenses rose 25% year-to-date, mainly due to M&A activity and personnel costs.

• IFRS net income attributable was $1.5 million for Q3 2024, down from $18.5 million in Q3 2023.

Outlook and guidance

• FRE targets reaffirmed at $170 million for 2024 and $200-$225 million for 2025, with per-share guidance of $1.10-$1.12 in 2024 and $1.26-$1.41 in 2025.

• On track to meet or exceed $5 billion fundraising target for 2024.

• Expecting incentive fees in Q4 to be around $10 million, driven by credit and real estate strategies.

• FRE margin expected to trend toward upper 50s% in 2025 as integration synergies are realized.

• DE per share growth anticipated to accelerate in 2025 as short-term headwinds subside.