Patria (PAX) Q2 2025 Earnings Call Transcript

Image source: The Motley Fool. DATEFriday, Aug. 1, 2025, at 9 a.m. ETCALL PARTICIPANTSChief Executive Officer — Alex SaighChief Financial Officer — Ana RussoHead of Shareholder Relations — Rob LeeChief Economist — Luis Fernando LopesNeed a quote from one of our analysts? Email [email protected]RISKSCEO Saigh cautioned, "President Trump's renewed threats to impose high tariffs on multiple trading partners, including high tariffs on imports from Brazil, which, if implemented, could have some negative impact on the Brazilian economy."CEO Saigh discussed, A 0.2% to 0.4% reduction in Brazil's GDP growth for 2025 is projected if U.S. tariffs are fully enforced, potentially lowering growth from the projected 3% to about 2.6%–2.8%.The CFO stated, We did not generate performance-related earnings for Q2 2025, indicating no realized carry for the period.TAKEAWAYSFundraising: $1.3 billion raised for Q2 2025 and $4.5 billion raised year-to-date for the first half of 2025, representing 75% of the original $6 billion fundraising target for 2025.Full-Year Fundraising Guidance: Management increased the 2025 fundraising target by 5%-10% to $6.3 billion-$6.6 billion, excluding M&A additions.Fee-Earning AUM: Fee-earning AUM rose to $37.2 billion in Q2 2025, up 6% sequentially and 20% year-over-year growth.Total AUM: Total AUM reached $48.7 billion as of Q2 2025.Organic Net Inflows: Over $600 million of organic net inflows into fee-earning AUM for Q2 2025 (non-IFRS), totaling $1.3 billion year-to-date as of Q2 2025 and $2.4 billion of organic net inflows into fee-earning AUM over the last twelve months (non-IFRS).Fee-Related Earnings (FRE): $46.1 million in fee-related earnings (non-IFRS) for Q2 2025, representing 8% sequential and 17% year-over-year growth; Fee-related earnings margin rose 170 basis points sequentially to 56.8% for Q2 2025.FRE per Share: Fee-related earnings per share (non-IFRS) were 29¢ for Q2 2025, up 7% sequentially and 11% year-over-year.Distributable Earnings: $39 million, or 24¢ per share, in distributable earnings for Q2 2025, up 4% sequentially and 9% year-over-year.Net Accrued Performance Fees: Net accrued performance fee balance was $394 million, or $2.47 per share, up approximately 7% from Q1 2025, mainly due to FX impact.Pending Fee-Earning AUM: Pending fee-earning AUM was $3.3 billion for Q2 2025, down from $3.5 billion in Q1 2025, due to capital deployment partially offset by new fundraising.Permanent Capital Vehicles: Approximately 20% of fee-earning AUM was in permanent capital vehicles as of Q2 2025, cited as a long-term strategic focus.Acquisitions: Seven Brazilian REITs acquired, expected to add approximately $600 million in high-margin, permanent capital fee-earning AUM beginning in Q3 2025.Share Buyback Authorization: Board approved repurchase program for up to 3 million shares over the next twelve months; no shares repurchased in the quarter.Quarterly Dividend: Board approved a quarterly dividend of 15¢ per share for 2025.Net Financial and Other Income: Negative $4 million for Q2 2025, mainly due to interest expenses, partially offset by $700,000 from the TRIA energy trading platform.Net Debt: Net debt was approximately $130 million as of Q2 2025, with a net debt to fee-related earnings (non-GAAP) ratio of 0.6x as of Q2 2025, expected to remain stable at year-end 2025 after approximately $40 million of M&A-related cash payments.Tax Rate: Effective tax rate was 8% for Q2 2025, up one percentage point from the prior quarter; management expects the 2025 effective tax rate to be below 10%.Fee-Related Earnings Guidance: Management reaffirmed the 2025 fee-related earnings (non-IFRS) target of $200-$225 million ($1.25-$1.40 per share), with the midpoint representing ~20% year-over-year growth for 2025 fee-related earnings; The 2027 fee-related earnings targets remain $260-$290 million ($1.60-$1.80 per share).Expense Management: Operating expenses (personnel and G&A) for Q2 2025 totaled about $35 million, nearly flat sequentially and up 10.7% year-over-year, mainly due to acquisitions.Fundraising by Product: Infrastructure fundraising was "approximately three times greater" than all of 2024, led by Infrastructure Fund V with $2.5 billion in commitments as of Q2 2025; Credit fundraising has already reached 85% of the level achieved in 2024.Regional Mix: Local investors in LatAm and Europe accounted for approximately 55% of fundraising in 2025 and 68% in 2024.SUMMARYPatria Investments (PAX -0.43%) delivered sequential and annual growth in both fundraising and fee-related earnings (non-IFRS), supporting management’s revised guidance for higher 2025 fundraising targets. The company executed significant inorganic AUM additions through targeted acquisitions of Brazilian REITs, anticipated to immediately impact the high-margin permanent capital base starting in Q3 2025. Management attributed strong fundraising momentum in Q2 2025 to diversified product offerings, increased demand for infrastructure and credit strategies, and notable inflows from both local and international investors amid heightened macroeconomic and geopolitical uncertainty. Strategic discipline in expense management and a significant share repurchase authorization signaled continued capital allocation focus. Management reaffirmed full-year 2025 and medium-term (2027) fee-related earnings targets (non-IFRS), linking execution to the deployment of a sizable pipeline of pending fee-earning AUM and further expansion in long-duration vehicles.CEO Saigh emphasized minimal direct portfolio exposure to US export markets, with most private equity investments focused on domestic consumption, and infrastructure assets inherently local.CFO Russo noted, A 10% variance in soft currencies against the dollar impacts fee-related earnings by only about 2%, based on Patria’s current asset class mix as reviewed at the December 9 Investor Day.Management described M&A -- highlighting the Brazilian REIT acquisitions -- as a cost-effective complement to organic fundraising for scaling permanent capital AUM. Patria reports financial results under IFRS and refers to certain non-IFRS measures in its disclosures.The management fee rate averaged 95 basis points over the trailing four quarters. Management anticipates future averages between 92 and 94 basis points over the coming quarters, depending on the evolving asset mix.A share buyback program was renewed and expanded, with the stated intention to offset dilution from stock-based compensation and maintain the share count within a guided 158-160 million range from 2025 to 2027.CEO Saigh addressed trade-related uncertainties, stating that, if US tariffs fully materialize, Brazil's GDP growth could be reduced by up to 0.4 percentage points, but anticipated only marginal effect on fundraising demand for PAX's local and regional investment vehicles.The company reported its fourth consecutive quarter of positive net organic fee-earning AUM inflows, supported by a 34% year-over-year reduction in redemptions during Q2 2025.The board maintained the quarterly dividend at 15¢ per share for 2025, with management stating there are no current plans to increase the quarterly dividend of 15¢ per share for 2025, pending further visibility into fundraising conditions for 2026.INDUSTRY GLOSSARYFRE (Fee-Related Earnings): Profits generated from recurring management and advisory fees, excluding carry and investment income.AUM (Assets Under Management): Total market value of all assets managed on behalf of clients, including fee-earning and non-fee-earning capital.Fee-Earning AUM: Portion of AUM on which recurring management fees are charged.Distributable Earnings: Earnings available for distribution, often reported on a per-share basis, commonly used by alternative asset managers.Pending Fee-Earning AUM: Capital already raised but not yet deployed and therefore not yet generating recurring fees.GPMS (Global Private Market Solutions): Patria's private markets platform focused on secondary, primary, and co-investment strategies, especially in Europe and the U.S.FIBRA: Mexican real estate investment trust structure akin to REITs in the US and FIIs in Brazil.TRIA: Patria's energy trading platform referenced for its earnings contribution.Full Conference Call TranscriptOperator: Good day, and thank you for standing by. Welcome to the Patria Investments Limited Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, please press 11 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star then 1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Rob Lee, Head of Shareholder Relations. Please go ahead.Rob Lee: Thank you. Good morning, everyone. Welcome to Patria Investments Limited's second quarter 2025 Earnings Call. Speaking today on the call are our Chief Executive Officer, Alex Saigh, our Chief Financial Officer, Ana Russo, and our Chief Economist, Luis Fernando Lopes, for the Q&A session. This morning, we issued a press release and earnings presentation detailing our results for the quarter, which you can find posted on the Investor Relations section of our website or on Form 6 filed with the Securities and Exchange Commission. This call is being webcast, and a replay will be available.Before we begin, I'd like to remind everyone that today's call may include forward-looking statements, which are uncertain, do not guarantee future performance, and undue reliance should not be placed on them. Patria Investments Limited assumes no obligation and does not intend to update any such forward-looking statements. Such statements are based on current management expectations and involve risks, including those discussed in the risk factors section of our latest Form 20-F annual report. Also note that no statements on this call constitute an offer to sell or a solicitation of an offer to purchase an interest in any Patria fund.As a foreign private issuer, Patria Investments Limited reports financial results using International Financial Reporting Standards, or IFRS, as opposed to US GAAP. Additionally, we would like to remind everyone that we will refer to certain non-IFRS measures which we believe are relevant in assessing the financial performance of the business but which should not be considered in isolation from or as a substitute for measures prepared in accordance with IFRS. Reconciliations of these measures to the most comparable IFRS measures are included in our earnings presentation. Now I will turn the call over to Alex.Alex Saigh: Thank you, Rob. And good morning, everyone. In the second quarter, we made continued progress leveraging and expanding the diversified platform we have built over the past several years as fundraising was a solid $1.3 billion in the quarter, led by our credit, infrastructure, real estate, and GPMS, global private market solutions businesses. Total fundraising over the first half of the year reached approximately $4.5 billion, 75% of our original $6 billion target for 2025. Reflecting our strong fundraising momentum and confidence in our outlook, we now expect full-year fundraising for 2025 to be 5% to 10% higher than our initial target or $6.3 billion to $6.6 billion versus the original $6 billion guidance.We also reported second quarter 2025 fee-related earnings of $46.1 million, representing 8% sequential and 17% year-over-year growth, while fee-earning AUM grew 6% sequentially and 20% year-over-year. Total AUM reached $48.7 billion. Importantly, we generated over $600 million of organic net inflows into fee-earning AUM in the quarter, $1.3 billion over the first half of this year, and $2.4 billion over the last twelve months. Year-to-date, net inflows reflect an annualized organic growth rate of about 8% based on fee-earning AUM since the start of the year. This is an important KPI to monitor over time, as it highlights our ability to drive organic revenue and earnings growth independent of M&A and investment returns.Overall, our diversification and the expansion of our investments and product capabilities are paying off in the form of robust fundraising and profitable net organic growth, enhancing our confidence in the three-year targets we introduced at our Investor Day last December. Now let me quickly summarize our second quarter results before we move on to some of the other highlights for the quarter.Ana Russo: First, fee-related earnings per share of 29¢ in the quarter rose 7% sequentially and 11% year-over-year, driven by higher management fees due to higher fee-earning AUM as well as a higher fee-related earnings margin as we continue to focus on expense management even as we invest in our business. Overall, we remain comfortable with our 2025 fee-related earnings target of $200 to $225 million, or $1.25 to $1.40 per share, reflecting at the midpoint of the range approximately 20% year-over-year growth. We generated $39 million of distributable earnings in the quarter, or 24¢ per share, up 4% sequentially and 9% year-over-year, driven by strong fee-related earnings growth. We did not generate performance-related earnings in this quarter.The net accrued performance fee balance of $394 million, or $2.47 per share, rose approximately 7% from the first quarter of this year, mainly due to the depreciation of the dollar. For perspective, and notwithstanding changes in the value of the public holdings in our carry funds, underlying business trends at our private equity portfolio companies generally remain positive. In local currency, EBITDA at our non-public private equity portfolio companies rose approximately 25% on average over the past year as we focus on resilient sectors of the economy such as agribusiness, food and beverage, and healthcare.Furthermore, Infrastructure Fund III, with $47 million of net accrued performance fees, is in full realization mode, and we continue to expect it will be the main source of realized performance-related earnings over the balance of 2025 and through 2026. On that note, we remain confident that we can achieve our performance-related earnings targets of $120 million to $140 million for the April 2024 through 2027 period. Against this target, we realized $41 million of performance-related earnings in 2024 and expect to realize an additional $15 to $20 million of performance-related earnings over the second half of this year.Alex Saigh: Moving on, fee-earning AUM of $37.2 billion rose a robust 20% year-over-year and 6% sequentially. There are several important things to keep in mind regarding our fee-earning AUM results. Net organic inflows in the quarter were over $600 million, $1.3 billion year-to-date, and $2.4 billion over the past year. This was our fourth straight quarter of positive net organic fee-earning AUM growth. Our annualized organic growth rate over 2025 was over 8% based on fee-earning AUM since the start of the year. Additionally, it is very important to mention that our organic growth was helped by a 34% year-over-year reduction in redemptions.We believe this highlights how our expanded platform is primed to grow organically, supported by the capabilities we have acquired through our M&A activity in addition to those we have developed internally. As a result, we have built a better and more resilient business. Indeed, one of the key features of our business is that it's built to grow no matter the macroeconomic environment. For example, in a high-interest rate environment, where concerns over inflation may be high, such as the current one, strategies such as credit and infrastructure investments, with high yields and/or built-in inflation protections, are in demand relative to equity-oriented strategies.When interest rates decline and those concerns recede, we would expect demand for more equity-oriented strategies, such as equity REITs or private equity, to improve. With regards to acquisitions, our ability to leverage our platform and scale to drive growth through incremental M&A is exemplified by the Brazilian REIT acquisitions we announced in 2025 and closed in July. At a time when the interest rate environment in Brazil makes it difficult to raise capital in listed REITs, we were able to use our position as market leaders to go shopping on the floor of the exchange and acquire a total of seven listed REITs, which are expected to add approximately $600 million of high-margin permanent capital fee-earning AUM.This is an example of how M&A can be an attractive alternative to fundraising as the prices paid for acquisitions are often similar to or even lower than what it would cost to fundraise the same amount of capital. Fee-earning AUM in the quarter also benefited from continued strong investment returns and a positive FX impact. Keep in mind that as we highlighted at Investor Day, the fee-related earnings impact from soft currency FX volatility is modest given that most of our expense base is denominated in local currencies, providing a substantial natural hedge.As we reviewed at our Investor Day back on December 9, based on our current asset class mix, a 10% variance in soft currencies against the dollar impacts fee-related earnings by only 2%. Moving on to fundraising, as I noted at the start of my remarks, we are pleased to report that we raised $1.3 billion in the second quarter, approximately $4.5 billion over the first half of the year, and are raising our initial $6 billion target for 2025 by 5% to 10% to $6.3 billion to $6.6 billion.The quarter's strong results, coming on the heels of our record fundraising in the first quarter of this year, highlight the diversified product offering and distribution capabilities of the platform we have been building. Fundraising continues to benefit from new strategies and products we have introduced over the past several years, including various institutional products targeted to local institutional investors in local currencies. As of the end of the second quarter of 2025, approximately 20% of our fee-earning AUM were in permanent capital vehicles, the growth of which remains a key long-term objective.Drilling down into some of the fundraising highlights for the quarter, credit was once again a standout, led by solid flows into our flagship LatAm US dollar high yield strategy. Infrastructure benefited from another closing on our flagship development fund, Infrastructure Fund V, and co-investments with demand driven by Asian and local institutional investors. It is worth noting that over 2025, fundraising in infrastructure is approximately three times greater compared to all of 2024, led by Infrastructure Fund V, which has reached $2.5 billion of commitments between the drawdown fund and fee-paying co-investment vehicles. Fundraising in credit has already reached 85% of the level achieved in 2024, which was itself a strong year.We believe these extraordinary results highlight how we are leveraging our strong investment performance in these verticals and the investments we have made in our platforms. In addition, Private Active Fund VII reached $1.4 billion, inclusive of related fee-paying co-investment vehicles. It is important to keep in mind that as we expand our business, a large portion of the capital we raise will only flow into fee-earning AUM as capital is deployed. Our current pending fee-earning AUM totals about $3.3 billion, down modestly from the $3.5 billion in the first quarter of this year due to deployment partially offset by fundraising.While the level of pending fee-earning AUM can vary over the short term, over time we would expect it to grow as our fundraising grows, and we raise more capital in drawdown funds, SMAs, and similar fund structures. Our efforts to diversify our platform and increase the resiliency of our business could not be timelier considering the highlighted global macro uncertainty and increased volatility that has gripped economies and markets around the world since the proposed imposition of widespread tariffs by The United States on its trading partners, and the uncertainty over future trade and economic policies.Against this backdrop, it is important for investors to understand and appreciate how the region in general and Patria Investments Limited specifically are positioned in these uncertain times. Consider President Trump's renewed threats to impose high tariffs on multiple trading partners, including high tariffs on imports from Brazil, which, if implemented, could have some negative impact on the Brazilian economy. However, the continued uncertainty caused by these on-again, off-again threats, in fact, highlights why LatAm and Europe are becoming more attractive destinations for global capital as investors rethink their global asset allocations. While much uncertainty remains, we believe these regions and Patria Investments Limited are positioned to weather and indeed possibly thrive in these challenging conditions.Consider that at the strategy or investment level, our private equity investments are mostly oriented towards domestic consumption markets, not export markets. Infrastructure, by its nature, is local, and our GPMS solutions business is focused on European and, to a lesser extent, United States, middle market private active secondaries, primaries, and co-investments. Direct exposure to export-focused businesses and/or investments in The United States is minimal. Investments in Brazil account for approximately 30% of our invested assets. As we noted earlier, demand for our credits and infrastructure products increases in periods of high interest rates and higher inflation concerns.Also, demand for our GPMS products increases as global institutional investors look for liquidity and flexible portfolio solutions for their middle market private equity exposure. Our current exposure to Mexico is minimal at below 3% of AUM. Long term, however, we believe Mexico remains an attractive market for expansion. As the prospects for a trade war remain high, we believe LatAm as a region is a beneficiary given the region's low level of geopolitical risk and export markets that focus on in-demand agricultural products in addition to both hard and soft commodities.With a population of over 650 million people and a combined GDP of over $6.5 trillion, the region also has large and growing internal markets that provide an attractive export destination for trading partners. The trade war is also driving global investors to take a deeper look at Europe as an alternative destination for investment capital. As investors become increasingly concerned that The United States may become a less reliable partner, from Patria Investments Limited's perspective, as investors in Latin America for over thirty-seven years with significant boots-on-the-ground resources, we have extensive experience in dealing with and investing through periods of high interest rates, FX volatility, and economic uncertainty.As the go-to alternative manager in LatAm, the recent tariff-induced economic uncertainty and other trade actions by The United States have led to increased interest from Asian, Middle Eastern, and increasingly European investors in our infrastructure and other investment strategies, including our European private equity solutions business. As investors seek alternative destinations outside The United States to deploy capital and earn returns, this is exemplified by the significant portion of this year's fundraising, which has been sourced from Asian investors. Our business is also built to serve local investors at the local level.We continue to see early signs of increased allocations to alternatives from local investors and institutions that are both under-allocated to alternative strategies and often required to invest locally and understandably have a home country bias in times of economic stress and uncertainty. Local investors in LatAm and Europe accounted for approximately 55% of our fundraising over 2025 and 68% in 2024. Finally, economically, our fee-earning AUM and management fees are very sticky and highly predictable as approximately 20% of our fee-earning AUM are in permanent capital vehicles and approximately 90% in vehicles with no or limited redemption features. At the same time, our fee-related earnings have little sensitivity to soft currency FX volatility as we mentioned earlier.Pulling this all together, our financial results and ongoing fundraising momentum provide additional evidence that our strategy to diversify and grow our business both organically and inorganically while also increasing our resilience is paying off. We believe we are off to a strong start to deliver on our 2025 goals, including the new fundraising target of $6.3 billion to $6.6 billion and fee-related earnings of $200 to $225 million or $1.25 to $1.40 per share. Additionally, we expect to achieve the 2027 targets we unveiled at our Investor Day, such as total fee-earning AUM of $70 billion and fee-related earnings of $260 million to $290 million or $1.60 to $1.80 per share.Now let me turn the call over to Ana to review our financial results in more detail. Thank you.Ana Russo: Thank you, Alex, and good morning, everyone. As Alex highlighted, we are very pleased with the strong momentum we have as we raised $1.3 billion in the second quarter and about $4.5 billion over the first half of the year. Clear proof that the strategic investments we've made in our investment platforms, products, and distribution capabilities are paying off. The strong results in the quarter increase our confidence that we are on track to achieve our 2025 objectives and off to a solid start of our three-year plan.Reviewing our second quarter results, as Alex highlighted in his remarks, our robust fundraising year-to-date demonstrates that we are well on track to achieve and indeed surpass our initial $6 billion target for the year against the backdrop of increased global uncertainty and volatility. Our fee-earning AUM rose 20% year-over-year and 6% sequentially to approximately $37 billion. While acquisitions contributed to the year-over-year increase, the strong growth reflects a combination of solid net organic inflows, as well as the positive contribution from strong investment performance and FX movement due to the depreciating US dollar.It's particularly noteworthy that in the quarter, Patria Investments Limited generated over $600 million of net inflows into fee-earning AUM, bringing our year-to-date total to $1.3 billion, an approximately 8% annualized organic growth. This is the fourth straight quarter of net organic inflows, highlighting our expanding fundraising capabilities coupled with the stickiness and resilience of our assets. While the US dollar depreciation in the quarter contributed to our strong sequential growth in AUM and fee-earning AUM, importantly, however, and as we highlighted in prior calls, FX fluctuations have limited impact on our fee-related earnings since our expense base provides a substantial hedge against currency movement that may impact our fee-earning AUM, consequently our fee revenues.As we reviewed at our Investor Day back on December 9, based on our current asset class mix, a 10% variance in soft currencies against the dollar impacts fee-related earnings by only about 2%. Pending fee-earning AUM totaled about $3.3 billion, down somewhat from the first quarter due to active deployment partially offset by fundraising. This pending fee-earning AUM combined with our fundraising goals, the 20% of fee-earning AUMs are in permanent capital vehicles, and the almost 35% of fee-earning AUM in drawdown funds with an average life of six and a half years, all point to our ongoing ability to generate net organic growth over time.Total fee revenue in the second quarter reached $81.1 million, up 14% over the prior year and about 5% sequentially. The sequential increase was driven by strong growth in fee-earning AUM, some incremental incentive fees from one of our real estate funds in Brazil, and from the strong active public equity performance. It is worth mentioning that due to the timing of net asset flow into fee-earning AUM, management fee revenues in the second quarter did not reflect the full impact of the quarter's asset growth. Our management fee rate averaged 95 basis points over the last trailing four quarters.As we reviewed at our Investor Day, we are steadily evolving our business and introducing new investment strategies and product structures, which are key drivers of our growth. Consequently, our management fee rate will continue to evolve, and we expect our fee rate to average between 92 and 94 basis points over the coming quarters, but with the potential to vary depending on the mix. Moving on, operating expenses, which include personnel and G&A expenses, totaled approximately $35 million in the quarter, practically flat versus Q1 2025 and up 10.7% year-over-year. The year-over-year increase mainly reflects the impact of acquisitions.The very slight sequential increase reflects our continued focus on expense controls and capturing operating efficiency, even as we continue to invest in the business. Looking ahead, we believe second quarter personnel and G&A expenses combined are a good baseline run rate. Putting it all together, Patria Investments Limited delivered fee-related earnings of $46.1 million in the quarter, up 17% versus the prior year and 8% sequentially, with a fee-related earnings margin that rose 170 basis points sequentially to 56.8% in the quarter. We continue to expect the full-year margin to fall within the range of 58% to 60% guidance as we grow fee revenues and capture incremental expense synergies from our acquisitions.We want to remind everyone that the fourth quarter is often our strongest in terms of fee-related earnings margin, driven by the recognition in the quarter of most of our high-margin incentive fees from our credit and public equity products. Regarding fee-related earnings, with half of the year completed, and as our visibility into the remainder of 2025 improves, we remain very confident in our ability to hit our 2025 target fee-related earnings range of $200 to $225 million and 2027 fee-related earnings target of $260 to $290 million, with a fee-related earnings margin target of 58% to 60%.Next, our net financial and other income in the second quarter of 2025 totaled a negative $4 million, reflecting mainly interest expenses on our credit facility, partially offset by income generated in our new energy trading platform, TRIA, which contributed about $700,000 in the quarter. As of the second quarter, net debt totaled approximately $130 million, and our net debt to fee-related earnings ratio of 0.6 times was well below the one-time at the end of the quarter, in line with our long-term guidance.As we manage our cash flow and capital structure over the balance of the year, we expect our debt level to remain relatively unchanged even as we fund M&A-related deferred cash payments of approximately $40 million through year-end, including the latest REIT acquisition in Brazil. Following these payments, our current deferred M&A-related cash payments through 2027 would be approximately $100 million, consistent with our guidance at our December Investor Day. Consequently, given our expectations regarding our net debt over the balance of the year and a somewhat higher contribution from TRIA, our net financial and other expenses line should be about 30% lower over the coming quarters compared to the second quarter.Our effective tax rate in the quarter was 8%, an increase of one percentage point versus the prior quarter, mainly reflecting our mix of jurisdictions. We expect our tax rate over the coming year to hover around 10% annually but will vary quarter to quarter depending on the evolving mix of our business, although we expect 2025 to be below 10%. Of note, as exemplified in the fourth quarter of 2024, quarters with large amounts of fee-related earnings tend to have lower tax rates as fee-related earnings are largely generated in low or no tax jurisdictions.In the second quarter of 2025, we generated $38.8 million of distributable earnings, up 15% year-over-year and over 5% sequentially, mainly reflecting higher fee-related earnings, partially offset by higher net financial interest and expense and higher debt. Second quarter distributable earnings per share of 24¢ was up 9% versus the prior year and 4% sequentially, mainly on higher fee-related earnings, partially offset by a higher share count versus both the second quarter of 2024 and the first quarter of 2025.Regarding the share count, we finished the quarter at 159.5 million shares and continue to expect the share count to average between 158 million and 160 million from 2025 to 2027, inclusive of share repurchase, which will be focused on offsetting stock-based compensation. On that note, the board of directors voted to renew and increase our share repurchase program, and over the next twelve months, we have the authorization to repurchase up to 3 million shares. We did not repurchase shares in the quarter, but we remain committed to our intention to repurchase shares over the balance of 2025 and keep our share count within the target range.Finally, as we announced during the past day, the board approved for 2025 a quarterly dividend per share of 15¢. Overall, we are very pleased with our second quarter results and the momentum we have built as we continue to diversify and improve the resilience of our business. We believe we are on track to meet our fee-related earnings target for 2025, and we are excited regarding the growth opportunity that lies ahead. Thank you, everyone, for dialing in, and we are now ready to answer your questions.Operator: Thank you. As a reminder, if you would like to ask a question, please press 11 on your telephone. We also ask that you limit yourself to one question and one follow-up. As well, wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. And the first question today will be coming from the line of Rodrigo Ferreira of Bank of America. Your line is open.Rodrigo Ferreira: Morning. Hope everyone is doing well, and thank you for taking my question. You've mentioned how Mexico is an area of interest for future expansion. What type of partner acquisition would you look for there? And is that the next target as we think about your $14 billion target of inorganic inflows from the Investor Day?Alex Saigh: Thank you, Rodrigo, for the participation here in our Q&A session. Just as a note, before we begin here the Q&A session, I would like to acknowledge here the tragic and senseless events that occurred early this week at Blackstone and other firms in their building in New York that led to the death of a friend or one of their employees and others in their building. We have many friends at Blackstone given our decade-long relationship with them. We are heartbroken here over the tragedy they had to endure. Our best wishes go out to everyone there and indeed everyone and their respective families that suffered at the hands of this very senseless violence.Going back to Mexico here, Rodrigo, I think Mexico is definitely not to be mentioned here in a long-term perspective. An attractive market is the second largest economy in Latin America, as you know. And the way I think that we see Mexico as of now is to try to find local partners in some of the asset classes that we think are better to expand at the current moment of the country. So, real estate being one of them and credit and infrastructure, I think, being the other ones.On the real estate front, we did actually buy a very small real estate fund in Mexico, the Fibras, which is now similar to the REITs in The US, similar to the FIIs, the PEEs here in Brazil. It was a very small acquisition, so we didn't announce it. It was a total assets of this mixed real estate lease of $26 million. We did buy the management company together with a local partner called Lexington, which is a real estate manager in Mexico. And this management company, the JV between us and them, we will manage fifty-fifty. We'll then manage this $20 million Fibras.In addition to buying this small management company that manages just this Fibras, this $26 million Fibras, they did buy a portion of the shares of the Fibras. So as an asset, it will be an investment in our balance sheet. The strategy here is to continue to grow raising money mainly for logistics real estate in Mexico. I don't know if you did see this latest news or not, but two weeks ago, the largest Mexican Fibras, Fibras Uno, did announce a spin-off together with new money of its industrial properties, its logistics properties, and raised in this spin-off plus IPO over $400 million of fresh capital. So what did Pilbarauda do?And I believe that Fibras Uno is the largest real estate investment trust in Latin America with around $5 billion of assets. Actually, $15 billion of assets of $10 billion of debt. So $5 billion of net worth. So probably is the largest real estate investment trust in LatAm listed in the Mexican Stock Exchange and did the spin-off of their industrial assets. And so there is a demand for industrial assets in Mexico as you can see from this deal that happened two weeks ago. And our strategy is to use this small Fibras that we did acquire in order to expand into the Mexican also industrial assets, logistic assets. No? It's no slow steps.We're gonna take here, so we don't have we don't wanna have to take a very large step into Mexico as of now. But this came about as a very unique opportunity. The Mexican authorities are not actually giving out authorization for new Fibras. That's why we decided to buy one. And we decided to buy a small one so we can actually learn and grow from there into other assets. And, you know, we're excited about the deal. Of course, it's very small. It doesn't move the needle at all given the size of bone and Fibras, but very excited as the first step.With that, I think we have a I think we also, as I mentioned earlier in the answer here, a huge opportunity to go in the credit space in Mexico. We do get exposure to the credit space in Mexico through our pan-regional credit funds. Our flagship fund, which is the high yield LATAM Penn Regional dollar-denominated fund that does carry securities issued by Mexican economies in US dollars. In total, we have a 3% exposure of our total assets into Mexico, a very small exposure, but most of that is in credit and some in equities, public equities. As you know, the pension system in Mexico is growing very healthily.It's basically doubling in the next five years in assets under management. NEV growth is one reason, but the main reason from the employers to the pension funds. It is the largest pool of pension funds in Latin America. Mexico is the second largest economy in Latin America, but the pension funds do manage the largest pool of capital, $350 billion. Approximately versus $250 billion here in Brazil. Versus $150 to $180 billion in Chile. So if and this largest pool, $350 billion will double in five years. So we have to tap that market, you know, with local products. FIBRA is a very local product.And we intend to actually launch other local products into the Mexican economy targeted initially to the institutional investors. Finally, the main investors of this small Fibras are the Mexican pension funds. And one of them being the largest, the Mexican pension fund. That is now our client. Together with a couple of other pension funds that became our clients. So we have local clients now in Mexico investing in a local product, which is the Fibras managed by us. So this is what we intend to do in Mexico, but will it be a major portion of the $14 billion that you mentioned in the, you know, later part of your question. I don't think so, Rodrigo.I think it's still early to say that over the next two years up to the '27, I think Mexico is gonna be still very modest, very small. Portion of our total AUM of the year is Thank you. Hope I answered your question.Rodrigo Ferreira: Thank you. No. That was great. For my follow-up, can you touch on how the deployment pipeline looks like at the moment? Particularly in infrastructure? How should we think about the pace of deployment there given the $3.3 billion of uncalled capital?Alex Saigh: Yes. Thanks for the second question here. Yeah. We are now excited with all the fundraising for this first half of the year as you probably heard during the call, and we have this for us. Sizable pool of capital that we can actually invest, the $3.3 billion that you mentioned. And, infrastructure, I think, is one of the main asset classes. It's $1.3 billion out of the $3.3 billion. So a third of that pending fee-earning AUM. We have a lot of things in the pipeline and infrastructure mainly in Brazil and Colombia. The usual suspects that we feel very comfortable in investing.For example, toll roads, a lot of auctions are going on in Brazil, as you know, over the next months, and we intend to select what we consider the best ones to participate. We have not only the fund investing, Infrastructure Fund V, but we have a pool of fee-paying co-investors that want to invest alongside, making us able to actually sign bigger checks for bigger concessions. We also see the energy market in Colombia very, very attractive. As you know, we are finalizing the construction of the largest solar panel, and we plan to expand that relationship. We also look into water sanitation. We also look to other sectors of the infrastructure.In GPMS, the other $1.4 billion out of the $3.4 billion. So another basically 40% of the money there. Money that we have raised, one of them, our flagship secondaries, Opportunity Fund V, investing in secondaries, buying positions of other LPs and GPs, mid-market mainly European private equity funds. So very excited with that product. As LPs seek for liquidity of their portfolio. So it's a very hot product right now. And we are very well positioned with our GPMS and SOF V, another SMAs that we did raise within our GPMS sector industry use segment. Thank you. I hope I answered your question.Rodrigo Ferreira: Yes. Thank you.Operator: Thank you. And one moment for the next question. Our next question will be coming from the line of Tito Labarta of Goldman Sachs. Your line is open.Tito Labarta: Hi. This is Tito from Goldman. I think Alex, my question, I guess, on the higher fundraising that you're expecting for the year, one, just to clarify, that is separate from the REIT that you announced that you acquired of around $600 million, right? So it would be that should be considered inorganic. Right? So the five to 10% increase in fundraising is organic, just to clarify that. And if so, what is driving that? Because as you mentioned, right, interest rates are still high in Brazil, but, I mean, you seem to be getting some more interest here. So you know, where do you see that interest is coming from that's leading to a better fundraising?Alex Saigh: Thank you. Yes. Hi, Tito. Thanks for participating, and thanks for the question here. Yes. The uplift in the guidance from $6 billion to $6.3 billion to $6.6 billion or five to 10% higher is in addition to the $600 million approximately $600 million of AUM REITs that we bought in Brazil. And, of course, also in addition to the small Mexican $26 million there, that I just mentioned while answering Rodrigo's question. So, yeah, we see so it is it is in addition. Yeah. So in addition to the $6.3 billion, $6.6 billion, we did this acquisition of $600 million of Brazilian REITs plus the $26 million of a small Mexican REIT.We see a lot of interest coming from Asian investors, Middle Easterns, Europeans mainly, and LatAm local to local. Into our infrastructure credits and GPMS products. So infrastructure, again, inflation, protected with alpha. So but we see a lot of the local pension funds in the region in Latin America willing to get exposed to this product because of the nature of the inflation-protected revenues that we have for infrastructure and the long-term contracts and concession contracts that we that is part of the business that is a characteristic of this business. On the credit side, of the interest rates and an alpha, we have been delivering great returns.What we're gonna see when as we file our presentation right now, which we didn't actually file last night. I'm sorry. You can see the returns on the credits, all of our credit strategies performing very well as our infrastructure strategies as well. So continue to deliver alpha throughout our credit strategies, which then, of course, attracts investors to be able to tap into the high-interest rate environment of most of the Latin American countries, high real interest rates, in most of these Latin American countries. So a continued interest from investors. We also see, now a slight shift as I tried to mention during my part of the earnings call.Investors looking into LatAm as a place to allocate capital versus The US. I don't see people actually redeeming money from The US, but I think, yeah, the additional allocation I think people are rethinking about the additional allocation into The US. And a small shift of this additional location into LatAm yeah, is already for us here a huge amount of money. So as we see a small shift coming from Asian investors, a small shift coming from Middle Eastern investors, LatAm investors, need to invest more locally given, you know, the volatility, the whole bias nature that people actually feel, in certain times.And European investors now with a trade agreement between European block European Union, and the South Coast market. All of this together adds the uncertainty, the tariffs in The US, the trade agreements being bilateral, being made between Latin America and Europe, for example, the allocation of the additional amount of capital not a 100% in The US as we were seeing, in during the year of 2024. A bit of that's being shifted to other regions. LATAM being one of them, all of this together, and, of course, we are the go-to alternative assets manager in the region is benefiting us in the fundraising.And this is the fourth quarter, no second a sequential quarter that we see net new money in a very positive and growing. So that's why we feel comfortable that we can actually uplift the guidance here. And, also, within the Brazilian setup that you mentioned, high interest rates, yes, but our credit products here are also doing well and have been able to raise capital in addition again, investors trying to tap this high real interest rates environment, high interest rate environment in Brazil as well. Right. I hope you have I answered your question.Tito Labarta: Yeah. No. That's very helpful. Very thorough. Thank you, Alex. Maybe just a follow-up. You know, given that you are maintaining your guidance for fee-related earnings, I mean, should we assume to already see a step change from all this fundraising in 3Q? I know 4Q tends to be seasonally stronger. You get the incentive fee. But just to get to that guidance, fee-related earnings will need to go up in the second half of the year. But should we already begin to see that in 3Q or we expect most of that in 4Q?Alex Saigh: Yeah. I think most of that more tail-ended because we now have to which is the good part of it and the fun part of it, all my portfolio managers here. We have to then invest this money. And as we invest the money, this money becomes then invested capital that we can charge fees, revenue, etcetera. What is what is this? A small time lag. So as we already in late July, early August here, I will see more in the fourth quarter. But what is the message here? Now we will deliver the guidance of $225 million of fee-related earnings. We feel very comfortable with that given all the fundraising that transforms into revenues.And we get into that at the '25, when we get into 2026 in a very strong position. Because if these investments are not made this year, it's gonna be made late this year. So turning into revenues early 2026. So puts us in a very good position to deliver '26. And then heads us to '27. That's why we feel comfortable as it's a very long-term sticky management fee business. That we manage, we can see 2027 delivering the $260 to $290 million that's already guided.So all of the fundraising in the beginning of the three-year plan, we could have this fundraising later in the three-year plan, we would still read the numbers, but now all of this could fundraising the beginning of the three plan makes it even more comfortable that we will deliver. If we do a simple math here, Tito, our fee-related earnings in the second quarter was approximately $44 million, again, just remembering there's no incentive fees in the second quarter. If you multiply that by four, we're already at $176 million. If we add $10 to $12 million of incentive fees that happens in the fourth quarter, we're at $186, $188.So we are touch off the $200 million, which is the entry level of the range of $200 to $225, $12 million of additional fee-related earnings in the next two quarters is I mean, it's a it's a small amount. If you do the math, I have to invest more or less $1.3 to $1.5 billion and we have $3.3 billion already fee-paying AUM. So we're in a very good position. Of course, we have to do great investments because now the name of the game here is to continue delivering great returns. As we are. With great returns, we manage to then raise more money.But, of course, we're gonna do great investments with, you know, the high-quality portfolio managers that we have here at Patria Investments Limited. I'm sure that we're gonna do that, but, you we are in a good position. Now we are in a good position between I do half of my fee-paying AUM that I have an inventory as of today. Things work in the way that I just described, and here we are delivering the $200 to $225 million fee-related earnings. And putting us in a strong position to start 2026. So good position to be in. We, of course, as you know, we have a very sophisticated, CRM structure to manage our fundraising.We can see the what we call internally here the funnel. All the way from a leads to a subscription document signed. And when we see that funnel, we also make makes us comfortable that we can hit the five to 10% higher guidance of the $6 billion, that we announced as a fundraising guidance for '25. So no, we're no. Great position. I'm happy for the team and the congratulations for my from my team here from Patria's commercial team that did a great job this, this first half of the year. Thank you, Tito.Tito Labarta: Okay. No. Very clear. Thank you, Alex.Operator: Thank you. One moment for the next question. And the next question will be coming from the line of Ricardo Buchpiguel of BTG. Your line is open.Ricardo Buchpiguel: Good morning, everyone, and thank you for the opportunity of making questions. You mentioned the seven REITs acquisition representations package to add $600 million in fee-earning AUM. Could you walk us through the timeline for when they will start being consolidated on your results? Will any shareholder approval from this would be required? And if so, are there any meaningful costs that will be associated with these approvals?Alex Saigh: Thank you. Hi, Ricardo. Thanks for the question. Thanks for participating. We did two acquisitions here or a group of REITs that we acquired from a ship from Genial. As you know, it's the, you know, Brazilian local bank and a group of REITs that we bought from a local alternative asset manager, real estate alternative asset management called Vectis. On the Vectis front, we did the acquisition of one of their holding companies, which manage these funds. The transaction is basically already closed. So we did sign and already close. So you will see these numbers already in the third quarter. Adding to our fee earnings as we did announce in July.In the case of Genial, we have to go through the assemblies have to call a share no shareholders' vote. But for 90% of the funds, we already got the approval. The as too much detail here, but I we probably know that we need 25% of the quota holders of each fund to actually vote to transfer the management of these REITs from Genial to us. And for 90% of the AUM, we already got the votes in. The share the for the shareholders meetings, they're still going on because they a forty-five days we have in order to reach out for these votes, but the we already have more than 25% counts as of today.So we are in a good position. You know, just 10% of the Genial funds, which is a, you know, $30 million fund out of the whole $600 million that we did acquire. 5%, we're still counting to get to the 25%, but I think we'll probably get there, but we still have a couple weeks to go. Which is the forty-five day period within the shareholders' meeting that we did call for. And in the worst of the worst case, we can extend that and it's only 5% of the AUM. So if you could probably gonna see during our third quarter of 2025, revenues from that is on an annualized basis $3 million.So going forward, it should add $1.5 million to our revenue. Which should translate into a $1 million of fee-related earnings. Not analyze the for the for the year. One is $2 million for annualized, but for the year, $1 million. As we did do this transaction in July. So it's it's not a it's doesn't move the needle, but it's a $1 million that we will that we will add to our fee-related earnings. Within the year of 2025. It's the costs associated with these are irrelevant. It's basically calling on a shareholders meeting and a very, very insignificant cost that is not it doesn't move the needle at all. And I think the of our transaction costs.And I think this is it. Oh, very clear.Ricardo Buchpiguel: And just a follow-up here, still on the real estate segment. We saw a pickup in fundraising during the quarter. If you could comment on what type of investors and are driving the demand, which products are they mainly focusing in? It would be helpful. And, also, if you could comment, if we should see this level of fundraising, from Q2 in the following quarters also would be Thank you.Alex Saigh: Yeah. I think our response have been performing extremely well, and I congratulate to hear the portfolio managers and my partners that fund the business. Mainly, the industrial logistics, which is the HGLG, and also the urban retail fund, which is the HGRU, the ticker of these two funds. And, of course, the credit fund as well to be very well given the we're the times of high interest rates that we are living in Brazil right now. So we are we announced the follow-on offering for the logistics fund, HGLG. As we speak. The 2 billion reais follow-on. We already have 1 billion reais taken which we are exchanging assets for, you know, shares of the fund.So investors that own assets, own real estate assets are in this follow-on offering, are exchanging these assets and receiving in exchange shares of the fund. That accounts for more or less half of the offering, and the other half of the offering would be new money. So it's a significant offering that we are running right now. And the other fund that looks into a good position to be able to do a follow-on is our street retail fund, the HGRU, which why do I see that? Because the share price is trading at the very close level to the NAV of the fund. And puts us in a good position to do a follow-up.So street retail, logistics, of course, more than an office fund. And credit also doing very well. So we're very you know, again, it's high interest rates, environment, but being able to manage the funds. Our logistics funds very well, manage them very well. Our logistics funds is the largest in the segment. So that attracts a lot of investors because of its size, because of its liquidity. Same with the street retail, one of the largest of the second. The Brazilian economy is doing reasonably well. I think there, you it's it's and those particular things of Brazil.And one of them is so they buy very high interest rates and very high real interest rates, the economy continues to perform reasonably well. GDP at around, you know, 3% growth for 2025, which is impressive. You would imagine that at such a high interest rates, you would you know, cause a slowdown of the economy. The economy will probably finish 2025 posting a 3% growth. And that reflects in all our businesses. And as you know, Brazilians find a way to protect themselves against inflation, indexing, hedging, etcetera.So the good to the good to the bad to what I'm saying, and we see in our private equity portfolio, our EBITDA I think I mentioned during my earnings call, organically up 20% year-over-year, which is, you know, the whole portfolio. We have everything in that in the portfolio now from fund four to all the way to fund seven. Exposure to several sectors is why it's asking. Our private portfolio is a quasi ETF of the Brazilian economy now because it's exposed to so many different sectors and a 20% EBITDA growth for organic. It's over 30 something percent if I consider the acquisitions.So again, the fact, you know, as a Brazilian particularity is Brazilian economy, we continue to perform given this environment. And we continue to fundraise in real estate, in infrastructure. For infrastructure, for real estate, and for credit. I hope I answered your question. Thank you.Ricardo Buchpiguel: Thank you. Very clear.Operator: Thank you. One moment for the next question. And the next question will come from the line of William Barranjard of Itaú BBA. Your line is open.William Barranjard: Hey. Good morning. Thank you everyone for the presentation. I have a couple of questions here. Starting with, you know, first one regarding fundraising. I just want to pick up brains on how do you think the recent news flow regarding the US tariffs on Brazil affected maybe Dambuda international investors towards Brazil and the region. I would say that apparently it didn't affect so much because of the upward guidance revision. But maybe if you comment quick comments, here a little bit. And, I have a second question now regarding a different topic, regarding the net debt, dividends, buyback. So Ana commented during the call, the net debt should remain stable throughout the year. Right?And also that you should use this new buyback program as a way to keep the number of outstanding shares in the range of the guided range. Right? So I wanted to understand here what should we see in order for the dividends to increase from the 15¢ per share we've been seeing for the past, you know, year and a half. If when do you expect net debt to do increase the and if we should see that in order for this dividend, to increase again.Alex Saigh: Thank you very much, William, and thanks for participating in the call. With Elhamslores. First question on US tariffs. They're all predictions and expectations. Right? It's very hard to understand exactly what's gonna happen given that we haven't lived in an environment similar to this. For a while now, for over fifty, sixty, seventy years. So we don't have a lot of data to be able to go back and understand what are the exact effects. Of course, in my general view, you know, higher tariffs globally it's it's not good news for global trade, for global growth. In general, making this general comment.How will these tariffs be the cost of these tariffs be absorbed by the supplier of the goods and services, by the importer of the goods and services. It's hard to say. I think it's you know, will probably be absorbed within the whole system. As far as Brazil is concerned, as you know, 12% of our exports are directed to The US. And a lot of, 45% of that 12% were exempt from the tariffs. So 45% of 12 exempt, so 55% of the 12, around 6% of our exports, are going to The US with higher tariffs and we might see some additional, I think, exemptions.For example, coffee, it seems it doesn't make a lot of sense given the exemptions. That the Trump administration gave on products similar to coffee, with a rationale that, you if there is a plant or something that is will not that does not grow in The US, they have to import it without tariffs, and coffee is one of them. Coffee is grown does not grow in the Northern Hemisphere. So that now can be another five to 7% of the exports and you know, so it might be affected by 35 to 40% of the export, not 55 as of now. So in the end, I think we're might not really change the needle dramatically for Brazil.I've I have here Luisa Danlos is with us. Our initial math does account for a, you know, point two to point four of reduction in GDP, and the whole thing gets into effect, and nothing comes back. And that was more of the, you 100% of tariffs on a 100% of the goods. Tariffs on 55% of the goods, was more to the point two, point three than the point four. As I was mentioning earlier, we were expecting GDP to grow around 3% this year in Brazil. So we might see by the end of the year that reducing to an annualized growth rate of two point six.2.7 because of the tariff, so it's of course, it's painful, but I don't think it's dramatic in the sense that our 3% GDP growth will go down to zero in Brazil, something like that. It's on the on the on the as we say here on the margin, right, on the margin. So that's, I think, is more of the economic impact. I think, on the second part of your question, I think if there's a, you know, political impact, which is no cause. I think everybody's concerned and attention that these tariffs are not really derived from trading issues, but they come from political issues. That puts us in a more uncertain scenario. Right?Because even if we go back and we have trade negotiations, but we didn't fix as far as Mr. Trump is concerned, the political side of it, now where do we land, and so that puts us in a in a more uncertain position. So it's harder to say, you know, you know, the where will this thing land. So the third thing that I would say before I, you know, conclude the question here other regions of the world, you know, Middle Eastern, Indonesians, and Europeans, they I think they have moved in the direction of, investing more in Latin America.As we see from our, you know, higher and robust fundraising for the '25, and we see the pipeline with very robust fundraising. For the for the next five, six months of 2025. And some of it has to do with it. I think they look. Right? I'm gonna direct my exports not into The US. I'm gonna direct my exports to Latin America. And the Chinese car industry, for example. They're very competitive. They're directing their exports to Brazil. And other countries in LatAm other European manufacturers and service providers, are directing experts to LatAm and Brazil in particular.And that, you know, of course, brings them to invest more be it financial investors, be strategic investors in the country. And, we didn't see any blip in the interest. On the contrary, we saw more interest in the region. And I think it has to do and they say it out. Actually, our clients say that the uncertainty of the, like, now of The US economy in general and maybe in certainty of The US being that trade partner that we thought that he was in the past, I'm gonna look for new markets, for new partners.And even if they shift a small amount of their total, and it's in the only the new money and in the margin of the new money, that's already huge amount of money for us. Right? For Brazil, we have an FDI of around $60 to $70 billion. No. Another $5 to $10 billion raises the FDI by 10%. And today, it today's terms, $5 to $10 billion is not a lot of money. Look at us. Now we're managing close to $50 billion. The Brazilian alternative best to manage. So even us could raise another $10 billion. It would be another 10% of our AUM, and that's no.Increases the FDI into Brazil by five to 10%, which is amazing. I think we still we continue to be in a good position. So final finalizing my answer, I think it's the effects of the tariffs are marginal. They're not gonna I think it's not gonna cause major harms in Brazil. Of course, particular sectors are gonna suffer a lot more than what I just mentioned. We look into a point two to point four reduction in GDP. Out of a 3% growth in GDP from Brazil, of course, very painful, but not very traumatic. But my main concern is on the political side where we land there.But, nevertheless, investors continue to show very high interest in our products and in the region. On the net debt, the share count difference recount here, William. What I can say is, like, as Ana mentioned, we see net debt remaining relatively flat from the number that we posted by the end of the '25, around a $120,130 million dollars net debt probably finished the year with a hundred and twenty, hundred and thirty million dollars of net debt. Share count, we are at one fifty-nine point five. The range that we gave at our 12/09/2024 Investor Day was a 158 to 160 million shares, and I think we're gonna stay in that within that share count.And we don't foresee any increase in the dividends as of today. So we continue with 15¢ per share per quarter, and our Board last week approved the dividends of 15¢ per share to be paid for the 2025, and we see that dividends will remain in the third quarter and the fourth quarter. As we approach the end of the year, and if the fundraising continues to go the way that we are seeing, and, of course, the uncertainties that we just described in my answer here, William, recedes and we see 2026 as robust as we are seeing when I answer my question here Tito from Goldman, we can review this dividend policy.But as of today, we're remaining with 15¢ percent share for the third quarter and the fourth quarter. Thank you. I hope I answered your question.William Barranjard: Okay. You did. Very complete. Thank you, Alex.Operator: Thank you. One moment for the next question. And the next question will come from the line of Guilherme Grespan of JPMorgan. Your line is open.Guilherme Grespan: Good morning, Alex and team. My question is more as well to pick your brain a little bit related. How do you how you think your the business, Alex, in relation to geography? And just the context of the question, I have been having more and more debates around Brazil potential case scenario, next year. And this bouquet, I think it's a combination of potential administration change plus lower rates. So some investors are seeing the scenario of a risk on scenario in Brazil. And my question to you is how you see Patria Investments Limited nowadays, and how much could we expect in terms of benefits from Brazil specifically?Because if you go in into the past ten years ago, you used to be a very specific concentrated in Brazil. Right? But, I think for the right reasons, you diversified a lot of business nowadays. Brazil, I think, if I recall correctly, it's only 25% of the fundraising. And if you can recap, I'm not sure how much it represents in terms of asset allocation. But my point to you is if we see this bull case scenario in Brazil in terms of risk calling environment, do you think fundraising trends are expected to accelerate? Or at this point, do you think it's reasonable to see a steady growth going forward independent if Brazil does super well or not.That's it. Thank you.Alex Saigh: Thank you, Guilherme. Thanks for your question. No. Definitely so. I think if there's a rerating as you just explained, linked to the political shift to a center-right government in Brazil, definitely, in my view, fundraising and prices of assets post-election will rise. And we've been seeing that, and we've been following that. And we do cover that very closely, and you can see from the whole kinds of graphs and data points what happens with in the shifts from center-left to center-right in economies like Brazil. You know, there's some correction or increase in the prices of assets before, but a big correction in prices of the assets post the election. And increases in fundraising in general.But what I would like to highlight is not just Brazil. And we not by chance, but by strategy, as you mentioned, we did diversify our business into other countries in Latin America first and then into Europe. And what you just mentioned about Brazil is also happening in other countries. In Latin America, mainly in Chile and Colombia. And today, on the liability side, we have 65% of our fundraising from investors that are based outside of LatAm. 20% from investors based outside of Brazil, Latin investors that are not Brazilians, or based in Brazil. And 15% of our fundraising coming from Brazilian-based investors. 65, twenty fifteen. On the asset side, where do we invest this money?It's more or less a third, a third, a third, a third in Brazil. It's 30 it's 28, 30%. I'm just rounding the numbers to make it easier here. Illustrate my example. A third in LatAm ex Brazil, and a third outside of LatAm. So taking a view of the a third, which is LATAM ex Brazil. And I also mentioned earlier, it's just 3% in Mexico. So May it's mainly Chile, Peru, and Colombia. These three countries are growing sorry, are growing, over the next six to three months. Four to twelve months or four to eighteen months through elections. And we already see the same effect that you just mentioned for Brazil and Chile.Most probably, the election polls are showing us that a center-right government in Chile will win. Is it Mrs. Mate or Mr. Cass? And that puts us in a very good position to, you know, rerate Chile. So we can you can see that the more liquid securities in the Chilean economy is already being priced up. And we can see also fundraising of our Chilean clients to be more exposed to this rerating Chile going up. So we're raising more money in Chile to bet on this, rerating strategy or election strategy or election arbitrage as we call. And we go then next, which is actually the presidential election at TDR.Happening should happen at the end of this year. Then we go into 2026, we have elections in Colombia and Peru. And, in Colombia, the same. The same. A little behind Chile because the elections in Colombia is just in the in the in the 2026. But what the polls show today that most probably we're gonna have a center-right government because of popularity of the current government. President there, Mr. Petro, is really, really low. And with that, the whole rerating, the whole election arbitrage, and we're playing course, with that. We're seeing investors willing to invest in our funds.Know, we're having success in raising a private equity fund in Colombia, success in raising an infrastructure fund in Colombia, and, mostly through our institutional investors clients and they are saying exactly that you mentioned about Brazil, about Colombia. And then Peru comes next. And we have a, the vice president of Peru actually took over as the, running president, and she is then conducting election in 2026. And, you know, she managed to do the same thing that Mrs. Rousseff managed, right, to her popularity is lower than the inflation in the, which is a rare a rare position to be in. But her population is lower than inflation. So I think her population is around two, 3%.I don't know how low can you get. How can you get lower than that? Right? And inflation in Peru around four. So inflation in Peru is higher than top popularity. We normally say here, Patria Investments Limited, that when your popularity rate is lower than the inflation rate, I think time for you to go. Right? Which is, I think, the case of the Peruvian press. And she's gonna be substituted by a center-right president. So Ruben caught me also has this election arbitrage. And then comes us, Brazil. '26. Very, very early to say, you know, sixteen months before an election, so many things eighteen months before an election, so many things can happen.But I think there's a chance of what the center-right government to win the elections here in Brazil. And that arbitrage play will come into effect. And we see that interplay more of the hedge funds that we see in some of our funds. We see the local investors already betting on that. We see also, you know, several data points as you know, we had a very large sizable short position on the real at the end of the year. Short position basically diminished I don't think people are in a buy long position, but I think the short position went to a neutral position. Same in the stock exchange. I think the short went to a neutral position.So I haven't seen here in Brazil because it's the latest. It's the fourth country in my this year, Chile. Colombia, Peru, and then comes elections in Brazil. So we're a little further down the road, the Brazilian elections. So but I already saw a shift from a short position to a neutral and we might get into a long buy position as we head into the '25 or '26, and the elections poll shows that center-right in Brazil have a good chance to win. So, yeah, very exciting moments, to be honest. William. And, we're gonna we're gonna play this two-thirds of our assets as I mentioned invested here. In the region, not only in Brazil.In Mexico, we don't see that, of course. The present there was just reelected for a six-year term. So but it's it's amazing. You know, we look into the Mexican and Colombian and the Chilean economy, why are these economies, you know, having been able to have low interest rates in Brazil? Very simple. The fiscal. Right? Mexico is investment grade. With a 50% debt to GDP. Chile is investment grade, OECD and Mexico is also OECD member. Chile is investment grade OECD member. And also interest rates coming down with a fiscal of 40 stands relatively under control, 40% debt to GDP.Colombia, not investment grade, but it's 50% debt to GDP, moving a notch up to 50 something percent that's the GDP, but the leadership in Colombia is quite complex. And us here with gross debt at 76% of the gross debt to GDP, so the fiscal says a lot about these four countries as well. Right? That I just mentioned. So we might have even not only a centralized government winning the next election, but a solution or at least a path to a solution to our fiscal problem. And that you know, adds to the whole rerating or election arbitrage in Brazil.So we are pretty excited, to be honest, and we see all of this happening in all of these countries, and we did expose Patria Investments Limited for by strategy to these countries. And if no. Lastly, if I go to the Europe, we're basically exposed to The UK, UK is doing reasonably well. Given the situation and went out and already signed a tariff deal with the with the US administration, which seems as they good tariff deal given what the European Union signed and given what Japan signed. So they're in the good side. And that also is an economy that interesting. A lot of infrastructure investors because of their higher defense spending, etcetera.So I'm pretty excited here, William, and I hope I answered your question. I'm glad I'm sorry. I hope I answered your question. It's Guilherme. Thank you, Alex. Guilherme and William is the Brazilian and English version. So it's something like I thought is it the Brazilian version or the English version? So that's why. I'm sorry. I'm confused. Yeah. Thank you.Guilherme Grespan: No problem at all. Thank you, Alex. Thank you.Operator: And this does conclude the Q&A session for today. I would like to turn the call over to Alex Saigh, CEO, for closing remarks. Please go ahead.Alex Saigh: Thank you very much. Thanks for the call. Thanks for coordinating the call as well, and again, we're very excited with the news of the first half of the year and are looking to a great 2025. Thanks for your participation. Thanks for the patience, and I hope to see you all in person. And safe in the near future. Thank you. Bye.Operator: Thank you all for participating in today's conference call. You may now disconnect.