Guilherme Grespan

Guilherme Grespan asked about the sustainability of the strong performance in corporate solutions and insurance services into early 2026. He also questioned whether XP is significantly benefiting from the current market environment, characterized by good performance in risk assets primarily driven by foreign investors rather than local dynamics.

Answer

Victor Mansur, CFO of XP, affirmed that the corporate business, having evolved significantly in product and cross-sell, is expected to maintain its pace in 2026. Regarding risk assets, Mansur noted it's too early to see a reflection in take rates, as retail client volumes in fixed income and equities are not increasing, with foreign clients being the main drivers. He suggested that sustained market performance and Central Bank interest rate cuts could eventually lead to increased individual trading activity and fixed income duration decompression, impacting revenues later.

Guilherme Grespan of JPMorgan Chase & Co. sought clarification on a one-off processing cost in Brazil, asking if a reversal created a double positive effect. He also requested dLocal's perspective on stablecoins as a business opportunity versus a competitive threat.

Answer

CEO Pedro Arnt confirmed a partial reversal of a prior one-off cost in Brazil but stated it was not large enough to create a significant headwind for Q3. Regarding stablecoins, Arnt positioned them as a major opportunity, highlighting dLocal's unique ability to serve as an on-ramp and off-ramp provider by leveraging its local liquidity, FX capabilities, and existing infrastructure, thus capturing value in the fiat-to-stablecoin conversion process.

Guilherme Grespan asked for color on the strong performance in the 'Other LatAm' region, questioning if it was driven by volume or take rates, and inquired about the expected evolution of EBITDA margins for the rest of the year.

Answer

CEO Pedro Arnt attributed the 'Other LatAm' strength to a combination of strong TPV growth in frontier markets like Chile and higher take rates characteristic of those markets. On margins, he confirmed it is an investment year with some expense timing in Q1, but expects modest margin expansion for the full year, with long-term leverage potential from AI and automation.

Guilherme Grespan questioned the reasons behind the significant cash decrease during the quarter and sought clarification on the 2025 gross profit guidance, which appears to suggest a slowdown compared to the momentum in the second half of 2024.

Answer

Executive Mark Ortiz attributed the cash decrease to temporary settlement delays at year-end and shorter settlement periods related to the new orchestration product in Brazil. Executive Pedro Arnt addressed the gross profit guidance, noting that while robust, it reflects take rate compression from large merchants hitting higher volume tiers. He also cautioned that annualizing the seasonally strong second half of 2024 would lead to an overly aggressive projection.

Guilherme Grespan asked for color on the strong gross profit growth in the 'Other LatAm' and 'Other Africa and Asia' geographies, questioning if new regions were ramping up quickly and whether the business was primarily cross-border or local-to-local.

Answer

Executive Pedro Arnt confirmed that the strength in these newer, more 'frontier-ish' markets is largely driven by the cross-border business, which surpassed $3 billion in TPV for the first time. He highlighted South Africa, Colombia, and Peru as examples of emerging franchises that contribute to the company's increasing geographic diversification and resilience.

Guilherme Grespan of JPMorgan Chase & Co. asked about the fundraising outlook for the second half of 2025 and the amount of undeployed AUM. He also requested guidance on forecasting the financial income line, considering the J-curve effect of GP commitments.

Answer

Bruno Zaremba, President of Finance & Operations, noted a constructive fundraising environment for H2, driven by Credit and Global IP&S, aiming for double-digit FX-adjusted AUM growth for the year. He explained that financial income will see a temporary reduction as capital moves from liquid to closed-end funds, with value returning to distributable earnings starting around 2027 as funds mature. CEO Alessandro Horta reinforced that Credit and TPD are key fundraising verticals.

Guilherme Grespan inquired about the drivers behind the significant AUM decline in the Global IP&S segment, particularly in liquid TPD, and asked for an explanation for the meaningful markdown in accrued performance fees from private equity.

Answer

CEO Alessandro Morgado Horta clarified that the net outflow in liquid TPD was driven by general market volatility, not a specific strategy, and noted that after FX adjustments, the outflow was about BRL 7 billion. Bruno Zaremba, President of Finance and Operations, explained the accrued performance fee markdown was primarily due to a currency translation lag from Q4, not a change in underlying asset valuations, and should recover if FX stabilizes. He also highlighted that capital returns in TPD alternatives are positive, as clients often reinvest.

Guilherme Grespan asked for clarification on the BRL 16 million FX impact from U.S. debt, questioning if it is unhedged. He also inquired about the recurring nature of performance-related earnings (PRE) from the IP&S segment and confirmed if Compass results were included for the full quarter.

Answer

Bruno Sacchi Zaremba, President of Finance and Operations, explained the debt exposure is from the convertible preferred with Ares and is not fully hedged due to the natural hedge provided by dollar-denominated revenues. He noted that while the Argentina fund was a significant PRE contributor, performance fees were diversified across 20 products, and he hopes another fund will step up in 2025. Zaremba also confirmed Compass was consolidated for only two months (November and December).

Guilherme Grespan noted the BRL 1.2 billion outflow in the Investment Products & Solutions (IP&S) segment and asked for confirmation on which products were affected. He also inquired about the outlook for the strategy's AUM, considering the headwind of potential interest rate hikes in Brazil.

Answer

Private Equity Chairman and Head of IR Bruno Zaremba clarified that the Q3 outflow trend shifted from commingled funds to specific, low-fee separate mandates, making the revenue impact less significant than in prior quarters. He acknowledged that the high-interest-rate environment remains a strong headwind, making significant inflows unlikely, but expressed hope that improved fund performance could moderate future outflows.

Guilherme Grespan of JPMorgan Chase & Co. asked how Patria is positioned to benefit from a potential 'bull case' scenario in Brazil, considering the company's significant geographic diversification compared to its past concentration.

Answer

CEO Alexandre Saigh agreed that a political shift to a center-right government in Brazil would definitely lead to rising asset prices and increased fundraising. However, he emphasized that Patria is strategically positioned to capitalize on similar political shifts and 'election arbitrage' plays across Latin America, particularly in Chile, Colombia, and Peru, where elections are also forthcoming. He noted that about two-thirds of Patria's assets are invested in the region, with a third in Brazil, a third in LatAm ex-Brazil, and a third outside LatAm. This diversification allows Patria to benefit from regional trends, not just a potential Brazilian bull case.

Guilherme Grespan asked about the drivers behind the strong fundraising and performance in the credit strategy and its expected resilience. He also requested a recap of the target fund sizes and fundraising timelines for the Private Equity VII and Infrastructure V drawdown funds.

Answer

CEO Alexandre Saigh attributed the credit strategy's success to the team's skill in navigating market volatility, favorable macro shifts in countries like Chile, and strong investor demand that may prompt the launch of a second private credit fund soon. For the flagship funds, he stated that Private Equity VII is expected to close around $2 billion, while Infrastructure V will likely reach $2.5 billion, with both totals including capital from newly signed SMAs.

Guilherme Grespan asked which real estate products generate performance fees and sought more detail on the private credit strategy, including opportunities in Brazil and the rest of Latin America beyond the legacy Moneda business.

Answer

CFO Ana Russo clarified that while some real estate funds generate incentive fees, the vast majority (95-97%) comes from the credit platform. CEO Alex Saigh elaborated on the private credit strategy, stating Patria manages over $1.5 billion in the segment and is capitalizing on refinancing opportunities in Brazil. He also noted a strategic shift in real estate fundraising from 'brick-and-mortar' in H1 to credit-related funds in H2 2024.

Guilherme Grespan of JPMorgan asked for clarification on two specific items: the strong performance of the 'working capital and others' line within NII, and the reason for the higher effective tax rate in the quarter.

Answer

CEO Milton Maluhy Filho and CFO Gabriel de Moura explained that the working capital line can have some seasonal or non-recurring effects but that the underlying yield is sustainable. Regarding taxes, the higher rate was driven by two factors: a greater share of profits coming from subsidiaries with higher tax rates, and the dilutive effect of higher overall profitability on the JCP tax benefit. They expect the rate to converge towards guidance for the full year.

Guilherme Grespan asked for an explanation of the nearly BRL 1 billion decline in net cash, questioning the cash conversion from net income and whether the drivers were one-offs. He also inquired about the outlook for take rates net of funding costs in the second quarter.

Answer

VP of Finance Mateus Schwening explained the net cash decline was driven by the BRL 843 million share buyback, seasonal payments for variable compensation, and prepaid expenses for a marketing contract. He expects stronger cash conversion going forward. Regarding take rates, he noted the company focuses on adjusted gross profit to TPV, which should see some improvement in Q2 from the full impact of repricing, though tempered by higher interest rates.

Guilherme Grespan focused on capital allocation, asking how much of the company's BRL 5 billion in excess cash could be distributed to shareholders. He also inquired if management incentives would be changed from nominal profit to ROE or EPS to better align with a capital return strategy.

Answer

Executive Mateus Schwening acknowledged the excess capital and confirmed they are developing a framework for distribution, with more visibility to come in future quarters, but declined to give a specific figure. CEO Pedro Zinner responded that changing incentives is part of the discussion, with the current focus leaning more towards EPS than ROE, and that more details would be shared in Q1 of the next year.