Vinci Partners Investments Ltd.

VINP Details

Vinci Partners Investments Ltd. (NASDAQ: VINP) is a Brazil-based investment management company and offers alternative investment management and financial advisory services. The company’s business segments include private equity, public equities, real estate, credit, infrastructure, hedge funds, and investment products and solutions. Its financial advisory business is focused mostly on pre-initial public offering (pre-IPO) and merger and acquisition (M&A) advisory services for Brazilian middle-market companies. VINP was listed on NASDAQ on January 28, 2021. As of June 11, 2021, the company’s market capitalization stood at USD 855.98 million.

Newly Listed REIT for Urban Commercial Properties: On May 31, 2021, the company announced that it raised BRL 269.5 million in the IPO of Vinci Imóveis Urbanos FII (VIUR), a newly listed REIT managed by VINP’s Real Estate segment. VIUR is focused on the acquisition of urban commercial properties in Brazil, such as street retail, grocery, healthcare, and education-focused real estate properties.

Full Deployment of Industrial Properties REIT Capital: On May 26, 2021, Vinci Logística FII (VILG11), another listed REIT focused the acquisition of industrial properties in Brazil, announced that it has fully deployed its funds raised from its last capital raise in March 2021 and completed three asset acquisitions, all of which are 100% leased to high-quality tenants. The fund’s market capitalization was over BRL 1.7 billion as of the announcement date.

Q1FY21 Results: The company reported a steep 42.68% increase in net revenue to BRL 106.86 million in Q1FY21 (ending March 31, 2021) compared to BRL 74.89 million in Q1FY20, with revenue from management fees accounting for 76.59% of the total revenue in Q1FY21. Net profit for Q1FY21 was BRL 47.01 million, higher than BRL 30.62 million in Q1FY20. Total AUM at the end of Q1FY21 was BRL 54.76 billion, 44.74% higher than BRL 37.84 billion in Q1FY20.

YoY Growth in AUM (Source: Investor Presentation, May 2021)

Key Risks: Mr. Gilberto Sayão da Silva owns 100% of the company’s outstanding Class B shares, representing 77.3% of the total voting power and control over all matters requiring shareholder’s approval. This concentration of ownership and voting power can limit VINP’s ability to influence corporate matters. Moreover, the company operates in a highly regulated industry and is subject to new regulations as well as evolving interpretations of existing regulations in Brazil, the US, and worldwide, which may increase the company’s cost of conducting its business and maintaining its global compliance standards.

VINP Daily Technical Chart

Stock Recommendation: VINP has increased by 41.71% in the last one month and is currently trading at 85.5% of its original issue price. Considering the current valuation of the newly listed company, solid track record of growth in AUM, and associated risks, we recommend a “Hold” rating on the stock at the closing price of USD 15.39, up by 2.33% as of June 11, 2021. The target price of USD 16.68 represents a Price/Earnings multiple of 4.15x on FY21E earnings per share of USD 4.02.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.