Vinci Partners Investments Ltd. (NASDAQ: VINP), a leading alternative investment platform based in Brazil, announced today an agreement for a combination with Compass. Once closed, the Transaction will create a full-service Latin American alternative asset manager with more than US$50 billion in assets under management1 (“AUM”), across private markets, investment products and solutions (“IP&S”), public equities and corporate advisory segments.
Founded in 1995, Compass is a leading independent asset manager and investment advisory firm in Latin America (“LatAm”), currently present in seven countries in LatAm, the U.S. and U.K.[2], with outstanding reputation and 20 executive partners with a track record of consistently strong performance.
“This combination with Compass marks the most significant step so far in our long-term strategic growth plan presented at our Investor Day, allowing us to expand our footprint into Latin America, one of the most attractive markets for alternatives,” said Alessandro Horta, Chief Executive Officer of Vinci Partners.
“Together, we will become a true pan-regional platform, and create a leading player in Latin America, expanding our geographic footprint and strengthening our combined business through complementary products, broader geographic coverage and more diversified revenue and funding bases. We believe this transaction consolidates Vinci’s position as the gateway to alternative investments in Latin America, as investors gain unparalleled access to the full-suite of alternative investments across the region, and we will be able to meet our stakeholders’ investment needs on a local-to-local, global-to-local, local-to-global and global-to-regional basis.”
“We are thrilled to partner with a leader in alternative investments in Brazil and are excited about the future opportunities for our combined platform alongside Vinci,” said Jaime Martí, partner and Chief Executive Officer of Compass.
“Over the last 28 years, we have built a strong reputation through our extensive distribution network and track record in Latin America. Combining with Vinci is the perfect complementary move, as we gain access to a leading and diverse set of alternative investment opportunities in Brazil. Our shared vision includes offering the best Latin American investment solutions to global investors and providing global solutions to Latin American investors. There is a significant opportunity to grow in LatAm, and the combination with Vinci will allow us to develop new regional products leveraging on their extensive capabilities as well as expand our product base into Brazil through Vinci´s distribution relationships.”
Strategic Rationale
- Combination of businesses creates a leading platform in Latin America, with more than US$50 billion in assets under management;
- Transaction is fully aligned with Vinci’s strategic growth plan to expand its geographic footprint into a true pan-regional platform;
- Vinci will be able to enhance the distribution reach of its investment strategies across Latin America through Compass’ unmatched platform, and Compass will be able to provide access to world-class managers and offer global and regional solutions to Vinci´s broad client base in Brazil;
- Mindset and cultural alignment between partners from both companies, catalyzing superior execution;
- Transaction is immediately accretive to Vinci´s Fee Related Earnings (“FRE”) per share, with short and medium-term additional accretion from revenue and productivity enhancement synergies to be unlocked with the integration of both platforms.
Transaction Overview
The Transaction will have a total upfront consideration of 11,783,384 shares of VINP Class A common stock, and a cash consideration of US$31.3 million, in the form of VINP Class C redeemable common stock.
Under the agreement, Compass partners are entitled to an earn-out of up to an additional 7.5% stake in the combined entity, subject to the achievement of pre-determined metrics, to be paid in VINP Class A common stock until 2028.
Upon Transaction closing, Manuel Balbontín, partner, founder and Chairman of Compass, and Jaime de la Barra, partner, founder and Vice Chairman of Compass, will join Vinci´s Board of Directors.
Compass executives and senior management will continue in their current roles and remain fully committed to the combined business, with a long-term plan aligned with the plan that is currently in place for Vinci´s executive partners.
The Transaction is expected to close in the third quarter of 2024, subject to regulatory approvals and other customary closing conditions.
Goldman Sachs & Co. LLC acted as financial advisor to Vinci, with Simpson Thacher & Bartlett LLP as transaction legal counsel and Carey Abogados as Latin American legal counsel. Morgan Stanley & Co. LLC acted as financial advisor to Compass, with Skadden, Arps Slate, Meagher & Flom LLP as transaction legal counsel.
About Vinci Partners
Vinci Partners is a leading alternative investment platform in Brazil, established in 2009. Vinci Partners’ business segments include private equity, public equities, real estate, private credit, infrastructure, hedge funds, special situations, investment products and solutions, and retirement services, each managed by dedicated investment teams with an independent investment committee and decision-making process. We also have a corporate advisory business, focusing mostly on pre-initial public offering, or pre-IPO, and merger and acquisition, or M&A, advisory services for Brazilian middle-market companies.
About Compass
Compass is a leading independent asset management firm in Latin America, providing investment advisory to institutional investors, intermediaries, family offices, and high-net worth individuals. Founded in New York in 1995, the firm has over 25 years of experience and a team of more than 300 professionals currently present in seven countries in Latin America, the U.S. and UK2. Compass has more than US$37 billion in assets under management and advisory and maintains strategic relationships with world renowned asset managers.
