Patria Investments Ltd. ((PAX)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Patria Investments Ltd. recently held its earnings call, conveying a positive sentiment fueled by impressive fundraising achievements, growth in fee-related earnings, and strategic acquisitions. Despite facing challenges such as the absence of performance-related earnings and potential impacts from U.S. tariffs, the company’s diversified growth strategy and robust fundraising efforts instill confidence in meeting future objectives.
Strong Fundraising Performance
Patria Investments reported a robust fundraising performance, securing $1.3 billion in the second quarter of 2025. This brings the total fundraising for the first half of the year to approximately $4.5 billion, which is 75% of the original $6 billion target for 2025. The company now anticipates full-year fundraising to exceed initial expectations by 5% to 10%, reaching between $6.3 billion and $6.6 billion.
Fee-Related Earnings Growth
The company experienced significant growth in fee-related earnings (FRE), reporting $46.1 million in the second quarter of 2025. This marks an 8% sequential growth and a 17% increase year-over-year. Patria remains confident in achieving its 2025 FRE target of $200 million to $225 million.
Increase in Fee-Earning AUM
Patria’s fee-earning assets under management (AUM) grew by 6% sequentially and 20% year-over-year, reaching $37.2 billion. The total AUM now stands at $48.7 billion, with $600 million of organic net inflows recorded in the second quarter of 2025.
Organic Growth and Diversification
The company’s strategy of diversification and expansion in investments and product capabilities is driving strong fundraising and profitable net organic growth. Patria reported an annualized organic growth rate of about 8% based on fee-earning AUM.
Strategic Acquisition in Brazil
Patria completed the acquisition of seven listed REITs in Brazil, which is expected to add approximately $600 million of high-margin permanent capital fee-earning AUM.
No Performance-Related Earnings in Quarter
During the second quarter of 2025, Patria did not generate performance-related earnings. However, the net accrued performance fee balance increased by 7% from the first quarter.
Potential Impact of U.S. Tariffs
There are concerns regarding potential U.S. tariffs on Brazilian exports, which could negatively impact the Brazilian economy and Patria’s business. Nevertheless, the company believes any impact would be marginal.
Challenges in Mexico
Patria’s exposure to Mexico is currently small, comprising 3% of total assets. The company plans modest expansion in the Mexican market, including a small acquisition of a real estate fund.
Forward-Looking Guidance
Patria Investments has revised its fundraising guidance upwards, now expecting to raise between $6.3 billion and $6.6 billion, surpassing the original $6 billion target. This adjustment is due to strong fundraising across various segments, including credit, infrastructure, real estate, and global private market solutions. The company also remains on track to meet its 2025 fee-related earnings target, reflecting a 20% year-over-year growth at the midpoint.
In conclusion, Patria Investments Ltd.’s recent earnings call highlights a positive outlook driven by strong fundraising, strategic acquisitions, and growth in fee-related earnings. While challenges such as potential U.S. tariffs and the absence of performance-related earnings exist, the company’s diversified strategy and robust fundraising efforts provide confidence in achieving future targets.