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Good day, and thank you for standing by. Welcome to the Patria first quarter 2026 earnings. At this time, all our participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would like to hand over the conference to our first speaker today, Andre Medina, Investor Relations Director. Please go ahead.

Good morning, everyone. Welcome to Patria's first quarter 2026 earnings call. Speaking today are our Chief Executive Officer, Alex Saigh, and our Chief Financial Officer, Raphael Denadai, who join us for his first earnings call in this role. This morning we issued a press release and earnings presentation available on our investor relations website and on Form 6-K filed with the SEC. A replay will be available on our IR website. As a reminder, today's call contains forward-looking statements which are subject to risks and uncertainties, do not guarantee future performance, and undue reliance should not be placed on them. Please refer to these forward-looking statements disclaimer and risk factors in our most recent Form 20-F. Patria reports under IFRS and will reference certain non-IFRS measures. Reconciliations are in the earnings presentation. With that, I'll hand it to Alex.

Thank you, Andre. Good morning, everyone. We started 2026 with solid operating performance as we continue to make progress expanding the breadth and reach of our platform. Our results this quarter reflect three consistent drivers: continued organic fundraising momentum, growth in Fee-Earning AUM, and differentiated investment performance across our investment strategies. Before I turn to the quarter, I want to formally welcome Raphael Denadai for his first earnings call as our CFO. Raphael has been a partner of this firm since 2024 and has been closely involved in our financial operations. He knows our business well, I am confident he will bring a fresh perspective to the role. Now turning to the quarter. Fundraising totaled $2.1 billion, keeping us firmly on track to achieve our full year guidance of $7 billion.

We see upside potential as we work to beat our 2025 record fundraising of $7.7 billion given the strength of investor demand we are seeing across the platform. Fee-earning AUM reached $45.8 billion, up approximately 12% from fourth quarter 2025 and 31% year-over-year, reflecting year-over-year organic growth and the closing of Solis, our Brazilian CLO platform, and three Brazilian REITs acquisitions, including RBR, Vectis, and Genial, which together added approximately $4.9 billion of Fee-earning AUM. Pro forma for WP Global Partners, our co-investment platform in the U.S., which closed on April 1st, Fee-earning AUM stands at approximately $47.5 billion.

The growth in Fee-Earning AUM drove fee-related earnings of approximately $51 million for the quarter, up 19% year-over-year, and we remain on a solid path to achieve our full year FRE guidance of $225 million-$245 million. To put this progress into context, analyzing our first quarter FRE and adding the $10 million-$15 million of seasonal incentive fees that typically crystallize in the fourth quarter gets us to roughly $215 million-$220 million even before considering the additional revenue growth and margin expansion versus first quarter 2026 that we expect to see over the balance of the year. Finally, Distributable Earnings per share of $0.27 rose 14% year-over-year. Raphael will take you through the financials in detail.

I also want to highlight that subsequent to the quarter, Patria reached an important milestone as we completed our first issuance of $350 million of fixed rate long-term debt. The notes were placed with a diversified group of institutional investors, primarily in the U.S., the offering was approximately three times oversubscribed. This transaction extends our maturity profile, reduces our reliance on short-term credit facilities, and provides additional balance sheet flexibility. The notes include a mix of five, seven, and 10-year maturities with fixed coupons ranging from 6%-6.6%, resulting in an average duration of 8.5 years and an average cost of 6.4% per year. Proceeds are being used to retire our existing revolving credit facilities with the balance sheet available to fund future growth initiatives.

Pro forma for the offering, our net debt to FRE ratio stands at approximately 0.8x, consistent with our long-term target of 1x or less. Raphael will provide more detail on our capital management outlook in his remarks. Of course, the bedrock of our ability to grow the business is investment performance, and we continue to generate attractive returns across our platform. As shown in our earnings presentation, the vast majority of our funds have historically outperformed their relevant benchmark. With over 80% of our current Fee-Earning AUM, excluding SMAs and third-party managed funds, invested in funds that have exceeded their benchmarks since inception. This reflects the consistency of our investment process across cycles and strategies and remains the foundation of our LP relationships and our capacity to raise capital. I invite you to take a look at the return pages of our earnings presentation.

For example, our largest strategy, Credit LatAm High Yield, with over $5 billion in Fee-Earning AUM shown on the investment performance section of our earnings presentation, has generated 11% annualized net returns in USD since inception 26 years ago, outperforming its benchmark by over 360 basis points. As you can also see in the page, is outperforming its benchmark for all periods analyzed year-to-date, one, three and five years. Investment performance, of course, directly translates into revenue growth as over 70% of our Fee-Earning AUM, mainly in credit, real estate, GPMS and public equities, grows as our funds deliver positive performance according to their underlying market value. As a reminder, our drawdown vehicles charge fees on a cost basis, so marks in underlying portfolios do not affect management fees.

Moving on, we are very pleased with our fundraising in the quarter, which reflected our continued momentum across multiple verticals. Our credit vertical continues to stand out as we raised over $925 million across various strategies that keep attracting strong demand from local investors and depending on the strategy, global investors as well. Of note, Solis contributed with over $265 million in the quarter, quickly highlighting how this business is additive to our overall platform. The integration of Solis is progressing well and is expanding our capabilities in private structured credit, particularly in the Brazilian CLO market. This positions us to benefit from the continued development of non-bank financing in Brazil, which we view as a structural multi-year growth opportunity.

We're also seeing strong interest in our dollar-denominated Private Credit LatAm Fund II from international investors and expect this to be a meaningful contributor to fundraising throughout the year. Infrastructure continues to attract sustained demand from global institutional investors and raised over $545 million in the quarter. Particularly notable as we are not currently raising a flagship fund, as we are seeing growing interest in large-scale SMA and co-investment mandates. Many of these mandates are targeted to specific initiatives, such as the data center project we announced in partnership with ByteDance that is now advancing through its construction phase, and we are in active conversations on additional transactions of comparable scale. This represents the kind of fee-generating structured mandate we expect to see with greater regularity as our product offering continues to develop.

In addition, we continue to expand the breadth of our Infrastructure platform into new strategies such as Infrastructure Core. In private equity, we raised $275 million through a co-investment opportunity and continue to develop a pipeline of additional co-investment and SMA transactions. We are also seeing growing traction in our local buyout Colombian fund and our high growth reforest fund. Our ability to raise capital for co-investments reflects continued LP confidence in our origination capabilities, even considering the DPI challenge facing the more mature vintages of our flagship private equity buyout funds, Fund V, and especially Fund IV. The DPI profile of our buyout funds reflects a slower realization environment as well as company-specific challenges. While lower interest rates would support improved exit activity, the new interest rate environment has not yet materialized.

To address the challenges of that part of our business, we have recently appointed the leader of our value creation team to focus primarily on divestments. While the existing leader of our private equity vertical will focus on investing our Buyout Fund VII and various SMAs and co-investment opportunities. Meanwhile, Buyout Fund VI and Buyout Fund VII portfolio companies are performing well, having generated an average EBITDA growth of approximately 17% last year. Performance has also been strong for our growth equity and venture capital strategies, with flagship funds generating a net IRR in US dollars of 13% and 17% respectively. With respect to GPMS, first quarter fundraising totaled around $265 million, and we anticipate that 2026 should be a good year for several reasons.

We note that this quarter's fundraising includes a $139 million first close for our inaugural commingled co-investment vehicle, the Patria Co-Investment Partnership Fund. This highlights our ability to develop new products on top of acquired platforms. We expect to complete the fundraise for our secondaries opportunity Fund V or SOF V in the coming months. We can share that SOF V has already received commitments in excess of its initial target of $500 million, and that we believe the fund could reach close to $600 million by its final close, which would make it approximately 50% larger than its predecessor. This highlights our ability to enhance the commercial performance of existing products within acquired platforms.

Finally, we are particularly pleased to see that our European program is seeing increased interest from a broad range of institutional investors, including local institutional clients in Latin America, as well as North American and Asian investors who are already part of Patria's global client base. This is an important development I want to highlight. The incremental demand from existing investors who have partnered with us in Latin America and are now expanding their engagement with us into new strategies and most notably into new regions. Furthermore, the WP Global Partners acquisition, which closed on April 1st, further strengthens our position in the U.S. lower middle market, adding a local institutional presence and origination network in a segment where track record and relationships are the primary competitive differentiators. Real estate fundraising outlook remains strong. Take two of our largest Brazilian REITs in logistics and urban retail, for example.

They have over $160 million of capital already contracted, which should flow into Fee-Earning AUM in the coming quarters, highlighting what we believe to be one of our structural competitive advantages. The scale of our listed vehicles allows us to execute on our asset exchange model through which property owners transfer illiquid assets in exchange for shares of our large liquid listed funds as a way to monetize their portfolios. This asset exchange program is generating an attractive fundraising pipeline that we believe is not only less dependent on the interest rate environment than traditional fundraising, but also potentially less costly to originate as well. The RBR acquisition further enhance our scale and structural advantage as we expect real estate, which is currently over 90% in permanent capital vehicles, to be a strong contributor to fundraising over the balance of the year.

Reflecting on the growth and fundraising that we are experiencing across our platform, it is clear to us that we have significantly diversified our firm's investment and distribution capabilities, both organically and inorganically. We believe we now have at least 10 investment strategies with flagship funds, with the potential to raise more than $1 billion each per fund, up from just two flagship funds at the time of our IPO. All of our fundraising initiatives reinforce and support the high quality of our asset base as over 85% of our Fee-Earning AUM is in vehicles with no or limited redemptions. Our permanent capital base now stands at approximately $10.7 billion or roughly 23% of total Fee-Earning AUM.

In addition, pending Fee-Earning AUM, capital committed that would earn fees as deployed increased about 17% to approximately $3.3 billion in the quarter, providing additional visibility into future management fee revenues. At our December 2024 Investor Day, we set a three-year cumulative performance-related earnings or PRE target of $120 million-$140 million for the period from fourth quarter 2024 through year-end 2027, having generated approximately $62 million through the first quarter of 2026. Infrastructure Fund III continues to support this progress with about $19 million of net accrued carry well-positioned for monetization this year.

As we approach the midterm of our guidance period and gain greater visibility into Private Equity Fund VI, which has $237 million of net accrued carry, we now expect PRE realization to take longer, making contributions more likely beyond 2027 rather than within our original timeframe. Importantly, this is a timing issue, not a value one, and Private Equity Fund VI is well-positioned to be a significant PRE contributor in 2028 and beyond. Meanwhile, we are encouraged by the expansion of our PRE sources across growth, venture, real estate, and credit, which together has about $13 million of growing net accrued carry, some of which could generate PRE in 2027.

Taking it all together, we believe cumulative PRE for the fourth quarter 2024 through the fourth quarter 2027 period can reach $80 million-$100 million with upside potential if markets improve and divestment activity accelerates. Let me share a brief perspective on the operating macro environment. Having invested across Latin America through multiple cycles for nearly 40 years, we bring long-term standing perspective, deep local knowledge, and resilience that few can match. We continue to believe the region's exposure to commodities is evolving renewable energy mix, and its significant infrastructure needs make it an area of sustained structural interest for global capital well beyond short-term market dynamics.

Given the recent geopolitical developments you are well aware of, we are seeing growing engagement from global investors with institutional allocators across Asia and Europe increasingly turning their attention to Latin America and engaging with us across a broader and more diversified set of strategies than has historically been the case. This reflects not just interest in the region, but confidence in our integrated platform, scale, and execution capabilities. We are continuing to invest in our ability to meet this demand, and we believe we are uniquely positioned to capture these opportunities. In summary, we are executing consistently across the business. Fundraising is on track. Our asset base is predominantly long duration and non-redeemable. Our investment performance is solid, and we remain confident in our ability to achieve our full-year objectives. With that, I will hand the call to Raphael. Thank you.

Thank you, Alex. Good morning, everyone. I am pleased to be here for my first earnings call as CFO. I have been deeply involved with Patria since 2023, and I aim to bring to this role continued transparency, a focus on the quality of our earnings, and over time, improvements in the clarity of our financial disclosures. Now, let me take you through the first quarter results. Total fee revenues for the first quarter was approximately $92.6 million, up 20% year-over-year from $77.3 million in first quarter 2025 and up 3% sequentially from fourth quarter 2025, excluding the incentive fees that typically crystallize in the fourth quarter. The year-over-year growth reflects the full quarter contribution of Solis in the Brazilian REITs acquired through 2025, two months of RBR, organic fee AUM growth, and the net FX and performance effects.

Our last 12 month management fee rate was approximately 87 basis points in the quarter, reflecting the full quarter impact of Solis in first quarter, as well as stronger growth in credit, real estate, GPMS, and various co-investments in SMAs over the recent quarters. Independently of fluctuations in average fee rates, as evidenced by our marginal outlook to be discussed in a few moments, the economics of these products remain very attractive given their often high incremental margin and the sticky and long duration structure of the mandates, which can include permanent capital vehicles. Regarding expenses, total compensation and operating expenses for the quarter were approximately $42 million, up 14% sequentially from fourth quarter 2025. The increase reflects integration of recent acquisitions, planned investments in distribution and investment capabilities, and the seasonal reset of compensation programs at the start of the year.

Fee-Related Earnings for the quarter were approximately $50.5 million, up 19% year-over-year, showing an FRE margin of 54.6%. The margin reflects the contribution of the acquisitions closed in the quarter, platform investments, and seasonal compensation timing, all consistent with our prior guidance on quarterly phasing. We expect the margin to improve progressively through the year as management fees grow, integration work evolves, and expense growth moderates. We remain comfortable with our long-term FRE margin guidance of 58%-60%. We are reaffirming full year 2026 FRE guidance of $225 million-$245 million or $1.42-$1.54 per share. Approximately 15%-16% growth from last year's $202.5 million.

We are also maintaining our 2027 FRE target of $260 million-$290 million. Total Distributable Earnings for the quarter were $42.4 million or $0.27 per share, up 14% year-over-year on a per share basis. Growth was driven primarily by FRE. Alex has updated you on our PRE expectations, so let me turn to Stock-Based Compensation. Stock-Based Compensation in the quarter was $10.1 million. Based on current programs, we expect full year 2026 and 2027 Stock-Based Compensation to represent between 11%-12% and 10%-11% of total fee revenues respectively. The expected nominal increase reflects an intentional expansion of equity ownership deeper into the organization and a higher proportion of total compensation delivered in equity for key employees.

When benchmarked against listed alternative manager peers, we believe our stock-based compensation profile is consistent with the group. Finally, we believe that over the long term, our stock-based compensation will moderate as a percent of the net revenues as our business scales. A brief note on taxes. The first quarter effective rate was approximately 10.3%, reflecting our evolving business mix and consistent with our guidance. This is driven by country mix as we engage in acquisitions with higher tax burden, which increase the total tax expense. Regarding the balance sheet, I want to make the opportunity to help you understand Patria's updated liquidity profile following the completion of our debt private placement, which, as Alex noted, extends our maturity profile, eliminates reliance on revolving credit facilities, and provides fixed rate capital for future business development.

To facilitate this discussion, we have added a specific slide to reconciliations and disclosure sections of our earnings presentation available on our website. Between proceeds from the debt offering and expected cash generation, we expect to have ample capacity to meet all of our obligations.

Pay out dividends, reinvest in the business, and buy back shares while maintaining a conservatively structured balance sheet. In this context, share count for the quarter was 159.1 million shares, inclusive of 893,000 share repurchased directly in the market for $12.7 million, and the initial implementation of a new Total Return Swap or TRS of an additional 840,000 shares. It remains our goal to maintain the share count in the 158 million-106 million range. To summarize, our financial picture is straightforward. We have a business generating growing, sticky cash flows from a highly diversified and predominantly long duration and low redeem on asset base. Our fundraising momentum continues and fee-related earnings are growing, giving us confidence that we are on track to meet our objectives.

In addition, the balance sheet remains strong and positioned to support future growth initiatives. We look forward to your questions.

Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Craig Siegenthaler from Bank of America. Your line is now open.

Good morning, Alexandre. Hope everyone's doing well.

Hi, Craig. Thanks for joining our call. Yes, everybody fine here. Hope everybody's fine on your side as well.

Alexandre, you have a big election coming up in Brazil. I was wondering if you could talk about what the outcomes could mean for the asset management industry in Brazil and Patria, even though I know Brazil has been a shrinking part of your overall business, given your diversification.

Yes, of course. Well, as you know, it's pretty tied between the two runner-up, right? The current President Lula and the son of Mr. Bolsonaro, the ex-president, under the name of Flavio, right? It's very hard to say which way it's gonna go. The scenario of having a fourth mandate of Mr. Lula is more of the same. I think what we can see will be as in our take here, an environment with you know, higher inflation and therefore higher interest rates driven by a fiscal indiscipline that is you know, currently kind of the trademark of the Mr. Lula's government.

I think the main difference for the asset management industry, Craig, is a higher inflation, higher interest rate environment under Mr. Lula's government's fourth mandate and a lower inflation, lower interest rates under Mr. Bolsonaro's, Jair Bolsonaro's government. Even though I think in the first moment it's gonna be hard for Mr. Bolsonaro to reduce the deficits from Monday to Tuesday, the projections will show that he will work on that deficit, the yield curve will start showing a decline in interest rates during his fourth four-year mandate, therefore, I think the environment will be less benign versus Mr. Lula's is gonna be more, I think, with a higher interest rate environment.

Where do we, does Patria then actually act on that, and where do we stand? Our, you know, credit business will continue to perform extremely well as it is right now. As you saw, fundraising over the last years and the last quarter, record fundraising for our credit products. We're expanding our credit portfolio, mainly in Brazil with the acquisition of Solis. I think that the non-bank financing in Brazil is a huge opportunity. As I say in my earnings call here, I think it's a multi-year, very important opportunity for us. We wanna place Patria the same way that we place Patria in the REITs business in Brazil, the Real Estate Investment Trust.

There we are the number one, the leader of a BRL 250 billion reais plus industry that is growing at a double digits. Same in credit. The non-bank financing in Brazil is expanding tremendously. In 2025 was the first year that capital markets non-bank financing surpassed financing for corporations in Brazil. Banks, because of the regulation and Basel and et cetera, and restrictions are lending less. Capital markets was for the first year actually surpassed banks again in lending in Brazil. For individuals, the same thing is gonna happen. The right structure to do this is through Solis, through our FIIs, which is the real estate investment trust that focuses on real estate credit. The opportunity there, you know, the numbers there, Craig, are just immense.

Positioning ourselves there to continue to expanding our credit business and our real estate business that as it relates to credit, we have a very large real estate credit business as well within our real estate investment trusts. I think on the other side of the equation with Lula 4, equities might continue to suffer given what the high interest rates environment, right. Now with Mr. Bolsonaro, I think again, we're gonna see, you know, credit continue to be a major source of income for us because I think it will take some time for Mr. Bolsonaro to be able to reduce inflation, and therefore interest rates in Brazil. The yield curve already projecting a decrease.

Other, you know, products that are more real estate dependent, like, you know, the brick-and-mortar real estate side of the business, not the credit side of the business, and equities will favor under Mr. Bolsonaro. What we're trying to do is actually, you know, given our, you know, 40-year experience in doing business in Brazil, is actually having a broad spectrum of products. And, you know, betting a lot on the credit side, private credit, non-bank financing that actually can be, you know, the engine of our growth, followed by, you know, real estate.

Of course, we don't have GPMS here, which is growing a lot outside LatAm for us, followed by infrastructure, which is, you know, inflation-hedged, with a higher inflation environment that also should benefit under Mr. Lula's government. Mr. Lula, during his three terms, did promote once, one of the, you know, largest concession programs in the world, toll roads, water sanitation, et cetera, et cetera, et cetera. We are benefiting a lot from that through our infrastructure division and vertical here. As it is inflation protected because, you know, most of the revenues are contracted and the revenues from, you know, adjusted by inflation.

That's another product that we see favoring under Mr. Lula's government because of his willingness to do concessions and his, in our view, higher interest rate environment. I hope I answered your question there, Craig.

No, Alexandre, great. Very comprehensive. Just for my follow-up, Brazilian public equities have been very strong over the last 12+ months. I'm curious on how this impacted your realization outlook, which should make IPO exits easier, and I'm especially looking at some of your older vintage private equity funds, like Fund IV and V.

Yeah. We are, yes, all true that you said. I think the, you know, the more liquid, listed securities, of course, looking into, you know, a change in geopolitics, you know, favoring Latin America, a lot of flows coming to the region. Independent of Mr. Lula's fiscal imbalance, we saw a huge flow coming into the region benefiting, of course, our stock exchange and other listed securities, appreciating the value of those assets. Of course, you know, you see some of the, you know, the returns of some of our funds are just amazing. Last year, our public equities funds had returned from 40%-60% in US dollars and in reais, and then even more so in US dollars.

Our credit funds that also have no listed securities, the market value of these securities went up with everything that you just said. We are also seeing some that flow into the private markets is it takes a little longer. I think last year we saw listed securities being benefit from this flow first, of course, comes into that benefit kind of flows into the private side of the world. It takes some time for that to ripple down, that ripple down effect. We are now exiting most of our companies in our Private Equity Fund IV, Private Equity Fund V, Infrastructure Fund II, Infrastructure Fund III, and using this momentum to exit.

Even with the exits that we are actually under execution, we will not generate performance fees for Private Equity Fund IV in our view. Private Equity Fund V might generate performance fee, but Private Equity Fund IV will not. Infrastructure Fund II will not generate performance fees, but Infrastructure Fund III, yes, and it's a great fund which has, you know, been paying performance fees over the last years, and we see that we will continue to pay performance fees in 2026. Yes, we are using this momentum to sell a lot of the companies in the funds and clean our portfolio, send money back to investors. Private Equity Fund IV, Craig, not enough for it to generate performance fees. Okay. Thank you.

Thank you, Alexandre.

Thank you.

Thank you. Our next question comes from the line of Lindsey Shema from Goldman Sachs. Your line is now open.

Hi, good morning, Alex, Andre, and welcome Raphael, look forward to working with you. Maybe just kind of following up on the private equity outlook and performance fees. I know last call you had mentioned that the not official accrued, but Private Equity Fund V performance fees were running around $40 million. Is that still the case? What kind of has changed since then to take it out of carry? I know it's very volatile, but maybe just kind of updates on the outlook specifically there. Then more broadly, what do you really need to see? I know rates is a factor, and you mentioned you're starting to get some momentum from the inflows into Brazil, but I mean, you now have a person entirely, it seems like, in charge of focusing on divestment. Is the upside really just on rates?

Is it maybe this momentum's a little bit better? Just kinda understanding the factors that led to revising down guidance and what could kinda, you know, be upside there. Thank you.

Thank you. Thank you, Lindsey. I think as mentioned to Craig and to you all, I think the outlook for performance fees coming from Private Equity Fund IV is not positive. We do not expect performance fees coming from Private Equity Fund IV, even though we are selling companies from Private Equity Fund IV. It will, you know, generate DPI for investors, but not enough. Not enough, no. Not even close to enough. Okay. For Private Equity Fund V, I think we conservatively value the companies at very conservative valuations in our view, in, you know, all of the companies of Private Equity Fund V.

The upside there, Lindsey, is like if we can sell companies with a, you know, valuation higher than our current marks, then it will generate performance fees. Under the scenario, I prefer to be conservative and as of today, not have any expectations of performance fees coming from Private Equity Fund V as well. Private Equity Fund IV, pretty sure about that. Private Equity Fund V, I'm being conservative about it, but I think that's the scenario. We're using a more conservative scenario in order not to generate expectations. There's an upside potential for Private Equity Fund V, but there's no upside for Private Equity Fund IV. Private Equity Fund VI, you can see that, you know, no great performance fee there, over $230 million.

Private Equity Fund VII's too early to say, but the companies in the portfolio is performing very well. In addition, our growth equity funds, as you see, are performing very well. We have a large asset in our growth equity fund, which is a online pet business that is, you know, a sizable investment that can generate sizable performance fees. We don't see it in within the range of 2027. An upside could be 2027. That's why we reduced the expectations for the 2027 period. I think there's sizable performance fees coming from that business, which is called Petlove. It's a market leader in Brazil. Patria Growth Equity Fund II, you know, the portfolio's shaping extremely well.

Venture also, you know, portfolio's shaping extremely well. DPI is very high for our, you know, Venture Funds. You know, our Venture Fund II over 1x DPI. Our Venture Fund III already 0.3x DPI. We're after one that company, it will go to close to 1x DPI, 0.9xs DPI for the Venture III. Venture IV is pre-new. Very, you know, good news coming from that side of the business. Plus performance fees that can come from other asset classes like real estate, like credit, et cetera.

Lastly, what I would like to emphasize, Lindsey, is like, you know, let's say that, you know, we do generate $80 million-$100 million of performance fees versus the $120 million, $140 million. The difference, you know, between one scenario and the other is around, you know, $40 million-$60 million. If we divide that by 3, you know, because it's a three-year period guidance. 40 divided by 3, around, whatever, $13 million, and 60 divided by 3, around $20 million. It will be an additional $13 million-$20 million that we'll add to our DE.

Given our, you know, projections that we're going to generate $225 million-$245 million of FRE this year, $260 million-$290 million of FRE next year, an additional $13 million-$20 million, of course, I prefer more $13 million-$20 million than less $13 million-$20 million. Percentage-wise, it's pretty small. It doesn't actually move tremendously the needle. Our performance fees, because as, you know, are becoming less relevant to our business and our results, we moved Patria into more NAV and market-oriented funds. Listed funds where we charge fees on the market value of these funds, like REITs, like the public equities, like credit, et cetera.

70%, so the 70% of our fee in the AUM come from funds that actually do charge fees on the market value of the assets, like credit, like public equities, like real estate, like GPMS. 30% are the drawdown nature funds that has the performance fees. That's already now in 2026, 2027. Looking into 2030, by the end of the year, first week of December, we're gonna give out our 2030 vision. Even more so, this path continues for us to expand the business on the asset classes that I just mentioned, permanent capital vehicle, listed funds, whatever, that charge fees on the market value of the assets.

The performance fees are gonna become even less relevant as we move into the future. That's not by chance. It's by strategy. Of course, we wanted to guide the company because it becomes more predictable, more visible, as performance fees have this kind of volatility. Sometimes, you know, we are, you know, doing an M&A, and I joke that M&A stands not only for mergers and acquisitions, but it also stands for misery and anguish. You're there signing a deal, someone, you know, doesn't wanna sign the deal, whatever, it goes to the next quarter. We're moving the business to be allocated to asset classes and fund strategies that give us a lot more predictability. That's what the bond investors actually saw.

I think the rating agency, the investors that came into our bond, of course, they have a look into the credit quality. They want to, you know, of course, get their debt paid. They don't want much upside on that sense. They want predictability. Even though, you know, the performance fees can add that extra $15 million-$20 million in my example here, you know, they saw this very predictable business of Patria. That's why we managed to raise a, you know, seven-year, ten-year notes with these kind of terms that we just went over here. I hope I answered your question, Lindsey.

Yes, that was great. Definitely heard on the strategy moving more towards market valued assets. I do have one more question, maybe a little bit more specific on this year. On the expense growth in the quarter, if you could just break down maybe by magnitude, how much was acquisition related, how much was investment, how much was comp resetting, how much was FX? Just trying to get a sense of what each impact was and how much margin can expand throughout the year. Could you reach your longer term FRE margin target this year, or is that more of a topic for 2027?

Yeah. I'll go for the short-term answer, and then I'll pass on to Rafael. Yes, we can reach the 58%-60% FRE margin for this year, and I'll pass on to Rafael to give you this breakdown. Thank you.

Hello, Lindsey. First, thank you for your question. We have three temporary factors that explain the first quarter margin. The first one is integration costs from the Solis and RBR closings. The second one is the seasonal compensation reset at the start of the year. The third one is the platform investment that were front-loaded. Okay. The path, as Alexandre said, to 58%-60% margin is supported by simple math. Moving the margin from 54.6% to 58% on our $45.8 billion Fee-Earning AUM base generates approximately $50 million of additional FRE before any new fundraising contribution. On top of that, our $3.3 billion of Pending Fee-Earning AUM converts to fee-paying status through the year.

We expect $10 million-$15 million of seasonal incentive fees in the fourth quarter. Annualizing first quarter FRE plus those incentive fees gets us to roughly $250 million, and the margin expansion plus organic growth reaches the rest. We are reaffirming the 58%-60% range. Just to give you some more perspective on the costs, we have, that's your question. We have an FX impact that is pretty much important in the first quarter of the year. We have to keep in mind that we also have a positive impact on revenues, okay?

When we look, the expenses, separately, we can see this impact, but when we look it all together, it goes to the bridge that I just mentioned to you.

Perfect. Just confirming the $3.3 billion of Pending Fee-Earning AUM, is that all to be deployed this year or only part?

No, I would no. Of course, the plan is to deploy within the year because it's. If you do a roll of, you know, 90 basis, which is our roll, you can see where, you know, $25 million coming from here. Yes, within the next quarters. I think our expectation and also investors' expectation, they want to see the money on the ground being deployed.

Okay, perfect. Thank you so much.

No, thank you. Thank you.

Thank you. Our next question comes from the line of Guilherme Grespan from JPMorgan. Your line is now open.

Thank you so much. Good morning, Alex and team. My first question was actually answered, was on the pending AUM. The second one is just on the average management fee rate, Alex. I know that when you look at the consolidated view, there was a step down, I think, mostly related to mix. Whenever we try to do the per segment fee or basis that you disclose the management fee per segment, we saw a small step down on Private Equity and Infra, that there was no M&A. Just want to confirm sometimes those movements are average balance calculation that impacts the average management fee. Just want to confirm there was no step down or any change to the fee schedule of PE and Infra. Thank you.

No, Guilherme, thank you for your question, a great question, because it's, I think it's important for us to emphasize. The short answer, then I'll go through the explanation. No, no fee pressure, okay? Within private equity and infrastructure. What happens, when we raise a flagship fund, which is not the case of this year and this quarter, the flagship funds do actually post a higher fee rate. You know? Private Equity 1.17 and 20, 1 and 1.75 for our management fees and 20% performance fees. Infrastructure, 1.5, 1.6 management fees and 15% performance fees, okay? The flagship funds, which we are not raising this year. When we actually raise the SMAs which we mentioned.

The SMA that was actually even used as an example in our earnings call, the data center SMA, with ByteDance or the toll road SMA that we did with PIF, the Saudi sovereign fund, and also with GIC, the Singaporean sovereign fund. Those SMAs are more on the 1 and 10 basis, 1% management fees and 10% performance fees. It is a way, so that's all. As we raise these SMAs during 2026, and we are not raising a flagship fund, you see some of this margin movements or lower movements that you just mentioned for private equity and infrastructure. Private equity, we did raise an SMA.

We did sign, not yet closed, a large healthcare deal in Colombia and in Chile. You probably, you probably know, recall that UnitedHealthcare owns three large assets in the region in South America, one in Brazil, Amil, that it sold last year. And then, UnitedHealthcare, which is facing now their issues of their own, decided to sell the Colombian asset and the Chilean asset. We did actually raise an SMA of over $500 million there with now 200 is already there in our first quarter. We will have another 200 to come in the second quarter for private equity to buy these two assets in Colombia and in Chile.

Again, now raising an SMA for private equity is 1 in 10, is not 1.75 and 20. Actually it's 1 in 15 in this case of private equity. During the year, you're gonna see this, the years that we are not raising flagship funds, but no fee pressure. Needless to say, you know, some of the investors that do put money in the fund, in the main fund and are paying 1.75 and 20 in the case of private equity at 1.5, 1.6% management fees and 15 in the case of infrastructure, they do require that we do give them opportunities to co-invest, where in the co-investment vehicles, they pay a fee of 1 in 10.

It's a way of giving them a discount, Guilherme, right? It's not in the main fund because it would spoil the whole economics that other investors are now getting into the fund. They want most favored nations clause, whatever. We don't reduce the funds that the fees for the main flagship funds. We do give them the opportunities to co-invest. In the co-investment vehicles, we have this lower fee combination. Which is now the way that the industry operates. It's not a 2025 or 2026 phenomenon. For the last 20 years, we've been doing this, and it's the same, the same mechanics. A very large investor gets into the fund, pays full fees, but then asks to co-invest and pay a lower fee in the co-investment vehicle.

That is a 20-year phenomenon. It's not a 2025, 2026 phenomenon. We're not getting any fee pressure going back to the beginning of my answer here. Hope I answered your question.

Yes, you did. Super clear. Thank you, Alex.

Thank you. Our next question comes from the line of Nicolas Vaysselier from BNP Paribas. Your line is now open.

Hello, hope you can hear me. I have two questions on my side. The first one would be a bit a follow-up on the previous one, but I was wondering on the co-invest in infrastructure and private equity, do you manage to charge anything at all in terms of fees or it's purely at zero? I do understand that it's necessary for doing the business in that industry, but just wondering if there's any revenue impact. Second question, your last acquisition this year in mid-market secondaries developed mid-market secondaries. I was wondering if any other deal you might be doing in the near future would still be looking at developed market capacities. I know you've been talking about the U.S. quite a bit on recent calls.

Yeah, was wondering if this is, it's gonna be something, you're going to focus on more, in the near future.

Nicholas, thank you very much for your question, and thanks for participating on. We do charge fees on the co-investment vehicles. How does that work? I, now, I don't wanna, you know, bog you guys into much detail, but very big institutional investors, normally, they require that the first dollar that they invest that matches the dollar that they put in the fund is no fee, no carry. Let me use you an example. If a very large investor decides to invest $300 million in one of our flagship funds, they require that the first $300 million of co-investments do not pay any fee and carry, the management fees and carry. In the end, it's a 50% discount. Of course, it's their option to do the co-investment.

After that, Nicolas, we charge the 1 in 10 that I mentioned when I was answering Guilherme's question. 1 to 1, yes, for the large guys, no fee, no carry. After 1 to 1, we do charge, normally we charge 1 in 10. If it's an investor that is not an investor in the fund, he already goes into the 1 in 10. Okay? In the case of infrastructure. In the case of private equity is 1 in 15. They pay a higher performance fee for the SMEs, for, you know, private equity. In private equity, it works the same. The first dollar for dollar, no fee, no carry. After that, they pay fee and carry.

I'm generalizing, of course, there's no, if we go into the, you know, detail of some of the relationships, there might be a little twist here or there. In general terms, I think this is, I think gives you a good view of how it works. Again, it's not a Patria thing, it's not just for Patria, it's an industry thing. It's an industry kind of phenomenon, an industry characteristics of our industry, the 1 to 1, and over 1 to 1 people do pay fees for for co-investments. Okay? On the USA and the WP acquisition. The WP acquisition was No, let me start with a short answer. No, we do not intend to expand in the U.S. in a big way.

Let me give you then some more detail. The WP acquisition was targeted to enhance our capabilities through the GPMS team. The GPMS does, as you know, private equity primaries, secondaries, and co-invest, and are mainly in Europe. Two-thirds of our portfolio is a, you know, European focused portfolio. Our investors that ask us to have more of a global approach to, you know, private equity primaries, secondaries, and co-invest mid-market focus. That means, you know, having a larger U.S. presence and competence. The WP acquisition comes to fulfill and enhance and strengthen the part of the strategy of our GPMS business.

So besides that, which is, you know, enhancing something that we have already purchased in Europe, which is a GPMS business from abrdn, we don't see any other short-term opportunities to get into the U.S. Our focus is to, you know, LatAm and, you know, we're not really in big time in Mexico. We're growing in Colombia, as you know. U.K. is a main focus. U.K. is the second-largest alternative asset market in the world. I think the second technically is China, so U.S., China, and the U.K. For us, U.K. is, as it's harder for us to approach the Chinese market. The U.K. for us is the second-largest alternative market in the world. Very fragmented, contrary to the American market, which is, you know, went through a consolidation.

We actually can see ourselves through organic growth and acquisitions becoming one of the top three to five alternative managers in the U.K. and therefore in Europe, in credit, in GPMS, in real estate, in these asset classes. Our focus is to continue expanding where we already are in the U.K./Europe, continental Europe, LatAm, but not in the U.S. besides the GPMS that I just mentioned. I hope I answered your question, Nicholas.

Yeah, it's actually very clear, and thank you very much for clarification on co-invest. That was very useful.

Well, thank you.

I am showing no further questions at this time. This concludes our Q&A, and I would like to turn it back to Alex Saigh for closing remarks.

Well, thank you very much for your participation. Again, I think a great quarter for us. A strong performance, starting with, you know, performance of our funds, then, you know, comes, you know, rippling down to fundraising, great fundraising of $2.1 billion for the quarter. We know there's an upside there on our $7 billion guidance, even, I think, beating the $7.7 billion record fundraising that we had in 2025. You know, very strong FRE growth for us, confirming the $225 million-$245 million FRE for 2026. And a 58%-60% FRE margin. We also, you know, would like to thank you for your participation.

Hope to see you in person soon, and have a very, very good day. Thank you.

Thank you all for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Patria Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Andre Medina from Patria Shareholder Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Patria's Fourth Quarter and Full Year 2025 Earnings Call. Speaking today on the call are our Chief Executive Officer, Alex Saigh; and 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 in the Investor Relations section of our website on Form 6-K filed within 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 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 reports financial results using International Financial Reporting Standards, or IFRS, as opposed to U.S. 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. Reconciliation of these measures to the most comparable IFRS measures are included in our earnings presentation. Now I'll turn the call over to Alex.

Thank you, Andre. Good morning, everyone, and thank you for joining us today. We are very excited to report our fourth quarter results, a capstone to a very successful 2025, which highlights how as we enter 2026, Patria is in a strong position to achieve and hopefully exceed the 3-year fundraising and FRE fee-related earnings objectives in addition to other important KPIs we set for ourselves at our Investor Day in December 2024. Highlights of the quarter and 2025 include organic fundraising of $1.7 billion in the quarter and a record $7.7 billion for the full year, sharply surpassed our previously upwardly revised full year target of $6 billion by more than $1 billion. We generated $203 million of fee-related earnings in 2025, up 19% year-over-year, achieving our objective of $200 million plus for the year. Distributable earnings per share reached $1.27 in 2025, driven by the strong fee-related earnings growth in addition to $19.6 million of performance-related earnings in the fourth quarter. We announced back on November 26, 2025, the acquisition of 51% of the Brazilian private credit manager, Solis, which closed on January 2. Solis, with approximately $3.5 billion of fee-earning AUM as of the third quarter 2025, substantially expands our capabilities and scale in the rapidly growing private credit market in Brazil. Pro forma for the acquisition, our credit vertical fee-earning AUM is approximately $12.1 billion. We also announced on December 11, 2025, the acquisition of several REITs real estate investment trusts from the Brazilian real estate manager, RBR, which closed yesterday and is expected to add approximately $1.3 billion of permanent capital real estate investment trust assets in Brazil. We are now the largest manager of listed REITs in Brazil with a pro forma fee-earning AUM of approximately $5.7 billion, a market in which we believe scale provides significant competitive advantages. Also just yesterday, we announced an agreement to acquire WP Global Partners, a U.S.-based lower middle market private equity solutions manager with $1.8 billion of fee-earning AUM as of the third quarter 2025, which will enhance our global capabilities in our global private markets solutions business. Pro forma for the acquisition, our GPMS Global Private Markets Solutions fee-earning AUM is approximately $13.6 billion. Our total fee-earning AUM of $41 billion as of the fourth quarter 2025 rose 5% sequentially and 24% year-over-year. Pro forma for the announced acquisitions, our fee-earning AUM at year-end is approximately $47.4 billion, putting us in a strong position to achieve our year-end 2027 target of $70 billion. We are also pleased to share that our energy trading platform, Tria, which has experienced strong growth since its launch in 2024 and contributed with $4 million to our 2025 distributable earnings signed a definite agreement with Raizen to acquire its energy trading arm, Raizen Power. Upon completion of the transaction, Tria is expected to become one of the largest independent energy trading companies in Brazil. Finally, adding to our current approved share buyback program of 3 million shares, of which we have already acquired 1.5 million in the third quarter 2025, our Board just approved an additional 3 million share buyback program. On top, further illustrating Patria Partners' alignment with our business, of which we already own approximately 60% and our belief in Patria's unique position to continue its growth path, we, Patria's Partners through our holding company, PHL, are happy to announce our intention to purchase up to 2.5 million PAX shares. Summing it all up, we can now purchase up to 7 million shares to return capital to our shareholders. Now let's take a closer look into the quarter and the year, starting with fundraising. The $1.7 billion of capital we raised in the fourth quarter 2025 and the $7.7 billion we raised for the full year do not include any acquisition and were driven by continued demand for our infrastructure, credit, real estate and GPMS strategies. Our fundraising in 2025 exceeded the initial $6 billion target we set back at our Investor Day in December 2024. As well as the revised target of $6.6 billion we set in the third quarter of 2025. While we are leaving our 2026 and 2027 fundraising targets at $7 billion and $8 billion unchanged for now, our success in leveraging the investments we have been making in our platforms and distribution capabilities increases our confidence in our ability to meet and hopefully exceed our targets. Now turning to the fundraising performance of specific asset classes As the leading infrastructure investor in Latin America, we continue to see increased global interest in this fast-growing asset class as we raised approximately $2.3 billion for our infrastructure strategies in 2025, led by the final closing of our Infrastructure Development Fund V and various fee-paying SMAs and co-investment vehicles. This was approximately 5x what we raised for infrastructure in 2024, and we see no letup in demand for these strategies from both global investors as exemplified by the recently announced $2 billion data center projects led by one of our drawdown funds in partnership with ByteDance and increasingly local investors. Next, GPMS raised almost $2 billion in 2025, continuing to highlight the strong support from our clients and our success in integrating this business into our platform. The recently announced agreement to acquire WP Global Partners with approximately $1.8 billion of fee-earning AUM, we expect will further strengthen investor demand for our solutions strategies over time as it enhances our investment capabilities in the United States. Credit also had another strong year, fundraising a record $1.8 billion of capital, handily surpassing the $1.4 billion raised in 2024, which was itself a record. Continued strong investment performance, combined with the addition of Solis and its robust private credit capabilities further enhances the capital raising prospects of our credit platform. On that note, let me give a little more color on how we see the private credit opportunity in Brazil. The total Brazilian credit market reached $1.7 trillion in 2024, with $800 billion estimated to represent the addressable market opportunity for asset-backed nonbank private credit, of which around $200 billion is already currently served through private credit vehicles, mainly CLOs. CLOs, which AUM in Brazil exceeded $150 billion as of September 2025, have been the fastest-growing asset management strategy in the country, having grown at a 30% plus CAGR compounded annual growth rate since 2019. This growth is supported by multiple structural drivers, including, but not limited to, favorable regulation, banking disintermediation, tax incentives and broader financial deepening and growing interest in the CLO structure amongst investors. With the acquisition of a majority stake in Solis, Patria significantly enhances its capabilities and scale in this very attractive market. Finally, even within a high interest rate environment, we see building momentum in our real estate business. Our real estate strategies raised over $520 million in the fourth quarter of 2025, including over $260 million through a follow-on offering in our Brazilian logistics REITs and over $180 million in our funds in Colombia. As the largest manager of REITs assets in Brazil and one of the largest in Colombia with over $8 billion of pro forma permanent capital fee earning AUM, -- we believe our substantial scale in this business is a significant competitive advantage when it comes to attracting investor capital, and we are excited with the opportunities this business has to offer heading into 2026. Of course, fundraising alone does not drive growth in fee-earning AUM and management fees. And we are proud to report that redemptions decreased by approximately 25% in 2025 versus 2024, a clear reflection of our strong investment performance across our verticals. Our ability to grow our fee-earning AUM is further enhanced by the stickiness of our asset base, given that approximately 90% is in vehicles with no or limited redemptions, including 22% or $9.1 billion of fee-earning AUM in permanent capital vehicles. Our strong fundraising, coupled with low redemption rates and a sticky asset base is translating into solid net organic growth as we generated approximately $2.4 billion of organic net inflows into fee-earning AUM in 2025, representing an organic growth rate of about 7%. We see additional room for our organic growth rates to increase further in the years ahead as we plan to grow our base of attractive products in sticky structures. In addition, with over 50% of our management fees charged on NAV or market value, our strong investment performance continues to be an important growth driver, contributing approximately $3 billion to our fee-earning AUM. Combined organic net inflows and the positive impact of investment performance added over $5.3 billion to our fee-earning AUM in 2025. The impact of FX throughout the year was also positive, adding $2 billion to our fee-paying asset base. Finally, the acquisition of the Brazilian REITs discussed during our last earnings call and concluded in the second quarter of 2025 contributed with $600 million. Summing it all together, our fee-earning AUM in the fourth quarter of 2025 reached $40.8 billion, up 24% or $7.9 billion year-over-year. Pro forma for recently announced acquisitions, our fee-earning AUM is now at $47.4 billion. It is also important to highlight 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 fourth quarter 2025 pending fee-earning AUM totaled about $2.9 billion, further highlighting our future fee-earning AUM and management fee growth potential. Our fee-earning AUM growth is also reflected in the diversification of our business. Pro forma for recent acquisitions, our fee-earning AUM base is well diversified across our asset classes with 29% in GPMS, 26% in credit, 19% in real estate, 12% in private equity, 9% in infrastructure and 6% in public equities. Patria today has over 35 investment strategies with more than 100 products with no single product representing more than 8% of our pro forma fee-earning AUM. Our largest fund, which is a corporate credit LatAm high-yield fund has approximately $3.8 billion in AUM and has delivered an impressive 13.1% net compounded annualized return since inception in 2022 and as of the fourth quarter 2025. Our corporate credit LatAm high-yield strategy more broadly, which started back in 2000, currently has an aggregate AUM of over $5 billion. And as of the fourth quarter 2025 has outperformed its benchmark for every single period, 1 year, 3 years, 5 years and since inception. with since inception, net compounded annualized return of 11.1%, exceeding the benchmark by more than 360 basis points. In terms of geography, approximately 1/3 of our assets are invested in Brazil, 1/3 in other Latin American countries and 1/3 in developed markets across Europe and the United States. With regards to our investor base, our sources of capital are also diversified across geographies with approximately 27% of our AUM coming from Europe and the Middle East, 31% from Latin America, excluding Brazil, 16% from North America, 18% from Brazil and 9% from the Asia Pacific region. Looking at our foreign exchange exposure, over 60% of our fee-earning AUM is denominated in a diversified basket of hard currencies, mainly the U.S. dollar and not exposed to soft currency fluctuations. Finally, as I mentioned before, approximately 90% of our pro forma fee earnings AUM is in vehicles with no or limited redemptions, including 22% or $9.1 billion of fee-earning AUM in permanent capital vehicles. These points further highlight the quality of our fee-paying asset base and the predictability and long duration of our management fees. Finally, we're also expanding the number of flagship drawdown funds into new strategies and asset classes, including infrastructure development, infrastructure credit, private equity buyouts, growth equity, venture capital, private credit, real estate development, secondaries, co-investment vehicles, among others. All of these products will be eligible to generate performance fees, highlighting the potential for even greater diversification of our performance fee earnings stream. Now our strong fee-earning AUM growth is translating into robust growth in fee-related earnings. In the fourth quarter of 2025, we reported fee-related earnings of $64.2 million, representing 30% sequential and 17% year-over-year growth, also supported by our margin expansion of 5% versus the third quarter 2025 and 5% versus 1 year ago, reflecting our success in integrating acquisitions and the growing scale of our business. For the full year, fee-related earnings reached $202.5 million, up 19% and in line with our guidance. On a per share basis, fee-related earnings of $0.41 in the fourth quarter 2025 rose 30% sequentially and 14% year-over-year. Full year fee-related earnings per share was $1.28, a 15% year-over-year increase. Given our strong fundraising momentum and fee-earning AUM growth outlook, we remain confident in meeting our 2026 fee-related earnings targets of $225 million to $245 million or $1.42 to $1.54 per share, in addition to our target of $260 million to $290 million or $1.60 to $1.80 per share. As a reminder, our fee-related earnings targets are inclusive of already announced and prospective M&A. We reported $78.5 million of distributable earnings in the fourth quarter and $200.9 million for the full year. On a per share basis, this was $0.50 and $1.27, respectively. In addition to the very strong fee-related earnings growth we highlighted earlier, distributable earnings also benefited from multiple monetization events in our Infrastructure Fund III as we announced last quarter, our share count for the fourth quarter 2025 remained at 158 million shares. In connection with performance-related earnings, I think it is important to address the decrease in our net accrued performance fees primarily due to private equity buyout Fund V falling out of carry. As this particular fund's performance is close to its hurdle rate and given its European carry structure, foreign exchange and the price of public holdings can drive private equity buyout Fund V in and out of carry frequently. However, as we look more deeply into our business, we are optimistic in our ability to generate future performance fees as we believe we remain on track to deliver our performance-related earnings target range of $120 million to $140 million from the fourth quarter 2024 to the end of 2027. We have already realized $62 million of performance-related earnings against our target and Infrastructure Fund III, which is generating cash carry and had approximately $19 million of net accrued carry remaining as of year-end is expected to generate performance fees in 2026. Private Equity buyout Fund VI, which is a 2019 vintage and has over $210 million of net accrued carry is fully invested and entering its monetization phase. We have several newer strategies in growth and venture that have performed well. And while still early days, already have about $7 million of net accrued carry, a balance that we would expect to grow over the coming years. For both private equity and infrastructure, an increasing proportion of our growing co-investment assets are carry eligible, which has the potential to generate performance fees on a deal-by-deal basis. In addition, as I mentioned, we have an expanding range of drawdown funds across our asset classes eligible to generate performance fees. To summarize, I want to reinforce that we believe that we are on track to deliver on our performance-related earnings target range of $120 million to $140 million from the fourth quarter 2024 to the end of 2027. With $62 million already realized, approximately $20 million expected in 2026, mainly from our Infrastructure Development Fund III and the remaining balance expected to be realized in 2027 from multiple funds. Before I conclude, a quick note on macro. From our perspective, the macro events, both globally and within the region favor the drivers of our business. These long-term drivers such as the financial deepening across Latin America, deregulation and pension reforms in large economies in the region, increased allocations to alternatives, robust demand for infrastructure investing, potentially lower interest rates on the back of declining inflation and better fiscal prospects, a consequence of more market-friendly governments being elected in the region continue to drive demand from both local and global investors. If anything, the current geopolitical scenario, coupled with a weaker U.S. dollar and attractive on-the-ground trends are fueling increased interest in Latin America from a broadening range of investors. Incidentally, that is what capital markets showed in 2025 and also year-to-date with the region outperforming in many asset classes. With that as a backdrop, we think it is important for investors to keep in mind that we have close to 40 years of investing experience navigating the various economic and political cycles in the region. This experience, combined with the greater diversification and resilience of our business, in our view, make us uniquely positioned to capitalize on both the increased investor interest in the region and the wide range of investment opportunities we see. Again, we are excited about the fundraising and fee-related earnings momentum we have been building, momentum which is supported by our increasing scale and capabilities across an expanding range of strategies. We believe our long-term opportunity and outlook remain bright, and none of this would be possible without the dedication and capabilities of our team members. for which I am very proud and grateful. On a final note, I want to comment on organizational and structural changes we have announced in recent months. First, I'd like to thank our CFO, Chief Financial Officer, Ana Russo. Ana approached me about a year ago with her plan to step down from her current corporate role as Patria's CFO to focus the next stage of her career on advisory and nonexecutive roles and projects. We are sorry to see Ana leave and want to thank her for all her hard work and contribution in the past several years. but we are glad that we will continue our relationship in several fronts as, for example, with her current position as Board member of Patria-Moneda Asset Management in Chile. I wish Ana the best of luck as she charts a new career path. Following an extensive review process, we announced that Raphael Denadai, currently Patria's partner and CFO of Portfolio Management with over 25 years of experience, will assume the role of Patria's CFO effective in April 2026. Ana, who will remain in her position until then, will provide more color on the transition in her prepared remarks. In addition, as we announced back in December 2025, to further strengthen our corporate structure in order to drive operational excellence and better support Patria's strategic execution at scale. Patria recently created the role of Global Chief Operating Officer and was pleased to introduce Nikitas Psyllakis as our new Global COO. Nikitas joins Patria from DWS Group, bringing over 20 years of extensive global experience in financial services, having led strategic planning, operational transformation and regulatory initiatives. With that, I would like to once again welcome Nikitas and Raphael to their new roles. Now let me turn the call over to Ana to review our financial results in more detail. Thank you, Ana.

Thank you, Alex, for the kind words, and good morning, everyone. Indeed, it's quite rewarding to close out 2025 with $7.7 billion of organic fundraising, exceeding by a large margin, our previously upwardly revised full year target of $6.6 billion by more than $1 billion. We expect the strong fundraising momentum and fee-earning AUM growth for 2025 to continue as we enter the second year of our current 3-year plan and are even more confident of our ability to achieve our objectives for 2026 and 2027. Before I review our financials in more detail, I would like to take a moment to speak about my transition from the CFO role. Stepping down as Patria's CFO is a deeply personal decision driven by my desire to dedicate the next stage of my career to advisory and nonexecutive positions, areas where I believe I can contribute to a different organization given my diverse background. I will continue serving as a Board member of Patria-Moneda Asset Management in Chile and remain fully committed to Patria as a CFO through the end of April. Over the next few months, my focus will be on delivering all 2025 annual reports and regulatory obligations, supporting our new auditor, KPMG, as they complete their first annual audit and most importantly, ensuring a smooth and effective transition to Raphael Denadai. I'm extremely proud of how Patria has evolved during my 3.5-year tenure as CFO, and I'm confident that my colleague, Raphael, will do an excellent job and supported by a strong and committed team. Let's review our fourth quarter and full year 2025 results in more detail. Our full year organic fundraising of $7.7 billion was an important step to deliver our cumulative 3-year plan of $21 billion of total fundraising that we communicated at our 2024 Investor Day. Our success this year demonstrates that the strategic investments we made across our investment platforms, products and distribution capabilities are paying off. We entered 2026 with greater visibility and unwavering confidence in our ability and our path to achieve our objectives for this year and next. Our FEAUM rose 24% year-over-year and 5% sequentially to $40.8 billion. The strong year-over-year growth reflects mainly the combination of solid organic net inflows of $2.4 billion and the positive contribution from our strong investment performance in addition to a positive FX impact and the acquisition of several Brazilian REITs concluded in the second quarter of 2025. As Alex mentioned, our fee-earning AUM growth continues to highlight our expanding fundraising capabilities and deployment opportunities, coupled with the stickiness and resilience of our asset base. Pending fee-earning AUM of $2.9 billion, combined with our fundraising goals, the 22% of fee-earning AUM that are in permanent capital vehicles, the almost 35% of fee-earning AUM in drawdown funds with an average life of 6 years and an overall stickiness of our asset base, altogether highlight our ongoing ability to generate net organic FEAUM growth over time. Total fee revenue in the fourth quarter reached $101 million, up 8% year-over-year and about 19% sequentially. For the full year, total fee revenue reached $344 million, an increase of 14% versus 1 year ago. Our management fee rate averaged 92 basis points over the trailing 4 quarters. As reviewed at our December 9, 2024 Investor Day, we are steadily diversifying 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 trend towards approximately 90 basis points over the coming quarters, but with the potential to vary depending on the mix. Looking into our expense lines, operating expenses, which include personnel and G&A expenses, totaled approximately $36.1 million in the quarter, up 5% sequentially and down 4% year-over-year. We remain focused on controlling expenses and capturing operating efficiencies even as we continue to reinvest in the business. For the full year, operating expenses totaled $141.6 million, up 8% versus 2024, mainly driven by new acquisitions and salary increase inflation adjustment, partially offset by realized operating efficiencies. As we look ahead to 2026, excluding the impact of acquisitions, total expenses in the fourth quarter are a good starting point as we enter the new year. Putting it all together, Patria delivered fee-related earnings of $64.3 million in the quarter, up 17% versus prior year and 30% sequentially with an FRE margin that rose approximately 5 percentage points versus Q4 '24 and sequentially to 63.6%. We remind everyone that the fourth quarter is often our strongest quarter in terms of FRE margin, driven by the recognition of most of our high-margin incentive fees from our credit and public equity portfolio, which totaled $11.3 million in the quarter. For the full year 2025, we generated $202.5 million of fee-related earnings, up 19% year-over-year, in line with our guidance. As Alex mentioned, we continue to expect to generate $225 million to $245 million of FRE in 2026, and we remain confident that we are on path to deliver on our 2027 FRE target of $260 million to $290 million with an FRE margin objective of 58% to 60%. While our recent M&A may exert some short-term pressures of FRE margins, our expanding scale and ability to realize operating efficiencies keep us confident that we can meet our FRE margin objectives for 2026 and 2027 of 58% to 60%. As noted on our last call, in Q4 2025, we had multiple monetization events in our Infrastructure Fund III, which generated $19.6 million of performance-related earnings in the fourth quarter. We continue to expect Infrastructure III, which had approximately $19 million of net accrued performance fees at the quarter end to continue its realization through 2026. Our total net accrued performance fee decreased from $402 million in the third quarter '25 to $249 million in the fourth quarter of 2025, mainly driven by private equity Fund V falling out of carry, driven by the price of public listed companies and FX. For reference purpose, if we consider the FX rate and the price of the public holdings by end of January, net accrued performance fees for Fund V would have been around $40 million. As we look more deeply into our business and as detailed by Alex, we are optimistic about our ability to generate future performance fees from multiple funds. Next, our net financial and other income and expenses in fourth quarter '25 totaled a positive $1.8 million versus Q4 '24, mainly due to lower average debt and higher contribution from Tria, our energy trading platform. Sequentially, net financial income and other expenses were up of $0.8 million versus third quarter '25, mainly reflecting a lower contribution from Tria. While it can vary sharply quarter-to-quarter, it's worth noting that in 2025, Tria contributed approximately $4 million to Patria, and we are very excited regarding the long-term potential of this business and hope to share more updates on the development of this business over the course of 2026. At the end of the quarter, net debt totaled approximately $105 million, slightly below the $108 million for the third quarter '25 as we did not have any meaningful M&A payments in the quarter. Our net debt to FRE ratio of 0.5 was well below our long-term guidance of 1x. Deferred M&A-related cash payments through 2028 currently total approximately $110 million, excluding potential earn-outs. As highlighted in previous earnings call, during third quarter, we entered a total return swap or TRS with a financial institution through which 1.5 million shares were purchased on our behalf. We expect to settle the TRS by Q3 2026, at which point the share will be transferred to Patria and subsequently retired. I would like to take the opportunity to recap our capital management strategy based on our strong cash generation and conversion of distributable earnings. First, we increased our dividend by $0.05 per share for 2026, resulting in an expected dividend payment of $100 million. Second, we will target around 3 million shares repurchase to offset dilution from stock-based compensation and any M&A transaction settled in shares. For this purpose, we may again consider the use of total return swaps, which have proven to be a cost-effective capital management tool. With regard to current M&A, we expect funding to come primarily from cash. Also, as of December 31, our 2026 deferring contingent payment totals approximately $100 million, of which about 80% is expected to be paid in cash. To highlight our ample ability to fund our growth and maintain a healthy dividend, let's look at a simple math. Based on the midpoint of our 2026 FRE guidance and expected PRE, we estimate our cash generation in 2026 will be approximately $220 million. So detracting our dividend, payment of TRS and the current deferred and contingent payments noted before, we still leave us with the capacity to fund CapEx and additional M&A when considering our cash generation and our total unused debt capacity of over $100 million. Of note, our total current net debt capacity is about $235 million or onetime FRE compared to the $105 million at year-end, which is very conservative as industry standards. All the above underscores the strength of our financial position to support growth initiatives and maintain strategic optionality for our shareholders. Our effective tax rate in the fourth quarter '25 was 4.2%, excluding performance fees, which is usually crystallized in the tax favorable jurisdiction, the effective rate was 5.6%, which represents 120 basis point improvement versus Q4 '24 on a comparable basis. The reduction was mainly driven by tax credits on our U.K. entities. On a full year basis, excluding performance fees, the effective tax rate reached 6.3% with 180 basis points lower than 2024. Looking ahead, we continue to expect our annual tax rate to average around 10% -- in the fourth quarter, we generated $78.5 million of distributable earnings or $0.50 per share. For the full year, distributable earnings were $200.9 million or $1.27 per share, representing a 6% year-over-year growth from $189.2 million in 2024 with a strong FRE growth more than offsetting lower performance-related earnings and the higher share count. While FRE and DE are important financial metrics, I would like to give you some additional color on line items that impact our net income. In 2025, net income totaled $85.6 million, which is up 19% versus $71.9 million in 2024. The increase of $13.6 million is mainly driven by distributable earnings growth and lower deferred contingent consideration, partially offset by higher than originally anticipated equity-based compensation, reflecting better performance, lower employee turnover and expansion of the program. We plan to give more color on the equity-based comp and other line items during our first quarter call. We finished the quarter with 158 million shares, unchanged from the prior quarter. We did not repurchase any share in the quarter and continue to expect the share count to average between 158 million and 160 million from 2025 to 2027, inclusive of our additional share repurchase. In 2025, the Board approved a share repurchase program of up to 3 million shares, of which we have utilized $1.5 million through the TRS. At our recent Board meeting, we received the approval for an additional 3 million shares to be added to the program. Finally, we declared a dividend of $0.15 per share for the fourth quarter. We remind everyone that we have updated our fixed dividend policy from $0.60 in 2025 to $0.65 per share for 2026, an increase of 8%. Overall, we are truly encouraged by our fourth quarter results and with the momentum we are building as we continue to diversify and improve the resilience of our business. We believe we are firmly on track to achieve the various targets we have shared with you, and we are excited by the growth opportunity ahead. Thank you, everybody, for dialing in, and we are now ready to answer your questions.

[Operator Instructions] And our first incomes from Craig Siegenthaler of Bank of America.

So first question is on private equity valuation process. We've had some recent inbound on the topic, so I thought we could kind of clean it up here. Private Equity Funds IV and V, they're both pre-2016 vintage funds. They both have a significant amount of unrealized value. So I was wondering if you could talk about your internal valuation process, how it works and also how those valuations are validated by third parties.

Okay. Thank you very much, Craig. Thanks for your question. On the valuation process, we -- in summary, we use industry practice, industry common valuation process for our private equity drawdown funds and our infrastructure fund funds, all of our drawdown funds, we -- once a year, we have an independent appraiser to value the funds. We normally use a recognized independent appraiser that does the valuation with year-end numbers, in this case, end of 2025. This independent appraiser works with the management teams of the respective portfolio company, going through a whole understanding of the business, understanding of the next 3 to 5 years and future prospects of the business and more of a technical discounted cash flow model as it is common in the industry for these kinds of valuations. And then this valuation, of course, is compared with multiples and compared with industry multiples, peers, if there are no comparable listed peers, whatever. So it's, of course, the main methodology is a discounted cash flow. And of course, the end result is compared with peers, valuations, listed, nonlisted M&A transactions, et cetera, et cetera. As it is what I'm saying, it's completely normal for these kind of valuations in the industry. And what we do is actually we then -- they give us a range and then we value within the range, we actually mark the companies one by one. That's what we do. And during the year, we don't really do much. We just actually have the valuation during the year, quarter-by-quarter be adjusted by the cost of capital of that specific business and adjust the valuation if something major happens like we sell part of the business or we merge or whatever or something really went -- goes wrong, like COVID or something like that or whatever. But if there was no major changes, I don't -- we really don't like and we are advised not really to keep changing the valuation of the business. If nothing major happens with that specific business during the year, we just then adjust the valuation by, again, the cost of capital until we go through that process, all that process again at the end of the subsequent year. So again, we have been doing this for -- since inception, right? Our first private equity fund was back in '97. It's going to be 30 years, not 29 years as of now. We know that because it's going to be -- this year is going to be our annual meeting with investors #29, and we do 1 a year. So it's now 29 years ago, we did our first one. And we've been doing this kind of valuation for the businesses since then. We check with the industry practices now and again, and the industry practices continue to be more or less what I just mentioned. But it's different, and I think there's sometimes confusion when we -- if we -- when we -- about charging management fees and performance fees, et cetera. Now we do not charge management fees on NAV for the drawdown funds. So the valuation is an indicative value because it doesn't mean much for our revenues. It doesn't mean anything for our revenues because we charge on costs. So if we did invest $100 in that business and that business now is valued at $150 or $50, we continue charging on $100 until we sell the business. So the valuation does not affect our management fees. Number two, we do not run performance fees, unrealized performance fees through our P&L. So if we have more performance fee, more unrealized performance fees or less unrealized performance fees, all the numbers that you just heard me say about our 2025 financials and Ana Russo say about our 2025 financials does not affect any little bit, okay? It's no effect whatsoever because we do not run our performance fees through our P&L. Our team, our employees are not incentivized by unrealized performance fees. They do not receive a bonus on unrealized performance fees. So if the valuation is 1, 2, 3 or 4, 10 or 0, their bonus is exactly the same. We only run the performance fees through our P&L. We only recognize performance fees if they are paid, if they are paid, cash in the bank. And then we recognize as revenues and then we calculate the bonuses of our employees, and we pay a couple of quarters later. So there's even a negative working capital here, the firm versus the employees on paying performance fees. Now we don't anticipate any performance fees as bonus before we actually get the cash, okay? And we get the money in the bank account. So we do actually give the number of unrealized performance fees as an off-balance sheet number, not completely off balance sheet, is unrealized. And as you probably saw for the December 2025 numbers, we have around $250 million of unrealized performance fees. And we gave the guidance that we're going to -- we should generate around $120 million to $140 million of performance fees from the last quarter of 2024, all the way to the end of 2027. We already realized $60 million plus. We have another $60 million to go, $60 million. And there's a -- I think the most -- the highest probability fund that will generate performance fees continues to be Infrastructure Fund III for 2026. We just gave the guidance that we think we're going to generate another $20 million for 2026. And there are so many other strategies that today we have in our menu of products that generate performance fees, venture capital, growth equity, private debt, opportunistic real estate, blah, blah, blah, blah, blah, all of them should then generate more fees that we should actually make us hit the target by the end of 2027. So this is what we do. Again, it's industry practice. We try to be as conservative as possible, but we get a valuation range from the appraiser we normally don't -- of course, we talk to the operator about the valuation process. But what we do is like we try to put in the middle of the range, and that's how we use -- that's the exercise of how we actually mark our companies. I think it's -- again, it's -- this is -- again, you are -- you know the industry very well. And sometimes you might compare the valuation of a company with another company that you might know well in another industry, in another country, in another situation, one company is doing better, the other company is doing worse, one company is this, one company is that, one company has more debt, less debt. It's very hard sometimes for you to compare one single asset with another single asset. Of course, it's hard for us to also be able to have individual opinions because we follow the valuation of the independent appraiser, okay? So this is what we do. And yes, our Private Equity Fund IV, as you know, has been underperforming. And now we have Private Equity Fund V also not generating performance fees. So 2 funds that as of the end of 2025, we don't expect performance fees coming from these 2 funds. And this is also already reflected in all of our numbers. So when we gave our projections guidance for '25, '26, '27, the end of 2024, we had a PC stay with '25, '26, '27 projections. As you can see from that presentation, we had asset class by asset class projection. And you can see that we were conservative in capital raising for private equity, given that private equity Fund IV and V are underperforming. And we were more optimistic and realistic about fundraising for the other asset classes. So -- and if you look at how much money we raised in 2025, $7.7 billion, surpassing by 30% our initial guidance of $6 billion, 30% more than our initial guidance is a substantial increase in which asset classes in credit, in real estate and in GPMS, Global Private Market Solutions. So we were not expecting to raise in 2025 more money for the private equity asset class vertical. We were expecting to raise from other asset classes. Not only we did, we surpassed in total by 30% our initial guidance. We gave a guidance for 2026 of $7 billion organic fundraising and 2027 for $8 billion, and we raised $7.7 billion in 2025. So I think we're in a strong position to continue delivering the guidance and hopefully even exceeding. So I hope I answered your questions there.

I do have a follow-up also on private equity. But if you look at the MSCI Brazil Index of listed public equities, Brazil has been very strong. As you know, it's returned 55% over the last 12 months, outperforming the S&P 500 in the U.S. by about 40%. Interest rates are expected to decline in Brazil. All this should benefit public equities, private equities, your realization pipeline. So can you talk about the prospects for both IPOs and strategic exits in private equity in 2026? And I assume exits to other private equity firms are still quite limited at this moment given the lack of competition in Brazil, too.

Yes. Thank you very much. Yes, I think normally, I'm generalizing again here, sorry to generalize listed traded securities do anticipate trends. And in this case, I think the upward trend that you just mentioned, we did see through the 2025 numbers of listed securities. And the MSCI is one of them. As you mentioned, appreciating substantially in 2025 in local currency and in U.S. dollars. Of course, the U.S. dollar has weakened against some of the local currencies. So that's helped the U.S. dollar also base return. That normally translates into private securities with time. It is not from Monday to Tuesday, but the whole enthusiasm with the region and investors start buying assets which they can and the listed ones are the ones that they have more access because they're listed, of course. And the private assets come in due time. And that's exactly what we're seeing. And a lot of exits from both our infrastructure and private equity funds programmed, infrastructure coming first. Basically, all of the assets of our Infrastructure Fund II were sold already. All of the assets of our Infrastructure III sold most of the assets in Infrastructure Fund III. So we're getting into the mode of beginning to realize the investments of Infrastructure Fund IV. Same in private equity, I think focusing in selling the assets of Private Equity Fund IV and V. Private Equity Fund IV, as we do invest -- we did invest mostly in health care, it was affected also by COVID, but companies they are recovering. And Private Equity Fund V, we have invested also in health care also investing in other sectors and Private Equity Fund VI and VII, I fully invested, 7 being invested now should begin to come into realization. Also, we have the growth equity funds, which are also private equity. Now we just mentioned about the private equity buyout funds, but we have private equity growth funds. Private equity growth Fund #1, which is a single asset fund, which was managed by [ Kamado Ping ], the asset manager that we did partner with acquire a couple of years ago, is a company in the pet care space that is doing extremely well, and that's a prospect for a sale and IPO as well. We also see private Active Growth Fund #2 with already 2 realizations, partial realization, full realization of an education company was the full realization. And we see other prospects coming along of more realizations this year and in 2026. And we also see our private active venture fund with significant and important realizations in '25 and other realizations coming into 2026. One of the notorious realizations that we did of our private equity venture fund #3 was a company called Avenue, which is basically a brokerage house targeted for Brazilians willing to open a cash account or a bank account in U.S. dollars. And it was acquired by Itau. It was a very, very, very good deal for us. So not only is the private equity buyout strategies that are posed to generate performance fees, our private equity growth funds, our private equity venture funds, our infrastructure development funds, our real estate opportunistic funds that we have in Colombia that is also right for realizations, our real estate opportunistic funds in Chile that also are right for realizations and will generate performance fees in the future. And now with other funds like private debt that we raised private debt LatAm #1, also fully invested, short duration, should generate performance fees in the future, and we are currently in the road raising private debt #2. So again, I think we're excited about the prospects, but boil everything down, we're expecting $60 million of performance fees over the next 2 years, $20 million should come from Infrastructure Fund III. Our presentation shows that we have an inventory as of December 2025 of approximately $250 million of performance fees. So $60 million out of $250 million is close to 20%, 20-something percent. So if we realize 20-something percent of that $49 million, $250 million of performance fees that we showed as of now in our December 2025 numbers, we should then be able to hit the guidance that we gave for the next 2 years. Of course, no major caveats. Performance fees depends on so many things. It depends on the macro situation. It depends on the political situation. So I'm just saying there's no macro caveat here. I think when I look into management fees, the preservability and predictability of our management fees, given that 22% of fee-paying AUM is now permanent capital structures, and we have long-dated drawdown funds, 90% of our funds are in drawdown funds or permanent capital. I can say with more confidence that our predictability of our management fees and therefore, our FRE is more visible. Everything that I said about performance fees is a big question mark because things can happen and companies can perform better or worse. The macro situation can get better or worse. The U.S. dollar can get -- can strengthen and weaken. So therefore, we have a low hit ratio. And I'm putting this major caveat that we might generate it, but we might not as well, given there are performance fees, not management fees that are already being driven by permanent capital or drawdown funds in nature, okay?

And our next question comes from Lindsey Shema of Goldman Sachs.

Just wondering, you maintained your 2026 fundraising guidance. And because of that, it does imply slightly lower fundraising in 2026. So because of that, I just want to understand, do you see any risks to fundraising? Are you maybe a little bit less optimistic? And what are really those reasons for maintaining the fundraising guidance where they are? And then on the flip side, if there's kind of any upside risk to that guidance? And then on that note, if you could just mention how much of your fundraising is coming from your own fund of funds and how that plays into your fundraising?

Lindsey, thanks for the question, and thanks for participating in the call. No, we're just being conservative, to be honest. I think it's -- we're not -- we had a guidance. We gave a 3-year plan. We want to hit the 3-year plan. And the 3-year plan that we did give out December of '24 was to raise organically $21 billion. So it would be $6 billion in 2025, which we did $7.7 billion, actual $7.7 billion versus $6 billion, the guidance and $7 billion for 2026, $8 billion for 2027. So $6 billion plus $7 billion plus the $8 billion, $21 billion, our organic fundraising to hit the $70 billion of fee-earning AUM by the end of 2027, having started in the end of 2024 at around $35 billion. So we would double fee-earning AUM, which is 25% increase per year. And -- we are extremely positive about our fundraising momentum. And -- but we wanted to keep that as a $7 billion and $8 billion guidance. Nothing that really worries about that. On the contrary, we see a good momentum. But we didn't see any reason for us to upsize this guidance given that it's $21 billion for the 3 years. I think we're in a good momentum to deliver the 3-year plan. But having said that, let us go through the first 1 or 2 quarters of 2026, and we're going to be in the mid of the $21 billion target. And if we feel even more confident we'll come out with a new number. Hopefully, I cannot guarantee. Hopefully, it's going to be on the positive side, but that's it. It was more for conservative reasons than any other reason. On the second part of your question that our fund of funds do not really fund of funds, to be honest. And I think private equity and infrastructure, if that's what you're referring to, we don't see any of our -- we don't have any fund of funds investing in our buyout private equity funds, growth private equity funds, venture private equity funds. We don't have any fund -- our fund of funds investing in our development infrastructure funds. We do not -- we don't have that fund of funds investing in our own funds that I can -- I don't know -- Marco, any comments there? I don't think we have anything, right?

My only comment here and good afternoon, everyone. My only comment here is, as Alex said, we don't have a fund of fund. We do manage a listed trust that has actually funded one of our secondary funds. The amount is $75 million. Again, a very small amount relative to the overall fundraising for last year. Just to remind, this is a vehicle that has an independent Board. It's a listed trust listed in the London Stock Exchange. Therefore, decisions are subject to an independent Board.

Okay. Any subsequent questions, Lindsey? Did we manage to answer your questions?

Yes. Thank you, Marco. It was the listed vehicle that I was asking about there. And then maybe just some further color on fundraising. Are you still seeing international interest in Latin America region? I know Brazil has been kind of a hot topic right now. What regions are you really seeing the most interest from? And where do you expect that incremental fundraising to come from?

Yes. No, thank you, Lindsey. No, yes, I think we have the -- I have been saying that, I think, over the last earnings -- several earnings calls that we have been geographically overperforming LatAm, overperforming Asia, Middle East. We're kind of performing at expectations in Europe. and we are underperforming the U.S. So I've been saying that for several earnings calls. That hasn't really changed much throughout the whole year 2025. We have been, again, overperforming LatAm. In general, we have been overperforming, right, 7.7% versus the guidance of 6%, 30% more. Where is it coming from? Overperforming Asia Pacific, overperforming Middle East, overperforming LatAm, in line with our expectations in Europe, underperforming the U.S. And asset class-wise, overperforming credit, overperforming GPMS, overperforming infrastructure, in line with real estate and in line with private equity. And as I mentioned, our expectations for private equity were low, but were in line with our expectations. We see these geopolitical shifts in the world benefiting LatAm. We see interest from Asia Pacific, Middle East and LatAm itself. I think some of that interest in LatAm has to do with geopolitical shifts in some of the investors in these regions allocating more to LatAm versus other parts of the world. And I think LatAm is extremely well positioned to benefit from these trends given the solid democracies with solid institutional frameworks, solid regulatory framework with -- if you look at the kind of balanced fiscal budgets relative to other countries in the world, of course, you can see that -- you can say the 1% or 2% there or here is that. But if you compare to other countries in the world in a somewhat better situation. We see also a region of the world with a high percentage of renewable energy being driving manufacturing. We have commodities, soft and hard commodities in the region. We have -- the region has the second largest deposit of rare earth in the world is in the region, a region that is also rich in oil and gas and also in protein and other commodities. So it's a region that actually was, in my view, underrated for so many years. And now I think it's getting its place under the sun. -- optimistic about continuing to see even more resources coming to the region in the near future.

Our next question comes from Ricardo Buchpiguel of BTG Pactual.

Can you please provide more color on the nature of the process related to the around $100 million in litigation liabilities Patria has and also comment about the chances of having to pay some of this value? And how are the key steps on the main litigations on this bulk of $100 million?

All right. Ana, do you want to help me with this answer? I think specifically the litigation liability, please?

Thank you, Ricardo, for the question. I was also making sure that this -- the $100 million as is posted in our -- I think in our financial statement and also 20-F, it just so that is not in our balance sheet, as you know, because we just consider an accrue if there is a possibility for considering that is losing. So you -- as part of our information, you're going to see that more than 80% of this litigation, we already it's going to went away in our next reports and basically as we already in the past already included in all the statements that are very -- it was not possible -- it was not a remote, but it was probable. So we actually won and this more than 85% is going to go away in our next reports, okay? So we will see in our next reports.

That's clear. And a follow-up question. We saw that there was an increase in transaction costs related to M&A understand that Pat has been reaccelerating the M&A agenda and some announcements were made this year. So my question is if we should see -- should expect this level of transaction costs of around like $20 million, $25 million per quarter in the following quarters.

Yes. I think -- well, I can take that from a macro view and then I can answer specific about the numbers. Just again, just to go through this litigation process again. So we won a specific litigation there, Ricardo, where around approximately 85% of the number of $100 million will come out of our numbers as of beginning of 2026, okay? So that's 85% out of the $100 million there. On transaction costs, I think we did say, I think, to the market that we would have a hiatus in our acquisitions during 2025 in order to be able to show our capability to integrate the businesses that we have acquired and fundraise for the businesses that we did acquire, which I think we were spot on with the $7.7 billion that we raised does not include any acquisitions because we did not do any acquisitions during 2025. And we raised money for businesses that we had acquired in the past like our credit business, our GPMS business, et cetera, and our real estate business as well. So happy that, that happened. We had 1 year of hiatus. In addition, we also mentioned that as we do integrate these acquisitions will bring our FRE margins again to 58% to 60%. Now our FRE margin was close to 59% for 2025, so right in the middle of the 58%, 60% number that we gave. And compared to 2024, our margins increased from around 56% to around 59% because of the integration of the businesses that we acquired in 2024 or earlier than that, okay? We also mentioned that as of the end of 2025, we would like to continue our acquisitions in very strategically placed. We also gave the guidance in December 2024 that we would fundraise $21 billion organically, as I mentioned here in Vinay's answer, but also do $18 billion of fee-paying AUM acquisitions. In order to reach the $70 billion of fee-paying AUM by 2027. So we will come back with the acquisitions programs as we did with the acquisition of this private debt platform, private credit platform in Brazil, plus some real estate investment trust in Brazil as well. Plus recently, we announced the signing of a global private market solution business in the United States called WP. So yes, I think we will come back. And I think what is the guideline is the $18 billion. If you add these 3 acquisitions is around 7.5 -- so we see that -- or we give us a guidance that we should try to buy another $10 billion of fee-paying AUM by the end of 2027. So that's -- it's the same guidance as we gave in the end of 2024. The $18 billion, I'm just subtracting what we have already acquired, around 8 billion. So we have another $10 billion to go by the end of 2027. I hope I answered your question.

No, that's clear. And given that the pace of M&A should continue in line with the strategy here, should we expect still this transaction cost that impacts the accounting net profit and excluded from distributable earnings, should it continue to be around like $20 million, $25 million?

Yes. Sorry, that's right. Ana, if you can comment on the number itself, please. I'm sorry. I forgot the second part of your answer.

Ricardo, as you know, this line of transaction costs, including all our nonrecurring expenses, which is directly related to our M&As and also restructuring costs, as you know. The quarter specifically was accelerated because of those M&A agenda, as Alexandre mentioned, the closing of those 2 of Solis and RBR and signing of WP. And specifically in this quarter is a higher than usual, the quarter specifically because of the impact of those transactions and some of the specific agreements that hit or cost that hit the fourth quarter. So when we look in a quarterly basis, is -- I would say this is on the high end. So -- it's too high to consider that all quarters is going to be around $20 million. But we are -- as we have no new M&As, when we talk about total year, we can expect to have a slightly lower next year, but not in a quarterly basis, $20 million is more on the high side because of those events happening in the same quarter. I think I don't know if I answer your question.

That's very clear. So mainly when you are closing M&A, we should see small well. That's very clear.

And our next question comes from Nicolas Vaysselier of BNP Paribas.

I would like to bring the discussion back to the flagship PE and infrastructure funds. I acknowledge this is not the bulk of your fundraising targets for the next few years. Still, I would like to have a bit of color from your side. I mean you've managed to raise the success of funds in what was a difficult environment -- macro environment for the LatAm region. And I was wondering if you could tell us more about the changes in the LP base you might have had from PE Fund IV to PE Fund V and same thing on the infra and particularly the sort of free-up rates you've managed to achieve from your LPs?

Nicolas, thanks for your question. Well, we have seen, in general, I think if we go back to our earlier funds and today, a shift from endowments and family offices to institutional investors. And so if you look at the absolute value of the dollars that we raised more and more for these funds that you mentioned, the drawdown funds, private equity funds and infrastructure funds drawdown, private equity buyout, private equity growth and infrastructure development, which no value add, we see more and more institutional investors composing the absolute value of the fundraising. You have a big number of family offices, but in absolute value, they are contributing less and because the institutional investors come with sizable checks, not sizable checks. So that has been the trend in most of our drawdown funds, those that you just mentioned specifically, the trends are similar to ones that I described. Re-up rates, they go from 40% to 60% re-up rates. I think the latest fund that we are raising drawdown is our secondaries opportunity fund #5. We have re-up rates above 50%. So that's the latest one. So to give you no fresh news on that. And if you go back to the funds that you mentioned, even though you mentioned private equity buyout #4, but it's a 10-year-old fund. To be honest, I forget now what is the re-up rate versus private equity buyout #3 because it's 10, 12 years ago. But the latest funds, it's around the 40%, 60%, which I have in mind number, Nicolas. I can get back to you offline on the re-up rates of private equity buyout #4, which I forget given that it's not a 10-year-old fund. But the last ones that I see infrastructure development fund #5 that we closed in 2025. That's the range, 40% to 60% re-ups. -- secondary opportunistic opportunity fund #5. We see around 50% re-up rates. So that's more or less between the 40% and 60% for the more recent funds that I have fresher in my memory. But I can go offline and look for you for the older funds, okay, if you don't mind.

And our next question comes from Carlos Gomez-Lopez of HSBC.

So first, I want to congratulate Ana I think for a very good present very good job and luck in your next endeavor. Specifically on Page 21, you give us a very good breakdown about shares outstanding and the increase in the first quarter of '25. We understand this is related to particular transactions M&A. What do we expect for the share count in the next, let's say, 2 or 3 years? Where should we expect to be dilution to shareholders -- and second, when you look at the EPS evolution on Page 2 -- and I realize that the earnings is not everything, but you have had 126 in '23, 24 in '24, 127 '25. What -- again, what is the evolution that we should expect in the coming years.

Carlos, thank you for your question. I'll ask Ana to help me here and answer specifically on the numbers that you just mentioned. In general, we gave a guideline in our December 2024 3-year plan tax Day that we will have a share count of around 158 million to 160 million shares for the '25, '26 and '27 period. We have finished 2025 with 158 million shares, and we project 2026 to '27 for the share count to stay within that range, around 160 million shares, around 160 million shares. Again, a guideline that we gave in the end of 2024 for the '25, '26 and '27 period. And we have -- also we gave as a guideline, our FRE for 2026 for this year is $225 million to $245 million with a midrange, of course, of $235 million. And for 2027, $260 million to $290 million with a midrange to $275 million. So then we use these numbers and we use the share count that I gave you and to calculate the FRE per share. And Ana, do you have the specific numbers there that you can help me, please for FRE per share for '26 and '27?

Sorry, I was on mute. Yes. I think just to understand what Carlos, what you're saying. So -- when we look into our FRE per share -- sorry, we have 108 on the FRE when we talk -- I'm sorry, -- you were talking about FRE per share. I'm sorry that we couldn't hear you.

No, no. Actually, your answer has been on FRE per share, and I understand that it is the main metrics that you use. But I was looking at distributable earnings, which ultimately is the measure for shareholders.

To be honest, it's very hard to listen exactly to what you were asking. I think there was a noise in the background. So I understood FRE, but you're saying DE. So I'm sorry about that, Carlos.

No, no, my fault. I hope it's better now.

No, no, I'm sorry. We were not listening very well to your question. So on the DE side, what we do is the following. We give an FRE number, which is the one that I just gave you, $225 million to $245 million for 2026, $260 million to $190 million for 2027. We also give them a share count number, which is 158 million shares to 160 million shares for '26 and '27. And we also give a performance-related earnings number. We do not give a per year number because it's very hard, as I was, I think, answering one of the questions here today to pinpoint exactly which quarter, which year that performance fees is going to be generated. So we gave a 3-year guidance. The 3-year guidance was $120 million to $140 million of performance fees. As of the end of 2025, we generated approximately $60 million, $62 million of performance fees. So for 2026 and 2027, there's $60 million to $80 million to go. okay? And we -- it's very hard again to predict exactly what quarter or even 1 year. So that's why we gave a 3-year guidance. We are 1 year into the guidance. We have another 2 years to go. If we take into the low end of the range, which is now $60 million to go of performance fees, we predict that Infrastructure Fund III is the one that will probably generate the highest probability to generate performance fees. And we estimate that there is a non unrealized performance fees in that fund of $20 million. So that's $20 million out of the $60 million. And the other $40 million should come from other funds that we have several funds that are maturing to generate performance fees in several different asset classes. So we don't give specific DE per share on a quarter-by-quarter basis or year-by-year basis because of this nature of our performance fees. if I managed to answer your question.

No, you have answered that question. And last one, do you expect the tax rate, which is down again about 5% or so to stay in those levels?

Our guidance on tax is around 10% tax rate. That's our guidance. We're currently been able to have a lower tax rate several different reasons. One specifically for 2025 is because we had a tax credit in the U.K. But we don't see that as a recurring tax credit for 2026, 2027. So we should, as we move into 2026, 2027 to see approximately a 10% tax rate. And Ana, do you want to comment on that as well, please?

Yes. Our tax rate, there are 2 impacts when you look into our tax rate is also the size of the performance also impact our effective tax rate because some of the revenue sometimes comes from jurisdiction which have a favorable tax rate. So you also have to take that into consideration when compared year-over-year. But when we look into over time, and as Alexandre mentioned, and I mentioned in my remarks, is actually this year was actually had a favorable impact of a credit on the U.K. And therefore, we foresee for the next 3 years that at the end of the 3-year period, it would reach approximately 10%. So it's going to increase over time to reach approximately 10% as we increase revenue and income in jurisdictions and pay more tax as we -- as our mix of M&A that enters and also our revenue. So this has been our guidance and we're looking to our plan.

Our next question comes from Fernanda Sayao of JPMorgan.

You've been growing very aggressively on the real estate business. Could you elaborate a little bit more on the strategy here? And how dependent do you think that lower rates is to grow this business?

Thank you, Fernanda. Thanks for your question. And well, we are extremely excited with our real estate business in general, not only in Brazil, but in LatAm. And we are the largest real estate investment trust manager in Brazil as of now and scale in this asset class does matter. Yes, I think it's -- we've been successfully fundraising and there are several ways that we can fundraise. It is an asset class in general that is interest rate dependent. Yes, it is in general. We see that as interest rates do raise, you have a slower pace of fundraising as interest rates start showing a trend of decreasing, which is the case of Brazil, which is -- we saw that in Chile last year, we see the fundraising increasing, increasing. So it is dependent. Interest rates -- when interest rates increased in Brazil, using Brazil as an example, fundraising then the pace of fundraising decreased and vice versa now, we see that the Brazilian Central Bank will most probably reduce interest rates in Brazil this year as the yield curve also shows that. And our fundraising pace, at least in Brazil should increase. It should be better fundraising environment for our Brazilian real estate investment trusts. In addition, Fernanda, what we also see that given the size of our funds in Brazil, -- we -- a lot of investors look to us. And of course, we are talking also proactively with investors in exchanging their assets for shares of the fund. So it's an asset exchange. If you have a portfolio of real estate and you want to exit that portfolio, maybe you don't want to sell the whole real estate 100%, you can actually get shares of the fund and you can sell 10% now, 20% then because we have large funds that do have a sizable and very reasonable daily liquidity. It's also very interesting for families when they do inheritance planning. You have one real estate or a portfolio of real estate and you have 2 or 3 sons or daughters, you don't have to sell the whole thing and you don't have to give real estate divided by 3, you can give shares of a fund. which for inheritance purposes and planning is very, very intelligent. So we see a lot of not only institutional investors looking for our funds as a liquidity path, exchanging their portfolio with shares of our funds. We also see families and family offices looking for our funds in order to have better family inheritance planning. So all of that together, I think we see that 2026 should be a better year in Brazil for fundraising for the real estate investment trust versus '25. '25 was already a good year, and we already started doing this exchange of assets for shares of the fund. But I think we see even more so in 2026. So yes, I think we're excited about that asset class, and I think that adds to our enthusiasm with fundraising for 2026, Fernanda. I hope I answered your question.

I'm showing no further questions at this time. I'd like to turn it back to Alex Saigh for any closing remarks.

Great. Thank you very much for your patience and keeping on with us for long 1.5 hour here and your support is very much appreciated. I hope to see all of you in person during the year. I think there are several conferences that you already invited, and thank you very much for the invitation. And here we go. Hope to continue delivering as we are extremely confident in our numbers, and we start the year with a very strong momentum. And hopefully, that momentum is going to translate into even better fundraising that we gave the guidance and also fee earnings AUM and revenues, et cetera. Thanks a lot. Have a good day. Bye-bye.

This concludes today's conference call. Thank you for participating, and you may now disconnect.