Patria Investments Has Fulfilled the Requirements Necessary to Complete the Transfer of Credit Suisse’s Brazilian Real Estate Business Following Approval by REIT Shareholders, Positioning Patria as One of the Leading Real Estate Managers in Brazil and Latin America

Rhea-AI Summary

Patria Investments (NASDAQ:PAX) has received approval from REIT shareholders to acquire Credit Suisse’s Brazilian Real Estate funds (CSHG Real Estate), which manage approximately $2.4 billion in Fee Earning AUM. This acquisition will increase Patria’s Real Estate AUM to over $6 billion, up from less than $700 million in 2021. The transaction, expected to be completed by August 30th, will also increase Patria’s permanent capital to roughly 20% of total Fee Earning AUM. This move solidifies Patria’s position as a leading independent manager of REITs in Brazil and Latin America, while expanding its presence in Brazil, Chile, and Colombia. The acquisition includes seven REITS, with over 960,000 shareholders, and aims to diversify and scale Patria’s Real Estate offerings across various property types. Marcelo Fedak and Daniel Sorrentino of Patria praised the strategic growth and new opportunities this acquisition brings.

Positive

• Patria Investments' Real Estate AUM will rise to over $6 billion.
• The acquisition increases Patria's permanent capital to approximately 20% of Fee Earning AUM.
• This move solidifies Patria as a leading independent REIT manager in Brazil and Latin America.
• The transaction includes seven REITs with over 960,000 shareholders.
• Patria’s Real Estate business now spans Brazil, Chile, and Colombia.
• Diversification across various property types, including logistics, office, retail, and credit.
• Potential new avenues of growth for Patria’s Real Estate platform.

Negative

• The transaction's completion is staged and won't be finalized until August 30th, creating potential uncertainty in the short term.
• Significant capital and resource allocation required to integrate the new assets and team.

Insights

Financial Analyst

Patria Investments Limited has successfully obtained approval for managing Credit Suisse's Brazilian Real Estate funds, adding approximately $2.4 billion in Fee Earning AUM. This move will significantly raise Patria's Real Estate business' AUM to over $6 billion, up from less than $700 million since its IPO in 2021. This represents an impressive growth trajectory for Patria, elevating it to a top position in the Latin American real estate sector.

From a financial perspective, the transaction is highly favorable for Patria. The addition of Credit Suisse's real estate assets improves Patria's revenue streams, given the fee-earning nature of these assets. Moreover, the growth in permanent capital AUM from virtually nil to 20% signifies a more stable and predictable income base, which is attractive for long-term investors. Notably, such an increase in scale can lead to operational efficiencies and strengthen Patria’s negotiating power in future deals.

In the short-term, the market may view this development as a catalyst for stock appreciation due to the enhanced earnings potential. Long-term, the diversification of investment assets across various property types such as logistics, office, retail and credit could provide more resilience against sector-specific downturns, thus stabilizing revenue streams.

Market Research Analyst

The Brazilian Real Estate Investment Trust (REIT) market is extensive, with over $30 billion in assets and has been growing at an annualized rate of 27% from 2018 to 2023. The approval and subsequent transfer of Credit Suisse’s real estate assets to Patria provide Patria with a critical mass in this rapidly expanding market. The inclusion of over 960 thousand shareholders and seven REITs enhances Patria's footprint in Brazil and by extension, in Latin America.

For investors, the key takeaway is the strategic positioning of Patria in an increasingly attractive market. The broad range of investment strategies and property types included in Patria's portfolio can appeal to a diverse group of investors, thereby increasing demand for Patria’s offerings. The expansion into markets like Chile and Colombia through joint ventures further indicates a well-rounded growth strategy that leverages both organic and inorganic growth.

From a market dynamics perspective, investors should be aware that such rapid growth and expansion can carry integration risks and potential overextension. However, Patria’s existing scale and expertise may mitigate these risks, positioning the company favorably in the competitive Latin American real estate market.

GRAND CAYMAN, Cayman Islands, May 28, 2024 (GLOBE NEWSWIRE) -- Patria Investments Limited (“Patria”) (NASDAQ:PAX), a global alternative asset manager and leader in Latin America, announced that it has received all necessary REIT shareholders approvals for the transfer of management of Credit Suisse’s Real Estate funds (FIIs) in Brazil (“CSHG Real Estate”) with approximately $2.4 billion of Fee Earning AUM. Following the transfer of the funds, which is expected to take place in stages and be completed by August 30th, Patria’s Real Estate business will total more than $6 billion in Fee Earning AUM, up from less than $700 million at the time of its 2021 IPO, and the transaction brings Patria’s permanent capital to approximately 20% of total Fee Earning AUM, compared to virtually nil at the time of the IPO.

The transaction, which includes seven REITS with over 960 thousand shareholders, adds additional scale to Patria’s Real Estate business and solidifies Patria’s position as a leading independent manager of REITs in Brazil and Latin America. When combined with its VBI Real Estate business and the recently closed joint venture with Bancolombia, Patria’s Real Estate business now spans across Brazil, Chile and Colombia and includes a broad range of strategies and property types including logistics, office, retail, and credit, among others.

Marcelo Fedak, head of Patria’s Real Estate business commented: “We are very pleased that we were able to gain the approval of shareholders and excited to welcome this talented team of professionals to Patria once the transfer of the funds is concluded. This family of REITs, which focus on generating consistent returns to shareholders, further diversifies our product offerings in Brazil, adds additional scale to our Real Estate platform, and opens potential new avenues of growth for Patria.”

Daniel Sorrentino, managing partner and head of America at Patria commented: “The listed real estate funds (FIIs) market in Brazil alone totals more than R$ 160 billion (over $30 billion) after experiencing annualized growth of 27% from 2018 to 2023, based on data from the Brazilian Association of Financial and Capital Markets Entities (Anbima). Accordingly, this transaction represents a significant step forward for Patria as it looks to add additional investment capabilities in this attractive market segment and scale its Real Estate platform in Latin America.”

About Patria Investments
Crafting attractive returns for our clients and building a legacy in the regions where we operate.
Patria is a leading alternative investment firm with over 35 years of history specialized in key resilient sectors. Its unique approach combines the knowledge from macro analysts, investment leaders, operating partners and on the ground team. With over U$40 billion pro forma assets under management and a global presence, it aims to provide consistent returns in attractive long term investment opportunities while creating sustainable value for society.
Asset Classes: Private Equity, Infrastructure, Credit, Public Equities, Real Estate and Global Private Markets Solutions
Investment Regions: Latina America, Europe and United States
Further information is available at www.patria.com.

Media Contact:
Hill & Knowlton: +44 20 7113 3468 /

Ideal H+K Strategies / patria@ideal.pr
Fabio Martins: +55 11 97336-1526 / fabio.martins@ideal.pr
Rodrigo Fonseca: +55 11 94846-5003 / rodrigo.fonseca@ideal.pr

Patria Shareholder Relations:
Andre Medina: +1 917 769 1611 / andre.medina@patria.com

FAQ

What is the impact of Patria Investments acquiring Credit Suisse’s Brazilian Real Estate funds (CSHG Real Estate)?

The acquisition increases Patria’s Real Estate AUM to over $6 billion and solidifies its position as a leading independent REIT manager in Brazil and Latin America.

When is the acquisition of Credit Suisse’s Brazilian Real Estate funds by Patria expected to be completed?

The transaction is expected to be completed by August 30th.

How much Fee Earning AUM will Patria Investments manage after acquiring Credit Suisse’s Real Estate funds?

Patria Investments will manage over $6 billion in Fee Earning AUM after the acquisition.

What percentage of Patria’s total Fee Earning AUM will be permanent capital after the acquisition?

Approximately 20% of Patria’s total Fee Earning AUM will be permanent capital post-acquisition.

How many shareholders are involved in the seven REITs being acquired by Patria Investments?

There are over 960,000 shareholders involved in the seven REITs being acquired.

Which countries will Patria Investments' Real Estate business span after the acquisition?

Patria Investments' Real Estate business will span Brazil, Chile, and Colombia.

What property types will Patria Investments' Real Estate business include after the acquisition?

Patria’s Real Estate business will include logistics, office, retail, and credit property types.