Skip to content
    PAX
    Earnings call· Jun 2026(Q2 FY26)

    Patria Investments Q2 FY26 earnings call PAX

    Jul 31, 2026 Source

    Executive summary

    Patria Investments Q2 FY26 — Strong Fundraising and FRE Growth

    Patria Investments delivered a strong second quarter, driven by robust fundraising momentum across its diversified platform and significant growth in fee-earning AUM. While recent acquisitions temporarily impacted the FRE margin, management remains confident in achieving its full-year FRE target and restoring margin levels in 2027. The firm continues to expand its global reach and product offerings, with a focus on organic growth and selective M&A.

    Highlights

    5

    • Fundraising totaled $2.3 billion in Q2, bringing year-to-date to $4.5 billion, on track to exceed the full-year target of $7 billion.

    • Fee-earning AUM reached $48.9 billion, up 7% sequentially and 32% year-over-year.

    • Fee-related earnings (FRE) were $57.1 million, up 13% sequentially and 24% year-over-year, on track for full-year guidance of $225 million to $245 million.

    • Distributable earnings per share (DEPS) of $0.32 rose 19% sequentially and 31% year-over-year.

    • Secured a new $1 billion commitment from an existing sovereign wealth fund client for a multi-asset separately managed account.

    Concerns

    3

    • Private Equity Funds IV and V have not performed well and were marked down in the quarter, with no accrued performance fees since Q4 '25.

    • Full-year 2026 FRE margin is expected to fall modestly below the 58% to 60% target due to the short-term impact of recent acquisitions operating at lower margins.

    • Shareholders' equity declined by $40 million in the quarter, primarily due to the accounting recognition of gross obligations related to put options over minority interests in certain subsidiaries.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year fundraising target
    exceed $7 billion
    high materiality
    High
    3-year fundraising target
    exceed $21 billion
    high materiality
    High
    Full-year FRE
    $225 million to $245 million
    high materiality
    High
    Full-year FRE per share
    $1.42 to $1.54
    medium materiality
    High
    Full-year FRE margin
    modestly below 58% to 60%
    medium materiality
    Medium
    FRE margin
    58% to 60%
    medium materiality
    High
    2027 FRE target
    $260 million to $290 million
    high materiality
    High
    2027 FRE per share target
    $1.60 to $1.80
    medium materiality
    High
    Long-term share count
    158 million to 160 million shares
    low materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Credit
    Credit remained a strong contributor to fundraising, driven by strong performance across public credit strategies and growing interest in dollar-denominated private credit funds. Solis, the recently acquired CLO business, has raised significant capital and contributes structuring fees.
    Fundraising Q2: $650 millionFundraising YTD: $1.6 billionFlagship LatAm high-yield strategy fee-earning AUM: $5.5 billionFlagship LatAm high-yield strategy annualized net returns since inception: 11%Flagship LatAm high-yield strategy outperformance vs benchmark: 360 bpsSolis funds raised since acquisition: $500 million
    		————
    Infrastructure
    Infrastructure is a primary area of interest for SMAs, including the new $1 billion multi-asset mandate. The Infra Core strategy is targeting a first closing later this year. The segment added $5 million in annual recurring net revenues in H1 from SMA and co-investment deployment.
    Latest 3 vintages pool return outperformance vs benchmark: >750 bpsAnnual recurring net revenues added from SMAs and co-investments (H1): $5 millionPending fee-earning AUM with visible line of sight to deploy: $1 billion
    		————
    Global Private Market Solutions (GPMS)
    GPMS saw the final close of SOF V, exceeding its fundraising target. The WP Global Partners acquisition was closed and integrated, expanding the lower middle market private equity solutions platform in the U.S. Older co-mingled secondary funds continue to outperform benchmarks.
    SOF III outperformance vs benchmark: 650 bpsSOF IV outperformance vs benchmark: 560 bpsSOF V total commitments: $676 millionSOF V commitments exceeding target: 35%SOF V re-up investors: 36% of commitmentsSOF V North America capital commitments: >50%SOF V Europe capital commitments: ~40%
    		————
    Private Equity
    Older vintages (Funds IV and V) have underperformed and were marked down, but they do not impact current management or performance fees. Newer vintages (Funds VI and VII) are performing well with deleveraged portfolio companies, growing EBITDA by approximately 10.5%.
    Fund IV and V fee-earning AUM: <$1.3 billionFund IV and V accrued performance fees: None since Q4 '25Fund IV management fees: None for last 2 yearsFunds VI and VII portfolio companies EBITDA growth (average over 2 years): ~10.5%
    		————

    Operational metrics

    21
    Fundraising
    $2.3 billion
    Q2 FY26

    Total fundraising in the second quarter.

    Fundraising
    $4.5 billion
    YTD FY26

    Year-to-date fundraising.

    Fee-earning AUM
    $48.9 billionup 7% sequentially, up 32% year-over-year
    Q2 FY26

    Driven by organic growth, acquisitions, and positive investment performance.

    Total fee revenues
    $105.8 millionup 30% year-over-year, up 14% sequentially
    Q2 FY26

    Includes $1.5 million of catch-up fees related to the final closing of SOF V.

    Incentive fees
    $2.5 million
    Q2 FY26

    Attributable to real estate and Solis, which earns incentive fees semiannually.

    Structuring fees (Solis)
    $0.4 million
    Q2 FY26

    Included in other fee revenues, a regular feature of the private credit business.

    Average management fee rate
    86 bps
    LTM Q2 FY26

    Reflects the impact of the WP transaction and growth in credit, real estate, GPMS, co-investments, and SMAs.

    FRE margin
    54%vs 54.6% in prior quarter
    Q2 FY26

    Reflects short-term impact of acquisitions and normal expense growth.

    Total distributable earnings
    $50.7 millionup 31% year-over-year, up 19% sequentially
    Q2 FY26

    Growth driven primarily by increase in FRE, with no performance-related earnings in the quarter.

    Net financial expense
    $1.5 million
    Q2 FY26

    Benefited from TRIA contribution and higher investment income, partially offset by higher interest expenses from bond offering.

    TRIA contribution
    $2.9 million
    Q2 FY26

    Contribution from the trading platform, which can vary sharply quarter-to-quarter.

    Stock-based compensation
    $13.5 million
    Q2 FY26

    Totaled $23.6 million year-to-date, or 12% of total fee revenues.

    Effective tax rate
    9%
    Q2 FY26

    Reflecting evolving business mix and consistent with guidance.

    Share repurchase (TRS facility 1)
    1.5 million shares
    Q2 FY26

    Completed a second TRS facility.

    Share repurchase (TRS facility 2)
    1.3 million shares
    Q2 FY26

    In process of refinancing and slightly increasing the size of the first POS facility.

    Share count
    159.5 million shares
    Q2 FY26

    Current share count for the quarter.

    Permanent capital
    $11 billion
    Q2 FY26

    Represents roughly 22% of total fee-earning AUM, invested in vehicles with limited or no redemption rights.

    Pending fee-earning AUM
    $4 billionincreased approximately 20% in the quarter
    Q2 FY26

    Supported in part by the new multi-asset SMA mandate, providing visibility into future fee growth.

    Portfolio companies EBITDA growth
    10.5%
    Past 2 years

    Average EBITDA growth for portfolio companies in Private Equity Funds VI and VII.

    Annual recurring net revenues
    $5 million
    H1 FY26

    Added through the deployment of capital sourced from a variety of fee-paying SMAs and co-investments in infrastructure.

    Shareholders' equity decline
    $40 million
    Q2 FY26

    Primarily due to accounting recognition of gross obligations related to put options over minority interests in certain subsidiaries, specifically the remaining 49% of Solis.

    Industry KPIs

    5
    MetricValueDetails
    Fee rate86 bpsbps
    Fundraising inflows$2.3 billion (Q2), $4.5 billion (YTD)USD
    Performance revenue—
    Fee related earnings$57.1 millionUSD
    Deployment realizations—

    Product announcements

    2
    ProductTypeDetails
    SOF Vmilestone
    Infra Core strategylaunch

    Deals & partnerships

    4
    Sovereign wealth fund clientNew $1 billion commitment to a multi-asset separately managed account (SMA).$1 billion

    This mandate allows capital to be deployed flexibly across asset classes and strategies, primarily expected to be allocated to infrastructure and credit.

    SolisAcquisition of a CLO business in Brazil.

    Closed at the start of the year. Solis has raised over $500 million since the transaction and has been integrated into Patria's operations.

    WP Global PartnersAcquisition to expand lower middle market private equity solutions platform in the U.S.

    Closed on April 1 and onboarding completed. The team is integrated into Patria's New York office.

    RBRAcquisition of a real estate investment trust in Brazil.

    Mentioned as one of the three acquisitions completed this year that came with a lower fee base and ROA.

    Risks & headwinds

    4
    Underperformance of older Private Equity fundsOngoing

    Funds IV and V marked down in the quarter; no accrued performance fees since Q4 '25 for both, Fund IV no management fees for 2 years.

    Mitigation: Significant changes made to PE team and strategy; Funds VI and VII performing well with deleveraged portfolio companies; future fundraising not significantly reliant on these older funds.

    Short-term pressure on FRE margin from acquisitionsFY 2026

    Full-year 2026 FRE margin expected to fall modestly below 58% to 60% target; Q2 FRE margin at 54% vs 54.6% in prior quarter.

    Mitigation: Acquired businesses (Solis, WP, RBR) operating at lower margins are being integrated; management expects margins to return to 58%-60% by 2027 through cost management and synergies.

    High interest rates in BrazilOngoing

    Not quantified directly, but mentioned as 'very, very high interest rates in Brazil'.

    Mitigation: Private equity portfolio companies (Funds VI and VII) are deleveraged and cash flow generative, with solid capital structures to face high interest rate environments.

    Shareholders' equity decline due to accounting obligationsQ2 FY26

    Shareholders' equity declined $40 million in Q2 FY26.

    Mitigation: Related to accounting recognition of gross obligations for put options over minority interests (e.g., Solis 49% minority interest); not a cash outflow in the quarter.

    What to watch in Q3 FY26

    5

    Fundraising momentum

    Next quarter / FY26
    Current$4.5 billion YTD
    TargetExceed $7 billion for FY26, potentially surpass $7.7 billion (2025 record)

    Why it matters

    Fundraising is a key driver of fee-earning AUM and future FRE growth, critical for achieving financial objectives.

    Given the strong momentum in investor demand, we continue to believe fundraising can surpass our 2025 all-time record of $7.7 billion, and we are on pace to exceed our 3-year fundraising target of $21 billion from 2025 through 2027.

    Q&A highlights

    7

    Inquired about the slight decline in management fees as a percentage of AUM and the impact of acquisitions on the FRE margin, asking what it would take to restore the 58%-60% target.

    Management clarified that the change in management fees is due to mix from recent acquisitions (Solis, WP, RBR) which have lower fee bases and margins, not pressure on specific products. They expect the FRE margin to return to 58%-60% by 2027 as synergies are realized and costs are managed, viewing the current dip as a timing issue.

    “It's just a timing issue. No, I don't see any blip on the way. You're going to probably see margins going up quarter-over-quarter as we reach the end of '26. But the overall yearly margin will be slightly down to the 58%, 60% because we incorporated this lower-margin business in the beginning of '26.”

    asked by Tito Labarta · answered by Alexandre Teixeira de Assumpção Saigh

    2 min read6 chapters

    Detailed Narrative

    01

    Fundraising Momentum and Diversification

    Patria achieved strong fundraising of $2.3 billion in Q2, bringing the year-to-date total to $4.5 billion, positioning the firm to exceed its full-year target of $7 billion and potentially surpass the 2025 record of $7.7 billion. This momentum is supported by diversification across asset classes, with credit, infrastructure, and Global Private Market Solutions (GPMS) being key contributors. The firm has expanded from two flagship strategies at IPO to at least ten, strengthening the quality and resilience of its earnings base.

    02

    Investment Performance and Private Equity Markdowns

    Investment performance remains consistent, with over 85% of fee-earning AUM (excluding SMAs and third-party managed funds) performing at or above benchmarks. Flagship strategies in credit and infrastructure have significantly outperformed their benchmarks. However, two older private equity vintages (Funds IV and V) were marked down due to macroeconomic adversities and sector-specific shocks, though these do not impact management fees or accrued performance fees for the firm's overall FRE guidance.

    03

    Strategic Acquisitions and Integration

    Patria completed three acquisitions this year: Solis, WP Global Partners, and RBR. Solis, a CLO business in Brazil, has raised over $500 million since its acquisition and contributes structuring fees to other fee revenues. WP Global Partners, acquired on April 1, has been successfully integrated into the GPMS platform. These acquisitions, while strategically expanding the platform, temporarily impacted the FRE margin due to their lower operating margins, but management expects margins to normalize by 2027.

    04

    Multi-Asset Mandates and Client Relationships

    A key highlight was a new $1 billion commitment from an existing sovereign wealth fund client for a multi-asset separately managed account. This mandate reflects growing demand for Patria's solutions-oriented approach and deepens strategic partnerships. Such mandates offer stable, long-duration capital and are expected to primarily allocate to infrastructure and credit over the next 4-6 quarters, contributing to future fee-earning AUM.

    05

    Macro Context and Latin America Outlook

    The geopolitical backdrop remains supportive of Latin America, particularly South America, with a shift towards more market-friendly governments. Institutional investors from Asia and Europe are increasingly engaging across a wider range of strategies, and North America is showing renewed interest in Patria's products, especially for mid-market private equity, infrastructure, and private credit in LatAm. This positive macro environment underpins the firm's confidence in its growth objectives.

    06

    Balance Sheet and Capital Management

    Patria completed a $350 million bond offering, using proceeds to repay outstanding credit facilities and fund M&A, share repurchases, and growth initiatives. The firm repurchased 1.5 million shares for $18.3 million via a TRS facility maturing in Q2 2027 and is refinancing another facility to repurchase an additional 1.3 million shares for $31 million by Q3 2027. Despite a decline in shareholders' equity due to accounting for put options, Patria maintains ample liquidity and a strong financial position.

    AI-generated summary of the company’s earnings call. Not investment advice.