On Tuesday, Vinci Partners Inv (NASDAQ:VINP) discussed second-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Vinci Compass Investments Ltd reported fee-related earnings of 88.7 million reais and adjusted distributable earnings of 63.3 million reais for Q2 2026, with a quarterly dividend of 17 cents per share declared.
The company announced the acquisition of Navis Real Estate funds, adding approximately 800 million reais in assets under management, and completed its combination with Bucks Asset Management, enhancing its presence in Argentina.
Management highlighted strong capital formation of 13 billion reais in Q2, and expressed optimism about future fundraising, especially in credit, real assets, and private equity, despite macroeconomic volatility in Latin America.
Increased management fees and FRE margin growth were noted, with the company on track to reach a 38% FRE margin by 2028, driven by acquisitions and organic fundraising.
Concerns were raised about the temporary impact of capital calls on short-term financial income, while strategic acquisitions are expected to bolster long-term distributable earnings.
Full Transcript
OPERATOR
Good afternoon and welcome to Vinci Compass Investments Ltd 2026 earnings conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call will be recorded. I would now like to turn the conference over to Ana Castro, Investor Relations Manager. Please go ahead, Anna.
Ana Castro, Investor Relations Manager
Thank you, and good evening, everyone. Joining us today are Alessandro Horta, Chief Executive Officer, Bruno Zariamba, President of Finance and Operations, and Sergio Pasos, Chief Financial Officer. Earlier today we issued a press release, slide presentation, and our financial statements for the second quarter 2026, which are available on our website at ir.venturecompass.com. I'd like to remind you that today's call may include forward-looking statements, which are uncertain and outside of the firm's control and could differ from actual results materially.
We do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our 20-F. We will also refer to certain non-GAAP measures, and you will find reconciliations in the release. Also note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Vinci Compass Investments Ltd fund. On results for the second quarter 2026, Vinci Compass Investments Ltd generated fee-related earnings of 88.7 million reais, or 1 real and 35 cents per share, with an FRE margin of 32.5%, and adjusted distributable earnings of 63.3 million reais, or 96 cents per share. We declare a quarterly dividend of 17 cents on the dollar per common share, payable on September 9th to shareholders of record as of August 20. With that, I'll turn the call over to Alison.
Alessandro Horta, CEO
Thank you, Anna, and good evening, everyone. Thank you for joining us today. The second quarter marked another important step in Vinci Compass Investments Ltd's journey as the leading full-service alternative asset manager in Latin America. Over the past few years, we have consistently executed on a strategy built around three pillars: expanding our investment capabilities, increasing the scale of our platform, and building a more diversified and resilient business.
This quarter reflects tangible progress across each of these fronts, and I am particularly pleased to announce today the signing of an agreement to acquire Navis Real Estate funds. Navis's real estate platform spans six funds across multi-strategy and residential strategies, with four vehicles listed on the Brazilian Stock Exchange and/or the CGP. After closing, which we expect to happen during the fourth quarter, the transaction will add approximately 800 million reais in assets under management, concentrated primarily in perpetual and long-term lock-up vehicles.
Strategically, the fit couldn't be better. The transaction deepens our presence in the multi-strategy real estate segment by adding scale to one of our smaller strategies across the REIT business, spanning across real estate and credit. This is significantly important in the REIT market, as larger funds tend to benefit when it comes to follow-on offerings once markets are supportive when compared to smaller funds. The transaction also broadens the range of solutions we can offer our clients and strengthens our ability to compete in a market where scale, distribution, and specialized investment expertise carry increasing weight.
Together with our existing funds, this brings our pro forma real estate AUM for the second quarter of 2026 to approximately 7 billion reais, of which 750 million reais now within multi-strategy, giving us a stronger foundation from which to grow the business over time. It also reinforces Vinci Compass Investments Ltd's role as a consolidator of high-quality investment franchises across Latin America, and it reflects the discipline we bring to every opportunity we pursue, seeking those that are strategically compelling, financially attractive, and highly complementary to what we already do.
Moreover, this transaction speaks to a defining characteristic of our model. Over the years, we have invested in building a scalable organization underpinned by deep investment expertise and a robust corporate infrastructure. That foundation allows us to absorb a meaningful volume of additional assets while leveraging the resources we already have in place. Another important milestone was the successful closing of our combination with Bucks Asset Management in early June, adding 4 billion reais in AUM across credit and equities.
By combining our asset management capabilities with Bucks's extensive corporate and retail distribution network, we took an important step towards building a scaled and increasingly relevant asset management platform in Argentina, one that's well positioned to benefit from the ongoing transformation of the country's financial system and the growing demand for more sophisticated investment solutions. We remain constructive on the long-term outlook for Argentina, supported by the evolving savings dynamics in the region, rising financial penetration, and a growing need for scale and efficiency.
Against this backdrop, the combination enhances our ability to capture attractive growth opportunities across multiple funds, money market products, dollar-based strategies, and alternative investments, while strengthening our position in a market that is still in the early stages of consolidation. Since announcing the transaction, we have been very pleased with the reception from clients and partners, and we are already seeing early signs of that enthusiasm beginning to translate into inflows, which we expect to build over the second half of the year.
Taken together, Bucks and Navis capture something we have consistently emphasized to investors: the strategic benefits of our platform compound as we grow, becoming more powerful with scale. Alongside these developments, our existing businesses continued to perform well, reinforcing the strength of the platform we have built over many years. In the quarter, we had 13 billion reais in capital formation and appreciation, with close to 1 billion reais in new commitments across our newest vintages currently in the fundraising SPS4, MAV4, LACAN4, and VSP2.
Looking at the fundraising pipeline going forward, we are very excited about a strong and well-diversified set of flagship strategies in the market during the second half of 2026, such as Copco, VRI5, Credit Infra, and further commitments in VSP2, SPS4, and LACAN4, spanning our credit, real assets, private equity, and global IPNs segments. The breadth and quality of this pipeline reinforce our confidence in the growth ahead, and Bruno will walk you through it in more detail shortly.
Supporting this extensive product suite, the macro environment across Latin America remains constructive in general, though still marked by volatility. Political uncertainty has started to ease in some markets, with recent market-friendly election outcomes in Peru and Colombia. Mexico in particular remains an important growth lever for Vinci Compass Investments Ltd. During the quarter, we saw strong momentum in our short-duration strategies, with over 440 million reais in inflows into our Mexican credit funds.
It also remains one of the most compelling structural opportunities in the region. Following the pension reform, mandatory contribution rates are set to rise towards 15% by 2030, and we expect the AFORE system to keep growing meaningfully over the coming years. In addition, the structural nearshoring trend, reflected in recent record foreign direct investment, reinforces our long-term conviction in the market. In Brazil, the current interest rate environment continues to create attractive conditions for disciplined capital deployment in private markets, as elevated rates support more compelling entry valuations and allow us to negotiate downside protection structures, including hybrid debt and equity solutions that enhance risk-adjusted return potential. At the same time, still elevated real interest rates, a more cautious monetary cycle, and election-related fiscal uncertainty continue to impact risk appetite, broader M&A activity, and liquidity events, which may affect the timing of certain realizations and deals in private equity. We had some important liquidity initiatives in early 2026 through the listing of AGI, a reverse IPO of CBO into Ocean Pact, and the sale of Mundudu Cabilleiriro.
We continue to maintain a meaningful pipeline of potential divestment opportunities for the second half of the year. In corporate advisory, a constructive environment could gradually translate into higher deal activity. Against this backdrop, the team is working on an extensive pipeline of opportunities for the second half of 2026, which we expect to materialize as market conditions improve. At this point, we expect that the second half of the year will be better than the first half revenue-wise, with some mandates expected to close in the next six months.
Moreover, external fundamentals remain supportive, with strong trade flows, resilient commodity exports, and a stable currency backdrop, which the Brazilian real and regional currencies continue to benefit from. These fundamentals could reopen room for an improvement in domestic assets. A relevant factor during the quarter was the strong supply of IPOs and follow-on offerings tied to artificial intelligence and the broader technology sector in the U.S. Enthusiasm around AI remains one of the main drivers of the U.S. market, but the sheer size of these transactions requires meaningful capital absorption. As a result, some investors have reduced positions in other markets to participate in these deals, putting pressure on assets outside the technology sector. Encouragingly, this dynamic appears less intense going forward. The most recent AI and technology-related offerings do not seem to carry the same extraordinary volumes observed earlier, suggesting that the technical pressure from capital rotating out of other markets may begin to ease.
In this context, our equity segment could be a beneficiary of this rotation. Turning to a brief snapshot of our financial performance this quarter, we posted higher management fees, with an initial one-month contribution for Bucks, as well as organic growth across credit and global IPNs. Fee-related earnings reached 89 million reais in the second quarter '26, up 36% year over year, with an FRE margin of 33%, up 450 basis points year over year. In the second quarter '26 year to date, FRE margin reached 34%, up 580 basis points year over year.
This profitability expansion reflects the operating leverage of our platform, as revenue growth from both recent acquisitions and organic fundraising continues to outpace the growth in our cost base. We remain firmly on track toward the 38% FRE margin target by 2028 that we laid out at our Investor Day. As we have been highlighting over the past communications, distributable earnings naturally carry more volatility, and this is particularly true at this stage of our cycle as we accelerate capital calls into our proprietary funds, which will impact our short-term financial income.
During the quarter, we called approximately 56 million reais, bringing total capital called from our IRA commitments to over 960 million reais, or roughly 65% of our 1.5 billion reais in total commitments. As this capital is deployed, it temporarily reduces the short-term financial income which we earn on our cash, which weighs on distributable earnings in the near term. This, however, is a natural and intended feature of our model. Capital invested today into our own funds is designed to generate management fees, carry, and capital gains as these funds mature and begin returning capital.
In that sense, once again I would like to highlight the long-term value embedded in our balance sheet. We currently hold approximately 890 million reais in long-term proprietary funds on our balance sheet, which is not fully reflected in our distributable earnings and, by consequence, at this stage constitutes a hidden asset in our business. We expect this value to translate into meaningful distributable earnings in the coming years as capital begins to flow back to us.
That same focus on building durable long-term value is evident across our funds in infrastructure. VICC closed the acquisition of a stake in Faro Energy, one of Brazil's leading distributed generation solar platforms. The transaction gives the fund exposure to a scaled and highly contracted portfolio with operations across multiple Brazilian states while also providing a meaningful pipeline for future expansion. Importantly, the investment aligns well with VICC's strategy of building exposure to essential infrastructure assets supported by long-term contracted cash flows and secular trends linked to the energy transition.
We believe this will further reinforce our team's ability to deploy capital in sectors where operational expertise and active asset management can create substantial long-term value. Another important development within our infrastructure platform relates to the International Airport of Rio de Janeiro, Galeão. As previously disclosed, Vinci Compass Investments Ltd expects to receive between 90 and 100 million reais, net of taxes and associated expenses, from the indemnification associated with the airport's concession process.
This amount should be recognized during the second half of 2026 and will impact our distributable earnings. Beyond its financial contribution, this outcome reflects the value generated by our infrastructure team prior to the auction, including involvement in the negotiation and structuring of the new regulatory model. To conclude, what we find most compelling is the alignment between where our platform is today and where the structural opportunity is heading.
The demand for alternatives across Latin America is accelerating. The region stands out as a stable and diversified destination for global capital, and we have spent years building the platform, the talent, and the execution capabilities required to capture it. Each transaction we complete adds scale, deepens our capabilities, broadens the solutions we can offer our clients, and reinforces our ability to compound value. Vinci Compass Investments Ltd enters the second half of 2026 from a clear position of strength.
We are executing with discipline against the priorities we laid out on our Investor Day, strengthening our regional presence, scaling our highest growth strategies, and allocating capital with rigor. Above all, our focus remains on creating long-term value for our clients, shareholders, and partners. I have never been more confident in our ability to deliver it. Thank you all for joining us today. I will turn the call over to Bruno.
Sergio Passos
Thank you, Bruno, and good evening to everyone. The second quarter of 2026 reflected continued progress in our business with management fees growing and our FRE margin expanding year over year. Let me start with our AUM. We ended June with 361 billion reais, up 19% year over year and 4% quarter over quarter. The quarterly growth was driven by portfolio appreciation across Global EPS and Credit and by the combination with BACS, partially offset by negative FX variation and by net outflows in our third-party distribution business.
On this point, it's worth highlighting that, as Bruno detailed, a significant portion of the net outflows in Global EPS corresponds to returning capital within our third-party distribution alternative strategy where fees had been charged upfront. As a result, this AUM no longer carries recurring fees and the segment's management fee revenues should not be affected by these movements. In the second quarter, management fees totaled 252 million reais, up 29% year over year.
The increase was driven by inorganic growth from the Vierge and BACS acquisitions contributing a full quarter and one month, respectively, as well as by continual organic growth reflecting our successful fundraising efforts over the last 12 months. Advisory fees totaled 9 million reais in the quarter, a decrease of 65% year over year. As we have highlighted in prior calls, upfront fees in our third-party distribution alternative business can vary significantly depending on the timing of commitments.
As Bruno mentioned, the current environment for global alternatives is characterized by longer capital-raising periods, which naturally lead investors to defer commitments toward later closings. As a result, we do not expect meaningful alternatives flows in the third quarter. Our Corporate Advisory segment also continues to reflect a slower environment for deal activity in the second quarter, amid still elevated interest rates and election-related uncertainty in Brazil.
Looking ahead, we have a meaningful pipeline of opportunities for the second half of the year, and we expect a gradual pickup in deal activity by year end. At this point, we expect a stronger second half of the year than first half for the Corporate Advisory business. Altogether, fee-related revenues reached 272 million reais, up 17% year over year, and 544 million reais in the first half of 2026, also up 17% year over year. Turning to fee-related earnings, reaching 89 million reais in the quarter, or R$1.35 per share, up 36% year over year on a nominal basis and 31% per share.
Our FRE margin expanded to 33%, an improvement of approximately 450 basis points compared to the second quarter of 2025. This progression was driven by the acquisition of Vierge, one month of BACS, and the operating leverage embedded in our platform as revenue grows faster than costs, as well as the cost-efficiency initiatives we implemented over the past year. As we mentioned last quarter, the second quarter tends to carry high seasonal costs, particularly related to third-party services such as legal and consulting fees.
As a result, the fluctuation in our FRE margin compared to the first quarter of 2026 was expected as these seasonal costs materialized. It's also worth noting that BACS contributed only one month of results this quarter. Beginning in the third quarter, we will benefit from its full-period contribution, which should further support management fee growth and reinforce the operating leverage of the business going forward. Moving to performance-related earnings, our PRE recognized 4 million reais in the second quarter, primarily across Credit, Equities, and Global EPS, in line with seasonality.
Both the second quarters of 2026 and 2025 benefitted from performance fees generated by liquid funds. Across these strategies, though, performance fees in Equities were slightly higher in the second quarter of 2025, reflecting stronger local stock market performance. Realized GP investment income totaled 9 million reais in the quarter, supported by REIT dividends and a real estate closed-end fund realization. This was partially offset by mark-to-market adjustments in real estate funds, which weighed on unrealized GP investment income and brought IRE to 1 million reais in the period.
While IRE can fluctuate from quarter to quarter, we continue to view our proprietary commitments as an important long-term driver to value creation for Vinci Compass Investments Ltd. Turning to realized financial income, and consistent with the capital call dynamic we have been emphasizing around our IRE commitments, this line declined 63% year over year in the quarter. As capital calls reduce our cash positions, we expect it to keep trending lower as our proprietary funds mature towards the realization cycle.
The minority interest line, introduced following various transactions, reflects the portion of earnings attributable to the remaining 49.9%. Non-controlling interest now also comprises the minority interest related to BACS. Before turning to adjusted distributable earnings, a quick word on non-operational expenses: this quarter included some costs related to our M&A activities, mainly attributable to BACS. As a reminder, these are added back in our adjusted distributable earnings, which provide a cleaner view of the recurring earnings power of the business.
On that basis, Vinci Compass Investments Ltd generated 63 million reais in adjusted distributable earnings for the quarter, or 96 cents per share, bringing our first-half total to 126 million reais, or 1.92 per share. As anticipated, the year-over-year comparison was primarily impacted by lower realized financial income and soft Advisory and PRE contributions. Even as FRE continued to grow meaningfully, the growth seen in our FRE reinforced the scalability of our platform.
While the successful closing of the BACS combination and the recently announced NAVI acquisition underscore the selective inorganic expansion, that, together with organic growth and operating leverage, remains central to how we compound earnings over time. As we look ahead to the second half of the year, we do so with fundraising visibility and additional earnings contribution we expect from the acquisitions and initiatives already underway, leaving us well positioned to continue creating value for our shareholders.
With that, I would like to open the call for questions. Once again, thank you for joining us this evening. Operator, please proceed.
OPERATOR
We are going to start the question-and-answer session for investors and analysts. If you wish to ask a question, please click on Raise Hand. Please wait while we poll for questions. The first question comes from Ricardo Buchpigo with BTG Pactual.
Ricardo Buchpigo, Analyst at BTG Pactual
Hi everyone, and thanks for the opportunity of making questions. I have two here on my side. So first, could you comment on what drove the acceleration on fee-related expenses this quarter, which grew around 5%? And could you help us understand how much of this is related to a one-off investment specific to this quarter, and what should drive the recovery in FRE margins to get to the mid-30s that you guys reiterated? And for my second question, how much of the 5.7 billion in net outflow from IPNS was related to the capital returns you mentioned?
And do you have a sense of how much of these capital returns are usually recycled and should translate into future inflows in situations like this? Just wanting to understand if there should be a pickup in fundraising already for the next quarter or the second half of the year, or should it be a longer cycle. Thank you.
Bruno
Okay, Ricardo, thank you for the question. This is Bruno. So, on your first question, the second quarter tends to be seasonally stronger for us in terms of expenses. We have some of the payments that fall into the second quarter, some of the service payments mainly—so service providers. And in the second quarter this time, as we continue to improve the productivity of the platform and try to see where there is opportunity for us to improve productivity, we had some cost reduction regarding people as well this quarter, which we do not adjust, as we had not adjusted in ’25.
So in the second quarter, I would say those were the two most significant impacts: the severance cost that we had in the second quarter related to some cost reductions that we did in people, and also the seasonal nature of expenses. When we look at the forecast for the second half, as we said in the prepared remarks, we continue to see FRE margins in the mid-30s range. I think now, as we also made a comment, there is also this tailwind from BACS consolidation, which will add to FRE margins as well.
So at this point we see the number solidly in the mid-30s, right? Could be actually a little bit better, but that's the number that we're sticking to at this time. Regarding your second question on the outflows, I would say approximately one third of the outflows were due to capital returns from the alternative TPD funds. What we see in the industry—in this case our main clients for this line of products are in Chile and Mexico, right? Although we also do have some exposure in Colombia—but the TPD markets, mainly the institutional investors in Chile and Mexico, these investors are almost all of the time fully allocated, right?
They don't carry cash positions in their balance sheet. They're usually fully allocated. So although we might have some fluctuation from quarter to quarter—as we did have, if you remember, I think we did have some fluctuation 1Q25, we had some redemptions also in 1Q25 in the TPD liquid side—we are seeing those redemption flows in this second quarter now of ’26. But given that they are fully allocated by nature and the growth rates of both the Chilean AFPs and the Mexican authorities are quite high—they're growing in the low to mid-teens now given the contribution factors—over time, the TPD line will be very positive for us.
If you look at the organic growth that we had in TPD in AUM on a year-to-year basis—if you add inflows and appreciation—that organic growth is close to 20%. So we expect that to continue to be the case as these institutional investors continue to grow their bases, and we might have these fluctuations from one quarter to the other. But the fundamentals for these two asset lines, both the TPD liquids and the alternatives, continue to be quite favorable for us.
Alessandro Horta, CEO
And Ricardo, that's Alessandro. Just to add on top of what Bruno said, just to complement—these outflows, this is very normal. As Bruno said, the AFPs, they rebalance the portfolio, especially after the growth because of the markets going in the right direction. And the majority of these outflows that you saw came from the liquid side. Of course we have some capital returns, as Bruno mentioned, on the alternative side, but in terms of the outflows they came from the liquid side.
Some of these investors, in a way, if you may, are taking profits of a very benign market, and to Bruno's point they will come back to rebalance the portfolios, and then you'll see this fluctuation when the market's going in one direction or the other.
Ricardo Buchpigo, Analyst at BTG Pactual
That's super, super clear. Thank you.
OPERATOR
The next question comes from Fernanda Sayon with J.P. Morgan.
Fernanda Sayon, Analyst at J.P. Morgan
Good evening, Alessandro, Bruno, Sergio. My question is on the recent acquisition of BACS and NAVI. I was wondering if you could discuss how these should impact management fee revenues, FRE margins, expenses. Anything you can share would be very helpful. And you specifically mentioned that BACS has a higher margin. Would it be possible to quantify that? Thank you.
Bruno
Ok, Fernanda, this is Bruno. So BACS, to give you some sense, In June the impact was about 4 million in revenue in the month of June. So as we consolidate the numbers going forward, I think that's a good run rate in terms of the revenue base. The margin for Box is higher than the average of the company. It's closer to 50%. So if you do the math between the two and the FRE that we have, the positive impact to us should be around 50 basis points, more or less, in terms of the tailwind for the second half. I think the other thing that is important to mention is even pre-Box, Argentina was about 40 above budget for us.
So the flows are very strong in the business. Argentina, hopefully with Box we have even more of that impact. But that's also another interesting information that we're seeing: Argentina being very strong. In the case of Navi, we calculated it's a much smaller business, right. So we're talking about about 7750 million. Although the fees are good — they're around 1% — and as we mentioned in the press release, we are not bringing anyone from the orig real estate team; it's going to manage this money. So it's fully incremental to us. So this margin is going to be very high, probably on the FRE line, probably in the 60–70% right after taxes and some bonus provision. So this should be also interesting for the platform, but the size is not very big, so it shouldn't move the needle as Box will. But it's going to help. It's going to be incremental to us as well.
UNKNOWN Analyst
Super clear. Thank you so much.
OPERATOR
The next question comes from William Barangard with Itaú BBA.
William Barangard, Analyst at Itaú BBA
Good. Good evening everybody. Thank you for the presentation. Also a follow-up on Box acquisition and Argentina operation as a whole, right? On a more qualitative view, what are the integration milestones you expect for Box, your operation in Argentina, be it in terms of products, cross-selling opportunities, the KPIs you think are relevant there? Overall, wanted to grasp what is your view for Vinci Compass Investments Ltd in Argentina. And the second one may be quicker on inorganic growth.
If, beyond Box and Navi, how active is the M&A pipeline? If M&A continues — inorganic growth continues being one of the priorities ahead — or are you shifting your focus to growth towards organic growth and working with all this suite of products you've already built in the past year since you've been listed? But that's it. Thank you.
Alessandro Horta, CEO
Thank you for your question. That's Alessandro. So, talking about Box in a more qualitative way, as you mentioned, the Argentine market is still in the early days of gaining more traction on the asset management side. Our combination with Box was a very, I'd say, good one in terms of not just about the products but also about the channel of distribution. Our activity was more on the institutional side, and Box, because of the relationship with Potecario, the liability side comes more from the retail wealth management side.
So, having said that, that was very, very synergic. We have been able to integrate smoothly. Of course this is a merit of our team in Argentina that knew the partners of Box for a long time, and also our new partners, the Potecario Group, has been a very good surprise in terms of the way that we have been integrating with them. The market today is very concentrated, more like public credit and fixed income in general. But we see a lot of opportunities to introduce more sophisticated and more specific and structured products to the Argentine market.
So we are really very optimistic with the setup that we have — a very strong base from our Argentine operation also together with Box. But we think there is a huge opportunity for asset management in Argentina as the market continues to improve and to require more structured products. So we think that's a market that we are very well positioned in, in a very good situation to take advantage of the trends that we believe will happen there. Talking a little bit more to your second question about M&A activity or inorganic versus organic growth, we continue to have a very strong pipeline of inorganic possibilities.
As we have been repeating here, our main focus would be to grow inorganic, if the opportunity arises, outside Brazil — more in the other countries in Latin America — to reinforce our capabilities on the local markets. But there are not so many opportunities, and it's very difficult to structure these deals. But we have a very strong pipeline on them. And talking more about Brazilian opportunities — that's the case of Navi — we would be a little bit more opportunistic on that sense, to look for more creative terms of acquisitions, because, as you know, the asset management market in Brazil is passing an adjustment, and for us has been very good because we have been consolidators of this market and continue to grow organically and also taking advantage of some opportunities. But we should be very careful to understand the drivers for each of the opportunities that we have in our pipeline. So we will continue to focus on the organic growth, but being very selective in the inorganic opportunities. I don't know if Bruno would like to add on top of that.
Bruno
Yeah, I think it was a good question from William to touch on a few additional points, which I think makes sense. As Alessandro said, right, M&A outside of Brazil — we are looking into those options to grow the alternative asset management base — and in Brazil, options that complement the platform. And I think the Galileo inflow is going to increase our flexibility. I think it's a point that I would like to make because we're going to receive a virtual equity injection of about 90 to 100 million reais in the second half, most likely in the fourth quarter, which will add flexibility.
When we analyze these opportunities, we're going to have dry powder to perhaps pursue things that we feel make sense and that add value to the platform. And the other thing that I would like to mention: even with all of the deals that we did, I think the base that we have created over these last few years with the movements that we did is already yielding a lot of positive momentum in the business. So, if you look at the organic growth rates in some of our verticals — if you look at, I had mentioned already, global PNs with almost 20% growth in AUM; real assets, the organic growth in AUM year on year in the second quarter was about 40%; credit was about 30% — and when you look at our FRE performance with no acquisitions, we had about high-single-digit revenue growth with flat expenses and FRE growth of 35%. So the FRE growth of the platform without M&A in the second quarter was more or less the same growth that we had with M&A. So I think to that end, I think M&A continues to be a way for us to branch out and complement the platform.
But I think the presence that we have across the region is already strong enough to sustain the organic growth to us and to be meaningful value creators to the business on a go-forward basis. So I think those points are important that we make — that the platform is already, in itself, without any additional M&A, generating a lot of value and growing quite handsomely in the second quarter.
William Barangard, Analyst at Itaú BBA
All right, thank you. Very clear. Thanks Bruno. Alessandro,
OPERATOR
The next question comes from Tito Labarta with Goldman Sachs.
Tito Labarta, Analyst at Goldman Sachs
Hi, good evening. Alejandro, Bruno, Sergio, thanks for the call. A couple questions also just, I guess, on the AUM — very good growth, credit, IPNs. I mean, probably considering the rate environment, makes a lot of sense. Do you think that sort of is where the growth is going to continue? What about some of the other lines that are not growing — do you think, I mean, private equity — that should continue to be fairly muted? Anything that could change that outlook there?
And how much does the mix also impact your margin, a bit to some extent? And also because advisory was weak, did that also have a negative impact on the FRE margins?
Bruno
Thank you Tito for the question. So yeah, we have been talking about credit a lot, and I think obviously the rate environment helps in Brazil mostly — not the case of the other countries. Other countries, the rates are much smaller already than here, but I think there is a lot of product momentum. I think the rates help in Brazil, but we have a lot of product momentum outside of Brazil. I think Colombia, in that sense, is a good example. We had the visibility from Karla, who is the lead person on Colombia for us, about demand from institutional investors on the private debt side.
We went after capability to run a private credit product in Colombia, which we obviously didn't have at the time, and we are in line to have a closing of this fund in the Third quarter of a few hundred million dollars. So as in the case of COPICO, we have similar developments in other credit products outside of Brazil, and also in Brazil. Right. So in Brazil we continue to see demand for new products. We actually approved a new product today in our product committee, which is a partnership with a bank where we distribute the product, which is a mix of two products that we have and could be a billion reais product, I mean in terms of the size of the distribution channel and what we see as potential.
So I think not only the rates environment is a tailwind in the case of this segment, but also really product proliferation and the ability to launch new strategies across other countries in Latin America. Regarding the private equity business, I think we are in a hiatus now in terms of fundraising. VCP4 is still within the investment cycle, so we are not in a position now to raise another VCP fund. We need to fully invest VCP4 before coming back to market.
And we are in the final, let's say pre-launch stages of VIR5. VIR5 is a fund that we expect to have a first close in the next several, I would say at this point in time, probably next several weeks. We already have aligned the anchor investors for that fund. So either in the third quarter or very early in the fourth quarter we should have a first close for that fund. And then depending on how the VCP4 strategy performs in the next few quarters, we could have VCP5 coming back to market later next year.
So it's more of a life cycle issue in private equity. It doesn't necessarily have to do with demand, but we do have a private equity product coming online in the short term. When you look at the growth components, I would say probably given that private equity is less strong at this time, you have the growth coming from real assets, real estate, and IPNs. I would say it probably would be net positive, very marginally net positive for us. I wouldn't say it's a relevant impact.
And obviously your last question: corporate advisory is very important for us for the FRA margin because when we have results and revenues coming from corporate advisory, the leverage of that revenue is very high, so it really helps us dilute the fixed cost base of the company. So the first half, in that sense, we had I think something around 550 or 540 basis points of margin expansion in the first half, and that was without corporate advisory because the first half corporate advisory number was very, very small.
For the second half we expect that number to improve. What we have now in terms of visibility is for low teens million reais of revenue for the second half. So that also goes into, I think, Hikarada's earlier question regarding the visibility of the FRA margin. If we do have that corporate advisory revenue kicking in the second half, and I would say the visibility at this point that we have for a big chunk of that revenue is quite high, that will also help us to drive that margin comfortably into the mid-30s or eventually a bit higher that we are seeing when we look at the models for the second half.
But certainly not having corporate advisory is something that hurts the cost dilution of the platform.
Sergio Passos
Just to add on top of what Bruno said, just to add a very quick comment summarizing what Bruno said, I see, to your question, two main products that we probably will see developing short term on the credit side. That's the COPICO in Colombia and also a final close until the end of the year probably, or further development that says PS4, and also we probably will see a final closing of the Lacan 4. So we have been able, at the same time that we see the growth coming from IPNs and the TPD side and etc., we are seeing very interesting spots of capital falling into our strategies both in credit, more structured ones, and also in real assets, as Bruno said. What we see next for private equity is VRF5 that will see first closing very soon, and wait a little bit more to the flagship VCP5 when, of course, the fourth vintage is already invested.
UNKNOWN Analyst
Very clear. Thanks Alexandra for doing.
OPERATOR
I would like to turn the floor back to Mr. Alessandro Horta for the closing remarks. Please, Mr. Horta, you can proceed.
Alessandro Horta, CEO
Thank you very much again for your support and your interest. We are very, very optimistic that we have been able to deliver even against a backdrop of high interest rates, especially in Brazil. We think that soon we'll have part of, I would say, the volatility coming from the political side. We already got results from Chile, Colombia, and Peru recently. We will, probably in our next meeting here for the third quarter results, already have defined the election in Brazil too.
So even against this last month's political expectations and volatility from all of these countries, we have been able to continue to deliver growth, and even with the high interest rate environment, especially in Brazil, we are very optimistic moving forward. We are very comfortable within our platform. So I'd like to thank you all again and have a good night to you. Thank you.
OPERATOR
This concludes today's presentation. We thank you all for your participation and wish you a very good evening.
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