Patria Investments Ltd [PAX] Filings

20-F 1 pax-20231231.htm 20-F pax-20231231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 20-F

_________________________

(Mark One)


o			REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934


x			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _______________

For the transition period from _______________ to _____________

Commission file number: 001-39911

_________________________

Patria Investments Limited

(Exact name of Registrant as specified in its charter)

_________________________

Not applicable

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

60 Nexus Way, 4th floor,

Camana Bay, PO Box 757, KY1-9006

Grand Cayman, Cayman Islands

+1 345 640 4900

(Address of principal executive offices)

Ana Cristina Russo, Chief Financial Officer

Tel: +1 345 640 4900

60 Nexus Way, 4 floor,

Camana Bay, PO Box 757, KY1-9006

Grand Cayman, Cayman Islands

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Copies to:

Manuel Garciadiaz

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Phone: (212) 450-4000

Fax: (212) 450-6858

_________________________

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol

Name of each exchange

on which registered

Class A common shares, par value US$0.0001 per share

PAX

The Nasdaq Global Select Market

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

_________________________

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

The number of outstanding shares as of December 31, 2023 was 55,308,508 Class A common shares and 92,945,430 Class B common shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x No o

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o No x

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Emerging growth company

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. o

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report: x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b): ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP

International Financial Reporting Standards as issued by the International Accounting Standards Board

Other

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

o Item 17 o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Table of Contents

TABLE OF CONTENTS


			Page

Presentation of Financial and Other Information			1
Cautionary Statement Regarding Forward-Looking Statements			2

PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS			4
A. Directors and Senior Management			4
B. Advisers			4
C. Auditors			4
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE			4
A. Offer Statistics			4
B. Method and Expected Timetable			4
ITEM 3. KEY INFORMATION			4
A. [R eserved ]			4
B. Capitalization and Indebtedness			4
C. Reasons for the Offer and Use of Proceeds			4
D. Risk Factors			4
ITEM 4. INFORMATION ON THE COMPANY			60
A. History and Development of the Company			60
B. Business Overview			64
C. Organizational Structure			99
D. Property, Plants and Equipment			99
ITEM 4A. UNRESOLVED STAFF COMMENTS			99
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS			99
A. Operating Results			99
B. Liquidity and Capital Resources			118
C. Research and Development, Patents and Licenses, etc.			120
D. Trend Information			120
E. Critical Accounting Estimates			120
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES			120
A. Directors and Senior Management			120
B. Compensation			126
C. Board Practices			127
D. Employees			129
E. Share Ownership			129
F. Disclosure of a R egistrant’s A ction to R ecover E rroneously A warded C ompensation			130
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS			130
A. Major Shareholders			130
B. Related Party Transactions			132
C. Interests of Experts and Counsel			134

Table of Contents


ITEM 8. FINANCIAL INFORMATION			134
A. Consolidated Statements and Other Financial Information			134
B. Significant Changes			137
ITEM 9. THE OFFER AND LISTING			137
A. Offer and Listing Details			137
B. Plan of Distribution			137
C. Markets			137
D. Selling Shareholders			137
E. Dilution			137
F. Expenses of the Issue			137
ITEM 10. ADDITIONAL INFORMATION			137
A. Share Capital			138
B. Memorandum and Articles of Association			138
C. Material Contracts			153
D. Exchange controls			153
E. Taxation			153
F. Dividends and Paying Agents			157
G. Statement by Experts			157
H. Documents on Display			157
I. Subsidiary Information			157
J.Annual Report to Sec urity Holders			157
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			158
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES			160
A. Debt Securities			160
B. Warrants and Rights			160
C. Other Securities			160
D. American Depositary Shares			160

PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES			161
A. Defaults			161
B. Arrears and Delinquencies			161
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS			161
A. Material Modifications to Instruments			161
B. Material Modifications to Rights			161
C. Withdrawal or Substitution of Assets			161
D. Change in Trustees or Paying Agents			161
E. Use of Proceeds			161
ITEM 15. CONTROLS AND PROCEDURES			161
A. Disclosure Controls and Procedures			161
B. Management’s Annual Report on Internal Control Over Financial Reporting			161
C. Attestation Report of the Registered Public Accounting Firm			162
D. Changes in Internal Control Over Financial Reporting			162

Table of Contents


ITEM 16. [RESERVED]			162
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT			162
ITEM 16B. CODE OF ETHICS			162
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES			163
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES			163
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS			163
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT			163
ITEM 16G. CORPORATE GOVERNANCE			164
ITEM 16H. MINE SAFETY DISCLOSURE			164
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS			164
ITEM 16J. INSIDER TRADING POLICIES			164
ITEM 16K. CYBERSECURITY			165

PART III
ITEM 17. FINANCIAL STATEMENTS			167
ITEM 18. FINANCIAL STATEMENTS			167
ITEM 19. EXHIBITS			167
I NDEX TO CONSOLIDA TED FINANCIAL STATEMENTS			F-1

iii

Table of Contents

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

All references to “U.S. dollars,” “dollars” or “$” are to the U.S. dollar. All references to “real,” “reais,” “Brazilian real,” “Brazilian reais,” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “IFRS” are to International Financial Reporting Standards, as issued by the International Accounting Standards Board, or the IASB.

Financial Statements

Patria was incorporated in Bermuda on July 6, 2007 as a limited liability exempted company and changed the jurisdiction of its incorporation to the Cayman Islands on October 12, 2020, registering by way of continuation as a Cayman Islands exempted company with limited liability duly registered with the Cayman Islands Registrar of Companies.

We maintain our books and records in U.S. dollars, the presentation currency for our financial statements and also our functional currency. See note 5 to our audited consolidated financial statements (as defined below), included elsewhere in this annual report, for more information about our and our subsidiaries functional currency. We prepare our annual consolidated financial statements December 31, 2023 and 2022 in accordance with IFRS, as issued by the IASB. Unless otherwise noted, our financial information presented herein for the years ended December 31, 2023, 2022 and 2021 is stated in U.S. dollars, our reporting currency. The consolidated financial information of Patria contained in this annual report is derived from its audited consolidated financial statements as of and for the three years ended December 31, 2023, together with the notes thereto. All references herein to “our financial statements,” “our audited consolidated financial information,” and/or “our audited consolidated financial statements” are to Patria consolidated financial statements included elsewhere in this annual report.

This financial information should be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and our consolidated financial statements, including the notes thereto, included elsewhere in this annual report.

Our fiscal year ends on December 31. References in this annual report to a fiscal year, such as “fiscal year 2023,” relate to our fiscal year ended on December 31 of that calendar year.

Corporate Events

Our operational and financial condition results for the historical periods discussed in this annual report prior to the events described below do not reflect or include the operational results or any assets or liabilities of the transactions below, as well as certain critical accounting policies and estimates related to goodwill, intangible assets and purchase accounting related to the transactions. We began consolidating (i) Moneda and its subsidiaries as of December 1, 2021, (ii) the SPAC as of March 14, 2022, (iii) VBI as of July 1, 2022, (iv) Igah Ventures as of November 30, 2022, (v) Kamaroopin as of April 12, 2023, and (vi) our company in partnership with Bancolombia as of November 1, 2023. Accordingly, our operational and financial condition results in future periods may not necessarily be comparable to our operational and financial condition results for historical periods, including those discussed in this annual report.

Combination with Moneda Asset Management

On December 1, 2021, we completed our previously announced combination with Moneda Asset Management SpA, or Moneda, a leading asset manager headquartered in Chile. The transaction created a combined asset manager with US$23.8 billion in assets under management as of December 31, 2021, allowing us to solidify our position as one of the leading private equity, infrastructure and credit platforms in Latin America. As a result, we issued 11,045,430 Class B common shares to entities controlled by certain Moneda partners. On January 10, 2024, we issued 1,879,977 Class A common shares to the entities controlled by certain Moneda partners, as deferred compensation pursuant to the Moneda Transaction Agreement. See “Item 4. Information on the Company—A. History and Development of the Company—Our History—Combination with Moneda Asset Management” for additional information.

Launch of Growth Equity Strategy and Agreement to Partner with Kamaroopin

On December 8, 2021, we announced the launch of a new Growth Equity strategy, anchored by a proposed partnership with Kamaroopin Gestora de Recursos Ltda. (purchased by PILTDA) and Hanuman GP Cayman, LLC (purchased by Patria Finance Ltd.), collectively “Kamaroopin.” Our partnership was structured in two stages with financial terms not disclosed. The first stage included the acquisition of a 40% minority equity stake and the second stage contemplated the acquisition of the remaining 60% for an undisclosed equity consideration (see note 29(a) to our audited consolidated financial statements). The first tranche of the acquisition of Kamaroopin was signed on December 8, 2021 and closed on February 1, 2022, whereas the second tranche was signed on March 16, 2023 and closed on April 12, 2023. As a result, Patria currently owns 100% of Kamaroopin.

Patria Latin American Opportunity Acquisition Corp.

On March 14, 2022, Patria Latin American Opportunity Acquisition Corp., or the “SPAC,” announced the closing of its initial public offering of 23,000,000 units, including the exercise in full by the underwriters of the right to purchase an additional 3,000,000 units to cover over-allotments, at a price of US$10.00 per unit. Each unit consists of one Class A ordinary share of the SPAC, with a par value of US$0.0001 per Class A ordinary share, and one-half of one redeemable warrant of the SPAC, with each whole warrant being a public warrant entitling the holder thereof to purchase one Class A ordinary share of the SPAC for US$11.50 per share, subject to adjustment. The units were sold at a price of US$10.00 per unit, generating gross proceeds from the issuance of US$230,000,000.

The SPAC is a special purpose acquisition company incorporated in the Cayman Islands and sponsored by one of our affiliates, Patria SPAC LLC, for the purpose of effecting a business combination with one or more businesses with a focus in Latin America. The registration statement on Form S-1 (File No. 333-254498) relating to the securities referred to therein and subsequently amended has been filed with the SEC and declared effective on March 9, 2022. For further details, see notes 5, 12(d) and 20(c) to our audited consolidated financial statements.

On June 12, 2023, the SPAC held an extraordinary general meeting of its shareholders (the “Extraordinary General Meeting”). At the Extraordinary General Meeting, the SPAC shareholders approved amendments to its Amended and Restated Memorandum and Articles of Association to extend the date (the “Termination Date”) by which the SPAC has to consummate an initial business combination from June 14, 2023 (the “Original Termination Date”) to June 14, 2024 (the “Articles Extension Date”), in addition to other proposals. Accordingly, the SPAC now has up to June 14, 2024 to consummate its initial business combination. In connection with the Extraordinary General Meeting, shareholders holding an aggregate of 6,119,519 of the SPAC’s Class A ordinary shares exercised their right to redeem their shares on June 14, 2023. Following such redemptions, 16,880,481 ordinary shares of the SPAC remained outstanding and subject to redemption. The SPAC trust account has a remainder balance of US$180 million following the withdrawal for the SPAC Class A ordinary shares redemption. On June 14, 2023 the SPAC Sponsor also deposited into the SPAC trust account an aggregate of US$300,000 to effect the extension of the termination date. The purpose of the extension is to provide time for the SPAC to potentially complete a business combination. The SPAC Sponsor intends to continue to deposit US$300,000 each month until the earlier of the completion of a business combination or its liquidation date.

Agreement to Acquire VBI Real Estate to Anchor Brazil Real Estate Platform

On June 9, 2022, we announced an agreement to acquire VBI Real Estate Gestão de Carteiras S.A. (“VBI Real Estate” or “VBI”) one of the leading independent alternative real estate asset managers in Brazil, which had approximately R$5 billion in assets under management across both development and core real estate vehicles.

While specific financial terms are not being disclosed, the transaction is structured in two stages. The first stage closed on July 1, 2022, and entailed the acquisition of 50% of VBI for a cash consideration, plus the contribution of Patria’s two existing Brazilian REIT vehicles. The second stage allows us to exercise an option to acquire the remaining 50% of VBI and thus consolidate VBI’s platform into the Patria group.

In the course of 2023, VBI acquired three small-scale independent asset managers focused in real estate in Brazil: (i) BlueMacaw Asset Management Ltda., or "BlueMacaw" the spun-off portion of BlueMacaw Gestora Limitada, or “BlueMacaw Gestora”, an investment manager focused on real estate assets in Brazil. BlueMacaw Gestora was created as a spin-off of Blackstone's Real Estate operations in Latin America, led by Marcelo Fedak; (ii) Bari Gestão de Recursos Ltda. (which was further renamed to VBI Securities Ltda.); (iii) Move Capital S.A., and (iv) Morc Gestora de Recursos de Crédito Ltda. (which was further renamed to VBI Capital Ltda.), fostering the growth in the real estate vertical. See note 5 to our audited consolidated financial statements.

VBI continues to be Patria’s Real Estate platform in Brazil and both co-founding partners of VBI – Ken Wainer and Rodrigo Abbud – are expected to continue leading VBI’s businesses, with Marcelo Fedak joining VBI’s board and in due course being appointed as an investment committee member in the business arrangement with Bancolombia, representing Patria.

On July 5, 2023, we announced that we had entered into a business arrangement with Bancolombia, a leading full-service financial conglomerate incorporated in Colombia, to expand our real estate capabilities into Colombia and leverage our private markets expertise to offer access to alternative investment products to Colombian investors. The transaction closed on November 1, 2023. Since its inception, Patria Asset Management S.A. ("PAM") manages a capital real estate investment vehicle with approximately US$1.4 billion of assets under management as of December 31, 2023. Patria expects to contribute capital to be deployed over multiple years to support PAM’s operations as well as to fund general partner commitments. Patria holds 51% of PAM with the remaining 49% being held by Bancolombia.

Agreement to Acquire Private Equity Solutions Business from abrdn

On October 16, 2023, we announced that we had entered into an agreement for the acquisition of the carved-out private equity solutions business from abrdn. Upon closing, the acquired platform together with certain of our existing feeder funds that direct Latin American capital to global private markets is expected to form a new vertical named Global Private Markets Solutions, or “GPMS,” to be led by Marco D’Ippolito. We expect this new vertical to further develop as a complementary gateway for Latin American investors to access private markets on a global scale. The transaction is expected to add more than US$8.0 billion in FEAUM based on numbers as of December 31, 2023. The transaction includes total consideration of up to GBP100 million (approximately US$122 million) payable to the seller in cash as follows: (i) GBP80 million as base value of which GBP60 million was due at closing and GBP20 million is due 24 months after closing; and (ii) GBP20 million is contingent on certain performance factors and is due 36 months after closing. The transaction is subject to customary closing conditions and certain regulatory approvals.

Table of Contents

Corporate Structure and Ownership

As of December 31, 2023, we had a total of 148,253,938 common shares issued and outstanding, consisting of 81,900,000 Class B common shares beneficially owned by Patria Holdings, 11,045,430 Class B common shares beneficially owned by entities controlled by certain Moneda partners, and 55,308,508 Class A common shares beneficially owned by our shareholders, including 1,061,008 shares beneficially owned by partners who joined Patria through M&A activity and received consideration in equity. On January 10, 2024, we issued 1,879,977 Class A common shares to entities controlled by certain Moneda partners as deferred consideration pursuant to the Moneda Transaction Agreement. See “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders.”

The following chart shows our corporate structure and equity ownership as of April 25, 2024, after giving effect to our corporate reorganization and combination with Moneda; our acquisition of Kamaroopin, Igah, BlueMacaw and PAM with Bancolombia; our interests in VBI; the listing of the SPAC. This chart is provided for illustrative purposes only and does not show all of the legal entities:

(1)24,437,198 Class B common shares of the 81,900,000 Class B common shares beneficially owned by Patria Holdings Limited are held by SPV PHL, which is a wholly owned subsidiary of Patria Holdings Limited.

(2)References to (A) stand for Class A common shares, (B) stand for Class B common shares, and (*) stand for voting power.

Table of Contents

Special Note Regarding Non-GAAP Financial Measures

This annual report presents our Fee Related Earnings and Distributable Earnings information, which are Non-GAAP measures. A Non-GAAP financial measure is generally defined as one that purports to measure financial performance but excludes or includes amounts that would not be so adjusted in the most comparable IFRS measure.

Fee Related Earnings

Fee Related Earnings, or "FRE," is a performance measure used to assess our ability to generate profits from revenues that are measured and received on a recurring basis. FRE is calculated as management, incentive, and other ancillary fees, net of rebates and related taxes, less personnel and administrative expenses, adjusted for brand amortization, and amortization of placement agents fees, excluding the impacts of equity-based compensation and nonrecurring expenses. FRE includes base compensation (salaries and wages) in fixed amounts and variable compensation in the form of discretionary cash bonuses, which are awarded based on each individual’s performance upon consideration of a number of qualitative and quantitative factors. Incentive fees are realized performance-based fees earned by certain funds when the returns for such funds surpass the relevant benchmark over a specified time horizon. Such incentive fees are included in FRE because they represent a source of revenues that is measured and received on a recurring basis and is not dependent on realization events from the underlying investments, although the amount of incentive fees may fluctuate based on the performance of the funds relative to the relevant benchmark.

The table below presents more information on our FRE:


	For the Years Ended December 31
	2023	2022	2021	Change 2023/2022	Change 2022/2021
	(in US$ millions)
Revenue from management fees(1)	245.6	220.6	144.7	25.0	75.9
Revenue from incentive fees	4.1	6.1	4.9	(2.0)	1.2
Revenue from advisory and other ancillary fees	2.7	4.2	0.7	(1.5)	3.5
Taxes on revenues	(5.0)	(3.7)	(3.9)	(1.3)	0.2
Personnel expenses(2)	(125.1)	(103.9)	(79.8)	(21.2)	(24.1)
(-) Long-term employee benefit (3)	14.6	3.5	3.0	11.1	0.5
(-) Carried interest allocation(4)	25.3	10.2	30.2	15.1	(20.0)
(-) Carry bonus provision	—	—	0.9	—	(0.9)
(-) Deferred and contingent consideration(5)	23.0	24.4	2.0	(1.4)	22.4
(-) Other transaction costs	2.2	0.5	—	1.7	0.5
Amortization of intangible assets(6)	(0.8)	(0.4)	(0.2)	(0.4)	(0.2)
Administrative expenses	(38.1)	(30.8)	(14.3)	(7.3)	(16.5)
(-) Rebate fees	6.5	3.9	0.4	2.6	3.5
(-) SPAC expenses and transaction costs(7)	1.1	0.8	—	0.3	0.8
Placement fees amortization and rebates	(8.4)	(5.3)	(2.5)	(3.1)	(2.8)
Fee Related Earnings (FRE)	147.7	130.0	86.0	17.7	44.0

Note: For our non-GAAP financial measures, we reflect the results attributable for controlling owners to include our exposure from our ownership stake on each line item.

(1)Revenue from management fees consist of fee revenue from managing an investment fund in our portfolio, which are calculated as a fixed percentage over the committed capital and/or the deployed capital for each one of the investment funds following the relevant limited partnership agreement, or “LPA,” or private placement memorandum, or “PPM.” Such revenue increased from prior year due to (a) management fees earned by acquired businesses and (b) management fee revenue commencing in 2023 from newly launched investment fund Private Equity Fund VII.

(2)Personnel expenses consist of (1) fixed compensation costs comprised of salaries and wages, (2) variable compensation costs comprised of partners’ compensation, rewards and bonuses and employee profit sharing, (3) social security contribution and payroll taxes and (4) other short- and long-term benefits. The increase is a result of the acquired businesses.

(3)Long-term employee benefits consist of the equity-based compensation and long term employee benefits from acquired businesses. Includes Officers’ Fund tracking shares, IPO's share-based incentive plan, and legacy strategic bonus from acquired business.

(4)Carried interest allocation refers to our employees’ right to up to 35% of the performance fees recognized from investments funds. As of December 31, 2023, we had a payable balance of US$31.9 million (US$22.6 million non-current), primarily related to performance fees recognized from Patria Infrastructure Fund III.

(5)Deferred and contingent consideration consists of consideration expected to be paid to former shareholders of Moneda in exchange for future services as employees, which were payable in two installments due December 2, 2023 and December 2, 2024. We account for this consideration as a compensation expense as the employees render services. For the year ended December 31, 2023, US$23.0 million was recognized as an expense in 2023. our income statement and our acquisition of Moneda included a total expected consideration of US$57.5 million

(6)Amortization of intangible assets, such as software.

(7)SPAC expenses and transaction costs consist of expenses related to Patria Latin American Opportunity Acquisition Corp., a special purpose acquisition company (SPAC), which are excluded from our FRE.

We believe FRE is useful to investors because it provides additional insight into the operating profitability of our business and our ability to cover direct base compensation and operating expenses from total fee revenues. FRE is derived from and reconciled to, but not equivalent to, its most directly comparable IFRS measure of income before income tax. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Non-GAAP Financial Measures and Reconciliations—Fee Related Earnings (FRE)” for our reconciliation of FRE. For further information on why our management chooses to use these Non-GAAP financial measures, and on the limits of using these Non-GAAP financial measures, please see “Presentation of Financial and Other Information—Special Note Regarding Non-GAAP Financial Measures.”

Distributable Earnings

Distributable Earnings, or “DE,” is used to assess our performance and capabilities to distribute dividends to shareholders. DE is calculated as FRE less current income tax expense, plus net realized performance fees, net financial income/(expenses), and other income/(expenses) adjusted to exclude IPO related expenses and non-recurring transaction costs, including changes to deferred and contingent considerations, gross obligation, options, warrants, SPAC's results, and share of equity-accounted earnings. DE is derived from and reconciled to, but not equivalent to, its most directly comparable IFRS measure of net income. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Non-GAAP Financial Measures and Reconciliations—Distributable Earnings (DE)” for our reconciliation of DE.

The following table presents more information on our DE:


	For the Years Ended December 31,
	2023	2022	2021	Change 2023/2022	Change 2022/2021
	(in US$ millions)
Fee Related Earnings (FRE)	147.7	130.0	86.0	17.7	44.0
Revenue from performance fees	74.1	30.4	89.3	43.7	(58.9)
Taxes on revenue—performance fees	(1.4)	(1.2)	(0.2)	(0.2)	(1.0)
Carried interest allocation	(25.3)	(10.2)	(30.2)	(15.1)	20.0
Carry bonus provision	—	—	(0.9)	—	0.9
Other income/(expenses)	(18.6)	(9.3)	(12.2)	(9.3)	2.9
Other transaction costs	9.5	6.7	11.8	2.8	(5.1)
Deferred and contingent consideration	(8.6)	(11.6)	(0.3)	3.0	(11.3)
SPAC expenses and transaction costs	6.2	10.6	—	(4.4)	10.6
Gross obligation - unwinding	11.7	3.5	—	8.2	3.5
Net financial income/(expense)	(1.6)	8.1	(0.3)	(9.7)	8.4
Derivative financial instruments	3.2	(3.2)	—	6.4	(3.2)
Share of equity-accounted earnings	(0.1)	(2.3)	—	2.2	(2.3)
Amortization of intangible assets from equity-accounted investments	0.6	2.2	—	(1.6)	2.2
Current income tax expense	(9.6)	(6.5)	(1.7)	(3.1)	(4.8)
Distributable Earnings (DE)	187.8	147.1	141.3	40.7	5.8

Note: For our non-GAAP financial measures, we reflect the results attributable for controlling owners to include our exposure from our ownership stake on each line item.

FRE and DE are measures of profitability and have certain limitations in that they do not take into consideration certain items included under IFRS. Such measures may not be comparable to similarly titled measures used by other companies and is not a measure of performance calculated in accordance with IFRS. FRE and DE should not be considered in isolation or as a substitute for net income or other income data prepared in accordance with IFRS. The use of such measures without consideration of related IFRS measures is not adequate due to the adjustments described above. Our management compensates for these limitations by using FRE and DE as supplemental measures to IFRS results, to provide a more complete understanding of our performance as management measures it. A reconciliation of FRE and DE to their respective most directly comparable IFRS measure of income before income taxes provision can be found in “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Non-GAAP Financial Measures and Reconciliations.” For further information on why our management chooses to use these Non-GAAP financial measures, and on the limits of using these Non-GAAP financial measures, please see “Presentation of Financial and Other Information—Special Note Regarding Non-GAAP Financial Measures.”

Certain Terms Used in this Annual Report as KPIs to Measure Operating Performance

Assets Under Management, or AUM, refers to the total capital funds managed by us plus the investments directly made by others in the invested companies when offered by us as co-investments. In general lines, our AUM equals the sum of (i) the fair value of the investments of each one of the funds and co-investments; and (ii) unfunded capital, which is the difference between committed and called capital. The Net Asset Value, or “NAV,” equals total assets minus total liabilities. Committed capital corresponds to the amount which investors have agreed to contribute to an investment fund. Called capital corresponds to the portion of the committed capital called by the fund to make investments or cover expenses, such as management fees.

Our AUM measure includes Assets Under Management for which we charge either nominal or zero fees and indicates the size of our business and products. Our definition of AUM is not based on any definition of Assets Under Management contained in our operating agreement or in any of our fund management agreements. Given the differences in the investment strategies and structures among other alternative investment managers, our calculation of AUM may differ from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures presented by other investment managers. We believe this measure is useful to stockholders as it provides additional insight into our capital raising activities and the growth of the Company itself, as it illustrates the evolution of our business in terms of size, assets under management, and products, by allowing us to see the AUM by product, and its ability to generate revenues.

FEAUM means our Fee Earning AUM and is measured as the total capital managed by us on which we derive management fees at a given time. Management fees are based on “net asset value,” “adjusted cost of all unrealized portfolio investments,” “capital commitments,” or “invested capital” plus “reserved capital” (if applicable), each as defined in the applicable management agreement.

Our Net Accrued Performance Fees balance, as of the reporting date, reflects the amount Patria would receive as realized performance fees net of related compensation if all eligible funds were fully divested at their marks/valuations at the same reporting date.

Market Share and Other Information

This annual report contains data related to economic conditions in the market in which we operate. The information contained in this annual report concerning economic conditions is based on publicly available information from third-party sources that we believe to be reasonable. Market data and certain financial services industry forecast data used in this annual report were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information (including information available from the United States Securities and Exchange Commission website) and financial services industry publications. We obtained the information included in this annual report relating to the industry in which we operate, as well as the estimates concerning market shares, through internal research, public information and publications on the financial services industry prepared by official public sources, such as the Brazilian Central Bank, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários), or “CVM,” the Brazilian Institute for Geography and Statistics (Instituto Brasileiro de Geografia e Estatística) the “IBGE,” the Brazilian Power Research Company (Empresa de Pesquisa Energetica), the Brazilian Association of Food Industries (Associação Brasileira da Indústria de Alimentos), the Bank for International Settlements, DERA/SEC, the Center for Advanced Studies on Applied Economics (Centro de Estudos Avançados em Economia Aplicada), or “CEPEA,” the Luiz de Queiroz Agriculture College (Escola Superior de Agricultura Luiz de Queiroz), or “ESALQ,” the Federal Reserve, the International Monetary Fund, the Brazilian Superintendence of Private Insurance (Superintendência de Seguros Privados), or “SUSEP,” the Organization for Economic Co-operation and Development, or “OECD,” the World Bank, as well as private sources, such as the Alternative Credit Council, the Brazilian stock exchange (B3 S.A.—Brasil, Bolsa, Balcão), or “B3,” Bain & Company, Boston Consulting Group, or “BCG,” Brian & Company, CAIA Association, Cambridge Associates, Campden Wealth, the Economist Intelligence Unit, or “EIU,” Ernst & Young, or “EY,” the Financial Times newspaper, Greenhill, Hamilton Lane, ILOS—Logistics and Supply Chain Specialists, KPMG, McKinsey, Morningstar, Morgan Stanley, Oliver Wyman, Platform research, Preqin, PricewaterhouseCoopers, or “PwC,” Reuters, The Bertelsmann Stiftung’s Transformation Index, or “BTI,” the Brazilian Private Equity and Venture Capital Association (Associação Brasileira de Private Equity e Venture Capital), or “ABVCAP,” the Brazilian Financial and Capital Markets Association (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais), or “ANBIMA,” the Brazilian Association of Pension Funds (Associação Brasileira das Entidades Fechadas de Previdência Complementar), or “ABRAPP,” the Brazilian Economic Institute of Fundação Getulio Vargas (Instituto Brasileiro de Economia da Fundação Getulio Vargas), or “FGV/IBRE,” among others.

Market data used throughout this annual report is based on management’s knowledge of the industry and the good faith estimates of management. All of management’s estimates presented are based on industry sources, including analyst reports and management’s knowledge. We also relied, to the extent available, upon management’s review of independent industry surveys and publications prepared by a number of sources and other publicly available information. We are responsible for all of the disclosure in this annual report, and we believe that each of the publications, studies and surveys used throughout this annual report are prepared by reputable sources and are generally reliable, though we have not independently verified market and industry data from third-party sources. None of the publications, reports or other published industry sources referred to in this annual report were commissioned by us or prepared at our request. We have not sought or obtained the consent of any of these sources to include such market data in this annual report. All of the market data used in this annual report involves a number of assumptions and limitations and therefore is inherently uncertain and imprecise, and you are cautioned not to give undue weight to such estimates. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Item 3. Key Information—D. Risk Factors” in this annual report. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties.

Rounding

We have made rounding adjustments to some of the figures included in this annual report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this annual report can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others.

Forward-looking statements appear in a number of places in this annual report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section entitled “Item 3. Key Information—D. Risk Factors” in this annual report. These risks and uncertainties include factors relating to:

•general economic, financial, political, demographic and business conditions in Latin America, as well as any other macroeconomic factors in the countries we may serve in the future and their impact on our business;

•general economic, financial, political, demographic and business conditions in Europe, with respect to the conflict between Russia and Ukraine, the Middle East, with respect to the conflict between Israel and Hamas, and elsewhere where military action occurs, which may result in, among other things, global security issues that may adversely affect international business and economic conditions, and economic sanctions which may impact the global economy;

•fluctuations in exchange rates, interest and inflation in Latin America and any other countries we may serve in the future;

•the impact of the COVID-19 outbreak or other pandemics, epidemics and similar crises, on general economic and business conditions in Brazil, Chile, elsewhere in Latin America and globally, and any restrictive measures imposed by governmental authorities in response thereto;

•our ability to find suitable assets for investment;

•our ability to manage operations at our current size or manage growth effectively;

•our ability to successfully expand in Latin America and other new markets;

•the fact that we will rely on our operating subsidiaries to provide us with distributions to fund our operating activities, which could be limited by law, regulation or otherwise;

•our ability to arrange financing and maintain sufficient levels of cash flow to implement our expansion plan;

•our ability to adapt to technological changes in the financial services sector;

•the availability of qualified personnel and the ability to retain such personnel;

•our capitalization and our funds’ and portfolio companies’ level of indebtedness;

•the interests of our controlling shareholders;

•changes in the laws and regulations applicable to the private investment market in Brazil, Chile and in the other countries we operate;

•climate change and our ability to assess the climate related risks we face, as well as those applicable to the funds under our management;

•macroeconomic and political conditions in Chile, including the potential effects of constitutional reform, disruptions in trade with China or the United States, tax reform and natural disasters such as earthquakes and floods in the region;

•risk associated with our international operations;

•our ability to compete and conduct our business in the future;

•changes in our businesses;

•government interventions, resulting in changes in the economy, taxes, rates or regulatory environment;

•our ability to effectively market and maintain a positive brand image;

•the availability and effective operation of management information systems and other technology;

•our ability to comply with applicable cybersecurity, privacy and data protection laws and regulations;

•changes in client demands and preferences and technological advances, and our ability to innovate to respond to such changes;

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•our ability to attract and maintain the services of our senior management and key employees;

•changes in labor, distribution and other operating costs;

•our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us

•other factors that may affect our financial condition, liquidity and results of operations; and

•other risk factors discussed under “Item 3. Key Information—D. Risk Factors.”

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

A. Directors and Senior Management

Not applicable.

B. Advisers

Not applicable.

C. Auditors

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

A. Offer Statistics

Not applicable.

B. Method and Expected Timetable

Not applicable.

ITEM 3. KEY INFORMATION

A. [Reserved]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Summary of Risk Factors

An investment in our Class A common shares is subject to a number of risks, including risks relating to our business and industry, risks relating to Latin America and risks relating to our Class A common shares. The following list summarizes some, but not all, of these risks. Please read the information in the section entitled “Detailed Risk Factors” for a more thorough description of these and other risks.

Certain Factors Relating to Our Business and Industry

•The global outbreak of COVID-19 caused severe disruptions in Latin America and global economies and as a result, has adversely impacted our performance and results of operations. From 2020 to 2022, the pandemic exacerbated many of the risks described in this annual report. We expect other pandemics, epidemics and similar crises to adversely impact our performance and results of operation causing a slowdown in capital raising, capital deployment and realization activity.

•Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition. We may need to reduce our fixed costs and other expenses in order to maintain profitability, including by cutting back or eliminating the use of certain services or service providers, or terminating the employment of a significant number of our personnel that, in each case, could be important to our business and without which our operating results could be adversely affected.

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•A period of economic slowdown, which may be across one or more industries, sectors or geographies, could contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows. To the extent global markets enter a period of slower growth relative to recent years, such period of economic slowdown (which may be across one or more industries, sectors or geographies), may contribute to poor financial results at our funds’ portfolio companies, which may result in lower investment returns for our funds.

•An increase in interest rates and other changes in the debt financing markets could negatively impact the ability of our funds and their portfolio companies to obtain attractive financing or refinancing and could increase the cost of such financing if it is obtained, which could lead to lower-yielding investments and potentially decrease our net income. If our funds are unable to obtain committed debt financing for potential acquisitions, can only obtain debt financing at an increased interest rate or on unfavorable terms or if the ability to deduct corporate interest expense is substantially limited, our funds may face increased competition from strategic buyers of assets who may have an overall lower cost of capital or the ability to benefit from a higher amount of cost savings following an acquisition, or may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would otherwise be the case, each of which could lead to a decrease in our revenues.

•If we cannot make the necessary investments to keep pace with rapid developments and change in our industry, the use of our services could decline, reducing our revenues. The revenues that we earn are driven in part by the pace at which our funds make investments and the size of those investments, and a decline in the pace or the size of such investments may reduce our revenues. The market environment for private equity transactions, for example, recently has been and continues to be characterized by relatively high prices, which can make the deployment of capital more difficult.

•Our revenue, earnings, net income and cash flow can all vary materially and be volatile from time to time, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause the price of our Class A common shares to decline. Achieving steady growth in net income and cash flow on a quarterly basis may be difficult, which could in turn lead to large adverse movements or general increased volatility in the price of our Class A common shares.

•In addition to traditional physical and transitional risks, climate change can create other risks that are gaining increasing social, regulatory, economic and political relevance globally. Our efforts may not be successful in mitigating the climate-related risks arising from the increased focus, pace, breadth, and depth of regulatory expectations requiring implementation in short time frames across multiple jurisdictions and from changes in public policy, laws, and regulations of climate change and related environmental sustainability matters.

Certain Factors Relating to Latin America

•Governments have a high degree of influence in Brazil, Chile and the other economies in which we operate. The effects of this influence and political and economic conditions in Brazil, Chile and other Latin American countries could harm us and the trading price of our Class A common shares. In addition, recent economic and political instability in Brazil in general has led to a negative perception of the Brazilian economy and higher volatility in the Brazilian securities markets, which also may adversely affect us and our Class A common shares. In Chile, potential constitutional reform in the medium-term or fluctuations in copper prices related to demand in China may also adversely affect us and our Class A common shares.

•Developments and the perceptions of risks in other countries, including other emerging markets, the United States and Europe, may harm the economy of Brazil, Chile and the other countries in which we operate and the trading price of our Class A common shares. Crises and political instability in other emerging market countries, the United States, Europe or other countries, including increased international trade tensions and protectionist policies, could decrease investor demand for securities offered by companies with significant operations in Brazil, Chile and other Latin American countries, such as our Class A common shares.

•The ongoing economic uncertainty and political instability in Brazil, including as a result of ongoing corruption investigations, may harm us and the price of our Class A common shares. Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities offered by companies with significant operations in Brazil.

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•Inflation and government measures to curb inflation may adversely affect the economies and capital markets in some of the countries in which we operate, and as a result, harm our business and the trading price of our Class A common shares. In the past, high levels of inflation have adversely affected the economies and financial markets of some of the countries in which we operate, particularly Argentina and Brazil, and the ability of their governments to create conditions that stimulate or maintain economic growth.

•Exchange rate instability may have adverse effects on the Brazilian economy, our business and the trading price of our Class A common shares. The Brazilian government has implemented various economic plans and used various exchange rate policies, including sudden devaluations, periodic mini-devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating exchange rate system.

Certain Factors Relating to Our Class A Common Shares

•Patria Holdings owns the majority of our issued and outstanding Class B common shares, which represent approximately 83.2% of the voting power of our issued share capital, and controls all matters requiring shareholder approval. Patria Holdings’ ownership and voting power limits your ability to influence corporate matters.

•The dual class structure of our share capital has the effect of concentrating voting control with Patria Holdings; this will limit or preclude your ability to influence corporate matters. Due to the ten-to-one voting ratio between our Class B and Class A common shares, Patria Holdings, the beneficial owner of the majority of our Class B common shares, controls the voting power of our common shares and therefore will be able to control all matters submitted to our shareholders so long as the total voting power of the issued and outstanding Class B common shares is at least 10% of the total voting power of shares outstanding.

•We are a Cayman Islands exempted company with limited liability. The rights of our shareholders, including with respect to fiduciary duties and corporate opportunities, may be different from the rights of shareholders governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and, separately, a duty of care, diligence and skill to the company.

Detailed Risk Factors

Certain Factors Relating to Our Business and Industry

The global outbreak of COVID-19 caused severe disruptions in Latin America and global economies, and as a result, has adversely impacted our performance and results of operations. Other pandemics, epidemics and similar crises may also adversely impact our performance and results of operations.

The World Health Organization designated COVID-19 as a pandemic. Actions from countries in response to the outbreak created severe economic contraction and adversely impacted many industries. While most countries lifted the public health restrictions with a view to reopening their economies, recurring COVID-19 outbreaks could lead to the re-introduction of such restrictions. The vaccination programs have contributed to the containment of the spread of COVID-19. However, as new variants of the COVID-19 virus spread throughout the world, the long-term ramifications of the COVID-19 pandemic are highly uncertain, and it is hard to predict the duration of the pandemic or of other pandemics, epidemics and similar crises and their effects on the global, Brazilian, Chilean and other Latin American economies where we have substantial portion of our operations.

From 2020 to 2022, the COVID-19 pandemic impacted, and may continue to impact, our business, financial condition, results of operations, liquidity and prospects materially. The pandemic has exacerbated many of the risks described in this annual report. We expect other pandemics, epidemics and similar crises to cause a slowdown in capital raising, capital deployment and realization activity. Adverse impacts on our business as a result of the COVID-19 pandemic or other pandemics, epidemics and similar crises include, but are not limited to a move into a system of, at least, partial remote working by our employees, which could introduce operational risks, including heightened cybersecurity risk. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit this scenario. In addition, third-party service providers on whom we have become increasingly reliant for certain aspects of our business, including for the administration of certain funds, as well as for certain information systems and technology could be impacted by failures of, or attacks on, their information systems and technology.

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Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.

Our business is materially affected by financial market and economic conditions and events throughout the world—particularly in Brazil, Chile and other Latin American countries—that are outside our control. We may not be able to or may choose not to manage our exposure to these conditions and/or events. Such conditions and/or events can adversely affect our business in many ways, including by reducing the ability of our funds to raise or deploy capital, reducing the value or performance of the investments made by our funds and making it more difficult to fund opportunities for our funds to exist and realize value from existing investment. This could in turn materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition. In addition, in the face of a difficult market or economic environment, we may need to reduce our fixed costs and other expenses in order to maintain profitability, including by cutting back or eliminating the use of certain services or service providers, or terminating the employment of a significant number of our personnel that, in each case, could be important to our business and without which our operating results could be adversely affected. A failure to manage or reduce our costs and other expenses within a time frame sufficient to match any decrease in profitability would adversely affect our operating performance.

Turmoil in the global financial markets driven by factors such as rising interest rates, inflation, and events such as the recent COVID-19 pandemic can provoke significant volatility of equity and debt securities prices. This can have a material and rapid impact on our mark-to-market valuations, particularly with respect to our public holdings and credit investments. As publicly traded equity securities may represent a proportion of the assets of many of our carry funds, stock market volatility, including a sharp decline in the stock market, such as those experienced since 2020, may adversely affect our results, including our revenues and net income. In addition, our public equity holdings have at times been concentrated in a few positions, thereby making our unrealized mark-to-market valuations particularly sensitive to sharp changes in the price of any of these positions. Further, although the equity markets are not the only means by which we exit investments, should we experience another period of challenging equity markets, our funds may experience increased difficulty in realizing value from investments.

Certain trends and conditions in financial markets may influence our ability to raise new capital which may negatively impact our growth in Assets Under Management and Revenues. For example, the direction of interest rates in individual countries may impact the level of demand from local investors for certain investment products. In periods of higher interest rates in countries such as Brazil and Chile, it may be more difficult for us to raise new capital in strategies targeting local investors. Likewise changes in the actual or target asset allocations of our investors, driven by factors such as a sudden drop to public equity markets or adjustments to risk profiles, could temporarily or permanently impact their ability to make new commitments to our funds.

Geopolitical concerns and other global events, including, without limitation, trade conflict, national and international political circumstances (including wars, terrorist acts or security operations) and pandemics, such as the recent COVID-19 pandemic, or other severe public health events, have contributed and may continue to contribute to volatility in global equity and debt markets. The past few years brought significant geopolitical concerns, including, among other things, continued trade tensions, most notably between China and the U.S., resulting from the implementation of tariffs by the U.S. and retaliatory tariffs by other countries on the U.S., continued tensions with North Korea over its ballistic missile testing and nuclear programs, ongoing hostilities in the Middle East and the possibility of their escalation, political tension and uncertainty in Latin America and continued uncertainty regarding the United Kingdom's ("U.K.") withdrawal from the European Union and the war in Ukraine. Such concerns have contributed and may continue to contribute to volatility in global equity and debt markets.

The outbreak of the novel coronavirus in many countries continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. The global impact of the outbreak has continued to evolve, and, as new variants continue to be identified in additional countries, many countries have reacted by instituting new quarantines and restrictions on travel. Such actions continue to create disruption in global supply chains, and adversely impact a number of industries, such as transportation, hospitality and entertainment. The outbreak could continue to have an adverse impact on economic and market conditions. The rapid development and fluidity of this situation preclude any prediction as to the ultimate adverse impact of the novel coronavirus. Nevertheless, coronavirus presents material uncertainty and risk with respect to our and our funds’ performance and financial results.

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In addition to the factors described above, other factors described herein may affect market, economic and geopolitical conditions, and thereby adversely affect our business include, without limitation:

•economic slowdown in Brazil, Chile and internationally;

•changes in interest rates and/or a lack of availability of credit in Brazil, Chile and internationally;

•commodity price volatility;

•foreign exchange volatility;

•public health crises, such as the COVID-19 pandemic; and

•changes in law and/or regulation, and uncertainty regarding government and regulatory policy.

A period of economic slowdown, which may be across one or more industries, sectors or geographies, could contribute to adverse operating performance for certain of our funds’ investments, which would adversely affect our operating results and cash flows.

We have experienced buoyant markets and positive economic conditions in certain markets. Although such conditions have increasingly made it more difficult and competitive to find suitable capital deployment opportunities for our funds, they may also contribute to positive operating performance at our funds’ portfolio companies. To the extent global markets enter a period of slower growth relative to recent years, such period of economic slowdown (which may be across one or more industries, sectors or geographies), may contribute to poor financial results at our funds’ portfolio companies, which may result in lower investment returns for our funds. For example, periods of economic weakness have in the past and may in the future contribute to a decline in commodity prices and/or volatility in the oil and natural gas markets, each of which would have an adverse effect on our energy investments. The performance of our funds’ portfolio companies would also likely be negatively impacted if pressure on wages and other inputs increasingly pressure profit margins. To the extent the performance of those portfolio companies (as well as valuation multiples) does not improve, our funds may sell those assets at values that are less than we projected or even a loss, thereby significantly affecting those investment funds’ performance. In addition, as the governing agreements of our funds contain only limited requirements regarding diversification of fund investments (by, for example, sector or geographic region), during periods of economic slowdown in certain sectors or regions, the impact on our funds may be exacerbated by concentration of investments in such sector or region. As a result, our ability to raise new funds, as well as our operating results and cash flows could be adversely affected.

In addition, during periods of weakness, our funds’ portfolio companies may also have difficulty expanding their businesses and operations or meeting their debt service obligations or other expenses as they become due, including expenses payable to us. Furthermore, such negative market conditions could potentially result in a portfolio company entering bankruptcy proceedings, thereby potentially resulting in a complete loss of the fund’s investment in such portfolio company and a significant negative impact to the investment fund’s performance and consequently to our operating results and cash flow, as well as to our reputation. In addition, negative market conditions would also increase the risk of default with respect to investments held by our funds that have significant debt investments, such as our credit-focused funds.

The ongoing military conflict between Russia and Ukraine may have repercussions on the world’s geopolitical and economic scenarios.

The ongoing military conflict between Russia and Ukraine has provoked strong reactions from the United States, the U.K., the EU and various other countries around the world, including from the members of the North Atlantic Treaty Organization, or “NATO.” Following Russia’s invasion of Ukraine beginning on February 24, 2022, the United States, the U.K., the EU and other countries announced broad economic sanctions against Russia, including financial measures such as freezing Russia’s central bank assets, limiting its ability to access its dollar reserves, the U.S., the EU and the U.K. have also banned people and businesses from dealings with the Russian central bank, its finance ministry and its wealth funds, selected Russian banks will also be removed from Swift messaging system, which enables the smooth transfer of money across borders. Other sanctions by the U.K. include major Russian banks from the U.K. financial system, stopping them from accessing sterling and clearing payments, preventing major Russian companies and the country from raising finances or borrowing money on the U.K. markets, and establishing limits on deposits Russians can make at U.K. banks. The U.S., the EU and the U.K. adopted personal measures, such as sanctions on individuals with close ties to Mr. Putin, and placed visa restrictions on several oligarchs, as well as their family members and close associates, and froze their assets.

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While the precise effect of the ongoing armed conflict and these sanctions on the Russian and global economies remains uncertain, should tensions continue to increase, markets may face continued volatility as well as economic and security consequences including, but not limited to, supply shortages of different kinds, increases in prices of commodities, including piped gas, oil and agricultural goods, among others. Given that Russia and Ukraine are among the largest grain exporters in the world, impacts on financial markets, inflation, interest rates, unemployment and other matters could affect the global economy that is currently recovering from the effects of the COVID-19 pandemic. Particularly, these effects could result in increased inflation in Brazil and in measures by the Brazilian government to contain inflation, such as raising the basic interest rate (SELIC), which could materially impact the cost of debt and third-party capital for financing and investing activities across industries.

In October 2023, the state of Israel was the target of an attack by the terrorist group Hamas, which led to the death of a number of civilians. As a result, Israel declared war on Hamas and conflicts commenced in Israel and the Gaza strip. Although the conflict is still developing, other world leaders have declared support to Israel, including through the commitment of funds and military personnel and capabilities. It is unclear whether the conflict and its underlying uncertainties will be contained or resolved, and what effects they may have on the global political and economic conditions in the long term.

Other potential consequences include, but are not limited to, growth in the number of popular uprisings in the region, increased political discontent, especially in the regions most affected by the conflict or economic sanctions, an increase in cyberterrorism activities and attacks, exodus to regions close to the areas of conflict and an increase in the number of refugees fleeing across Europe, among other unforeseen social and humanitarian effects.

As a company that operates globally, the adverse effects—global or localized—of the ongoing conflict between Russia and Ukraine, and/or economic sanctions and import and/or export controls to be imposed on the Russian government by the United States, the U.K., the EU or others, could materially affect our operations, expansion plans, and ultimately our results. See “—We are subject to anti-corruption, anti-bribery, anti-money laundering and sanctions laws and regulations in Brazil, Chile, the United States and in the various countries in which we operate. Violations of any such laws or regulations could have a material adverse impact on our reputation and results of operations and financial condition.”

We may, in our sole discretion, decrease the percentage or amount of fees paid by the funds directly or indirectly to us, or even fully waive the payment of such fees for a determined period of time or until the maturity of our funds. If we determine to decrease or waive such fees or otherwise alter our current fee structure, our profit margins and results of operations could be adversely affected.

Our profit margins and net income are dependent in significant part on our ability to maintain current fee levels for the products and services that our asset managers offer, and in particular, on our funds’ receipt of asset and performance-based fees, which may vary substantially from year to year. There has been a trend toward lower fees in many segments of the asset management industry, there is fee pressure in many portions of the active equity and fixed income industry, driven in part by inflows into low-fee passive asset management products, and we face continued market pressure with respect to fee levels for many products. In addition, in the ordinary course of our business, we may, in our sole discretion, decrease the percentage or amount of fees paid by our funds directly or indirectly to us, and may also fully waive the payment of such fees, or limit total expenses, on certain products or services for a determined period of time or until the maturity of our funds, to manage fund expenses, or for other reasons, and to help retain or increase managed assets. Although we have no obligation to modify any of our fees with respect to our existing funds, we have experienced and may continue to experience pressure to do so. More recently, institutional investors have been increasing pressure to reduce management and investment fees charged by external managers, whether through direct reductions, deferrals, rebates or other means. In addition, we may be asked by investors to waive or defer fees for various reasons, including during economic downturns or as a result of poor performance of our funds. No assurances can be given that we will be able to maintain our current fee structure. Competition could lead to our asset managers reducing the fees that they charge their clients for products and services. See “—The asset management business is subject to substantial and increasingly intense competition.” In addition, our asset managers may be required to reduce their fee levels, or restructure the fees they charge, because of, among other things, regulatory initiatives or proceedings that are either industry-wide or specifically targeted, or court decisions. A reduction in the fees that our asset managers charge for their products and services will reduce our revenues and could reduce our net income. These factors also could inhibit our ability to increase fees for certain products.

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Our AUM can generate very different revenues per dollar of managed assets based on factors such as the type of asset managed (alternative assets and equity assets generally produce greater revenues than fixed income assets), the type of client (institutional clients generally pay lower fees than other clients), the type of asset management product or service provided and the fee schedule of the asset manager providing the service. A shift in the mix of our AUM from higher revenue-generating assets to lower revenue-generating assets may result in a decrease in our revenues even if our aggregate level of AUM remains unchanged or increases. Products that use fee structures based on investment performance may also vary significantly from period to period, depending on the investment performance of the particular product. No assurances can be given that our funds will be able to maintain current fee structures or levels. A decrease in our revenues, without a commensurate reduction in expenses, will reduce our net income.

An increase in interest rates and other changes in the debt financing markets could negatively impact the ability of our funds and their portfolio companies to obtain attractive financing or refinancing and could increase the cost of such financing if it is obtained, which could lead to lower-yielding investments and potentially decrease our net income.

Our business and the businesses of the companies in which we invest are materially affected by changes in interest rates and other changes affecting the debt financing markets throughout the world. A period of sharply rising interest rates could create downward pressure on the price of real estate, increase the cost and availability of debt financing for the transactions our funds pursue and decrease the value of fixed-rate debt investments made by our funds, each of which may have an adverse impact on our business. In addition, a significant contraction or weakening in the market for debt financing or other adverse change relating to the terms of debt financing (such as, for example, higher equity requirements and/or more restrictive covenants), particularly in the area of acquisition financings for private equity and real estate transactions, could have a material adverse impact on our business. For example, a portion of the indebtedness used to finance certain fund investments often includes high-yield debt securities issued in the capital markets. Availability of capital from the high-yield debt markets is subject to significant volatility as well as to sharp changes in interest rates, and there may be times when our funds or their portfolio companies might not be able to access those markets at attractive rates, or at all, when completing an investment.

During 2022 and until the date hereof, the global markets have experienced significant increases in interest rates, which impact the interest rates applicable to public and private debt financings. In addition, adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have in the past and may in the future lead to bank failures and market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our ability to obtain financing, and on our current and projected business operations and our financial condition and results of operations. Any instability in the banking and financing markets could limit the availability of funds for financing activities or result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. An increase in interest rates may also adversely impact the profitability and return on projects we consider, and may cause us to decide not to pursue certain business opportunities.

If our funds are unable to obtain committed debt financing for potential acquisitions, can only obtain debt financing at an increased interest rate or on unfavorable terms or if the ability to deduct corporate interest expense is substantially limited, our funds may face increased competition from strategic buyers of assets who may have an overall lower cost of capital or the ability to benefit from a higher amount of cost savings following an acquisition, or may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would otherwise be the case, each of which could lead to a decrease in our revenues. In addition, rising interest rates, coupled with periods of significant equity and credit market volatility may potentially make it more difficult for us to find attractive opportunities for our funds to exit and realize value from their existing investments.

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Our funds’ portfolio companies also regularly utilize the corporate debt markets in order to obtain financing for their operations. To the extent monetary policy, tax or other regulatory changes or difficult credit markets render such financing difficult to obtain, more expensive or otherwise less attractive, this may also negatively impact the financial results of those portfolio companies and, therefore, the investment returns on our funds. In addition, to the extent that market conditions and/or tax or other regulatory changes make it difficult or impossible to refinance debt that is maturing in the near term, some of our funds’ portfolio companies may be unable to repay such debt at maturity and may be forced to sell assets, undergo a recapitalization or seek bankruptcy protection.

If we cannot make the necessary investments to keep pace with rapid developments and change in our industry, the use of our services could decline, reducing our revenues.

The revenues that we earn are driven in part by the pace at which our funds make investments and the size of those investments, and a decline in the pace or the size of such investments may reduce our revenues. Many factors could cause a decline in the pace of investment, including the inability of our investment professionals to identify attractive investment opportunities, increasing competition for such opportunities from international and local competitors, among other potential acquirers, decreased availability of capital on attractive terms and our failure to consummate identified investment opportunities because of business, regulatory or legal complexities or uncertainty and adverse developments in the Latin American or global economy or financial markets. If we cannot make the necessary investments to keep pace with rapid developments and change in our industry, the use of our services could decline, reducing our revenues. In addition, if our funds are unable to deploy capital at a pace that is sufficient to offset the pace of realizations, our fee revenues could decrease.

Our revenue, earnings, net income and cash flow can all vary materially and be volatile from time to time, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause the price of our Class A common shares to decline.

Our revenue, net income and cash flow can all vary materially due to our reliance on performance revenues. We may experience fluctuations in our results, including our revenue and net income, from quarter to quarter due to a number of other factors, including timing of realizations, changes in the valuations of our funds’ investments, changes in the amount of distributions, dividends or interest paid in respect of investments, changes in our operating expenses, the degree to which we encounter competition and general economic and market conditions. Achieving steady growth in net income and cash flow on a quarterly basis may be difficult, which could in turn lead to large adverse movements or general increased volatility in the price of our Class A common shares. We also do not provide any guidance regarding our expected quarterly and annual operating results. The lack of guidance may affect the expectations of public market analysts and could cause increased volatility in our Class A common shares price.

It takes a substantial period of time to identify attractive investment opportunities, to raise all the funds needed to make an investment and then to realize the cash value (or other proceeds) of an investment through a sale, public offering, recapitalization or other exit. Even if an investment proves to be profitable, it may be a number of years before any profits can be realized in cash (or other proceeds). We cannot predict when, or if, any realization of investments will occur, and therefore our cash flows from performance allocations may be difficult to predict.

The mark-to-market valuations of investments made by our funds are subject to volatility driven by economic and market conditions. Economic and market conditions may also negatively impact our realization opportunities. The valuations of and realization opportunities for investments made by our funds could also be subject to high volatility as a result of uncertainty regarding governmental policy with respect to, among other things, tax, financial services regulation, international trade, immigration, healthcare, labor, infrastructure and energy.

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Adverse economic and market conditions may adversely affect the amount of cash generated by our businesses, and in turn, our ability to pay dividends to our shareholders.

If the global economy and conditions in the financing markets worsen, our fund investment performance could suffer, resulting in, for example, the payment of less or no performance allocations to us. Poor investment performance could lead to a loss of assets under management and a decline in revenues. This could materially and adversely affect the amount of cash we have on hand, including for, among other purposes, the payment of dividends to our shareholders. Having less cash on hand could in turn require us to rely on other sources of cash (such as the capital markets, which may not be available to us on acceptable terms) for the above purposes. Furthermore, during adverse economic and market conditions, our funds or their portfolio companies might not be able to renew all or part of their indebtedness under existing financing arrangements, or find alternate financing on commercially reasonable terms. As a result, their uses of cash may exceed their sources of cash, thereby potentially affecting their liquidity position and ability to pay dividends, which could adversely affect our results of operations and in turn, our ability to pay dividends to our shareholders.

We depend on our key senior managing directors, and the loss of their services would have a material adverse effect on our business, results of operations and financial condition.

We depend on the efforts, skill, reputations and business contacts of our key senior managing directors, the information and deal flow they generate during the normal course of their activities and the synergies among the diverse fields of expertise and knowledge held by our professionals. Accordingly, our success will depend on the continued service of these individuals, who are not obligated to remain employed with us. Some key senior managing directors have left the firm in the past and others may do so in the future, and we cannot predict the impact that the departure of any key senior managing director will have on our ability to achieve our investment objectives. For example, the governing agreements of many of our funds, such as limited partnership agreements and private placement memoranda, generally provide investors with the ability to terminate the investment period in the event that certain “key persons” in the fund do not provide the specified time commitment to the fund or our firm ceases to control the general partner. The loss of the services of any key senior managing directors could have a material adverse effect on our revenues, net income and cash flows and could harm our ability to maintain or grow assets under management in existing funds or raise additional funds in the future. We have historically relied in part on the interests of these professionals in the investment funds’ performance fees and incentive fees to discourage them from leaving the firm. The negative impact on net accrued performance that occurred as a result of the COVID-19 pandemic on portfolio companies and the depreciation of the real against the U.S. dollar could have a negative impact on employee motivation and retention. Therefore, to the extent our investment funds perform poorly, thereby reducing the potential for performance fees and incentive fees, their interests in performance fees and incentive fees become less valuable to them and become less effective as incentives for them to continue to be employed at Patria.

Our senior managing directors and other key personnel possess substantial experience and expertise and have strong business relationships with investors in our funds, clients and other members of the business community. As a result, the loss of these personnel could jeopardize our relationships with investors in our funds, our clients and members of the business community and result in the reduction of assets under management or fewer investment opportunities.

The asset management business is subject to substantial and increasingly intense competition.

The asset management business is increasingly subject to intense competition from a variety of local and international players, based on a variety of factors, including investment performance, the quality of service provided to clients, investor liquidity and willingness to invest, fund terms (including fees), brand recognition and business reputation. Furthermore, client attrition could cause our revenues to decline and the degradation of the quality of the products and services we offer, including support services, could adversely impact our ability to attract and retain clients and partners. Our asset management business competes with a number of private equity funds, specialized investment funds, hedge funds, funds of hedge funds and other sponsors’ managing pools of capital, as well as corporate buyers, traditional asset managers, commercial banks, investment banks and other financial institutions (including sovereign wealth funds), and we expect that competition will continue to increase. For example, certain traditional asset managers have developed their own private equity platforms and are marketing other asset allocation strategies as alternatives to fund investments. Additionally, developments in financial technology, or fintech, such as distributed ledger technology, or blockchain, have the potential to disrupt the financial industry and change the way financial institutions, as well as asset managers, do business. A number of factors serve to increase our competitive risks:

•a number of our competitors in some of our businesses may have greater financial, technical, marketing and other resources and more personnel than we do;

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•some of our funds may not perform as well as competitors’ funds or other available investment products;

•several of our competitors have significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many alternative investment strategies seek to exploit;

•some of our competitors, particularly strategic competitors, may have a lower cost of capital, which may be exacerbated to the extent by any changes to applicable tax laws that may come into effect (including with respect to the deductibility of interest expense);

•some of our competitors may have access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities;

•some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we can and/or bear less compliance expense than we do;

•some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors;

•some of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them to consider a wider variety of investments and to bid more aggressively than us for investments that we want to make;

•some of our competitors may be more successful than us in the development and implementation of new technology to address investor demand for product and strategy innovation;

•there are relatively few barriers to entry impeding new alternative asset fund management firms, and the successful efforts of new entrants into our various businesses, including former “star” portfolio managers at large diversified financial institutions as well as such institutions themselves, is expected to continue to result in increased competition;

•some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do;

•our competitors that are corporate buyers may be able to achieve synergistic cost savings in respect of an investment, which may provide them with a competitive advantage in bidding for an investment;

•some investors may prefer to invest with an investment manager that is not publicly traded or is smaller with only one or two investment products that it manages; and

•other industry participants will from time to time seek to recruit our investment professionals and other employees away from us.

We may lose investment opportunities in the future if we do not match investment prices, structures and terms offered by competitors. Alternatively, we may experience decreased rates of return and increased risks of loss if we match investment prices, structures and terms offered by competitors. Moreover, if we are forced to compete with other alternative asset managers on the basis of price, we may not be able to maintain our current fund fee terms. There is a risk that fund fees in the alternative investment management industry will decline, without regard to the historical performance of a manager. Fund fees income reductions on existing or future funds, without corresponding decreases in our cost structure, would adversely affect our revenues and profitability. In addition, the attractiveness of our investment funds relative to investments in other investment products could decrease depending on economic conditions. This competitive pressure could adversely affect our ability to make successful investments and limit our ability to raise future investment funds, either of which would adversely impact our business, revenue, results of operations and cash flow.

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Our organizational documents do not limit our ability to enter into new lines of businesses, and we may expand into new investment strategies, geographic markets and businesses, each of which may result in additional risks and uncertainties in our businesses.

Our plan, to the extent that market conditions permit, is to continue to grow our investment businesses and expand into new investment strategies, geographic markets and businesses. Our organizational documents do not limit us to investment management businesses. Accordingly, we have pursued and may continue to pursue growth through acquisitions of asset managers and other investment management companies, acquisitions of critical business partners, or other strategic initiatives. To the extent we make strategic investments or acquisitions, undertake other strategic initiatives or enter into a new line of business, we will face numerous risks and uncertainties, including risks associated with (1) the required investment of capital and other resources, (2) the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, (3) the diversion of management’s attention from our core businesses, (4) assumption of liabilities in any acquired business, (5) the disruption of our ongoing businesses, (6) the increasing demands on or issues related to the combining or integrating operational and management systems and controls, (7) compliance with additional regulatory requirements and (8) the broadening of our geographic footprint, including the risks associated with conducting operations in several jurisdictions.

Entry into certain lines of business may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation, including tax and regulatory risk. For example, we have increasingly undertaken business initiatives to offer credit funds, constructivist funds (investment in public equity applying the private equity modus operandi) funds and publicly-traded real estate funds (known in Brazil as a Fundo de Investimento Imobiliário, or “FII”) and to increase the number and type of investment products we offer to family offices and high net worth individuals. These activities have and will continue to impose additional compliance burdens on us and could also subject us to enhanced regulatory scrutiny and expose us to greater reputation and litigation risks. In addition, if a new business generates insufficient revenues or if we are unable to efficiently manage our expanded operations or to successfully overcome the challenges we may face in expanding into new geographic regions in Latin America, our results of operations will be adversely affected. Our strategic initiatives may include, among other things, initiatives seeking to expand our and our portfolio companies’ management capabilities, which require a robust legal and compliance framework, and entry into joint ventures, which may require us to be dependent on, and subject us to liability, losses or reputational damage relating to, systems, controls and personnel that are not under our control.

We may not be successful in expanding our operations in Latin America, which could adversely affect our business, results of operations and financial condition.

We currently operate and may operate in the future in regions and countries in Latin America where we have little or no experience, and we may not be able to expand our investment activities in these markets successfully. As we expand our operations into Latin American markets, including new geographies, we may have difficulty adapting to unknown circumstances and conditions. We may seek to expand our operations in Latin America, including new geographies, through acquisitions of asset managers and other investment management companies in the region, which may be financed using a portion of the proceeds of our initial public offering or through other sources of financing. In order to remain competitive, we must be proactive and prepared to implement necessary resources when growth opportunities present themselves, whether as a result of a business acquisition or rapidly increasing business activities in particular markets or regions. Local regulatory environments may vary widely in terms of scope, adequacy and sophistication. We may also encounter other risks of doing business in Latin America, including: (1) difficulties and costs associated with complying with a variety of complex domestic and foreign laws, regulations and treaties; (2) changes in legislative or regulatory requirements; (3) price and currency exchange controls; (4) political instability, including nationalization and expropriation; (5) trade restrictions, including timing delays associated with customs procedures, tariffs and import or export licensing requirements; (6) taxes; and (7) difficulties in enforcing our intellectual property rights. We cannot assure you that the political, fiscal or legal regimes in the countries in which we operate or expect to operate, will not increase our compliance costs or otherwise adversely affect our geographic expansion efforts, which may harm our results of operations or financial conditions. See “—We expect to continue to make investments in companies that are based in Latin America, which may expose us to additional risks not typically associated with investing in companies that are based in the United States.” No assurance can be provided that we will be able to obtain capital resources to fund our expansion strategy on acceptable terms or at all. If we are not successful in implementing or funding our expansion strategy, our business, financial results and the market price for our Class A common shares may be adversely affected.

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If we are unable to consummate or successfully integrate additional development opportunities, acquisitions or joint ventures, we may not be able to implement our growth strategy successfully.

Our growth strategy is based, in part, on the selective development or acquisition of asset management portfolios, businesses or other businesses complementary to our business where we think we can add substantial value or generate substantial returns in Brazil, Chile and in certain countries of Latin America. The success of this strategy will depend on, among other things: (1) the availability of suitable opportunities, (2) the level of competition from other companies that may have greater financial resources, (3) our ability to value potential development or acquisition opportunities accurately and negotiate acceptable terms for those opportunities, (4) our ability to obtain requisite approvals and licenses from the relevant governmental authorities and to comply with applicable laws and regulations without incurring undue costs and delays and (5) our ability to identify and enter into mutually beneficial relationships with venture partners. Mor