Patria Investments Limited (PAX) Earnings

Management highlights

### Overall Financial Performance - Fee-earning AUM reached $48.9 billion in Q2 2026, up 7% sequentially QoQ and 32% YoY, driven by organic growth, three completed acquisitions, and positive investment performance across most segments. - Fee-related earnings (FRE) totaled $57.1 million in Q2, up 13% sequentially and 24% YoY. YTD FRE hit $108 million, putting the firm on track to meet full-year guidance. - Distributable earnings per share was $0.32, up 19% sequentially and 31% YoY. - Total fee revenue for Q2 was $105.8 million, up 30% YoY and 14% sequentially. ### Investment Performance - Over 85% of fee-earning AUM (excluding SMAs and third-party managed funds) is in funds performing at or above their inception-to-date benchmarks. - Credit flagship strategy outperforms its benchmark across all time horizons (YTD, 1-year, 3-year, 5-year) with 360 bps of cumulative outperformance since inception. - The most recent three infrastructure fund vintages outperform their benchmark by more than 750 bps. - Management has repositioned the private equity franchise, with team and strategy changes made in recent years that have resulted in solid performance for newer vintages. ### Fundraising - Q2 2026 fundraising totaled $2.3 billion, bringing YTD total to $4.5 billion. The firm is on track to exceed the full-year 2026 target of $7 billion and potentially beat the 2025 all-time record of $7.7 billion, and is on pace to hit the 2025-2027 three-year target of $21 billion. - A key highlight is a $1 billion multi-asset separately managed account (SMA) commitment from an existing sovereign wealth fund client, expanding the long-term strategic partnership and adding $1 billion to pending fee-earning AUM. - Pending fee-earning AUM grew 20% QoQ to $4 billion, providing strong visibility into future revenue growth. - The firm has expanded from 2 flagship strategies at IPO to 10, creating a more diversified and resilient earnings base: ~90% of fee-earning AUM is in vehicles with limited/no redemption rights, and ~22% ($11 billion) is permanent capital. ### Acquisitions and Integration - Three acquisitions have closed in 2026 YTD: Solis (CLO business in Brazil), WP Global Partners (US lower middle-market GPMS), and a small Mexican real estate investment trust. - All acquisitions are progressing through integration as planned, with WP already fully integrated into the New York office and contributing to investment activity. ### Balance Sheet and Capital Management - Completed a $350 million bond offering early in Q2, with proceeds used to repay the outstanding credit facility, leaving remaining cash for M&A payments, share repurchases, and growth initiatives. - Repurchased 1.5 million shares via a second TRS facility for $18.3 million. The firm is refinancing and expanding its first TRS facility to 2.8 million shares (from 1.5 million), totaling ~$31 million, maturing Q3 2027. - The firm maintains a conservative balance sheet with ample liquidity to meet all future obligations, pay dividends, reinvest in the business, and repurchase shares. Long-term target share count is 158-160 million, with Q2 share count at 159.5 million, in line with target.

Guidance

- Full-year 2026 FRE guidance is maintained at $225 million to $245 million, and management remains confident the firm will hit this target. 2027 FRE guidance of $260 million to $290 million ($1.60 to $1.80 per share) is also maintained. - Full-year 2026 FRE margin is expected to come modestly below the original 58% to 60% target, due to acquisitions that closed earlier in the year than originally planned, which currently have lower operating margins. The 58% to 60% FRE margin target for 2027 and beyond is maintained, as margins are expected to rise quarter-over-quarter through the second half of 2026 as integration and cost synergies are realized. - Full-year 2026 fundraising guidance of $7 billion is expected to be exceeded, with management noting a clear pathway to beat the 2025 record of $7.7 billion, and hitting the 2025-2027 three-year target of $21 billion remains on track. - Transaction costs are expected to decline to ~$7 million to $8 million per quarter for the second half of 2026, with a significant further decline in 2027 and beyond, as large M&A activity is completed and future activity will be small-scale and selective. - No changes to guidance were made as a result of the private equity Fund 4 and 5 markdowns, as these funds were already not contributing to current earnings and were not included in guidance projections.

Segment performance

1. Credit: Raised $650 million in Q2 2026, bringing year-to-date fundraising to ~$1.6 billion. The acquired Solis CLO business has raised over $500 million in 2026 YTD, and the flagship LATAM high-yield strategy holds $5.5 billion in fee-earning AUM with 11% annualized net USD returns since inception. Solis contributed $0.4 million in structuring fees in Q2, with expected average incremental structuring fees of $2 million per quarter going forward. Incentive fees from credit contributed to Q2 2026 total incentive fees of $2.5 million. Accounts for a significant share of the 70% of fee-earning AUM that charges fees based on market value of traded securities. 2. Global Private Market Solutions (GPMS): SOF5 (fifth secondary fund) completed its final close at $676 million, exceeding the original $500 million target by 35% and contributing $1.5 million in catch-up fee revenue in Q2. The WP Global Partners acquisition closed April 1, 2026, has been successfully integrated, and expands the lower middle-market private equity solutions platform in the US. SOFT3 and SOFT4 outperform their benchmarks by 650 bps and 560 bps, respectively. GPMS is one of the top performing fundraising segments in 2026 YTD. 3. Infrastructure: The new core infrastructure strategy targeting a first closing in late 2026, with a pipeline of mature contracted US dollar revenue assets in Chile, Colombia, and Brazil. A significant portion of the new $1 billion multi-asset SMA mandate is expected to be allocated to infrastructure. Infrastructure added $5 million in annual recurring net revenue in H1 2026 from SMA and co-investment deployments, with approximately $1 billion of pending fee-earning AUM visible for future deployment. 4. Private Equity: Older active vintages (Funds 4 and 5, totaling <$2 billion AUM / <$1.3 billion fee-earning AUM) were marked down in Q2 due to prolonged macro shocks after COVID and slow divestment progress. Fund 4 has not generated management fees for 2 years, and neither fund has accrued performance fees since Q4 2025, so markdowns do not impact current earnings. Newer vintages (Funds 6 and 7) have portfolio companies with little to no leverage, growing average EBITDA by 10.5% over the past two years. Fund 7 still has significant dry powder for 2-3 additional $100 million ticket deals. 5. Real Estate: Contributed to Q2 2026 incentive fees (alongside Solis) for a total Q2 incentive fee of $2.5 million. Is one of the core segments supporting diversified fundraising, with growing investor interest in exchanging shares for Brazilian REIT quotas.

Risks & headwinds

- Older vintages of private equity (Funds 4 and 5) have underperformed due to prolonged macroeconomic adversity after COVID and sector-specific shocks, leading to markdowns in Q2 2026, though these do not impact current earnings. - Transaction costs are elevated in the near term due to the accelerated pace of large acquisitions in the first half of 2026, suppressing full-year 2026 FRE margins. - Newly acquired businesses currently operate at lower margins than PATREIA's core business, creating near-term margin pressure before integration synergies are realized. - Structuring fees from the Solis business are irregular in timing and size, making them difficult to forecast accurately quarter to quarter. - Contribution from the TRIA trading platform is volatile quarter to quarter, making net financial expense difficult to predict.

Analyst Q&A

• Q: Management fee rates as a percent of AUM have declined slightly. Is there further pressure on fees, what is driving the change, and when will FRE margins return to the 58-60% target? /

  A: There is no product-specific fee pressure; the slight decline in blended management fee rates is solely due to acquisition mix. Acquisitions completed earlier in 2026 than planned have lower standalone margins and lower fee rates than core PATREIA businesses, dragging down the blended average. Margins will rise quarter-over-quarter in H2 2026 as cost synergies from integration are realized, and will return to the 58-60% target by 2027 as expected, with no structural issues impacting margin long-term.

• Q: Where is the increased fundraising coming from geographically and by client type, and what is the M&A agenda for the next 12 months after the H1 acquisition surge? /

  A: The strongest fundraising growth is in Asia (for large SMA mandates) and Latin America (for core strategy investments), with North America returning to strong growth after years of underperformance, driven by the expanded product menu aligned with North American investor demand. One-third to one-half of fundraising comes from repeat clients, with new clients making up the balance amid strong overall growth. Going forward, M&A will be very small-scale and selective, as PATREIA has already built out all core asset classes it targeted; future growth will be overwhelmingly organic, with future acquisitions focused on small acqui-hires and niche expansion rather than large scale deals. Transaction costs will decline significantly after 2026.

• Q: Shareholders' equity declined by $40 million in Q2, far more than can be explained by net income and dividends. What drove this drop? /

  A: The additional $25 million drop in equity is due to the accounting requirement to gross up the obligation for the put option on the remaining 49% minority interest in the recently acquired Solis business. This is a one-time accounting entry upon closing the acquisition and does not reflect an operating loss or cash outflow.

• Q: What are the fee margins on multi-asset SMAs, and does the private equity markdown change 2026/2027 FRE guidance? /

  A: Multi-asset SMAs typically charge a 1% management fee and 10% performance fee on average, which is slightly lower than the 1.5-2% management / 15-20% performance fee structure for drawdown funds. The markdown only impacted one underperforming company in an older vintage, and these older vintages have not contributed to performance fees since the end of 2025. No changes to guidance are needed, as the markdown impact was already accounted for and newer private equity vintages are performing well with no leverage. Strong performance from newer high-growth private equity strategies (venture and growth) remains on track.