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October 28, 2020
Alexandre Teixeira de Assump o Saigh
Chief Executive Officer
Patria Investments Limited
18 Forum Lane, 3rd floor,
Camana Bay, PO Box 757, KY1-9006
Grand Cayman, Cayman Islands
Re: Patria Investments
Limited
Draft Registration
Statement on Form F-1
Submitted October
1, 2020
CIK No. 0001825570
Dear Mr. Saigh:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Registration Statement on Form F-1 filed October 1, 2020
Summary, page 3
1. We note your references
to CAGR in several sections of the prospectus. Because CAGR
only represents two
discrete snapshots in time, but does not show trends or events during
the period presented,
please balance your disclosure by including the annual rate for each
of the periods
presented, or include a reference to where in the prospectus that
presentation can be
found. Also, please revise the disclosure regarding CAGR to include
balancing language
stating that there is no guarantee that you will achieve comparable
CAGR metrics in the
future.
Alexandre Teixeira de Assump o Saigh
FirstName LastNameAlexandre Teixeira de Assump o Saigh
Patria Investments Limited
Comapany
October 28,NamePatria
2020 Investments Limited
October
Page 2 28, 2020 Page 2
FirstName LastName
2. We note references to third-party information and industry research
throughout the
prospectus, beginning with your reference to the Brazilian Financial
and Capital Markets
Association on page 5. Please advise us as to whether any of these
reports were
commissioned or prepared for this filing. If any of these reports were
prepared
specifically for this filing, please file a consent acknowledging the
use of the information
in the prospectus.
3. We note references in the Summary and throughout the filing to the
company as an
industry leader. Please explain the basis for the assertion that the
company is an industry
leader.
Market Opportunity, page 5
4. Please revise to update to a more recent practicable date some of the
data and reports
discussed in this section, or advise. For instance we note a 2017
report discussed, data
from 2018 and the growth of global AUM of secondary products from 2015
- 2018.
5. Please revise the discussion of private versus capital investments at
the top of page 6 to
provide context for the information and to explain how it pertains to
the company's
investment.
Risk Factors, page 21
6. Please expand the risk factor on page 29 that addresses expansion into
additional Latin
American geographical regions to explain whether any portion of the
proceeds will be
used to fund this expansion. If so, please discuss the risks
associated with not being able
to fund these goals and amend the Use of Proceeds section accordingly.
7. Refer to the second risk factor on page 39. Please explain your
statement that "we will be
subject to a number of actual and potential conflicts of interest and
subject to greater
regulatory oversight and more legal and contractual restrictions than
that to which we
would otherwise be subject if we had just one line of business." It is
unclear why
additional lines of asset management business would result in
conflicts of interest. Please
clarify this for investors.
If we were deemed an "investment company", page 51
8. Please provide us with an analysis as to why you are not an investment
company as
defined in the Investment Company Act of 1940 and any exemption you
rely upon.
Please also expand your risk factor disclosure to explain why you do
not think you are
Investment Company so that investors can assess the risk.
Special Note Regarding Non-GAAP Financial Measures
Fee Related Earnings , page 69
9. You disclose that fee related earnings (FRE) is useful to investors
because it provides
additional insight into the operating profitability of your business
and your ability to cover
Alexandre Teixeira de Assump o Saigh
Patria Investments Limited
October 28, 2020
Page 3
direct base compensation and operating expenses from total fee
revenues. Please tell us,
and disclose the following, related to FRE:
which compensation components are revenue based, and the related
revenue; and
why incentive fees are included in FRE when you disclose on page
89 that these fees
were exceptionally high in 2019, you had no incentive fees in
2018, and these fees
will fluctuate in future periods
Please also enhance the compensation and cost of services rendered
disclosures to specify
fixed and variable compensation costs.
Use of Proceeds, page 75
10. We note your disclosure that you intend to use the proceeds to fund
capital commitments,
expansion through acquisitions, opening new offices, and for general
corporate purposes.
Please revise to indicate the anticipated amount of proceeds for each
of these uses. Please
also disclose any known acquisitions, or advise.
Key Business Metrics, page 82
11. Please disaggregate assets under management (AUM), fee-earning AUM,
performance
revenue eligible AUM or PREAUM by product (i.e. private equity,
infrastructure) in your
next amendment, consistent with your disaggregated product portfolio
disclosures on
pages 135.
12. You disclose that performance and incentive fees are primarily
generated when the return
of the funds surpass the performance hurdle set out in the related
charters. You also
disclose that performance revenue eligible AUM or PREAUM represents
the total capital
at fair value, on which performance revenues could be earned if
certain hurdles are met.
Disclose and clarify if PREAUM represents the total capital at fair
value on which
incentive fees can be earned if certain hurdles are met.
13. We note your disclosure on page 42 that, "your investment funds
generally invest their
assets in the equity, debt, loans or other securities of issuers
located in Latin America,
including...Argentina." Given the current hyperinflationary economy in
Argentina, please
tell us and revise your disclosures in your next amendment to disclose
your investments in
Argentina, as well as any material losses, defaults or collection
issues associated with
these investments.
Management's Discussion and Analysis of Financial Condition and Results of
Operations , page
82
14. Please revise to disclose whether there is any specific length of time
that client funds have
FirstName LastNameAlexandre Teixeira de Assump o Saigh
to be invested or whether they can manage their investments on an
ongoing basis, making
Comapany NamePatria
investment Investments
changes, Limited
withdrawals, or deposits at any point in time.
October 28, 2020 Page 3
FirstName LastName
Alexandre Teixeira de Assump o Saigh
FirstName LastNameAlexandre Teixeira de Assump o Saigh
Patria Investments Limited
Comapany
October 28,NamePatria
2020 Investments Limited
October
Page 4 28, 2020 Page 4
FirstName LastName
Our ability to successfully deploy capital, page 85
15. We note your disclosure that you have overseen the deployment of
capital raised by your
products, IPOs, and debt raised by underlying companies, for instance.
Please revise to
briefly explain how these categories relate to your assets under
management.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Year Ended December 31, 2019, Compared to the Year Ended December 31, 2018
Net Revenues from services, page 88
16. Please disaggregate net revenue from services by product (i.e. Private
Equity,
Infrastructure, and Emerging Products).
Industry, page 96
17. Please revise the disclosure surrounding the circle graph on page 97
to clarify what
portion of your investors are outside of Latin America, and to explain
the relevance of the
market for other parts of the world to your business and to investors.
Competition , page 152
18. Please revise this section to include a brief description of the
various markets in which
you compete, the types of competition that you face, and the basis on
which the company
competes.
Principal and Selling Stockholder, page 160
19. Please disclose in a footnote the natural person or persons that have
voting and dispositive
control of Patria Holdings Ltd. and Blackstone PAT Holdings IV LLC.
20. Please briefly describe the transactions from which the selling
shareholders initially
received their shares and the exemption relied upon from registration.
Note 26. Financial Instruments
(d) Risk Management
(i) Credit Risk, page F-34
21. You disclose that you have a low exposure to credit risk and that as
of December 31,
2019, most of your accounts receivable are expected to be received in
the first semester of
2020. Based on the aging disclosed, it appears that $15,110 million of
total accounts
receivable of $27,117 million is overdue 360 days. Additionally, we
note that your
deferred taxes related to management fee write-offs increased from
$954 at December 31,
2018 to $1,442 at December 31, 2019. Please tell us and disclose the
following related to
accounts receivable:
clarify how you determined exposure to credit risk is low;
Alexandre Teixeira de Assump o Saigh
Patria Investments Limited
October 28, 2020
Page 5
clarify why the majority of your accounts receivable appear
past due;
provide a rollforward of accounts receivable in the periods
presented; and
provide a rollforward of any allowance for accounts receivable
in the periods
presented.
22. Please reconcile the following disclosures related to accounts
receivable which appear to
be inconsistent: disclosure on page F-36 that, "the amounts receivable
as at December 31,
2019 are expected to be received mostly in the first semester of
2020," with the disclosure
on page F-20 that, "non-current balances are related to management
fees receivable in
annual equal installments between 2020 and 2022."
General
23. Please provide us with supplemental copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications. Please contact Julia Griffith at 202-551-3267 to
discuss how to submit
the materials, if any, to us for our review.
24. Please provide us mockups of any pages that include any additional
pictures or graphics to
be presented, including any accompanying captions. Please keep in
mind, in scheduling
your printing and distribution of the preliminary prospectus, that we
may have comments
after our review of these materials.
You may contact Michelle Miller at 202-551-3368 or David Irving at
202-551-3321 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Julia Griffith at 202-551-3267 or Susan Block at 202-551-3210 with any
other questions.
Sincerely,
FirstName LastNameAlexandre Teixeira de Assump o Saigh
Comapany NamePatria Investments Limited
Division of Corporation
Finance
October 28, 2020 Page 5 Office of Finance
FirstName LastName