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UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2021

Commission File Number: 001-39911

 

Patria Investments Limited 

(Exact name of registrant as specified in its charter)

 

18 Forum Lane, 3rd floor, 

Camana Bay, PO Box 757, KY-9006 

Grand Cayman, Cayman Islands 

+1 345 640 4900 

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F

X 

   Form 40-F  

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes     No

X 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Yes     No

X 

 

 

TABLE OF CONTENTS

 

EXHIBIT  
99.1 Patria Investments Limited – Unaudited interim condensed consolidated financial statements for the six-month period ended June 30, 2021.

 

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    Patria Investments Limited
     
     
      By: /s/ Marco Nicola D’Ippolito  
        Name: Marco Nicola D’Ippolito
        Title: Chief Financial Officer
             

Date: August 19, 2021

 

 

 

 

 

 

 

 

Exhibit 99.1

Patria Investments Limited

 

Condensed Consolidated Statement of Financial Position 

As of June 30, 2021 and December 31, 2020 

(In thousands of United States dollars – US$)

 

      Unaudited   
Assets  Note  6/30/2021  12/31/2020
          
Cash and cash equivalents  6   25,194    14,052 
Short term investments  10(a)   286,347    9,929 
Accounts receivable  7   111,005    24,022 
Project advances  8   1,867    1,277 
Other assets  9   2,952    3,703 
Recoverable taxes      865    692 
              
Current assets      428,230    53,675 
              
Accounts receivable  7   21,993    21,993 
Deferred tax assets  16   3,107    2,338 
Project advances  8   556    495 
Other assets  9   649    540 
Long term investments  10(b)   8,566    1,986 
Property and equipment  11   4,013    3,819 
Intangible assets  12   19,335    22,357 
              
Non-current assets      58,219    53,528 
              
              
              
              
Total assets      486,449    107,203 

      Unaudited   
Liabilities and equity  Note  6/30/2021  12/31/2020
          
Personnel and related taxes  13   15,389    12,802 
Taxes payable  14   438    1,070 
Dividends payable  25(c)   -    23,259 
Other liabilities  15   6,145    6,913 
Carried interest allocation  20(a)   30,380    - 
Current liabilities      52,352    44,044 
              
Personnel liabilities  13   1,751    1,527 
Deferred tax liabilities  16   154    185 
Other liabilities  15   2,074    2,374 
              
Non-current liabilities       3,979    4,086 
              
Capital  25(a)   14    1 
Additional paid-in capital  25(b)   300,372    1,557 
Other reserves  25(d)   610    - 
Retained earnings      135,316    62,001 
Cumulative translation adjustment  25(f)   (6,194)   (6,244)
Equity attributable to the owners of the Parent      430,118    57,315 
Non-controlling interests  25(g)   -    1,758 
              
Equity      430,118    59,073 
              
Total liabilities and equity      486,449    107,203 

          

The accompanying notes are integral parts of these condensed consolidated interim financial statements.

 

 

 

Patria Investments Limited 

 

Condensed Consolidated Income Statement

For the six and three month periods ended June 30, 2021 and 2020 

(In thousands of United States dollars - US$, except earnings per share)

 

      Unaudited three-month periods ended June 30,  Unaudited six-month periods ended June 30,
   Note  2021  2020  2021  2020
                
Revenue from services  19   118,997    24,603    149,610    50,119 
                        
Cost of services rendered      (43,147)   (7,631)   (55,132)   (16,094)
Personnel expenses  20   (11,259)   (6,161)   (21,741)   (13,149)
Amortization of intangible assets  20   (1,508)   (1,470)   (3,011)   (2,945)
Carried interest allocation  20(a)   (30,380)   -    (30,380)   - 
                        
Gross profit      75,850    16,972    94,478    34,025 
                        
Operating income and expenses      (3,784)   (3,117)   (8,567)   (5,753)
Administrative expenses  21   (3,795)   (3,111)   (6,215)   (5,865)
Other income/(expenses)  22   11    (6)   (2,352)   112 
                        
Operating income before net financial income/(expense)      72,066    13,855    85,911    28,272 
                        
Net financial income/(expense)  23   156    (130)   (102)   389 
                        
Income before income tax      72,222    13,725    85,809    28,661 
                        
Income tax  24   1,178    (535)   653    (3,102)
                        
Net income for the period      73,400    13,190    86,462    25,559 
Attributable to:                       
Owners of the Parent      73,401    13,862    87,747    26,022 
Non-controlling interests      (1)   (672)   (1,285)   (463)
                        
Basic and diluted earnings per thousand shares  25(e)   0.53913    0.11848    0.65519    0.22241 

 

The accompanying notes are integral parts of these condensed consolidated interim financial statements.

 

 

 

Patria Investments Limited

 

Condensed Consolidated Statement of Comprehensive Income 

For the six and three month periods ended June 30, 2021 and 2020

(In thousands of United States dollars - US$)

 

   Unaudited three-month
periods ended June 30,		  Unaudited six-month
periods ended June 30,
   2021  2020  2021  2020
             
Net income for the period   73,400    13,190    86,462    25,559 
Items that will be reclassified to the income statement:                    
Currency translation adjustment   (171)   (1,904)   50    (2,184)
Currency translation adjustment - non controlling interests   780    1,242    (88)   (2,407)
                     
Total comprehensive income   74,009    12,528    86,424    20,968 
Attributable to:                    
Owners of the parent   73,230    11,958    87,797    23,838 
Non-controlling interests   779    570    (1,373)   (2,870)
                     
                     

 

The accompanying notes are integral parts of these condensed consolidated interim financial statements.

 

 

 

Patria Investments Limited

 

Condensed Consolidated Statement of Changes in Equity

For the six-month periods ended June 30, 2021 and 2020

(In thousands of United States dollars - US$)

 

      Attributable to owners      
   Notes  Capital  Additional paid-in capital 

Other reserves

 

  Retained earnings  Cumulative translation adjustment  Equity  attributable to owners of the Parent  Non-controlling interests  Equity
                            
Balance at December 31, 2019      1    1,557    -    85,483    (5,884)   81,157    7,590    88,747 
                                            
Cumulative translation adjustment  25(f)   -    -    -    -    (2,184)   (2,184)   (2,407)   (4,591)
Net income for the period      -    -    -    26,022    -    26,022    (463)   25,559 
Dividends distributed  25(c)   -    -    -    (35,929)   -    (35,929)   (3,552)   (39,481)
Balance at June 30, 2020 (unaudited)      1    1,557    -    75,576    (8,068)   69,066    1,168    70,234 
                                            
                                            
Balance at December 31, 2020      1    1,557    -    62,001    (6,244)   57,315    1,758    59,073 
                                            
Cumulative translation adjustment  25(f)   -    -    -    -    50    50    (88)   (38)
Share Split      11    (11)   -    -    -    -    -    - 
Capital issuance      2    325,507    -    -    -    325,509    -    325,509 
Transaction costs      -    (27,066)   -    -    -    (27,066)   -    (27,066)
Net income for the period      -    -    -    87,747    -    87,747    (1,285)   86,462 
Dividends declared  25(c)   -    -    -    (14,432)   -    (14,432)   -    (14,432)
Grant of share based incentive plan  25(d)   -    -    610    -    -    610    -    610 
Changes in interest of subsidiaries  5(o)   -    385    -    -    -    385    (385)   - 
                                            
Balance at June 30, 2021(unaudited)      14    300,372    610    135,316    (6,194)   430,118    -    430,118 

 

 

The accompanying notes are integral parts of these condensed consolidated interim financial statements.

 

 

 

Patria Investments Limited

 

Condensed Consolidated Statement of Cash Flows

For the six-month periods ended June 30, 2021 and 2020

(In thousands of United States dollars - US$)

 

      Unaudited six-month
periods ended June 30,
   Note  2021  2020
Cash flows from operating activities             
Net income for the period      86,462    25,559 
Adjustments to net income for the year             
 Depreciation expense  11/21   846    881 
 Amortization expense  12/20/21   3,087    2,954 
 Net financial investment income  23   (71)   (284)
 Valuation adjustment of long term investments  23   415    (57)
 Interest expense on lease liabilities  23   498    436 
 IPO expenses accrual  22   1,693    - 
 Deferred income taxes expense  24   (700)   2,650 
 Current income taxes expense  24   47    452 
 Share based incentive plan  25(d)   610    - 
 Other non-cash effects      (776)   5 
              
Changes in operating assets and liabilities             
Accounts receivable      (87,125)   (7,332)
Projects advances      (617)   3,849 
Recoverable taxes      (172)   (76)
Personnel and related taxes      2,580    (4,482)
Carried interest allocation  20(a)   30,380    - 
Taxes payable and deferred taxes      (419)   (479)
Payment of income taxes      (236)   (1,225)
Other assets and liabilities      (3,623)   (4,304)
Payment of placement agent fees  15   (1,200)   - 
Net cash provided by operating activities      31,679    18,547 
              
Cash flows from investing activities             
Decrease (increase) in short term investments  10(a)   (276,280)   21,013 
Decrease (increase) in long term investments  10(b)   209    1,115 
Acquisition of investments in long term investments  10(b)   (6,891)   - 
Acquisition of property and equipment  11   (118)   (58)
Acquisition of software and computer programs  12   (96)   (200)
Net cash provided by investing activities      (283,176)   21,870 
              
Cash flows from financing activities             
IPO proceeds      302,722    - 
IPO transaction costs      (1,737)   - 
Dividends paid  25(c)   (37,691)   (39,481)
Lease payments  15   (393)   (454)
Interest paid on lease liabilities  15   (486)   (436)
Net cash used in financing activities      262,415    (40,371)
              
Foreign exchange variation on cash and cash equivalents in foreign currencies      224    (419)
              
Increase/(decrease) in cash and cash equivalents      11,142    (373)
              
Cash and cash equivalents at the beginning of the period  6   14,052    4,120 
Cash and cash equivalents at the end of the period  6   25,194    3,747 
Increase/(decrease) in cash and cash equivalents      11,142    (373)
              
Non-cash operating and investing activity             
Transfer of long term investment with a corresponding decrease in liability (note 10)      300    - 
Addition  of right of use assets (note 11)      793    200 
IPO transaction costs decrease in assets with corresponding decrease in equity      624    - 
IPO transaction costs accrual increase in liability with corresponding decrease in equity      1,915    - 
Changes in interest of subsidiaries (note 5(o))      385    - 

 

The accompanying notes are integral parts of these condensed consolidated interim financial statements.

 

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

1General information

 

Patria Investments Limited (the "Company") was established on July 6, 2007 in Bermuda and transferred its registration and domicile by way of registration by continuation to the Cayman Islands on October 12, 2020. The Company also transferred its headquarters from Bermuda to the Cayman Islands on October 12, 2020. Since then, the Company's obligations, whether legal, regulatory, or financial, will be in accordance with the applicable laws and regulations of the Cayman Islands.

 

On January 21, 2021, the Company completed its initial public offering ("IPO") registration, offering 34,613,647 Class A common shares, being 19,147,500 new shares by the Company (primary offering), and the remaining 15,466,147 shares by a selling shareholder (secondary offering). The shares offered and sold in the IPO were registered under the Securities Act of 1933, as amended, according to the Company's Registration Statement on Form F-1 (Registration N° 333-251823). The common shares began trading on the Nasdaq Global Select Market ("NASDAQ-GS") on January 22, 2021, under the symbol "PAX".

 

The Company is a public holding company controlled by Patria Holdings Ltd., which held 60% of the Company's common shares as of June 30, 2021, controlled by a group of individuals.

 

The Company and its subsidiaries (collectively, the "Group") are a private markets investment firm focused on investing in Latin America. Since 1994 the Group has expanded from its initial flagship private equity funds to other investment products, such as its flagship infrastructure development funds (its private equity approach applied to infrastructure assets), its co-investments funds (focused on successful companies from its flagship funds), its constructivist equity funds (applying its private equity approach to listed companies), as well as its real estate and credit funds. The Group operates around the globe, including investment offices in Montevideo (Uruguay), São Paulo (Brazil), Bogota (Colombia), and Santiago (Chile), as well as client-coverage offices in New York and Los Angeles (United States), London (United Kingdom), Dubai (UAE), and Hong Kong (China) to cover the investor base of its underlying investment products, in addition to its corporate business and management office in Grand Cayman (Cayman Islands).

 

The Group's main executive office is located at 18 Forum Lane, Grand Cayman, Cayman Islands.

 

The COVID-19 pandemic developed rapidly in 2020, with a significant number of cases. Measures taken by various governments to contain the virus have affected economic activity. The Company has taken several measures to monitor and mitigate the effects of COVID-19, such as safety and health measures for its people (such as social distancing and working from home) and securing the supply of essential materials to maintain its offices.

 

The impact on business and results has not been significant and based on the experience to date, the Company expects this to remain the case. The Company will continue to follow the various government policies and advices. In parallel, the Company will do the utmost to continue to operate in the best and safest way possible without jeopardizing the health of its people.

 

Management has considered the consequences of COVID-19 and other events and conditions. It has determined that they do not create a material uncertainty that casts significant doubt upon the entity's ability to continue as a going concern.

 

8

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

These unaudited condensed consolidated interim financial statements for the six-month periods ended June 30, 2021 and 2020 include the condensed financial information regarding the Company and its subsidiaries, as described in note 5.

 

2Presentation of financial statements

 

a.Statement of compliance

 

The unaudited condensed consolidated interim financial statements were prepared in accordance with IAS 34 - Interim Financial Reporting issued by the International Accounting Standards Board ("IASB"). These condensed consolidated interim financial statements should be read together with the annual consolidated financial statements as of and for the years ended December 31, 2020, 2019 and 2018.

 

The Board of Directors approved the unaudited condensed consolidated interim financial statements on August 12, 2021.

 

b.Functional and presentation currency

 

The unaudited condensed consolidated interim financial statements are presented in United States dollar (USD). The effects of the translation from the functional currency into the presentation currency are recognized in equity under the caption "Cumulative Translation Adjustment".

 

See note 4 of the Company's annual consolidated financial statements for the year ended December 31, 2020, for details around the remeasurement of the balances and transactions in foreign currencies to the functional currency of the Company and its subsidiaries, and note 5 for the functional currency determined for each entity.

 

c.Use of estimates and judgments

 

The preparation of these unaudited condensed consolidated interim financial statements is in accordance with IAS 34 - Interim Financial Reporting, which requires management to make estimates that affect the amounts reported in the condensed consolidated interim financial statements and accompanying notes. Management believes that estimates utilized to prepare the condensed consolidated interim financial statements are prudent and reasonable. Actual results could differ from those estimates and such differences could be material.

 

The most significant accounting estimates and corresponding assumptions are the following:

 

(i)employee profit-sharing, long term benefits, and bonus accruals, where management considered the expected results and targets to estimate the accruals;

(ii)the useful lives of tangible and intangible assets and impairment analysis of such assets;

(iii)the assessment of the recoverability of deferred tax assets, where management considered cash flow projections, income and expenses growth rates and timing for utilization of the net operating losses and temporary differences, as well as any cap for compensation;

(iv)the assessment and measurement of risk regarding provisions and contingencies, where management, supported by the opinion of its legal counsel, determined the likelihood of losses and the probable cash outcome expected for each claim;

 

9

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(v)revenue recognition, where management determined the multiple elements in the contracts and the criteria and timing for revenue recognition;

(vi)the fair value of financial instruments, where management determined the methodology and the inputs to the model, including observable and unobservable inputs.

 

3Segment information

 

The Group operates through a single reportable operating segment, in accordance with IFRS 8, reflecting how the Group's chief operating decision maker allocates resources and assesses performance under the Group's global strategy, which includes integrated product lines.

 

4Significant accounting policies

 

These unaudited condensed consolidated interim financial statements with the exception of the disclosures under note 25(d), were prepared in accordance with policies, accounting practices, and methods for determining estimates consistent to the accounting policies and estimates adopted in the preparation of the annual consolidated financial statements for the years ended December 31, 2020, 2019 and 2018. The classification, recognition, measurement of the share incentive plan introduced during the period ended June 30, 2021 is determined in accordance with requirements of IFRS 2 share based payment as disclosed under note 25(d).

 

5Consolidation and subsidiaries

 

The unaudited condensed consolidated interim financial statements include the entities listed below, which are the Company's direct or indirect subsidiaries:

 

     

Functional

Currency

 

Equity interest

(direct or indirect) (%)

        

June

30, 2021

  December 31, 2020
Subsidiaries            
Patria Finance Ltd.  (a)  USD   100.00%   100.00%
Patria Brazilian Private Equity III, Ltd.  (b)  USD   100.00%   100.00%
PBPE General Partner IV, Ltd.  (c)  USD   100.00%   100.00%
PBPE General Partner V, Ltd.  (d)  USD   100.00%   100.00%
Patria Brazilian Private Equity General Partner VI, Ltd.  (e)  USD   100.00%   100.00%
Patria Brazil Real Estate Fund General Partner II, Ltd.  (f)  USD   100.00%   100.00%
Patria Brazil Real Estate Fund General Partner III Ltd.  (g)  USD   100.00%   100.00%
Patria Brazil Retail Property Fund General Partner, Ltd.  (h)  USD   100.00%   100.00%
Patria Investments UK Ltd.  (i)  GBP   100.00%   100.00%
Patria Investments US LLC  (j)  USD   100.00%   100.00%
Patria Investments Colombia S.A.S.  (k)  COP   100.00%   100.00%
Infrastructure II GP Ltd.  (l)  USD   100.00%   100.00%
Infrastructure III SLP  Ltd.  (m)  USD   100.00%   100.00%
Patria Infrastructure General Partner IV Ltd.  (n)  USD   100.00%   100.00%
Pátria Investimentos Ltda.  (o)  BRL   100.00%   51.00%
Pátria Companhia Securitizadora de Créditos Imobiliários  (p)  BRL   100.00%   51.00%
Patria Investments Latam S.A.  (q)  USD   100.00%   - 
Patria Investments Uruguay S.A.  (r)  USD   100.00%   - 
Patria Investments Cayman Ltd.  (s)  USD   100.00%   - 
Patria Investments Chile SpA  (t)  CLP   100.00%   100.00%
Patria Investments Hong Kong, Ltd.  (u)  HKD   100.00%   100.00%
Patria Farmland General Partner, Ltd.  (v)  USD   100.00%   100.00%
Platam Investments Brazil Ltda.  (w)  BRL   100.00%   100.00%
Patria Constructivist Equity Fund General Partner, Ltd.  (x)  USD   100.00%   100.00%
Patria Constructivist Equity Fund General Partner II, Ltd.  (y)  USD   100.00%   100.00%
PI General Partner V Ltd.  (aa)  USD   100.00%   100.00%

 

"USD" United States dollars, "BRL" Brazilian Real, "GBP" Pound sterling, "CLP" Chilean peso, "COP" Colombian peso, "HKD" Hong Kong dollar

 

 

10

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(a)Patria Finance Ltd.: headquartered in the Cayman Islands, Patria Finance Ltd. is responsible for managing funds and providing financial advisory services to clients around the world. It also provides accounting and finance support to the Group.

 

(b)Patria Brazilian Private Equity III, Ltd.: headquartered in the Cayman Islands, and serves as manager of offshore funds.

 

(c)PBPE General Partner IV, Ltd. (formerly Patria Brazilian Private Equity General Partner IV, Ltd.): a subsidiary of Patria Finance Ltd, headquartered in the Cayman Islands, and serves as manager of offshore funds.

 

(d)PBPE General Partner V, Ltd. (formerly Patria Brazilian Private Equity General Partner V, Ltd.): a subsidiary of Patria Finance Ltd, headquartered in the Cayman Islands and serves as manager of offshore funds.

 

(e)Patria Brazilian Private Equity General Partner VI, Ltd.: headquartered in the Cayman Islands, and serves as manager of offshore funds.

 

(f)Patria Brazil Real Estate Fund General Partner II Ltd.: headquartered in the Cayman Islands, serves as manager of offshore funds.

 

(g)Patria Brazil Real Estate Fund General Partner III Ltd.: headquartered in the Cayman Islands, serves as manager of offshore funds.

 

(h)Patria Brazil Retail Property Fund General Partner, Ltd.: headquartered in the Cayman Islands, and serves as manager of offshore funds.

 

(i)Patria Investments UK Ltd.: headquartered in London (UK), and is engaged in the development of investor relations.

 

(j)Patria Investments US LLC: a subsidiary of Patria Investments UK Ltd. headquartered in Delaware (USA) and is engaged in the development of investor relations and marketing services and certain back-office services.

 

(k)Patria Investments Colombia S.A.S.: headquartered in Bogotá (Colombia) and is engaged in advisory services related to asset management of investment funds and investments in private equity and infrastructure areas and investor relations and marketing services.

 

11

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(l)Infrastructure GP II, Ltd. (formerly Patria Infrastructure General Partner II, Ltd.): headquartered in the Cayman Islands and serves as manager of offshore funds. Infrastructure GP II, Ltd. was the major owner of Pátria Infraestrutura Gestão de Recursos Ltda. ("PINFRA") until September 28, 2020 when it transferred its shares in PINFRA to Pátria Investimentos Ltda.

 

(m)Infrastructure III SLP, Ltd. (formerly Patria Infrastructure General Partner III, Ltd.): headquartered in the Cayman Islands, serves as manager of offshore funds and provides financial advisory services. After a corporate restructuring completed in 2016, this entity became the successor entity to the P2 Group, a fund manager acquired in 2015.

 

(n)Patria Infrastructure General Partner IV, Ltd.: headquartered in the Cayman Islands, serves as manager of offshore funds.

 

(o)Pátria Investimentos Ltda. ("PILTDA"): headquartered in Brazil and engaged in asset management, fund administration, consulting, and planning services related to asset management and the organization and performance of transactions in the commercial and corporate sectors. On September 28, 2020, PILTDA became the owner of Pátria Infraestrutura Gestão de Recursos Ltda ("PINFRA") after receiving shares from Infrastructure GP II, Ltd. On September 30, 2020, PINFRA was merged into PILTDA to simplify the structure and consolidate the Group's investments while optimizing costs and providing operational synergies. The Company had entered into a purchase agreement among Blackstone, Patria Holdings Ltd, and PILTDA, as part of a corporate reorganization pursuant to which the 19.6% non-controlling interest in PILTDA held by Blackstone and the 29.4% non-controlling interest in PILTDA held by a related party of Patria Holdings Ltd (the "Related Party") were reorganized as follows: (i) the direct interest held by Blackstone in PILTDA was contributed to the Company in exchange for three Class A common shares issued to Blackstone; and (ii) the direct interest held by the Related Party was redeemed in its entirety at par value for a promissory note, and Patria Holdings Ltd contributed the promissory note to the Company, in consideration for which the Company issued seven Class B common shares. This transaction was completed on June 1, 2021.

 

(p)Pátria Companhia Securitizadora de Créditos Imobiliários: a subsidiary of Pátria Investimentos Ltda headquartered in Brazil, engaged in the issuance and placement of Real Estate Receivables Certificates backed by real estate receivables and the trading and services related to the securitization of these receivables.

 

(q)Patria Investments Latam S.A. (formerly Zedra S.A.): acquired in September 2020* and changed its name from Zedra S.A. to Patria Investments Latam S.A. in July 2021. It is a holding company headquartered in Uruguay.

 

(r)Patria Investments Uruguay S.A.: acquired by Patria Investments Latam S.A. (formerly Zedra S.A.) in September 2020* and changed its name from Improdem S.A. to Patria Investments Uruguay S.A. in November 2020. It is a company headquartered in Uruguay providing advisory services related to asset management of investment funds and investor relations and marketing services.

 

(s)Patria Investments Cayman Ltd.: created on October 19, 2020, headquartered in the Cayman Islands, serves as a holding company for the Group investing activities.

 

 

12

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(t)Patria Investments Chile SpA: headquartered in Chile, engaged in advisory services related to asset management of investment funds, investments in infrastructure, and investor relations and marketing services.

 

(u)Patria Investments Hong Kong, Ltd.: a subsidiary of Patria Investments UK Ltd. headquartered in Hong Kong, engaged in developing investor relations and marketing services.

 

(v)Patria Farmland General Partner, Ltd.: a subsidiary of Patria Finance Ltd, headquartered in the Cayman Islands, serves as manager of offshore funds.

 

(w)Platam Investments Brazil Ltda. a subsidiary of Patria Investments Latam S.A. (formerly Zedra S.A.) headquartered in Brazil that provides advisory services.

 

(x)Patria Constructivist Equity Fund General Partner, Ltd. a subsidiary of Patria Finance Ltd, headquartered in the Cayman Islands, serves as manager of offshore funds.

 

(y)Patria Constructivist Equity Fund General Partner II, Ltd. a subsidiary of Patria Finance Ltd, headquartered in the Cayman Islands, serves as manager of offshore funds.

 

(aa)PI General Partner V Ltd. a subsidiary of Patria Finance Ltd, headquartered in the Cayman Islands, serves as manager of offshore funds.

 

(*) These companies do not have any operations and/or material assets and liabilities, and the acquisition amounts were not material. Therefore, the disclosure requirements were not applicable (IFRS 3 – Business Combinations).

 

6Cash and cash equivalents

 

  

June 30,

2021

  December 31, 2020
Bank accounts   25,194    14,052 

 

7Accounts receivable

 

  

June 30,  

2021 

  December 31, 2020
Current (a)   111,005    24,022 
Non-current (b)   21,993    21,993 
           
Accounts receivable   132,998    46,015 

 

Amounts receivable from customers relate to management and performance fees, including reimbursement of expenses from investment funds and financial advisory services. The group has not recorded write-offs or allowances for uncollectible accounts receivable for the periods presented in these unaudited condensed consolidated interim financial statements.

 

13

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(a)An amount of US$ 86.8 million is reflected under current balances, related to performance fees receivable from PBPE Fund III (Ontario), L.P. (formerly Patria Brazilian Private Equity Fund III, L.P.) determined in accordance with the funds offering documents, based on the expected value for which it is highly probable that a significant reversal will not subsequently occur. As of June 30, 2021 the expected value is the value of the underlying investments of the fund.

(b)Non-current balances are related to management fees receivable from fund Private Equity IV in equal annual installments on December 31, 2022, and 2023. No interest is charged and the impact of the adjustment to amortized cost using the effective interest rate method at the date of initial recognition is not material.

 

8Project advances

 

  

June 30,

2021

  December 31, 2020
Current   1,867    1,277 
Non-current   556    495 
           
Project advances   2,423    1,772 

 

Project advances represent recoverable advances relating to the development process of new funds or to the capture of non-capitalized funds. In both cases, the amounts are subject to reimbursement as provided for in the respective agreements between the Group and investors.

 

The balance recorded as non-current assets corresponds to projects related to funds still in the structuring stage.

 

9Other assets

 

  

June 30,

2021

  December 31, 2020
Advances to suppliers (a)   162    1,583 
Advances to employees   466    283 
Prepaid expenses (b)   1,605    966 
Officer's fund (c)   -    47 
IPO costs (d)   -    624 
Other current assets   719    200 
           
Other current assets   2,952    3,703 
           
Prepaid expenses (b)   387    398 
Deposit/guarantee on lease agreements   262    142 
           
Other non-current assets   649    540 

 

(a)Advances to suppliers are advances paid for services not yet received. The Company reviews such amounts and records the portion related to the period in the income statement on an accrual basis. The balances as of December 31, 2020 were related mainly to attorney fees for services to a fund and were reimbursed after year-end.

 

(b)Prepaid expenses are composed mainly of IT services paid in advance, such as renewal of licenses, technical support, and guarantees. These services refer to future periods; therefore, these items will be recorded as administrative expenses.

 

14

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(c)The balance of US$ 0 as of June 30, 2021 and US$ 47 as of December 31, 2020 represents the amount receivable from the Officer's fund related to reimbursable costs incurred by the Group. For more details, see note 27.

 

(d)IPO Costs related to the Company's Initial Public Offering (IPO), which was concluded on January 21, 2021. The December 31, 2020 amount refers to the costs allocated to the primary offering and has been transferred to equity as capitalization costs upon IPO's conclusion.

 

10Investments

 

a.Short-term investments

 

  

June 30,

2021

  December 31, 2020
Securities (a)   286,347    9,929 
           
Short-term investments   286,347    9,929 

 

(a)Short-term investments are liquid investment funds, with portfolios made of term deposits, equities, government bonds, and other short-term liquid securities. The June 30, 2021 balance includes a portion of the Company's IPO proceeds.

 

b.Long-term investments

 

  

June 30,

2021

  December 31, 2020
       
Patria Brazil Real Estate Fund II, L.P. (a)   879    1,146 
PBPE Fund III (Ontario), L.P. (a) (formerly Patria Brazilian Private Equity Fund III, L.P.)   73    369 
Patria Infra Energia Core Feeder FIP   528    - 
Patria Infra Energia Core Feeder II FIP   112    - 
Patria Infra Energia Core FIP EM Infraestrutura   6,321    - 
PBPE Fund IV (Ontario), L.P. (formerly Patria Brazilian Private Equity Fund IV, L.P.)   111    102 
PBPE Fund V (Ontario), L.P. (formerly Patria Brazilian Private Equity Fund V, L.P.)   178    89 
Patria Brazil Real Estate Fund III, L.P.   32    32 
Patria Private Equity Fund VI, L.P.   200    130 
PI Fund II (Ontario), L.P. (formerly Patria Infrastructure Fund II, L.P.)   42    44 
PI Fund III (Ontario), L.P. (formerly Patria Infrastructure Fund III, L.P.)   74    61 
Patria Infrastructure Fund IV, L.P.   3    1 
Patria lnfrastructure II LAP Co-lnvest UK, L.P.   3    3 
Patria Alphaville Co-Invest, L.P.   3    4 
Patria Farmland Fund I, L.P.   1    1 
Other investments   6    4 
           
Long-term investments   8,566    1,986 

15

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

These investments in securities will be maintained until the funds' respective termination dates and are measured at fair value, according to the methodology described in note 27(c). The Group's ownership interest on these investments range from 0.00006% to 0.19960%.

 

(a)These investments are subject to a participating share held by a related party in Patria Brazilian Private Equity III, Ltd., and Patria Brazil Real Estate Fund General Partner II, Ltd. that gives it the right to all returns and the related asset. Consequently, the Group has recorded a liability in the same amount (see notes 15b and 27c).

 

11Property and equipment

 

Changes in cost  Six-month period ended June 30, 2021
   Opening balance  Additions  Disposals  Transfer  CTA(*)  Closing balance
                   
Furniture and fixtures   726    -    -    -    21    747 
Building improvements   2,997    14    (21)   -    77    3,067 
Electronic equipment   184    -    -    (3)   6    187 
IT equipment   1,784    104    -    3    33    1,924 
Telecommunication equipment   281    -    -    -    10    291 
Right-of-use assets (a)   4,183    890    (97)   -    152    5,128 
                               
Total - Cost of fixed assets   10,155    1,008    (118)   -    299    11,344 

 

Changes in accumulated depreciation  Six-month period ended June 30, 2021
   Opening balance  Additions  Disposals  Transfer  CTA(*)  Closing balance
                   
(-) Furniture and fixtures   (422)   (35)   -    -    (16)   (473)
(-) Building improvements   (2,070)   (137)   14    -    (52)   (2,245)
(-) Electronic equipment   (149)   (7)   -    -    (5)   (161)
(-) IT equipment   (1,445)   (88)   -    -    (27)   (1,560)
(-)Telecommunication equipment   (262)   (3)   -    -    (10)   (275)
(-) Right-of-use assets (a)   (1,988)   (576)   58    -    (111)   (2,617)
                               
Total - Accumulated depreciation   (6,336)   (846)   72    -    (221)   (7,331)
Property and equipment, net   3,819    162    (46)   -    78    4,013 

 

(*) CTA – Cumulative translation adjustment

 

16

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

Changes in cost  Six-month period ended June 30, 2020
   Opening balance  Additions  Disposals  Transfer  CTA(*)  Closing balance
                   
Furniture and fixtures   883    12    -    -    (206)   689 
Building improvements   3,617    18    -    -    (807)   2,828 
Electronic equipment   222    3    -    -    (60)   165 
IT equipment   2,043    25    -    -    (459)   1,609 
Telecommunication equipment   352    -    -    -    (88)   264 
Right-of-use assets (a)   5,168    200    -    -    (1,392)   3,976 
                               
Total - Cost of fixed assets   12,285    258    -    -    (3,012)   9,531 

 

Changes in accumulated depreciation  Six-month period ended June 30, 2020
   Opening balance  Additions  Disposals  Transfer  CTA(*)  Closing balance
                   
(-) Furniture and fixtures   (451)   (36)   -    -    118    (369)
(-) Building improvements   (2,045)   (215)   -    -    494    (1,766)
(-) Electronic equipment   (176)   (7)   -    -    48    (135)
(-) IT equipment   (1,558)   (91)   -    -    375    (1,274)
(-)Telecommunication equipment   (335)   (2)   -    -    90    (247)
(-) Right-of-use assets (a)   (1,256)   (530)   -    -    378    (1,408)
                               
Total - Accumulated depreciation   (5,821)   (881)   -    -    1,503    (5,199)
Property and equipment, net   6,464    (623)   -    -    (1,509)   4,332 

 

(*) CTA – Cumulative translation adjustment

 

As of June 30, 2021 and 2020 there was no indication that any of these assets were impaired. Depreciation expenses in the amount of US$ 846 and US$ 881 were recorded as Administrative expenses For the six-month periods ended June 30, 2021 and 2020, respectively.

 

(a)The Group is the lessee in lease agreements for which the underlying assets are the office spaces located in São Paulo, Grand Cayman, and Montevideo. Depreciation expense relating to these assets was recognized in the amount of US$ 576 and US$ 530 For the six-month periods ended on June 30, 2021 and 2020, respectively.

 

17

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

12Intangible assets

 

Changes in costs  Six-month period ended June 30, 2021
   Opening              Closing
   balance  Additions  Disposals  Transfer  CTA(*)  balance
                   
Placement agents (a)   36,896    -    -    -    52    36,948 
Contractual rights (b)   44,156    -    -    -    -    44,156 
Software   1,313    96    (465)   422    41    1,407 
                               
Total - Cost of intangible assets   82,365    96    (465)   422    93    82,511 

 

Changes in accumulated amortization  Six-month period ended June 30, 2021
   Opening              Closing
   balance  Additions  Disposals  Transfer  CTA(*)  Balance
                   
(-) Placement agents (a)   (28,915)   (1,197)   -    -    (39)   (30,151)
(-) Contractual rights (b)   (30,428)   (1,812)   -    -    -    (32,240)
(-) Software   (665)   (78)   407    (422)   (27)   (785)
                               
Total - Accumulated amortization   (60,008)   (3,087)   407    (422)   (66)   (63,176)
                               
Intangible assets, net   22,357    (2,991)   (58)   -    27    19,335 

 

Changes in costs  Six-month period ended June 30, 2020
   Opening              Closing
   balance  Additions  Disposals  Transfer  CTA(*)  balance
                   
Placement agents (a)   35,284    -    -    -    (452)   34,832 
Contractual rights (b)   44,156    -    -    -    -    44,156 
Software   887    200    -    -    (217)   870 
                               
Total - Cost of intangible assets   80,327    200    -    -    (669)   79,858 
                               

 

Changes in accumulated amortization  Six-month period ended June 30, 2020
   Opening              Closing
   Balance  Additions  Disposals  Transfer  CTA(*)  Balance
                   
(-) Placement agents (a)   (27,387)   (1,097)   -    -    846    (27,638)
(-) Contractual rights (b)   (26,805)   (1,828)   -    -    -    (28,633)
(-) Software   (678)   (29)   -    (65)   235    (537)
                               
Total - Accumulated amortization   (54,870)   (2,954)   -    (65)   1,081    (56,808)
                               
Intangible assets, net   25,457    (2,754)   -    (65)   412    23,050 

 

(*) CTA – Cumulative translation adjustment

 

As of June 30, 2021 and 2020, there was no impairment indication for any of these assets.

 

18

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(a)Placement agents refer to amounts capitalized relating to agreements with investment placement agents relating to funds raised from foreign investors in offshore funds. These assets are amortized based on the estimated duration of the respective investment funds. In case of an early liquidation of an investment fund, the amortization period is also adjusted, or if there is an indication of impairment, an impairment assessment is performed and, if necessary, an impairment loss is recognized. The remaining balance, as of June 30, 2021, is expected to be amortized as shown below:

 

  2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Total

Placement agent fees 

 957 1,416 1,216 1,110 993 200 199 181 175 175 175 6,797

 

 

(b)Contractual rights refer to the management of the Infrastructure GP II, Ltd. and Infrastructure III SLP, Ltd. funds. These rights were recorded as a result of the acquisition of control of P2 Brasil Private Infrastructure General Partner II Ltd. and P2 Brasil Holding Ltd. on September 25, 2015 from Promon International Inc. The purchase agreement includes contingent consideration that will be paid to Promon International Inc. based on the performance of P2 Brasil Private Infrastructure General Partner II Ltd., expected to be settled in 2022 and only if the performance is achieved. As of the date of these financial statements, no amounts were due relating to these agreements. These intangible assets were recorded based on their respective fair values using estimates of expected future earnings on the acquisition date.

 

(c)Following is the breakdown of the total intangible assets by region:

 

  

June 30,

2021

  December 31, 2020
       
Brazil   751    815 
United Kingdom   10    - 
Cayman Islands   18,574    21,542 
Balance   19,335    22,357 

 

13Personnel and related taxes

 

  

June 30,

2021

  December 31, 2020
Personnel and taxes   219    222 
Withholding income tax on payroll   92    150 
Accrued vacation and related charges   1,117    920 
Employee profit sharing (a)   12,373    10,239 
Officers’ fund (b)   1,588    1,271 
           
Personnel and related taxes current   15,389    12,802 
           
Officers’ fund (b)   1,751    1,527 
Personnel non-current liabilities   1,751    1,527 

19

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(a)The Group recognizes a provision for payment of profit sharing to employees, according to conditions approved by management, which is recorded as personnel expenses in the income statement. The balance on December 31, 2020 of US$ 10,239 was fully paid on February 26th, 2021.

 

(b)Represents the amount of accrued employee benefits related to the Officers' fund, as described in note 27(b).

 

14Taxes payable

 

  

June 30,

2021

  December 31, 2020
Taxes on revenues   317    902 
Income taxes   82    119 
Other taxes payable   39    49 
Taxes payable   438    1,070 

 

15Other liabilities

 

  

June 30,

2021

  December 31, 2020
Placement agent fees   50    1,250 
Suppliers   4,365    3,039 
Advances from customers   603    1,688 
Occupancy costs   160    146 
Lease liabilities (a)   950    780 
Other current liabilities   17    10 
Other current liabilities   6,145    6,913 
           
Investment fund participating share in Patria Brazilian Private Equity III, Ltd., and Patria Brazil Real Estate Fund General Partner II, Ltd. (b)   952    1,515 
Lease liabilities (a)   1,070    802 
Other non-current liabilities   52    57 
Other non-current liabilities   2,074    2,374 

 

(a)The Group is the lessee in lease agreements for which the underlying assets are the office spaces located in São Paulo, Grand Cayman, and Montevideo. The amount of interest on lease liabilities recognized in the six-month periods ended on June 30, 2021 and 2020 were US$ 498 and US$ 436, respectively, which was disclosed in note 23. The principal amount paid in the six-month periods ended on June 30, 2021 and 2020 on leases were US$ 393 and US$ 454, respectively.

 

(b)This liability refers to a participating share held by a related party in Patria Brazilian Private Equity III, Ltd., and Patria Brazil Real Estate Fund General Partner II, Ltd. that gives it the right to all returns and the related investment in PBPE Fund III (Ontario), L.P. and Patria Brazil Real Estate Fund II, L.P. For more details, see note 10(b).

 

20

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

16Deferred taxes

 

  

June 30,

2021

  December 31, 2020
       
Deferred tax assets on the provision for employee profit sharing (a)   2,699    1,945 
Deferred tax assets on management fee provision(a)   406    391 
Others   2    2 
           
Deferred tax assets   3,107    2,338 
           
Deferred tax liabilities on initial application of IFRS 16   154    185 
           
Deferred tax liabilities   154    185 

 

 

(a)Deferred tax is calculated on temporary differences in the provision for employee profit-sharing and management fee write-offs.

 

Deferred tax assets  Employee profit sharing  Management fee provision  Taxable Goodwill  Impact of IFRS 16  Other  Total
                   
As of December 31, 2019   3,220    1,442    1,260    48    34    6,004 
(Charged)/credited                              
- to profit or loss   (1,401)   (759)   (516)   28    -    (2,648)
- directly to equity / CTA   (579)   (312)   (280)   (15)   2    (1,184)
As of June 30, 2020   1,240    371    464    61    36    2,172 
                               
As of December 31, 2020   1,945    391    -    -    2    2,338 
(Charged)/credited                              
- to profit or loss   664    -    -    -    -    664 
- directly to equity / CTA   90    15    -    -    -    105 
As of June 30, 2021   2,699    406    -    -    2    3,107 

 

Deferred tax liabilities  Initial application of IFRS 16  Other  Total         
                   
As of December 31, 2019   365    37    402             
(Charged)/credited                              
- to profit or loss   -    2    2                
- directly to equity / CTA   (97)   (6)   (103)               
As of June 30, 2020   268    33    301                
                               
As of December 31, 2020   185    -    185                
(Charged)/credited                              
- to profit or loss   (36)   -    (36)               
- directly to equity / CTA   5    -    5                
As of June 30, 2021   154    -    154                

 

17Provisions and contingent liabilities

 

In 2017 and 2018, respectively, the Company's subsidiaries Patria Investimentos Ltda. ("PILTDA") and Patria Infraestrutura Gestão de Recursos Ltda. ("PINFRA"), that was subsequently merged into PILTDA on September 30, 2020 (see note 5(o)), became involved in administrative procedures, in which the entities defend the exemption of municipal tax over services ("ISS"). In 2019 Municipality of São Paulo obtained a favorable judgment; however, these administrative proceedings gave rise to judicial lawsuits, for which judgments are still pending. As of June 30, 2021, the external legal

 

21

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

counsel assessed the risk of loss relating to these lawsuits as possible and evaluated the potential loss for PILTDA as US$ 2,174 (US$ 1,926 as of December 31, 2020) and for PINFRA as US$ 947 (US$ 681 as of December 31, 2020).

 

Also, there is an ongoing administrative process related to this subject involving PINFRA with a potential loss of US$ 1,269 as of June 30, 2021 (US$ 1,124 as of December 31, 2020), which was also classified as possible by management supported by the opinion of external legal counsel. On January 9, 2020, PILTDA received infraction notices in the amount of approximately US$ 5,198 as of June 30, 2021 (US$ 4,956 as of December 31, 2020) related to Social Contributions on Gross Revenue (PIS and COFINS) and in the amount of approximately US$ 2,016 (US$ 1,923 as of December 31, 2020) related to labor taxes, for which external legal counsel assessed the risk of loss relating to these lawsuits as possible.

 

In 2019 and 2020, PILTDA became involved in employment lawsuits with the risk of loss considered possible by external legal counsel. As of June 30, 2021, the potential loss was US$ 40 (US$ 36 as of December 31, 2020), for which liability has not been recognized.

 

For the periods covered by these financial statements, the Group was not directly involved in lawsuits for which the possibility of loss was probable. Therefore, no provision was recorded pursuant to IAS 37 (Provisions, Contingent Liabilities, and Contingent Assets).

 

18Leases

 

The lease commitments in which the Group is a lessee refer to the leasing of its office spaces located in São Paulo, Cayman, and Montevideo. The condensed consolidated statement of financial position and the condensed consolidated income statement shows the following amounts relating to leases:

 

Amounts recognized in the Statement of Financial Position

 

  

June 30,

2021

  December 31, 2020
Right-of-use assets   5,128    4,183 
(-) Depreciation of right-of-use assets   (2,617)   (1,988)
Right-of-use assets   2,511    2,195 
           
Lease liabilities (current)   950    780 
Lease liabilities (non-current)   1,070    802 
Lease liabilities   2,020    1,582 

 

Amounts recognized in the Income Statement

 

   Three-month periods
ended June 30,		  Six-month periods
ended June 30,
   2021  2020  2021  2020
Depreciation of right-of-use assets   (294)   (217)   (576)   (530)
Interest on lease liabilities   (259)   (186)   (498)   (436)

22

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

19Revenue from services

 

 

   Three-month periods
ended June 30,		  Six-month periods ended
June 30,
   2021  2020  2021  2020
Revenue from management fees   33,019    25,367    64,359    49,209 
Revenue from incentive fees   24    148    24    148 
Revenue from performance fees (a)   86,800    -    86,800      
Fund fees   119,843    25,515    151,183    49,357 
                     
Revenue from M&A and monitoring fees   -    -    -    2,491 
                     
Total gross revenue from services   119,843    25,515    151,183    51,848 
                     
Taxes on revenue - management fees   (843)   (893)   (1,570)   (1,484)
Taxes on revenue – incentive fees   (3)   (19)   (3)   (19)
Taxes on revenue - performance fees   -    -    -    - 
Taxes on revenue – M&A and monitoring fees   -    -    -    (226)
Taxes on revenue   (846)   (912)   (1,573)   (1,729)
                     
Revenue from services (b)   118,997    24,603    149,610    50,119 
Brazil   6,673    5,813    12,406    12,812 
Cayman Islands   112,324    18,790    137,204    37,307 

 

(a)Performance fees and incentive fees are primarily generated when the return of the funds surpass the performance hurdle set out in the related charters. Since the funds’ performance are susceptible to market volatility and to factors out of the Group's control, the related fees fall under the variable consideration defined in IFRS 15. According to the referred standard, the Group recognizes these fees at a point in time when the related uncertainties are resolved, the likelihood of a claw-back or reversal is improbable and the likely amount of the transaction prices can be estimated without significant chance of reversal, indicating high probability of economic benefits and cash inflow to the Group.

 

 

(b)The funds managed by the Group attract and retain many global investors that represent the Group's portfolio of clients. None of the Group's individual clients represents more than 10% of the total revenues for the presented periods.

 

20Cost of services rendered

 

   Three-month periods
ended June 30,		 

Six-month periods ended

June 30,

   2021  2020  2021  2020
             
Salaries and wages   (2,172)   (1,940)   (4,222)   (4,154)
Partners’ compensation (note 27)   (583)   (590)   (1,203)   (1,242)
Officers' fund   (508)   (91)   (653)   (91)
Rewards and bonuses   (6,007)   (2,684)   (12,273)   (4,415)
Social security contributions and payroll taxes   (558)   (350)   (1,185)   (2,151)
Share based incentive  plan (note 25(d))   (610)   -    (610)   - 
Other short-term benefits   (821)   (506)   (1,595)   (1,096)
Personnel expenses   (11,259)   (6,161)   (21,741)   (13,149)
                     
Amortization of placement agents’ fees (note 12)   (599)   (545)   (1,197)   (1,097)
Rebate fees   (2)   (11)   (2)   (20)
Amortization of contractual rights (note 12)   (907)   (914)   (1,812)   (1,828)
Amortization of intangible assets   (1,508)   (1,470)   (3,011)   (2,945)
                     
Carried Interest Allocation (a)   (30,380)   -    (30,380)   - 
                     
Costs of services rendered   (43,147)   (7,631)   (55,132)   (16,094)

23

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(a)This expense refers to a carried interest share held by the Group’s senior managing directors and employees in Patria Brazilian Private Equity III, Ltd. that gives it the right to up to 35% of the performance fees recognized from PBPE Fund III (Ontario), L.P.

 

21Administrative expenses

 

   Three-month periods ended June 30,  Six-month periods ended June 30,
   2021  2020  2021  2020
Professional services   (2,524)   (1,604)   (3,873)   (2,714)
Occupancy expenses   (88)   (254)   (210)   (489)
Travel expenses   (79)   (130)   (103)   (387)
IT and telecom services   (330)   (257)   (582)   (552)
Materials and supplies   (24)   (12)   (55)   (57)
Taxes and contributions   (43)   (34)   (65)   (61)
Marketing   (83)   (45)   (142)   (141)
Depreciation of property and equipment   (135)   (165)   (270)   (351)
Depreciation of right-of-use assets   (294)   (217)   (576)   (530)
Software amortization   (41)   (14)   (78)   (29)
Other administrative expenses   (154)   (379)   (261)   (554)
Administrative expenses   (3,795)   (3,111)   (6,215)   (5,865)

 

22Other income/(expenses)

 

   Three-month periods ended
June 30,		  Six-month periods ended
June 30,
   2021  2020  2021  2020
Net loss on sale of property and equipment (a)   (46)   -    (46)   - 
IPO expenses and IPO related bonuses (b)   24    -    (2,342)   - 
Other   33    (6)   36    112 
Other income/(expenses)   11    (6)   (2,352)   112 

 

(a)Loss on sale of property and equipment was recognized on retirement of right of use assets related to the lease of the London office which was terminated in May 2021.

 

(b)IPO expenses and IPO-related bonuses were recognized related to the Company's Initial Public Offering concluded on January 21, 2021. The amount was considered according to the costs allocated to the secondary offering and includes the non-cash expense of $1,693.

 

24

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

23Net financial income/(expense)

 

   Three-month periods ended June 30,  Six-month periods ended June 30,
   2021  2020  2021  2020
Net financial investment income   (17)   118    71    284 
Valuation adjustment on long-term investments   (274)   57    (415)   57 
Interest on recoverable taxes   1    -    1    3 
Net exchange variation   705    (58)   787    542 
Interest expenses   26    (31)   (3)   (33)
Banking fees   (25)   (30)   (51)   (61)
Interest on receivables   -    -    -    33 
Interest on lease liabilities   (259)   (186)   (498)   (436)
Other financial income/(expenses)   (1)   -    6    - 
Net financial income/(expense)   156    (130)   (102)   389 

 

24Income taxes expenses

 

As an entity headquartered in the Cayman Islands, the Company is subject to a neutral tax regime. However, the Group's subsidiaries headquartered in Brazil, Colombia, Chile, the United Kingdom, the United States of America, and Hong Kong are subject to income taxes as set out by local tax laws.

 

  Three-month periods ended June 30,  Six-month periods ended June 30,
Reconciliation of income tax  2021  2020  2021  2020
             
Income before income taxes   72,222    13,725    85,809    28,661 
Bermuda (2020)/Cayman Islands (2021) statutory income tax   -    -    -    - 
Impact of difference in tax rates of foreign subsidiaries   1,154    (172)   653    (2,683)
                     
Nondeductible expenses   24    (363)   -    (419)
                     
Total income taxes   1,178    (535)   653    (3,102)
Current   (41)   (235)   (47)   (452)
Deferred   1,219    (300)   700    (2,650)
Effective tax rate   -1.6%   3.9%   -0.8%   10.8%

 

25Equity

 

(a)Capital

 

On January 13, 2021, the Company carried out a share split of 117:1 (one hundred and seventeen for one). As a result, the share capital previously represented by 1,000,000 common shares was increased to 117,000,000 common shares, with a par value of US$ 0.001 each, totaling US$ 1 (one thousand Dollars). The share split has been applied retrospectively to all figures in the condensed consolidated interim financial statements and notes regarding the number of shares and per share data as if the share split had been in effect for all periods presented.

 

The Company Memorandum and Articles of Association authorize the issuance of up to US$100,000, consisting of 1,000,000,000 shares of par value US$0.0001. Of those authorized shares, (i)

 

25

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

500,000,000 are designated as Class A common shares, (ii) 250,000,000 are designated as Class B common shares, and (iii) 250,000,000 are as yet undesignated and may be issued as common shares or shares with preferred rights. Since its initial public offering on January 26, 2021, the Company currently has a total of 136,147,500 common shares issued and outstanding, 54,247,500 Class A common shares, beneficially owned by investors who purchased in the initial public offering and Blackstone (taken together), and 81,900,000 Class B common shares beneficially owned by Patria Holdings. As of June 30, 2021 and December 31, 2020, the issued share capital was distributed as follows:

 

   June 30, 2021  December 31, 2020
   Shares  Capital (US$)  Shares  Capital (US$)
Total   136,147,500    13,615    117,000,000    1,000 
Class A   54,247,500    5,425    -    - 
Blackstone Pat Holdings IV, LLC   19,633,858    1,963    -    - 
Free-Float   34,613,642    3,462    -    - 
Class B   81,900,000    8,190    117,000,000    1,000 
Patria Holdings Ltd.   81,900,000    8,190    70,200,000    600 
Blackstone Pat Holdings IV, LLC   -    -    46,800,000    400 

 

(b)Additional paid-in capital

 

The Additional Paid-in Capital amounts recorded in June 30, 2021 and December 31, 2020 were demonstrated below:

 

   June 30, 2021  December 31, 2020
Patria Holdings Ltd.   1,332    934 
Blackstone Pat Holdings IV, LLC   424    623 
Free-Float   298,616    - 
Total   300,372    1,557 

 

(c)Dividends

 

In January 2021, the Company paid US$ 23,259 related to 2020 dividends to Patria Holdings Ltd. and Blackstone Pat Holdings IV, LLC. The shareholders received US$ 21,100 and US$ 2,159, respectively.

 

Dividends declared by the Group to the parent company’s shareholders for the period ended June 30, 2021 and 2020 were:

 

Shareholder  2021  2020
      US$*     US$*
Patria Holdings Ltd.   8,682    0.1060    35,929    0.5118 
Blackstone Pat Holdings IV, LLC   2,081    0.1060    3,552    0.0759 
Free-Float   3,669    0.1060    -    - 
Total   14,432    0.1060    39,481    0.3375 

 

(*) Per thousand shares after share split, see note 25(a).

 

26

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

Prior to the IPO, dividends were paid on a disproportional basis using a predetermined formula that considers adjusted net income and other adjustments agreed to by the shareholders in the Group’s previous shareholders agreement valid at that time. For the period ended June 30, 2021, dividends were declared and paid to shareholders on a pro-rata basis during the quarter ended on June 30, 2021.

 

(d)Share based incentive plan

 

The establishment of the share based incentive plan was approved at the board of director’s meeting on May 19, 2021 setting out that the maximum number of shares should not exceed 410,115 of the issued and outstanding shares of the Company. As of June 30, 2021, the outstanding number of performance restricted units (“PSU”), convertible into class A common shares, granted under the plans was 289,183 PSUs to be settled at the vesting date.

 

The share based incentive plan is designed to provide long-term incentives to certain employees, directors, and other eligible participants in exchange for their services.

 

The vesting conditions can be divided into two groups. Time vesting conditions and market performance conditions.

 

The vesting period (time vesting condition) is divided in three tranches as follows:

 

·third anniversary of the grant date, upon which one third (1/3) of the PSUs will become time vested.

 

·fourth anniversary of the grant date, upon which one third (1/3) of the PSUs will become time vested.

 

·fifth anniversary of the grant date, upon which one third (1/3) of the PSUs will become time vested.

 

As a market performance condition, the number of shares delivered to the participants is also dependent on the total shareholder return (“TSR”), including share price growth and dividends in comparison to a peer group. If performance TSR reaches at least 8% per year, the PSUs are delivered to the participant. In addition to that, if in the case the TSR is equal or above the TSR of a determined peer group at the end of the last vesting period, each participant shall be entitled to receive an additional number of PSUs equivalent to twenty per cent (20%) of the total number of PSUs originally granted to the participant.

 

If an eligible participant ceases to be employed by the Company, within the vesting period, the rights will be forfeited, except in limited circumstances that are approved by the Committee on a case-by case basis.

 

The cost of the share based incentive plan is measured using the fair value at the grant date. The cost is expensed together with a corresponding increase in equity over the service period.

 

The total amount to be expensed is determined by reference to the fair value of the tranche shares granted at the grant date, which is also based on:

 

·Market performance condition (“TSR”); and

·The impact of any non-market performance vesting conditions (i.e. remaining an employee of the entity over a specified time).

 

27

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of shares that are expected to vest based on the non-market vesting conditions. The Company recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

 

When the PSUs are vested, at the discretion of the Committee, the Company will deliver treasury shares or newly issued shares to satisfy the delivery of PSUs to this Plan. The Committee may also decide to settle the delivery of PSUs pursuant to this Plan in cash.

 

Set out below is a summary of PSU activity for the period ended June 30, 2021.

 

    PSUs
Outstanding,  December 31, 2020   -
Granted   289
Forfeited   -
Outstanding, June 30, 2021   289

 

No shares were granted, forfeited, exercised, expired or vested during the periods covered by the above table.

 

For the period ended June 30 2021, total PSU cumulative expenses were US$ 610.

 

Provisions do not include any tax benefits on total share based incentive plan expense, as this expense is not deductible for tax purposes. The tax benefits will be considered when the PSUs shares are converted into common shares.

 

The original weighted-average grant-date (January 22, 2021) fair value of PSU shares is US$ 15.95, which was calculated based on the Monte Carlo model, so as to incorporate the effects of the performance conditions on the fair value. Dividends were not considered separately on the model since the participant is compensated with more shares when dividends are distributed during the vesting period and because the TSR performance condition already considers dividends distributed as part of the calculation.

 

The Monte Carlo model was implemented to best reflect the market condition regarding the TSR obtained by Patria in comparison to a minimum TSR of 8% per year, and also in comparison with a peer group. Future share prices of Patria and peer group considered, for each company, the share price in the grant date, the expected volatility, an estimated correlation between share prices and the T-Bond as risk free interest rate.

 

28

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(e)Earnings per share (basic and diluted)

 

Basic earnings per share have been calculated based on the Group's profit for the period attributable to the holders of the Group's common shares.

 

Diluted earnings per share are equal to basic earnings per share as the average market price of ordinary shares during the period does not exceed the exercise price of the shared based incentive plan in the reporting periods and there are no others outstanding financial instruments or agreements convertible into potentially dilutive common shares.

 

   Three-month periods ended
June 30,		  Six-month periods ended June
30,
   2021  2020  2021  2020
             
Net income for the period attributable to the Owners of the Parent   73,401    13,862    87,747    26,022 
Weighted average number of shares   136,147,500    117,000,000    133,925,967    117,000,000 
Basic and diluted earnings per thousand shares   0.53913    0.11848    0.65519    0.22241 

 

(f)Cumulative Translation Adjustments

 

The Company translates the financial information of its subsidiaries from their functional currency to U.S. Dollars, which is the Company's and the Group's presentation currency. The effects of the translation are accounted for and presented on Equity under the caption "Cumulative Translation Adjustments".

 

(g)Non-controlling interests

 

The Group's subsidiary with non-controlling interests as of December 31, 2020 is Patria Investimentos Ltda. This entity has share capital consisting solely of ordinary shares.

 

      Equity(*)  Income (Loss) (*)
         Six-month periods ended June 30,
   Interest  June 30, 2021  December 31,  2020  2021  2020
Non-controlling interest in Patria Investimentos Ltda.  49%   -    1,758    (1,285)   (463)

 

*As of June 1, 2021 Patria Investments Limited holds 100% of Patria Investimentos Ltda as discussed under note 5(o)

 

29

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

26Financial instruments

 

 

(a)Financial instruments by categories

 

The Group classifies its financial instruments into the categories below:

 

Financial assets 

June 30,

2021

  December 31, 2020
       
Financial assets at amortized cost          
Accounts receivable   132,998    46,015 
Project advances   2,423    1,772 
Other assets (excluding advances to suppliers and prepaid expenses)   1,447    1,296 
           
Financial assets at fair value through profit or loss          
Cash and bank accounts   25,194    14,052 
Short term investments   286,347    9,929 
Long term investments   8,566    1,986 
           
Financial liabilities          
           
Financial liabilities at amortized cost          
Lease liabilities   2,020    1,582 
Placement agent   50    1,250 
Other liabilities (excluding advances from customers)   4,594    3,252 
Carried interest allocation   30,380    - 

Financial liabilities at fair value through profit or loss 

          
Investment fund share held by non-controlling   952    1,515 

 

(b)Financial instruments measured at fair value

 

The fair value measurement methodologies are classified according to the following hierarchical levels:

 

·Level 1: measurement based on quotations of identical financial instruments, traded in an active market, without any adjustments;

 

·Level 2: valuation techniques based on observable inputs. This category covers financial instruments that are valued using: (i) quotations of similar financial instruments, traded in an active market; (ii) quotations of identical or similar financial instruments, traded in a fairly inactive market; and (iii) other valuation techniques in which all significant inputs are directly or indirectly observable in market input;

 

·Level 3: valuation techniques based on unobservable inputs. This category covers all financial instruments whose valuation techniques are based on inputs not observable in market inputs when such inputs have a significant impact on the measurement of their fair values. This category includes financial instruments that are valued based on quotations of similar financial instruments that, however, require adjustments and assumptions to ensure that their fair values reflect the differences among them.

 

 

30

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

As of June 30, 2021 and December 31, 2020, cash and investments were measured by level 1 and level 2 methodologies, respectively.

 

(c)Financial instruments measured at amortized costs

 

As of June 30, 2021, and December 31, 2020, the book values of the financial instruments measured at amortized cost correspond approximately to their fair values because the majority are short-term financial assets and liabilities or the impact of the time value of money is not material.

 

(d)Risk management

 

The Group is exposed to the following risks arising from the use of financial instruments:

 

(i)Credit risk

(ii)Liquidity risk

(iii)Market risk

 

i.Credit risk

 

Credit risk is the possibility of incurring a financial loss if a client or a counterpart in a financial instrument fails to perform its contractual obligations.

 

The Group has low exposure to credit risk because its customer base is formed by investors in each fund. These investors are required to comply with the capital calls in order to repay related fund expenses. If capital calls are not complied with, the participation of that investor is diluted among the remaining investors of the fund. In addition, management fees could be settled by the sale of the underlying investments kept by the funds. The cash and the short-term investments as of June 30, 2021 is maintained in large banks with a high credit rating scale. Furthermore, the accounts receivable as of June 30, 2021 and December 31, 2020 are composed mainly of management fees and performance fees of investment funds, and also of advisory fees and reimbursement of expenses to be received from investees of such funds.

 

The amounts receivable and project advances as of June 30, 2021, are expected to be received as demonstrated below:

 

  Overdue Due in
  Less than 90 days 91 to 180 days 181 to 270 days 271 to 360 days

01 to 90

days

 91 to 180 days 181 to 270 days 271 to 360 days Over 360 days Total
Accounts Receivable (a) 555 175 99 528 11,852 10,996 - 86,800 21,993 132,998
Project Advances         1,105 -   762 556 2,423
Total 555 175 99 528 12,957 10,996 - 87,562 22,549 135,421

31

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(a)Non-current balances are related to management fees receivable from fund PBPE Fund IV (Ontario), L.P. in equal annual installments on December 31, 2022, and 2023.

 

Current balances includes an amount of US$86.8 million related to performance fees receivable from PBPE Fund III (Ontario), L.P.

 

ii.Liquidity Risk

 

Liquidity risk is the possibility of imbalances between tradable assets and liabilities, payables and receivables mismatches, which might affect the Group's payment ability, taking into consideration the different currencies and settlement terms of its assets and liabilities.

 

The Group performs the financial management of its cash and cash equivalents, keeping them available for paying its obligations and reducing its exposure to liquidity risk.

 

Expected future payments for liabilities as of June 30, 2021, are shown below.

 

  Expected liabilities to be paid in
  01 to 60 days  61 to 120 days  121 to 180 days  181 to 360 days  Over 360 days  Total
Personnel and related taxes (excluding officers' fund and accrued vacation and related charges)   311    -    -    12,373         12,684 
Suppliers   4,365    -    -    -    -    4,365 
Placement agents' fees   50                   -    50 
Investment funds participating shares   -    -    -    -    952    952 
Lease (a)   302    283    283    848    1,668    3,384 
Carried interest allocation   -    -    -    30,380    -    30,380 
Other liabilities (excluding advances from customers)   177    -    -    -    47    224 
Total   5,205    283    283    43,601    2,667    52,039 

 

(a)Amounts reflect undiscounted future cash outflows to settle liabilities.

 

iii.Market risk

 

Market risk is defined as the possible negative impact on income caused by changes in market prices, such as interest rate, foreign exchange rate, and share prices. The Group's policy is to minimize its exposure to market risk.

 

The marketable securities as of June 30, 2021 and December 31, 2020 consist basically of investment funds whose portfolio is composed mainly of fixed income assets, which reduces the Group's exposure to market risk. Besides, the Group does not hold financial liabilities linked to market prices. Therefore, the Group does not have significant exposure to interest rate risk and is not presenting such sensitivity analysis.

 

During the three-month period ended June 30, 2021 and the year ended December 31, 2020, the Group did not hold derivative financial instruments.

 

Regarding the foreign exchange risk, it results from a possible change in foreign exchange rates that would affect the finance income (or costs and expenses) and the liabilities (or assets) balance of contracts indexed to a foreign currency. The Group measures its foreign exchange exposure by

 

32

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

subtracting other than American dollar currencies liabilities from its respective denominated assets, thus obtaining its net foreign exchange exposure and the amount actually affected by exchange fluctuations.

 

Sensitivity analysis

 

The sensitivity analysis was based on the material assets and liabilities exposed to currency fluctuations against US$, as demonstrated below:

 

As of June 30, 2021

 

   Balance in each exposure currency       
   BRL(a)  HKD (b)  CLP (c)  COP (d)  GBP (e)  USD 

Total Balance

USD		 

Exchange Variation impact considering 10% change in the ending of period rates.

Cash and cash equivalents   432    7,096    198,999    596,766    42    23,704    25,194    149 
Short term investments   9,865    -    -    -    -    284,375    286,347    197 
Accounts receivable   22,087    8    38,614    138,535    14    128,472    132,998    452 
Projects Advance   2,726    43    4,614    327    7    1,857    2,423    58 
Other assets   6,498    381    22,026    137,355    93    2,058    3,601    154 
Long term investments   34,849    -    -    -    -    1,599    8,566    696 
Personnel and related taxes   46,326    1,797    103,930    997,546    862    6,049    17,140    (1,109)
Taxes payable   1,762    122    3,680    61,855    36    -    438    (44)
Carried interest allocation   -    -    -    -    -    30,380    30,380    - 
Other liabilities   10,059    242    10,842    63,752    119    5,981    8,219    (224)
Net Impact                                      329 

 

(a)BRL - Brazilian Real, (b) HKD - Hong Kong dollar, (c) CLP - Chilean Peso, (d) COP - Colombian Peso, (e) GBP - Pound Sterling

 

The exposure shows the balance sheet impact considering a US$ valuation increase of 10%. This scenario best reflects the Group's expectations based on projections available in the financial market and takes into account the closing rates for each year.

 

33

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

27Related parties

 

(a)Directors' and Officers' compensation

 

The amounts paid to directors and officers for their roles as executives in the six-month periods ended June 30, 2021 and 2020 included in “Personnel expenses” are shown below:

 

  

Three--month periods ended

June 30,

 

Six-month periods ended

June 30,

   2021  2020  2021  2020
Directors' and officers' compensation   (583)   (590)   (1,203)   (1,242)

 

Additionally, for the six-month and three-month period ended June 30, 2021 the Company has accrued US$ 5,886 million and US$ 2,952 million respectively (US$ Nil for the six-month and three-month period ended June 30, 2020) as bonuses to directors and officers, which is included in "Personnel expenses".

 

(b)Officers' Fund

 

  

June 30,

2021

 

December 31,

2020

Other Assets   -    47 
Personnel current liabilities   1,588    1,271 
Personnel non-current liabilities   1,751    1,527 

 

The Officers’ Fund is administered by the Company through a limited liability entity (the "Officers' Fund") registered as an administered fund under the laws of the Cayman Islands.

 

The employees are offered the opportunity to purchase quotas in the Officers' Fund based on the discretion of the directors of the Officers' Fund. With the payment of a contribution to the Officers' Fund on the grant date, these employees are entitled to a cash benefit that is calculated by management based on defined financial metrics of the Group (e.g., DE – Distributable Earnings) with certain vesting conditions and financial hurdles. Each grant benefit is subject to graded vesting periods of 2 to 4 years. Upon vesting, the benefits are redeemable yearly at the option of the holder or mandatorily redeemed after two years. Should the employee cease to be eligible for the cash benefit (e.g., as a result of leaving the Group), all unvested benefits are paid based on the amount that was originally contributed to the Officers’ Fund.

 

(c)Long-term investments

 

As described in notes 10(b) and 15, PBPE Fund III (Ontario), L.P. and Patria Brazil Real Estate Fund General Partner II, Ltd. have a related party (represented by certain of the Group's founding shareholders) holding a participating share that gives it the right to all returns on Patria Brazil Real Estate Fund II, L.P., and PBPE Fund III (Ontario), L.P., these investments are recorded under long term investments with equivalent liabilities to the holder of the participating share. All contributions to these funds are made by the related party; distributions received are returned to the related party.

 

34

 

 

Patria Investments Limited

 

Notes to the unaudited condensed consolidated interim financial statements

As of June 30, 2021 and December 31, 2020 and for the six and three-month periods ended June 30, 2021 and 2020

 

(Amounts in thousands of United States dollars - US$, except where otherwise stated)

 

(d)Carried interest allocation

  

As described in note 20(a), 35% of the performance fee receivable from PBPE Fund III (Ontario), L.P. is payable to the carried interest vehicle which is ultimately held by the Group’s senior managing directors and employees.

 

28Events after the reporting period

 

On August 12, 2021 the Board of Directors approved dividends of US$ 0.46 per share to be paid by September 2021. Subsequent to June 30, 2021 and up until the date of authorization for issuance of the unaudited condensed consolidated interim financial statements, there were no further significant events that occurred after the reporting period for disclosure.

 

* * *

Luis Gustavo G. Mota 

Accountant

 

Marco Nicola D’Ippolito 

Chief Financial Officer

 

Alexandre T. A. Saigh

Chief Executive Officer

 

35