Ricardo Buchpiguel: Very clear. Thank you.
Operator: One moment for our next question. Our next question comes from the line of Pedro Leduc of Itau BBA. Your line is now open.
Pedro Leduc: Thank you guys so much for the call and taking the question. Circling back to the FRE guidance for the full year, which implies about $50 million in the fourth quarter, has to do with certain funds that you guys are going to charge on. Should we expect this also to be a run rate for 2024, if you guys can comment a little bit on the FRE outlook for that year? And we enter with 50 and if there’s more such revenue collections that you guys have visibility on, on top of the natural growth, that would be the first question. And the second, just something on the personnel expenses line that was a bit volatile this quarter. Just wondering if you guys have a little more color on it and also what to expect looking ahead. Thank you.
Ana Russo: Hi. Hello. This is Ana. Thank you for your question. So I would address the first one. The FRE expected for the fourth quarter. As mentioned, the main drivers that we have for DP revenues is related to our private equity fund 7, also the — our growth fund and also activation of our infrastructure 5. So this is all ads that the fourth quarter is also different from previous quarter because we also account for incentive realization for the incentive of the quarter. And that’s why you also see a higher margin as well in this quarter. I think it’s worth mentioning that the fourth quarter is also we have — as we announced the closing of Bancolombia, we also have additional effort for the Bancolombia for the last two months.
Okay. So in terms of cost as well as the fourth quarter, we are assuming that we continue to progress our manage — very carefully manage our cost base, and this is not going to be different in the fourth quarter. So going to your second question related to personnel expenses. Also, as I mentioned, I have — we have accounted for in this quarter for our implementation of our executive bonus program, and that is also accounted for the three quarters. It’s kind of a year-to-date accounting — accounted for, and that’s the reason you cannot just think that this is going to be implied for every quarter that is an adjustment for this quarter, and this is the launch of this program. But in addition to that, we’re also looking to our consolidation and our integration of our business that also impact our careful manage on the person.
I think we answer your question.
Pedro Leduc: Yeah. But what did you have before this executive program? And did it replace something? Or is it just come in addition of something else?
Alexandre Saigh: Well, we announced the program, this program in early 2021, we haven’t implemented it. So it is an executive program that it’s pretty immaterial, to be honest. It’s whatever is — on the whole is a very, very small number. But yes, just as a guidance, we gave out a program that voluntarily, partners can actually take a portion of their bonus. And actually, we will match with shares, we will give them a matching of shares. But it’s — we started with a very initial way of doing this very carefully. It’s very immaterial. Again, it’s not even relevant to the whole number here, it’s less than 2%. But yes, it’s important that we just mentioned that we started with this program that we had announced back in 2021, where we have ever executed it.
So again, partners can get a portion of their bonus and actually commits to matching with shares given by Patria, and that — those group of shares will be then held in escrow for five years. We’re vesting in a third in the third year or third in the fourth year or third and the fifth year. So it’s an alignment program to Patria that would like to have more of a longer term view of their compensation. But again, Pedro, coming back to the materiality, still very, very small.
Pedro Leduc: Got it. Thank you.
Operator: One moment for our next question. Our next question comes from the line of Beatriz Abreu of Goldman Sachs. Your line is now open.
Beatriz Abreu: Hi, Alex, Marco and Ana. Thank you for the call and taking my question. My question is on the divestments breakdown that Alex mentioned, to sell over the next 12 months, $2 billion to $2.5 billion in divestments. Just wondering if you could give us a rough breakdown if that’s over infra fund 3 or PE fund 5 and what would be necessary for PE fund 5 to enter the catch-up phase just for us to have sort of a rough estimate going forward. Thank you.
Alexandre Saigh: Yeah. It’s — this number encompasses assets that we’re selling from all of our development infrastructure funds and all of our private active buyout funds and the growth fund and everything. So it encompasses all of the private equity and infrastructure drawdown funds. As you know, today, we have a couple of assets in our infrastructure 2. We have a couple of assets in our infrastructure 3 and several assets in infrastructure 4. And we are now raising infrastructure 5. We did one investment. And I could say the same about private equity. We still have assets in private equity 4. We’re selling some of private equity 5, private equity 6, private equity 7, then we have growth equity. And then we have our venture capital funds.
Now we have 3 venture capital funds. We are raising venture capital number four. So some all of the divestments of all of these funds, the $2.5 billion that I gave you over the next several months, to be honest. I think I was answering Craig’s question is a very macro view top down, what are all of the efforts that you’re getting now if I sum everything, that’s the number. But I have no expectation of selling that in the short term. It is over the next 24 to 36 months, right, because it’s a substantial number that I just gave out. On — specifically to your question, infrastructure fund 3 is in the catch-up phase. So whatever we sell, we get the performance fee. On private equity fund 5, we did — it’s a $1.8 billion fund. We invested around $1.5 billion.
We gave back, as I mentioned to you, 0.4 DPI, so 40% of $1.5 billion. So we still need 900 to $1 billion to go. If you do the math, 60% of $1.5 billion. $800 million to go. We have several assets in that fund that are worth that much. So we have two assets that it sold independently. I think they were worth that much, and we have then a third group of smaller assets that are also worth that much. So we have several options there, Beatriz, to reach to the other 0.6 DPI that is missing for us to hit one time DPI and then get to the catch-up phase. We are, of course, on the way of trying to sell these assets. It’s within that big bucket of 2.5 that I mentioned to you. I think that, as I also mentioned here in this call, there’s a — if I do an expectation analysis, probability analysis, I think the assets from infrastructure fund 3 are more aligned to be sold.
But again, mergers and acquisitions can actually play tricks on you. And one asset that you felt that was going slower, it speeds up the process and the other one that you thought that was going a little quicker, there’s something that hits a bump and you take another couple of quarters to sell it. But if you — if I had to put a probability, I would say that the infrastructure assets were more online to be sold in the very, very short term. In the midterm, this is basically it. I hope I answered your question.
