#TGAR11 - EITA

Lucas Fii - Fundos Imobiliários

5 Sept 202415:15

Summary

TLDRThe video discusses the performance of a fund, noting a drop in distribution from 1.35 to 1.12, which disappoints. The script speculates on the reasons behind this decline, including a significant cash injection that might have affected returns. It also covers the fund's strategy of investing in credit to maintain a well-remunerated cash position. The video further delves into the fund's high-risk investments, such as a substantial purchase in CPS H shares, questioning the fund's strategy and its alignment with the initial investment thesis. The host expresses concern over the fund's conservative distribution approach due to economic uncertainties and the impact of rising interest rates on sales and project completion.

Takeaways

😀 The speaker discusses a recent financial report, highlighting some surprising elements and expressing concern about the fund's performance.
😬 The Tigar fund's income dropped from 1.35 to 1.12, which is causing concern for investors, particularly due to unclear reasons behind this decrease.
📉 The Tigar fund's reports are often delayed, which complicates tracking its performance in real-time, unlike other funds that offer more timely data.
💸 Tigar is currently investing heavily in credit operations to maintain liquidity and generate better returns on idle cash reserves.
🏗️ The fund is involved in large-scale development projects, where profits will be realized gradually as these projects progress and sales are made.
📊 The fund projects a total profit of 3.6 billion BRL, but only 600 million BRL have been recognized so far, with the rest expected over the coming years.
💰 The fund's strategy involves keeping cash invested in credit operations to maintain liquidity for future project investments, although this can affect income distribution.
⚠️ The speaker expresses concern about Tigar's decision to invest 50 million BRL in the CPSH fund, which may not align with Tigar's core investment strategy.
💡 The speaker suggests that some of the fund’s recent investments, particularly in the CPSH shopping fund, might not be the best use of capital given Tigar's high-risk profile.
🤔 Overall, the speaker concludes that while the Tigar fund is following some logical strategies, there are areas of concern, particularly with income drops and potentially misaligned investments.

Q & A

What is the main topic discussed in the video?
-The main topic is a detailed analysis of the Tigar fund, including its recent performance, distribution drops, and financial strategies.
Why is the speaker concerned about Coti in the video?
-The speaker mentions that Coti is likely upset due to the drop in distribution from the Tigar fund, which went from 1.35 to 1.12.
What is the issue with the timing of the reports mentioned in the video?
-The speaker highlights that reports for many funds, including Tigar, are often delayed, making it difficult to explain recent performance declines like the drop to 1.12.
Why did the Tigar fund's distribution drop to 1.12?
-The distribution dropped due to various factors, including a large amount of cash held in reserves and allocations to credit operations, which have reduced the overall yield.
What is the strategy behind Tigar's allocation of funds to credit operations?
-Tigar allocates funds to credit operations to ensure better remuneration of its cash reserves, thus maintaining a higher yield compared to leaving the money idle.
How does the macroeconomic environment, particularly interest rates, affect the Tigar fund?
-Rising interest rates can negatively affect the performance of Tigar's projects, especially in the sales and development of real estate, as higher rates slow down economic activity and reduce sales.
What are Land Bank projects, and how do they affect Tigar’s performance?
-Land Bank projects are undeveloped or dormant projects that haven't been activated yet. While they represent future potential, they currently do not contribute to Tigar's active earnings.
What concerns does the speaker have regarding Tigar’s credit operations?
-The speaker is worried about the concentration of cash in certain credit operations. Around 10% of the cash is invested in a single operation, which could pose risks if that investment underperforms.
Why does the speaker criticize Tigar's investment in the CPSH fund?
-The speaker criticizes the decision to invest 50 million reais in the CPSH fund, which focuses on shopping centers. This move is seen as inconsistent with Tigar's core strategy, and the speaker believes it doesn’t make sense for Tigar’s high-risk profile.
What is the speaker's overall view on Tigar's recent strategies?
-The speaker is critical of Tigar’s recent strategies, particularly the drop in distribution and questionable investments like CPSH. They express frustration with the fund's management and the lack of clarity in some of the decisions.

Outlines

00:00

😀 Overview of the Fund's Surprises

The video starts with the host laughing before discussing surprising updates about the Tigar fund. The focus is on the drop in income from 1.35 to 1.12, which the host is unable to fully explain due to delays in receiving reports. The reporting process of many funds, including Tigar, is slow and lacks timeliness compared to others like Kinea. The video touches on Tigar’s operations, including allocating funds to credit investments, raising R$15 million, and the impact this might have on income distribution.

05:01

😅 Understanding Tigar's Cash Flow and Project Progress

This section explains Tigar's focus on credit investments to maximize returns while holding cash reserves. The fund invests in development projects, including 160 ongoing ones, and expects a total profit of R$3.74 billion from these projects. Of this, R$600 million has been recognized, with the rest expected in future years. Some projects are still in the planning (Land Bank) stage, where the land is secured but development hasn’t started. The success of these projects depends heavily on the sales performance and completion of construction.

10:03

📈 Tigar's Projected Revenue and Challenges

Tigar expects to generate profits from the sale of ongoing projects, but also faces challenges. The fund needs R$200 million to finish current projects. It provides details on expenses, revenues, and the expected total profit of R$3.6 billion, with a significant amount still in stock awaiting sale. The rise in interest rates could negatively impact sales, which in turn would delay the recognition of profits. The fund's management is taking a more conservative approach to ensure stability in revenue distribution for the next few months.

15:04

🤯 The Fund's Risky Strategic Moves

The discussion shifts to Tigar’s more controversial decisions, such as purchasing R$4.5 million worth of shares in the CPSH fund. This move is seen as risky and not aligned with the fund’s original objectives, especially considering Tigar's focus on high-risk projects. Despite these issues, the fund still has high liquidity and continues its credit strategy, but there is concern over the allocation of significant amounts to CPSH, which could be seen as a misstep.

😬 Challenges in Fund Management and Risk of Distribution Cuts

The last part of the script delves into the challenges posed by Tigar’s allocation strategy, particularly regarding its investment in CPSH, which some investors might not agree with. The fund's strategy to keep part of its cash in credit operations could be risky, especially with 10% of its cash in a single operation. The host expresses concern over these strategic moves and the potential impact on income distribution, reflecting frustration with how the fund is managing investors' money.

Mindmap

Keywords

💡TIGAR

TIGAR is a fund (fundo) mentioned throughout the script, which the speaker discusses in terms of its performance, distribution, and investment strategy. The speaker points out issues related to the distribution drop from 1.35 to 1.12 and the need to allocate money in credit. The discussion around TIGAR focuses on the fund's strategy of investing in projects and credit operations to manage its cash flow and returns.

💡Distribution

Distribution refers to the payouts made by the fund to its shareholders. In the context of the video, the speaker discusses the decline in TIGAR's distribution from 1.35 to 1.12, raising concerns about the fund's performance. The explanation highlights that the decrease in distribution may be due to the allocation of money in credit and maintaining a cash reserve that isn't fully optimized.

💡Credit Allocation

Credit allocation is the strategy employed by the fund to invest in credit operations to generate income. This is discussed as a key aspect of TIGAR's strategy to keep its cash reserves remunerated while awaiting better opportunities or to invest in other projects. The speaker explains that this strategy can lead to reduced distributions due to the need for a cash buffer.

💡Land Bank

A 'Land Bank' is a term used to describe undeveloped land held by a fund or company for future projects. In the video, the speaker explains that some of TIGAR’s projects are in this stage, meaning they have not yet been executed. The land bank phase represents a holding period where potential projects are planned but not yet initiated, impacting the overall earnings of the fund.

💡Economic and Financial Viability Studies

These studies are assessments conducted to determine the profitability and feasibility of projects. The video discusses how these studies for 160 projects within TIGAR indicate a potential total profit of 3.74 billion reais. These studies are crucial for understanding the potential future earnings and risks associated with the projects the fund is involved in.

💡High-Risk Investments

High-risk investments refer to investments that come with a significant chance of loss or lower-than-expected returns. The speaker highlights that TIGAR’s investments have a high level of risk due to the nature of the projects and economic uncertainty. The video points out the importance of managing these risks, especially given the volatile economic environment.

💡Fund Reports

Fund reports are documents released by the fund to provide information about its performance, investments, and financial health. In the script, there is a mention of how TIGAR's reports are delayed compared to other funds like Kinet, which is more prompt in reporting. The speaker emphasizes the importance of timely and transparent reports for investors to make informed decisions.

💡CAPEX (Capital Expenditure)

CAPEX, or Capital Expenditure, refers to funds used by a company or fund to acquire, upgrade, and maintain physical assets such as property or equipment. In the context of the video, it relates to the amount of money TIGAR has to invest in its ongoing and future projects. This is a critical aspect as it determines how much liquidity is required and how it affects the fund's overall financial strategy.

💡Volatility Mitigation

Volatility mitigation refers to strategies used to minimize fluctuations in a fund's income or performance. In the video, it is discussed as a conservative approach adopted by the management of TIGAR due to economic uncertainties and expected interest rate hikes. By mitigating volatility, the fund aims to provide stable and predictable returns to its investors.

💡CPHS Fund Investment

The CPHS fund investment refers to TIGAR’s decision to invest a significant amount in another fund focused on shopping centers. This move is criticized by the speaker as being outside of TIGAR’s main objectives and potentially risky. It serves as an example of fund managers making unexpected decisions that may not align with the expectations of their investors.

Highlights

Discussion of the 'Tigar' report, which contains several surprises, including a drop in distribution from 1.35 to 1.12.

Explanation that the July report, released on 30/08, is the most recent and highlights the slow process of updates for certain funds.

Comparison with other funds, such as 'Kinet,' which provide faster and more frequent updates on distributions.

The 'Tigar' fund has allocated 15 million and invested in credit operations, which could explain part of the distribution drop.

The fund is managing a substantial land bank with projects that haven't started yet but have projected profits.

The report highlights a 3.74 billion profit projection from 160 projects, of which 600 million has already been recognized.

Clarification that the land bank projects are in the planning stage, with no active development or sales.

Concern about rising interest rates affecting the fund's ability to sell and generate profits.

The fund has taken a more conservative stance in distributions due to economic uncertainties.

3-month projection for distributions between 1.10 and 1.30 per share.

Mention of the fund's equity portfolio, which is highly dependent on performance and sales, with risks linked to the macroeconomic environment.

Allocation of credit to maintain liquidity for ongoing projects, currently holding 10% of its assets in a single operation.

Discussion of a controversial 4.5 million investment in 'CPSH' (shopping fund), which some consider unrelated to the fund's core strategy.

The report shows the fund's strategy to use credit to improve its cash returns while waiting for capital needs in projects.

Concern that recent decisions, like the 'CPSH' investment, may not align with the fund's original objectives and risk profile.