Patria Investments delivered strong second-quarter performance in 2026, showcasing impressive fundraising success and strategic expansion. The company secured $2.3 billion in capital during the quarter, bringing its total for the year to $4.5 billion, putting it well on its way to exceeding the annual target of $7 billion. This substantial capital formation underscores robust investor confidence and the effectiveness of Patria's diversified strategies. The firm's Fee-Earning Assets Under Management (AUM) saw a significant increase, reaching $48.9 billion, representing a 32% rise from the previous year and a 7% sequential increase from the first quarter of 2026. This growth was fueled by strong organic net inflows, positive investment performance across various asset classes, and the successful integration of three key acquisitions completed earlier in the year.
Furthermore, Fee-Related Earnings (FRE) for the quarter stood at $57.1 million, marking a 24% year-over-year growth and a 13% sequential increase. This solid performance was primarily driven by the expansion of net fee revenues, despite a 16% sequential increase in expenses attributed to the accelerated onboarding of Solis and WP Global Partners. These acquisitions, while contributing to short-term fluctuations in the FRE margin, are strategic long-term investments designed to broaden Patria's market presence and product offerings. Management has reaffirmed its full-year FRE guidance of $225 million to $245 million, or $1.42 to $1.54 per share, demonstrating confidence in the company's operational efficiency and future profitability. Distributable Earnings Per Share (DEPS) also saw a healthy increase, rising 31% year-over-year and 19% sequentially to $0.32, reflecting the overall strength of Patria's financial health.
The company's commitment to strategic growth is further evidenced by its focus on asset class diversification and disciplined M&A activity. Patria successfully raised $650 million in credit fundraising, boosted by robust interest in dollar-denominated private credit and the integration of the Solis CLO business. The Global Private Markets Solutions (GPMS) division also achieved a notable milestone with $676 million in commitments for SOF V, surpassing its original target. Additionally, a $1 billion commitment from a sovereign wealth fund client for a multi-asset Separately Managed Account (SMA) highlights the growing demand for Patria's tailored investment solutions. While acknowledging some underperforming legacy private equity funds, management emphasized that these are not reflective of the current private equity franchise, which has undergone significant strategic and team enhancements. The company projects a return to its target FRE margin of 58% to 60% by 2027, driven by ongoing cost management and synergy realization from recent integrations. Patria's strong balance sheet, coupled with its consistent cash flow generation, positions it favorably for sustained growth and continued shareholder returns, including a declared quarterly dividend of $0.1625 per share.
Patria Investments continues to demonstrate remarkable resilience and strategic foresight in a dynamic global financial landscape. Its ability to consistently meet and exceed fundraising targets, coupled with a proactive approach to portfolio diversification and accretive acquisitions, positions the firm for enduring success. By fostering strong client relationships and maintaining a robust operational framework, Patria not only secures its financial future but also exemplifies adaptive leadership in the investment management industry, promising continued positive impact and value creation.