You Inc

About the project

“In March 2012, Paladin approved, in partnership with other investors, a US$40.0 million investment in You Inc., a medium-sized residential developer focused on the development of residential projects in the city of São Paulo. The investment was structured through a convertible preferred shares, equivalent to 30% of the company’s capital, which granted Paladin an option to convert the debentures into debt, at a pre-specified rate, in addition the terms guaranteed to Paladin representation on the board, approval of important decisions, preemptive rights in projects to be developed by the company and periodic mandatory redemptions.

You Inc. weathered the severe 2014-2016 recession in Brazil by outperforming most builders of similar size. Under Paladin’s guidance and direction, the company was able to reduce its volume of launches, with a commensurate reduction in overheads. The company’s management has done an exceptional job of managing the industry’s huge surge in sales cancelations during the recession, maintaining a cancelation rate of less than half the industry average through proactive customer management and credit monitoring.

The company redeemed around half of Paladin’s shares in 2015, the transaction resulting in an IRR of 23% and a multiple of 1.8x in local currency on the redeemed shares.

In 2018, Paladin entered into an agreement to sell its remaining shares to the founding partner of YOU Inc., generating an IRR of 12% and a multiple of 1.8x, on the remaining stake.”

Diferentials

	Knowledge of the local market and micro regions		Active investment management		Financial discipline
	Medium and long term capital