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Group structure
 12 Months Ended
Dec. 31, 2019
Disclosure of basis of consolidation explanatory [Abstract]  
Group structure
5.
Group structure
 
 
(i)
Subsidiaries
The following are the direct and indirect interests of Company in its subsidiaries for the purposes of these consolidated financial statements:
 
          
% of Group’s interest (i)
 
Entity name
  
Country of
incorporation
   
Principal activities
  
2019
  
2018
  
2017
 
Directly controlled
       
XP Investimentos S.A.
   Brazil    Holding   100.00%   100.00%   100.00% 
Indirectly controlled
       
XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.
   Brazil    Broker-dealer   100.00%   100.00%   100.00% 
XP Investments US, LLC
   USA    Broker-dealer   100.00%   100.00%   100.00% 
XP Investments UK LLP
   UK    


 		Inter-dealer
broker and
Organized
Trading Facility
(OTF)		 
 
 
 
 		  100.00%   100.00%   99.90% 
Sartus Capital LTD
   UK    Investment
advisor		 
 		  100.00%   100.00%   100.00% 
XP Private (Europe) S.A.
   UK    Investment
advisor		 
 		  100.00%   100.00%   100.00% 
XP Vida e Previdência S.A. (v)
   Brazil    Private pension
and insurance		 
 		  100.00%   100.00%   —   
Banco XP S.A. (vi)
   Brazil    Multipurpose
bank		 
 		  100.00%   —     —   
Xperience Market Services LLC (vi)
   USA    
Non-operational
   100.00%   —     —   
Chamaleon Bravery Unipessoal LDA (vi)
   Portugal    


 		Investment
Advisor
(pending
regulatory
approval)		 
 
 
 
 		  100.00%   —     —   
XP Holding Investimentos S.A.
   Brazil    Financial
Holding		 
 		  —     —     100.00% 
XP Controle 3 Participações S.A.
   Brazil    Financial
Holding		 
 		  100.00%   100.00%   100.00% 
XPE Infomoney Educação Assessoria Empresarial e Participações Ltda.
   Brazil    Digital Content
services		 
 		  99.99%   99.70%   96.69% 
Tecfinance Informática e Projetos de Sistemas Ltda.
   Brazil    Rendering of IT
services		 
 		  99.76%   99.73%   99.73% 
XP Corretora de Seguros Ltda.
   Brazil    Insurance
Broker		 
 		  99.99%   99.82%   99.81% 
XP Gestão de Recursos Ltda.
   Brazil    Asset
management		 
 		  93.70%   92.80%   91.65% 
XP Finanças Assessoria Financeira Ltda.
   Brazil    
 		Investment
consulting
service		 
 
 		  99.99%   99.99%   99.95% 
Infostocks Informações e Sistemas Ltda.
   Brazil    
 		Mediation of
information
systems		 
 
 		  99.99%   99.99%   99.99% 
XP Advisory Gestão Recursos Ltda.
   Brazil    Asset
management		 
 		  99.57%   99.52%   99.52% 
XDEX Intermediação Ltda. (iii)
   Brazil    
 		Intermediary
and service
agency		 
 
 		  —     —     99.99% 
XP Holding International LLC
(ii)
   USA    
 		International
financial
holding		 
 
 		  100.00%   100.00%   100.00% 
XP Advisory US
   USA    Investment
advisor		 
 		  100.00%   100.00%   100.00% 
XP Holding UK Ltd
   UK    
 		International
financial
holding		 
 
 		  100.00%   100.00%   100.00% 
XP Vista Asset Management Ltda. (iv)
   Brazil    Asset
management		 
 		  99.42%   99.60%   —   
XP Controle 4 Participações S.A. (v)
   Brazil    Insurance
holding		 
 		  100.00%   100.00%   —   
Leadr Serviços Online Ltda. (vi)
   Brazil    Social media   99.99%   —     —   
Spiti Análise Ltda. (vi)
   Brazil    

 		Research
(pending
regulatory
approval)		 
 
 
 		  99.99%   —     —   
Consolidated investments funds
        
Falx Fundo de Investimento Multimercado Crédito Privado Investimento no Exterior
   Brazil    Investment fund    100.00%   100.00%   100.00% 
Gladius Fundo de Investimento Multimercado Investimento no Exterior
   Brazil    Investment fund    100.00%   100.00%   100.00% 
Scorpio Debentures Incentivadas Fundo de Investimento Multimercado Crédito Privado
   Brazil    Investment fund    100.00%   100.00%   100.00% 
Galea Fundo de Investimento Multimercado Crédito Privado Investimento no Exterior
   Brazil    Investment fund    100.00%   100.00%   100.00% 
Javelin Fundo de Investimento Multimercado Crédito Privado Investimento no Exterior
   Brazil    Investment fund    100.00%   100.00%   100.00% 
Spatha Fundo de Investimento Multimercado Crédito Privado Investimento no Exterior
   Brazil    Investment fund    100.00%   100.00%   —   
Frade Fundo de Investimento em Cotas de Fundos de Investimento em Direitos Creditórios NP
   Brazil    Investment fund    100.00%   100.00%   —   
Frade III Fundo de Investimento em Cotas de Fundo de Investimento Multimercado Crédito Privado (vi)
   Brazil    Investment fund    100.00%   —     —   
Balista Debentures Incentivadas Fundo de Investimento Multimercado Crédito Privado (vi)
   Brazil    Investment fund    100.00%   —     —   
Coliseu Fundo de Investimento Multimercado Crédito Privado Investimento no Exterior (vi)
   Brazil    Investment fund    100.00%   —     —   
XP Short Brasil Alavancado Fundo de Investimento Multimercado Investimento no Exterior (vii)
   Brazil    Investment fund    —     —     100.00% 
XP Pacote Brasil Alavancado Fundo de Investimento Multimercado Investimento no Exterior (vii)
   Brazil    Investment fund    —     —     100.00% 
 
(i)
The percentage of participation represents the Group’s interest in total capital and voting capital of its subsidiaries.
(ii)
Subsidiaries legally merged into their respective immediate parent, with no impact on the consolidated financial statements.
(iii)
Relates to subsidiary incorporated in 2017 sold to Company’s controlling shareholders in 2018 at its early stages.
(iv)
Subsidiary acquired in 2018. See further details in Note 5 (ii) below.
(v)
Subsidiaries incorporated in 2018 for operating in the private pension and life insurance business, which is regulated by the Superintendency of Private Insurance (SUSEP) in Brazil.
(vi)
New subsidiaries and investment funds incorporated in the year.
(vii)
Investment funds closed during the year.
 
(ii) Business combinations
Acquisition of Rico Corretora de Títulos e Valores Mobiliários S.A.
On August 10th, 2017, following the approval of the Central Bank, the Group acquired Rico Corretora de Títulos e Valores Mobiliários S.A. (“Rico”) through the acquisition of its sole parent FLAFLU Participações S.A. (“FLAFLU”). With this transaction, the Group aimed to extend its operations in brokerage and securities distribution market to retail, through expanding the customer base and absorbing innovative technology in online market developed by Rico, in view of the complementary nature of positioning between the brands.
Details of the net assets acquired, the goodwill and the purchase consideration are as follows:
 
   
Fair value recognized on
acquisition
 
Assets
  
Cash
   96 
Financial instruments (FVPL)
   356,648 
Financial instruments (FVOCI)
   20,212 
Accounts receivable
   1,915 
Other assets
   11,582 
Deferred tax assets
   3,751 
Property and equipment (Note 13 (a))
   1,728 
Intangible assets (Note 13 (b))
   75,813 
  
 
 
 
  
 
471,745
 
Liabilities
  
Social and statutory obligations
   (560) 
Tax and social security obligations
   (12,651) 
Securities trading and intermediation
   (322,371) 
Provisions and continget liabilities (Note 25)
   (7,921) 
Other liabilities
   (5,217) 
  
 
 
 
  
 
(348,720
) 
  
 
 
 
Total identifiable net assets at fair value
  
 
123,025
 
Goodwill arising on acquisition (Note 13 (b))
   281,702 
  
 
 
 
Purchase consideration transferred
  
 
404,727
 
  
 
 
 
Analysis of cash flows on acquisition
  
Consideration paid in cash
   404,727 
Net cash acquired with the subsidiary
   (96) 
  
 
 
 
Net of cash flow on acquisition (investing activities)
  
 
404,631
 
  
 
 
 
For the purchase price allocation, the following intangible assets were identified. The valuation techniques used for measuring the fair value of separately identified intangible assets acquired were as follows:
 
Assets
  
Amount
   
Method
  
Expected
amortization period
 
Customer list
   50,077   
Multi-period excess earning method
   8 years 
Trademark
   19,304   
Relief from royalty
   10 years 
Technology
   2,028   
Relief from royalty
   3 years 
 
The fair value of the consideration given was R$ 404,727. The goodwill is attributable to the workforce and the high profitability of the acquired business. It will be deductible for tax purposes. The fair value and gross contractual amount of trade accounts receivable was the same—R$ 1,915. There was no other contingent liability recognized on the acquisition for a pending lawsuit, apart from R$ 7,921 already provisioned, related to tax contingencies (Note 25).
Acquisition-related costs of R$ 690 are included in administrative expenses in profit or loss and in operating cash flows in the statement of cash flows.
From the acquisition date, Rico contributed revenues of R$ 53,942 and net profit of R$ 12,125 to the Group’s consolidated statement of profit and loss for the year ended December 31, 2017. If the acquisition had occurred on January 1, 2017, consolidated
pro-forma
revenue and profit for the year ended December 31, 2017 would have been R$ 133,411 and R$ 29,919 respectively.
Acquisition of XP Vista
On January 5, 2018, the Group acquired 99.60% of shares of XP Vista Asset Management Ltda. (“XP Vista”), an asset management entity, through the acquisition of its controlling shareholder Marathon Investimentos e Participações S.A for a consideration of R$ 10,938, mostly comprised of cash in the amount of R$ 525. Goodwill in the amount of R$ 9,799, attributable to sinergies expected from the combined operations within the Group. Marathon was subsequently incorporated by the Group.
(iii) Subscription (redemptions) of
non-controlling
interests
In 2016, certain
non-controlling
interest subscribed for new quotes in a subsidiary investment fund, Pedras Secas Fundo de Investimento Multimercado Crédito Privado Investimento no Exterior, in the total amount of R$ 43,000. During 2017, such shareholders redeemed those quotes receiving R$ 45,550 from the investment fund.
(iv) Other transactions with
non-controlling
interests
In the course of its business, the Group admits individual partners to join the share capital of certain subsidiaries while others might decide to leave the subsidiaries resulting in gains or losses recorded directly to equity. For the year ended December 31, 2019, the Group recorded a gain of R$ 374 (2018 – R$ 409 gain), while
non-controlling
interest decreased in the amount of R$ 2,229 (2018 – R$ 788 decrease).