Q2 2021 Radius Global Infrastructure Inc Earnings Call
Yeah.
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Greetings and welcome to the radius global infrastructure second quarter 2021 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero.
On your telephone keypad.
As a reminder, this conference is being recorded I would now like to turn the conference over to your host Mr. Jason <unk> head of Investor Relations for radius global infrastructure.
You may begin.
Thank you operator, and welcome everyone for the radius global infrastructure second quarter 2021 earnings call.
On this morning's call Youll, Brooklyn, our CEO and co chairman and will provide an overview of our second quarter results followed by a more detailed update from Glen pricing or our Chief Financial Officer. After these comments, we will open up the call for your questions.
Before we begin I would like to remind everyone that many of the comments made today are considered forward looking statements on a federal securities laws as described on our earnings release and filings with the SEC. These statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed these statements speak as of today's date and we undertake no obligation publicly.
And to update or revise these forward looking statements and addition on today's call. We may discuss certain non-GAAP financial information you can find this information together with reconciliations for the most directly comparable GAAP financial measure and this morning's earnings release and the supplemental financial information available on our website at www dot radius global Dotcom and <unk>.
I'd like to turn the call over to Bill.
Thanks, Jason. Thank you all for joining us today for radius, Inc. Second quarter 2021 earnings Conference call I'm pleased to report that and the second quarter, we maintained robust quarter over quarter growth.
Exceeding 100 billion and annualized in place rents.
This is a substantial accomplishment for the company and I'd like to acknowledge the hard work of all of our team across the 19 countries and which we operate for this collective achievement from the moment radius became a public company approximately 18 months ago, we embarked on a mission to significantly increase our scale, which we are and in fact doing.
And for which I, thank our entire team again for their tireless efforts.
Turning to our financial results, we generated revenue growth of 54% and the second quarter over the prior year period through disciplined capital deployment and organic growth from the portfolio.
We remain optimistic about our ability to continue requiring durable cash flow streams generated from real property interest at the current quarterly pace through the remainder of 2021 day.
During the quarter, we deployed approximately 125 million of acquisition Capex, continuing to trend and accelerated capital deployment, we began in the fourth quarter of 2020.
His capital investment represents the acquisition of $9 million and additional rent increasing our total annualized in place rents to a run rate of $102 million a year over year increase of 60%.
We are seeing the benefits of increased scale as larger acquisitions of recurring rental revenue continues to drive operational leverage against our origination platform cost, which Glen will discuss in greater detail shortly.
During the quarter, we raised 275 million and capital to support our acquisition strategy, which has continued to broaden from wireless only sites into adjacent digital infrastructure assets with similar characteristics.
Although we have seen increased competition to acquire assets and certain markets. We expect our recent acquisitions to generate mid teen Levered returns and.
We share with you on our last earnings call. The range of digital telecom infrastructure assets, we are selectively acquiring and others. We are evaluating continues to expand our extensive multinational origination network and team is on uncovering mission critical digital infrastructure assets from our core leasehold interest in digital.
Tennis systems, where das and two fiber connection rich communications aggregation sites or points of presence all of the acquired assets have broadly similar attribute and underwriting criteria that we adopt specifically they represent long duration low risk triple net rental streams payback.
The world's largest communications operating and infrastructure companies.
In June radius global infrastructure was added to the broad market Russell 3000 index, the small cap Russell 2000, and index as well and the Russell Microcap Index. We are pleased to be included and these indices, which we expect will increase our visibility in the investment community when prices for our CFO will now for.
<unk> and overview of our current holdings and financial results in more detail Brian.
Thanks Bill.
We continued to grow the portfolio at an elevated pace and the second quarter.
Taking advantage of investment opportunities across our footprint to deploy capital.
And.
As of the end of the second quarter, we owned 5868 sites with 7000 and 748 lease streams reps.
Represented by a tenant base.
Rice of <unk> 40 per cent tower companies and 60% mobile network operators.
The vast majority of which are investment grade.
With respect for annualized in place rents, 39% argue nominated in euros, and 20% and British pounds, 18% and U S dollars.
And the remaining 23% and other currencies.
Revenues were up 54, three per cent to $25 million in the quarter and gross profit will grow and cash flow rose 52, 2% to $24.5 million.
Rezoning and a gross profit margin of approximately 98%.
And the second quarter, we generated 3.9% growth from escalators and other organic growth offset by one 2% of gross churn.
Sorting and net organic growth of two 7% on a year over year basis, which compares to two 8% net organic growth and the second quarter of 2020.
As Bill mentioned earlier, we deployed $125.4 million for acquisition Capex and in the quarter compared to $35 million last year, representing a 258% increase and up from $107.8 million and the first quarter.
And this level of deployment added $9.2 million and rent generated from 214, new sites across 282, new lease streams.
We anticipate these new lease streams will generate a fully burdened initial cash yield of approximately six 8% in line with the year ago level.
With the continued growth of our portfolio, we are seeing the benefits of greater economies of scale from our acquisition platform.
For multiple of origination SG&A to rent acquired declined to one <unk> and the second quarter versus three Forex and the prior year period.
We expect that this trend will continue as we deploy incremental capital and leverage the platform.
Turning to our balance sheet and liquidity at June 30, we had $894 million and total gross debt outstanding and net debt of $617 million.
Debt carries and weighted average cash coupon up for 1%.
Overall our debt.
It has a weighted average term of six two years and our first maturity of $75 million in 2023.
In the quarter, we issued $75 million and junior debt secured by U S rental screens at $98 two five with a 6% cash paying maturing in April 2023.
We also raised $200 million of common equity and a pipe transaction and me.
As a result of the debt and equity financing the company had $337 million of liquidity available for incremental investment as of quarter and.
Please refer to the supplemental materials posted to our website. This morning for additional details.
Bill.
Thanks Gwen.
That concludes our prepared remarks, operator, please open the call for questions. Thank you.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your line is and the question queue.
You May press star two if you'd like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Our first question comes from the line of Sami Badri with Credit Suisse. Please proceed with your question.
Hi, Thank you for taking my questions I guess.
Just first wanted to start with just an assessment of the competitive landscape that you guys are navigating now I know your business has been and the public spotlight.
Some of the other tower industry constituents are probably seeing the successes that you've been having consolidating a very highly fragmented and global business could you kind of are.
And our opportunity could you just give us a bit of a summary on.
On some of the competitive dynamics that you're seeing and maybe just give us any.
Europe, and North America, a little bit separately, just so we can understand the two different.
Two different environments in each region.
Sure, Thanks, Sami and in it.
Good question I have to say.
Look every country is different every day.
The actual market landscape and each country is different and what I mean by that is you have.
Movement, where the <unk> and mobile network operators are shedding their towers or selling them to tower companies in the countries where that has yet to occur it's on.
And obviously, usually less competitive because typically <unk> don't spend the time or the capital to compete against us and acquire sites. When it does occur as we've been all watching in cross most of the European countries. Yes, we have more competition typically the tower companies try to acquire properties on.
Underlying their sites in competition with US now the funny thing is the market is so enormous debt, we will come across them in a competitive bidding environment and by a site, but there are times significant times, where we don't just because for whatever reason they didn't get to this landlord and when we got to a particular property.
On her or vice versa. So that we expect that to continue going forward.
We expect we will continue to be successful we expect that.
The extent of our success.
And is still uncertain given what other things can happen and the market, but as we look at where we're going we think at the very least we should remain.
And the ability to acquire what we've been acquiring to date and then on top of that we add new countries that we intend to work hopefully expect to open.
As well as new approaches to acquiring assets, which can range from different types of offers and different type of marketing approach is such that we can be a better competitor and <unk>.
Access the asset, meaning acquiring the asset at a acceptable return for ourselves.
I think yes, I think that's basically how I would frame it.
Got it got it.
One other follow up is has.
And you were approaching sellers for.
For land interests and.
And you know historically, maybe you guys were maybe the only party are the only buyer and the markets trying to court and the seller of the land interest have you seen now and increase and the number of potential offers that the same on land interests.
Our currently garnering or are you seeing more people coming to the table and submitting offers.
We typically either if there's really two buckets so easier to your good point, it's just us alone and.
And oftentimes it may take two or three years before a property owner says, yes, I'm ready to sell them out because they typically sell if you remember when they need capital.
Second bucket would be yes, it would be ourselves and typically the if theres now a tower company. That's operating the steel on top of our on top of that property. It would be that tower company competing with us.
Okay got it got it.
And then just my last question is but just remember one thing if you are.
It's gonna say semi debt, if you're in a market such as France, and their 60000 sites and you've got 20000 sites, if you're with the largest and certainly tower company.
That's a lot of sites and a lot of people to reach and it's never as efficient as you think so that they always know that there should be being against us to buy that property to just oftentimes they didnt reach that landlord and time and there are times and we didn't reach a landlord that they may acquire and time.
Got it got it. Thank you for that and then just my final question has a lot to do with the fully burdened unlevered yield.
And that the company targets to achieve your growth rate since you became more formalized as and independently listed public company has obviously been a lot higher than what a lot of us were computing.
There have been any changes with your targeted corporate fully burdened unlevered yield range that you were you know you guys are trying to achieve or produce.
I guess the way we measure it is not just on our yield even though we report it that way.
And some of the alternative assets, which we really view is the same exact mission critical durable revenue stream you will note that the property right that we're acquiring is typically fee simple around 99 years in other places, where we're buying the wireless related rooftop or ground underneath.
They ground based tower.
That can range from fee simple for 99 years and can be assured and some other Latin American countries and it 30 years. So obviously, you would see and say to yourself, it's a 30 year one the actual.
Yield will be higher than the underlying net present value because youre only going out 30 years now we always thought there. It's 30 years, we have in year 10 for your five the ability to always go back to the property owner and buy extra years, whenever we want and sort of an embedded option, even though it's not formalized.
The other other things I'd add there Sammy sorry, it's Glenn the other thing to add there is in Q2 I'm sorry, the second quarter second half for the year for 2021 are purchased term was there any for years versus 58 years and the prior period and then Youre seeing.
And our percent of escalators that are inflation based on market base for moving up to 76% from 70%. So that's going to drive the Levered returns.
Thanks Glenn.
Got it thank you.
Thank you. Our next question comes from the line of Walter Piecyk with Lincoln. Please proceed with your question.
Hey, Walt.
On what's going on and Bill Hey.
The escalation line it seems to kind of bounce around a little bit obviously very good this quarter at free over 3%.
At first I thought it was like and kind of a rounding error because you do have like one decimal, but and I see you actually in your and your report show it at 3% so.
Like our experience with tower companies and Thats typically a pretty stable number like what what makes that move around or what was it.
And the given quarter in terms of mix of assets that drove that up and as I can.
And most importantly.
Is 10, 3% be the new norm.
And when you look at your business going forward.
Well I think I'd like to remind you it was going to say just at the high level to remind you on how the escalators work as Glenn mentioned many of our countries are inflation based and every country's difference that youre going to see some variability and whatever the inflation measure was the first party escalator and the second part of the escalator would be.
Increases from lease expiration with our tenants being a tower company, who are on mobile network, operator, where when we go to renew and have that negotiation you will get a bump up if it's below market. So thats another contributor too.
I guess, the variance and lease up and.
And when you think about your escalator I don't know if youre breaking it out from our organic growth versus the actual escalator. If it's just the escalator, you're focusing on yes, 3% fixed and the U S and inflation linked and so that's going to vary plus you've got some FX movement too.
Got it and then also and the relief you talked about obviously.
Huge origination again this quarter. So I guess the first part of that question is like is this the new norm on origination, but more importantly, when you talked about raising additional capital.
And you talked about broadening from wireless only sites into adjacent digital infrastructure assets with similar characteristics may have touched on this a little bit last quarter, but can you can just kind of refresh our memory on.
What are these adjacent digital infrastructure assets that are kind of mixing into the portfolio.
Sure I know, it's a mouthful and if you have a better way for us to frame it from us and no I think it's good I think it is good.
Let me know, but I think specifically it would be as and equipment I'll give you. An example, we would buy a day.
The hospitals revenue stream they received from two or three mobile network operators to put a distributed antenna system within a hospital so that would be and examples. So we're buying the same type of rent from the three operators that we would typically get if we are just owning the ground on their tower. It just so happens that we're buying the distributed and.
Antenna driven rent, which is long term and contractual so.
So we don't really in our mind think it's any different but technically I guess, you would say well, let the indoors and if that makes sense. Another example on are we seeing a fiber assets I'm sorry.
Yeah that makes sense go on.
So that's why we haven't really broken it out because it's the same thing to US and then the other would be a fiber aggregation point, where you've got on May eight point, where multiple networks and putting the largest and mono has come together on fiber gets connected and we used to call. It either and MTS is really basically a routing point as they interconnect right there typically.
These are in structures. So we're actually owning the physical structure oftentimes there be a cell site on the roof. So we would get that too. It's the reason we haven't broken it out those are larger scale assets, there and we we typically would acquire on a wireless site and as a result that has been driving a lot.
All of our alternative sorry are on.
Our adjacent asset acquisition, so we will see that and a lot of places.
Trying to think what else we have bought.
Let's see most recently bought a data center that is hosting medical information and oftentimes. These have sales sites on the roof. This one within a particular country sort of mission critical it's terrific site with a great structure again I want to remind you that it's all triple net lease.
So and so what's interesting about all of these things that you've described is it it seems to me that on the surface. Yes, you have what you call revenue enhancements growth, which and kind of tower lingo as the Colo and amendments right the incremental growth.
And that's just starting out right.
However, the words are it's the extra stuff right. So.
And when I think of land, obviously theres opportunities for shelters and other things that.
Drive some of that growth, but when I think about when and what with what you described it seemed like there might be more opportunity for those.
Additional growth on existing assets organic revenue revenue enhancements or whatever you want to call does that true or is that not the way to look at it.
It's a great question and we spent a lot of time thinking about what our additional usage and our property rights permit us to actually do and what can they be that could be in addition to the core activity, whether it's the wireless tower.
And China is on a rooftop or and this particular case.
A data center structure, which may have a sell side on the roof.
I'd like to say that.
There are a lot of things we've considered nothing that we will come out yet and say, but but I am kind of determined and come up with something else that just adds value, but until we have on that we think the economics really work and it makes sense for us we there's nothing to really talk about but you know it's high on our.
And I guess, our think tank exercise and there are lots of things that we have considered that one can put on a rooftop where the top of the structure. Let me say it that way I don't mean to be coy, but we also don't want to alert our competitors to other things, we're thinking about which is probably the first and the first example, you provided though where it's a it's a das and Theres two on winners and there are there's always an opportunity that I guess a third op.
Greater could come in there and if you own the hotel and convention center or whatever it is as lease payments on that that would be incremental organic growth, which seems more logical than you know.
And maybe someone putting a shelter on that on the land underneath the tower.
No that's correct, but I wouldn't say, it's more logical we have and have an extra shelter, we often do get extra generate eight sorry, not and extra generated but on a new generator and that's put on a piece of property.
And we may have and some some countries.
Countries. They may want to test other types of power generation, whether it's.
Solar or otherwise.
There's lots of alternatives and things that can be put there it could be a battery array it could be.
The diesel fuel tank that powers the generators. So there is definitely uses.
Great.
Well.
Yes, I'm sorry.
And I was going to say Bryan Im sorry, and hotel and you want on augment its capacity and and.
Some countries you may want to go a little higher youre going to maybe need guy wires and guy wires as you remember they go farther out in the plot of land right, because they're sort of like the diagonal line of triangle, so they're going to need if it's not if it's starting as a monopole and wants to convert to a.
A guidewire tower, it's going to be more land.
Understood just one last one and sorry to other people on the call but.
Years ago, when wind crown and talked about vapor Io and <unk>.
<unk> had some deal with on them and remember what company was that was I think maybe packet, which is now and I don't even know if they throw around there was a lot of talk of edge compute.
And that could theoretically be something that you'd bet you benefit from but then it never really materialized more recently dish and.
And at mobile World Congress had a lot to say.
And with Amazon and really the same concept like putting physical products.
Product at closer to the edge at cell sites and have you seen I guess for sort of the question is have you seen any of this anywhere in the world yet started to.
Perk up and is that something that you benefit from or does that more of a revenue opportunity and for the tower companies.
No I mean, so number one we haven't really seen it and certainly not in our numbers.
It's going to get continue to get a I guess a lot of talk I'm somewhat skeptical because what it is really solving is typically latency on.
And how many applications require latency differential between 10 miles as an example, with the speed of light. It's just not so much but putting that aside if indeed, it should come in and they need extra space, we will benefit.
Okay, great. Thank you.
Thanks, Paul.
Thank you. Our next question comes from the line of Jon Petersen with Jefferies. Please proceed with your question.
Hey, Jonathan and Thanks, Hey, How's it going on.
Okay.
I wanted to ask Bill I think you said the $125 million of acquisitions and <unk> is a I think you said that's a good run rate for the rest of the year I just wanted to confirm that that was indeed guidance for the next couple of quarters.
Well I think we've and love to give guidance too.
Too far out because I think as I've said before.
We've got visibility probably for a couple of quarters, but were just pretty conservative and how we think about the world.
And I would say that.
I hate putting a number out there, but we're hopeful to repeat the quarter. We've just had for the end of the year I guess in my mind to keep it more simple and say and thinking it through the end of the year, we probably could do about 100, and we're optimistic that it and that so it's just been it's been going really well and not just in terms of what.
We're investing but of course, the returns that we're getting and the quality of the assets that we're buying and the countries that we're most targeted on and while we love Latin America, we do make sure that it's only a portion of what we do.
Europe of course lately has been a big drive for us and it's going it's going well really well.
Got it and sorry that was a $100 million per quarter or 100 million spread over the next two quarters I just want to talk about till the end of the year I think we would should be able to replicate what this quarter is by hope, but I'd say 100, and it is my conservative way of reflecting it not trying to sandbag or anything but you never know if we do better.
Yes, no that's fair.
And then just to get on maybe a little more color on the acquisitions that you did do and the quarter and then can you break out like what percent was land under macro towers.
Much was rooftop easements and how much was just other land under digital adjacent and stuff.
And so it's a great question, we wrestle internally about when or if we want to actually do that.
On.
Well I was going to say is that we're not yet ready and mostly because of competitive reasons don't want to really detail to our competitors exactly what we're doing and how we're doing it we recognize that we will very likely at some point go into more detail on it but if it's okay. With you, we're just not ready to share that for competitive reasons.
Okay.
Same answer for geographic breakdown.
No I think graphic breakdown.
Europe is definitely as I mentioned before probably our strongest push and drive Latin America slightly less.
Everything else was put on in line with what we've done in the past when correct me if I'm wrong.
Yes, sorry, I was on mute, yes, that's correct and you can see you can see the trajectory.
Through the annualized and place right.
Slide on the debt, we breakout in the supplement materials and so you can see that it is shifting.
From your from your from Latam and Europe.
Got it Okay and just one more question speaking of.
Competition, your competitors and landmark infrastructure seems to be and some sort of a bit more that's probably your closest public peer you don't have a pure public peer, but I'm just curious have any.
Any read throughs or implications on kind of values of portfolios of of.
Of land under digital assets out there and and what that means for you guys and maybe a follow up now and I could not.
And you guys might enter this bidding war, but that does acquiring a portfolio at some point. It makes sense for you guys to get to that to really kind of scale that G&A.
Yeah, I mean, I think two great questions on the value of the portfolio, Yeah, I think theres somewhat instructive, if you remember landmarks different and us in that it has a significant portion of their portfolio being billboards and while we think are a valuable asset and a good one I think our.
Our belief is that Theyre, just not worth the same as the mission critical revenue streams, we buy because oftentimes they are reflecting not just contractual fixed brands with an escalator, but a percentage of rent that they get paid from the outdoor advertising company and as a result, you're tied to the economic health of the economy, which reflects what happens.
Outdoor advertising so when you look at their their mix, it's just different than ours. So it's really hard to say apples to apples on evaluation as to your second question actually I would say that melody.
So his portfolio from what we understand for 26 for 2007 times to sculptor capital and Dime and tower sculptor being the old Oxy, If I guess fund and Diamond elite is managing and actually adds a sharp guy has done and and that was a U S based portfolio so that would be.
<unk> a good comparable and it was also mentioned about some I can't confirm this debt when American tower bought insight. We believe they paid around 26 times, if I'm not mistaken for the ground debt inside it also acquired in the U S. So those would be some comparable.
In terms of would it be helpful for us to buy portfolios sure you bet. It would give us more scale more property management efficiency and the like and you would imagine that we've looked at a whole bunch of them, but they have to hit our return criteria and our quality of the assets that we're buying just.
Sure.
Actually I would say, we're very disciplined when it comes to that in terms of the landmark situation. I think you know mark over a digital bridge has done a terrific job and navigating clearly a complicated structure and you know, even though theres been other people trying to bid the price up.
His sole control of the GP is when I looked at it and I believe he has some other attribute stat. It's not if he acquires and it's really just what price that he gets to with the conflicts committee as I've read through it and.
And.
And I think he did a good deal there it was a complicated one but he.
And he clearly is a terrific dealmaker.
Okay.
Great. Thank you very much sure.
Thank you. Our next question comes from the line of Ric Prentiss with Raymond James. Please proceed with your question.
Hey, good morning Ray.
Good morning, guys, sorry, I had to join the call and progress we're at our parks for the summit, so been listening, which I wanted yes, I'll, let you know that.
Right.
No worries.
Couple of follow on questions.
For the raw monitoring the Delta variant and COVID-19, So hope you and family friends and employees are doing well, but how does it affect.
The M&A environment, how our landlords and owners dealing with Covid and how are you guys dealing with COVID-19 as far as for flow internationally.
Look I think it's a great question and I would say to you in the countries, where and culturally and people like to do transactions face to face. It has impacted us specifically in Latin America, we just have been able to originate less.
Because people like to get deals done a person to person and the other countries.
And.
I would say common law and it really hasnt impacted us in some of the civil law you wouldn't have to go out and get a node OEM person, but even at the height of Covid. We've had our teams have been just really talented at navigating that and getting the proper notarized.
And sure that they require so I'd say Latin America is the one place that we've really noticed not really elsewhere.
Okay.
Obviously you've.
And you've alluded to a couple of times new countries, maybe entering them thinking and the past you've mentioned get your sea legs and walk before you run how should we think about the pacing of when you might enter new countries and how that affects the SG&A around.
Yeah. That's a great question every new country, we enter should typically.
Impact the SG&A, but we've been trying awfully hard that when we enter if we can.
I guess.
Already have and hand, a bunch of deals so it mutes it a bit that's been sort of one of our goals, we are and beginning to get up and running in a couple of countries. I don't think we'll announce that we're in them for a while again for competitive reasons. There is no reason to alert competitors that were there.
But yes, there will be a whole bunch of them that we should have opened and if our organic SG&A should increase and that's just be its and investment to us just like when I look at organic SG&A I always view it as an investment and growth Capex, even though the accountants call and SG&A.
The good news is of course, when we get to deduct.
Data from our any potential tax.
And build that we would have but that's why EBITDA is less of a measure for us we really focus ourselves on run rate ground or run rate rents as a triple net.
And fire.
Okay.
Final one for me is obviously, we're all watching the interest rates.
Bounces around the tower stocks are fairly correlated to interest rates not just growth rates of business. How are you guys doing and where do you see interest rates heading and and how is inflation impact your business.
Right.
So it is the seminal question for almost for most businesses out there that <unk> leverage and and grow.
And grow it effectively with the impact of inflation and interest rates because they're completely attached at the hip the way we've always viewed it as acquiring inflation linked rents is a way to mute interest rates and so and Glen and got on the phone and said, 75% plus of our rents are inflation linked.
Pretty terrific what I would also point out is if you look at sell next typically their inflation linked rents are capped and not going to say all of them, but when I read through their annual reports you will see that they get capped I want to say, 2%, but I'd have to confirm that ours are open ended and and I've always felt that inflation linker or that option to get.
That growth and inflation has been undervalued and underappreciated from the market, but that is more of a mathematical discussion. We can talk about and the other thing to remind you is when you're trying to keep this simple is that when interest rates will rise is a central bank wants to try to sorry, and inflation should rise as central bank will typically want to raise.
Interest rates, so that and Theres a lag time.
Between that but we've always felt that if interest rates.
Go up we are nicely hedged with that inflation linked bonds, it's not to say that we won't be impacted by inflation rates because investors for whatever reason may not know the actual the real underpinnings of what the values event inflation linker, Hence my original point, but we feel pretty good or bad for the last thing I assume and interest rates.
Yes.
As you know we're right now levered above six times at our holding company level, approximately I want to say eight and a half or so at the.
Subsidiary AEP wireless level.
When I think about leverage I guess, even inside our shop, the more leverage we put on speaking simply.
More equity, we're taking out so that means less of your equity is now exposed to any interest rate movement. So we're not nervous when they are always disciplined on how much leverage we put on but if we really wanted to hedge ourselves and that would be the simplest way, which is just to lever even more so long as it was non recourse to a particular country.
Free to set of countries does that makes sense.
And it does and I appreciate the color guys. Thanks.
Thanks, Rick have a good conference.
Thank you, ladies and gentlemen, as a reminder, if you'd like to join the question queue. Please press star one on your telephone keypad and our next question comes from the line of Simon Flannery with Morgan Stanley. Please proceed with your question.
Hey, Thank you very much good morning, how are you Bill you talked about some very strong origination volumes.
Can you give us some sense of the scale of the platform I don't know.
Something like quota bearing head count or just how is that scaled over time and on what are your projections there.
Right I think our head count hasn't necessarily changed dramatically and what has been changing is our ability to source and acquire.
The alternative adjacent assets that I mentioned in answering some of the earlier questions. That's been pretty terrific and I can say this has been just an incredible quarter for us and our.
Team is just doing a great job.
Joke internally that it's like we have our CIA intelligence agents out there and looking for what we thought were $100000 deals, but some of these alternative asset classes like the aggregation points for fiber or the indoor distributed antenna systems at a hospital as I mentioned, they're just larger ticket deals and that's been just really.
And it benefiting us.
Are you getting more productivity, but I guess to get into if you wanted to go into some new countries or whatever you might want to add resources for that is that fair.
That's correct, but we're trying if we can.
These new countries too.
And we're in France came and we also assist our team and Belgium with some of the French team that we have.
Those are type of things and overlaps we look for it I think that wasn't the best example, but we have other countries, we try to to expand out to something that's on the border to see if we can use that team to assist us in the out other country.
On the other approaches sometimes finding local agents that can assist us where they are not part and parcel of our team that being said when we do open new countries and it does have an investment to get it up and running.
Yeah, Okay, and then one other big things over the last couple of quarters and the tower space is being built to suit, we're seeing a lot of interest and in Europe, now with with trailers and Germany, and and then it's obviously been big and Brazil and parts of Latin America for a long time and India.
Does that create opportunities for you or does the tower companies kind of deal with the land at the time that they're kind of we're hoping to find those sites et cetera.
That's a great question and actually we've been adding to our team to hopefully be able to put ourselves in a position to initiate a build to suit platform. We don't have anything to report because we'd only do it when we get a contract upfront.
Field of dreams, and the way, we view the business and the way the tower guys use a business, but I do think there's opportunities.
On interesting in Europe, and I'm sure, you're well aware oftentimes the carrier itself will do the build and then they'll sell it at the end once its constructed to the actual tower company, we've seen that with cell next when they're buying these assets and bundling them with build to suit contracts.
Now that being said I do think there's still an opportunity for us to win a whole bunch of contracts and hopefully at some point walks on the report on it but we have to get a little lucky and we have to win contracts.
Great and just one last one you talked about your interest and Latin America, but you're kind of you're it sounds like you've got a little bit about emerging market kind of.
Quota if you like so.
And what's the right way to think about your mix between developed and emerging over time.
I think we've not really wanted to go greater than 20% from and emerging perspective and that being said, we when you have Chile as an example, which is part of OECD. It's just slight is just different and Mexico, sorry, not Mexico, and Brazil and Colombia.
And so we've had good experience in Chile.
And so that would be and example of how we look at but I don't see it go and greater than 20% now. The nice thing is is that we've been buying so much and Europe that Latin America continues to get smaller as a piece of the overall and as I mentioned to Rick Prentiss.
And because of Covid weeks, we were not able to acquire as much as we were expecting and Latin America, but of course, we made up for it in Europe in spades.
Alright, Thanks, a lot.
Thanks Simon.
Thank you ladies and gentlemen, this concludes our question and answer session I'll turn the floor back to Mr. Brookman for any final comments.
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Stay safe and manages through both Covid and this delta variant.
Thanks very much.
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