Q3 2021 Colliers International Group Inc Earnings Call
Hello, and welcome to Colliers International third quarter, 2021 quarter Investor's Conference call.
Today's call is being recorded.
Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward looking statements that involve known and unknown risks and uncertainties.
Actual results may be different maybe materially different from any future results performance or achievements contemplated in the forward looking statements additional information concerning factors that could cause actual results to materially different from those in the forward looking statements.
And in the company's annual information form as filed with the Canadian Securities administrators and in the company's annual report on form 40 F. As filed with the U S Securities and Exchange Commission.
As a reminder, today's call is being recorded today is November the second 2021 and at this time for opening remarks, and introductions I would like to turn the call over to the global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead Sir.
Thank you operator, and good morning, and thanks for joining us for the third quarter conference call as the operator.
As the operator mentioned I'm, Jay Hennick, Chairman and Chief Executive Officer of the company and with me today is Christian Mayer Chief Financial Officer as always this call is being webcast and is available in the Investor Relations section of our website a presentation slide deck is also there to.
Two of companies today to accompany today's call.
Earlier today Colliers delivered strong results for the third quarter with continued momentum across all service lines here are some of the highlights.
<unk> management again generated strong results for the quarter raised a record $4 $9 billion in capital commitment. So far this year and finished the quarter with AUR or assets under management of more than $46 billion.
Capital markets and leasing were both up significantly over the prior year, while our recurring outsourcing advisory segments, including engineering and design property and project management and mortgage servicing and valuation also delivered solid internal growth.
Given these strong results and the continued with continued momentum we are seeing we now expect colliers to exceed the top end of the previously provided outlook as you'll hear from Christian in just a few minutes.
During the quarter, we released our elevate the built environment framework designed to embed ESG practices across our organization.
We are implementing specific targets to reduce carbon emissions and we've committed to net zero in our own operations by 2030 and expect more of our ESG efforts coming in the in the upcoming quarters.
Last week Colliers formally announced its new enterprise 25 gross strategy setting of ambitious growth targets for 2025.
Over the next five years, we will strive to double our profitability and generating more than 60% of our adjusted EBITDA from recurring services.
As shareholders know our five year plans have always been an important roadmap for our company. If we are able to achieve our new enterprise 25, 2025 growth plan. It will be very good news for shareholders.
After quarter end, we announced two acquisitions and carry on and Colliers, Italy, both of which are expected to close by the end of the first quarter of 2022.
And Terry on one of the largest investment management firms in Italy with more than $4 billion in <unk>.
We will augment our colliers global investors platform.
<unk>, Italy adds another market leader to our strong company owned services business in Europe.
And yesterday, we completed the previously announced acquisition of Bergman, which provides additional scale and further diversifies, our rapidly growing engineering and design business.
The bottom line is this colliers continues to seize opportunities and to think differently as we lead our company and our industry into the future.
We are one of the top global players in the business with a global brand and platform second to none and we have a highly diversified business model diversified by revenue by client by asset class and by geography, and we're also more resilient than ever with more than 50%.
Of our revenues coming from higher value recurring revenue streams.
With our proven track record of more than 26 years unique enterprising culture differentiated and diversified business model and significant inside ownership colliers is better positioned than ever to continue to create value for its shareholders. One step at a time.
Now, let me turn things over to Christian for comment Christian.
J S.
Announced earlier today Colliers reported strong third quarter financial results My comments all the flow of the slides posted on the Investor Relations section of Colliers Dot com to accompany this call.
Please note that the non-GAAP measures referenced on this call are as defined in the press release issued today.
All references to revenue growth are expressed in local currency.
Third quarter 2021 revenues were $1 2 billion up 46% relative to the prior year period with continued momentum from earlier quarters.
Revenues were up strongly across all service lines, particularly capital markets and investment management.
Growth for the quarter was virtually all internally generated compared to 2019 pre pandemic levels capital markets revenues were up 34% and leasing was up 8% with office leasing in recovering into within 5% of 2019 levels.
Our Q3 consolidated adjusted EBITDA was $124 million up 32% from 92 million reported one year ago with margins at 12, 1% versus 13, 3% in the prior year quarter.
Our margin was impacted by performance based incentive compensation, the reinstatement of variable cost and higher support staffing cost.
All due to the strong rebound in transaction activity levels.
Americas Q3 revenues for.
$617 million up 45% over the prior year period.
Capital markets revenues were up 92% driven by significant increases in industrial and multifamily sales transaction activity.
Leasing revenues were up 34% largely due to stronger industrial and office leasing activity across the region versus the prior year period.
Office leasing activity showed steady improvement in Q3, although remained below pre pandemic levels.
Outsourcing and advisory revenues were up 24% driven by strong internal growth in engineering and design.
<unk> and mortgage services.
Adjusted EBITDA for the region was $66 million up 20% from last year with a margin impacted by performance based incentive compensation from strong year over year growth in operating results.
Statement of certain variable costs and higher support staffing costs.
Third quarter, EMEA revenues were $155 million up 29%.
With strong revenue increases in each service line, particularly leasing and capital markets.
Adjusted EBITDA for the region was $15 million up from $8 million last year on higher revenues and continued savings from pandemic related cost measures.
In the Asia Pacific region third quarter revenues were $172 million.
51% relative to the prior year period with all service lines reporting robust growth led by capital markets and leasing on.
On a geographic basis growth was led by Australia, New Zealand and China.
Adjusted EBITDA was 21 million compared to $13 million last year with the increase attributable to operating leverage and continued cost management in light of the pandemic.
Certain parts of Australia, New Zealand, and Japan are underpinned epic stay at home orders during the quarter, which made our operating results all the more impressive.
Investment management revenues were $78 million up 87% versus the prior year period.
After eliminating the impact of pass through carried interest revenues were up 50% driven by management fee growth.
Assets under management were 46 billion at quarter end up 27% from one year ago and reflected another record quarter of fund raising following on the record capital commitments achieved in the first and second quarters.
Adjusted EBITDA for the quarter was 28 million up from $15 million generated in the prior year period, reflecting solid operating leverage on incremental management fee revenue.
Our consolidated operating cash flow for the first nine months of 2021 was 211 million.
However, adjusting for the nonrecurring cash component of the LTI a settlement.
Cash flow was 300.
Almost triple the 104 million generated in the same period in 2020.
Okay.
Impacted by a combination of higher earnings and a reduction of working capital usage, which was elevated during the pandemic last year.
Capital expenditures for the nine months ended September 32021 were $44 million.
A significant increase from the prior year and reflected investments in leasehold in several markets.
<unk> certain markets, where we deferred relocations and expansions during the pandemic.
For the full year of 2021, we expect capex to be in the range of $55 million to $60 million.
Almost one third of this capex will be landlord funded leasehold improvements, reducing the net cash capital expenditures to approximately $40 million.
Turning to our debt capital structure, our leverage ratio as defined by defined as net debt to pro forma adjusted EBITDA was <unk> five times at September 32021.
After quarter end, we issued $300 million in U S and euro denominated senior notes due 2031 and paid down our revolving credit facility in full.
As a result, we now have well over $1 billion of liquidity available to fund future acquisitions and ongoing operations.
In addition to this liquidity our capital structure has low leverage low borrowing rates and latter debt maturities extending to 2031 with all this in place. We believe we are perfectly positioned to execute on our enterprise 25 growth plan.
Given the strong results reported for Q3 and continued momentum.
We are updating and increasing our financial outlook for the full year 2021.
We now expect to exceed the top end of our previous outlook.
We expect that adjusted EBITDA could be 40% to 45% above 2020 levels.
The new outlook includes two months of the Bourbon acquisition completed yesterday and are subject to the risks and uncertainties that are outlined in the accompanying slides.
That concludes my prepared remarks, I would now like to open the call for questions.
Operator can you please open the lines.
Thank you, ladies and gentlemen, as a reminder to ask a question you will need to press Star then one on your telephone.
To withdraw your question Christa.
Again, Thats star one to ask a question.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Stephen Macleod with BMO capital markets. Your line is open.
Thank you good morning, guys.
Hey, Steve Good morning.
I just had a couple of questions that I wanted to follow up on.
Specifically around the operating cautionary note I know the operating costs came down a lot through the pandemic and previously question you've given numbers around sort of where you are on a run rate basis can you talk about how many of those how much of those costs have actually come back into the system.
Yes, Steve I think the majority of the costs are back in the system, particularly in the.
In the Americas.
The.
EMEA and Asia Pac regions are still benefiting from some of those operating cost reductions.
Can see that in the margins in the quarter.
Yes.
Yes.
We've made.
I think a very prudent.
We've managed very prudently over the past year and a half.
And we're trying to remain disciplined as possible in terms of returning our cost to the system.
As we as we.
Emerge from the pandemic.
Great. Thanks, that's helpful.
And then my second question I just wanted to.
It was more of a high level here you released your five year plan last week.
Which which is another another great.
Has a great five year outlook and I'm just wondering if you could talk a little bit about sort of some of the key drivers that may may lead you to potentially outperform that five year outlook, and where youre seeing the majority of growth. When you think about doubling EBITDA over that time period.
Okay.
Well first of all we think it's an ambitious plan over the next five years.
We think it speaks for itself.
Steve you've been with us for a long time, we've done this two or three times in the past and.
There is a lot of rigor that goes around the plan.
And we're.
We're pleased that we're able to issue. It now we would've normally issue with an earlier given the pandemic, we slow the ball down a little bit but.
I think we have a very clear path on growing internally and.
And through acquisition.
We are going to differently than in the past, we are going to be more strategic around the additions that.
That we make to our business.
Focusing on more recurring and long duration revenue streams, because we think that it enhances the value of our overall company we have not.
And I think our peers are in the same boat we have not been.
Particularly pleased with.
The market valuation of companies in our sector and believe that part of the reason for that is the lead.
Less or lower level of recurring revenue streams and as you can see over the past two years ours is elevated considerably.
And if we continue to do that we're hoping that in addition to driving great results operationally we can also.
Attract a better valuation for a great global business with unlimited growth opportunities. We just see so many so many ways to grow this business and having a global platform.
Allows allows us to do that very well in the coming years.
That's great color. Thank you Jay.
And then maybe just finally.
With respect to the engineering and design business you cited it as a good contributor to this year this quarters Americas.
America's growth and I'm, just wondering what youre seeing in terms of engagements in the pipeline in that business.
You know pipelines.
Pipelines have been.
Higher than the prior year.
And one of the benefits of continuing to grow the business.
Is that you add credibility you add disciplines, you add additional service potential to the business. So.
We believe the addition of Bergman will open up some existing doors within the Colliers engineering and design business and vice versa, and so we're seeing.
We're seeing it.
Expect to see the pipelines.
Grow for that reason, but also with all of the stimulus discussions that you're reading about in the paper.
Virtually in every country.
And every budget, we believe that we are going to be a beneficiary of that.
As we move forward.
Great. Thank you guys. That's it for me thank you.
Thank you.
Our next question comes from the line of Stephen Sheldon with William Blair. Your line is open.
Hey, Thanks, Good morning, I guess, just first relative to what you were previously expecting with your guidance, what what had been the biggest surprises on the way things have progressed over the last two to three months, especially.
Across the different service lines, and then also across the geographies.
It's Steven we have as you know.
Good visibility on the recurring revenue side of our business, so not any significant surprises there, but certainly on the transactional side.
We have been.
Continuing to see very strong capital markets activity.
And a rebound in leasing activity industrial leasing office leasing stronger than expected.
When we sat here three months ago, certainly so those have been very strong contributors to our performance.
Got it that's helpful. And then just wanted to ask about the labor supply challenges out there is that.
A notable headwind as you think about this quarter or I guess could it become more of one if you think about the next few quarters with let's just get your thoughts on that.
On that topic.
Yeah, it's definitely an issue that we are noticing.
There are more broad economic and demographic social trends.
<unk> pandemic that are happening.
So there are elevated levels of turnover.
Across all sectors of the economy in the professional services.
Sector, as well and that does affect.
Our employee base.
We're managing it.
The best we can.
Through that.
But it is not.
Had a material impact.
On our on our business to date, although when you think about some of our professionals.
Difficult to recruit.
Engineers and project managers, and <unk> and those types of.
Our folks so one of the biggest factors constraining our growth will be the recruitment of those types of professionals.
Forward, because certainly as Jay mentioned the pipelines are very strong in the first activity is going to be very strong as a matter of getting the staff to complete that.
Those assignments.
I'd add something else Stephen.
As you know a lot of our business is performance driven.
<unk>.
And our people are generally paid at the higher levels.
<unk>.
Compensation scale.
When you are in the business of janitorial and other markets like that where youre are duty bound to provide a whole bunch of low level employees to our building.
It's a serious theres a serious gap in.
In providing those services. So I think we are.
Everybody is impacted but.
But I think we are structured colliers and our focus on higher value services has really.
Held us in good stead versus others, who are.
Our duty bound to be providing thousands and thousands and thousands of low level employees building on the building side.
Yes.
Makes sense. Thank you.
Thank you.
Our next question comes from the line of Daryl Young with TD Securities. Your line is open.
Good morning, guys.
Just with respect to the five year plan.
I'm just wondering if there is a focus embedded in there on returning to some of the gateway cities I know you've been somewhat over indexed to the secondary markets historically, but just wondering if that's a core part of the plan going forward.
Hi.
Always as we do at market for market, where do we have gaps where is their growth opportunities where it can we talk radar people.
Perhaps jenna.
Generate better returns and the other thing.
That we're in the early stages of and I think it is very exciting is cross market opportunities and how do we best cover clients that are multi market clients globally nationally regionally.
And we've made great progress there, but I think we've got a lot of room to grow in our occupier services business and our capital markets and our debt capital markets.
The same.
The same groups of clients that are operating in the United States and Europe, and a variety of other markets and how best to cover those.
Those.
Occupiers, how best to cover those investors in real estate as an opportunity and in a big gap for all all of the players in this industry and we see big opportunity there.
Okay great.
And then just thinking about the growth in that strategy.
<unk> historically had a really nicely balanced organic and M&A mix.
Would you see more M&A going forward or M&A contributing a greater proportion of the growth in this next five year plan than historical.
I think maybe that's a fair comment.
Not materially different but I think it is different.
As as we've grown and matured and become really global in our in our M&A activities.
One of our competitive advantages is our great leadership teams around the world and they are actively looking market for market too to accelerate their own growth and meet their own five year plans and they are all heavily incentivized to do that so.
More so than ever so I think.
M&A will play a bigger role in the execution of our five year plan, yes.
Okay, Perfect and then one just last one on margins.
In the quarter was there anything unique.
Terms of incentive accruals or anything that would have pushed margins down further or is this sort of more of the run rate.
Going forward now that all the discretionary costs have come back and that we would see kind of margins grind higher over the next couple of years.
Darrel, our incentive plans are based on year over year, EBITDA growth and because of the low base from 2020.
The accruals. This year are elevated the plans haven't changed it's just the baseline is lower than the growth. This year is higher and youre seeing that in the results.
And there were no bonuses paid last year to anyone in fact people.
Pickups last year, when we were in the depths of the pandemic.
So.
Going forward those incentives.
Accruals in 2022 will be less.
As as things return to more normal growth conditions.
This year, we're just seeing the.
The impact of the update of the elevated level of growth year over year.
Got you perfect. Thanks, very much guys and congrats on the good results.
Thanks, Thank you.
Our next question comes from the line of Frederic Bastien with Raymond James Your line is open.
Hey, good morning, guys.
Hey, Fred.
The EBITDA you generated by investment management represented a step change over what.
What we've seen in the past now given your successes in fund raising and also the acquisition that you are hoping to close early next year, how should we think about the segment's performance over the next four five quarters.
Well as you probably know it's all a function of capital raised and about half. The business. Currently is open ended funds. So there is very very great consistency quarter over quarter, depending upon how much money is deployed.
And as we raise additional opportunistic funds.
<unk>.
It also drives the.
The revenue and because it's a high margin business, the EBITDA up as well.
No.
So I think as long as.
As we continue to raise.
Capital, we're hitting new records for for the organization.
It bodes well for continued increases in revenue and EBITDA in that segment okay.
Okay, but if I just.
Straight line.
Performance here now over 100 million Bucks in the EBITDA annually is that is that a fair kind of a run rate that we should be thinking about with with with added growth.
And there is there is one one point I should make here.
Before I jump to that conclusion.
That we completed fund raising for one of our opportunistic funds fund eight and.
During the quarter.
So when that happens there are management fees that are earned going back to the first close which which within the Q4 2020.
So there was a very pronounced.
Pronounced amount of managed fee earned in the third quarter because of that completion, the catch up fees in the calculation of that fundraising activity.
So I think while the growth trajectory is going to be very strong I would not at this point <unk>.
Straight line.
Your projections.
Growth will occur on a more on a more.
Normalized slope, okay awesome, thanks for that clarification.
Switching gears to Colliers engineering and design is the focus over the next five years to gain.
<unk> mass critical mass in the U S or do you see this business potentially extending its footprint to other regions like.
Yes. It is.
Very much a growth story.
We have great critical mass on the east coast of the U S. So there's lots of opportunity in the U S. But.
We believe that we it fits beautifully within what we do at Colliers.
We are being approached by other engineering firms around the world that are intrigued by the unique partnership philosophy that we offer.
So I wouldn't be surprised over the five year plan that you would see engineering continued to accelerate its growth in other regions around the world under a brand that is truly a global an institutionally recognized brand, which is becoming more and more helpful.
With clients around the world.
Great. Thanks last one from me Christian can you repeat where you expect to end the year in terms of EBITDA growth on my line cut off when you said that.
Yeah. So we expect to exceed the top end of our previous outlook and in terms of EBITDA that can be in the 40% to 45% range relative to 2020.
Thanks for clarifying that.
All I have good quarter.
Thanks preferences.
Thank you.
Our next question comes from the line of George do Matt.
With Scotiabank your line is open.
Quarter.
I think last call you guys mentioned that office leasing was down 29%.
Pre pandemic levels Jamba number with where we are today.
Maybe some color there Jay as to when you expect or maybe you can possibly see that number surpassed.
On the combo going on any color on that office category.
Yes, George I think if youre fading in and out a little bit on the call, but I think if I hear your question right, you're asking about office leasing and yes, it was down significantly.
Versus prior year levels and.
In Q2.
In Q3, obviously seeing had recovered to a 75% of 2019.
Levels.
If that answers your question.
Yes. Thank you and would you would you expect that to maybe surpass those levels next year.
Out there.
Well, we certainly are optimistic that that will occur.
We don't know what the timing of that is going to be but certainly next year is.
Within.
Within reason.
And we will see to see the full rebound in office leasing around the world.
Okay.
I think earlier you mentioned the operations operational costs were back in the Americas, but I believe prior to the pandemic.
It was applying to.
To improve those margins in the Americas by 250 plus basis points.
Just wondering how much of that has been left maybe how much of that is baked into.
Our five year plan and anything you can provide some maybe timing market.
Yes, George as I mentioned, the elevated operating costs in the third quarter are a function of the year over year performance based incentives.
Our very.
Very strong very high this year, given the low base last year.
As we look ahead for the next five years, we certainly expect.
<unk> enhancement.
Modest enhancement each year in the Americas region.
We become more efficient as we execute on some of our.
Some of our operating plans.
Okay I just wanted to quantify maybe looking at the five year plan we have.
What's baked in for organic revenue growth for the transactional business.
Excluding this year's recovery. So just kind of wondering maybe on a more normalized basis, maybe from next year.
<unk> 2025, how should we think about organic growth for that business line.
George.
It'll be on the.
The low to mid single digits.
Range.
For the transactional business and that's consistent with our expectations and our process and our last five year plan certainly we hope we can exceed that but.
That's the thinking in the plan.
Okay, great. Thanks for your answers.
Thank you.
Ladies and gentlemen, Thats star one to ask the question.
Our next question comes from the line of Scott Thompson with CIBC. Your line is open.
Thank you and good morning, gentlemen.
Just wondering are you seeing market share gains in any particular regions or business lines.
I think we're seeing market share gains all over the place.
When we look at our peers results and we see market comps.
We are we continue to take share or.
Our revenues are up significantly as you heard and in most markets.
But in this business, it's always about.
Market for market.
And some markets that used to be strong or not as strong for a variety of reasons.
It's a constant battle to top grade our professionals and to ensure that we get our fair share and hopefully more but I would say market share continues to grow.
And brand.
The quality of the brand continues to get enhanced.
We hear constantly.
From clients that.
<unk>.
That they are using colliers more and more.
And I think some of our more sophisticated service lines investment management, our debt capital.
Operations have all helped to elevate the stature of the Colliers brand.
In markets all around the world.
This also reflects the composition of it.
Buyers and sellers or maybe in other words are you seeing more activity from global investors.
Global investors are way more active.
And the opportunity to take a.
Canadian global Investor to a different market.
Is bigger today than ever before so capital flows.
Market for market and it was sort of a comment I made earlier today, we see it as a big opportunity a big white space for us and probably for most of our peers.
Because I think capital flows today market for market are way more than ever before.
Thanks, Jay I'll leave it there.
Thank you.
Our next question comes from the line of Matt Logan with RBC capital markets. Your line is open.
Thank you and good morning.
Hey, Matt.
Okay. Since this will be.
My last conference call wondering if you could humor me.
Talk about some of the lessons you've learned in building successful companies over the past 25 years and how these lessons will help you achieve your ambitious 2025 targets.
Well, that's loaded as loan and do you have an hour.
Do you have an hour.
Look look I think I think it all comes down to culture.
And one of the things that.
That we've been able to.
Accomplish both in the other company first service and Colliers is the unique operating culture that is very very hard to.
To replicate.
We have exceptional teams of people.
The case of Colliers they are global they're placed globally they have compensation systems that.
Pay them handsomely for delivering handsome results.
And.
All of these types and our way of operating is very entrepreneurial. So it attracts the kinds of people that want to make a difference and don't just want to punch a clock and move.
Chairs around on the Titanic, So I think I think that its culture more than anything else that makes the difference.
<unk>.
If I were buying fiber in the business of allocating capital to public companies I think it all comes down to the culture of the ethos of the company and how they've delivered over a lot of years.
And.
We're very proud of our performance.
And continue to believe that that our culture will sustain us over our five year plan and beyond.
Agreed.
Turning to your recurring services, one thing that I don't think gets enough credit as the quality of your EBITDA.
Can you remind us what the organic growth was for the outsourcing and advisory business in 2020 as well as the investment management segment.
We'll get you those numbers right now.
Or maybe maybe looking forward, how you expect the organic growth for outsourcing and invest management will trend over the next couple of years.
Yes.
Yes.
Thanks, Matt.
Organic growth in the us.
Sourcing advisory and Iam business were in the high single digits not the number directly in front of US right now but that certainly.
Strong organically.
And in 2020 and.
As it relates to enterprise 25.
We have high expectations for those businesses.
High single digits or better.
And due to a number of factors.
Our engineering and design business.
It's a business that operates in a sector, where there are a tremendous tailwind for infrastructure spending and development.
Our investment in the business.
He is very well situated.
It's focused on alternatives.
Alternative assets that isn't real assets.
That.
We think it is going to translate into outsize.
Both.
As well.
Mortgage.
Area, we got into last year again high opportunities there are for growth.
Our successful and integrating it into colliers and <unk>.
Increasing the amount of.
Transaction flow that we were able to.
Cut through that.
<unk> had very strong multifamily channel that we have so we feel very and someone can filter and get about the <unk>.
Prospects in our outsourcing and advisory and I and businesses for the next five years.
Just looking at outsourcing and advisory this year year to date, all internal growth it's up 32%.
<unk>.
Engineering and design activities.
But even engineering.
Engineering acquisition was modest.
Since the bereavement, the berkman ones so anyway.
It's significant and growing much faster than the other areas, but I'm.
I'm glad you pointed it out.
Great color guys.
Okay and earlier you had mentioned.
Bergman opening doors.
Can you talk about help Bergman and the interior and acquisitions are kind of a one plus one equals three scenario.
How that relates to driving cross sell opportunities across the business.
Well they are really different.
<unk> is in our engineering and design segment.
And that is a business all about.
Continuing to do more for clients and if you have the credibility in one segment of an engineering practice.
It's often a great segue into offering more services.
And especially when with Colliers is also involved in the acquisition of the land or in the in the project management.
Project surrounding the client around our various services helps anterior <unk> is really an addition.
<unk>, our European investment management platform.
Which we are trying to grow it's a small business right now obviously relative to Harrison Street.
This this is an exceptional operator, who we've known for many years because he is actually.
Also the owner of Colliers, Italy, the services business and so we've watched him grow this business over the past 15 years, one step at a time and believe that this is a natural addition to our business and will only strengthen it so.
Having relationships with multiple Lps multiple investors.
And having probably most importantly, a great track record of delivering returns to these investors all helps too.
<unk>.
Allow us to continue to raise additional capital as as real estate opportunities present themselves and I would say that it's more competitive out there for real estate traditional real estate asset opportunities.
Than ever before but our teams are up.
Up for that.
And maybe one last question for me before I turn it back you've got a lot of white space in your business. If there's one vertical that you're not in currently that you could see yourself entering over the next five years, what would that be.
Well we have.
We think we've got a full plate with our existing verticals. We have so much runaway room everywhere I think that in our five year plan.
<unk>.
One assumption is that in year, four or year five we bring on another platform. We have some ideas around some that might make some sense for us, but that's well down the list right now we just want to we like our balance of our business.
Across the board and what we really want to do is continue to double and triple the size of these opportunities because we have great leadership in place, we know how to integrate them well, we think we can buy them well and our unique partnership philosophy helps us I think a grow.
And find the right business is better than most.
Thanks, Joe Thanks, Christian I'll turn the call back.
Hey, Matt.
Congratulations on your new role and wish you all the best in the future we sure Matt you've done a great job for us. Thank you.
I appreciate it guys.
Operator are there any more questions.
If there are no more questions.
We'll say thank you everyone for participating and look forward to the next.
Conference call. Thank you.
Okay.
I'm showing no other questions in the queue I would now like to turn the call back over to Jay for closing remarks.
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Okay.
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