Q2 2025 Colliers International Group Inc Earnings Call

Operator: Welcome to the Colliers International Second Quarter Investors 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 materially different from any future results, performance, or achievements contemplated in the forward-looking statements. Additional information concerning factors that would cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's annual report on Form 40F as filed with the US Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Thursday, July 31st, 2025. And at this time, for opening remarks and introductions, I would like to turn the call over to Global Chairman and Chief Executive Officer, Mr.

Welcome to the call nursing. International second quarter investors conference call.

Today's call is being recorded legal counsel records us to advise that the discussion scheduled to take place. Today may contain forward-looking statements that involve known and then known risks and uncertainties.

Actual results may be materially different from any future results performance or achievements contemplated in the forward-looking statements.

Exchange permission.

Operator: Jay Hennick. Please go ahead, sir.

As a reminder, today's call is being recorded today is Thursday July 31st 2025 and at this time for opening remarks and introductions, I would like to turn the call over to Global chairman and chief executive officer. Mr. J henik. Please go ahead sir.

Jay Hennick: Thank you, Operator. Good morning, and thanks for joining our second quarter conference call. As the Operator mentioned, I'm Jay Hennick, Chairman and CEO of Colliers, and with me today is Christian Mayer, our CFO. This call is webcast and available in the Investor Relations section of our website, along with the presentation slide deck. As you saw, we exceeded expectations with our strong second quarter results, highlighting the exceptional performance of our engineering division. Our long-term strategy to build a diversified professional services and investment management business with high-quality recurring revenue streams is clearly paying off. All three divisions, real estate services, engineering, and investment management, demonstrated strong momentum driven by organic growth, new revenue pipelines, and acquisitions. We anticipate this positive trend to continue throughout the year, prompting us to raise our outlook despite macroeconomic uncertainties, as you'll hear from Christian in just a few minutes.

Thank you, operator. Good morning and thanks for joining our second quarter conference call. As the operator mentioned, I'm Jay henock, chairman and CEO of colour and with me today is Christian mayor. Our CFO this call is webcast and available in the investor relations section of our website along with the presentation, slide deck.

As you saw, we exceeded expectations with our strong second quarter results. Highlighting the exceptional performance of our engineering division.

Our long-term strategy to build a diversified Professional Services and Investment Management business. With high quality recurring revenue streams is clearly paying off.

All 3 divisions, Real Estate Services engineering and Investment Management. Demonstrated strong momentum jury uh driven by organic growth new Revenue pipelines and acquisitions.

Jay Hennick: Last week, we rebranded our investment management division into Harrison Street Asset Management, reflecting the strength and global recognition of the Harrison Street brand. We also expanded our leadership team, appointing co-founder Chris Merrill as Global CEO and Zach Michaud and Steve Gordon as managing partners and Global CFO and COO, respectively. Chris and the team remain significant shareholders, consistent with our long-standing partnership philosophy. As part of this initiative, we launched a dedicated private wealth channel by rebranding and expanding our Versus Capital subsidiary. The newly branded Harrison Street Private Wealth will continue to deliver highly differentiated alternative investment strategies to wealth managers, financial advisors, and high-net-worth individuals. This rebranding significantly expands our Harrison Street's broad array of global investment products and capabilities. This week, we also completed the acquisition of Roundshield Partners, a premier European credit platform with 5.4 billion in AUM.

We anticipate this positive trend to continue throughout the year, prompting us to raise our outlook, despite macroeconomic uncertainties, as you'll hear from Christian in just a few minutes.

Last week we rebranded our investment management division into Harrison Street Asset Management reflecting the strength and Global recognition of the Harrison Street brand. We also expanded our leadership team appointing. Co-founder Chris Merrill AS Global CEO, and Zack, meesho, and Steve Gordon as managing partners and Global CFO and coo respectively.

Chris and the team remains significant shareholders consistent with our long-standing partnership philosophy.

As part of this initiative, we launched a dedicated private wealth Channel by rebranding and expanding our versus Capital subsidiary, the newly branded Harrison Street. Private wealth will continue to deliver highly differentiated alternative investment strategies to wealth managers financial advisors and high net worth individuals.

This rebranding significantly expands our Harrison streets, broad array of global investment products and capabilities.

Jay Hennick: This acquisition enhances our credit, student housing, and hospitality capabilities. In addition, Roundshield's vertically integrated student housing platform offers an exciting opportunity to scale our combined operations across the region. Overall, AUM increased to $103 billion during the quarter and over $108 billion pro forma for the acquisition of Roundshield. Fundraising has improved over the past few quarters, and we expect this to continue, although still below historical levels. Operationally, we continue to deliver attractive risk-adjusted returns for investors throughout our various investment strategies, including real assets, infrastructure, and credit. This quarter, new investments increased 64% year over year, and currently, we have about $8 billion of capital to put to work, which positions us very well to continue to seize opportunity and deliver value to our investors. Realizations were also up 150% over the prior year, yielding substantial returns for our investors while providing necessary liquidity for reinvestment.

This week, we also completed the acquisition of round Shield Partners a premier European credit platform with 5.4 billion in AUM. This acquisition enhances our credit student housing and Hospitality capabilities.

In addition, round Shields vertically integrated student housing platform offers an exciting opportunity to scale our combined operations across the region.

Overall AUM increased to 1.103 billion during the quarter and over 108 billion. Pro-forma for the acquisition of round Shield.

Fundraising is improved over the past few quarters and we expect this to continue although still below historical levels.

operationally, we continue to deliver attractive, risk, adjusted returns for investors throughout our various investment strategies including real assets infrastructure and credit

This quarter, new Investments increased, 64% year-over-year, and currently we have about 8 billion dollars of capital to put to work, which put positions us very well to continue to seize opportunity and deliver value to our investors.

Jay Hennick: Besides Roundshield, we also completed four Tuck Under acquisitions in engineering and two in real estate services since the beginning of the quarter. Our M&A pipeline remains robust, and we are confident in completing several additional Tucks throughout the balance of the year. With our 30-year track record of value creation, visionary leadership, and three high-value growth engines, Colliers is well-positioned to continue to seize opportunities and deliver enduring value for our shareholders. Now, I'll turn things over to Christian for his financial report. Then we'll open the call to your questions. Christian?

Realizations were also up 150% over the prior year. Yielding substantial returns for our investors will providing necessary liquidity for reinvestment.

The sides round shields. We also completed four tuck-under acquisitions in engineering and two in real estate services since the beginning of the quarter.

Our m&a pipeline remains robust and we are confident in completing several additional tux wrote the balance of the year.

With our 30-year track record of value creation, Visionary leadership, and 3 high-value growth engines. Call yours is well, positioned to continue to seize opportunities and deliver enduring value for our shareholders.

Christian Mayer: Thank you, Jay, and good morning, everyone. As a reminder, all non-GAAP measures referenced today are defined in the materials accompanying this call. Revenue growth figures are presented in local currency terms. We delivered strong results in the second quarter with revenues of $1.3 billion, up 17% year over year. Growth was led by our engineering segment, supported by recent acquisitions, as well as solid internal performance. Overall, internal revenue growth came in at 4%. Adjusted EBITDA was $180 million for the quarter, a 15% increase from last year. In our real estate services segment, revenue grew 4%. Recurring outsourcing revenues rose 6%, with growth across property management, valuation, and loan servicing. Capital markets revenues were up 16%, improving on the 10% growth reported in Q1 and ahead of our expectations. Sales brokerage was strongest in the US and Western Europe.

Then we'll open the call to your questions, Christian.

Thank you, Jay and good morning. Everyone. As a reminder all non-gaap measures reference today are defined in the materials accompanying. This call.

Revenue growth figures are presented in local currency terms.

We delivered strong results. In the second quarter with revenues of 1.3 billion up 17% year-over-year.

Growth has led by our engineering segment supported by recent acquisitions as well as solid internal performance.

Overall, Internal Revenue growth came in at 4%.

Adjusted IBA was 180 million for the quarter, a 15% increase from last year.

In our Real Estate Services. Segment Revenue, grew 4%.

Recurring Outsourcing revenues Rose 6% with growth across Property Management, valuation and Loan Servicing.

Capital markets revenues were up 16% improving on the 10th percent. Growth reported in q1 and ahead of our expectations.

Christian Mayer: Debt finance activity also surged, led by significantly higher US multifamily originations. Leasing revenues declined 5% globally, coming in below expectations. While office leasing was strong, it was offset by weaker industrial volumes due to tariff-related and other macroeconomic uncertainty. Segment net margin was down slightly to 11.9%, impacted by revenue mix and continued investments in recruiting. Our engineering net revenue jumped 70%, fueled by acquisitions and internal growth of 8%. The net margin rose to 13.7%, a substantial increase from last year, with improvements coming from both acquisitions and enhanced productivity in our core operations. We continue to monitor any potential impacts from tariffs or government policy, but we've seen no significant effect on our backlogs to date. In investment management, net revenues declined 7% as expected due to catch-up fees recognized in the prior year.

Sales brokerage was strongest in the US and Western Europe.

Debt Finance activity. Also, surged led by significantly. Higher us. Multi-family originations.

Leasing revenues declined. 5% globally coming in below, expectations.

While office leasing was strong, it was offset by weaker industrial volumes due to tariff related and other macroeconomic uncertainty.

Segment, net margin was down slightly to 11.9%.

impacted by Revenue, mix and continued investments in recruiting

Our engineering net revenue, jumped 70% fueled by Acquisitions and internal growth of 8%.

The net margin Rose to 13.7% a substantial increase from last year with improvements coming, from both Acquisitions, and enhanced productivity in our core operations.

We continue to monitor any potential impacts from tariffs or government policy, but we've seen no significant effect on our backlogs to date.

Christian Mayer: However, the net margin improved 42% from 40%, driven by disciplined cost control and lower incentive compensation. We have been very active on fundraising. During Q2, we raised $1 billion in new capital commitments. We also raised an additional $0.5 billion since quarter end, bringing total year-to-date fundraising to $2.7 billion. The launch of Harrison Street Fund 10 in May was the primary driver for fundraising during the quarter. With this fund and others currently in market or launching later this year, we remain well on track to achieve our $5 to $8 billion full-year fundraising target. Assets under management stood at $103.3 billion at June 30th, up 3% from March 31st, and up 7% from a year ago, supported by new capital raised, deployment activity, and favorable mark-to-market adjustments. Free cash flow remains strong.

An investment management, net revenues declined 7%, as expected, due to catch-up fees recognized in the prior year.

However, the net margin improved to 42% from 40% driven by disciplined cost control and lower incentive compensation.

We have been very active on fundraising.

During Q2, we raised $1 billion in new capital commitments.

We also raised an additional 0.5 billion since quarter end.

Bringing total year-to-date fundraising to $2.7 billion.

The launch of Harrison Street fun. 10 in May was the primary driver for fundraising during the quarter.

With this fund and others currently in Market or launching later this year we remain well on track to achieve our 5 to 8 billion full year fundraising Target.

Assets under management stood at 103.3%, up 3% from March 31st and up 7% from a year ago, supported by new capital raised.

Deployment activity and favorable mark-to-market adjustments.

Christian Mayer: On a trailing 12-month basis, we converted 98% of adjusted net earnings into free cash flow, in line with our long-term target. As we've noted before, our working capital-light business model and modest capex result in strong free cash flows available for reinvestment and growth. Turning to our balance sheet, our leverage ratio was 2.3 times as of June 30th. Second quarter leverage was slightly higher than anticipated, firstly due to our increased pace of acquisitions and secondly due to the recent appreciation of the US dollar, which increased the reported value of our foreign denominated debt. With the completion of the Asterisk and Roundshield acquisitions in July, we now expect our leverage to decline to just under two times by year-end. This assumes no additional major acquisitions. We have raised our full-year consolidated outlook to reflect our strong year-to-date performance and the impact of recent acquisitions, including Roundshield.

Free cash flow remains strong.

On a trailing 12-month basis. We converted 98% of adjusted net earnings into free cash flow in line with our long-term Target

As we've noted before, our working capital, a business model and modest capex result in strong free cash, flows available for reinvestment and growth.

Turning to our balance sheet.

Our leverage ratio was 2.3 times as of June 30th.

Second quarter leverage was slightly higher than anticipated. Firstly due to our increased pace of Acquisitions and secondly due to the recent appreciation of the US dollar which increased the reported value of our foreign denominated debt,

With the completion of the Asterisk and Round Shield acquisitions in July, we now expect our leverage to decline to just under 2 times by year-end.

This assumes no additional major acquisitions.

Christian Mayer: Roundshield contributes approximately $35 million in annual management fee revenue at margins consistent with our existing investment management division. While we continue to monitor the effects of global trade tensions and interest rate volatility, particularly on our real estate services segment, we remain optimistic. Our outlook is supported by healthy pipelines across all three of our segments and the expectation of a modest improvement in market conditions through the second half of the year. That concludes my remarks. Operator, please open the line for questions.

And the impact of Greece and Acquisitions, including round Shield.

Round Shield contributes approximately 35 million and annual management fee Revenue at margins consistent with our existing Investment Management division.

While we continue to monitor the effects of global trade tensions and interest rate volatility, particularly on our Real Estate Services segment.

We remain optimistic.

Our Outlook is supported by healthy pipeline lines, across all 3 of our segments, and the expectation of a modest Improvement in market market conditions through the second half of the year.

That concludes my remarks operator. Please open the line for questions.

Operator: Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speaker phone, please make sure to lift your handset before pressing any keys. Your first question is from the line of Anthony Pallone from JP Morgan. Please go ahead.

Thank you very much, ladies and gentlemen, we will now begin the question and answer session.

Should you have a question please? Press star. Followed by the number 1 on your Touchstone phone and you will hear a prompt that your hand is erased.

Should you wish to decline from the polling process? Please press star followed by the number 2?

If you are using a speakerphone, please make sure to lift your handset before pressing any keys.

Anthony Paolone: Thank you and good morning. My first question relates to leasing. I understand the industrial weakness that occurred in the quarter. Just wondering, did you find that to be a surprise? Like, did the market change more dramatically than maybe you thought? And then also, just what's it look like today? Has there been much of a rebound as you start to look at the second half of the year?

Your first question is from the line of Anthony bellone from JP Morgan. Please go ahead.

Uh, thank you and good morning. Um, my first question relates to, uh, leasing, um, I understand the industrial weakness that occurred in the quarter. Just wondering, did you find that to be a surprise, like, did the market change more dramatically than maybe you thought? And then also, just what's it look like today. Has there been much of a rebound as you start to look at the second half of the year.

Christian Mayer: Tony, we'd expected leasing softness for the second quarter. I think we telegraphed that in our first quarter commentary. You know, we compete in many markets. We have a very diversified business in 35 countries and strong positions in places like Canada, Australia, and Western Europe that are, you know, heavily tariff-impacted. And that was something we thought would weigh on our results, and it did. Although I am, I can report that July has been more positive in terms of trajectory on that, and that includes industrial leasing activity being, you know, trending more positively today.

Anthony Paolone: And what's industrial as a percentage of your leasing revenue at this point?

Um, Tony, we'd expected, uh, leasing softness for for the second quarter. I think we telegraphed that and and and our first quarter uh commentary. Um, you know, we compete in uh, many markets. We have a very Diversified business and 35 countries and, um, strong positions in places like, Canada, Australia, and Western Europe that are, um, you know, heavily, uh, tariff, uh impacted and, and that was something. We thought would weigh on our on our results. And, and it did, uh, although I am, I can report that July has been, uh, more positive, uh, in terms of trajectory, um, on that. And that includes industrial, uh, leasing activity being, uh, you know, trending more positively today.

What's um, industrial? Uh, as a percentage of your leasing Revenue at this point.

Christian Mayer: 40%, 45%.

Anthony Paolone: Okay. All right. And then just my second question. In investment management, can you talk a bit more about the branding that you announced, how much centralization perhaps might occur, or just any other economic implications of just the reorganization of investment management?

40% 40. 45%.

Okay. Um all right and then just my my my second question in Investment Management. Can you talk a bit more about the The Branding that you announced? Um, how much

Uh, centralization perhaps might occur, or just any other economic implications of just the reorganization of it, uh investment management.

Jay Hennick: Yeah, so we're very excited about it for a number of reasons. When we, and for those that have been long-term shareholders, we curated this division one step at a time since 2016, and every one of the moves that we made were all complementary. So, for example, the rebranding and integration of Versus, which is a very well-managed business, its focus was entirely on the private wealth channel. And so how do we, you know, internally, we were focused on how do we accelerate the growth and utilize the expertise of the Versus team across the entire platform. And so, in addition to rebranding Harrison Street, it was a natural step as part of that initiative to add Versus.

Yeah, so we're we're, uh, we're very excited about it for a number of reasons when we, um, and for those that have have been long-term shareholders, we curated this, uh, this Division 1 step at a time since 2016. And every 1 of the moves that we made were all complimentary. So, for example, the uh, the the rebranding and integration of verses, which is a very, uh, well-managed business. Um, it's focused was entirely on, um, on, uh, the private wealth Channel. And so how do we, uh, you know, internally? We were, we were focused on how do we accelerate the growth and the and utilize the expertise of the versus Team across the entire platform. And so,

Jay Hennick: And I would say going forward, we're looking for similar opportunities to leverage some of the expertise that we have throughout the platform, and I think you'll see more of it over the next couple of quarters.

Um, in addition to rebranding Harrison Street, it was a natural step as part of that initiative to add versus and and, and, and I would say going forward, we're looking for similar opportunities to leverage some of the expertise that we have throughout the platform. Um, uh, and I think you'll see more of it over the next couple quarters.

Anthony Paolone: Okay, thank you.

Okay, thank you.

Operator: Your next question is from the line of Stephen Sheldon from William Blair. Please go ahead.

Your next question is from the line of Stephen Sheldon from William Blair, please go ahead.

Stephen Sheldon: Hey, thanks. Some nice results here. First one, just on the guidance raised for the year. Can you help frame how much of that is driven by M&A completed since the last earnings call versus higher organic revenue and profit expectations? And specifically, I guess, are your underlying organic assumptions for the year also moving higher?

Hey, thanks, and that's results here. Uh, first 1, just on the guidance, rates for the year. Can you help frame? How much of that is driven by m&a completed since the last earnings call versus

Christian Mayer: Stephen, that's a good question. We expect that, you know, out of our outlook, an increase that half will come from the partial-year effect of completed acquisitions, and half will come from increasing expectations for organic growth in our core operations. In particular, we're seeing, you know, revenue acceleration in real estate services. In the back half of the year, we've increased that slightly relative to our prior expectations. And engineering, as you can see, has been outperforming expectations in the first and second quarter with very strong organic growth, both top line as well as margin enhancement. So, I mean, those are the key drivers for the organic piece. And, you know, between the combination of the acquisitions and the organic growth improvement, that is the basis of the increase in outlook.

Stephen, um, that's a good question. Uh, we expect that, you know, out of our Outlook, uh, and increase that half will come from The partially your effect.

Of completed acquisitions.

And half will come from uh increasing uh expectations for organic growth.

In our core operations, uh, in particular, uh, we're seeing um, you know, Revenue acceleration in Real Estate Services. Um, in the back half of the year we we've increased that uh slightly um, relative to our prior expectations.

And Engineering. Uh, as you can see, has been outperforming, uh, expectations in the first and second quarter with, uh, very strong organic, uh growth, uh, both Top Line, uh, as well as, uh, margin enhancement. So I mean, those are the key drivers, uh, for uh, the organic piece and uh and you know, between the combination of the Acquisitions, um and the uh organic uh growth uh Improvement. Um, that is the basis of the uh, increase in Outlook.

Stephen Sheldon: Great, that's helpful. And as a follow-up, I also wanted to ask about the IM branding consolidation under Harrison Street. Jay, you've been pretty vocal, I think, about investors undervaluing the IM segment and the team considering a potential spin-off. Does the rebranding set the stage even more for that? And generally, how serious are you about pursuing that if Colliers doesn't get the sum of the parts valuation you think it deserves?

Great, that's helpful. Uh, and there's a follow-up. I also wanted to ask about the IM, uh, branding consolidation under Harrison Street. J, you've been pretty vocal. I think about Investors undervaluing the IM segment and the team considering a potential spin-off.

Does the rebranding set the stage even more for that? And generally, how serious are you about pursuing that if callers doesn't get the sum of the parts valuation? You think it deserves?

Jay Hennick: You know, we always look at, you know, our overall valuation, and we believe that the overall valuation, especially given the component parts of Colliers, is materially below where it should be. The steps we're taking in the IM segment are probably steps we would have taken anyway. And, you know, for those that follow us, you'll know that our reluctance so far to accelerate doing anything, and we haven't made any final decisions about this, has been really around fundraising. The fundraising for the past couple of years has been softer than we've expected, but it's picking up now. So, you know, now is an appropriate time to make the changes necessary to augment our leadership team. All of our platforms have been working beautifully together.

Um,

you know where we always look at, uh, you know, our overall valuation. And we believe that the overall valuation specially, given the component parts of Collier's, um, is materially below where it should be, um, the steps we're taking and the IM segments are probably steps. We would have taken anyway, um, and um, you know, um, for those that follow us for, uh, followed us, you'll, you'll know that, that they, they the, the, the, the, the, the, uh,

The the reluctance so far to accelerate doing anything. And and, and we haven't made any final decisions about this has been really around fundraising, the fundraising, for the past couple of years has been softer than we've expected and and, uh, but it's picking up now. So,

Jay Hennick: There's lots of collaboration going on, mostly around new investment products, new markets that we can take our existing expertise to, things like infrastructure, data centers, and now credit in a much bigger way are all exciting opportunities for this platform. And it's brought a collaboration beyond, I think, what we would have anticipated. So, we're very excited about it. The teams are incredible. They own direct equity in the business, which has always been consistent with our philosophy of partnership. So, we've got high hopes for that division, and what will be, will be.

Um, you know, now, as an appropriate time to to, to make the changes necessary to augment our leadership team. Um, all of our platforms have been working beautifully together, there's lots of collaboration going on, um, uh, mostly around new investment products, new markets that we can take our existing expertise to um, things like infrastructure data, centers. Um, and now Credit in a much bigger way are all exciting opportunities for, um, for this platform and it's and and it's brought um, a collaboration uh, that Beyond, I think what we would have anticipated. So we're very excited about it. The teams are in incredible, they own direct equity in the in the business, which is always been consistent. With our, our philosophy of partnership.

so we've got high hopes for that Division and what will be will be

Stephen Sheldon: Understood. Thank you.

Understood, thank you.

Operator: Your next question is from the line of Stephen McLear from BMO Capital Markets. Please go ahead.

Stephen McLear: Oh, thank you. Good morning, guys. Just wanted to circle around on the engineering business, which obviously had a strong Q2, and as you pointed out, a strong, you know, as we saw as well, strong Q1. You did reference the backlog. So, I was just wondering if you could sort of characterize either quantitatively or qualitatively sort of what the backlog looks like for the balance of the year and then into 2026, and I guess even longer term, if you can get some color on that too.

Your next question is from the line of Steven mcclear from BMO Capital markets. Please go ahead.

Oh, thank you. Good morning, guys. Um, just wanted to circle around on the engineering business, which obviously had, um, had a strong strong Q2. And as you pointed out a strong, um, you know, as we saw as well, strong q1, um, you did reference the backlog. So I was just wondering if you could sort of characterize uh either quantitatively or qualitatively sort of what the backlog looks like for the balance of the year and then into 2026 and I guess even longer term if you can get some color on that too.

Christian Mayer: Steve, we always strive to maintain a backlog in excess of 12 months of revenue, and that continues to be the case today, despite, and not despite, but you know, regardless of the fact we've increased revenue significantly. So, that backlog needs to grow significantly as the revenue on the trailing 12 basis grows in the business, and we are able to do that. We are having success with gaining wins on contracts for new infrastructure projects, you know, larger scale type projects as well in the private sector. So, you know, we feel very confident about our pipeline of revenue in that business and where it's tracking, you know, right where we expect it to be in terms of our planning. We also strive to maintain a mix of private sector and public sector clientele in the segment.

We're we are able to do that. We are having success, uh, with um, gaining, uh, wins on contracts for new, uh, infrastructure projects. Uh, you know, larger scale, uh type uh um projects as well, uh, in the private sector. So, you know, we feel very confident about our, uh, pipeline of of, of Revenue in that business and and where it's tracking, you know, right? Where we expect it to be, uh, in terms of our uh, our our our planning. Uh, we also strive to maintain a mix of

Christian Mayer: So, we look at that carefully, and that balance gives our revenues additional resilience through all cycles of the economy, and that's something we strive to do as well.

Private sector and public sector clientele, um, in the segment. So we look at that carefully and that balance gives our revenues additional resilience, um, through all, uh, cycles of the economy and not something. We we strive to do as well.

Stephen McLear: Okay, that's helpful color, Christian. Thank you. And then maybe just on the Harrison Street asset management, you know, with the balance of fundraising kind of year to date being in the, you know, high $2.7 billion range and the long-term, the yearly target of $5 to $8 billion, can you talk a little bit about where that back half growth is expected to come from? Is it in addition to Harrison Street 10, and are there maybe just some color around that as well?

Okay, that's that's helpful color. Christian, thank you. Um, and then maybe just on the on the uh, um, Harrison Street Asset Management. Um, you know, with the balance of fundraising kind of year to date being in the, you know, High 2.7 billion range in the long term, the yearly Target of 5 to 8 billion dollars. Can you talk a little bit about where that, that, um, back half growth is expected to come from? Um, is it in addition to Harrison Street 10 and are there? Uh, maybe just some color around that as well.

Christian Mayer: Yes, Steve, as I noted, Harrison Street Fund 10 launched very successfully in May of this year, so just a few months ago. We have another significant closed-end fund launching in the fourth quarter, the Basalt latest fund. It'll be their Fund 5. We expect that will have a significant impact on our AUM growth for the full year in terms of fundraising. And we also have a number of other products in the market, open-ended products and others that are fundraising and that will be additive for the rest of the year.

Jay Hennick: We have a total of about 20 products in the market at various sizes right now, and that includes the Roundshield products that also offer, there's some overlap obviously with student housing and some hospitality, but 20 products in total. So, we're optimistic that fundraising will finish the year nicely on fundraising, which sets us up beautifully for '26 and beyond. So, we're looking forward to that.

Yeah. Steve as I noted Harris Street fun, 10 launch, uh, it's a very successfully, uh, in May of this year. So, just a few months ago, we have another, uh, significant closed end fund launching in the fourth quarter, um, the basalt, um, latest, uh, fund that. It'll be their fund 5. Um, we expect that we'll have a, a significant impact on our AUM growth, uh, for the full year in terms of fundraising. And we also have a number of other products in the market, uh, open-ended products, uh, and others, uh, that are fundraising, uh, and that will be additive, uh, for the rest of the year. We have a total of about 20 products in the Market at various sizes right now. Um, and, and that, that includes the, uh, the round Shield, uh, products that that also offer. Uh, there's, there's some overlap, obviously, with student, with student housing and some Hospitality. Um, but uh, 20,

Products in total. So we're, um, we're optimistic that, uh, fundraising will, will will finish the year nicely on fundraising with sets us up beautifully for 26 and Beyond. So, um, we're we're, um, we're looking forward to that.

Stephen McLear: That's great to hear. Thanks for that color, Jay. Appreciate it. Thanks, guys.

That's, that's great to hear. Thanks for that color, J. Appreciate it. Thanks guys.

Jay Hennick: Thanks.

Thanks.

Operator: Your next question is from the line of Mitch Germain from Citizens Capital Markets. Please go ahead.

The next question.

From the line of Mitch Germaine from a Citizens Capital markets. Please go ahead.

Mitch Germain: Thank you, and congrats on the quarter. Is the goal to centralize the functions of the investment management platform, like fundraising and other capabilities?

Thank you. And uh, congrats on the quarter. Um,

Is the goal to to centralize the functions of the investor management platform, like fundraising and other capabilities.

Jay Hennick: It's to make them better. So, I don't think that centralizing them necessarily is the ultimate goal, but it's to better enhance the distribution capabilities of all the segments of the platform.

um,

it's to make the better, uh, so I don't think that uh, centralizing them necessarily is the ultimate goal. Uh, but it's the better, uh, better. Um,

uh,

enhance the distribution capabilities of all the segments of the platform.

Mitch Germain: Okay. That's helpful. And then, Jay, do you think the is the $5 to $8 million of fundraising, is that what you would consider to be a target in the current environment or a kind of a longer-term target based on the composition of that platform today?

Okay, um, that's helpful. And then okay. Do you think the is the 5 to 8 million?

Jay Hennick: In the current environment, we think we can do much better. Historically, we've done much better than that, and we're much bigger today than we were before. You know, you're seeing the data from, you know, all the other firms in the space that are reporting. They're all having challenges around fundraising, unless, of course, they have an insurance arm, which helps them quite a bit. We don't have that. But everybody's having fundraising challenges. They were more challenging last year than they are this year. We think that we're doing a much better job both internally and externally. And it all comes down to the success of our products and the returns that we've been delivering to our investors. So, our investor base keeps getting stronger.

Of fundraising, is that what you would consider to be a Target in the current environment or a kind of a longer term Target based on the composition of that platform today?

In the current in the current environment. We we, we think we can, we can do much better. Historically. We've done much better than that, and we're much bigger today than we were before. Um, you know, you you're you're seeing the data from

Jay Hennick: And, you know, as I said to one of the, you know, to one of the earlier questions, we're quite excited about '26 and beyond and what it could mean.

earlier questions, uh, were quite excited about 26 and Beyond and what it could mean

Mitch Germain: Thank you for that. I appreciate your time.

Thank you for that. I appreciate your time.

Operator: Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by the number one on. Next question is from the line of Daryl Young from Stifel. Please go ahead.

Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by the number 1.

Anthony Paolone: Hey, good morning, everyone. Question on the investment management platform, and specifically, you're gearing towards Europe. You know, Harrison Street, Basalt, and now Roundshield all have good representation there. Is that a geography you're specifically targeting, or is it potentially the timing of what acquisitions are available when? Just any color you can give on sort of the European exposure.

Questions from the line of Daryl. Young from stifel, please. Go ahead.

Hey, good morning everyone. Uh, question on the investment management platform and and specifically your gearing towards Europe, um, you know, Harrison Street, the salt and now round Shield, all have have good representation. There is that a geography or specifically targeting, or is it? Is it potentially the timing of what Acquisitions are available when uh, just any color you can give on on sort of the the European exposure.

Jay Hennick: Well, let's also not forget Colliers Global Investors, which has been in Europe for, you know, probably 10 years now and have a significant portfolio in hospitality, multifamily, etc. We see Europe as some white space for us. The beauty of Roundshield is there was some overlap with some of the existing products that we offered in Europe. And it was, you know, it was all credit-based. So, you know, we can help with our student housing business. We can help with some seniors' business by providing credit. And Roundshield also has, you know, and I want to emphasize this, a vertically integrated business, which is new to us, and especially new in Europe where there isn't as much experience in managing student housing facilities. So, we see a lot of opportunity to collaborate with our existing products there.

Well that's also not forget call yours Global Investors which has been in Europe for um you know, probably 10 years now and have a a significant uh portfolio in Hospitality multi, family, Etc. Um, we see Europe as some white space for us. The beauty of round Shield is there was some overlap with our existing, uh, some of the existing products that we offered in in Europe, um, and it was, you know, it was all credit-based. So you know we can help with our our, our student housing business.

Jay Hennick: So, all of this to say, it's just further increasing the size, scope, depth of management, and probably most importantly, investment strategies in Europe. We have a significant business there, and it's growing. And so that really supports our business in North America as well.

Anthony Paolone: Okay, great. And then just as a second question on IM, do you have the capabilities you're looking for now? I think historically, you've said you'd avoid traditional private equity as a vertical, but just curious if there's any other capabilities you'd like to add to continue scaling up the platform.

Business. Um, we can help with some seniors business by providing credit uh uh. And round Shield, also has uh, you know, and I want to emphasize this a vertically integrated, uh, business which um, which is new to which is new to us and especially new in Europe where there isn't as much experience in managing student housing facilities. So uh we see a lot of opportunity to um to collaborate with our existing products there. So um all of all of this to say um it's just further increasing the size scope depth of management. Um and uh and probably most important, most importantly, uh investment strategies in Europe. We have a significant business there and it's growing and so that really supports our our business in North America as well.

Okay, great. And then just as a second, a second question on IM, um, do you have the capabilities? You're, you're looking for now. I think historically, you've said you'd avoid traditional private Equity as, as a, a vertical. But, uh, just curious if there's any other capabilities you'd like to add to continue scaling up the platform.

Jay Hennick: There are some additional capabilities we'd like to continue to expand in a couple of areas: credit, in particular, infrastructure, mid-market infrastructure, where we have a very, very strong presence both in Europe and North America. Private equity is not something that we've targeted, not to say that we wouldn't, but it's not sort of a near-term opportunity that we're pursuing. So, you know, we're always looking for white space. We're always looking for products and investment strategies where we can generate better returns for our investors so that we can introduce them to those new opportunities. And so that was one of the great things about Roundshield. Its results over a long period of time were stellar. And that, you know, helps to introduce Roundshield's products to our existing investor base.

Um, we're there are some additional capabilities. We'd like to we'd like to continue to to expand in a couple of areas Credit. In particular, uh, infrastructure mid-market infrastructure where we have a very, very strong presence both in Europe and North America. Um, uh, private Equity is not something that we've, uh, targeted. Um, not to say that we wouldn't, but it's not sort of a near-term, uh, uh, uh, near-term, uh, uh, opportunity that we're pursuing. Um, so, you know, we're we're, we're always looking for white space. We're always looking for products and investment strategies where we can generate better returns for our investors so that we can introduce them to those new opportunities. And so, uh, that was 1 of the great things about round Shield, its results, uh, over a long period of time where where

Where stellar and, um, and that, you know, that helps to, uh, introduce round Shields products to our existing investor base.

Anthony Paolone: Okay, that's great. And congrats on the good quarter. I'll get back in the queue.

Jay Hennick: Thanks.

Got it. Okay, that's great. And congrats on the good quarter. I'll get back in the queue.

Thanks.

Operator: Your next question is from the line of Scott Fletcher from CIBC. Please go ahead.

Anthony Paolone: Hi, good morning. Wanted to ask a question about engineering. Strong quarter margin expansion, looking quite good. Is there anything specific to call out on what drove that margins, whether it was more tilted to the M&A or just the operation side, and just how we should expect that to play out going forward?

Your next question is from the line of Scott Fletcher from CIBC. Please go ahead.

Hi. Good morning, wanted to ask a question about engineering. Um, strong quarter, margin expansion, looking looking quite good. Is there anything specific to call out on what drove? That margin. So there was more tilted to the m&a or just or or the operation side and just how we should expect that to play out. Going forward.

Christian Mayer: Yeah, Scott. In terms of the engineering margins, the margin expansion came equally from acquisitions and from organic improvement in the productivity and efficiency and utilization of our staff. So, we've made strides there, and that's showing in the reported margins. So, as you look ahead to Q3 and Q4 of this year, you'll see the gains from the acquisition piece become a little bit less. We do expect, because we've left the N Globe acquisition and a few others, we do expect continuing enhancement in efficiency and productivity in the core operations. So, you'll see we expect margins to continue to tick up on a year-over-year basis for that reason.

Yeah, Scott uh, in terms of the an engineering margins.

Not showing in the reported margins.

So, as you, uh, look at to Q3 and Q4 of this year, um, you'll see the, um, the gains from the acquisition piece. Um, become a little bit less. We do expect, uh, because we've left the end goal back position, uh, and a few others. Uh, we do expect continuing, uh, enhancement in efficiency and productivity, uh, on in the core operations, so, you'll see. Um, we expect margins to continue to, uh, tick up on a year-over-year basis, uh, for that reason.

Anthony Paolone: Okay, thanks. And then sticking on the margin front, and on the investment management side, has there been any change to the future view that margins should expand nicely in 2026, I think just given this year has had some additional investments and lacking some tougher costs?

Okay. Thanks and then sticking on the margin front. Um, and in the on the investment management side has there been any change to the sort to the

Future view that margins should expand nicely in 2026 and just give them the series had had some some, some additional Investments and laughing. Some

Proper coughs.

Christian Mayer: Yeah, Scott, in our objective in investment management is that margins, as we scale the business, should improve over time. Today, we're in the low 40s range. We would expect, you know, over time, in this period of a couple of years, to get that margin to the 45% and even approaching 50% range as the business scales and we've, you know, had more success on fundraising, which is going to drive it.

Jay Hennick: You know, I might add to that. We are doing a lot of investment spending also in a bunch of areas around Harrison Street. And so that's going to keep pressure on, I think, Christian, the margins a bit for the next year or two as we continue to build out some of these capabilities, especially in the areas of, you know, our private wealth channel as an example, some distribution, etc. So, we're hiring, and so that always puts a little bit of a damper on margins. But we're very focused on margins, so we're trying to balance that, as Christian was talking about. But I just wanted to emphasize the fact that, you know, with the margins being in a good spot right now relative to our peers, that is with some significant investment that we're making.

Yeah, Scott in our objective and investment management is that, uh, margins as we scale the business, uh, it should improve over time. Um, today we're in the low 40s range. We, we would expect uh, you know over time and this is a period of a couple of years. To get that margin to the 45% and even approaching 50% range uh as the business uh scales and our and and we've uh, you know, have more success on fundraising but we're just going to drive it.

You know, I might, I might add to that. We are doing a lot of investment spending also in in a bunch of, uh, a bunch of areas, uh, around Harrison Street. And uh, so that's going to, you know, that's going to keep pressure on. I think Christian the margins, a bit for the next year or 2, as we continue to build out some of these capabilities, especially in the areas of, you know, our private wealth Channel as an example, some distribution Etc. So we're we're hiring and um, and so that always has a, you know, has a puts a little bit of a damper on margins but we're very focused on margins. So we're trying to balance that as Christian was talking about but I just wanted to emphasize the fact that you know with the margins being and and a in a good spot right now relative to our peers um and that is with uh some significant investment that we're making.

Anthony Paolone: Okay, great. Good to hear. Thank you.

Okay. Great. Good to hear. Thank you.

Operator: Your next question is from the line of Julian Lewin from Goldman Sachs. Please go ahead.

Anthony Paolone: Hello, this is Ryan Triazon for Julian. Congrats on the strong quarter. On the engineering segment specifically, I was wondering what types of additional businesses you guys are looking to add in order to round out your offering there and what respective multiples you're able to acquire them at.

Your next question is from the line of Julian, wuen from Goldman Sachs, please go ahead.

Hello. This is Ryan, trees. On for Julian, uh, congrats on the strong quarter, um, and the engineering segment, specifically, I was wondering, uh, what types of additional businesses. You guys are looking to add in order to round out your offering there. And what respect of multiples, you're able to require them at

um,

Jay Hennick: We're very active across the board in engineering, as you can see. Being global allows us to continue to augment our platforms in North America, Canada, US, in particular Australia, New Zealand. And we are actively looking in Europe. You asked about valuations. Valuations are interesting right now because we believe that we can continue to do Tuck Under acquisitions at very favorable rates. Platform acquisitions, however, are higher value, and they're worth higher value, frankly. So, I would say that if we were to enter the European marketplace, which we'd like to do over the next year or two, you know, we would expect to pay a more healthy valuation, for example, than we would in Tucks. The rest of our business is, you know, we've got significant platforms, so we can continue to Tuck Australia, New Zealand, Canada, US, and we're continuing to be very successful there.

we we, we're, we're, we're very active across the board, um, in engineering, as you can see, um, being Global allows us to continue to augment our Platforms in North America, Canada Us in particular, Australia, and New Zealand. Um, and uh, we are actively, uh, looking in uh, in Europe.

Um, you asked about valuations valuations are interesting right now because um, we believe that we can continue to do tuck under Acquisitions at very favorable rates.

Um, platform acquisitions, however, are of higher value, um, and they're worth higher value, frankly. Um, so, um, I would say that, um, if we were to enter the European marketplace, which we'd like to do over the next year or two, um, you know, we would expect to pay, um, a more healthy valuation, for example, than we would in tuck.

Jay Hennick: I should also add that there's one or two other specialties in engineering that command higher valuations as well. So, if it's a significant platform within the United States that would add to our overall business mix, you know, for example, Power, I'm using that as an example just to give you a sense, that might be an evaluation that would be higher than normal. But its beauty is always in the eye of the beholder. And, you know, we've been in the acquisition business now for 30 years, so we'd hope that we know when to pay up for something that's incredible and will add value to us and not.

The rest of our business is, you know, we've got significant platforms so we can continue to tuck Australia, New Zealand uh uh Canada us and we're and we're continuing continuing to be very successful there. I I should also add that um there's 1 or 2 other Specialties and in in engineering

that that command higher valuations as well. So if it's a significant platform within the United States that would add uh to our overall business mix. Um,

You know, for example, power—I'm using that as an example just to give you a sense—that might be an evaluation that would be higher than normal.

Anthony Paolone: Thanks. That color is super helpful. And for my follow-up, is it possible for you guys to expand on the state of the fundraising environment on your real estate funds versus your alternative infrastructure funds? Thank you.

In the eye of the beholder. And, um, you know, we've been in the acquisition business now for 30 years. So we hope we hope that we know. Um, we know, uh, when to, uh, to pay up for something that's incredible and we'll add value to us. And and not

Thanks that color, super helpful. Um and for my follow-up is it possible for you guys to expand on the state of the fundraising environment versus on your real estate funds versus your alternative? Infrastructure funds. Thank you.

Jay Hennick: I don't think we want to do that, to be candid. There's some competitive information in there that we want to hold on to. But we've, and Christian, you may have a view on this, but we've consistently talked about our fundraising totals across all strategies and not been specific around, you know, where the fundraising is coming from, other than your comments on the two big flagship funds that are in the marketplace now.

um,

Christian Mayer: I would just add to that, Jay, that we do, and we have been seeing fundraising in all strategies. You know, our traditional real estate strategies, our infrastructure strategies, our alternative strategies, you know, every single area has been active in fundraising year to date, and we expect that to continue.

I don't think we want to do that uh to be candid. Um, there's some competitive information in there that, uh, we want to, we want to hold on to but, uh, uh, we have and Christian, you may have a view on this, but we've consistently talked about, um, our fundraising totals across all strategies, and not been specific around. Uh, you know where the fundraising is coming from other than your comments on the, the 2 big Flagship funds that are in the marketplace. Now, I mean, I I would just add to that Jay that we do. Um, and we have been seeing fundraising in all strategies. Um, you know, our traditional real estate strategies, our infrastructure strategies, our alternative strategies and every single area has been active in fundraising year to date and we can expect that to continue.

Anthony Paolone: Appreciate it. Thanks.

Some appreciate it. Thanks.

Operator: Your next question is from the line of Himanshu Gupta from Scotiabank. Please go ahead.

Himanshu Gupta: Thank you and good morning. So, on capital markets, you know, it looks like Q2 was ahead of expectations. So, any asset class or geography which drove that good performance? And then how should we think about, you know, Q3 or back half of the year on capital markets? Thank you.

Your next question is from the line of human Gupta from Scotia Bank. Please go ahead.

Thank you and good morning. So on Capital markets, uh, you know, looks like Q2 was ahead of expectations. Uh, so any asset class or geography, which drove that good performance, uh, and then how should we think about, you know, Q3 or back off of the year on Capital markets? Thank you.

Christian Mayer: So, Himanshu, as I mentioned, our capital markets performance was led, you know, by the US and Western Europe. And we're coming off a low base. So, you know, we had strong growth in Q2 of 16%. I would expect that we can repeat or enhance that level of year-over-year growth in Q3. In Q4, the comps are going to get a bit tougher. If you recall, in Q4 of 2024, there was a surge in capital markets activities, so the comps are getting a little bit tougher. But certainly, you know, I think the momentum in capital markets is strong and should continue.

So so Manu, as a, as I mentioned, uh, our Capital markets performance was led um, you know, by by um, the US and and Western Europe.

And uh, we're coming off a low base. So, you know, we we had um strong growth in Q2 of 16%, uh, I would expect uh, that we can

Himanshu Gupta: Got it. Thank you. And then on the leasing, I know, you know, some comments here have already been provided. Just wondering, in your guidance for the back half, what kind of growth are you, you know, expecting or incorporating in your guidance for leasing revenues?

Um, repeat or or enhance uh, that level of of year-over-year growth in in Q3, uh, in Q4. Uh, the cops are going to get a bit tougher if you're a call and Q4 of 2024, there was a, um, a, a surge in capital markets activities. So the comps are getting a little bit tougher but, um, certainly, you know, I think, uh, the momentum and capital markets, uh, is strong and and should continue.

Got it. Thank you. Uh, and then on the leasing uh, I know, you know, some commentary has already been provided, uh, just wondering uh, in your guidance, uh, for the back half. What kind of growth are you? You know, uh, expecting or incorporating in your guidance for leasing revenues?

Christian Mayer: Himanshu, we are still expecting on a full-year basis to have mid-single-digit growth in leasing. You know, as you've seen, leasing has been challenged the first half of the year. So, you know, that implies we're going to have some healthy uptick in leasing activity. And we expect that anyways for Q3 and Q4 to deliver, you know, on that full-year sort of mid-single-digit area in terms of growth.

Himanshu Gupta: Got it. Thank you. And then, you know, if I look at Q3, like capital markets seems to be sequentially improving, leasing obviously, outsourcing also looks like growth there. So, should we expect like some nice margin expansion in Q3 on a year-over-year basis on the real estate side?

Uh Hey Mana. We are uh still expecting on a full year basis, to have uh mid single digit, growth and leasing. Um, you know as you've seen uh leasing has been challenged the first half of the year. Uh, so, uh, you know, that implies we're going to have some healthy, um, uptick and, and leasing activity. And we expect, uh, that anyways for Q3 and Q4, uh, to deliver, you know, on the full year, sort of mid single digit, uh, area in terms of growth.

Got it. Thank you. Uh and then you know, if I look at Q3 like Capital Market seems to be sequentially, improving leasing obviously uh Outsourcing also looks like we're there. Uh, so should we expect like some nice margin expansion in Q3, on either your basis, uh, on real estate side.

Christian Mayer: Himanshu, we do expect some margin enhancement on a year-over-year basis in Q3 and in Q4, and hopefully on a full-year basis as well.

Hey man, you we do expect um some margin uh enhancement on a year of your basis in Q3, and in Q4 and uh hopefully on a full year basis as well.

Himanshu Gupta: That's very helpful. And maybe the last question, you know, switching gears on engineering, N Globe acquisition, I think it's almost one year now since you made that acquisition. So, as you look back one year, how has the acquisition performed related to underwriting or your expectations?

Uh, that's very helpful. Uh, and maybe the last question, uh, you know, switching gears on engineering and Globe acquisition. I think it's almost one year now since you made that acquisition. So as you look back one year, how has the acquisition performed relative to underwriting or your expectations?

Christian Mayer: Yeah, Himanshu, you're right. I think this week is the one-year anniversary of our N Globe acquisition. I can say, you know, from my perspective, it's been a pleasure working with the team at N Globe. We've done a lot of things together and integrated the business. They've been very active as well on acquisitions, which is part of the thesis around doing that transaction in the first place, was building out their Canadian presence. And we've done that now.I

Operator: think, with four acquisitions, if memory serves. So that's been very positive. The business is performing well. The backlogs are strong, as I mentioned in my general comments about engineering. That is also true of Englobe. So no, we think it's been a great first year, and we're excited about the future.

Rachel Smith: Got it. And just a follow-up, and that's my last question, by the way, on engineering, like, should we expect continued high single-digit organic growth in the second half? I know the first half has been pretty strong. So overall, engineering, like, second half of the year.

I I, um, they're Canadian, uh, presence and and we've done that. Now I think with 4 uh, Acquisitions uh, if memory serves uh, so uh, that's been very positive. Uh the business is uh you know performing well. Uh the backlogs are strong, as I mentioned in my general comments about engineering. Uh that is also true of envelope. Uh, so know, we're we're we think it's been a great uh, great first year and we're we're excited about the future.

Got it. Uh, and maybe just a follow-up. And that's my last question about the way, uh, on engineering. Uh, like, should we expect continued high single-digit organic growth in the second half? I know the first half has been pretty strong. Uh, so overall engineering, like, uh, second half of the year?

Operator: Yeah, I mean, in terms of organic growth for the second half of the year in engineering, I would expect something in the mid to high single-digit range. We have had some strong performance year to date. But I think that growth will continue, perhaps not at the same, not quite at the same rate, but certainly at very strong rates.

Rachel Smith: Got it. Thank you. And I'll turn it back. Thank you so much.

Yeah. I mean, in terms of organic growth for the second half of the year in engineering, uh, I I would expect uh, something in the mid to high single digit range. Uh, we have had some strong performance here today. Um, but uh, you know, I think that growth, uh, you know, we we will continue perhaps not at the same, uh, not quite at the same rate, but but certainly, um, I had very at very strong, uh, rates

Coordinate. Thank you. I'll turn it back. Thank you so much.

Jay Hennick: Ladies and gentlemen, if you would like to ask a question, please press star followed by the number one on your touchstone phone. If you are using a speaker phone, please make sure to lift your handset before pressing any keys. Your next question is from the line of Jimmy Shan from 8RBC Capital Market. Please go ahead.

Ladies and gentlemen, if you would like to ask a question, please press star followed by the number 1 on your Touchstone phone. If you are using a speakerphone, please make sure to lift your handset before pressing any keys.

Christian Mayer: Yeah, just a quick follow-up from me. One on Brown Shield. I was wondering if you could share with us the rough multiple paid for the business, or at least a rough range. And then in terms of capital allocation with respect to acquisitions going forward, you mentioned you could do tuck-ins in the engineering business, and it's a very attractive multiple. And I suspect this Brown Shield is going to be not as attractive.

Your next question is from the line of Jimmy Champs from 8, RBC Capital Market, please go ahead.

Yeah, just a quick follow-up for me. Uh, 1 on, um, on round Shield. I was wondering if you could share with us, um, the rough multiple paid for the business or, or at least a rough range.

Um and then um in terms of capital allocation uh with respect to Acquisitions going forward, um and you mentioned you could do tuck in and Engineering business and you know, it's very attractive. Multiple

Anthony Paolone: We can't hear you. Can you speak up, please?

Christian Mayer: Okay. Can you hear me better now?

You know, and and I suspect this round Shield is going to be uh, not as attractive. We can't hear it. We can't hear you. Can you speak up, please?

Okay, can you hear me better now?

Anthony Paolone: Better, yeah.

Christian Mayer: Okay. My second question was more about whether we should expect more IM acquisitions going forward versus the sort of the better multiples you're getting on the engineering tuck-ins that you've been doing in the last little while.

The better. Yeah. Okay. Uh, my second question was more about

Anthony Paolone: So let me answer the second question, and then Christian can deal with the first. We're always open for acquisitions. We're always talking to several potential targets. So nothing is off the table from that perspective. And yes, the valuations may be slightly higher in that business, but there's a lot of opportunity for us to accelerate growth. So we're looking at everything.

Um, whether we should expect more IM Acquisitions going forward versus the uh, you know, sort of the better better multiples you're getting on on the engineering, tuck in that, you've been doing um, in the last little while.

So, let me ask, let me answer the second question and Christian can deal with the first. Uh, we're always open for Acquisitions. Uh, we're always talking to, uh, to, to several potential targets. So, nothing is nothing is off the table from that that perspective and, um, and um, yes, the valuations may be slightly higher in that business, but there is, um, there's a lot of opportunity for us to accelerate growth. So, um, we're looking at everything.

Operator: And to your question specifically about Brown Shield, I mean, that transaction, and you know credit managers in the market have traded at very high prices over the past number of years. It is a high-growth area. So in our case, you know the Brown Shield acquisition was done in the low-teens area, and you know that's consistent with where the market is at for these. And I would add also that we've been active this year, you know, to date, in all three of our segments, balancing allocation of capital across real estate services and, of course, engineering, where we've been very active, and now also investment management. And that's a good place to be for us, is having that balanced approach to capital allocation where it makes sense and where we see the most opportunity.

And to your question specifically about round Shield, I mean that transaction and you know, um, you know, credit managers, uh, in the market have traded at uh, at at at very um, you know, high prices uh, over the past, uh, number of years. Uh, it is a high growth area. Um, so in, in our case, I know that the round Shield acquisition was done in the low teens, um, area, and, uh, you know, that's consistent with where the market is at for these. Um, and I would add also that we've been active, uh, this year, um, you know, to date, uh, in all 3 of our segments, um, balancing, um, allocation of capital across, you know, Real Estate Services and of course, engineering where we've been very active and now also, uh, investment management. And that's, uh, you know, a good place to be for us, is having, um, that balanced approach to Capital allocation, you know, where it makes sense. And where we see the most opportunity

Christian Mayer: Okay. And then, sorry, one more follow-up on the leasing side. Just trying to understand the sort of the weakness a little bit better. Is it fair to say that your industrial leasing outside of the US is a fairly decent-sized business? And that probably could explain some of that weakness relative to some of your peers?

Okay.

And then, sorry, 1 1 more follow up on the leasing side, um, just trying to understand the sort of the weakness a little bit better.

Is it fair to say that your industrial leasing outside of the US, if fairly decent sized business?

Anthony Paolone: We can't, we still can't hear you, buddy. You got to speak up. You got to speak up. It's very hard to hear you.

Um, and that probably could explain some of that this relative to some of your peers.

We can't we still can't hear you, buddy. You got to speak up. You got to speak up. It's very hard to hear you.

Christian Mayer: Okay. Apologize. Give me my phone. Is that?

Apologize could be my phone.

Anthony Paolone: Now we're okay.

Christian Mayer: All right. Probably a bad headset. Yeah, no, my second question was about leasing and understanding the weakness there and whether or not you have a larger size of industrial leasing outside of the US that might explain some of the relative weakness that we're seeing, weakness relative to your peers.

Is that now? We're okay. All right, but probably about headset. Um, yeah, I know my my second question was about leasing and uh, understanding the weakness there and whether or not you have a larger size of industrial, leasing outside of the US.

Operator: So, Jimmy, we have a significant industrial leasing practice globally, including in the US. But as I mentioned earlier, we do have perhaps larger exposure to markets like Canada and Australia and Western Europe than some of the others. So that is potentially a contributing factor here.

Explained. Um some of the relative weakness that we're seeing uh weakness relative to your peers.

So so Jimmy, we have a, you know, a significant, uh, industrial leasing practice, uh, globally, uh, including in the US. Um, but as I mentioned earlier, we do have, um, perhaps larger exposure to markets, like Canada and Australia and Western Europe than some of the others. So, uh, you know, that uh, is, is, is, uh, you know, um, potentially a, you know, contributing factor here.

Christian Mayer: Okay. Okay. Thanks.

Okay. Okay. Okay.

Thanks.

Jay Hennick: Your last question is from the line of Frederick Bastine from Raymond James. Please go ahead.

Your last question is from the line of Frederick Bastien from Raymond James, please go ahead.

Stephen Sheldon: I guess, guys, can you hear me?

Anthony Paolone: We can hear you. We can hear you. It was very difficult on the other one.

I get guys. Can you hear me?

Stephen Sheldon: Okay. A couple of questions. First of all, has the global trade uncertainty adversely impacted any of the engineering business? Because you did deliver exceptional organic growth on that front. I'm just curious if there was any impact, if at all.

We can hear you. We can hear you. It was very difficult on the other 1. Okay. Um, couple questions, first of all, the as the global trade uncertainty, uh, adversely impacted. Any of the uh, engineering business because you you did deliver exceptional. Uh, organic growth on that front. Just curious what the, um, if there was any any impact if at all?

Operator: Yeah, Frederick, as I mentioned in my prepared remarks, we have been in close contact with our teams and with our clients on this front. We have not seen any significant impacts on sort of government policy-related matters or on tariff-related matters in our engineering practice, thankfully. So that is not something that is causing us any concerns that relates to our backlog at the moment.

Stephen Sheldon: Okay, that's good. The other thing I noticed is on the investment management side, I appreciate that your revenues will swing around depending on the pass-through performance fees that sometimes you have to report. But I was surprised to see EBITDA come down sequentially. And I looked back at a couple of years of results, and I noticed Q2 is actually always your weakest during the year. Is there anything particular about Q2 that makes this trend? I'm just curious.

Yeah, Frederick, as I mentioned, in my prepared remarks, we have been uh, in close, uh, contact with with our teams and with our clients, uh, on this front, we have not seen any significant uh impacts uh, on a sort of government policy related matters or on Tara related matters, uh, in our engineering practice. Uh, thankfully. So, uh, that is not something that is causing us. Uh, you know, any any concerns relates to our backlog at the moment.

Okay, that's good. Uh, the other thing I noticed, um, is on the investment management side. I appreciate that your revenues will swing around depending on the past through performance fees. That that, uh, sometimes you you have to um, report. But I was surprised to see ebid.com, come down sequentially, and I looked back a couple years of, um, results. And I noticed as Q2 is, is actually, uh, always your weakest during the year. Is there? Anything particular about 22? That makes it, uh, makes this, um, trend

Operator: Frederick, there might be a little bit of time and expenses in there in the second quarter with investor conferences and that sort of thing. But the real, that's maybe part of it. But the bigger factors here, we did have higher co-investment income in the first quarter than the second quarter. So that explains part of the difference. And the final point I'll make is around catch-up fees, which are highly accretive to the bottom line. We had some of those in Q1 of this year, and we did not have any in Q2. So that is also a contributing factor.

Is this curious?

Uh, Frederick, there might be a little bit of time and expenses in there, uh, in the second quarter, uh, with investor Chronicles and that sort of thing. But, uh, the the real, um, that's that's maybe part of it. But the, the bigger, um, factors here. We had, we did have higher co-investment income in the first quarter and the second quarter.

Stephen Sheldon: Okay. That's helpful. Thanks so much.

So, so that explains part of the difference, and, uh, the final point I'll make is around catch-up fees, uh, which are, um, highly. Um, creative to the bottom line. Uh, we had some of those in q1 of this year. And we did not have any in Q2. So, so that, uh, is also contributing factor.

That's helpful. Thanks so much.

Jay Hennick: There are no further questions at this time. I'd like to turn the call over to Jay Hennick for closing comments. Sir, please go ahead.

Anthony Paolone: Thank you, everyone, for participating in today's call. We look forward to equally strong third-quarter results. And again, thanks for participating.

There are no further questions at this time. I'd like to turn the call over to Jay Hank for closing comments. So, please go ahead.

Thank you, everyone for participating. In today's call, we look forward to, uh, to, uh, equally strong, um, third quarter results. And, uh, again, thanks for participating.

Jay Hennick: Ladies and gentlemen, this concludes the conference call. Thank you for your participation and have a nice day.

Ladies and gentlemen, this concludes the conference call. Thank you for your participation, and have a nice day.