Q2 2019 Earnings Call
Welcome to the Jones Lang Lasalle incorporated second quarter 2019 earnings Conference call for your information. This conference call is being recorded I would now like to turn the conference over to Karen <unk> Senior Vice President of Investor Relations. Please go ahead.
Thank you operator, good morning, and welcome to our second quarter 2019 conference call for Jones Lang Lasalle incorporated.
Earlier. This morning, we issued our earnings release, which is available on the Investor Relations section of our website along with the slide presentation intended to supplement our prepared remarks, please visit <unk> dot J O <unk> dot com.
During the call, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and supplemental slides.
As a reminder, today's call is being webcast live and recorded a transcript of this conference call will also be posted on our website.
Any statements made about future results and performance plans expectations and objectives are forward looking statements actual results and performance may differ from those forward looking statements as a result factors discussed in the annual report on Form 10-K .
The fiscal year ended December 31, 2018, and in other reports filed with the FCC.
The company disclaims any undertaking to publicly update or revise any forward looking statements.
With that I would like to turn the call over to Christian Ulbrich, Our Chief Executive Officer for opening remarks.
Thank you Karen.
And welcome everyone to this review of our results for the second quarter and first half of 2019.
There are many planes I was CFO joins the coal and she will comment on our performance following my opening remarks.
To summarize we had a very strong and encouraging second quarter and first half.
Second quarter revenue and fee revenue, both increased by double digits in local currency.
Adjusted diluted earnings per share totaled $2.94 for the quarter up 30% compared with Q2, 2018 and up 19% for the first half.
Gross was primarily organic as our Americas leasing business continued to deliver excellent performance.
Our annuity revenue base was strengthened by grossing corporate solutions and superior performance Lasalle.
I saw recorded a very strong capital raised in the quarter, which along with contributions from recent acquisitions brought assets under management to a record $68.4 billion.
On July 1st we completed our acquisition of Hfcs.
The acquisition marks a major move forward on our beyond strategy.
Finding that talent market knowledge and experience of Gen <unk> and H have asked to accelerate our journey to be the world's most strategic creative and connected to real estate capital advisor.
Aided by the strong cultural alignment of the two organizations, we are hard at work and already making real progress integrating the two.
We will share combined results and progress on integration during our third quarter call.
Also in July we announced two additions to our board of directors.
Debbie Mckenney me brings deep knowledge of the real estate industry to JLL. She served as an H F F. Four men, but until the acquisition and currently sits on the board of KCI, All real estate Finance Trust.
THL credit Advisors Reef property Trust and Reef America read too.
Well be Mehta has extensive experience with financial services films and their use of technology.
He was president and CEO of Drunks Union from 2007 to 2012.
Prior to that he held senior positions at HSBC.
Including CEO of HSBC, North America Holdings, and CEO of HSBC Finance Corporation.
He currently serves on the boards of the old C Corp., Northern Trust and Drunks Union amongst others.
We welcome Bobby and Debbie to JLL and look to them to contribute to jail else continued growth and superior client service.
They filled the strengths and our distinguished board of directors.
Finally in the second quarter, we published our 10th annual Global Sustainability report, which recall its wide ranging progress toward our ambition to build a better tomorrow.
We will highlight sustainability related achievements on our upcoming yes, Gi focused weapon now.
You will find additional information on our Investor Relations website.
Now, let's turn to the global economic outlook.
GDP momentum slowed in the second quarter with annual 2019, GDP grows now predicted to be 3%.
Political and trade issues contributed to the slower pace.
But most observers continued to believe that the risk of recession remains no.
For a detailed refer to slide two and the supplemental information document it posted in the Investor Relations section of JLL Dot com.
Slide three summarizes recent activity in the investment sales and leasing markets globally.
The second quarter saw global investment volumes continuing to decline was first half activity totaling $341 billion, 9% below the same period last year, but well in line with expectations for the full year.
At the same time real estate investors continued to maintain or increase their allocations to real estate.
Prime office capital values across 30 major office markets accelerated slightly during the second quarter to 6.4% compact was 5.4% for the full year 2018.
The anticipated sharp decline in interest rates provided an added boost to real estate capital values and within JLL contributed to less cells strong incentive fees in the first half.
In the office leasing markets gross leasing activity remained healthy in the second quarter 112 million square feet. Although this shows leasing running somewhat below the record breaking levels of 2018.
Year to date leasing volumes were down 5% on the first top of 20 team and we expect that rate to be maintained through the rest of the year.
In this environment, However, our Americas leasing business continues to report excellent performance.
The global office vacancy rate fell to a cyclical low of 10.8% in Q2. The first time the rate has fallen below 11% since 2009.
Rental gross for Prime office space has remained consistent for the past two years trending out an annualized average of 3.5% to 4% across 30 cities globally was Boston goal in Singapore, notably up double digit annual gross.
All in all.
Then it continued good environment for commercial real estate, which contributed to a strong second quarter on a first half result up JLL.
Now, we will turn to Stephanie for detailed comments on our performance.
Thank you Christian and welcome everyone to our call. We're very pleased with our continued strong momentum through the second quarter.
We had another record performance.
Well heading into the second half of 2019 with robust pipeline.
Before we start as a reminder, we report percentage changes in local currency unless otherwise noted.
It's Christian outlined fee revenue increased 12% compared with second quarter 2018.
And increased 9% for the first half.
For the quarter the growth with nearly all organic led by strong Lasalle and leasing performance.
As well as solid growth in our annuity businesses.
Our capital markets business performed well against market investment volume moderating from near record levels.
In addition, without continued to see elevated levels of capital, raising which will drive future growth and assets under management.
Real estate services fee revenue growth grew 10% for the quarter and 9% for the first half compared with last year.
Growth was broad based with all service lines contributing to strong organic growth.
Most notable what our leasing business, where we achieved impressive fee revenue growth of 14% for the quarter and 17% for the first half.
Leasing has been the most significant driver of real estate services grew for the fifth consecutive quarter.
Our annuity fee revenue base was strengthened by corporate solutions growth across all geographies and excellent without advisory fee performance.
Corporate solutions grew 9% for the quarter and 11% for the first half.
And our advisory fees reached a new record this quarter.
Adjusted EBITDA margin calculated on a fee revenue basis was 13.9% for the quarter.
Margin expanded 90 basis points compared with second quarter 2018, driven by solid performance at Lasalle across all revenue stream.
In addition, our real estate services margin continued to expand inclusive of continued investment.
For a more detailed information please see slide five of the supplemental materials.
Turning now to debt management total net debt was 937 million at quarter end, reflecting a slight decrease from first quarter in 2019 and from the second quarter 2018.
Consistent with a strong balance sheet net debt to trailing 12 month adjusted EBITDA was one times for the quarter a decrease from 1.2 times one year ago.
Our operating cash flow for the second quarter of 2019 included the expected improvement in trade payables.
Following the prior quarter's payment acceleration related to Emeas financial ERP implementation in April .
Moving to segment results.
Second quarter fee revenue in the Americas increased 13% over the prior year and 14% for the first half.
Growth was broad based across all service lines with continued exception overperformance and leasing.
Americas leasing fee revenue grew 16% for the quarter and 22% for the first half.
For the quarter growth was driven by the South East and mid Atlantic markets and seen across all major asset classes.
The technology sector, and flex space trends continued to make them for a mark on footprint expansion.
Capital markets fee revenue grew 8% for the quarter with growth in both investment sales and debt placement.
We saw strong performance in the industrial and hotel sector.
As well as larger deals in the north West South Central and New England markets.
For the quarter growth in the Americas was further fueled by solid performance in our annuity businesses.
Property and facility management fee revenue grew 8% for the quarter.
Project and development services grew 11% and advisory and consulting grew 9%.
Adjusted EBITDA margin was 16.4% for the quarter and 14.6% for the first half.
The 50 basis points of margin expansion in the first half was primarily the result of strong leasing growth, while continuing to invest in platform and client facing technology.
Turning now to EMEA total fee revenue increased 3% from second quarter 2018, and was flat from the first half.
The region was impacted by sluggish performance in investment sales.
Primarily the result of Brexit and slower economic growth in Germany.
For the quarter strong leasing growth in France was more than offset by lower activity in the UK and Germany.
From an office market perspective year on year, London saw a slight contraction and take up in the quarter, but continued to perform well against Brexit related headwind.
Capital markets fee revenue declined 8% for the quarter and 16% for the first half.
A direct result of continued softer market condition.
Our annuity businesses performed well and they're growing at a healthy pace.
Property and facility management fee revenue grew 7% for the quarter.
Project and development services grew 12% and advisory and consulting grew 9%.
For the quarter adjusted EBITDA margin was 2.4% a decrease of 50 basis points year on year, primarily the result of a shift in service line mix towards anybody revenues.
Moving to Asia Pacific, where performance continued to be strong fee revenue increased 9% over 2018.
Both for the quarter and the first half.
In Q2 growth was broad based across all service lines, most notably in leasing and property and facility management.
Geographically, Australia OLED fee revenue growth.
Leasing fee revenue increased 17% for the quarter and 11% for the first half despite market softness.
For the quarter growth was driven by our Hong Kong, India, and Japan market.
Property and facility management fee revenue increased 12% for the quarter and 14% for the first half driven by organic expansion from existing integrated facility management clients plus new client wins.
Adjusted EBITDA margin was 12.9% for the quarter, a 90 basis point improvement year on year.
The expansion reflects the growth in our transactional revenue together with continued cost discipline.
Turning now to our investment management business.
Lets out fee revenue increased a strong 47% for the quarter and 12% for the first half.
Our advisory fees reached a record level growing 26% for the quarter and 22% year to date.
More than half of the advisory fee growth was from strong private equity capital raised and deployed with the balance related to recent M&A.
For the quarter incentive fees were 34 million, bringing the total for the first half to 41 million.
Equity earnings for the quarter were 11 million predominantly driven by net valuation increases in Asia Pacific.
Without the adjusted EBITDA margin was 33.7% for the quarter.
Compared with 28.5% last year.
The increase was primarily the result of incremental incentive fees and improved profitability and advisory fees as well as accretive M&A contributions from latitude and to Viva investors.
Well sounds private equity deployment and recent acquisitions drove assets under management to a record 68.4 billion.
Our ability to continue to grow at U.M. organically remains strong and concentrated and scalable higher margin products.
For the quarter Lasalle raised 2.7 billion in private equity capital, bringing the total for the first half to 4.5 billion, which positions us well at more than double last year's capital raise.
For equity earnings we continued to have modest expectations, reflecting a moderation in valuation increases as well as potential volatility from market exposure for publicly traded REIT.
To summarize we had a very strong and encouraging quarter and first half.
We are well positioned to deliver our 2019 targets of 6% to 8% organic fee revenue growth in our real estate services business.
And a consolidated adjusted EBITDA margin profile of 12.5% to 14.5%.
I will now turn the call back to Christian for final remarks.
Christian.
Thank you Stephanie.
To illustrate how we achieved these results slide 18 shows recent wins across service lines and geographies.
In our corporate solutions business, we won 43, new assignments in the first half expanded existing relationships with another 30 clients and renewed 16 contracts.
In a very notable win we extended our long term relationship with Procter and Gamble, one of our largest global food service clients and early outsourcing pop up.
Over the years, our collaborative relationship has led to the creation of numerous innovative client service offerings, including the development of a data and analytics capability that eventually became our ret platform.
We will retain by de Apptio should provide a range of services in EMEA.
And caterpillar selected us to provide facilities management services for all its sites in Singapore.
1.1 million square feet of manufacturing and office properties.
In our capital markets business, we assisted G O P. In the $18.7 billion sale offer one I'm not 79 million square foot U.S. logistics portfolio, the largest ever private real estate transaction globally.
And in Australia, we advised the Queensland investment cooperation on the 1.5 billion Australian dollar sale off 80, calling street in Melbourne.
It was meltdowns largest ever property sale.
Turning to leasing and management activity in the U.S., we will retained to lead the leasing over 250000 square foot spec office building in Denvers ribbon all neighborhoods.
The building has been designed with amenities and outdoor spaces to attract tech and creative tenants from Denver and comparable cities.
In Russia, JLL was appointed COO exclusive sales and leasing agent bye.
Hey, if I development for two office building projects.
And then sign up Porsche appointed us its exclusive leasing agent for greater China.
The appointment follows our successful relocation of forces one on a 40000 square foot headquarters in Shanghai.
The South property fund raised a record $497 million of capital in the first half was large capital commitments from a diverse group of global investors in Switzerland, Japan, the U.S. and other markets.
Inflows have been driven by the funds strong outperformance on a one year three year, five and seven year basis.
Now, let's focus on the future and return to slide three which summarizes JLL research market outlook for the full year.
Well they are certainly risk for global commercial real estate markets potential benefits are also emerging.
Risk free rates continue to fall, reducing financing cost and widening spreads for property at a time when investors a hungrier than ever for yield.
Why prices are elevated in many markets fundamentals remain sound underwriting is disciplined and debt levels are generally modest.
Investors remain cautious and selective in this environment.
As a result, we anticipate global investment in real estate to soft and by 5% to 10% this year.
Roughly 730 billion U.S. dollars.
In global leasing markets, we see Walliams continued to decrease by about 5% for the full year.
Consistent with what we have seen in the first half.
With global completions, increasing throughout the year, we anticipate that the global vacancy rate will start to move up in the second half, finishing the year hot around 11.3%.
Going forward, we expect to be able to reduce investments into our ERP implementation.
Pivot towards client facing technology.
The second quarter for example, we launched zoo and AI based smart enterprise assistant that improves the daily work experience for employees by simplifying Coleman workplace task and making smart building infrastructure more accessible to them.
We also continued to make progress on our commitment to JLL spark, who the 100 million dollar fund we have previously announced.
At the end of June we had committed $20 million to 13 investments.
We remain confident about our ability to keep advancing our business in this environment.
We see leasing continuing to lead revenue gross in our real estate services lines, along with project development services and property and facility management.
Our capital markets teams have strong pipelines, even as overall investment market volumes are slowing.
While it's still early days in the integration of Jay Leno, HF F. capital markets teams initial signs from both organizations are very positive.
And lets talk continues to perform well the increased assets under management will drive higher incentive and advisory fees.
To close our prepared remarks on these earnings calls.
I like to recognize a few of the many awards and on US our people left on foot shale Ellen our clients.
Once again, we have been named to the Fortune 500, rising one on that 67 places to the 189 position in the listings this year.
[noise] Bops called US one off America's best employers.
POS company named US best workplace for innovators.
Yeah that was recognized was 17 awards up the 2019 International Property Awards Asia Pacific.
Well the second consecutive year, we won office agency team off the year up the 2019 property awards in the UK.
Last salary seep, the 2019 energy star partner of the year, a walk from the U.S.G.P.A. and department of Energy why JLL, One energy Star sustained Excellence Award.
Congratulations to all our colleagues who might be and so many other awards possible.
And thinks as well to our people around the world for continuing to serve clients shareholders and JLL so well.
Now, let's take your questions operator would you please explain the Q in a process.
If youd like to ask a question at this time. Please press Star then the number one on your telephone keypad, if youd like to show. Your question press the pound key and for the first question comes from Anthony Paolone with JP Morgan. Please go ahead.
Hi, Yes. Thank you. My first question is Oh, maybe for Christian and Stephanie I'm trying to synthesize comments around the leasing environment being basically down in terms of activity for the full year and trying to understand what the second half of the year or perhaps revenue growth might look like for you all specifically and just trying to understand if it's cool if growth is going to be to be really hinged on market share gains were.
Or otherwise.
Oh, well I mean as you have seen our leasing performance has been very strong and the U.S. in particular.
Which was driven by a broad based kind of performance of all our businesses.
And are there specific gross coming from all these flex space called working company's financial services and the tech companies, where we tend to have a very high market share. So yes, if those type of companies half a particular gross in the Oh occupancy needs that means we will win market share. We tend to believe that the market for us continues to be pretty strong we would call. Our work in hand is very very strong the pipeline is strong going into the third and fourth quarter. So we have all reason to be fairly confident around our leasing business going forward.
Okay.
And then on outsourcing can you talk about the backlog there and what you are seeing that helps give comfort that revenue should continue to grow and it was a high single digits or low double digit range.
Well the overall outsourcing business continues to be very strong.
And and this is something which is which will continue and I could almost say, which will especially continue if if the overall economic outlook comes a little bit more blue coat or even tougher because then, especially those companies who have been hesitant to outsource.
Ah those services will have another shop look up that cost base and see the potential to not only increase quality and productivity, but to reduce cost. So what we have seen so far this year about the momentum is really really strong and that is a business, which which is pretty long term the business. We win today he will.
We'll kind of translate into revenues.
Next year.
And just to give you one on small metrics at the end of Q2, we have pretty much exactly twice as much new business in our hand, and then we had a year ago. So we see continued momentum and growth in that business and not as a pretty stable longer term trend.
I wouldn't expect anything to change around that trend in 2020.
Okay, Coney Island, I would add to that.
I would add to Christians comments that we've seen that growth in our core business for the second quarter. This year across all our segments.
So we are pretty confident that they're performing strong with that pipeline that Christian mentioned more than double we have good momentum going into the second half of the year as well as we're very focused on the profitability on an expanding that so we're seeing very good results and they're in line with our expectations.
Okay. Thank you for that and interest question, if we do see global economic growth step down appreciably worse, what changes would you make to the business overall.
Well you know we have been operating in a in a pretty Oh interesting environment now for several quarters, there's a lot going on in the world.
It hasn't filtered through to our performance, we continued to grow very strongly and and frankly, despite all the <unk> those.
Difficulties, we see in the World. We don't have any reason to believe that our momentum will slow down.
When you go to very specific situations as we have currently in the UK, we have adapted our cost base or early on.
And and we despite that volumes are significantly down in the UK and we are still pretty happy with our business because we reduced the cost base early on as you know our business or has the ability to to deal with volatility quite nicely because the transactional business, which is first impact it bye bye volatility in the market or has a pretty fluid compensation plans and they adapt accordingly, and so that's why it is probably in our industry slightly easier to write the the way so if the economy than it is in other industries.
Okay. Thank you.
Your next question comes from Stephen Sheldon with William Blair. Please go ahead.
Good morning.
First you know great trends in the Americas capital markets, you know with what appears to be market share gains.
Can you talk specifically about the pipeline, you're seeing there, including any visible it visibility you have to this point, including Hfm.
And then you know also any chance that with you know the first quarter of ownership that there's a little bit of distraction from integration as we think about forecasting for the third quarter.
Well first and foremost.
I'm very very proud what our capital markets business has delivered across the globe, but also very specifically in the U.S. because frankly speaking if there is any distraction. This distraction is probably the biggest issue.
In the period between signing and closing a deal because you can't do really a lot, but everybody is console and what's happening.
And and so that they were able to outperform the market and not quarter is really brilliant now the pipeline again is its very strong in the U.S. and we're talking about our up.
Original JLL pipeline that doesn't include HF F., we can talk about each of half separately. So the pipeline of jail Ellis without hfpef already very strong and and so there's there's good momentum in that business. If you move over to.
Pick up in that business going forward for the remainder of the and then Oh APEC business is also looking very encouraging for the third and the fourth quarter with regards to HFF F., we will always be stopped reporting on HFG F or after the third quarter.
But so far we are very happy how the integration is running this is a super Super professional team and we are coming together very nicely and clients are highly appreciative of the combination. So the first couple of weeks together has been really great an exciting weeks for us.
That's great and then apologies if I missed this but just an update on the expected cost and revenue synergies.
What the deal closing are there any changes to the expectations, we've laid out and also maybe.
Just your updated level of confidence about hitting those targets is there still the same thanks.
Hi, Steven.
We are still very very confident on the synergies that we outlined back in March when we talked to you about the acquisition. So just to kind of recall, where we where we said 60 million in run rate synergies about two thirds of those coming from a cost base and one third coming from our revenue expected synergies and 60 million. We said 28 million will come in the first 12 months. So we're excited about that as Christian said, it's early days, but we are I'm committed to those figure and we definitely have good visibility to those right now so.
Great. Thank you.
Thank you. Your next question comes from Jade Rahmani with KBW. Please go ahead.
Thanks, very much on the leasing side is there any indication that the technology appetite for large space is.
Waning somewhat slowing somewhat.
Not really I mean, they continue to be very strong employee us and you know the question on what kind of environment you provide for your employees in order to be very attractive is something which is also a play couple for tech companies. They also have to fight hard for that talent and so they all interested in upgrading their space diversifying from a geographic location this space and that drives the demand and so this is a trend which will probably continue to be the case.
Turning to the EMEA business.
What impact are you seeing from Brexit.
And has the amount of uncertainty.
That's increased recently.
Begun to impact the business more and more a more pronounced way you said that the capital markets pipelines have picked up there so that's somewhat surprising.
Yeah, I mean, as you know Brexit has been now around as kind of an overarching threat to the market fall for more than two years.
And there's a certain amount of time, you can push out decisions.
And then you will have to just do you have to make your decision and so it's not surprising that there's still quite a lot of activity, especially on the leasing market.
Which continues to be relatively relatively strong.
On the capital market side, it depends a little bit where you go to France is very very strong, but when you go over to the UK you have markets like the city of London, a capital markets volume has decreased by 70%.
Now what's happening and why our numbers are still pretty strong is there is a general trend when the environment gets more uncertain when the going gets tough you turn on to the advisors, where you feel kind of the biggest comfort and and that's why we tend to pick up a more market share in those type of more difficult environments. Then in an environment, where people would expect many advisors to perform great and so if you. If you are surprised that we have that strong book of business frankly, we are not that surprised we saw a similar situation in 2008 2009, where the market volumes overall, all came down quite significantly but within that market. Our share has risen very significantly I don't know I don't want to compare the current situation was 2008 2009, but for the UK.
Specific we have a pretty tough environment and that's why we are able to pick up market share.
Thank you very much on the H. after transaction.
In terms of transaction expenses I think the S. Four laid out 52 million and transaction costs and $22 million in retention bonuses.
Should we expect those to be amortized over a period or expensed in the third quarter, but I take on the numbers you quoted on the 21.6, yes, we expect that to be amortized and on the 52 million, we expect that to the extent.
Okay and can you give an update as to where the leverage is currently post the deal close.
Yeah. So we when we publish the information in March on the HFSA transaction, we gave some guidance there on where we thought our leverage would get too. If you recall that we said it would be adding about 900 million of debt and that that would bring us up above.
Above a 1.5, but below obviously, our two X level now there's some moving parts in there obviously when we get to Q3, we'll have cash generation from HF ethics cetera, but.
We'll probably we're starting out the acquisition a little elevated closer to about 1.31 0.4.
Thanks very much.
Your next question comes from Mitch Germain with JMP Group. Please go ahead.
Thank you.
Just on the Americas region, obviously, not a lot of operating leverage is there anything specific that you can point out this quarter that.
You might have been a bit of an anomaly when you look at some historical quarters.
No I mean, we have had a very strong first half of the and what we have always been very transparent about is when we see a significant outperformance. We are immediately increasing our investment into technology and that's exactly what has happened in the second quarter. We sold out very strong book of business and we increasingly and we immediately or accelerated our investment in technology and you know just to be clear on that we see technology as a clear reason why we are winning that market share, especially in the leasing business. We have we have.
Ah introduced a couple of different tech tools Blackbird is one of them, where which really helps us to win business and which differentiates our services from our competitors and that's why we're so keen to accelerate the rollout of those products as quickly as we can.
Great last one for me.
You initially grew outsourcing a couple of years ago made a big Splash capital markets is there any other.
You know regions or specific segments within the organization that is going to be a focus as you look at executing on the strategy you laid out at the Investor day, a couple of years ago.
I mean, we have three big buckets or.
The capital markets piece, you mentioned and you know we are just five weeks in off doing the biggest acquisition ever which will benefit our capital markets business very strongly and and we will be very very focused to to leverage that not only for the U.S., but also and the rest of the world because as you know hfpef brings really skilled debt business and we will use that that business to rule that out globally I'm on the carpet solution side, we on a on a multi year expansion program, which is not only topline expansion, but also very much margin expansion. We have invested heavily in that business over the last couple of years and were now coming to a point, where we are actually harvesting on those investments and so that is a continuous focus for us going forward, we still see a lot of potential in EMEA around our corporate solutions business.
And so we expect actually EMEA to half the strongest top line grows this year off the three regions, but also a pack is performing extremely well as you know.
Corporate real estate outsourcing started in the U.S. and and the other two reasons, we're letting very significant de but this is now a very much a global trend and you'll have a lot of clients who outsourcing all three regions at the same time and so there's more momentum on topline gross now in EMEA on a pack and we are obviously well position to take that on and then the third big piece is clearly around technology, where we have made a really strong investments over the last three four years and we are seeing now the returns coming in sometimes as part of winning market share, but also as direct revenues, which we see no growing quite significantly.
Great Congrats on the quarter.
Thank you.
We have a question from Jade Rahmani with KBW. Please go ahead.
Hi, This is actually Ryan tomasello swapping in for Jade. Thanks for taking the follow up everyone.
Just with the acceleration that we're seeing in prop tech interest and investment I was hoping you could.
Provide us.
With an update on what's going on over at JLL spark.
How does the fund's investment pipeline look and how have those existing investments performed and ultimately do you see JLL Sparks portfolio also serving as a potential M&A pipeline in future years.
Well so far we are very happy with the development of a spark a we have analyzed more than 800 business models, which was sent to us and out of these 800, we have made 13 investments since we started that activity.
And as you know we are only doing investments when we believe that our clients will immediately benefit from those type of of offerings those companies have and and so there's an immediate connection to our clients because what we do is we are trying to scale those companies, which we invest in within our client base right away and so that has been very successful so far and the companies are benefiting immediately from our investment as well as our clients up benefiting because they are forced in getting to those technology, which these start ups have created.
And and so in some cases, we have actually increased our share of the company in a in a in a second round already and so overall all the performance of that fund and it's early days, it's only out there now for about 15 months. So far the performance of that fund is is well above the usual performance off. These early stage venture capital funds you would see in the market.
And how much of jails on Capitol view currently have invested.
27 million.
Great. Thanks for all that color.
And we have no. There are no further questions I will now turn the call back over to management for closing remarks.
Well with no further questions. We will close today's call. Thank you for participating and Stefanie and I look forward to speaking with you again following the third quarter and as we said we are very confident that it will be again, a very nice quarter. So thank you for that and have a nice summer.
This concludes today's conference call you may now disconnect.