Christian Mayer: I mean not meaningfully, Himanshu. I mean this is — I think we do the best we can, and we look at our various components. Every time we update our and look at our forecast, but there’s nothing meaningful to call out at this time.
Himanshu Gupta: Then just looking at the valuation on IM, investment management, the valuation adjustment in Q1, was it mostly related to office? I mean can you elaborate a bit there?
Christian Mayer: Himanshu, it was primarily related to our alternative portfolio, and that is not related to the actual portfolio performance itself. I mean the income coming off these assets is the same or better than it was previously. What’s happened is the cap rates have gapped out and have driven reduction in the sort of the values that the outside appraisers attach to these assets. As it relates to our office portfolio, it’s quite small. It’s one third or one fourth of our traditional portfolio, which is a small piece overall. And we’ve taken cumulatively over the last one and half years, 27%, I believe, mark-to-market adjustment on that office portfolio already. So that is not a driver in the quarter, but certainly, it’s been something that’s been weighing on AUM over the past one and half years.
Himanshu Gupta: Maybe just a last question on M&A outlook or opportunities. So how close are you on the capital deployment, and anything you want to elaborate on that?
Christian Mayer: So Jay the question is how close are we on capital deployment in terms of acquisitions or other opportunities?
Jay Hennick: I’m not — that’s not something that we would normally talk about, number one. Number two, we’re actively involved in many transactions right now and they close when they close. And I can’t really give you any further color than that. They’re all opportunistic and they happen when they happen, but we have a track record of completing multiple transactions over many years.
Operator: The next question comes from Jimmy Shan at RBC.
Jimmy Shan: Maybe just a follow-up on the M&A. I know not so much you could share, but can you give us a sense of the deal sizes that you may be looking at across? You mentioned looking at small and big deals. And also, I think we talked about pricing last quarter. Has that — has there been any change in that given the change in continuously changing rate environment? Have you seen any change in sort of pricing expectations?
Jay Hennick: As I mentioned earlier, there are large transactions and there are smaller transactions. I would say that the large transaction pricing is high and it’s just the nature of the beast. And what’s also happening is, especially in the large transaction environment, these are businesses that are extremely well managed and have great long-term prospects, and that’s getting reflected in valuation. When it comes to smaller deals, and of course, smaller is always relative, the pricing is materially lower than it is on the larger transactions. And it also depends on what segment you’re talking about, whether it’s our more traditional service lines. Right now, you can buy more traditional real estate service businesses at relatively low valuations for obvious reasons, capital markets as an example.
But in the other two areas, the valuations, I think, are fair valuations, give or take, on the smaller transactions. And the beauty that we have is that we can integrate those acquisitions in different parts of the world in different segments of the country. That add different capabilities — service capabilities to us. For example, in engineering, we might want to augment one or two components of our business in a particular region. So there’s a nice opportunity for us to just strengthen our business and widen our capabilities. I’m probably giving you too much detail here. But having 3 distinct growth engines being able to execute on a global basis having a strong balance sheet, having a management team that’s done this for a number of years, all — it puts us in an excellent position to capitalize.
And in markets like this, there are pockets of areas to capitalize on. So we’re very excited about some of the opportunities we have, if we can bring them home. I think that it just takes us to an entirely new level as a company.
Jimmy Shan: And then maybe just Christian, a quick follow-up or a clarification. The AUM growth on the investment management business, $5 billion to $8 billion. I think I heard you correctly, you — in Q1, you had $450 million of fundraising. And so if I just look at the annual number for 2024, simple math, 1% on 5% to 8%, the thinking is that the additional revenue on an annualized basis would be $50 million to $80 million, but weighted towards second half of the year. Is that how we should be thinking about that?
Christian Mayer: Yes, I think that’s right, generally. I mean there’s a few strategies like credit where the capital does not generate fees until it gets put to work. But generally, in the traditional alternative infrastructure categories, when that capital is raised, there’s a fee, clock just starts running immediately.
Jimmy Shan: And then some of the new capabilities that you talked about fundraising new capabilities in the Middle East in the RIA channel. Those expenses are already running through in the current quarter?
Christian Mayer: There are charges against EBITDA in the first quarter and some costs were incurred late last year as well on these additional mostly staffing cost.
Operator: The next question comes from Frederic Bastien at Raymond James.
Frederic Bastien: You just added the Colliers affiliate in Philadelphia, but I was wondering if there are other non-owned affiliates or regions that are of interest to you, whether that’s in the US or globally?
Chris McLernon: To answer your question, there’s a couple potentials in the future. So Houston, Denver, South Carolina, those are kind of — and Columbus maybe. So just a couple. And internationally, there’s not really any affiliates. The markets aren’t really big enough.
Frederic Bastien: And maybe switching gears, still on M&A. But on the engineering side, you’ve been up to now pretty much active in the US and started — established a footprint in Australia. Are these sort of the regions you’re going to continue to focus on in the short term?
