CNS — Cohen & Steers, Inc.

Summary of Cohen & Steers Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): $0.81, up 11.6% from $0.73 in Q2.
• Revenue: $141 million, a 4.2% increase from the prior quarter.
• Assets Under Management (AUM): Increased to $90.9 billion, driven by market appreciation and net inflows.
• Effective Fee Rate: Stable at 59 basis points.
• Operating Margin: Improved to 36.1% from 33.6% in Q2.
• Net Inflows: $233 million for the quarter, with year-to-date inflows totaling $325 million.
• Liquidity: Increased to $364 million from $323 million in the prior quarter.
• Compensation Ratio: Year-to-date ratio at 40.25%, expected to remain stable for 2025.

2. Strategic Updates and Business Highlights

• Positive Trends: Continued positive net flows into open-end funds for five consecutive quarters, although offset by institutional net outflows.
• Institutional Pipeline: Expanded significantly to $1.75 billion, the largest since Q4 2021, with 66% in U.S. REIT strategies.
• Active ETFs: Strong performance with $70 million in net inflows, total AUM over $200 million, and plans to launch two more ETFs in Q4.
• Private Real Estate: Progress in capital raising with the final close of the Cohen & Steers Real Estate Opportunities Fund at $236 million.
• Rights Offering: Successfully raised $353 million for the Cohen & Steers Infrastructure Fund, providing over $500 million for future investments.

3. Forward Guidance and Outlook

• 2025 Guidance: Expect compensation ratio to remain at 40.25%, with G&A expenses projected to increase by around 9% compared to 2024.
• 2026 Outlook: Anticipate moderation in G&A growth to mid-single-digit percentage range.
• Market Conditions: Expect continued resilience in economic growth and corporate profits, with a broadening foundation for growth anticipated in 2026.

4. Bad News, Challenges, or Points of Concern

• Institutional Outflows: Experienced net outflows from institutional advisory and subadvisory accounts, totaling $537 million, primarily due to client reallocations.
• Performance Discrepancies: Short-term performance was weaker, with only 33% of AUM outperforming benchmarks, particularly affected by U.S. REIT performance.
• Market Concentration Risks: Concerns regarding high valuations and market concentration, which could affect future performance and investor sentiment.

5. Notable Q&A Insights

• Wealth Management Channel: Positive demand for U.S. REITs, but the recovery is expected to be gradual rather than V-shaped due to previous real estate pricing adjustments.
• Geographic and Client Profile: Predominantly North American pipeline, with some European reallocations noted. Institutional clients are diversifying into international real estate strategies.
• Cash Allocation Trends: Anticipated movement of cash from money markets into inflation-sensitive real asset strategies, including real estate and infrastructure.
• Compensation Dynamics: The need to remain competitive for talent amidst strong market performance, which could pressure compensation ratios if market appreciation continues.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session, providing a comprehensive overview of Cohen & Steers' performance and outlook for Q3 2025.