Cohen & Steers, Inc. (New York) Q4 FY2024 earnings call

• Raja discussed as-adjusted results, noting Q4 earnings of $0.78 per share vs $0.77 sequentially, and full year earnings of $2.93 per share. Revenue growth driven by higher average AUM and performance fees. - Jeff Palma discussed asset allocation, highlighting real assets as attractively valued with diversification potential. - Joe Harvey talked about investment performance, with 49% of AUM outperforming benchmarks in Q4, and plans to launch three active ETFs in Q1 2025, focusing on RIA segment and education on asset classes.

In the fourth quarter, revenue increased 4.9% sequentially to $139.9 million, and full year 2024 revenue was $518 million, a 5.9% increase. Average AUM in Q4 was higher than prior quarter, with net inflows primarily in open-end funds. AUM was $85.8 billion at year-end, down from $91.8 billion at Q3 end. Operating income was $49.7 million in Q4, with operating margin 35.5%. Full year earnings per share were $2.93, up from $2.84 in 2023.

• Expected effective tax rate to remain at 25.3% in 2025. - Compensation ratio to stay at 40.5%. - G&A expected to increase 6%-7% in 2025. - Plan to launch three active ETFs in Q1 2025: active U.S. REIT strategy, broader preferred stock strategy, and natural resources equity strategy.

• Market depreciation in asset classes. - Interest rates impacting private markets, with private valuations potentially falling. - FOMO influencing investor timing, making it challenging to time asset allocation moves. - Tight credit spreads and difficult exits in private markets as potential headwinds.

Q: Could you give more color on sales conversation in wealth management channel for REITs and preferreds?

A: Strong interest in U.S. REITs, less strong in preferreds due to competition from private credit. Flows from RIA channel growing.

Q: Talk about plan for rolling out active ETFs?

A: Leading with core asset classes, starting with RIA market, educating advisers on asset classes and strategies. No concern on cannibalization as focus on performance and education.

Q: Can you grow operating margins in 2025?

A: Driven by market levels, organic growth, and new investments. Comp ratio and G&A guidance factored in, progression based on market and organic growth.

Q: Any plans for acquisitions?

A: Historically focused on organic growth, but open to strategic acquisitions if they enhance lineup, but not part of day-to-day.

Q: Best markets outside U.S. for flow demand?

A: Opportunities in Asia ex Japan, with Singapore office opened to serve clients, and Japan showing positive trajectory for investment and asset management.