Cohen & Steers Sees Inflows Amid AUM Growth, Margin Holds Steady

Date of Call: Jan 23, 2026

Financials Results

• Revenue: $143.8M, up 2% sequentially; $554M for full year, up 6.9% YOY
• EPS: $0.81 per share, equal to prior quarter; $3.09 per share for full year 2025, up from $2.93 in 2024
• Operating Margin: 36.4%, compared to 36.1% in the prior quarter

Guidance:

• Compensation ratio expected to remain at 40% in 2026.
• Annual G&A growth in 2026 projected to be in the mid-single-digit percentage range.
• Effective tax rate expected to be 25.4% on an as-adjusted basis in 2026.

Business Commentary:

Revenue Growth and Stable Fee Rates:

• Cohen & Steers reported revenue of $143.8 million for Q4, up 2% sequentially, and $554 million for the full year 2025, up 6.9% year-on-year.
• The increase in revenue was driven by higher average AUM and recognition of $1.7 million in performance fees, with a stable effective fee rate of 59 basis points.

Net Inflows and AUM Trends:

• The company experienced net inflows of $1.2 billion in Q4, marking five out of six trailing quarters with net inflows, and ended the year with $90.5 billion in AUM.
• The inflows were primarily related to advisory and closed-end funds, offset by market depreciation and distributions, indicating improved investor confidence.

Operating Income and Margin Improvement:

• Operating income increased 3% to $52.4 million in Q4 and rose 6.3% to $195.1 million for the full year 2025, with an operating margin of 36.4%.
• The improvement was attributed to higher average AUM and effective fee rates, despite increased G&A expenses.

Investment Performance and Outflows:

• On a one-year basis, 95% of Cohen & Steers' AUM outperformed its benchmark, with notable performance in natural resource equities at 30% and global listed infrastructure at 14%-22%.
• Outflows were primarily due to client allocation changes and investment vehicle shifts rather than performance issues, reflecting a strategic realignment in investor portfolios.

Growth in Global Institutional Interest:

• The company observed a strengthening institutional pipeline, with a focus on increasing coverage in the RIA channel and expanding global sub-advisory resources.
• Improved macroeconomic confidence, portfolio flexibility, and inflation-sensitive allocation interests drove increased institutional engagement, particularly in non-U.S. markets.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted 'solid revenue growth,' 'another quarter of net inflows,' and an 'unfunded pipeline near multi-year highs.' The outlook is optimistic, citing 'above-consensus global growth,' a 'broadening economic growth engine,' and a 'multi-year commodity supercycle.' CEO stated they are 'reaching the peak of balance sheet funding' and 'very excited' about scaling active ETFs.

Q&A:

• Question from John Dunn (Evercore ISI): Are you seeing improving demand for private real estate, and can it be a more significant contributor in 2026?
  Response: Early signs of increasing interest are seen, potentially driven by capital from struggling private credit markets; positioned well with non-traded REIT for transition.

• Question from John Dunn (Evercore ISI): Can active ETFs scale more quickly due to established strategies?
  Response: Yes, active ETFs can scale rapidly as they are based on proven core strategies and the market is adopting them faster, with adoption accelerating as seen with the REIT ETF.

• Question from Rodrigo Ferreira (Bank of America): What is the recent progress in the institutional channel and where can it go from here?
  Response: Pipeline has strengthened and broadened over the last two quarters due to a better environment with more portfolio liquidity and persistent inflation driving interest; investing more resources to grow this segment.

• Question from Rodrigo Ferreira (Bank of America): Is the amount won and funded intra-quarter increasing, and what dynamics are driving that?
  Response: The increase is a reflection of the broader positive dynamic in business activity, not a unique trend; consistent with longer-term history.

• Question from Matt Sykes (Gabelli): What areas of demand are you seeing for active ETFs, and any surprises?
  Response: Demand is coming from independent RIAs and existing open-end fund holders converting; cannibalization is in line with expectations, and wirehouse onboarding is in process.

Contradiction Point 1

Institutional Pipeline Demand and Funding Patterns

Contradiction on drivers for intra-quarter funding increase.

What progress has been made in the institutional channel and its future outlook, and why has the intra-quarter funding of won and unfunded pipeline increased? - Rodrigo Ferreira (Bank of America)

2025Q4: The increase is a reflection of the broader positive dynamic in the business and is consistent with historical patterns; no unique new factor is driving it. - [Joe Harvey](CFO)

Could you provide the geographical and client-type profile of institutional investors contributing funds? - John Dunn (Evercore ISI Institutional Equities)

2025Q3: There has been a win from the restructuring of an 'old architecture' annuity plan... The pipeline spans strategic allocation changes and reallocations from underperforming managers... - [Joseph Harvey](CEO)

Contradiction Point 2

Global Real Estate Demand Drivers

Contradiction on primary catalysts for global real estate demand.

What are the regional demand patterns for advisory and sub-advisory services in the institutional sector, and what factors could position global real estate as a tailwind? - John Dunn (Evercore ISI) - Follow-up

2025Q4: Two main factors could drive increased demand: 1) A re-acceleration in demand from global institutions... 2) A shift in perception as international real estate underperformance relative to the U.S. likely ends... - [John Cheigh](CFO)

How has demand for U.S. REITs in the wealth management channel evolved compared to past cycles in relation to interest rates? - John Dunn (Evercore ISI Institutional Equities)

2025Q3: It's not just a rate story... Oversupply in sectors like industrial and apartments due to past low rates is creating a hangover. - [John Cheigh](CEO)

Contradiction Point 3

Gross Sales Trends in the Wealth Channel

Contradiction on the trend and level of gross sales activity.

What is the recent progress and future outlook for the institutional channel, and why has intra-quarter funding of won and unfunded pipeline been increasing? - Rodrigo Ferreira (Bank of America)

2025Q4: The pipeline has strengthened for two consecutive quarters, broadening... This is driven by a more favorable macro environment... - [Joe Harvey](CEO)

Could you provide insights into the current state of the wealth management channel, including appetite for gross sales and which strategies are in or out of favor? - John Joseph Dunn (Evercore ISI Institutional Equities, Research Division)

2025Q2: Gross sales in Q2 were about 10% lower than recent levels, with some seasonality observed in past quarters. - [Joseph Martin Harvey](CEO)

Contradiction Point 4

Institutional Adoption of Global Real Estate

Contradiction on the observed strength and drivers of global real estate flows.

What are the regional demand patterns for advisory and sub-advisory services on the institutional side, and what factors could drive global real estate to become a tailwind? - John Dunn (Evercore ISI) - Follow-up

2025Q4: Institutional interest is expanding beyond the U.S. due to stronger non-U.S. market performance and diversification concerns. - [John Cheigh](CEO)

Did the stronger global real estate flows in Q2 come from U.S. or international investors? - Rodrigo Beisbier Ferreira (BofA Securities, Research Division)

2025Q2: Stronger flows in global real estate were partly due to international components underperforming relative to the U.S., creating an 'American exceptionalism' dynamic... - [Joseph Martin Harvey](CEO)

Contradiction Point 5

Strength and Drivers of the Institutional Pipeline

Contradiction on whether pipeline strength is consistent or a recent improvement.

What progress has been made in the institutional channel, and what's next? Why is the intra-quarter funding of the won and unfunded pipeline increasing? - Rodrigo Ferreira (Bank of America)

2025Q4: The pipeline has strengthened for two consecutive quarters, broadening in terms of number of mandates, geographic domicile of allocators, and strategy range. - [Joe Harvey](CFO)

Will this quarter's pipeline be viewed as an anomaly, or could we sustain a low level? - John Dunn (Evercore ISI)

2025Q1: Historical pipeline data shows consistency and strength, so this quarter's low ($61M vs. $531M prior) is not being dismissed. - [Joe Harvey](CFO)