Cohen & Steers Inflows Accelerated as Assets Topped $100 Billion
Net inflows reached $1.3 billion, the firm’s best quarter since late 2021.
Cohen & Steers (CNS), the real-assets-focused investment manager, ended the second quarter with $100.1 billion under management, up 7.5% QoQ and 12.6% YoY. Market appreciation contributed $6.4 billion, while $1.3 billion of net inflows more than offset $768 million of distributions.
The flow recovery gained momentum. Net inflows accelerated from $0.5 billion in the first quarter and reversed a $0.1 billion outflow a year earlier, giving Cohen & Steers a fourth consecutive quarter of organic growth and its strongest inflow quarter since the fourth quarter of 2021.
Open-end funds drove the advance, attracting $1.45 billion compared with $555 million QoQ and $285 million YoY. Institutional accounts remained under pressure, with $157 million of outflows, wider than $59 million in the prior quarter but narrower than $519 million a year earlier.
Demand also diverged across real-estate strategies. U.S. real estate drew $883 million after a $20 million outflow in the first quarter, while global and international real estate recorded $403 million of outflows after taking in $46 million QoQ.
Higher assets translated into faster fee growth. Revenue rose about 5% QoQ and 12% YoY to $152.7 million, while investment-advisory and administration fees increased to $144.3 million from $136.8 million in the first quarter and $128.5 million a year earlier. Average AUM climbed to $99.0 billion from $94.4 billion QoQ and $87.2 billion YoY.
The effective yield on those assets continued to narrow. The adjusted fee rate excluding performance fees declined 0.3 basis points QoQ and 0.6 basis points YoY to 58.1 basis points. Even with that compression, the adjusted operating margin expanded 120 bps QoQ and 270 bps YoY to 36.3%, as revenue grew faster than expenses.
Adjusted operating expenses increased 3.3% QoQ and 7.6% YoY to $96.7 million, primarily as employee compensation rose with revenue. GAAP expenses grew 4.6% QoQ and 7.7% YoY, with the annual increase also reflecting RQI rights-offering costs.
The distribution buildout added another source of potential organic growth. Active ETFs surpassed $1 billion of AUM during the quarter, and the European listed-fund platform exceeded $2 billion.