CNS - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cohen and Steers Fourth Quarter and full year 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded Thursday, January 25, 2018. I would now like to turn the conference over to Adam Johnson, Senior Vice President and Associate General Counsel of Cohen and Steers. Please go ahead, sir.

Adam Johnson

to XXXX and Earnings welcome and Fourth and Year Full Conference you, the Steers Cohen Quarter Thank Call.

Stadler. Chief Joining Bob me Officer, our Steers; Officer, Matt Financial our President, are Joe Harvey; Chief Executive and

factors to there Before I turn make some could of conference materially which that to the call the to that presentation statements that any over a non-GAAP the which this section XX-K, risks is are Also, number the Factors of uncertainties, these available we duty contains statements. financial various forward-looking believe measures, point Company on These in statements. are are assumes outcomes Company's in remind I performance. Risk you no course forward-looking that believe actual to at during call to out factors to those want Matt, described from the important the our these want update and we may of our We and statements. cause I forward-looking Form evaluating in subject of differ today meaningful XXXX website we make are cohenandsteers.com. indicated

data on release on refer and you measures For to non-GAAP the website. and our in their reconciliations, the GAAP these disclosures presentation, financial which available financial contained earnings should are

offer solicitation these offer communication performance have does funds may buy have may to a statements this an not that presentation the effective. registration our with securities. want This performance strategies. and investment performance. filed yet that contain is funds of constitute the to presentation future contain certain I not of or past sell Finally, remind information with the that information about an respect guarantee SEC of to also This not to of become you

funds, I'll expenses these over our And visit website. the charges, risks, For turn Matt. with including about that, and please information call more complete to

Matt Stadler

share $X.X The in included quarter rate beginning $X.XX or in per reserves. taxes to our on March the I reversal certain enactment income of included which charge taxes of fourth million next Pages the the and million for earnings of with primarily The as-adjusted a with we moment. provision benefit tax to and share of this tax fourth The provide the $X.X share, year. XXXX $X.XX our million, revaluation million quarter included asset. or years $X.XX Jobs of $XX.X income our Cuts morning, per of release, transition payable everyone. due of and also deferred Act. a income the per eight guidance a on will A a and Adam, good remainder December reconciliation earnings of charge on can GAAP Yesterday Tax onetime you, XX associated focus XX reported for source be tax results. results found earnings of foreign remarks morning XX repatriation associated $X.X net Thank of presentation. transition will provision the XX on installments in or of of tax a Slides my deemed XX tax our as-adjusted of is and over on The net tax

As sequentially. adjusted $X.XX for and with earnings year’s prior the were quarter $X.XX $X.XX in fourth quarter the per compared share

assets million higher prior $X.XX million fourth billion, and The prior year’s billion sequentially. was Operating for the fee per in year $XX.X in record million compared billion a the compared income with the billion year’s record a and assets in management attributable $XX.X a under Average average $X.XX million were and $XX $XX.X $XX.X we $XX.X record $XX.X increase Revenue $XX.X compared record the million quarter $XX.X from for revenue third management in more for quarter quarter share, of was was year’s to reported the quarter mix. For per sequentially. last prior earnings with favorable quarter under a sequentially. the also primarily share quarter, the the year. with and quarter, at compared with

was with a year, $XXX.X record $XXX.X also XXXX. operating million, in compared at million For income the

the margin to And XX.X% fourth to reimbursement from XX.XX% fee compensation travel and the reflect at Our with guidance paid. ratio costs XXXX. included U.S. fees. The entertainment. in and XX.X% to The from decreased actual G&A distribution and on XX.X% increased assets The primarily operating for lower the operating margin G&A, we in our full expense benefits, basis was our XX.X% mutual cumulative primarily the quarter. average increase service funds. due year than XX.XX% provided. in increase service in and in to compensation distribution a an under came higher The slightly last quarter higher management and to in fund increased and consistent open-end was revenue full increase for X.X% in the adjustment Expenses due a increase compensation sequential year a

our tax effective States. on XX.XX%, cash call. four earnings the rate held and for quarters. indicates cash And we current provided with was presentation portion the equivalents last cash investments trailing equivalents the and seed of Our of that cash, displays outside the the consistent guidance and United our XX Page quarter for

of provide we back place, our our some have territorial $X will bringing in on additional we in cash. of anticipate Bob non-U.S. Steers approximately that a a this moment. use thoughts cash Now million system tax

payment at of $XXX last firm per or Our compared $XXX million special December. in stockholders' million stockholders $XXX $X totaled balances was and And $XX with million a $XXX for made million, with share reflect firm equity liquidity XX. approximately liquidity The quarter. dividend compared September million, the of equity

per Over free. special years share remain in We the debt we dividends. paid eight past have $X.XX

or management totaled of as under increase Assets an XX, billion at $XX.X September of XX. December $XXX X% million,

$XX.X December billion, under of or management last in $X.X an end management And at Open management X% closed $XXX billion. end accounts increase decrease million record funds assets from under quarter. last a of from $XX.X institutional remained or of in steady $XXX totaled Assets assets had million of billion XX, under quarter. X% funds

inflows total organic marks net have $XXX we X%. quarter XXth For increased the growth net the management the billion consecutive X%.This annualized in reported of year, inflows. under of $X.X rate recorded and assets million We quarter or

For X% Page investment billion, accounts Institutional of the quarter, $XXX organic growth the we earnings $X.X inflows vehicle. by an of year, X%. of net a of reflects outflows rate. fourth decay flows annualized recorded the rate X million in net presentation net organic had

from of the of quarter, For Subadvised portfolios compared with institutional inflows quarter. in million U.S. are organic million, distribution $XXX estate net X% outflows net to rate. last of The of had Japan real had subadvised. cut Estate a portfolios. that accounts we in increase on can two year, main be outflows U.S. XX% $XXX primarily attributed the the Funds Real second outflows Net million of the net outflows a $XXX growth November in

announced million that Real Estate Fund from past XX% Distributions of last first the quarter. million, will this You U.S. July. recall $XXX a totaled decrease cut $XXX a

of real year, Japan distributions million net most into had accounts the portfolios million, of had estate of $XXX of $X net in and outflows inflows portfolios. For were $XX subadvised Subadvised global excluding which billion Japan

the accounts accounts Japan, had and $XXX real U.S. portfolios. had For quarter, during estate global excluding net $XXX primarily Advised the million subadvised net million. from of outflows of year, outflows

end totaled million. will $XXX gains, activity year Open the of an of color had on capital For Bob the in be end XX%. of providing the level some which year net growth of $XXX reinvested. the Distributions, annualized during advised institutional payment of inflows $XXX which inflows recorded quarter, organic million $XXX pipeline. million funds our net of were included million, rate

end open a inflows funds year had growth rate. $X.X billion, XX% organic the For of

beginning Let that discuss me the will guidance into not adoption be Please few adjustments the effective this of of year. revenue briefly as standard for this account does which the made relative to note items of a new take XXXX. is recognition consider that to the

will revenue affect the expect operating our We income. that not standard recognition

previously are currency we As of asset imply lower respect II, distribution to slightly $XXX U.S. expect be These be generally would estate flows, We to the G&A than XXXX. higher project implied increase the and that or Changes we to with benefits distribution million be XXXX. the reimbursement on amount The index for majority and rates mutual partner compensation could market of the XX%, XXXX revenue costs than noted, to subadvised. between of and can to increase items, recorded from fees cuts XX% distributions associated approximately performance the ratio billion funds the MiFID million affect reduced to $XXX attributed XXXX. that distinct real compensation both growth. higher in $X rate the With decline. largest fund and X% three in would redistribution

a XX.XX% result and XXXX. we the effective will G&A items, higher approximately tax than year. enacted last And as our three for Tax these Jobs X% would Excluding between finally, be recently be Act, XX.XX% and expect rate Cuts of

Now it I'd to like turn to Bob. over

Bob Steers

and you, morning Thank Matt everyone. good

As down issues slow a our although from XXth was quarter of register mainly moderated the organic sequential net who you channel. in heard growth, consecutive total Matt, positive $XXX of to our million, function timing inflows advisory

the out in total the our business ten the with investment that array their strategies Investment exception our of the demand intact. and factors remained strong wide flows and growth advised AUM. quarter performance strong of seven performance With for XX% are diverse beating of to Japanese which trends other fundamental and year, asset of ten the firmly key outperforming equates segments our a into benchmarks and of strategies. sub sustaining These experienced quarter robust all in eight include was flows, to

were open star As end our fund XX, in of five assets of December four XX% or funds.

open with quarter experienced last preferred exception Global the in the and Virtually real to one real essentially U.S. every with highlighted U.S. and our our global securities energy real-asset broaden quarter positive ended which all was net of of quarter fund, asset infrastructure funds end estate, I European momentum. listed our flat. real continue portfolios. As sales midstream estate, beyond inflows the flows multi-strat estate

or rate. annualized of result a the a wealth growth million net As achieved XX% inflows channel $XXX

development discretionary majority result of flows in the flows being in direct by number business this European REIT selected of These for fund are European CCAP. our into point which models, a star their inclusion was clarification a accounted fund. This of a included inflows financial As a $XXX intermediary of million this large into by for made was our five European team. net inroads the

Turning back our global were and our estate including there Three note added U.S., U.S. were list. developments of to several to retail real in recommended the the funds quarter. of channel, funds, additional international well major

of Our of star from rating and record Morningstar. its $XX our year estate energy fund category fund achieved as a performing finished The the inflows million four the in global top fund gained real midstream and result channel end the quarter, delays year a had and institutional the advisory $XXX of passive net lost were in million funding outflows importantly, of in awarded outflows rebalancing one mandates. however, mainly to

income was of European began subadvisory investor $X.X our real Japanese the second into of but Japan regions. were rate distributions is As net channel, resulted quarter you million which investment strategy. following evidenced and net investment opportunity modest time for of domicile. and $XX distribution as in across which quarter this $XXX the positive unfunded a subadvised the advisory Japan, $X.X million only fund unfunded U.S. after. we quarter, pipeline REIT we portfolio Of an The in largely a as in flows funded inflows as growing billion before was To reiterate net by geographic outlook An we’ll during that million strategies in experienced fourth million for real outflows fourth to of know the the year. for in unfunded total through its and REIT distribution fund our our global that whole the exciting mentioned, the November, business the and Japan, the from taking which CCAP important mandates. outflows mandates and five U.S. In across one launch with quarter. strategic the that open range reduced July, anticipated, products $XXX to $XXX in that the actually its of excluding reduced into the And represents team $XXX estate new Total win countries debt Matt in end added fixed that strategies amount fund asset quarter. quarter the improving our our pipeline, five were a pipeline million early billion

were lower they sooner Although significant these moderating anticipated. outflows are are expected and than than

that reform encouraged it's We the be tax possible tax tax a enacted our as discussions newly territorial transition effort. that are system, funds the the the interest CNS to of the well provisions. as have bill, stands but tell, corporate distributors largest also from respect lower With us. restarting in Time will their the repatriation may to regarding these to behind benefit worst sales initiated rate,

of include reform certainly reduced achievable. it oriented some a which taxable strategies REITs past investment change of investors. open these in today scenario readily floor expect income and remain the strategies we’ll to and assets in future. our In research, data, In performance. acquisition evaluating make grow most on include launching tax enhance will and will significant, addition, our entities, line, could questions. that will will to two investment to and to MLPs for of and ceding we shareholders for our do strategies, incremental legislation tax and rate The investing this expect the earnings the product focus. With new benefits any we wherever which productivity, of revenues not create extension but for Investing value technology opportunities makes our strategic priorities This more are improve sense them the bottom economics importantly and people

before $XX of million just our questions, of non-U.S. Thank point move Just a clarification, seven we okay, bringing to zero. on you. plan back cash, we

Operator

from question Instructions] Credit with line comes Ghosh Ari first the of [Operator Our Suisse.

your question. proceed may with You

Ari Ghosh

Hey good morning everyone.

be up and So are over both more Can the scale your strategic the well to product certain as XXXX? could on and as that and across years bit talk that you you a some in missed investments the flow couple additive profile be some little channels. about may side last of newer picking regions momentum investments

Bob Steers

Sure.

strategies As new we've for but CITs importantly, here, spoken vehicles, including retirement channel. we've launched some some about, new the

And you expand why that addition, repositioned importantly. In product Todd, we've our and in very reworked on don't little bit. strategies a Europe

Todd Glickson

Sure hi, question. I appreciate this the is Todd Glickson.

Cohen Europe registered and got is: Steers’ terms in spent that think we've how products time the those they're & best making number are priced, a where sure in So as relates what Number doing of bit relates what I customization little to of is relates we've two, also that to there one. one, best they to of markets. work

Bob fund the some that we preferred over considerations. five already a instance just product got alluded lot because global a launched of star we to well. very global traction the has REIT already stateside, for That's similar flows, is So tax tweaks have to European there but and of as

separately. think those So I are two investments key

resources one then invested significant it there in Japan, seen of can starting As work of in retirement, shoots. come seen lot we out although market might business. from green innovative bring that about see is we've in that to to that and things market the one things U.S. of the to a increasingly the is not entities just traction good just is really but there, thought make partners in we've relates DCIO, that there both side institutional the And the wealth to you've institutional and back work things We've strategies. back on that to our the of getting made And what's subadvisory some with back we're sure institutional investments the lastly,

is step channel. really into The the Trusts first having little of bit Collective CITs moving more also or that clients benefit Investment focus a and defined on the

is which that's to couple rate retirement resulted in last growth over So the significant. of XX%, overall years about really XX% a in

Bob Steers

And then just turning to infrastructure.

the infrastructure seeing, We strategies array robust market, across particularly for segments. are extremely in wide institutional a of demand

a logistics, strategy. So subsets product infrastructure real debt, infrastructure class expect which debt the that global public would of asset works, to asset new of see our you should new launches be subset broad some listed include are

now, interest. And interesting right where we continue invest very our So is a area. clients are to infrastructure indicating will

Todd Glickson

really add diversity performance at performing done of products business, the number Bob's year, to to product strong we've look last thing I of comments from the about a When our before it and last line. Yes would the to the and diversification. for speaks relates really this doubled it's and you that year which of new finals

good. those we before. MLPs, is our is level we're So formative, things across to that just both business channels really, where getting performance exceedingly extend infrastructure shoots green and And haven't still seen of our like although interest a

Ari Ghosh

of just on plan? Got comp the in included, in terms you're was the that. $XX deployment quick this maybe investing that that XXXX was thinking part million mentioned, a And And G&A it number guys. this sort of then holding back, you Really the follow-up growth maybe $XX capital it? expanding versus factored of appreciate bringing applying the in and as offering Or is then you business that that And the a More your paying how out of are on it that G&A color you was it about special? on independent it have? more that into – rate? back a you in then about the into growth your million rate the product it

Matt Stadler

probably see And Well, the a the strategy. two the million for one we'll – expansion conjunction that's need or products, acquisition for capital. It's things. most the not $XX new and certain we to any probably uses in seed just We product that's in opportunistic of evaluate that back capital, specific opportunities. continue launching step-up an earmarked of really is bringing do with

but it's said, the well. actually As – looking happening at are extensions extremely odds I've always something we're of not high, as product actively

Ari Ghosh

thank very you much. Great,

Operator

the Our Carrier next America line of with question Bank of from Mike comes Lynch. Merrill

your with question. may Your proceed

Mike Carrier

that. the that X MiFID, a get on Matt lot. mentioned, guidance XX. you just just thanks I things the Hi few to on Hi, G&A, the

And just distribution, Just terms the index on that was $XXX I million of know then distributions, that? are mentioned I given in something that there? those distributions the on the outlook and to what just it other was the the that you then flows items driving $XXX you related gauge, guidance on is to this in but gave some to tough any million reduction think

Matt Stadler

Well the let flows. me address

sub-advisory and second in cut substantial from we're are and And distributors can these ours. you to that still is time Japan. over the on The reduction problematic in competitor that the reality result, distribution so future our distributions translates wire it's a in the is What source. referring from away their outflows flows, below flows Fidelity, the is moving funds, as tell to the tricky Yes, reduction that, a You're into flows. I that good primary there news distributors ground the Obviously, are there, far houses. from about cautious that primarily product. some promoting a benefiting project

other hand, and the distributors dividend told the We On we've other that again. not banks their policy, not intend don't been regional our partner does are distribution reduce but to control reluctant.

that significant competitive put forward. in So a us would going advantage

time relative our our tell, in strong. is constant distribution but the stay investment So to to will likely competition, Fidelity. is contrast performance to And rate

you'll turn, flows until But know. well. never bodes that So

Matt Stadler

respect essentially the Mike, of on kind So that's with cap the math. I just for side, expenses to fund funds. expenses the up actually going like it's the distribution mean,

the on more them. so success from more and other the keep revenue asset ratios expense where gathering the payments that keep will generate we're require committed we And to we the have side to

business considering net fund that So goes would going first that those It's irony about revenue up going the you reimbursement the to up, that when the is process you suggests against we're higher. the how have very your effect standard And into and distribution but that at to think quarter. we we're display of recognition this high-margin for cost go in fees. costs look revenue fund or us. is that The for a

you when let to we'll know we get that. So

we really other pay, use. providers fees, just the the it's the we that license of for On indexes

who this being and all to control. something to managers which And so just these us, and them use things that's use papers for they them starting to of unique really that, internally, our is and understanding on out we is uses attribution is indexes. something the out that's not everybody white purposes charge that is As are asset our fees this beyond rolled other that just

something deal going in to XXXX. have So this is we're with to

Mike Carrier

some a when environment, a the these a current the we’re are seen sort it's in then I Obviously, the either that’s look side, seems raising the And of maybe the rising and on because terms you're should mentioning, rates the pipeline on the Joe, And bit. just cycles just helpful. the But inflation, right the seems given like And Japan. got potentially before. which at Bob lot then products. under that's But of and of follow-up, like where pressure heading shape up. direction. it you’ve anticipation unique REITs there's of a see for be little side, Okay, good of or institutional how that in kind retail flows got then you've we'll it at, you

dynamics that the or So have do product of the in kind you the XX months? and you the just takes next XX by puts strong of or performance, those retail given the and all where terms either and allocations see the over maybe set channels institutional

Bob Steers

about inflation And strategies. think which is our research, in seeing a to this the that question. rates growth. on ask in you're the our That's it insignificantly, that then starting what are flows, and so to internally interest impact strategies seeing interest I'm higher, in we We Joe as perform thus acceleration flows transition alluding rate-sensitive perhaps the these I feel our do we conversely, each how the a to not such is anticipated a that to that we going time, And And to last flows. a probably I'm where seeing strongly implemented an and you're in our more sales and Because we hedges emphasize referring pure benefits well been you're likely to. to. talk environment as significant everything performs great soften. will have the we continue underperforming It going of what to that's are strategies appears migrate refer potential address pivot, and strategies inflation-sensitive in MLPs. interesting summer, and of to

open-end mentioned every I funds. into virtually had our one earlier, of we As U.S. flows

the And in our previously and flows has the but the portfolio that actively are out into were of relationships, – asset MLP preferred flows is new preferred positive seeing into our strategy. flows that the than cons that are Very others, – fund. and preferred the with still low-duration global into portfolio. weren't wasn't actually, longer our the reflects strategy or an now larger that real importantly, Now and which duration a into our preferred, switching a what discussing pros accident. we're obviously of low-duration our And

didn't the are we we inflation to also underperformance accelerate, I one strategies? that's from higher-yielding these really continue migrate think strategies, global that. real of that higher, retail good inflation-sensitive going if beneficiary One estate our so we're seeing we that investors. and talk And go-to very would for an economy we investment accelerate. off about other and the global trends And about continues demand more real if standpoint in an expect is don't flows And institutional. but be not mention And these is feel fundamentals economies, as why hedge the or growing strategies. of strong, The additional into really, estate. you the if rates our to for to charts, strategies to both seeing global Joe,

Joe Harvey

of up in investment and so just me blanks. the some to discussion, a let fill overview the I part set growth. We've Sure, but gave think good got synchronized Bob global pretty

long global That's a really time. in economy. positive We the haven't for that had

U.S. that on better. add even reform top makes it that You tax of

with is of signs seeing be later of we're things the the which stages rising transitioning of to the One economic expansion. consistent inflation, would

there's leadership. And so we've markets anticipating, a in transition in as class been performance the asset

we've really an we dynamic a investment well excess for them. relative performance, for exciting our it's you strategies, is say high. across very at department of we've from investment larger outperformance And this. perspective I'd targets overall, AUM average time. positioned return And and been our to strategies our batting exceeding very When look so think been our

securities. underweight how So and in repositioned, just rate-sensitive we're interest more our to strategies state generally pro-cyclical we're

year. positioning and good year firm the So that's the that's end far showed so toward has of very overall, and results this continued that last

In real REITs down the in it real thoughts year-to-date, short security rate in to are to real Bob made expectation positive emerging be too, a in returns probably U.S. asset their of is past, think – economy the we're well. because this for for a there, good what very non-U.S. and real still important drivers and markets. the terms dollar guess, a But are far would estate as But in estate. is of REITs we the along fundamentals. for that good lag people term. the on very with specific estate period you experienced doing response about fundamentals of a that U.S. it's going most we're see estate year depreciation, sensitivity and the as and chugs one markets estate. pro-cyclical strategies dynamic these where we've for point to estate – classes. reflexive relates initial the of And where have the from returns interest – then real of of I time are that so over there's a REITs good see global some or And global economy. the U.S. REITs yields, in The will catch-up are positive And real an some as the realize that's period U.S., rising for and inflation-sensitive bond economy our more

have most global capacity this for U.S. to That's with real relates because we that investment So every the aligns firm where capacity it estate. as some goals important of it strategic dollar is we have.

see. the looking allocations, I these in think Our be successful we're for because mandates investors outstanding. global as positioned performance – very to is are And that well we

As hungry for to income, and for to didn't change it very other income still fixed the segments. preferreds preferreds, that tax reform relates relative investors picture are

our low-duration strategy. interest more in preferred are We seeing

our strategy to and Just about perspective, above more our a five. duration about put our smaller that talking yields of has with positioning of which our gets into favor, energy for X% to We’ve X%, MLPs; some X.X, of And about that's AUM duration's low-duration and our and we real and and been assets think that's yield with the continue. that strategies, but importantly, year, that clients and strategy these inflation-sensitive compares out commodities; are portfolio. going to strategies. Last our most midstream turning, multi-strategy were core they

And in lot across with different which multi-strategy particular, that interest aligns activity so approach it, more investor we're complex, channels. a anticipating to in the of

Mike Carrier

all color. thanks Okay, for the

Operator

Our line KBW. with the next Ann comes from of Dai question

may questions. with You your proceed

Ann Dai

bit late. And Hi, questions. good taking morning. my I a little joined Thanks for

sorry Japan So was the if subadvisory on I’m already. My question something asking business. was just first covered

say So heard intend again those your you distribution reduce products. the guys I on that does not think I to partner

guess, just in yields market the sustainability to those order products did exacerbate really products? high from those yield do what have over performance overall on the in I so? of that outflows so the And sustain and continued year to or conditions next like teens an for from currency the And standpoint, the actually look pressure

Bob Steers

can’t policy clients' Good input our question. color fund, a ours. on to It's have not no give the you Really distribution of We lot that. there. really

performance weakness REIT dollar returns so U.S. U.S. the of the and or And flows. and certainly, absolute strength influences investment

equally. to we're we forward that been affect just how – factors have will and going go we have are funds wait from see. those Where play. It all to So here, in always

Ann Dai

Yes, a okay. down you outflow net about comp I I And to that. And I'm guess leverage I XX% that you guess situation. heard ratio, market think the wondering or how think on on in I say

channels, does good And in you're how overall, how seeing that that seeing translate investment trends comp? to So across performance if still your into team? communicate but you do a you're divergence flow

Bob Steers

very and assets, takes It investment on. into account a and account, well-formed performance. here, first takes compensation which Well, into certainly, so also revenues, and we have foremost, framework

the those there public, been had So would We've over in since and that been and of compensation. where fantastic we've investment all versa. factors weak, we we've had, or years influence reflect compensation been investment have corporate has vice and years fantastic performance results

So you investment our was to if ratio framework. were our results year were compensation weak our but compensation go a true there financial We're might up. see strong, where extremely results the

Ann Dai

me? for the you last Okay, Thanks. Could think, I pipeline earlier. great. missed One just, that question repeat I

Bob Steers

awarded funding $X.X the began about, and in is quarter demand. only actually Yes. we the million quarter talked strong but million light. about so the $XXX we've had the unfunded was reflects $XXX we've institutional quarter, the And – The that of with funded very was billion, the fourth that pipeline as in

to So the headline, in The advisory made opposite. or shape. it's in terrific weak, which channel the contrast institutional the appear the advisory channel just is

exception every virtually Japan, segment business of the is very with of our strong. So

Ann Dai

much. Okay, thanks so

Operator

with Our Instructions] line from question Evercore of next John ISI. the [Operator Dunn comes

You question. may proceed with your

John Dunn

Hi.

of it? level learned stuff phase the control the With doing can Or the maybe you about And some you little going shift a like of you you have spend, same? asset next why a then G&A look way. to to expense some effort about the bit like? offset institute – of think few are talk guys higher the also, into is what it do real any might Is that more years in

Todd Glickson

this Hi, real is question on Glickson. assets. Good Todd

can in we what take last attendance lot that have have on things about years. But works over improve on a both had flagship we assets particularly on York, and of real say few channels, the across done a distribution think safe what It's we've to we that. the customize our to it institutes, road and and this. exceedingly couple good ones different I focus learned to New continue we've the

on And successful of wealth both products and our and in that year, discussion they’re to road we've in major on that have and some business, those to So really the the particularly, where assets asset been visit exposures working of kind institutional leverages to or institutional side do across going channel, shows this our or done we or wires separately. as something the centers taking we the both major of that has relates cities we're influences that really RAA that, cities real road the income-oriented which focus mirrors on side, the consultants. it of

in our really our been it looking for alluded really we're to traction And before, clients. educating clients, footprint there potential I So expand Bob to this that's multi-asset think got to as learned assets. and thought relates lesson as leader nice and real lastly, us, a we've

our allow a as launch lineup, over take in offshore well. there So our fund which to us show we have actually product pending will

Bob Steers

that. for Thanks

you that raised to with I So expenses, we only to the three items John with still, deal going G&A think, that. first distinct the have of respect all, And X%. is up

a CIT related quite everyone's and Operating and we in I an together think formed been administration we mentioned really and helping on our in is That plus and this fund so in administration force year us expense a said, first ago. this, Chief Derechin, instrumental had areas. expenses think, So worth pulling has and it, of expenses over task little Adam market are, million Officer, our $X foremost, to achieve savings. our expenses mind. previous everyone mutual I of calls, IT-related Most

G&A of just we review for and through think went XXXX. the I process the approving constantly

have our We the we'll react the the meetings able controllable our expense expenses, to we commitments. so to year And business doing track be on throughout versus have triggers markets. how to periodic is

X% dealing think real, XX% are so items pretty a the management These to with. redistribution I in forget, fees and II the that's the I is but a high-margin And for really of us. channel. are MiFID success everybody's that The don't distortive, costs product raised, business And fund real. our wealth reimbursement is

John Dunn

and – some Asia, about U.S. you're you've and then your happening hits Maybe have Europe. bunch just talked a misses push in all I think could us demand in what's on on and trends you. seen Got update a the you enhanced give good And push about of the – into an we hand maybe pretty we

Bob Steers

staffed we've we've and preferred jurisdictions well several on ones, to since years our register in reengaging the in of at reposition, meantime, that talked well been two we the has the It's various had time as asset appropriate to XX their the about, real staffing taken new fund including up team relationships. as as with the launch coming new Candidly, In portfolio. multi-strat as products ago. pending our launch it's least finished place. Well, leadership up about really or months we

both that and extremely reviewed kind from a intermediaries, materialize, pipeline from material year buckets, much product right of we're financial specific with hopper more I and from can we of will now. the be difficult And we in so two in to pipeline in when realignment and that where to we handicap fact, is buckets. to characterize One It's I yesterday, tell see lot There's alignment results encouraging. And And institutional the and the the we and business on a developing as traditional standpoint would accounts. review the but look other respect XXXX is progress at how the those expect that. you right fully can first opportunities both plan. in the

subadvisory to And from mentioned, the so Japan where develop we're new is opportunity real laboratory be to strategies. I us as for flows, very Asia, continues a that's pleased with coming our asset debt And In wonderful aside from. that.

and that on. We us to for a and public new have a client where that logistics, as our on so record infrastructure a infrastructure works, such we're develop behalf, in new is also global potentially region exciting it's area strategies, us. And digital very developing track the ceding

I But second most year a we we're competitively, the was again, in outflows our space, institutional tell at I'll or from are some although, in into of turn our is progress mentioned of for well well. you, most as portfolios. positioned Japan those advantageously seeing as And that relatively new inflows. least that can then, all when emphasize, meaningful third we're But of seeing managers I them will subadvised earlier, business think as growth. so resumption in of temporarily, outflows there don't the now And effort, U.S. know we're I that like Europe. And

show positive from and in Europe we institutional in So we financial expect intermediary market results, the and expect institutional to market do to the see results Japan.

Todd Glickson

interest seeded record. that, was or last platform, fund in would the our years think example the last made, with several We on overlap we years the those good Just we a is that of by it there. I on one reboot is was that do think products with thing the it's preferred focused would So ago. I spreads Bob We Japanese out of in we infrastructure have one that we region I and lineup ours. Asia. items there what once throughout product, two of out? we when some interest where to A quarter is the did comment that three seeded came markets. clients push-pull some out funds and looked terms we're the other with would just to the throw And is a need what it into our clients some the And years between of it example. be launch And on track knowledge soft then thing of to had initial in we global would And seeding be we the the two, and a in from are green also there that there it, we had was there, expand continues offshore where interest. good call as a bodies market cycle already ground, level there's three example got and of shoots

of all hopefully, start So this earnest. those things in to in year kick

John Dunn

you. thank Great,

Operator

Sykes the comes line from question next with Mac of Our Gabelli.

with proceed question. may your You

Mac Sykes

provide context REIT the you and of tax. to for some some well tax vesting? structures just some dig as Can So more of gentlemen. around morning into Good as reform trying the implications the

it, us alluded to but you granularity that? more has give little could Bob think I just on maybe

Bob Steers

Sure.

and that a So directly REITs, benefit will will investors as be pass-through to from take. REITs deduction entity, able the XX%

So from rate effectively, – go the tax will dividends for to the REIT tax rate on change. from highest down XX% and XX.X% investor,

investors a growth that – earnings that the tax is with are of much seeing relative deduction. corporate benefit with as reform aren't most taxes, the compared corporations. that's nuance More broadly benefit. the So basis, in market, not don't see they mutual nice XX% because won't funds pay One on a REITs

done is shuffled for both get the are Now we that changed unintended channels. think a organization they know trade with they Congress. that's which and in it the they we that the lost legislation, And regulatory think can get with an consequence that can got NAREIT, of reform REITs, ICI without working

So points that's the of in reform. kind for tax REITs high the

Mac Sykes

basket sort more And that institutions Then to of an terms you to are multi-strat in create a are demand? away necessarily? of it providing vehicle, strategies? trying ability customized real of for the Or get institutions – reacting asset is is my this you follow-up to is from solutions there for

Bob Steers

with to clients and types asset real portfolios. more opportunity we’re allocation all of is area examples to of on reacting seeing us that. work And a to not of more We’re it, big this provide for overlays asset

think one portfolio. comprehensive I was allocation overlay. client structure capital quarter estate talked the who adding We're into across one an we existing that have about real REITs different last for we transitioning three asset

got volatility portfolios think varieties characteristics. asset infrastructure. multi-strat In multi two a there's we've strategy real infrastructure in opportunity and have a to terms third that adding we We're expanding of different good our that and of return it

sub-sleeves. add either these just approach all and of others or an portfolios So we management sleeves provide comes asset going institution But we’ll an to says got but customize for them for specific like real that allocation hey be to I'd then if the asset to asset and one the overlay provide their work create. real there to with are specific allocation us I've an this

Mac Sykes

Thank you.

Bob Steers

to And up on just finish reform. the tax

less MLPs, of taxable would through than income the For is little a income from that the allocate it depreciation. which for – a It's deduction they generate. be because XX% MLPs underlying will benefit they their the sheltered for REITs also benefit bit

for REITs So would by be relative the to provide, that less effect distributions comparison. is they it the tax than

Operator

Suisse. Our from Crédit question Ari the next follow-up question is Ghosh with of line a

proceed You with your may questions.

Ari Ghosh

up Hey thanks it. appreciate follow-up. I for my taking

one side. a quick on macro the Just

for if a it to equity equities look overall last than more at be couple Japanese outlook market, over the I been looks So the Japanese little in the favorable has years. it

classes, as real gets estate. wondering potentially just money U.S. equities more the domestic versus you a as I'm this including subadvised view for So towards Japan business other headwind allocated if

Bob Steers

almost are I our yield. say distribution products high sold on obviously exclusively couldn't really a

equities from Japanese I’m the that U.S. think flatter and performing. about headwind returns weak concerned U.S. is I REITs look, So how are bigger negative a less dollar.

Ari Ghosh

guys. Thanks that. appreciate I

Operator

will further you. there to no back at Mr. questions call this time. are the turn Johnson I now

Adam Johnson

Great. Well And look for Thank you. you morning. quarter. this we again to next speaking all thank forward joining us

Operator

lines. conference conclude you your the participation call disconnect your for that Ladies thank ask and please for We gentlemen, that and today. does you

Cohen & Steers (CNS) 25 Jan 182017 Q4 Earnings call transcript