Cohen & Steers Inc

Ladies and gentlemen, thank you for standing by. Welcome to the Cohen and Steers second quarter 2024 earnings conference call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the star followed by the one on your telephone. If at any time during the conference, you need to reach an operator, please press star zero. As a reminder, this conference call is being recorded Thursday, July 18th, 2024. I would now like to turn the conference over to Brian Hull, Senior Vice President and Corporate Counsel of Cohen and Steers. Please go ahead.

Thank you and welcome to the Cohen and Steers Second Quarter 2024 Earnings Conference Call. Joining me are Joe Harvey, our Chief Executive Officer, Matt Stadler, our Executive Vice President and until late June, Chief Financial Officer, Raja Dhokori, our new Chief Financial Officer, and John Che, our Chief Investment Officer. I want to remind you that some of our comments and answers to your questions may include forward-looking statements. We believe these statements are reasonable based on information currently available to us, but actual outcomes could differ materially due to a number of factors. including those described in our accompanying second quarter earnings release and presentation, our most recent annual report on Form 10-K, and our other SEC filings. We assume no duty to update any forward-looking statements. Further, none of our statements constitute an offer to sell or the solicitation of an offer to buy the securities of any fund or other investment vehicles. Our presentation also includes non-GAAP financial measures, referred to as adjusted financial measures, that we believe are meaningful in evaluating our performance. These non-GAAP financial measures should be read in conjunction with our GAAP results. Reconciliation of these non-GAAP financial measures is included in the earnings release and presentation to the extent reasonably available. The earnings release and presentation as well as links to our SEC filings are available in the investor relations section of our website at www.cohenandsears.com. With that, I'll turn the call over to Matt.

Thank you, Brian. Good morning, everyone. Thanks for joining today. Before we begin the call, I'd like to welcome Raja Dakori, our new CFO, who joined us on June 24th. Raja will be reviewing the financial results on our earnings calls going forward. As in previous quarters, my remarks will focus on our as-adjusted results. A reconciliation of GAAP to as-adjusted results can be found on pages 17 and 18 of the earnings release and on slides 16 through 20 of the earnings presentation. Yesterday, we reported earnings of 68 cents per share compared with 70 cents in the prior year's quarter and 70 cents sequentially. Revenue was 122 million in the quarter, compared with 120.3 million in the prior year's quarter, and 122.9 million sequentially. The decrease in revenue from the first quarter was primarily due to lower average assets under management. Our effective fee rate was 58 basis points in the second quarter, consistent with our rate in the first quarter. Operating income was 42.5 million in the quarter, compared with $43.8 million in the prior year's quarter and $43.7 million sequentially. And our operating margin decreased slightly to 34.9% from 35.5% last quarter. Total expenses were essentially flat when compared with the first quarter, as an increase in G&A was partially offset by a decrease in compensation and benefits. The increase in G&A was primarily due to higher recruitment costs, as well as an increase in professional fees. And the decrease in compensation and benefits was in line with the sequential decline in revenue, as the compensation to revenue ratio for the second quarter remained at 40.5%. Our effective patch rate was 25.4% for the second quarter, consistent with our prior guidance. Page 15 of the earnings presentation sets forth our cash and cash equivalents, corporate investments in U.S. treasuries, and liquid seed investments for the current and trailing four quarters. Our firm liquidity totaled $325.1 million at quarter end, compared with $233.1 million last quarter. The second quarter amount included net proceeds of $68.5 million from our recently completed registered stock offering which closed in April. And we have not drawn on our $100 million revolving credit facility. Assets under management were $80.7 billion at June 30th, a decrease of $526 million or about 1% from March 31st. The decrease was due to net outflows of $345 million and distributions of $673 million, partially offset by market appreciation of $492 million. Joe Harvey will provide an update on our flows and institutional pipeline of awarded unfunded mandates. Let me briefly discuss a few items to consider for the second half of the year. With respect to compensation and benefits, we maintain a disciplined and measured approach to both the acquisition of new talent for strategic initiatives and replacement hires so that all things being equal, we would expect the compensation to revenue ratio to remain at 40.5%. We still expect G&A to increase 5% to 7% for the year from the $55 million we recorded in 2023. As a reminder, 2023 G&A included an adjustment to reduce accrued costs associated with the implementation of our trade order management system. Excluding that adjustment, we would expect G&A to increase 3% to 5% year over year. The majority of the increase is related to investments in technology, as well as costs associated with the relocation of our London and Tokyo offices. And finally, we expect our effective tax rate will remain at 25.4%. Now I'd like to turn it over to our Chief Investment Officer, John Che, who will discuss our investment performance.