Cohen & Steers Inc

Ladies and gentlemen, thank you for standing by. Welcome to the Cohen and Steers fourth quarter and full year 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 is being recorded Thursday, January 23rd, 2025. I would now like to turn the conference over to Brian Heller, Senior Vice President and Deputy General Counsel of Cohen & Steers. Please go ahead.

Thank you, and welcome to the Cohen & Steers Fourth Quarter and Full Year 2024 Earnings Conference Call. Joining me are Joe Harvey, our Chief Executive Officer, Raja Dhikori, our Chief Financial Officer, and Jeff Palma, our head of multi-asset solutions. 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 fourth quarter and full-year 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 statement. 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 vehicle. Our presentation also contains 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. A 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 Rasha.

Thank you, Brian, and good morning, everyone. My remarks today will focus on our as-adjusted results. A reconciliation of GAAP to as-adjusted results can be found in the earnings release and presentation. Yesterday, we reported earnings of 78 cents per share compared to 77 cents sequentially. Earnings for full year 2024 were $2.93 per share compared to $2.84 in 2023. Revenue for Q4 increased 4.9% sequentially to $139.9 million. Revenue for full year 2024 increased 5.9% to $518 million. The increase in revenue from the prior quarter was driven by two items. The primary driver was higher average AUM during the quarter. The secondary driver was the recognition of $1.4 million in performance fees. These performance fees recognized in Q4 related to the full year results of certain institutional accounts. Our effective fee rate during the quarter, excluding performance fees, was 58 basis points, which was consistent with the prior quarter. Operating income was $49.7 million during the quarter, compared to $47.6 million sequentially. Our operating margin was 35.5%, which was generally in line with the prior quarter. As noted, we did experience higher average AUM during Q4 as compared to the prior quarter. We generated net inflows during Q4 primarily related to our open-end funds. This is the second quarter of net inflows after strong flow results in Q3. However, our AUM was impacted by market depreciation during the quarter. As a result, AUM was $85.8 billion as of year-end compared to $91.8 billion at the end of Q3. Joe Harvey will provide additional insights regarding our flows and our pipeline. Total expenses were higher compared to the prior quarter, primarily due to an increase in compensation and benefits. To a lesser extent, expenses were impacted by increases in both distribution and service fees, as well as G&A. During the quarter, the increase in compensation and benefits was generally in line with the sequential increase in revenue. The compensation ratio for the full year was just below 40.5%, which was within our expectations. The increase in distribution and service fees during the quarter was due to higher average AUM related to our open-end funds. In addition, we did experience higher G&A expenses during the quarter, primarily related to travel and other business development activities. The full year G&A was within our expectations, increasing by 6.7% versus 2023. Regarding taxes, our effective rate was 25.3% for the quarter. Our earnings material presents at the end of Q4 and prior quarters our liquidity. Our liquidity totaled $361 million at quarter end, which represents a slight increase versus the prior period. As a reminder, our liquidity normally decreases during Q1 of each year, due to our compensation cycle with bonuses paid in the quarter. Let me now touch on a few items for 2025. We continue to dedicate resources to new strategies, vehicles, and initiatives. In Q1 of 2025, we will be launching three new ETFs. These will be the first ETFs for Cohen and Steers. While we believe these ETFs will serve a variety of customers, We are particularly focused on opportunities within our wealth channel. With respect to the compensation and benefits, we would expect our compensation ratio to remain at 40.5%. Drivers of compensation are disciplined investment in our sales and distribution channels and resources applied towards new vehicles such as our ETF. We expect our G&A to increase in the range of 6% to 7% for the year as compared to 2024. We continue to invest in our infrastructure, including our international offices. In addition, we expect increases in business development activities as we meet the needs of clients across the range of markets in which we operate. Further driving G&A are technology and marketing spend related to the upcoming ETF launch. Lastly, regarding 2025 guidance, we expect our effective tax rate to remain consistent at 25.3%. I'll now turn it over to Joe Harvey, who will lead discussions of our investment activities and business performance.