Cohen & Steers Inc

Ladies and gentlemen, thank you for standing by. Welcome to the Cohen and Steers second quarter 2026 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 star followed by 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 Friday, July 17th, 2026. I would now like to turn the conference over to Brian Heller, Senior Vice President and Deputy General Counsel of Cohen and Steers. Please go ahead.

Thank you and welcome to the Cohen and Steers second quarter 2026 earnings webcast and conference call. Joining me are Joe Harvey, our Chief Executive Officer, Amit Muni, our Chief Financial Officer, and Jon Cheigh, our President and 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 vehicle. The presentation that will accompany today's webcast also contains non-GAAP financial measures referred to as As well as links to our FCC filings are available in the investor relations section of our website, at www.cohensteers.com. With that, I'll turn the call over to Ahmed.

Thank you, Brian, and good morning, everyone. On today's call, I'll begin with a review of our operating and financial results for the quarter. Jon Cheigh will then discuss investment performance and the market environment, followed by Joe Harvey, who will highlight the growth momentum we are seeing across the business. We will then open the call for your questions. Turning to our summary highlights. I'll focus my remarks on our adjusted results. We reported adjusted earnings per share of 85 cents for the quarter, up from 79 cents in the first quarter and 73 cents in the second quarter of last year. Assets under management increased approximately 8% to over 100 billion, reflecting both positive market performance and strong net inflows. We generated 1.3 billion of net inflows, one of the strongest low quarters in our recent history. while our institutional pipeline remained robust at $1.6 billion. We also continued to make meaningful progress on our strategic growth initiatives, which Joe will discuss shortly, while maintaining strong long-term investment performance. Turning to the next slide, this slide highlights our AUM and flows by investment vehicle. As reflected on the chart on the bottom, Our net inflows were primarily driven by our open-end funds, which includes mutual funds, ETFs, and CCAS. In our advisory business, we experienced modest outflows related primarily to institutional client rebalancing activity, and our sub-advisory business generated slight net inflows as over 500 million of new mandates were partly offset by redemptions. The next slide reflects our AUM inflows by strategy. Looking at the chart on the bottom, U.S. real estate was the largest contributor, complemented by strong demand for our preferred securities and global listed infrastructure strategies. Turning to the next slide, I'll review our financial performance. Net income was $44 million for the quarter, an increase of 8% from the first quarter and 18% from the second quarter of last year. Our operating margin improved to 36.3%, reflecting the benefit of higher revenues as we scale the business. Turning to the next slide, I'll review the quarter-over-quarter changes in revenues and expenses. Revenue increased 5% to 152 million, driven by higher average AUM, resulting from positive market appreciation and net inflows. Total operating expenses increased 3% to 97 million, primarily due to higher incentive compensation accruals associated with increased revenues. Importantly, expense growth remained below revenue growth contributing to margin expansion. Looking ahead, we are maintaining our expense guidance. We continue to expect compensation and benefits expenses of approximately 40% of revenues, mid-single-digit growth in G&A expenses relative to 2025, and a pro forma effective tax rate of between 25% to 26%. Next slide on liquidity. We ended the quarter with $219 million of cash in U.S. Treasuries on our balance sheet, providing substantial financial flexibility. In addition, we held approximately $136 million of liquid seed investments across our funds. Our strong liquidity position continues us to support our capital management priorities and strategic growth initiatives.