# COHEN & STEERS, INC. (CNS) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from COHEN & STEERS, INC.'s 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1284812/000128481224000139/cns-20231231.htm
Accession: 0001284812-24-000139
Filing date: 2024-02-23
Report date: 2023-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/CNS/
All MD&A years: /company/CNS/mda/
Previous year: /company/CNS/mda/fy2022/ (FY 2022)
Next year: /company/CNS/mda/fy2024/ (FY 2024)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Annual Report on Form 10-K and other documents filed by us contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which reflect management’s current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these forward-looking statements. We believe that these factors include, but are not limited to, the risks described in Item 1A. Risk Factors of this Annual Report on Form 10-K. These factors are not exhaustive and should be read in conjunction with the other cautionary statements that are included in this Annual Report on Form 10-K. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Cohen & Steers, Inc. (CNS), a Delaware corporation formed in 2004, and its subsidiaries are collectively referred to as

the Company, we, us or our.

Executive Overview

General

We are a global investment manager specializing in real assets and alternative income, including listed and private real estate, preferred securities, infrastructure, resource equities, commodities, as well as multi-strategy solutions. Founded in 1986, we are headquartered in New York City, with offices in London, Dublin, Hong Kong, Tokyo and Singapore.

Our primary investment strategies include U.S. real estate, preferred securities, including low duration preferred securities, private real estate solutions, global/international real estate, global listed infrastructure, real assets multi-strategy, as well as global natural resource equities. Our strategies seek to achieve a variety of investment objectives for different risk profiles and are actively managed by specialist teams of investment professionals who employ fundamental-driven research and portfolio management processes. We offer our strategies through a variety of investment vehicles, including U.S. and non-U.S. registered funds and other commingled vehicles, separate accounts and subadvised portfolios.

Our distribution network encompasses two major channels, wealth and institutional. Our wealth channel includes registered investment advisers, wirehouses, independent and regional broker dealers and bank trusts. Our institutional channel includes sovereign wealth funds, corporate plans, insurance companies and public funds, including defined benefit and defined contribution plans, as well as other financial institutions that access our investment management services directly or through consultants and other intermediaries.

Our revenue from the wealth channel is primarily derived from investment advisory, administration, distribution and service fees from open-end and closed-end funds as well as other commingled vehicles. Our revenue from the institutional channel is derived from fees received from our clients for managing advised and subadvised accounts. Our fees are based on contractually specified rates applied to the value of the assets we manage and, in certain cases, may include a performance-based fee. Our revenue fluctuates with changes in the total value of our assets under management, which may occur as a result of market appreciation and depreciation, contributions or withdrawals from investor accounts and distributions. This revenue is recognized over the period that the assets are managed.

A majority of our revenue, 93.8%, 93.4% and 93.1% for the years ended December 31, 2023, 2022 and 2021, respectively, was derived from investment advisory and administration fees for providing asset management services to institutional accounts as well as open-end funds and closed-end funds sponsored by the Company.

Macroeconomic Environment

Our financial results declined when compared with 2022 primarily due to depreciation in market values of the portfolios we manage. The depreciation resulted, in part, from elevated interest rates that continued through 2023, primarily impacting the market values of real estate and preferred securities portfolios.

23

Assets Under Management

By Investment Vehicle

(in millions)

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2023","","2022","","2021"],["Open-end Funds"],["Assets under management, beginning of period","$","36,903","","","$","50,911","","","$","35,160"],["Inflows","11,937","","","17,939","","","19,542"],["Outflows","(13,614)","","","(19,713)","","","(10,765)"],["Net inflows (outflows)","(1,677)","","","(1,774)","","","8,777"],["Market appreciation (depreciation)","3,231","","","(10,282)","","","8,936"],["Distributions","(1,265)","","","(1,952)","","","(1,936)"],["Transfers","(160)","","","\u2014","","","(26)"],["Total increase (decrease)","129","","","(14,008)","","","15,751"],["Assets under management, end of period","$","37,032","","","$","36,903","","","$","50,911"],["Percentage of total assets under management","44.5","%","","45.9","%","","47.7","%"],["Average assets under management","$","36,159","","","$","43,202","","","$","42,991"],["Institutional Accounts"],["Assets under management, beginning of period","$","32,373","","","$","42,727","","","$","33,255"],["Inflows","2,985","","","5,915","","","6,152"],["Outflows","(3,225)","","","(6,357)","","","(5,563)"],["Net inflows (outflows)","(240)","","","(442)","","","589"],["Market appreciation (depreciation)","3,626","","","(8,927)","","","10,041"],["Distributions","(891)","","","(985)","","","(1,184)"],["Transfers","160","","","\u2014","","","26"],["Total increase (decrease)","2,655","","","(10,354)","","","9,472"],["Assets under management, end of period","$","35,028","","","$","32,373","","","$","42,727"],["Percentage of total assets under management","42.1","%","","40.3","%","","40.1","%"],["Average assets under management","$","32,878","","","$","36,383","","","$","38,906"],["Closed-end Funds"],["Assets under management, beginning of period","$","11,149","","","$","12,991","","","$","11,493"],["Inflows","17","","","575","","","206"],["Outflows","(91)","","","\u2014","","","(119)"],["Net inflows (outflows)","(74)","","","575","","","87"],["Market appreciation (depreciation)","617","","","(1,722)","","","2,033"],["Distributions","(616)","","","(695)","","","(622)"],["Total increase (decrease)","(73)","","","(1,842)","","","1,498"],["Assets under management, end of period","$","11,076","","","$","11,149","","","$","12,991"],["Percentage of total assets under management","13.3","%","","13.9","%","","12.2","%"],["Average assets under management","$","10,854","","","$","12,039","","","$","12,317"],["Total"],["Assets under management, beginning of period","$","80,425","","","$","106,629","","","$","79,908"],["Inflows","14,939","","","24,429","","","25,900"],["Outflows","(16,930)","","","(26,070)","","","(16,447)"],["Net inflows (outflows)","(1,991)","","","(1,641)","","","9,453"],["Market appreciation (depreciation)","7,474","","","(20,931)","","","21,010"],["Distributions","(2,772)","","","(3,632)","","","(3,742)"],["Total increase (decrease)","2,711","","","(26,204)","","","26,721"],["Assets under management, end of period","$","83,136","","","$","80,425","","","$","106,629"],["Average assets under management","$","79,891","","","$","91,624","","","$","94,214"]]
[[/GREPCENT_TABLE]]

24

Assets Under Management - Institutional Accounts

By Account Type

(in millions)

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2023","","2022","","2021"],["Advisory"],["Assets under management, beginning of period","$","18,631","","","$","24,599","","","$","17,628"],["Inflows","1,407","","","3,672","","","4,891"],["Outflows","(1,860)","","","(4,734)","","","(2,945)"],["Net inflows (outflows)","(453)","","","(1,062)","","","1,946"],["Market appreciation (depreciation)","1,926","","","(4,906)","","","4,999"],["Transfers","160","","","\u2014","","","26"],["Total increase (decrease)","1,633","","","(5,968)","","","6,971"],["Assets under management, end of period","$","20,264","","","$","18,631","","","$","24,599"],["Percentage of institutional assets under management","57.9","%","","57.6","%","","57.6","%"],["Average assets under management","$","18,798","","","$","21,233","","","$","22,092"],["Japan Subadvisory"],["Assets under management, beginning of period","$","8,376","","","$","11,329","","","$","9,720"],["Inflows","823","","","988","","","305"],["Outflows","(474)","","","(436)","","","(1,075)"],["Net inflows (outflows)","349","","","552","","","(770)"],["Market appreciation (depreciation)","1,192","","","(2,520)","","","3,563"],["Distributions","(891)","","","(985)","","","(1,184)"],["Total increase (decrease)","650","","","(2,953)","","","1,609"],["Assets under management, end of period","$","9,026","","","$","8,376","","","$","11,329"],["Percentage of institutional assets under management","25.8","%","","25.9","%","","26.5","%"],["Average assets under management","$","8,633","","","$","9,302","","","$","10,335"],["Subadvisory Excluding Japan"],["Assets under management, beginning of period","$","5,366","","","$","6,799","","","$","5,907"],["Inflows","755","","","1,255","","","956"],["Outflows","(891)","","","(1,187)","","","(1,543)"],["Net inflows (outflows)","(136)","","","68","","","(587)"],["Market appreciation (depreciation)","508","","","(1,501)","","","1,479"],["Total increase (decrease)","372","","","(1,433)","","","892"],["Assets under management, end of period","$","5,738","","","$","5,366","","","$","6,799"],["Percentage of institutional assets under management","16.4","%","","16.6","%","","15.9","%"],["Average assets under management","$","5,447","","","$","5,848","","","$","6,479"],["Total Institutional Accounts"],["Assets under management, beginning of period","$","32,373","","","$","42,727","","","$","33,255"],["Inflows","2,985","","","5,915","","","6,152"],["Outflows","(3,225)","","","(6,357)","","","(5,563)"],["Net inflows (outflows)","(240)","","","(442)","","","589"],["Market appreciation (depreciation)","3,626","","","(8,927)","","","10,041"],["Distributions","(891)","","","(985)","","","(1,184)"],["Transfers","160","","","\u2014","","","26"],["Total increase (decrease)","2,655","","","(10,354)","","","9,472"],["Assets under management, end of period","$","35,028","","","$","32,373","","","$","42,727"],["Average assets under management","$","32,878","","","$","36,383","","","$","38,906"]]
[[/GREPCENT_TABLE]]

25

Assets Under Management

By Investment Strategy

(in millions)

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2023","","2022","","2021"],["U.S. Real Estate"],["Assets under management, beginning of period","$","35,108","","","$","49,915","","","$","32,827"],["Inflows","7,077","","","10,572","","","11,538"],["Outflows","(6,521)","","","(10,869)","","","(6,499)"],["Net inflows (outflows)","556","","","(297)","","","5,039"],["Market appreciation (depreciation)","4,495","","","(12,097)","","","14,417"],["Distributions","(1,679)","","","(2,406)","","","(2,294)"],["Transfers","70","","","(7)","","","(74)"],["Total increase (decrease)","3,442","","","(14,807)","","","17,088"],["Assets under management, end of period","$","38,550","","","$","35,108","","","$","49,915"],["Percentage of total assets under management","46.4","%","","43.7","%","","46.8","%"],["Average assets under management","$","36,034","","","$","41,627","","","$","41,315"],["Preferred Securities"],["Assets under management, beginning of period","$","19,767","","","$","26,987","","","$","23,185"],["Inflows","4,997","","","7,059","","","8,802"],["Outflows","(6,890)","","","(10,212)","","","(5,053)"],["Net inflows (outflows)","(1,893)","","","(3,153)","","","3,749"],["Market appreciation (depreciation)","1,029","","","(3,240)","","","964"],["Distributions","(739)","","","(834)","","","(985)"],["Transfers","\u2014","","","7","","","74"],["Total increase (decrease)","(1,603)","","","(7,220)","","","3,802"],["Assets under management, end of period","$","18,164","","","$","19,767","","","$","26,987"],["Percentage of total assets under management","21.8","%","","24.6","%","","25.3","%"],["Average assets under management","$","18,439","","","$","22,638","","","$","25,262"],["Global/International Real Estate"],["Assets under management, beginning of period","$","14,782","","","$","19,380","","","$","15,214"],["Inflows","1,529","","","3,848","","","3,263"],["Outflows","(1,975)","","","(3,289)","","","(2,833)"],["Net inflows (outflows)","(446)","","","559","","","430"],["Market appreciation (depreciation)","1,616","","","(5,039)","","","3,933"],["Distributions","(93)","","","(118)","","","(197)"],["Transfers","(70)","","","\u2014","","","\u2014"],["Total increase (decrease)","1,007","","","(4,598)","","","4,166"],["Assets under management, end of period","$","15,789","","","$","14,782","","","$","19,380"],["Percentage of total assets under management","19.0","%","","18.4","%","","18.2","%"],["Average assets under management","$","14,899","","","$","16,692","","","$","17,688"]]
[[/GREPCENT_TABLE]]

26

Assets Under Management

By Investment Strategy - continued

(in millions)

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2023","","2022","","2021"],["Global Listed Infrastructure"],["Assets under management, beginning of period","$","8,596","","","$","8,763","","","$","6,729"],["Inflows","487","","","1,566","","","1,751"],["Outflows","(725)","","","(1,112)","","","(765)"],["Net inflows (outflows)","(238)","","","454","","","986"],["Market appreciation (depreciation)","204","","","(405)","","","1,256"],["Distributions","(206)","","","(216)","","","(208)"],["Total increase (decrease)","(240)","","","(167)","","","2,034"],["Assets under management, end of period","$","8,356","","","$","8,596","","","$","8,763"],["Percentage of total assets under management","10.1","%","","10.7","%","","8.2","%"],["Average assets under management","$","8,291","","","$","8,700","","","$","7,970"],["Other"],["Assets under management, beginning of period","$","2,172","","","$","1,584","","","$","1,953"],["Inflows","849","","","1,384","","","546"],["Outflows","(819)","","","(588)","","","(1,297)"],["Net inflows (outflows)","30","","","796","","","(751)"],["Market appreciation (depreciation)","130","","","(150)","","","440"],["Distributions","(55)","","","(58)","","","(58)"],["Total increase (decrease)","105","","","588","","","(369)"],["Assets under management, end of period","$","2,277","","","$","2,172","","","$","1,584"],["Percentage of total assets under management","2.7","%","","2.7","%","","1.5","%"],["Average assets under management","$","2,228","","","$","1,967","","","$","1,979"],["Total"],["Assets under management, beginning of period","$","80,425","","","$","106,629","","","$","79,908"],["Inflows","14,939","","","24,429","","","25,900"],["Outflows","(16,930)","","","(26,070)","","","(16,447)"],["Net inflows (outflows)","(1,991)","","","(1,641)","","","9,453"],["Market appreciation (depreciation)","7,474","","","(20,931)","","","21,010"],["Distributions","(2,772)","","","(3,632)","","","(3,742)"],["Total increase (decrease)","2,711","","","(26,204)","","","26,721"],["Assets under management, end of period","$","83,136","","","$","80,425","","","$","106,629"],["Average assets under management","$","79,891","","","$","91,624","","","$","94,214"]]
[[/GREPCENT_TABLE]]

27

Investment Performance as of December 31, 2023

_________________________

(1)    Past performance is no guarantee of future results. Outperformance is determined by comparing the annualized investment performance of each investment strategy to the performance of specified reference benchmarks. Investment performance in excess of the performance of the benchmark is considered outperformance. The investment performance calculation of each investment strategy is based on all active accounts and investment models pursuing similar investment objectives. For accounts, actual investment performance is measured gross of fees and net of withholding taxes. For investment models, for which actual investment performance does not exist, the investment performance of a composite of accounts pursuing comparable investment objectives is used as a proxy for actual investment performance. The performance of the specified reference benchmark for each account and investment model is measured net of withholding taxes, where applicable. This is not investment advice and may not be construed as sales or marketing material for any financial product or service sponsored or provided by Cohen & Steers.

(2)    © 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Morningstar calculates its ratings based on a risk-adjusted return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive five stars, the next 22.5% receive four stars, the next 35% receive three stars, the next 22.5% receive two stars and the bottom 10% receive one star. Past performance is no guarantee of future results. Based on independent rating by Morningstar, Inc. of investment performance of each Cohen & Steers-sponsored open-end U.S.-registered mutual fund for all share classes for the overall period at December 31, 2023. Overall Morningstar rating is a weighted average based on the 3-year, 5-year and 10-year Morningstar rating. Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages. This is not investment advice and may not be construed as sales or marketing material for any financial product or service sponsored or provided by Cohen & Steers.

Changes in Assets Under Management - 2023 Compared with 2022

Assets under management at December 31, 2023 increased 3.4% to $83.1 billion from $80.4 billion at December 31, 2022. The increase was due to market appreciation of $7.5 billion, partially offset by net outflows of $2.0 billion and distributions of $2.8 billion. Net outflows included $1.9 billion from preferred securities. Market appreciation included $4.5 billion from U.S. real estate, $1.6 billion from global/international real estate and $1.0 billion from preferred securities. Distributions included $1.7 billion from U.S. real estate and $739 million from preferred securities. Our overall organic decay rate was (2.5%) for the year ended December 31, 2023. The organic growth/decay rate represents the ratio of net flows for the year to the beginning assets under management.

28

Open-end funds

Assets under management in open-end funds at December 31, 2023, which represented 44.5% of total assets under management, increased 0.3% to $37.0 billion from $36.9 billion at December 31, 2022. The increase was due to market appreciation of $3.2 billion, partially offset by net outflows of $1.7 billion and distributions of $1.3 billion. Net outflows included $1.4 billion from preferred securities. Market appreciation included $2.4 billion from U.S. real estate and $547 million from preferred securities. Distributions included $608 million from U.S. real estate and $538 million from preferred securities. Of these distributions, $977 million was reinvested and included in net flows. Our organic decay rate for open-end funds was (4.5%) for the year ended December 31, 2023.

Institutional accounts

Assets under management in institutional accounts at December 31, 2023, which represented 42.1% of total assets under management, increased 8.2% to $35.0 billion from $32.4 billion at December 31, 2022. The increase was due to market appreciation of $3.6 billion, partially offset by net outflows of $240 million and distributions of $891 million. Net outflows included $435 million from preferred securities, $375 million from global/international real estate and $124 million from global listed infrastructure, partially offset by net inflows of $680 million into U.S. real estate. Market appreciation included $1.8 billion from U.S. real estate and $1.4 billion from global/international real estate. Distributions included $864 million from U.S. real estate. Our organic decay rate for institutional accounts was (0.7%) for the year ended December 31, 2023.

Assets under management in advisory accounts at December 31, 2023, which represented 57.9% of institutional assets under management, increased 8.8% to $20.3 billion from $18.6 billion at December 31, 2022. The increase was due to market appreciation of $1.9 billion, partially offset by net outflows of $453 million. Net outflows included $428 million from preferred securities. Market appreciation included $811 million from global/international real estate, $716 million from U.S. real estate and $271 million from preferred securities. Our organic decay rate for advisory accounts was (2.4%) for the year ended December 31, 2023.

Assets under management in Japan subadvisory accounts at December 31, 2023, which represented 25.8% of institutional assets under management, increased 7.8% to $9.0 billion from $8.4 billion at December 31, 2022. The increase was due to net inflows of $349 million and market appreciation of $1.2 billion, partially offset by distributions of $891 million. Net inflows included $428 million into U.S. real estate, partially offset by net outflows of $67 million from global/international real estate. Market appreciation included $912 million from U.S. real estate and $267 million from global/international real estate. Distributions included $864 million from U.S. real estate. Our organic growth rate for Japan subadvisory accounts was 4.2% for the year ended December 31, 2023.

Assets under management in subadvisory accounts excluding Japan at December 31, 2023, which represented 16.4% of institutional assets under management, increased 6.9% to $5.7 billion from $5.4 billion at December 31, 2022. The increase was due to market appreciation of $508 million, partially offset by net outflows of $136 million. Net outflows included $376 million from global/international real estate, partially offset by net inflows of $169 million into U.S. real estate and $91 million into real assets multi-strategy (included in "Other" in the Assets under Management - By Investment Strategy

table). Market appreciation included $298 million from global/international real estate and $157 million from U.S. real estate. Our organic decay rate for subadvisory accounts excluding Japan was (2.5%) for the year ended December 31, 2023.

Closed-end funds

Assets under management in closed-end funds at December 31, 2023, which represented 13.3% of total assets under management, were $11.1 billion at both December 31, 2023 and December 31, 2022. Assets under management in closed-end funds included net outflows of $74 million and distributions of $616 million, partially offset by market appreciation of $617 million. Our organic decay rate for closed-end funds was (0.7%) for the year ended December 31, 2023.

Changes in Assets Under Management - 2022 Compared with 2021

Assets under management at December 31, 2022 decreased 24.6% to $80.4 billion from $106.6 billion at December 31, 2021. The decrease was due to net outflows of $1.6 billion, market depreciation of $20.9 billion and distributions of $3.6 billion. Net outflows included $3.2 billion from preferred securities, partially offset by net inflows of $748 million into real assets multi-strategy (included in "Other" in the Assets under Management - By Investment Strategy table), $559 million into global/international real estate and $454 million into global listed infrastructure. Market depreciation included $12.1 billion from U.S. real estate, $5.0 billion from global/international real estate and $3.2 billion from preferred securities. Distributions

29

included $2.4 billion from U.S. real estate and $834 million from preferred securities. Our overall organic decay rate was (1.5%) for the year ended December 31, 2022.

Open-end funds

Assets under management in open-end funds at December 31, 2022, which represented 45.9% of total assets under management, decreased 27.5% to $36.9 billion from $50.9 billion at December 31, 2021. The decrease was due to net outflows of $1.8 billion, market depreciation of $10.3 billion and distributions of $2.0 billion. Net outflows included $3.1 billion from preferred securities, partially offset by net inflows of $733 million into real assets multi-strategy (included in "Other" in the Assets under Management - By Investment Strategy table), $248 million into global/international real estate and $184 million into global listed infrastructure. Market depreciation included $7.1 billion from U.S. real estate and $2.2 billion from preferred securities. Distributions included $1.2 billion from U.S. real estate and $611 million from preferred securities. Of these distributions, $1.6 billion was reinvested and included in net flows. Our organic decay rate for open-end funds was (3.5%) for the year ended December 31, 2022.

Institutional accounts

Assets under management in institutional accounts at December 31, 2022, which represented 40.3% of total assets under management, decreased 24.2% to $32.4 billion from $42.7 billion at December 31, 2021. The decrease was due to net outflows of $442 million, market depreciation of $8.9 billion and distributions of $1.0 billion. Net outflows included $799 million from U.S. real estate, partially offset by net inflows of $310 million into global/international real estate. Market depreciation included $4.2 billion from global/international real estate and $4.0 billion from U.S. real estate. Distributions included $934 million from U.S. real estate. Our organic decay rate for institutional accounts was (1.0%) for the year ended December 31, 2022.

Assets under management in advisory accounts at December 31, 2022, which represented 57.6% of institutional assets under management, decreased 24.3% to $18.6 billion from $24.6 billion at December 31, 2021. The decrease was due to net outflows of $1.1 billion and market depreciation of $4.9 billion. Net outflows included $1.5 billion from U.S. real estate, partially offset by net inflows of $316 million into global listed infrastructure and $313 million into global/international real estate. Market depreciation included $2.4 billion from global/international real estate and $1.9 billion from U.S. real estate. Our organic decay rate for advisory accounts was (4.3%) for the year ended December 31, 2022.

Assets under management in Japan subadvisory accounts at December 31, 2022, which represented 25.9% of institutional assets under management, decreased 26.1% to $8.4 billion from $11.3 billion at December 31, 2021. The decrease was due to market depreciation of $2.5 billion and distributions of $1.0 billion, partially offset by net inflows of $552 million. Net inflows included $488 million into U.S. real estate. Market depreciation included $1.8 billion from U.S. real estate and $659 million from global/international real estate. Distributions included $934 million from U.S. real estate. Our organic growth rate for Japan subadvisory accounts was 4.9% for the year ended December 31, 2022.

Assets under management in subadvisory accounts excluding Japan at December 31, 2022, which represented 16.6% of institutional assets under management, decreased 21.1% to $5.4 billion from $6.8 billion at December 31, 2021. The decrease was due to market depreciation of $1.5 billion, partially offset by net inflows of $68 million. Market depreciation included $1.1 billion from global/international real estate. Our organic growth rate for subadvisory accounts excluding Japan was 1.0% for the year ended December 31, 2022.

Closed-end funds

Assets under management in closed-end funds at December 31, 2022, which represented 13.9% of total assets under management, decreased 14.2% to $11.1 billion from $13.0 billion at December 31, 2021. The decrease was due to market depreciation of $1.7 billion and distributions of $695 million, partially offset by net inflows of $575 million. Inflows of $482

million, which included leverage, were attributable to the Company's offering of the Cohen & Steers Real Estate

Opportunities and Income Fund (RLTY). Our organic growth rate for closed-end funds was 4.4% for the year ended December 31, 2022.

30

Summary of Operating Results

[[GREPCENT_TABLE]]
[["(in thousands, except percentages and per share data)","Years Ended December 31,"],["","2023","","2022","","2021"],["U.S. GAAP"],["Revenue","$","489,637","","","$","566,906","","","$","583,832"],["Expenses","$","325,160","","","$","350,968","","","$","323,460"],["Operating income","$","164,477","","","$","215,938","","","$","260,372"],["Non-operating income (loss) (1)","$","15,774","","","$","(19,041)","","","$","21,572"],["Net income attributable to common stockholders","$","129,049","","","$","171,042","","","$","211,396"],["Diluted earnings per share","$","2.60","","","$","3.47","","","$","4.31"],["Operating margin","33.6","%","","38.1","%","","44.6","%"],["As Adjusted (2)"],["Net income attributable to common stockholders","$","140,511","","","$","182,251","","","$","197,947"],["Diluted earnings per share","$","2.84","","","$","3.70","","","$","4.03"],["Operating margin","36.2","%","","43.0","%","","46.0","%"]]
[[/GREPCENT_TABLE]]

_________________________

(1)Included amounts attributable to third-party interests in consolidated investment vehicles. Refer to non-operating income (loss) tables on pages 32 and 34 for additional detail.

(2)Refer to pages 35-37 for reconciliations of U.S. GAAP to as adjusted results.

2023 Compared with 2022

Revenue

[[GREPCENT_TABLE]]
[["(in thousands)","Years Ended December 31,"],["","2023","","2022","","$ Change","","% Change"],["Investment advisory and administration fees"],["Open-end funds","$","239,501","","","$","288,577","","","$","(49,076)","","","(17.0)","%"],["Institutional accounts","123,565","","","134,012","","","$","(10,447)","","","(7.8)","%"],["Closed-end funds","96,345","","","106,722","","","$","(10,377)","","","(9.7)","%"],["Total","459,411","","","529,311","","","$","(69,900)","","","(13.2)","%"],["Distribution and service fees","28,200","","","35,093","","","$","(6,893)","","","(19.6)","%"],["Other","2,026","","","2,502","","","$","(476)","","","(19.0)","%"],["Total revenue","$","489,637","","","$","566,906","","","$","(77,269)","","","(13.6)","%"]]
[[/GREPCENT_TABLE]]

Investment advisory and administration fees decreased from the year ended December 31, 2022, primarily due to lower average assets under management across all three types of investment vehicles, partially offset by higher performance fees from certain institutional accounts.

Total investment advisory and administration revenue from open-end funds compared with average assets under management implied an annual effective fee rate of 66.2 bps and 66.8 bps for the years ended December 31, 2023 and 2022, respectively.

Total investment advisory revenue from institutional accounts compared with average assets under management implied an annual effective fee rate of 37.6 bps and 36.8 bps for the years ended December 31, 2023 and 2022, respectively. The increase in the implied annual effective fee rate was primarily due to higher performance fees of $2.5 million for the year ended December 31, 2023 versus $636,000 for the year ended December 31, 2022. Excluding the performance fees, the implied annual effective fee rate would have been 36.8 bps and 36.7 bps for the years ended December 31, 2023 and 2022, respectively.

Total investment advisory and administration revenue from closed-end funds compared with average assets under management implied an annual effective fee rate of 88.8 bps and 88.6 bps for the years ended December 31, 2023 and 2022, respectively.

Distribution and service fees for the year ended December 31, 2023 decreased primarily due to lower average assets under management in U.S. open-end funds.

31

Expenses

[[GREPCENT_TABLE]]
[["(in thousands)","Years Ended December 31,"],["","2023","","2022","","$ Change","","% Change"],["Employee compensation and benefits","$","200,181","","","$","208,831","","","$","(8,650)","","","(4.1)","%"],["Distribution and service fees","54,170","","","82,928","","","$","(28,758)","","","(34.7)","%"],["General and administrative","66,704","","","54,826","","","$","11,878","","","21.7","%"],["Depreciation and amortization","4,105","","","4,383","","","$","(278)","","","(6.3)","%"],["Total expenses","$","325,160","","","$","350,968","","","$","(25,808)","","","(7.4)","%"]]
[[/GREPCENT_TABLE]]

Employee compensation and benefits decreased from the year ended December 31, 2022, primarily due to lower incentive compensation of $11.1 million and a decrease in amortization of restricted stock units of $5.5 million, partially offset by higher salaries of $6.9 million and an increase in severance of $1.4 million.

Distribution and service fee expenses decreased by $28.8 million from the year ended December 31, 2022, which included $14.2 million of costs associated with the offering of RLTY. The remainder of the decrease was primarily due to lower average assets under management in U.S. open-end funds.

General and administrative expenses increased from the year ended December 31, 2022, primarily due to incremental lease costs of $10.6 million related to the Company's new headquarters.

Operating margin for the year ended December 31, 2023 decreased to 33.6% from 38.1% for the year ended December 31, 2022. The operating margin for the year ended 2022 included costs associated with the offering of RLTY. Excluding those costs, the operating margin would have been 40.8%. The 720 basis point decrease in operating margin from December 31, 2022 was primarily due to higher employee compensation and benefits relative to revenue as well as an increase in general and administrative expenses relative to revenue. Operating margin represents the ratio of operating income to revenue.

Non-operating Income (Loss)

[[GREPCENT_TABLE]]
[["(in thousands)","Year Ended December 31, 2023"],["","Consolidated Investment Vehicles","","Corporate Seed Investments","","Corporate Other","","Total"],["Interest and dividend income\u2014net","$","3,622","","","$","3,547","","","$","7,449","","","$","14,618"],["Gain (loss) from investments\u2014net","4,915","","","1,246","","","(1,870)","","(1)","4,291"],["Foreign currency gain (loss)\u2014net","(556)","","","(22)","","","(2,557)","","(2)","(3,135)"],["Total non-operating income (loss)","7,981","","","4,771","","","3,022","","","15,774"],["Net (income) loss attributable to noncontrolling interests","(7,560)","","","\u2014","","","\u2014","","","(7,560)"],["Non-operating income (loss) attributable to the Company","$","421","","","$","4,771","","","$","3,022","","","$","8,214"]]
[[/GREPCENT_TABLE]]
_________________________

(1)Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments included in both Consolidated Investment Vehicles and Corporate Seed Investments.

(2)Comprised primarily of net foreign currency exchange gain (loss) associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

[[GREPCENT_TABLE]]
[["(in thousands)","Year Ended December 31, 2022"],["","Consolidated Investment Vehicles","","Corporate Seed Investments","","Corporate Other","","Total"],["Interest and dividend income\u2014net","$","3,718","","","$","1,355","","","$","1,745","","","$","6,818"],["Gain (loss) from investments\u2014net","(26,480)","","","(2,345)","","","3,719","","(1)","(25,106)"],["Foreign currency gain (loss)\u2014net","(3,765)","","","(14)","","","3,026","","(2)","(753)"],["Total non-operating income (loss)","(26,527)","","","(1,004)","","","8,490","","","(19,041)"],["Net (income) loss attributable to noncontrolling interests","21,556","","","\u2014","","","\u2014","","","21,556"],["Non-operating income (loss) attributable to the Company","$","(4,971)","","","$","(1,004)","","","$","8,490","","","$","2,515"]]
[[/GREPCENT_TABLE]]
_________________________

(1)Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments included in both Consolidated Investment Vehicles and Corporate Seed Investments.

(2)Comprised primarily of net foreign currency exchange gain (loss) associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

32

Income Taxes

A reconciliation of the Company’s statutory federal income tax rate and the effective income tax rate is summarized in the following table:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2023","","2022"],["U.S. statutory tax rate","21.0","%","","21.0","%"],["State and local income taxes, net of federal benefit","3.2","","","3.3"],["Non-deductible executive compensation","1.9","","","3.0"],["Excess tax benefits related to the vesting and delivery of restricted stock units","(1.2)","","","(2.7)"],["Unrecognized tax benefit adjustments","\u2014","","","(3.3)"],["Other","0.4","","","0.4"],["Effective income tax rate","25.3","%","","21.7","%"]]
[[/GREPCENT_TABLE]]

2022 Compared with 2021

Revenue

[[GREPCENT_TABLE]]
[["(in thousands)","Years Ended December 31,"],["","2022","","2021","","$ Change","","% Change"],["Investment advisory and administration fees"],["Open-end funds","$","288,577","","","$","288,359","","","$","218","","","0.1","%"],["Institutional accounts","134,012","","","146,345","","","$","(12,333)","","","(8.4)","%"],["Closed-end funds","106,722","","","108,840","","","$","(2,118)","","","(1.9)","%"],["Total","529,311","","","543,544","","","$","(14,233)","","","(2.6)","%"],["Distribution and service fees","35,093","","","37,630","","","$","(2,537)","","","(6.7)","%"],["Other","2,502","","","2,658","","","$","(156)","","","(5.9)","%"],["Total revenue","$","566,906","","","$","583,832","","","$","(16,926)","","","(2.9)","%"]]
[[/GREPCENT_TABLE]]

Investment advisory and administration fees decreased from the year ended December 31, 2021, primarily due to lower average assets under management in both institutional accounts and closed-end funds, as well as lower performance fees from certain institutional accounts.

Total investment advisory and administration revenue from open-end funds compared with average assets under management implied an annual effective fee rate of 66.8 bps and 67.1 bps for the years ended December 31, 2022 and 2021, respectively.

Total investment advisory revenue from institutional accounts compared with average assets under management implied an annual effective fee rate of 36.8 bps and 37.6 bps for the years ended December 31, 2022 and 2021, respectively. The decrease in the implied annual effective fee rate was primarily due to lower performance fees of $636,000 for the year ended December 31, 2022 versus $5.6 million for the year ended December 31, 2021. Excluding the performance fees, the implied annual effective fee rate would have been 36.7 bps and 36.2 bps for the years ended December 31, 2022 and 2021, respectively.

Total investment advisory and administration revenue from closed-end funds compared with average assets under management implied an annual effective fee rate of 88.6 bps and 88.4 bps for the years ended December 31, 2022 and 2021, respectively.

Distribution and service fees for the year ended December 31, 2022 decreased primarily due to lower average assets under management in U.S. open-end funds.

33

Expenses

[[GREPCENT_TABLE]]
[["(in thousands)","Years Ended December 31,"],["","2022","","2021","","$ Change","","% Change"],["Employee compensation and benefits","$","208,831","","","$","195,443","","","$","13,388","","","6.9","%"],["Distribution and service fees","82,928","","","75,891","","","$","7,037","","","9.3","%"],["General and administrative","54,826","","","48,034","","","$","6,792","","","14.1","%"],["Depreciation and amortization","4,383","","","4,092","","","$","291","","","7.1","%"],["Total expenses","$","350,968","","","$","323,460","","","$","27,508","","","8.5","%"]]
[[/GREPCENT_TABLE]]

Employee compensation and benefits increased from the year ended December 31, 2021, primarily due to higher amortization of restricted stock units of $9.1 million and an increase in salaries of $6.0 million, partially offset by

lower incentive compensation of $2.3 million.

Distribution and service fee expenses increased from the year ended December 31, 2021, primarily due to costs of $14.2 million associated with the offering of RLTY in 2022, partially offset by a shift in the composition of assets under management into lower cost share classes.

General and administrative expenses increased from the year ended December 31, 2021, primarily due to higher information technology-related expenses of $2.4 million, an increase in travel and entertainment of $1.9 million and one month of incremental lease expense related to the Company's future headquarters at 1166 Avenue of the Americas of $1.1 million.

Operating margin for the year ended December 31, 2022 decreased to 38.1% from 44.6% for the year ended December 31, 2021. The year ended December 31, 2022 included costs associated with the initial public offering of RLTY.

Non-operating Income (Loss)

[[GREPCENT_TABLE]]
[["(in thousands)","Year Ended December 31, 2022"],["","Consolidated Investment Vehicles","","Corporate Seed Investments","","Corporate Other","","Total"],["Interest and dividend income\u2014net","$","3,718","","","$","1,355","","","$","1,745","","","$","6,818"],["Gain (loss) from investments\u2014net","(26,480)","","","(2,345)","","","3,719","","(1)","(25,106)"],["Foreign currency gain (loss)\u2014net","(3,765)","","","(14)","","","3,026","","(2)","(753)"],["Total non-operating income (loss)","(26,527)","","","(1,004)","","","8,490","","","(19,041)"],["Net (income) loss attributable to noncontrolling interests","21,556","","","\u2014","","","\u2014","","","21,556"],["Non-operating income (loss) attributable to the Company","$","(4,971)","","","$","(1,004)","","","$","8,490","","","$","2,515"]]
[[/GREPCENT_TABLE]]
_________________________

(1)Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments included in both Consolidated Investment Vehicles and Corporate Seed Investments.

(2)Comprised primarily of net foreign currency exchange gain (loss) associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

[[GREPCENT_TABLE]]
[["(in thousands)","Year Ended December 31, 2021"],["","Consolidated Investment Vehicles","","Corporate Seed Investments","","Corporate Other","","Total"],["Interest and dividend income\u2014net","$","2,166","","","$","652","","","$","59","","","$","2,877"],["Gain (loss) from investments\u2014net","20,072","","","6,130","","","(7,418)","","(1)","18,784"],["Foreign currency gain (loss)\u2014net","331","","","(1)","","","(419)","","(2)","(89)"],["Total non-operating income (loss)","22,569","","","6,781","","","(7,778)","","","21,572"],["Net (income) loss attributable to noncontrolling interests","(14,758)","","","\u2014","","","\u2014","","","(14,758)"],["Non-operating income (loss) attributable to the Company","$","7,811","","","$","6,781","","","$","(7,778)","","","$","6,814"]]
[[/GREPCENT_TABLE]]

_________________________

(1)Comprised primarily of gain (loss) on derivative contracts, which are utilized to economically hedge a portion of the market risk of the Company's seed investments included in both Consolidated Investment Vehicles and Corporate Seed Investments.

(2)Comprised primarily of net foreign currency exchange gain (loss) associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

34

Income Taxes

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2022","","2021"],["U.S. statutory tax rate","21.0","%","","21.0","%"],["State and local income taxes, net of federal benefit","3.3","","","3.8"],["Non-deductible executive compensation","3.0","","","2.3"],["Unrecognized tax benefit adjustments","(3.3)","","","(3.2)"],["Excess tax benefits related to the vesting and delivery of restricted stock units","(2.7)","","","(2.2)"],["Other","0.4","","","(0.8)"],["Effective income tax rate","21.7","%","","20.9","%"]]
[[/GREPCENT_TABLE]]

Reconciliations of U.S. GAAP to As Adjusted Financial Results

Management believes that use of the following as adjusted (non-GAAP) financial results provides greater transparency into the Company’s operating performance. In addition, these as adjusted financial results are used to prepare the Company's internal management reports, which are used in evaluating its business.

While management believes that these as adjusted financial results are useful in evaluating operating performance, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with U.S. GAAP.

Effective January 1, 2023, the Company revised its methodology for as adjusted results to include interest and dividends from seed investments. Prior period amounts have not been recast to conform with the current period results as the impact was not significant.

Reconciliation of U.S. GAAP to As Adjusted Financial Results

Net Income Attributable to Common Stockholders and Diluted Earnings per Share

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands, except per share data)","2023","","2022","","2021"],["Net income attributable to common stockholders, U.S. GAAP","$","129,049","","","$","171,042","","","$","211,396"],["Seed investments\u2014net (1)","2,252","","","4,317","","","(5,870)"],["Accelerated vesting of restricted stock units","1,318","","","10,260","","","7,197"],["Lease transition and other costs - 280 Park Avenue (2)","9,721","","","776","","","\u2014"],["Closed-end fund offering costs (3)","\u2014","","","15,239","","","\u2014"],["Foreign currency exchange (gains) losses\u2014net (4)","2,371","","","(4,741)","","","(475)"],["Tax adjustments\u2014net (5)","(4,200)","","","(14,642)","","","(14,301)"],["Net income attributable to common stockholders, as adjusted","$","140,511","","","$","182,251","","","$","197,947"],["Diluted weighted average shares outstanding","49,553","","","49,297","","","49,090"],["Diluted earnings per share, U.S. GAAP","$","2.60","","","$","3.47","","","$","4.31"],["Seed investments\u2014net (1)","0.05","","","0.09","","","(0.12)"],["Accelerated vesting of restricted stock units","0.03","","","0.21","","","0.15"],["Lease transition and other costs - 280 Park Avenue (2)","0.20","","","0.02","","","\u2014"],["Closed-end fund offering costs (3)","\u2014","","","0.31","","","\u2014"],["Foreign currency exchange (gains) losses\u2014net (4)","0.05","","","(0.10)","","","(0.01)"],["Tax adjustments\u2014net (5)","(0.09)","","","(0.30)","","","(0.30)"],["Diluted earnings per share, as adjusted","$","2.84","","","$","3.70","","","$","4.03"]]
[[/GREPCENT_TABLE]]

_________________________

(1)Represents adjustment to remove the impact of consolidated investment vehicles and other seed investments from the Company's financial results. In accordance with the Company’s revised methodology, interest and dividends from seed investments were not included in the adjustment for the year ended December 31, 2023.

(2)Represents adjustment to remove the impact of lease and other expenses related to the Company's prior headquarters, for which the lease expired in January 2024. From a GAAP perspective, the Company recognized lease expense on both its prior and current headquarters as a result of overlapping lease terms.

35

(3)Represents costs associated with the offering of RLTY. Costs are summarized in the following table:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands)","2023","","2022","","2021"],["Employee compensation and benefits","$","\u2014","","","$","357","","","$","\u2014"],["Distribution and service fees","\u2014","","","14,224","","","\u2014"],["General and administrative","\u2014","","","658","","","\u2014"],["Closed-end fund offering costs","$","\u2014","","","$","15,239","","","$","\u2014"]]
[[/GREPCENT_TABLE]]

(4)Represents net foreign currency exchange (gains) losses associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

(5)Tax adjustments are summarized in the following table:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands)","2023","","2022","","2021"],["Exclusion of tax effects associated with items noted above","$","(3,085)","","","$","(3,522)","","","$","(2,262)"],["Exclusion of discrete tax items","(1,115)","","","(11,120)","","","(12,039)"],["Total tax adjustments","$","(4,200)","","","$","(14,642)","","","$","(14,301)"]]
[[/GREPCENT_TABLE]]

Reconciliation of U.S. GAAP to As Adjusted Financial Results

Revenue, Expenses, Operating Income and Operating Margin

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands, except percentages)","2023","","2022","","2021"],["Revenue, U.S. GAAP","$","489,637","","","$","566,906","","","$","583,832"],["Seed investments\u2014net (1)","(466)","","","790","","","411"],["Revenue, as adjusted","$","489,171","","","$","567,696","","","$","584,243"],["Expenses, U.S. GAAP","$","325,160","","","350,968","","","$","323,460"],["Seed investments (1)","(2,021)","","","(838)","","","(819)"],["Accelerated vesting of restricted stock units","(1,318)","","","(10,260)","","","(7,197)"],["Lease transition and other costs - 280 Park Avenue (2)","(9,721)","","","(776)","","","\u2014"],["Closed-end fund offering costs (3)","\u2014","","","(15,239)","","","\u2014"],["Expenses, as adjusted","$","312,100","","","$","323,855","","","$","315,444"],["Operating income, U.S. GAAP","$","164,477","","","$","215,938","","","$","260,372"],["Seed investments (1)","1,555","","","1,628","","","1,230"],["Accelerated vesting of restricted stock units","1,318","","","10,260","","","7,197"],["Lease transition and other costs - 280 Park Avenue (2)","9,721","","","776","","","\u2014"],["Closed-end fund offering costs (3)","\u2014","","","15,239","","","\u2014"],["Operating income, as adjusted","$","177,071","","","$","243,841","","","$","268,799"],["Operating margin, U.S. GAAP","33.6","%","","38.1","%","","44.6","%"],["Operating margin, as adjusted","36.2","%","","43.0","%","","46.0","%"]]
[[/GREPCENT_TABLE]]

_________________________

(1)Represents adjustment to remove the impact of consolidated investment vehicles from the Company's financial results.

(2)Represents adjustment to remove the impact of lease and other expenses related to the Company's prior headquarters, for which the lease expired in January 2024. From a GAAP perspective, the Company recognized lease expense on both its prior and current headquarters as a result of overlapping lease terms.

(3)Represents costs associated with the offering of RLTY. Costs are summarized in the following table:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands)","2023","","2022","","2021"],["Employee compensation and benefits","$","\u2014","","","$","357","","","$","\u2014"],["Distribution and service fees","\u2014","","","14,224","","","\u2014"],["General and administrative","\u2014","","","658","","","\u2014"],["Closed-end fund offering costs","$","\u2014","","","$","15,239","","","$","\u2014"]]
[[/GREPCENT_TABLE]]

36

Reconciliation of U.S. GAAP to As Adjusted Financial Results

Non-operating Income (Loss)

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands)","2023","","2022","","2021"],["Non-operating income (loss), U.S. GAAP","$","15,774","","","$","(19,041)","","","$","21,572"],["Seed investments\u2014net (1)","(6,863)","","","24,245","","","(21,858)"],["Foreign currency exchange (gains) losses\u2014net (2)","2,371","","","(4,741)","","","(475)"],["Non-operating income (loss), as adjusted","$","11,282","","","$","463","","","$","(761)"]]
[[/GREPCENT_TABLE]]

_________________________

(1)Represents adjustment to remove the impact of consolidated investment vehicles and other seed investments from the Company's financial results. In accordance with the Company’s revised methodology, interest and dividends from seed investments were not included in the adjustment for the year ended December 31, 2023.

(2)Represents net foreign currency exchange (gains) losses associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

37

Changes in Financial Condition, Liquidity and Capital Resources

We seek to maintain a balance sheet that supports our business strategies and provides the appropriate amount of liquidity at all times.

Net Liquid Assets

Our current financial condition is highly liquid and is primarily comprised of cash and cash equivalents, U.S. Treasury securities, liquid seed investments and other current assets. Liquid assets are reduced by current liabilities (together, net liquid assets).

The table below summarizes net liquid assets:

[[GREPCENT_TABLE]]
[["(in thousands)","December 31, 2023","","December 31, 2022"],["Cash and cash equivalents","$","187,442","","","$","247,418"],["U.S. Treasury securities","59,942","","","\u2014"],["Liquid seed investments\u2014net","71,375","","","67,987"],["Other current assets","73,360","","","70,716"],["Current liabilities","(106,603)","","","(114,522)"],["Net liquid assets","$","285,516","","","$","271,599"]]
[[/GREPCENT_TABLE]]

Cash and cash equivalents

Cash and cash equivalents are on deposit with major national financial institutions and include short-term, highly liquid investments, which are readily convertible into cash.

U.S. Treasury securities

U.S. Treasury securities, recorded at fair value, are directly issued by the U.S. government and were classified as trading investments.

Liquid seed investments—net

Liquid seed investments, recorded at fair value, are generally traded in active markets on major exchanges and can typically be liquidated within a normal settlement cycle. Liquid seed investments include corporate securities held directly for the purpose of establishing performance track records and the Company's economic interest in consolidated investment vehicles which are presented net of noncontrolling interests.

Other current assets

Other current assets primarily represent investment advisory and administration fees receivable. At December 31, 2023, receivables from institutional accounts comprised 47.7% of other current assets, while receivables from open-end and closed-end funds, together, comprised 45.5% of other current assets. We perform a review of our receivables on an ongoing basis in order to assess collectability and, based on our analysis at December 31, 2023, there was no allowance for uncollectible accounts required.

Current liabilities

Current liabilities included accrued compensation and benefits, distribution and service fees payable, operating lease obligations due within 12-months, certain income taxes payable and other liabilities and accrued expenses.

Future liquidity needs

Our business has become more capital intensive. Potential uses of capital range from, among other things, funding the upfront costs associated with closed-end fund launches and rights offerings, seeding new strategies and vehicles, co-investing in private real estate vehicles and making various one-time investments to grow our firm infrastructure as our business scales. In order to provide us with the financial flexibility to pursue these opportunities, on January 20, 2023, we entered into a Credit Agreement providing for a $100.0 million senior unsecured revolving credit facility maturing on January 20, 2026.

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Borrowings under the Credit Agreement, if any, will be used for working capital and other general corporate purposes. To date, we have not drawn on the Credit Agreement.

We have committed to invest up to $50.0 million in Cohen & Steers Real Estate Opportunities Fund, L.P. (REOF) of which $28.3 million remains unfunded. In addition, we have committed to invest up to $125.0 million in Cohen & Steers Income Opportunities REIT, Inc. (CNSREIT) of which $124.8 million remained unfunded as of December 31, 2023. In January 2024, the Company funded an additional $23.6 million of its commitment to CNSREIT. There are contractual restrictions on redemption of our seed investments in REOF and CNSREIT.

Cash flows

Our cash flows generally result from the operating activities of our business, with investment advisory and administration fees being the most significant contributor.

The table below summarizes our cash flows:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands)","2023","","2022","","2021"],["Cash Flow Data:"],["Net cash provided by (used in) operating activities","$","171,961","","","$","61,680","","","$","242,901"],["Net cash provided by (used in) investing activities","(114,776)","","","(2,857)","","","47,648"],["Net cash provided by (used in) financing activities","(119,052)","","","8,975","","","(145,426)"],["Net increase (decrease) in cash and cash equivalents","(61,867)","","","67,798","","","145,123"],["Effect of foreign exchange rate changes on cash and cash equivalents","2,756","","","(4,440)","","","(999)"],["Cash and cash equivalents, beginning of the period","248,714","","","185,356","","","41,232"],["Cash and cash equivalents, end of the period","$","189,603","","","$","248,714","","","$","185,356"]]
[[/GREPCENT_TABLE]]

In 2023, cash and cash equivalents, excluding the effect of foreign exchange rate changes, decreased by $61.9 million when compared with 2022. Cash flows from operating activities primarily consisted of net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities was $172.0 million. Net cash used in investing activities was $114.8 million, which included net purchases of U.S. Treasury securities held for corporate purposes of $59.7 million and purchases of property and equipment of $57.0 million, primarily related to the build-out of our new corporate headquarters. Net cash used in financing activities was $119.1 million, including dividends paid to stockholders of $112.4 million and repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of $21.5 million, partially offset by net contributions from noncontrolling interests of $14.5 million.

In 2022, cash and cash equivalents, excluding the effect of foreign exchange rate changes, increased by $67.8 million when compared with 2021. Cash flows from operating activities primarily consisted of net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities was $61.7 million. Net cash used in investing activities was $2.9 million, which included purchases of property and equipment of $4.2 million, partially offset by net proceeds from sales and maturities of U.S. Treasury securities held for corporate purposes and securities held directly for the purpose of establishing performance track records of $1.0 million. Net cash provided by financing activities was $9.0 million, including net contributions from noncontrolling interests of $142.1 million, partially offset by dividends paid to stockholders of $107.4 million and repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of $26.8 million.

In 2021, cash and cash equivalents, excluding the effect of foreign exchange rate changes, increased by $145.1 million when compared with 2020. The year ended December 31, 2020 included costs associated with the offering of the Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund and the Cohen & Steers Quality Income Realty Fund, Inc. rights offering. Cash flows from operating activities primarily consisted of net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities was $242.9 million. Net cash provided by investing activities was $47.6 million, which included $41.7 million of proceeds from sales and maturities of U.S. Treasury securities held for corporate purposes and net proceeds from sales of securities held directly for the purpose of establishing performance track records of $8.1 million. Net cash used in financing activities was $145.4 million, including dividends paid to stockholders of $147.6 million, which included a special dividend of $60.3 million paid on November 30, 2021, repurchases

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of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of $22.6 million, partially offset by net contributions from noncontrolling interests of $23.7 million.

Contractual Obligations, Commitments and Contingencies

The following table summarizes our contractual obligations at December 31, 2023:

[[GREPCENT_TABLE]]
[["(in thousands)","2024","","2025","","2026","","2027","","2028","","Thereafter","","Total"],["Operating leases","$","11,872","","","$","13,945","","","$","14,640","","","$","14,623","","","$","14,436","","","$","153,442","","","$","222,958"],["Purchase obligations (1)","7,825","","","6,178","","","3,269","","","341","","","26","","","\u2014","","","17,639"],["Other liability (2)","1,662","","","2,077","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","3,739"],["Total","$","21,359","","","$","22,200","","","$","17,909","","","$","14,964","","","$","14,462","","","$","153,442","","","$","244,336"]]
[[/GREPCENT_TABLE]]

_________________________

(1)Represents contracts that are either noncancellable or cancellable with a penalty. Our obligations primarily reflect information technology equipment, software licenses and standard service contracts for market data.

(2)Consists of the transition tax liability based on the cumulative undistributed earnings and profits of our foreign subsidiaries in connection with the enactment of the Tax Cuts and Jobs Act in 2017. See Note 15, Income Taxes, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing.

Investment Commitments

We have committed to invest up to $50.0 million in REOF. As of December 31, 2023, we had funded $21.7 million of this commitment. In addition, we have committed to invest up to $125.0 million in CNSREIT. As of December 31, 2023, we had funded $0.2 million of this commitment. In January 2024, the Company funded an additional $23.6 million of its commitment to CNSREIT. The timing for funding the remaining portion of our commitments is uncertain.

Dividends

    Subject to the approval of our board of directors, we anticipate paying dividends. When determining whether to pay a dividend, we take into account general economic and business conditions, our strategic plans, our results of operations and financial condition, cash flows and liquidity, contractual, legal and regulatory restrictions on the payment of dividends, if any, by us and our subsidiaries and such other factors deemed relevant.

On February 22, 2024, we declared a quarterly dividend on our common stock in the amount of $0.59 per share. This dividend will be payable on March 14, 2024 to stockholders of record at the close of business on March 4, 2024.

Contingencies

Due to the uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits at December 31, 2023, the Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore, $2.5 million of gross unrecognized tax benefits have been excluded from the contractual obligations table above. See Note 15, Income Taxes, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing.

Net Capital Requirements

Several of our subsidiaries are subject to minimum net capital requirements by the local laws and regulations to which they are subject. As of December 31, 2023, each of our subsidiaries subject to a minimum net capital requirement satisfied the applicable requirement. See Note 12, Regulatory Requirements, in the notes to the consolidated financial statements included in Part IV, Item 15.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes the estimates used in preparing the consolidated financial statements are reasonable and prudent. Actual results could differ from those estimates.

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Our significant accounting policies are disclosed in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements included in Part IV, Item 15 of this filing and should be read in conjunction with the summarized information below. Management considers the following accounting estimates critical to an informed review of our consolidated financial statements as they require management to make certain judgments about matters that may be uncertain at the time the estimates were determined.

Valuation of Investments

There is no established market for private real estate investments, and there may not be any comparable public market valuations. As a result, the valuation of a private real estate investment may be based on imperfect information and is subject to inherent uncertainties, and the resulting values may differ from values that would have been determined had a ready market existed for such investments, from values placed on such investments by other investors and from prices at which such investments may ultimately be sold.

We have retained an independent valuation services firm to assist in the determination of the fair value of certain of our private real estate investments. Each real property investment is valued no less than quarterly in accordance with the applicable governing documents. Limited partnerships that hold real property investments are valued using the valuation methodology we deem most appropriate and consistent with industry best practices and market conditions. We expect the primary methodology used to value real property investments will be the income approach, whereby value is derived by determining the present value of an asset’s expected stream of future cash flows (for example, discounted cash flow analysis). Consistent with industry practices, the income approach incorporates actual contractual lease income, professional judgments regarding comparable rental and operating expense data, the capitalization or discount rate and projections of future rent and expenses based on appropriate market evidence, and other subjective factors. Other methodologies that may also be used to value a real property investment include, among other approaches, sales comparisons and cost approaches. We will monitor the real property investments for material events that we believe may be expected to have a material impact on the most recent estimated fair values of such real property investments.

Income Taxes

We operate globally through our subsidiaries and therefore must allocate our income, expenses, and earnings taking into account various laws and regulations. Our tax provision represents an estimate of the total liability that we have incurred as a result of our global operations. The determination of our annual provision is subject to judgments and estimates and the actual results included in our annual tax returns may vary from the amounts reported in our consolidated financial statements. Accordingly, we recognize additions to, or reductions from, income tax expense as our estimated liabilities are revised and actual tax returns and audits, if any, are settled. Such adjustments are recognized in the quarterly period in which they are determined.

In addition, we record current and deferred tax consequences of all transactions that have been recognized in the consolidated financial statements in accordance with the provisions of the enacted tax laws. Deferred tax assets are recognized for temporary differences that will result in deductible amounts in future years at tax rates that are expected to apply in those years. Deferred tax liabilities are recognized for temporary differences that will result in taxable income in future years at tax rates that are expected to apply in those years. We record a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized.

The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations in several jurisdictions across our global operations. In accordance with Accounting Standards Codification Topic 740, Income Taxes (ASC 740), a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits.

We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may differ from our current estimate of the unrecognized tax benefit liabilities. These differences are reflected as increases or decreases in income tax expense in the period in which new information becomes available.

Recently Issued Accounting Pronouncements

See discussion of Recently Issued Accounting Pronouncements in Note 2 of the consolidated financial statements.

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