cns-20210331

________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-32236

________________

COHEN & STEERS, INC.

(Exact Name of Registrant as Specified in its Charter)

________________


Delaware			14-1904657
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

280 Park Avenue

New York, NY 10017

(Address of Principal Executive Offices and Zip Code)

(212) 832-3232

(Registrant's Telephone Number, Including Area Code)

________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

$.01 par value

CNS

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant's common stock, par value $0.01 per share, outstanding as of May 3, 2021 was 48,240,669.

COHEN & STEERS, INC. AND SUBSIDIARIES

Form 10-Q

Index


		Page
Part I.	Financial Information

Item 1.	Financial Statements	1

	Condensed Consolidated Statements of Financial Condition (Unaudited)	1

	Condensed Consolidated Statements of Operations (Unaudited)	2

	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	3

	Condensed Consolidated Statements of Changes in Stockholders' Equity and Redeemable Noncontrolling Interests (Unaudited)	4

	Condensed Consolidated Statements of Cash Flows (Unaudited)	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	36

Part II.	Other Information *

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 6.	Exhibits	38

Signatures		39

* Items other than those listed above have been omitted because they are not applicable.

Forward-Looking Statements

This report 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, 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," "may," "should," "seeks," "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 the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2020 (the Form 10-K), which is accessible on the Securities and Exchange Commission's website at www.sec.gov and on our website at www.cohenandsteers.com. These factors are not exhaustive and should be read in conjunction with the other cautionary statements that are included in this report, the Form 10-K and our other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

PART I—Financial Information

Item 1. Financial Statements

COHEN & STEERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(in thousands, except share data)


	March 31, 2021		December 31, 2020
ASSETS
Cash and cash equivalents	$	54,717	$	41,232
Investments ($94,318 and $80,743) (1)	128,437		154,978
Accounts receivable	71,957		69,680
Due from brokers ($339 and $223) (1)	6,081		5,125
Property and equipment—net	9,604		10,341
Operating lease right-of-use assets—net	28,646		31,203
Goodwill and intangible assets—net	20,048		20,495
Deferred income tax asset—net	2,065		6,995

Other assets ($318 and $637) (1)	11,538		8,404
Total assets	$	333,093	$	348,453

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accrued compensation	$	19,660	$	52,056
Distribution and service fees payable	8,598		7,748
Operating lease liabilities	32,068		34,926
Income tax payable	10,991		12,672
Due to brokers ($134 and $128) (1)	134		501
Other liabilities and accrued expenses ($358 and $326) (1)	10,050		15,646
Total liabilities	81,501		123,549
Commitments and contingencies (See Note 11)
Redeemable noncontrolling interests	62,365		50,665
Stockholders' equity:
Common stock, $0.01 par value; 500,000,000 shares authorized; 54,220,098 and 53,462,621 shares issued at March 31, 2021 and December 31, 2020, respectively	542		535
Additional paid-in capital	680,466		670,142
Accumulated deficit	(265,034)		(291,542)
Accumulated other comprehensive loss, net of tax	(4,729)		(4,134)
Less: Treasury stock, at cost, 5,983,474 and 5,674,510 shares at March 31, 2021 and December 31, 2020, respectively	(222,018)		(200,762)
Total stockholders' equity	189,227		174,239
Total liabilities and stockholders' equity	$	333,093	$	348,453

_________________________

(1) Asset and liability amounts in parentheses represent the aggregated balances at March 31, 2021 and December 31, 2020 attributable to variable interest entities consolidated by the Company. Refer to Note 4 for further discussion.

See notes to condensed consolidated financial statements

COHEN & STEERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share data)


	Three Months Ended March 31,
	2021		2020
Revenue:
Investment advisory and administration fees	$	116,921	$	97,289
Distribution and service fees	8,272		7,783
Other	554		758
Total revenue	125,747		105,830
Expenses:
Employee compensation and benefits	45,762		38,617
Distribution and service fees	16,506		14,104
General and administrative	10,374		23,588
Depreciation and amortization	1,167		1,152
Total expenses	73,809		77,461
Operating income (loss)	51,938		28,369
Non-operating income (loss):
Interest and dividend income—net	616		1,149
Gain (loss) from investments—net	4,559		(22,027)
Foreign currency gain (loss)—net	(222)		1,035
Total non-operating income (loss)	4,953		(19,843)
Income before provision for income taxes	56,891		8,526
Provision for income taxes	4,461		458
Net income	52,430		8,068
Less: Net (income) loss attributable to redeemable noncontrolling interests	(3,578)		12,504
Net income attributable to common stockholders	$	48,852	$	20,572

Earnings per share attributable to common stockholders:
Basic	$	1.01	$	0.43
Diluted	$	1.00	$	0.42
Dividends declared per share	$	0.45	$	0.39
Weighted average shares outstanding:
Basic	48,145		47,651
Diluted	48,709		48,591

See notes to condensed consolidated financial statements

COHEN & STEERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)


	Three Months Ended March 31,
	2021		2020
Net income	$	52,430	$	8,068
Less: Net (income) loss attributable to redeemable noncontrolling interests	(3,578)		12,504
Net income attributable to common stockholders	48,852		20,572
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss)	(595)		(1,500)
Total comprehensive income attributable to common stockholders	$	48,257	$	19,072

See notes to condensed consolidated financial statements

COHEN & STEERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND

REDEEMABLE NONCONTROLLING INTERESTS (Unaudited)

(in thousands, except per share data)


	Three Months Ended March 31, 2021
	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock		Total Stockholders' Equity		Redeemable Noncontrolling Interests
January 1, 2021	$	535	$	670,142	$	(291,542)	$	(4,134)	$	(200,762)	$	174,239	$	50,665
Dividends ($0.45 per share)	—		—		(22,344)		—		—		(22,344)		—
Issuance of common stock	7		423		—		—		—		430		—
Repurchase of common stock	—		—		—		—		(21,256)		(21,256)		—
Issuance of restricted stock units—net	—		793		—		—		—		793		—
Amortization of restricted stock units	—		9,185		—		—		—		9,185		—
Forfeitures of restricted stock units	—		(77)		—		—		—		(77)		—
Net income (loss)	—		—		48,852		—		—		48,852		3,578
Other comprehensive income (loss), net of tax	—		—		—		(595)		—		(595)		—
Net contributions (distributions) attributable to redeemable noncontrolling interests	—		—		—		—		—		—		8,122

March 31, 2021	$	542	$	680,466	$	(265,034)	$	(4,729)	$	(222,018)	$	189,227	$	62,365

	Three Months Ended March 31, 2020
	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock		Total Stockholders' Equity		Redeemable Noncontrolling Interests
January 1, 2020	$	527	$	636,788	$	(242,461)	$	(6,326)	$	(174,825)	$	213,703	$	53,412
Dividends ($0.39 per share)	—				(19,041)		—		—		(19,041)		—
Issuance of common stock	8		297		—		—		—		305		—
Repurchase of common stock	—		—		—		—		(25,847)		(25,847)		—
Issuance of restricted stock units—net	—		553		—		—		—		553		—
Amortization of restricted stock units	—		6,775		—		—		—		6,775		—
Forfeitures of restricted stock units	—		(16)		—		—		—		(16)		—
Net income (loss)	—		—		20,572		—		—		20,572		(12,504)
Other comprehensive income (loss), net of tax	—		—		—		(1,500)		—		(1,500)		—
Net contributions (distributions) attributable to redeemable noncontrolling interests	—		—		—		—		—		—		693
March 31, 2020	$	535	$	644,397	$	(240,930)	$	(7,826)	$	(200,672)	$	195,504	$	41,601

See notes to condensed consolidated financial statements

COHEN & STEERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)


	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net income	$	52,430	$	8,068
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense—net	9,348		6,970
Amortization of deferred commissions	347		443
Depreciation and amortization	1,167		1,152
Amortization of right-of-use assets	2,557		2,479
Amortization (accretion) of premium (discount)	17		(84)
(Gain) loss from investments—net	(4,559)		22,027
Deferred income taxes	4,919		281
Foreign currency (gain) loss	1,059		158
Changes in operating assets and liabilities:
Accounts receivable	(3,336)		(4,716)
Due from brokers	(956)		1,598
Deferred commissions	(358)		(440)
Investments within consolidated Company-sponsored funds	(8,695)		(2,011)

Other assets	(2,978)		(2,343)
Accrued compensation	(32,396)		(35,309)
Distribution and service fees payable	850		(1,289)
Operating lease liabilities	(2,858)		(2,762)
Due to brokers	(367)		(284)
Income tax payable	(1,684)		968
Other liabilities and accrued expenses	(5,594)		(459)
Net cash provided by (used in) operating activities	8,913		(5,553)
Cash flows from investing activities:

Purchases of investments	(17,417)		(9,634)
Proceeds from sales and maturities of investments	57,048		2,392
Purchases of property and equipment	(431)		(843)
Proceeds from sales of property and equipment	—		73
Net cash provided by (used in) investing activities	39,200		(8,012)
Cash flows from financing activities:
Issuance of common stock—net	365		259
Repurchase of common stock	(21,256)		(25,847)
Dividends to stockholders	(21,726)		(18,653)
Distributions to redeemable noncontrolling interests	(733)		(1,946)
Contributions from redeemable noncontrolling interests	8,855		2,639
Net cash provided by (used in) financing activities	(34,495)		(43,548)
Net increase (decrease) in cash and cash equivalents	13,618		(57,113)
Effect of foreign exchange rate changes on cash and cash equivalents	(133)		(1,279)
Cash and cash equivalents, beginning of the period	41,232		101,352
Cash and cash equivalents, end of the period	$	54,717	$	42,960

See notes to condensed consolidated financial statements

COHEN & STEERS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)

(UNAUDITED)

Supplemental disclosures of cash flow information:

During the three months ended March 31, 2021, the Company paid taxes of approximately $1,226,000. During the three months ended March 31, 2020, the Company paid taxes of approximately $1,784,000 and received tax refunds of approximately $2,517,000.

Supplemental disclosures of non-cash investing and financing activities:

In connection with its stock incentive plan, the Company recorded restricted stock unit dividend equivalents, net of forfeitures, in the amount of approximately $618,000 and $388,000 for the three months ended March 31, 2021 and 2020, respectively. These amounts are included in the issuance of restricted stock units and dividends in the condensed

consolidated statements of changes in stockholders' equity.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization and Description of Business

Cohen & Steers, Inc. (CNS) was organized as a Delaware corporation on March 17, 2004. CNS is the holding company for its direct and indirect subsidiaries, including Cohen & Steers Capital Management, Inc. (CSCM), Cohen & Steers Securities, LLC (CSS), Cohen & Steers Asia Limited (CSAL), Cohen & Steers UK Limited (CSUK), Cohen & Steers Japan Limited (CSJL) and Cohen & Steers Ireland Limited (CSIL) (collectively, the Company).

The Company is a leading global investment manager specializing in real assets and alternative income, including real estate, preferred securities, infrastructure, resource equities, commodities, as well as multi-strategy solutions. Founded in 1986, the Company is headquartered in New York City, with offices in London, Dublin, Hong Kong and Tokyo.

2. Basis of Presentation and Significant Accounting Policies

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The condensed consolidated financial statements set forth herein include the accounts of CNS and its direct and indirect subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements of the Company included herein are unaudited and have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the interim results have been made. The Company's condensed consolidated financial statements and the related notes should be read together with the consolidated financial statements and the related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Recently Adopted Accounting Pronouncements—In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying Accounting for Income Taxes. The standard is intended to simplify various aspects related to income taxes and removes certain exceptions to the general principles in Topic 740. This new guidance became effective on January 1, 2021. The Company's adoption of the new standard did not have a material effect on its condensed consolidated financial statements and related disclosures.

Accounting Estimates—The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes the estimates used in preparing the condensed consolidated financial statements are reasonable and prudent. Actual results could differ from those estimates.

Consolidation of Company-sponsored Funds—Investments in Company-sponsored funds and management fees are evaluated at inception and thereafter, if there is a reconsideration event, in order to determine whether to apply the Variable Interest Entity (VIE) model or the Voting Interest Entity (VOE) model. In performing this analysis, all of the Company's management fees are presumed to be commensurate and at market and are therefore not considered variable interests.

A VIE is an entity in which either (i) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support or (ii) the group of holders of the equity investment at risk lack certain characteristics of a controlling financial interest. The primary beneficiary is the entity that has (i) the power to direct the activities of the VIE that most significantly affect its performance, and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Investments and redemptions or amendments to the governing documents of the respective entities could affect an entity's status as a VIE or the determination of the primary beneficiary. The Company assesses whether it is the primary beneficiary of any VIEs identified by evaluating its economic interests in the entity held either directly by the Company and its affiliates or indirectly through employees. VIEs for which the Company is deemed to be the primary beneficiary are consolidated.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

Investments in Company-sponsored funds that are determined to be VOEs are consolidated when the Company's ownership interest is greater than 50% of the outstanding voting interests of the fund or when the Company is the general partner of the fund and the limited partners do not have substantive kick-out or participating rights in the fund.

The Company records noncontrolling interests in consolidated Company-sponsored funds for which the Company's ownership is less than 100%.

Cash and Cash Equivalents—Cash and cash equivalents are on deposit with several highly rated financial institutions and include short-term, highly-liquid investments, which are readily convertible into cash and have original maturities of three months or less.

Due from/to Brokers—The Company, including the consolidated Company-sponsored funds, may transact with brokers for certain investment activities. The clearing and custody operations for these investment activities are performed pursuant to contractual agreements. The due from/to brokers balance represents cash and/or cash collateral balances at brokers/custodians and/or receivables and payables for unsettled securities transactions with brokers.

Investments—Management of the Company determines the appropriate classification of its investments at the time of purchase and re-evaluates such determination no less than on a quarterly basis. At March 31, 2021, the Company's investments were comprised of the following:

•Equity investments at fair value, which generally represent equity securities held within the consolidated Company-sponsored funds, listed equity securities held directly for the purposes of establishing performance track records and seed investments in Company-sponsored open-end funds where the Company has neither control nor the ability to exercise significant influence.

•Trading investments, which generally represent debt securities held within the consolidated Company-sponsored funds and listed debt securities held directly for the purposes of establishing performance track records.

•Held-to-maturity investments, if any, generally represent corporate investments in U.S. Treasury securities recorded at amortized cost. Under the current expected credit loss model, any expected credit losses are recognized as an allowance, which represents an adjustment to the amortized costs basis. The Company did not hold any held-to-maturity investments at March 31, 2021.

•Equity method investments, which generally represent seed investments in Company-sponsored funds in which the Company owns between 20-50% of the outstanding voting interests or when it is determined that the Company is able to exercise significant influence but not control over the investments. When using the equity method, the Company recognizes its respective share of net income or loss for the period which is recorded as gain (loss) from investments—net in the Company's condensed consolidated statements of operations.

Realized and unrealized gains and losses on equity investments at fair value, trading investments and equity method investments are recorded in gain (loss) from investments—net in the Company's condensed consolidated statements of operations.

From time to time, the Company, including the consolidated Company-sponsored funds, may enter into derivative contracts, including options, futures and swaps contracts, to gain exposure to the underlying commodities markets or to economically hedge market risk of the underlying portfolios. Gains and losses on derivative contracts are recorded as gain (loss) from investments—net in the Company's condensed consolidated statements of operations. The fair values of these instruments are recorded in other assets or other liabilities and accrued expenses on the Company's condensed consolidated statements of financial condition.

Additionally, from time to time, the Company, including the consolidated Company-sponsored funds, may enter into forward foreign exchange contracts to economically hedge its currency exposure. These instruments are measured at fair value based on the prevailing forward exchange rate with gains and losses recorded in foreign currency gain (loss)—net in the Company’s condensed consolidated statements of operations. The fair values of these contracts are recorded in other assets or other liabilities and accrued expenses on the Company’s condensed consolidated statements of financial condition.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

Leases—The Company determines if an arrangement is a lease at inception. The Company has operating leases for corporate offices and certain information technology equipment and these leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities on the Company’s condensed consolidated statements of financial condition.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent obligations to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the net present value of lease payments over the lease term. The majority of the Company’s lease agreements do not provide an implicit rate. As a result, the Company used an incremental borrowing rate based on the information available as of lease commencement dates in determining the present value of lease payments. The operating lease ROU asset reflects any upfront lease payments made as well as lease incentives received. The lease terms may include options to extend or terminate the lease and these are factored into the determination of the ROU asset and lease liability at lease inception when and if it is reasonably certain that the Company will exercise that option. Lease expense for fixed lease payments is recognized on a straight-line basis over the lease term.

The Company has certain lease agreements with non-lease components such as maintenance and executory costs, which are accounted for separately and not included in ROU assets.

ROU assets are tested for impairment whenever changes in facts or circumstances indicate that the carrying amount of an asset may not be recoverable. Modification of a lease term would result in re-measurement of the lease liability and a corresponding adjustment to the ROU asset.

Goodwill and Intangible Assets—Goodwill represents the excess of the cost of the Company's investment in the net assets of an acquired company over the fair value of the underlying identifiable net assets at the date of acquisition. Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment by comparing the fair value to their carrying amounts.

Redeemable Noncontrolling Interests—Redeemable noncontrolling interests represent third-party interests in the consolidated Company-sponsored funds. These interests are redeemable at the option of the investors and therefore are not treated as permanent equity. Redeemable noncontrolling interest is recorded at fair value which approximates the redemption value at each reporting period.

Investment Advisory and Administration Fees—The Company earns revenue by providing asset management services to institutional accounts, Company-sponsored open-end and closed-end funds as well as model-based portfolios. Investment advisory fees are earned pursuant to the terms of investment management agreements and are generally based on a contractual fee rate applied to the average assets under management. The Company also earns administration fees from certain Company-sponsored open-end and closed-end funds pursuant to the terms of underlying administration contracts. Administration fees are based on the average daily assets under management of such funds. Investment advisory and administration fee revenue is recognized when earned and is recorded net of any fund reimbursements. The investment advisory and administration contracts each include a single performance obligation as the services provided are not separately identifiable and are accounted for as a series satisfied over time using a time-based method (days elapsed). Additionally, investment advisory and administration fees represent variable consideration, as fees are based on average assets under management which fluctuate daily.

In certain instances, the Company may earn performance fees when specified performance hurdles are met during the performance period. Performance fees are forms of variable consideration and are not recognized until it becomes probable that there will not be a significant reversal of the cumulative revenue recognized.

Distribution and Service Fee Revenue—Distribution and service fee revenue is based on the average daily net assets of certain share classes of the Company's sponsored open-end funds distributed by CSS. Distribution and service fee revenue is earned daily and is generally recorded gross of any third-party distribution and service fee expense for applicable share classes.

Distribution fee agreements include a single performance obligation that is satisfied at a point in time when an investor purchases shares in a Company-sponsored open-end fund. Distribution fees represent variable consideration, as fees are based on average assets under management which fluctuate daily. For all periods presented, a portion of the distribution fee revenue recognized in the period may relate to performance obligations satisfied (or partially satisfied) in prior periods. Service fee agreements include a single performance obligation as the services provided are not separately identifiable and are accounted

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

for as a series satisfied over time using a time-based method (days elapsed). Service fees represent variable consideration, as fees are based on average assets under management which fluctuate daily.

Distribution and Service Fee Expense—Distribution and service fee expense includes distribution fees, shareholder servicing fees and intermediary assistance payments. Distribution and service fee expense is recorded on an accrual basis.

Distribution fees represent payments made to qualified intermediaries for (i) assistance in connection with the distribution of the Company's sponsored open-end funds' shares and (ii) for other expenses such as advertising, printing and distribution of prospectuses to investors. Such amounts may also be used to pay financial intermediaries for services as specified in the terms of written agreements complying with Rule 12b-1 of the Investment Company Act of 1940. Distribution fees are based on the average daily net assets under management of certain share classes of certain of the funds.

Shareholder servicing fees represent payments made to qualified intermediaries for shareholder account service and maintenance. These services are provided pursuant to written agreements with such qualified institutions. Shareholder servicing fees are generally based on the average daily assets under management.

Intermediary assistance payments represent payments to qualified intermediaries for activities related to distribution, shareholder servicing as well as marketing and support of the Company's sponsored open-end funds and are incremental to those described above. Intermediary assistance payments are generally based on the average assets under management.

Stock-based Compensation—The Company recognizes compensation expense for the grant-date fair value of awards of equity instruments to certain employees. This expense is recognized over the period during which employees are required to provide service. Forfeitures are recorded as incurred.

Income Taxes—The Company records the current and deferred tax consequences of all transactions that have been recognized in the condensed 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. The Company records a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized. The effective tax rate for interim periods is based on the Company's best estimate of the effective tax rate expected to be applied to the full fiscal year adjusted for discrete items during the period.

The calculation of tax liabilities involves uncertainties in the application of complex tax laws and regulations across the Company's global operations. A tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, on the basis of the technical merits. The Company records potential interest and penalties related to uncertain tax positions in the provision for income taxes in the condensed consolidated statements of operations.

Currency Translation and Transactions—Assets and liabilities of subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the applicable condensed consolidated statement of financial condition date. Revenue and expenses of such subsidiaries are translated at average exchange rates during the period. The gains or losses resulting from translating non-U.S. dollar functional currency into U.S. dollars are included in the Company's condensed consolidated statements of comprehensive income. The cumulative translation adjustment was $(4,729,000) and ($4,134,000) at March 31, 2021 and December 31, 2020, respectively. Gains or losses resulting from transactions denominated in currencies other than the U.S. dollar within certain foreign subsidiaries are included in non-operating income (loss) in the condensed consolidated statements of operations. Gains and losses arising on revaluation of U.S. dollar-denominated assets and liabilities held by foreign subsidiaries are also included in non-operating income (loss) in the Company’s condensed consolidated statements of operations.

Comprehensive Income—The Company reports all changes in comprehensive income in the condensed consolidated statements of comprehensive income. Comprehensive income generally includes net income or loss attributable to common stockholders and amounts attributable to foreign currency translation gain (loss), net of tax.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

3. Revenue

The following tables summarize revenue recognized from contracts with customers by client domicile and by investment vehicle:


	Three Months Ended March 31,
(in thousands)	2021		2020
Client domicile:
North America	$	110,316	$	91,007
Japan	8,532		8,416
Europe, Middle East and Africa	3,981		3,335
Asia Pacific excluding Japan	2,918		3,072
Total	$	125,747	$	105,830


	Three Months Ended March 31,
(in thousands)	2021		2020







Investment vehicle:
Open-end funds (1)	$	68,875	$	57,591
Institutional accounts	30,987		27,859
Closed-end funds	25,331		19,622
Other	554		758
Total	$	125,747	$	105,830

________________________

(1) Included distribution and service fees of $8.3 million and $7.8 million for the three months ended March 31, 2021 and 2020, respectively.

4. Investments

The following table summarizes the Company's investments:


(in thousands)	March 31, 2021		December 31, 2020
Equity investments at fair value	$	100,486	$	94,089
Trading	27,936		18,700
Held-to-maturity carried at amortized cost (1)	—		41,648
Equity method	15		541
Total investments	$	128,437	$	154,978

_________________________

(1) At December 31, 2020, held-to-maturity investments comprised of U.S. Treasury securities had a fair value of approximately $41.7 million. These securities would have been classified as level 2 within the fair value hierarchy if carried at fair value. During the first quarter of 2021, two of these securities matured ($25.0 million) and two securities were sold ($16.7 million).

There were no new funds seeded for either the three months ended March 31, 2021 or 2020.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

The following table summarizes gain (loss)—net from investments:


	Three Months Ended March 31,
(in thousands)	2021		2020
Net realized gains (losses) during the period	$	1,889	$	(1,230)
Net unrealized gains (losses) during the period on investments still held at the end of the period	2,670		(20,797)
Gain (loss) from investments—net (1)	$	4,559	$	(22,027)

________________________

(1) Included net income (loss) attributable to redeemable noncontrolling interests.

At March 31, 2021 and December 31, 2020, the Company's consolidated VIEs included the Cohen & Steers SICAV Global Listed Infrastructure Fund (GLI SICAV), the Cohen & Steers SICAV Global Real Estate Fund (SICAV GRE), the Cohen & Steers SICAV Diversified Real Assets Fund (SICAV RAP) and the Cohen & Steers Co-Investment Partnership, L.P. (GRP-CIP).

The following tables summarize the condensed consolidated statements of financial condition attributable to the Company's consolidated VIEs:


	March 31, 2021
(in thousands)	GLI SICAV		SICAV GRE		SICAV RAP		GRP-CIP		Total
Assets (1)
Investments	$	7,426	$	48,270	$	38,357	$	265	$	94,318
Due from brokers	7		144		131		57		339
Other assets	15		165		138		—		318
Total assets	$	7,448	$	48,579	$	38,626	$	322	$	94,975

Liabilities (1)
Due to brokers	$	4	$	28	$	102	$	—	$	134
Other liabilities and accrued expenses	20		65		263		10		358
Total liabilities	$	24	$	93	$	365	$	10	$	492


	December 31, 2020
(in thousands)	GLI SICAV		SICAV GRE		SICAV RAP		GRP-CIP		Total
Assets (1)
Investments	$	7,140	$	39,672	$	33,654	$	277	$	80,743
Due from brokers	69		45		52		57		223
Other assets	44		359		234		—		637
Total assets	$	7,253	$	40,076	$	33,940	$	334	$	81,603

Liabilities (1)
Due to brokers	$	27	$	40	$	61	$	—	$	128
Other liabilities and accrued expenses	29		211		81		5		326
Total liabilities	$	56	$	251	$	142	$	5	$	454

_________________________

(1) The assets may only be used to settle obligations of each VIE and the liabilities are the sole obligation of each VIE, for which creditors do not have recourse to the general credit of the Company.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

5. Fair Value

Accounting Standards Codification Topic 820, Fair Value Measurement (ASC 820) specifies a hierarchy of valuation classifications based on whether the inputs to the valuation techniques used in each valuation classification are observable or unobservable. These classifications are summarized in the three broad levels listed below:

•Level 1—Unadjusted quoted prices for identical instruments in active markets.

•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable.

•Level 3—Valuations derived from valuation techniques in which significant inputs or significant value drivers are unobservable.

Inputs used to measure fair value might fall in different levels of the fair value hierarchy, in which case the Company defaults to the lowest level input that is significant to the fair value measurement in its entirety. These levels are not necessarily an indication of the risk or liquidity associated with the investments.

The following tables present fair value measurements:


	March 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Investments Measured at NAV as FV		Total
Cash equivalents	$	30,596	$	—	$	—	$	—	$	30,596
Equity investments at fair value:
Common stocks	$	97,246	$	224	$	—	$	—	$	97,470
Company-sponsored funds	174		—		—		—		174
Limited partnership interests	965		—		—		265		1,230
Preferred securities	1,466		18		—		—		1,484
Other	—		—		—		128		128
Total	$	99,851	$	242	$	—	$	393	$	100,486
Trading investments:
Fixed income	$	—	$	27,936	$	—	$	—	$	27,936

Equity method investments	$	—	$	—	$	—	$	15	$	15

Total investments	$	99,851	$	28,178	$	—	$	408	$	128,437

Derivatives - assets:
Futures - commodities	$	783	$	—	$	—	$	—	$	783
Total return swaps - commodities	—		147		—		—		147
Forward contracts - foreign exchange	—		801		—		—		801
Total	$	783	$	948	$	—	$	—	$	1,731
Derivatives - liabilities:
Futures - commodities	$	630	$	—	$	—	$	—	$	630
Total return swaps - commodities (1)	—		210		—		—		210
Total return swaps - equities	—		1,078		—		—		1,078
Forward contracts - foreign exchange	—		12		—		—		12
Total	$	630	$	1,300	$	—	$	—	$	1,930

________________________

(1) Included total return swaps - commodities held by consolidated Company-sponsored funds.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)


	December 31, 2020
(in thousands)	Level 1		Level 2		Level 3		Investments Measured at NAV as FV		Investments Carried at Amortized Cost		Total
Cash equivalents	$	23,372	$	—	$	—	$	—	$	—	$	23,372
Equity investments at fair value:
Common stocks	$	91,614	$	—	$	—	$	—	$	—	$	91,614
Company-sponsored funds	246		—		—		—		—		246
Limited partnership interests	831		—		—		277		—		1,108
Preferred securities	983		12		—		—		—		995
Other	—		—		—		126		—		126
Total	$	93,674	$	12	$	—	$	403	$	—	$	94,089
Trading investments:
Fixed income	$	—	$	18,700	$	—	$	—	$	—	$	18,700
Held-to-maturity investments	$	—	$	—	$	—	$	—	$	41,648	$	41,648
Equity method investments	$	—	$	—	$	—	$	541	$	—	$	541

Total investments	$	93,674	$	18,712	$	—	$	944	$	41,648	$	154,978

Derivatives - assets:
Futures - commodities	$	1,012	$	—	$	—	$	—	$	—	$	1,012


Derivatives - liabilities:
Futures - commodities	$	416	$	—	$	—	$	—	$	—	$	416
Total return swaps - commodities	—		136		—		—		—		136
Total return swaps - equities	—		1,562		—		—		—		1,562
Forward contracts - foreign exchange	—		345		—		—		—		345
Total	$	416	$	2,043	$	—	$	—	$	—	$	2,459

Cash equivalents were comprised of investments in actively traded U.S. Treasury money market funds measured at NAV.

Equity investments at fair value classified as level 2 were comprised of common stocks and preferred securities with predominately equity-like characteristics for which quoted prices in active markets are not available. Fair values for the common stocks classified as level 2 were generally based on quoted prices for similar instruments in active markets. Fair values for the preferred securities classified as level 2 were generally determined using third-party pricing services. The pricing services may utilize pricing models, and inputs into those models may include reported trades, executable bid and ask prices, broker-dealer quotations, prices or yields of similar securities, benchmark curves and other market information. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security.

Trading investments classified as level 2 were comprised of U.S. Treasury securities and corporate debt securities. The fair value amounts were generally determined using third-party pricing services. The pricing services may utilize evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information.

Investments measured at NAV were comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient. These investments were comprised of:

•Equity investments at fair value - included limited partner interests in limited partnership vehicles that invest in non-registered real estate funds and the Company's co-investment in a Cayman trust invested in global listed infrastructure securities (which is included in "Other" in the leveling table), both of which are valued based on the NAVs of the underlying investments. At March 31, 2021 and December 31, 2020, the Company

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

did not have the ability to redeem the interests in the limited partnership vehicles; there were no contractual restrictions on the Company's ability to redeem its interest in the Cayman trust.

•Equity method investments - included the Company's partnership interests in the Cohen & Steers Global Realty Partners III-TE, L.P. (GRP-TE) at March 31, 2021 and December 31, 2020. GRP-TE invests in non-registered real estate funds. The Company's ownership interest was approximately 0.2% and the Company did not have the ability to redeem the investment at either March 31, 2021 or December 31, 2020. In addition, at December 31, 2020, the Cohen & Steers Global Realty Focus Fund (GRF), a series of Cohen & Steers Series LP was included. During the first quarter of 2021, GRF was redeemed.

Held-to-maturity investments at December 31, 2020, were comprised of U.S. Treasury securities, which were directly issued by the U.S. government. These securities were purchased with the intent to hold to maturity and were recorded at amortized cost.

Investments measured at NAV and held-to-maturity investments have not been classified in the fair value hierarchy. The amounts presented in the above tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the condensed consolidated statements of financial condition.

Swap contracts classified as level 2 were valued based on the underlying futures contracts or equity indices.

Foreign currency exchange contracts classified as level 2 were valued based on the prevailing forward exchange rate, which is an input that is observable in active markets.

Valuation Techniques

In certain instances, debt, equity and preferred securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable broker-dealers or independent pricing services. In determining the value of a particular investment, independent pricing services may use information with respect to transactions in such investments, broker quotes, pricing matrices, market transactions in comparable investments and various relationships between investments. As part of its independent price verification process, the Company generally performs reviews of valuations provided by broker-dealers or independent pricing services. Investments in Company-sponsored funds are valued at their closing price or NAV (or its equivalent) as a practical expedient.

In the absence of observable market prices, the Company values its investments using valuation methodologies applied on a consistent basis. For some investments, little market activity may exist; management's determination of fair value is then based on the best information available in the circumstances, and may incorporate management's own assumptions and involve a significant degree of judgment, taking into consideration a combination of internal and external factors. Such investments, which are generally immaterial, are valued on a quarterly basis, taking into consideration any changes in key inputs and changes in economic and other relevant conditions, and valuation models are updated accordingly. The valuation process also includes a review by the Company's valuation committee which is comprised of senior members from various departments within the Company, including investment management. The valuation committee provides independent oversight of the valuation policies and procedures.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

6. Derivatives

The following tables summarize the notional amount and fair value of the outstanding derivative financial instruments none of which were designated in a formal hedging relationship:


	As of March 31, 2021
	Notional Amount				Fair Value (1)
(in thousands)	Long		Short		Assets		Liabilities
Corporate derivatives:
Futures - commodities	$	13,611	$	3,114	$	783	$	630
Total return swaps - commodities	—		10,189		147		—
Total return swaps - equities	—		19,240		—		1,078
Forward contracts - foreign exchange	—		17,648		801		12
Total corporate derivatives	$	13,611	$	50,191	$	1,731	$	1,720
Derivatives held by consolidated Company-sponsored funds:
Total return swaps - commodities	7,743		—		—		210
Total	$	21,354	$	50,191	$	1,731	$	1,930


	As of December 31, 2020
	Notional Amount				Fair Value (1)
(in thousands)	Long		Short		Assets		Liabilities
Corporate derivatives:
Futures - commodities	$	13,624	$	4,257	$	1,012	$	416
Total return swaps - commodities	—		9,598		—		136
Total return swaps - equities	—		17,688		—		1,562
Forward contracts - foreign exchange	—		14,061		—		345
Total	$	13,624	$	45,604	$	1,012	$	2,459

________________________

(1)The fair value of derivative financial instruments is recorded in other assets and other liabilities and accrued expenses on the Company's condensed consolidated statements of financial condition.

Our corporate derivatives include:

•Commodity futures utilized to gain exposure in the commodities market for the purpose of establishing a performance track record;

•Commodity swap contracts utilized as economic hedges to reduce the overall risk of the Company's market exposure to seed investments in commodity futures;

•Equity swap contracts utilized to economically hedge a portion of the market risk of certain other seed investments; and

•Foreign exchange forward contracts to economically hedge currency exposure arising from certain non-U.S. dollar investment advisory fees.

Non-corporate derivatives are comprised of commodity swap contracts that are utilized by certain of the consolidated Company-sponsored funds to gain exposure in the commodities market as part of the funds' investment strategies.

Cash included in due from brokers on the condensed consolidated statements of financial condition of approximately $5,740,000 and $4,902,000 at March 31, 2021 and December 31, 2020, respectively, was held as collateral for corporate derivatives including futures, forward and swap contracts. Investments on the condensed consolidated statements of financial condition of approximately $1,048,000 and $1,544,000 at March 31, 2021 and December 31, 2020, respectively, comprised of U.S. Treasury securities, were held as collateral for corporate derivatives including futures and swap contracts. There was no collateral required for the non-corporate derivatives at March 31, 2021.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

The following table summarizes net gains (losses) from derivative financial instruments:


	Three Months Ended March 31,
(in thousands)	2021		2020
Corporate derivatives:
Futures - commodities	$	705	$	(2,101)
Total return swaps - commodities	(658)		2,141
Total return swaps - equities	(1,068)		—
Forward contracts - foreign exchange	1,134		97
Total corporate derivatives	$	113	$	137
Derivatives held by consolidated Company-sponsored funds:
Total return swaps - commodities	(121)		—
Total (1)	$	(8)	$	137

________________________

(1) Gains and losses on derivative financial instruments are recorded in gain (loss) from investments—net in the Company's

condensed consolidated statements of operations.

7. Earnings Per Share

Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted average shares outstanding. Diluted earnings per share is calculated by dividing net income attributable to common stockholders by the total weighted average shares of common stock outstanding and common stock equivalents determined using the treasury stock method. Common stock equivalents are comprised of dilutive potential shares from restricted stock unit awards and are excluded from the computation if their effect is anti-dilutive.

The following table reconciles income and share data used in the basic and diluted earnings per share computations:


	Three Months Ended March 31,
(in thousands, except per share data)	2021		2020
Net income	$	52,430	$	8,068
Less: Net (income) loss attributable to redeemable noncontrolling interests	(3,578)		12,504
Net income attributable to common stockholders	$	48,852	$	20,572
Basic weighted average shares outstanding	48,145		47,651
Dilutive potential shares from restricted stock units	564		940
Diluted weighted average shares outstanding	48,709		48,591

Basic earnings per share attributable to common stockholders	$	1.01	$	0.43
Diluted earnings per share attributable to common stockholders	$	1.00	$	0.42
Anti-dilutive common stock equivalents excluded from the calculation	—		—

8. Income Taxes

The provision for income taxes included U.S. federal, state, local and foreign taxes. The effective tax rate for the three months ended March 31, 2021 was approximately 8.4%, compared with approximately 2.2% for the three months ended March 31, 2020. The effective tax rate for the three months ended March 31, 2021 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign income taxes which were more than offset by discrete tax items, primarily related to the reversal of certain liabilities associated with unrecognized tax benefits and the appreciated value of the restricted stock units delivered in January 2021. The effective tax rate for the three months ended March 31, 2020 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign income taxes which were more than offset by discrete tax items primarily related to the appreciated value of restricted stock units delivered in January 2020.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

Deferred income taxes represent the tax effects of the temporary differences between book and tax bases and are measured using enacted tax rates that will be in effect when such items are expected to reverse. The Company's net deferred tax asset was primarily comprised of future income tax deductions attributable to the delivery of unvested restricted stock units. The Company records a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized.

9. Regulatory Requirements

CSS, a registered broker-dealer in the U.S., is subject to the SEC's Uniform Net Capital Rule 15c3-1 (the Rule), which requires that broker-dealers maintain a minimum level of net capital, as prescribed by the Rule. At March 31, 2021, CSS had net capital of approximately $3,847,000, which exceeded its requirement by approximately $3,577,000. The Rule also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital of a broker-dealer is less than the amount required under the Rule and requires prior notice to the SEC for certain withdrawals of capital. CSS does not carry customer accounts and has no possession or control obligations under SEA Rule 15c3-3(b) or reserve deposit obligations under SEA Rule 153-3(e).

CSAL is subject to regulation by the Hong Kong Securities and Futures Commission. At March 31, 2021, CSAL had regulatory capital of approximately $6,773,000, which exceeded its minimum regulatory capital requirement by approximately $6,387,000.

CSUK is subject to regulation by the United Kingdom Financial Conduct Authority. At March 31, 2021, CSUK had regulatory capital of approximately $33,273,000, which exceeded its minimum regulatory capital requirement by approximately $27,932,000.

CSIL is subject to regulation by the Central Bank of Ireland. At March 31, 2021, CSIL had regulatory capital of approximately $2,932,000, which exceeded its minimum regulatory capital requirement by approximately $2,613,000.

CSJL is registered with the Financial Services Agency of Japan and the Kanto Local Finance Bureau and is subject to the Financial Instruments and Exchange Act. In accordance with its license, CSJL is required to maintain regulatory capital, as defined, of approximately $453,000. At March 31, 2021, CSJL had stated capital in excess of this requirement.

10. Related Party Transactions

The Company is an investment adviser to, and has administration agreements with, Company-sponsored funds for which certain employees are officers and/or directors.

The following table summarizes the amount of revenue the Company earned from these affiliated funds:


	Three Months Ended March 31,
(in thousands)	2021		2020
Investment advisory and administration fees (1)	$	84,648	$	68,342
Distribution and service fees	8,272		7,783
Total	$	92,920	$	76,125

_________________________

(1) Investment advisory and administration fees are reflected net of fund reimbursements of $3.5 million and $3.2 million for the three months ended March 31, 2021 and 2020, respectively.

COHEN & STEERS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

The following table summarizes sales proceeds, gross realized gains, gross realized losses and dividend income from investments in Company-sponsored funds that are not consolidated:


	Three Months Ended March 31,
(in thousands)	2021		2020
Proceeds from sales	$	74	$	7
Gross realized gains	1		—
Gross realized losses	(2)		—
Dividend income	1		1

Included in accounts receivable at March 31, 2021 and December 31, 2020 are receivables due from Company-sponsored funds of approximately $33,089,000 and $30,163,000, respectively. Included in accounts payable at March 31, 2021 and December 31, 2020 are payables due to Company-sponsored funds of approximately $152,000 and $574,000, respectively.

11. Commitments and Contingencies

From time to time, the Company is involved in legal matters relating to claims arising in the ordinary course of business. There are currently no such matters pending that the Company believes could have a material adverse effect on its condensed consolidated results of operations, cash flows or financial position.

The Company periodically commits to fund a portion of the equity in certain of its sponsored investment products. The Company has committed to co-invest up to $5,100,000 alongside GRP-TE, a portion of which is made through GRP-TE and the remainder of which is made through GRP-CIP for up to 12 years through the life of GRP-TE. As of March 31, 2021, the Company has funded approximately $3,800,000 with respect to this commitment. The actual timing for funding the unfunded portion of this commitment is currently unknown, as the drawdown of the Company's unfunded commitment is contingent on the timing of drawdowns by the underlying funds in which GRP-TE and GRP-CIP invest. The unfunded commitment was not recorded on the Company's condensed consolidated statements of financial condition.

12. Concentration of Credit Risk

The Company's cash and cash equivalents are principally on deposit with major financial institutions. The Company is subject to credit risk should these financial institutions be unable to fulfill their obligations.

13. Subsequent Events

The Company has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the condensed consolidated financial statements were issued. Other than the items described below, the Company determined that there were no additional subsequent events that require disclosure and/or adjustment.

On May 6, 2021, the Company declared a quarterly dividend on its common stock in the amount of $0.45 per share. The dividend will be payable on May 27, 2021 to stockholders of record at the close of business on May 17, 2021.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Set forth on the following pages is management's discussion and analysis of our financial condition and results of operations for the three months ended March 31, 2021 and 2020. Such information should be read in conjunction with our condensed consolidated financial statements and the related notes included herein. The condensed consolidated financial statements of the Company are unaudited. When we use the terms "Cohen & Steers," the "Company," "we," "us," and "our," we mean Cohen & Steers, Inc., a Delaware corporation, and its consolidated subsidiaries.

Executive Overview

General

We are a leading global investment manager specializing in real assets and alternative income, including 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 and Tokyo.

Our primary investment strategies include U.S. real estate, preferred securities and low duration preferred securities, global/international real estate, global listed infrastructure, real assets multi-strategy, midstream energy and MLPs, 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 management and institutional. Our wealth management 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 is derived from fees received from our clients, including fees for managing or subadvising client accounts as well as investment advisory, administration, distribution and service fees received from Company-sponsored open-end and closed-end funds. Our fees are based on contractually specified rates applied to the value of the assets we manage and, in certain cases, investment performance. 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.

Assets Under Management

By Investment Vehicle

(in millions)


	Three Months Ended March 31,
	2021			2020
Institutional Accounts
Assets under management, beginning of period	$	33,255		$	31,813
Inflows	2,335			2,263
Outflows	(748)			(1,461)
Net inflows (outflows)	1,587			802
Market appreciation (depreciation)	2,000			(7,254)
Distributions	(304)			(316)

Total increase (decrease)	3,283			(6,768)
Assets under management, end of period	$	36,538		$	25,045
Percentage of total assets under management	42.0		%	43.7		%
Average assets under management	$	34,622		$	29,894

Open-end Funds
Assets under management, beginning of period	$	35,160		$	30,725
Inflows	5,070			4,377
Outflows	(2,906)			(4,310)
Net inflows (outflows)	2,164			67
Market appreciation (depreciation)	1,537			(6,004)
Distributions	(238)			(227)

Total increase (decrease)	3,463			(6,164)
Assets under management, end of period	$	38,623		$	24,561
Percentage of total assets under management	44.4		%	42.8		%
Average assets under management	$	36,620		$	29,808

Closed-end Funds
Assets under management, beginning of period	$	11,493		$	9,644
Inflows	65			403
Outflows	—			(88)
Net inflows (outflows)	65			315
Market appreciation (depreciation)	469			(2,068)
Distributions	(148)			(128)
Total increase (decrease)	386			(1,881)
Assets under management, end of period	$	11,879		$	7,763
Percentage of total assets under management	13.6		%	13.5		%
Average assets under management	$	11,601		$	9,286

Total
Assets under management, beginning of period	$	79,908		$	72,182
Inflows	7,470			7,043
Outflows	(3,654)			(5,859)
Net inflows (outflows)	3,816			1,184
Market appreciation (depreciation)	4,006			(15,326)
Distributions	(690)			(671)

Total increase (decrease)	7,132			(14,813)
Assets under management, end of period	$	87,040		$	57,369
Average assets under management	$	82,843		$	68,988

Assets Under Management - Institutional Accounts

By Account Type

(in millions)


	Three Months Ended March 31,
	2021			2020
Advisory
Assets under management, beginning of period	$	17,628		$	15,669
Inflows	1,937			1,434
Outflows	(243)			(737)
Net inflows (outflows)	1,694			697
Market appreciation (depreciation)	957			(3,318)

Total increase (decrease)	2,651			(2,621)
Assets under management, end of period	$	20,279		$	13,048
Percentage of institutional assets under management	55.5		%	52.1		%
Average assets under management	$	18,900		$	14,836

Japan Subadvisory
Assets under management, beginning of period	$	9,720		$	10,323
Inflows	98			558
Outflows	(302)			(278)
Net inflows (outflows)	(204)			280
Market appreciation (depreciation)	712			(2,495)
Distributions	(304)			(316)

Total increase (decrease)	204			(2,531)
Assets under management, end of period	$	9,924		$	7,792
Percentage of institutional assets under management	27.2		%	31.1		%
Average assets under management	$	9,661		$	9,620

Subadvisory Excluding Japan
Assets under management, beginning of period	$	5,907		$	5,821
Inflows	300			271
Outflows	(203)			(446)
Net inflows (outflows)	97			(175)
Market appreciation (depreciation)	331			(1,441)

Total increase (decrease)	428			(1,616)
Assets under management, end of period	$	6,335		$	4,205
Percentage of institutional assets under management	17.3		%	16.8		%
Average assets under management	$	6,061		$	5,438

Total Institutional Accounts
Assets under management, beginning of period	$	33,255		$	31,813
Inflows	2,335			2,263
Outflows	(748)			(1,461)
Net inflows (outflows)	1,587			802
Market appreciation (depreciation)	2,000			(7,254)
Distributions	(304)			(316)


Total increase (decrease)	3,283			(6,768)
Assets under management, end of period	$	36,538		$	25,045
Average assets under management	$	34,622		$	29,894

Assets Under Management

By Investment Strategy

(in millions)


	Three Months Ended March 31,
	2021			2020
U.S. Real Estate
Assets under management, beginning of period	$	32,827		$	31,024
Inflows	3,126			2,487
Outflows	(1,391)			(1,931)
Net inflows (outflows)	1,735			556
Market appreciation (depreciation)	2,837			(7,377)
Distributions	(415)			(440)
Transfers	—			31
Total increase (decrease)	4,157			(7,230)
Assets under management, end of period	$	36,984		$	23,794
Percentage of total assets under management	42.5		%	41.5		%
Average assets under management	$	34,512		$	29,536

Preferred Securities
Assets under management, beginning of period	$	23,185		$	17,581
Inflows	2,406			2,456
Outflows	(1,596)			(2,576)
Net inflows (outflows)	810			(120)
Market appreciation (depreciation)	2			(2,395)
Distributions	(207)			(163)
Transfers	—			(31)
Total increase (decrease)	605			(2,709)
Assets under management, end of period	$	23,790		$	14,872
Percentage of total assets under management	27.3		%	25.9		%
Average assets under management	$	23,526		$	17,253

Global/International Real Estate
Assets under management, beginning of period	$	15,214		$	13,509
Inflows	1,079			1,747
Outflows	(567)			(898)
Net inflows (outflows)	512			849
Market appreciation (depreciation)	709			(3,345)
Distributions	(14)			(8)

Total increase (decrease)	1,207			(2,504)
Assets under management, end of period	$	16,421		$	11,005
Percentage of total assets under management	18.9		%	19.2		%
Average assets under management	$	15,588		$	12,732

Assets Under Management

By Investment Strategy - continued

(in millions)


	Three Months Ended March 31,
	2021			2020
Global Listed Infrastructure
Assets under management, beginning of period	$	6,729		$	8,076
Inflows	679			290
Outflows	(74)			(389)
Net inflows (outflows)	605			(99)
Market appreciation (depreciation)	315			(1,748)
Distributions	(45)			(54)
Total increase (decrease)	875			(1,901)
Assets under management, end of period	$	7,604		$	6,175
Percentage of total assets under management	8.7		%	10.8		%
Average assets under management	$	7,137		$	7,614

Other
Assets under management, beginning of period	$	1,953		$	1,992
Inflows	180			63
Outflows	(26)			(65)
Net inflows (outflows)	154			(2)
Market appreciation (depreciation)	143			(461)
Distributions	(9)			(6)

Total increase (decrease)	288			(469)
Assets under management, end of period	$	2,241		$	1,523
Percentage of total assets under management	2.6		%	2.7		%
Average assets under management	$	2,080		$	1,853

Total
Assets under management, beginning of period	$	79,908		$	72,182
Inflows	7,470			7,043
Outflows	(3,654)			(5,859)
Net inflows (outflows)	3,816			1,184
Market appreciation (depreciation)	4,006			(15,326)
Distributions	(690)			(671)

Total increase (decrease)	7,132			(14,813)
Assets under management, end of period	$	87,040		$	57,369
Average assets under management	$	82,843		$	68,988

Investment Performance at March 31, 2021

_________________________

(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) © 2021 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 March 31, 2021. 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.

Overview

Assets under management at March 31, 2021 increased 51.7% to $87.0 billion from $57.4 billion at March 31, 2020. The increase was due to net inflows of $13.4 billion and market appreciation of $19.6 billion, partially offset by distributions of $3.3 billion. Net inflows included $6.1 billion into preferred securities, $5.8 billion into U.S. real estate and $1.3 billion into global/international real estate. Market appreciation included $9.6 billion from U.S. real estate, $4.2 billion from global/international real estate, $3.6 billion from preferred securities and $1.6 billion from global listed infrastructure. Distributions included $2.3 billion from U.S. real estate and $741 million from preferred securities. Our organic growth rate for the twelve

months ended March 31, 2021 was 23.3%. The organic growth rate represents the ratio of net flows for the period to the beginning assets under management.

Average assets under management for the three months ended March 31, 2021 increased 20.1% to $82.8 billion from $69.0 billion for the three months ended March 31, 2020.

Institutional accounts

Assets under management in institutional accounts at March 31, 2021, which represented 42.0% of total assets under management, increased 45.9% to $36.5 billion from $25.0 billion at March 31, 2020. The increase was due to net inflows of $3.6 billion and market appreciation of $9.3 billion, partially offset by distributions of $1.4 billion. Net inflows included $2.0 billion into U.S. real estate and $1.4 billion into global/international real estate. Market appreciation included $3.9 billion from U.S. real estate, $3.6 billion from global/international real estate, $767 million from global listed infrastructure and $627 million from preferred securities. Distributions included $1.3 billion from U.S. real estate. Our organic growth rate for institutional accounts for the twelve months ended March 31, 2021 was 14.2%.

Average assets under management for institutional accounts for the three months ended March 31, 2021 increased 15.8% to $34.6 billion from $29.9 billion for the three months ended March 31, 2020.

Assets under management in institutional advisory accounts at March 31, 2021, which represented 55.5% of institutional assets under management, increased 55.4% to $20.3 billion from $13.0 billion at March 31, 2020. The increase was due to net inflows $2.5 billion and market appreciation of $4.7 billion. Net inflows included $1.4 billion into U.S. real estate and $1.1 billion into global/international real estate. Market appreciation included $1.9 billion from global/international real estate, $1.3 billion from U.S. real estate, $561 million from preferred securities and $452 million from global listed infrastructure. Our organic growth rate for institutional advisory accounts for the twelve months ended March 31, 2021 was 19.5%.

Average assets under management for institutional advisory accounts for the three months ended March 31, 2021 increased 27.4% to $18.9 billion from $14.8 billion for the three months ended March 31, 2020.

Assets under management in Japan subadvisory accounts at March 31, 2021, which represented 27.2% of institutional assets under management, increased 27.4% to $9.9 billion from $7.8 billion at March 31, 2020. The increase was due to net inflows of $491 million and market appreciation of $3.0 billion, partially offset by distributions of $1.4 billion. Net inflows included $600 million into U.S. real estate, partially offset by net outflows of $123 million from preferred securities. Market appreciation included $2.3 billion from U.S. real estate and $607 million from global/international real estate. Distributions included $1.3 billion from U.S. real estate. Our organic growth rate for Japan subadvisory accounts for the twelve months ended March 31, 2021 was 6.3%.

Average assets under management for Japan subadvisory accounts for the three months ended March 31, 2021 increased 0.4% to $9.7 billion from $9.6 billion for the three months ended March 31, 2020.

Assets under management in institutional subadvisory accounts excluding Japan at March 31, 2021, which represented 17.3% of institutional assets under management, increased 50.7% to $6.3 billion from $4.2 billion at March 31, 2020. The increase was due to net inflows of $518 million and market appreciation of $1.6 billion. Net inflows included $332 million into global/international real estate and $116 million into Other. Market appreciation included $1.0 billion from global/international real estate, $312 million from global listed infrastructure and $240 million from U.S. real estate. Our organic growth rate for institutional subadvisory accounts excluding Japan for the twelve months ended March 31, 2021 was 12.3%.

Average assets under management for institutional subadvisory accounts excluding Japan for the three months ended March 31, 2021 increased 11.5% to $6.1 billion from $5.4 billion for the three months ended March 31, 2020.

Open-end funds

Assets under management in open-end funds at March 31, 2021, which represented 44.4% of total assets under management, increased 57.3% to $38.6 billion from $24.6 billion at March 31, 2020. The increase was due to net inflows of $7.5 billion and market appreciation of $7.9 billion, partially offset by distributions of $1.4 billion. Net inflows included $3.8 billion into preferred securities and $3.6 billion into U.S. real estate. Market appreciation included $4.8 billion from U.S. real estate, $2.4 billion from preferred securities and $569 million from global/international real estate. Distributions included $732 million from U.S. real estate and $601 million from preferred securities. Our organic growth rate for open-end funds for the twelve months ended March 31, 2021 was 30.6%.

Average assets under management for open-end funds for the three months ended March 31, 2021 increased 22.9% to $36.6 billion from $29.8 billion for the three months ended March 31, 2020.

Closed-end funds

Assets under management in closed-end funds at March 31, 2021, which represented 13.6% of total assets under management, increased 53.0% to $11.9 billion from $7.8 billion at March 31, 2020. The increase was due to net inflows of $2.3 billion and market appreciation of $2.3 billion, partially offset by distributions of $536 million. Net inflows included

$2.1 billion from the Company's initial public offering of the Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund (PTA). Our organic growth rate for closed-end funds for the twelve months ended March 31, 2021 was 29.8%.

Average assets under management for closed-end funds for the three months ended March 31, 2021 increased 24.9% to $11.6 billion from $9.3 billion for the three months ended March 31, 2020.

Summary of Operating Information


	Three Months Ended March 31,
(in thousands, except percentages and per share data)	2021			2020
U.S. GAAP
Revenue	$	125,747		$	105,830
Expenses	$	73,809		$	77,461
Operating income	$	51,938		$	28,369
Non-operating income (loss)	$	4,953		$	(19,843)
Net income attributable to common stockholders	$	48,852		$	20,572
Diluted earnings per share	$	1.00		$	0.42
Operating margin	41.3		%	26.8		%

As Adjusted (1)
Net income attributable to common stockholders	$	38,629		$	29,439
Diluted earnings per share	$	0.79		$	0.61
Operating margin	42.3		%	38.2		%

_________________________

(1) These amounts represent the Company’s as adjusted results. Please refer to pages 31-32 for reconciliations of U.S. GAAP to as adjusted results.

U.S. GAAP

Three Months Ended March 31, 2021 Compared with Three Months Ended March 31, 2020

Revenue


	Three Months Ended March 31,
(in thousands)	2021		2020		$ Change		% Change
Institutional accounts	$	30,987	$	27,859	$	3,128	11.2	%
Open-end funds	60,603		49,808		10,795		21.7	%
Closed-end funds	25,331		19,622		5,709		29.1	%
Investment advisory and administration fees	116,921		97,289		19,632		20.2	%
Distribution and service fees	8,272		7,783		489		6.3	%
Other	554		758		(204)		(26.9)	%
Total revenue	$	125,747	$	105,830	$	19,917	18.8	%

Revenue for the three months ended March 31, 2021 increased primarily due to higher average assets under management across all three investment vehicles.

•Total investment advisory revenue compared with average assets under management in institutional accounts implied an annualized effective fee rate of 36.3 bps and 37.5 bps for the three months ended March 31, 2021 and 2020, respectively. The decrease in the implied annualized effective fee rate is primarily due to the recognition of performance fees for the three months ended March 31, 2020.

•Total investment advisory and administration revenue compared with average assets under management in open-end funds implied an annualized effective fee rate of 67.1 bps and 67.2 bps for the three months ended March 31, 2021 and 2020, respectively.

•Total investment advisory and administration revenue compared with average assets under management in closed-end funds implied an annualized effective fee rate of 88.6 bps and 85.0 bps for the three months ended March 31, 2021 and 2020, respectively. The increase in the implied annualized effective fee rate is primarily due to the initial public offering of PTA, which concluded on October 27, 2020.

Expenses


	Three Months Ended March 31,
(in thousands)	2021		2020		$ Change		% Change
Employee compensation and benefits	$	45,762	$	38,617	$	7,145	18.5	%
Distribution and service fees	16,506		14,104		2,402		17.0	%
General and administrative	10,374		23,588		(13,214)		(56.0)	%
Depreciation and amortization	1,167		1,152		15		1.3	%
Total expenses	$	73,809	$	77,461	$	(3,652)	(4.7)	%

Employee compensation and benefits for the three months ended March 31, 2021 increased primarily due to higher incentive compensation of $6.5 million and higher amortization of restricted stock units of $2.3 million, partially offset by lower production compensation of $904,000.

Distribution and service fees expense for the three months ended March 31, 2021 increased primarily due to higher average assets under management in U.S. open-end funds.

General and administrative expenses for the three months ended March 31, 2021 decreased primarily due to lower travel and entertainment expenses of $616,000 and lower sponsored conference expenses of $221,000. In addition, the first quarter of 2020 included costs associated with the Cohen & Steers Quality Income Realty Fund, Inc. (RQI) rights offering of approximately $12.0 million.

Operating Margin

Operating margin for the three months ended March 31, 2021 increased to 41.3% from 26.8% for the three months ended March 31, 2020. The first quarter of 2020 included costs associated with the RQI rights offering. Operating margin represents the ratio of operating income to revenue.

Non-operating Income (Loss)


	Three Months Ended
	March 31, 2021							March 31, 2020
(in thousands)	Seed Investments			Other		Total		Seed Investments			Other		Total
Interest and dividend income—net	$	604		$	12	$	616	$	607		$	542	$	1,149
Gain (loss) from investments—net	4,485			74		4,559		(22,027)			—		(22,027)
Foreign currency gain (loss)—net	191			(413)		(222)		(473)			1,508		1,035
Total non-operating income (loss)	$	5,280	(1)	$	(327)	$	4,953	$	(21,893)	(1)	$	2,050	$	(19,843)

_________________________

(1) Seed investments included net income of $3.6 million and net loss of $12.5 million attributable to third-party interests for the three months ended March 31, 2021 and 2020, respectively.

Income Taxes


	Three Months Ended March 31,
(in thousands, except percentages)	2021			2020			$ Change		% Change

Income tax expense	$	4,461		$	458		$	4,003	*
Effective tax rate	8.4		%	2.2		%

_________________________

* Not meaningful.

The effective tax rate for the three months ended March 31, 2021 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign income taxes which were more than offset by discrete tax items, primarily related to the reversal of certain liabilities associated with unrecognized tax benefits and the appreciated value of the restricted stock units delivered in January 2021. The effective tax rate for the three months ended March 31, 2020 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign income taxes which were more than offset by discrete tax items primarily related to the appreciated value of the restricted stock units delivered in January 2020.

As Adjusted

This section discusses as adjusted results. Please refer to pages 31-32 for reconciliations of U.S. GAAP to as adjusted results.

Three Months Ended March 31, 2021 Compared with Three Months Ended March 31, 2020

Revenue

Revenue, as adjusted, for the three months ended March 31, 2021 was $125.8 million, compared with $105.8 million for the three months ended March 31, 2020.

Revenue, as adjusted, excluded the consolidation of certain of our seed investments for both periods.

Expenses

Expenses, as adjusted, for the three months ended March 31, 2021 were $72.6 million, compared with $65.4 million for the three months ended March 31, 2020.

Expenses, as adjusted, excluded the following:

•The consolidation of certain of our seed investments for both periods;

•Amounts related to the accelerated vesting of certain restricted stock units for the three months ended March 31, 2021; and

•Costs associated with the RQI rights offering for the three months ended March 31, 2020.

Operating Margin

Operating margin, as adjusted, for the three months ended March 31, 2021 was 42.3%, compared with 38.2% for the three months ended March 31, 2020.

Non-operating Income (Loss)

Non-operating loss, as adjusted, for the three months ended March 31, 2021 was $118,000, compared with non-operating income, as adjusted, of $123,000 for the three months ended March 31, 2020.

Non-operating income (loss), as adjusted, excluded the following for both periods:

•Results from our seed investments; and

•Net foreign currency exchange gains and losses associated with U.S. dollar-denominated assets held by certain foreign subsidiaries.

Income Taxes

The effective tax rate, as adjusted, for the three months ended March 31, 2021 was 27.3%, compared with 27.4% for the three months ended March 31, 2020.

The effective tax rate, as adjusted, excluded the tax effects associated with items noted above, as well as discrete tax items for both periods.

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 we believe 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.

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

Net Income Attributable to Common Stockholders and Diluted Earnings per Share


	Three Months Ended March 31,
(in thousands, except per share data)	2021		2020
Net income attributable to common stockholders, U.S. GAAP	$	48,852	$	20,572
Seed investments (1)	(1,512)		9,588
Accelerated vesting of restricted stock units	1,088		—

Rights offering costs(2)	—		11,859

Foreign currency exchange (gains) losses—net (3)	209		(1,927)
Tax adjustments (4)	(10,008)		(10,653)
Net income attributable to common stockholders, as adjusted	$	38,629	$	29,439

Diluted weighted average shares outstanding	48,709		48,591
Diluted earnings per share, U.S. GAAP	$	1.00	$	0.42
Seed investments	(0.03)		0.20
Accelerated vesting of restricted stock units	0.02		—

Rights offering costs	—		0.25

Foreign currency exchange (gains) losses—net	0.01		(0.04)
Tax adjustments	(0.21)		(0.22)
Diluted earnings per share, as adjusted	$	0.79	$	0.61

_________________________

(1) Represents amounts related to the deconsolidation of seed investments in Company-sponsored funds as well as non-operating

(income) loss from seed investments that were not consolidated.

(2) Represents costs associated with the Cohen & Steers Quality Income Realty Fund, Inc. (RQI) rights offering which were recorded in general and administrative expense in the first quarter of 2020.

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

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




Discrete tax items	$	(10,239)	$	(5,820)
Tax effect of adjustments included above	231		(4,833)
Total tax adjustments	$	(10,008)	$	(10,653)

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

Revenue, Expenses, Operating Income and Operating Margin


	Three Months Ended March 31,
(in thousands, except percentages)	2021			2020
Revenue, U.S. GAAP	$	125,747		$	105,830
Seed investments (1)	94			(29)
Revenue, as adjusted	$	125,841		$	105,801

Expenses, U.S. GAAP	$	73,809		$	77,461
Seed investments (1)	(96)			(228)
Accelerated vesting of restricted stock units	(1,088)			—

Rights offering costs (2)	—			(11,859)

Expenses, as adjusted	$	72,625		$	65,374

Operating income, U.S. GAAP	$	51,938		$	28,369
Seed investments (1)	190			199
Accelerated vesting of restricted stock units	1,088			—

Rights offering costs (2)	—			11,859

Operating income, as adjusted	$	53,216		$	40,427

Operating margin, U.S. GAAP	41.3		%	26.8		%
Operating margin, as adjusted	42.3		%	38.2		%

_________________________

(1) Represents amounts related to the deconsolidation of seed investments in Company-sponsored funds.

(2) Represents costs associated with the RQI rights offering which were recorded in general and administrative expenses in the first quarter of 2020.

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

Non-operating Income (Loss)


	Three Months Ended March 31,
(in thousands)	2021		2020
Non-operating income (loss), U.S. GAAP	$	4,953	$	(19,843)
Seed investments (1)	(5,280)		21,893
Foreign currency exchange (gains) losses—net (2)	209		(1,927)
Non-operating income (loss), as adjusted	$	(118)	$	123

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(1) Represents amounts related to the deconsolidation of seed investments in Company-sponsored funds as well as non-operating (income) loss from seed investments that were not consolidated.

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

Changes in Financial Condition, Liquidity and Capital Resources

We seek to maintain a capital structure that supports our business strategies and to maintain the appropriate amount of liquidity at all times. Furthermore, we currently expect cash flows from operations to be more than adequate to fund our present and reasonably foreseeable future commitments for investing and financing activities.

Net Liquid Assets

Our current financial condition is highly liquid, primarily comprising cash and cash equivalents, U.S. Treasury securities, if any, seed investments and other current assets. Liquid assets are reduced by current liabilities, which are generally defined as obligations due within one year (together, net liquid assets). The Company does not currently have any outstanding debt.

The table below summarizes net liquid assets:


(in thousands)	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	54,717	$	41,232
U.S. Treasury securities	—		41,648
Seed investments—net	64,083		60,083
Current assets	72,361		70,208
Current liabilities	(51,558)		(93,870)
Net liquid assets	$	139,603	$	119,301

Cash and cash equivalents

Cash and cash equivalents are on deposit with several highly rated financial institutions and include short-term, highly-liquid investments, which are readily convertible into cash and have original maturities of three months or less.

U.S. Treasury securities

U.S. Treasury securities are directly issued by the U.S. government and were classified as held to maturity.

Seed investments—net

Seed investments are primarily comprised of investments in Company-sponsored funds that we do not consolidate, our pro-rata share of the net assets of the funds that we do consolidate, and listed securities held directly for the purpose of establishing performance track records. Seed investments are recorded at fair value, are generally traded in active markets on major exchanges and can typically be liquidated within a normal settlement cycle. Seed investments are presented net of redeemable noncontrolling interests.

Current assets

Current assets primarily represent investment advisory and administration fees receivable. At March 31, 2021, institutional accounts comprised 52.5% of total accounts receivable, while open-end and closed-end funds, together, comprised 46.9% of total accounts receivable. Open-end and closed-end fund receivables are generally collected on the first business day of the following month. We perform a review of our receivables on an ongoing basis in order to assess collectibility and, based on our analysis at March 31, 2021, there was no allowance for uncollectible accounts required.

Current liabilities

Current liabilities are generally defined as obligations due within one year, which include accrued compensation, distribution and service fees payable, operating lease obligations due within 12 months, certain income taxes payable, and other liabilities and accrued expenses.

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 cash flows:


	Three Months Ended March 31,
(in thousands)	2021		2020
Cash Flow Data:
Net cash provided by (used in) operating activities	$	8,913	$	(5,553)
Net cash provided by (used in) investing activities	39,200		(8,012)
Net cash provided by (used in) financing activities	(34,495)		(43,548)
Net increase (decrease) in cash and cash equivalents	13,618		(57,113)
Effect of foreign exchange rate changes on cash and cash equivalents	(133)		(1,279)
Cash and cash equivalents, beginning of the period	41,232		101,352
Cash and cash equivalents, end of the period	$	54,717	$	42,960

Cash and cash equivalents increased by $13.6 million, excluding the effect of foreign exchange rate changes, for the three months ended March 31, 2021. Net cash provided by operating activities was $8.9 million for the three months ended March 31, 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 investing activities was $39.2 million, which included $57.0 million of proceeds from sales and maturities of investments, partially offset by $17.4 million of investment purchases. Net cash used in financing activities was $34.5 million, including dividends paid to stockholders of $21.7 million and repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of $21.3 million, partially offset by contributions from redeemable noncontrolling interests of $8.9 million.

Cash and cash equivalents decreased by $57.1 million, excluding the effect of foreign exchange rate changes, for the three months ended March 31, 2020. Net cash used in operating activities was $5.6 million for the three months ended March 31, 2020. Cash flows from operating activities primarily consisted of net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash used in investing activities was $8.0 million, which included $9.6 million of investment purchases, partially offset by $2.4 million of proceeds from sales and maturities of investments. Net cash used in financing activities was $43.5 million, including repurchases of common stock to satisfy employee withholding tax obligations on the vesting and delivery of restricted stock units of $25.8 million, dividends paid to stockholders of $18.7 million, as well as distributions to redeemable noncontrolling interests of $1.9 million, partially offset by contributions from redeemable noncontrolling interests of $2.6 million.

Regulatory Requirements

We continually monitor and evaluate the adequacy of our capital. We have consistently maintained net capital in excess of the regulatory requirements for Cohen & Steers Securities, LLC (CSS), our registered broker-dealer, as prescribed by the Securities and Exchange Commission (SEC). At March 31, 2021, CSS had net capital of approximately $3.8 million, which exceeded its minimum regulatory capital requirement by approximately $3.6 million. The SEC’s Uniform Net Capital Rule 15c3-1 imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital. CSS does not carry customer accounts and has no possession or control obligations under SEA Rule 15c3-3(b) or reserve deposit obligations under SEA Rule 153-3(e).

Cohen & Steers Asia Limited (CSAL) is subject to regulation by the Hong Kong Securities and Futures Commission. At March 31, 2021, CSAL had regulatory capital of approximately $6.8 million, which exceeded its minimum regulatory capital requirement by approximately $6.4 million.

Cohen & Steers UK Limited (CSUK) is subject to regulation by the United Kingdom Financial Conduct Authority. At March 31, 2021, CSUK had regulatory capital of approximately $33.3 million, which exceeded its minimum regulatory capital requirement by approximately $27.9 million.

Cohen & Steers Ireland Limited (CSIL) is subject to regulation by the Central Bank of Ireland. At March 31, 2021, CSIL had regulatory capital of approximately $2.9 million, which exceeded its minimum regulatory capital requirement by approximately $2.6 million.

Cohen & Steers Japan Limited (CSJL) is registered with the Financial Services Agency of Japan and the Kanto Local Finance Bureau and is subject to the Financial Instruments and Exchange Act. In accordance with its license, CSJL is required to maintain regulatory capital, as defined, of approximately $453,000. At March 31, 2021, CSJL had stated capital in excess of this requirement.

We believe that our cash and cash equivalents and cash flows from operations will be more than adequate to meet our anticipated capital requirements and other obligations as they become due.

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, contractual, legal and regulatory restrictions on the payment of dividends, if any, by us and our subsidiaries and such other factors deemed relevant.

Investment Commitments

We have committed to co-invest up to $5.1 million alongside Cohen & Steers Global Realty Partners III-TE, L.P. (GRP-TE). As of March 31, 2021, we have funded approximately $3.8 million of this commitment. Our co-investment alongside GRP-TE is illiquid and is anticipated to be invested for the life of the fund. The timing of the funding of the unfunded portion of our commitment is currently unknown, as the drawdown of our commitment is contingent on the timing of drawdowns by the underlying funds in which GRP-TE invests. The unfunded portion of this commitment was not recorded on our condensed consolidated statements of financial condition at March 31, 2021.

Contractual Obligations and Contingencies

We have future obligations under various operating leases, purchase obligations and a transition tax liability in connection with the enactment of the Tax Cuts and Jobs Act in 2017. During the three months ended March 31, 2021, there were no material changes to the Company’s contractual obligations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity or capital resources.

Critical Accounting Policies and Estimates

A complete discussion of our critical accounting policies is included in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020.

Recently Issued Accounting Pronouncements

See discussion of Recently Issued Accounting Pronouncements in Note 2 of the Notes to Condensed Consolidated Financial Statements contained in Part I, Item 1 of this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of our business, we are exposed to risk as a result of changes in interest and currency rates,

securities markets and general economic fluctuations, which may have an adverse impact on the value of our investments.

Our seed investments are primarily comprised of investments in Company-sponsored funds that we do not consolidate, our pro-rata share of the net assets of the funds that we do consolidate, and listed securities held directly for the purpose of establishing performance track records. Seed investments are recorded at fair value, are generally traded in active markets on major exchanges and can typically be liquidated within a normal settlement cycle.

Our seed investments are subject to price risk. We may mitigate this by entering into derivative contracts to economically hedge a portion of our risk. The following table summarizes the effect that a ten percent increase or decrease in prices would have on the carrying value of our seed investments, which is presented net of redeemable noncontrolling interests, as of March 31, 2021 (in thousands):


	Carrying Value		Notional Value - Hedges		Net Carrying Value		Net Carrying Value Assuming a 10% increase		Net Carrying Value Assuming a 10% decrease
Seed investments—net	$	64,083	$	(29,429)	$	34,654	$	38,119	$	31,189

A majority of our revenue—93.0% and 91.9% for the three months ended March 31, 2021 and 2020, respectively—was derived from investment advisory and administration agreements with our clients. Under these agreements, the investment advisory and administration fee we receive is based on the market value of the assets we manage. Accordingly, a decline in the prices of securities generally, and real estate securities in particular, attributable to market conditions including inflation, interest rate changes and a general economic downturn, may cause our revenue and income to decline by causing the value of the assets we manage to decrease, which would result in lower investment advisory and administration fees; or by causing our clients to withdraw funds in favor of investments that they perceive as offering greater opportunity or lower risk or cost, which would also result in lower investment advisory and administration fees.

The economic environment may also preclude us from increasing the assets we manage in closed-end funds. The market conditions for these offerings may not be as favorable in the future, which could adversely impact our ability to grow the assets we manage and realize higher fee revenue associated with such growth. Depending on market conditions, the closed-end funds we manage may increase or decrease their leverage in order to maintain the funds’ target leverage ratios, thereby increasing or decreasing the assets we manage.

As of March 31, 2021, 61.4% and 27.3% of the assets we managed were concentrated in real estate and preferred securities, respectively. A change in interest rates or prolonged economic downturn could have a negative impact on the valuation of real estate and preferred securities in our clients’ portfolios, reduce our revenue, and impact our ability to increase assets in our open-end funds or offer new funds.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Acting Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives.

Our management, including our Acting Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, 2021. Based on that evaluation and subject to the foregoing, our Acting Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures as of March 31, 2021 were effective to accomplish their objectives at a reasonable assurance level.

There has been no change in our internal control over financial reporting that occurred during the three months ended March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—Other Information

Item 1. Legal Proceedings

From time to time, we may become involved in legal matters relating to claims arising in the ordinary course of our business. There are currently no such matters pending that we believe could have a material effect on our condensed consolidated results of operations, cash flows or financial condition. In addition, from time to time, we may receive subpoenas or other requests for information from various U.S. federal and state governmental authorities, domestic and international regulatory authorities and third parties in connection with certain industry-wide inquiries or other investigations or legal proceedings. It is our policy to cooperate fully with such requests.

Item 1A. Risk Factors

For a discussion of the potential risks and uncertainties associated with our business, please see Part I, Item 1A of our

Annual Report on Form 10-K for the year ended December 31, 2020 (the Form 10-K). There have been no material changes to the risk factors disclosed in Part 1, Item 1A of the Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2021, we made the following purchases of our equity securities that are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934.


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 through January 31, 2021	308,444	$	68.80	—	—
February 1 through February 28, 2021	—	$	—	—	—
March 1 through March 31, 2021	520	$	67.92	—	—
Total	308,964	$	68.80	—	—

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(1)Purchases made to satisfy the income tax withholding obligations of certain employees upon the vesting and delivery of restricted stock units issued under the Company's Amended and Restated Stock Incentive Plan.

Item 6. Exhibits

Any agreements or other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and should not be relied upon for that purpose. In particular, any representations and warranties made by the Company in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs at the date they were made or at any other time.


Exhibit No.		Description

3.1	—	Form of Amended and Restated Certificate of Incorporation of the Company (1)

3.2	—	Form of Amended and Restated Bylaws of the Company (2)

4.1	—	Specimen Common Stock Certificate (3)

4.2	—	Form of Registration Rights Agreement among the Company, Martin Cohen, Robert H. Steers, The Martin Cohen 1998 Family Trust and Robert H. Steers Family Trust (1)

31.1	—	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2	—	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1	—	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

32.2	—	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101	—	The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 formatted in inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Financial Condition (unaudited), (ii) the Condensed Consolidated Statements of Operations (unaudited), (iii) the Condensed Consolidated Statements of Comprehensive Income (unaudited), (iv) the Condensed Consolidated Statements of Changes in Stockholders' Equity and Redeemable Noncontrolling Interests (unaudited), (v) the Condensed Consolidated Statements of Cash Flows (unaudited), and (vi) the Notes to the Condensed Consolidated Financial Statements (unaudited).

104	—	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

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(1)Incorporated by reference to the Company's Registration Statement on Form S-1, as amended, originally filed with the Securities and Exchange Commission on March 30, 2004.

(2)Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008.

(3)Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

(4)Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:

May 7, 2021

Cohen & Steers, Inc.

/s/ Matthew S. Stadler

Name: Matthew S. Stadler

Title: Executive Vice President & Chief Financial Officer

Date:

May 7, 2021

Cohen & Steers, Inc.

/s/ Elena Dulik

Name: Elena Dulik

Title: Senior Vice President & Chief Accounting Officer