Cohen & Steers' AUM up 10.6% for quarter, 3.4% for year

Cohen & Steers had $83.1 billion in assets under management as of Dec. 31, up 10.6% from three months earlier and up 3.4% from a year earlier.

Executives at the real asset firm attributed the increases to market appreciation, partially offset by net outflows and distributions.

Market appreciation in 2023 was $7.5 billion, partially offset by $2 billion of net outflows and $2.8 billion in distributions, said Matthew Stadler, Cohen & Steers' executive vice president and chief financial officer during a Jan. 25 earnings call.

For the year ended Dec. 31, 85% of the firm's AUM outperformed its benchmark, compared with 74% in 2022, said Jon Cheigh, executive vice president and chief investment officer, during the same call.

Cohen & Steers had net outflows of $935 million in the fourth quarter and $2 billion in all of 2023.

"For the quarter and year, open-end funds drove the outflows with $504 million in the fourth quarter and $1.7 billion for the year, said Joseph Harvey, president and CEO, on the earnings call. Forty-one percent of the outflows were in real estate, Harvey said.

Open-end funds made up 44.5% of Cohen & Steers AUM as of Dec. 31. The firm's largest strategy was U.S. real estate, which accounted for 46.4% of its AUM, followed by preferred securities that made up 21.8% of AUM and global/international real estate, 19% of AUM as of Dec. 31.

"Consistent with the trend in the back half of 2023, overall prospect activity continues to improve as expectations for a shift in Fed (Federal Reserve) policy provides more confidence in asset allocation decisions," Harvey said. "We continue to see adoption of listed real estate strategies, listed infrastructure and multistrategy real assets portfolios."

At the same time, some clients are above their real asset allocations and will trim its public real assets holdings to get back to their target allocations, Harvey said.

But Cohen & Steers executives see alpha opportunities ahead, particularly with real estate investment trusts, which are beginning to attract more capital to acquire properties from sellers dealing with tighter credit and refinancing conditions.