Cohen & Steers Q2 2025 slides: AUM grows despite net outflows, margins contract

Cohen & Steers Inc (NYSE:CNS) reported mixed second-quarter 2025 results, with assets under management (AUM) growing to $88.9 billion despite experiencing net outflows during the period. The asset manager, which specializes in real assets and alternative income solutions, saw slight revenue growth while earnings per share and operating margins declined compared to the previous quarter.

Quarterly Performance Highlights

Cohen & Steers reported adjusted earnings per share of $0.73 for Q2 2025, down from $0.75 in the previous quarter. Revenue increased 1.1% quarter-over-quarter to $135.3 million, while adjusted operating income declined to $45.4 million, resulting in an operating margin of 33.6%, down from 34.7% in Q1 2025.

As shown in the following summary of second quarter results, the company’s AUM increased to $88.9 billion as of June 30, 2025, up from $87.6 billion at the end of March:

The company’s financial results over the past five quarters show the recent pressure on margins despite relatively stable revenue growth:

Detailed Financial Analysis

Revenue increased modestly in Q2 2025, primarily driven by higher open-end fund fees, which rose to $69.9 million from $69.1 million in the previous quarter. Institutional fees also increased to $32.8 million from $32.2 million, while closed-end fund fees remained relatively stable.

The following chart breaks down Cohen & Steers’ revenue streams over the past five quarters:

However, expenses grew at a faster rate than revenue, increasing to $89.9 million in Q2 2025 from $87.3 million in Q1 2025. This was primarily due to higher distribution and service fees, which jumped to $17.0 million from $15.6 million in the previous quarter. Employee compensation and benefits, the largest expense category, increased modestly to $54.8 million.

The expense breakdown over recent quarters illustrates these trends:

Assets Under Management Analysis

Cohen & Steers’ AUM growth was driven by $2.3 billion in market appreciation, which more than offset net outflows of $131 million during the quarter. This represents a shift from Q1 2025, when the company reported net inflows of $222 million.

The following chart shows the trend in both ending and average AUM over the past five quarters:

The company maintains a diverse mix of investment vehicles, strategies, and client locations. As of June 30, 2025, open-end funds represented the largest portion of AUM at 48.3%, followed by advisory accounts at 22.5%, subadvisory at 16.1%, and closed-end funds at 13.0%.

By strategy, U.S. real estate remains the company’s largest focus at 49.4% of AUM, followed by preferred securities (20.1%), global/international real estate (15.7%), and global listed infrastructure (11.3%). Geographically, North American clients account for 77.6% of AUM, with Japan representing 10.6%.

The following breakdown illustrates this diversification:

Investment Flows and Performance

The shift to net outflows in Q2 2025 represents a reversal from recent quarters. Total firm net outflows were $131 million, compared to net inflows of $222 million in Q1 2025, resulting in an organic decay rate of 0.6%.

The following chart details the inflows and outflows over recent quarters:

Despite the outflows, Cohen & Steers continues to demonstrate strong investment performance across its strategies. As of June 30, 2025, 94% of the company’s AUM was in strategies outperforming their benchmarks over a 1-year period, 96% over 3 years, 97% over 5 years, and 99% over 10 years.

Additionally, 90% of U.S. open-end fund AUM was rated 4 or 5 stars by Morningstar, though this represents a slight decline from 92% in the previous quarter.

The following chart highlights this strong performance record:

Financial Position and Outlook

Cohen & Steers maintained a strong liquidity position, with cash, cash equivalents, liquid seed investments, and U.S. Treasurys totaling $322.8 million as of June 30, 2025, up from $295.4 million at the end of March.

According to the earnings call transcript, the company anticipates a stable compensation ratio of 40.5% and an effective tax rate of 25.3% for the year. General and administrative expenses are expected to rise by 7-8% for the full year, with future growth moderating to mid-single digits.

The company’s President and CIO, Jon Cheigh, commented on market dynamics during the earnings call, stating, "We believe that too much is made of the higher for longer story impact on valuations, and not enough is being made of the positive impact higher rates has on discouraging new supply." CEO Joe Harvey added, "We continue to see opportunities for asset owners to add real asset allocations to their portfolios."

Cohen & Steers is also expanding its product offerings, having launched its first active ETFs in the quarter, which recorded $54 million in net inflows. The company plans to launch additional active ETFs and continues to explore strategic combinations in infrastructure and real estate.

The stock closed at $66.68 on the day of the earnings release, reflecting a 0.61% decrease from the previous trading session. As of October 14, 2025, the stock was trading at $66.77, up 0.14% for the day, with a 52-week range of $64.29 to $110.67.

Full presentation:

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