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Edited Transcript of CNS earnings conference call or presentation 20-Apr-17 1:00pm GMT

Thomson Reuters StreetEvents

Q1 2017 Cohen & Steers Inc Earnings Call

New York May 5, 2017 (Thomson StreetEvents) -- Edited Transcript of Cohen & Steers Inc earnings conference call or presentation Thursday, April 20, 2017 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Adam H. Johnson

Cohen & Steers, Inc. - SVP, Associate General Counsel, and Assistant Secretary

* John Todd Glickson

Cohen & Steers, Inc. - Director of Global Marketing and Product Solutions and EVP

* Joseph Martin Harvey

Cohen & Steers, Inc. - President and CIO

* Matthew Scott Stadler

Cohen & Steers, Inc. - CFO and EVP

* Robert Hamilton Steers

Cohen & Steers, Inc. - Co-Founder, CEO and Director

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Conference Call Participants

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* Ann Dai

Keefe, Bruyette, & Woods, Inc., Research Division - Assistant VP, Equity Research

* Arinash Ghosh

Crédit Suisse AG, Research Division - Research Analyst

* John Joseph Dunn

Evercore ISI, Research Division - Associate

* Macrae Sykes

G. Research, LLC - Research Analyst

* Michael Roger Carrier

BofA Merrill Lynch, Research Division - Director

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by. Welcome to the Cohen & Steers First Quarter 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded Thursday, April 20, 2017.

I would now like to turn the conference over to Adam Johnson, Senior Vice President and Associate General Counsel of Cohen & Steers. Please go ahead, sir.

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Adam H. Johnson, Cohen & Steers, Inc. - SVP, Associate General Counsel, and Assistant Secretary [2]

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Thank you, and welcome to the Cohen & Steers First Quarter 2017 Earnings Conference Call. Joining me are Chief Executive Officer, Bob Steers; our President, Joe Harvey; and our Chief Financial Officer, Matt Stadler.

Before I turn the call over to Matt, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that some of these factors are described in the Risk Factors section of our 2016 Form 10-K, which is available on our website at cohenandsteers.com. I want to remind you that the company assumes no duty to update any forward-looking statements.

Also, the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance. For disclosures on these non-GAAP financial measures and their GAAP reconciliations, you should refer to the financial data contained in the earnings release and presentation, which are available on our website.

Finally, this presentation may contain information with respect to the investment performance of certain of our funds and strategies. I want to remind you that past performance is not a guarantee of future performance. This presentation may also contain information about funds that have filed registration statements with the SEC that have not yet become effective. This communication does not constitute an offer to sell or the solicitation of an offer to buy these securities. For more complete information about these funds, including charges, expenses and risks, please visit our website.

With that, I'll turn the call over to Matt.

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Matthew Scott Stadler, Cohen & Steers, Inc. - CFO and EVP [3]

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Thank you, Adam. My remarks this morning will focus on our as-adjusted results, which exclude the after-tax financial effect associated with our seed investments, certain discrete tax items and the effect of an accelerated vesting of certain restricted stock units in the first quarter of last year.

Yesterday, we reported earnings of $0.47 per share compared with $0.41 in the prior year's quarter and $0.48 sequentially. Revenue was $89.7 million for the quarter compared with $79.7 million in the prior year's quarter and $89.5 million sequentially. The increase in revenue from the fourth quarter was attributable to higher average assets under management partially offset by 2 fewer days in the quarter.

Average assets under management for the quarter were $58.3 billion compared with $51.6 billion in the prior year's quarter and $57.4 billion sequentially.

Operating income was $35.5 million for the quarter compared with $30.3 million in the prior year's quarter and $35.9 million sequentially. Our operating margin decreased to 39.6% from 40.1% last quarter. Expenses increased 1.2% on a sequential basis, primarily due to higher compensation and benefits, partially offset by lower distribution and service fees and G&A.

The compensation-to-revenue ratio was 32.75% for the quarter, consistent with the guidance provided on our last call. The decrease in distribution and service fee expense was consistent with the decline in average assets under management in our U.S. no-load open-end mutual funds. And G&A decreased 1.6% on a sequential basis, primarily due to lower travel and entertainment.

Our effective tax rate for the quarter was 38%, consistent with the guidance we provided on the last call.

Page 12 of the earnings presentation displays our cash, cash equivalents and seed investments for the current and trailing 4 quarters and indicates that portion of cash and cash equivalents held outside the U.S. Our firm liquidity totaled $218 million compared with $239 million last quarter, and stockholders' equity was $273 million compared with $266 million at December 31. We remain debt-free.

Assets under management totaled $58.5 billion at March 31, an increase of $1.3 billion or 2% from December 31. Assets under management in institutional accounts totaled $28.9 billion, an increase of $276 million or 1% from last quarter. And open-end funds had assets under management of $20.4 billion, an increase of $785 million or 4% from last quarter.

Assets under management in closed-end funds increased $255 million or 3%. We recorded total net inflows of $905 million in the quarter, an annualized organic growth rate of 6%. This marks the 10th consecutive quarter of net inflows.

Institutional accounts had net inflows of $315 million in the first quarter, an annualized organic growth rate of 4%. Sub-advised portfolios in Japan had net inflows of $306 million in the quarter compared with $109 million of net inflows last quarter. Net inflows were primarily from U.S. real estate portfolios.

Distributions increased slightly to $811 million in the first quarter compared with $800 million last quarter. Sub-advised accounts excluding Japan had net inflows of $42 million with inflows from global real estate and global listed infrastructure portfolios being partially offset by outflows from large cap value portfolios. Advised accounts had net outflows of $33 million during the quarter, and Bob Steers will provide some color on the level of activity and our institutional pipeline in a moment.

Open-end funds had net inflows of $590 million during the quarter, an annualized organic growth rate of 12%. Distributions totaled $174 million of which $128 million were reinvested.

Let me briefly discuss a few items to consider for the second quarter and remainder of 2017. With respect to compensation and benefits, we expect to maintain a 32.75% compensation-to-revenue ratio. We still expect G&A to increase between 4% and 5% from last year. The increase is driven by investments to strategically add to our distribution capabilities in the DCIO channel and in Europe as well as higher mutual fund reimbursement costs and increased costs for administering our collective investment trusts, both of which are generally associated with asset growth in those respective vehicles. Excluding these items, G&A is projected to be flat year-over-year. Finally, we expect that our effective tax rate will remain at approximately 38%.

With that, I'd like to turn it over to Bob.

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [4]

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Thanks, Matt, and good morning. Before I get into our first quarter results, for perspective, I think it will be useful to explain our strategies regarding resource allocation at Cohen & Steers. The resource allocation process for us entails prioritizing investments and opportunities that have a high probability of generating significant organic growth while simultaneously finding efficiencies and cost savings wherever possible.

With these goals in mind, we are continuing to strategically add to our global investment and distribution teams. What gives us confidence to spend despite the current industry headwinds is our conviction that real asset and alternative income strategies are gaining share of portfolio allocations globally. Institutional search activity continues to grow for all of our strategies, but especially in infrastructure, real estate, multi-strat real assets and preferred security strategies.

Listed infrastructure, as an example, is currently experiencing exceptionally strong institutional demand. It appears that institutional investors are looking to capitalize not only on the looming prospect of higher government spending but also on the secular and seismic shift in supply chain logistics for B2B and B2C e-commerce as we're seeing in the retail sector. As a result, we have developed new and more targeted strategies within listed infrastructure that invest in companies related to logistics and, separately, the beneficiaries of current and prospective public works infrastructure programs.

Similarly, interest in our blended multi-strat real asset strategy is growing as well. In this instance because risk tolerances vary widely among prospective investors, we are now offering a balanced version of our real asset strategy, which lowers volatility through higher rates and TIPS and credit. Additional [iterations] are in the works as well.

Also, demand for preferred security strategies remain strong in the wealth channel and is expanding in the institutional channel. And here too, we have product expansion opportunities such as our new low-duration portfolio.

To capitalize on these and other opportunities, we are adding headcount to a number of our investment teams in order to add breadth and depth to our existing capabilities. Complementing this, we have and continue to broaden our institutional distribution capabilities across the board, including regionally in Europe, Hong Kong and Tokyo, and domestically by expanding our DCIO consultant relations and direct sales teams.

Listed real asset and alternative income strategies have generated consistent and significant organic growth because active management works and asset allocations are increasing. This is what gives us confidence that spending now to broaden our real asset and alternative income strategies and expand our distribution reach globally will generate additional organic growth and diversify our asset base.

Although we're investing for growth, we are also mindful of the margin pressures facing the industry and are carefully managing our cost structure. To that end, we have formed an internal task force aimed at more formally searching for efficiencies and cost savings. In addition, we're utilizing technology wherever possible to improve productivity throughout the organization. Although we're confident that expanding our organization will produce new and meaningful growth opportunities, we believe that the cost of this investment can be partially mitigated through diligent productivity and cost management.

Turning to the first quarter investment performance. With the exception of global listed infrastructure, all of our real asset strategies lag behind the S&P 500 following the postelection pattern of risk on investing. That said, all of our strategies except for commodities had positive returns and 5 out of 10 core investment strategies outperformed their respective benchmarks in the quarter, with the laggards being commodities, resource equities, real assets and international real estate.

Over the past 12 months, 67% of our AUM is in outperforming strategies and 91% of our open-end fund assets are in 4- or 5-star funds. Asset flows in the quarter were again positive, as Matt mentioned, and we have now achieved net inflows for 10 consecutive quarters.

Bolstering our view that demand for our real asset and alternative income strategies is broadening out, we experienced net inflows in 8 out of 10 strategies with only large cap value experiencing any material outflows. Our open-end funds registered net inflows of $590 million for a 12% organic growth rate. As has been the case in the past, we experienced strong net inflows into our top-performing U.S. real estate fund and our preferred securities fund. However, we also had a $155 million of net inflows into our low-duration preferred fund. This fund was recently approved and added to the Merrill Lynch and Wells Fargo platforms and is an excellent example of the growing opportunities and demand that we are experiencing from an expanded product set.

Advisory net outflows were a modest $33 million, and the pipeline of awarded but unfunded mandates shrank slightly from $330 million in the fourth quarter to $317 million in the first quarter. On the surface, both metrics were slightly disappointing. However, it's not atypical for the first quarter to be seasonally weak. And as I said upfront, search activity is now strong and improving. We are currently a finalist competing for 11 mandates totaling over $1.2 billion across multiple strategies, and we expect that most if not all of these searches will be concluded in this quarter.

In addition, we have been awarded 2 new model delivery sub-advisory mandates, which are AUA and not included in our pipeline figures: one is focused on MLPs and the second on global preferred securities. Importantly, each of these opportunities gives us access to new wealth markets in Asia: one in Taiwan and the other in South Korea. We expect both will fund in this quarter.

Sub-advisory ex Japan net flows were solid $42 million for a 3% organic growth rate. In Japan, we remain one of the only U.S. REIT sub-advisers with net inflows before distributions. Our net inflows in the quarter were $305 million and total distributions were $811 million.

Obviously, we're very upbeat about the prospects for our product and market opportunities. We're also as committed as ever to active management in our space, and our decision to devote additional resources to pursue investment and growth opportunities reflects our optimism.

With that, I'd like to open the floor to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Ari Ghosh with Credit Suisse.

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Arinash Ghosh, Crédit Suisse AG, Research Division - Research Analyst [2]

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So I believe that the outflow in the advisory channel was related to a mandate moving to passive. So I was just wondering if this client had more assets with you. And also, if you had a sense for additional at-risk assets that may move to passive strategies across your channels.

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [3]

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Sure. I didn't hear all of the question, Ari. But just to address the one question about the redemption in advisory, that related to a large cap value mandate where with the client we manage several accounts. And for this one account, they went passive. And as I'm sure you know in terms of the industry trends for the core style boxes that's where you're seeing the most switching from active to passive. Large cap value assets are a very small part of our asset base. So there's not a lot of potential for that to continue going forward.

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Arinash Ghosh, Crédit Suisse AG, Research Division - Research Analyst [4]

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And then maybe if you can give us an update on the CITs, including your partnership with SEI. I would just imagine that there was a fair bit of retirement money in motion from DOL and one for your seasonality. So I was just wondering about the velocity of flows here as you look to grow your retirement footprint. And also if you're seeing any increased competition from cheaper, passively managed targeted funds?

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John Todd Glickson, Cohen & Steers, Inc. - Director of Global Marketing and Product Solutions and EVP [5]

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This is Todd Glickson from the product and marketing group. Just to comment on your question about CITs, and it's a good one, you saw the uptick in our flows from last year. It's safe to say with our focus on DCIO more that will continue. We're working with our current clients that are in our retirement -- that are investors in our retirement products to evaluate whether or not the CIT is the right vehicle for them, separate and apart from what they are invested in now. And as we look at the new business that comes in with more and more frequency, they are certainly looking at that construct. So I don't think there's anything but positive news as it relates to that. And as we look to open new offerings, we're going to be very -- or new strategies, we're going to be very thoughtful about what the best wrapper is. So if we think that the appetite is more retirement focused in general, we may lead with the CIT as opposed to [for the act] product. It really just depends on the distribution opportunities. But it's safe to say that, that more frequency, you'll see us trafficking in that space.

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Operator [6]

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Our next question comes from the line of John Dunn with Evercore ISI.

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John Joseph Dunn, Evercore ISI, Research Division - Associate [7]

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Question on free compression. I mean, clearly, it's most pronounced in the classic style boxes. But looking outside of that, are there any strategies where you guys are feeling pressure on fees? And also, as more competitors try to crack into real estate strategies, can you just talk about some of the home-court advantages you guys have?

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John Todd Glickson, Cohen & Steers, Inc. - Director of Global Marketing and Product Solutions and EVP [8]

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Sure. This is Todd Glickson again. Perfect question. We talked a little bit about it last quarter. One of the things that we continue to be vigilant about is our price point versus our peers. So we always look at a couple of things, not only where we're priced relative to our peers, but also the peers that we think are most like us. As it relates to the asset classes that we traffic in, and Bob talked about it before, you can clearly see the advantage of active management. There is, over time, an alpha component that's been relatively consistent and high over the benchmark. And I think that gives us a little bit of comfort as it relates to our price point, but we stay focused on being competitive. As it relates to competition, certainly ETFs are out there for us. It gets back to where active works, where passive works. We think that there's a place for both in the spaces that we play in. Active has got some pronounced benefits that we see and that the market believes to be true. So we'll continue to be vigilant. But in terms of where we are now, we feel comfortable. But rest assured, we're examining those price points on a regular basis to make sure that we stay on top of it.

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John Joseph Dunn, Evercore ISI, Research Division - Associate [9]

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Got you. And then...

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [10]

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Maybe I'll continue the answer with respect to the home-court advantages and our real estate strategies. I think the question was framed in terms of new entrants into the space. And I would say we're not seeing a lot of new entrants to this space. We've got a lot of competition both on the active side and on the passive side. In terms of our home-court advantages, it's the size and the experience of our team, and it's a global team. When you think about real estate with us, we run many strategies: U.S., global, regional. When you think about the competition, which is primarily from passive, the most penetration has occurred in the U.S. Historically, active managers have had a high betting average of outperformance last year. That was in the case only about 5% of active managers outperform last year, that's very unusual. This year, active managers I think are going to have a pretty good year. And one reason just to give you some perspective is that, retail, which you'd probably read about in the press is under a lot of stress, and those companies have underperformed. And if you're active in your underweight retails, you're doing well versus the passive indexes. Just thinking about the home-court advantage more broadly, when you think about global, we think that active has a lot to offer. When you think about the different ways, we can add alpha through country selection, security selection, emerging markets, hedging currency. Now that's a place, and we think that there's going to be increasing demand for global mandates because of how well the U.S. markets have performed looking backward. But the global space is one where active brings a lot to the table.

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John Joseph Dunn, Evercore ISI, Research Division - Associate [11]

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Got it. And then on expenses, to get to the 4% to 5% in G&A, it's going to be a ramp in the next few quarters. Can you give us a sense of what the target for you that might be quarter-to-quarter? And then with the internal task force, would you say that a goal that task force might be to slow the G&A rate below the increase this year?

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Matthew Scott Stadler, Cohen & Steers, Inc. - CFO and EVP [12]

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Well, John, I'd say the goal of task force is just to rationalize all the expenses and make sure we're getting the appropriate value there. So it is not a target. It's just a discipline. I think with respect to the increase in the G&A, I basically just say it's pro rata over the remaining 3 quarters.

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Operator [13]

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Our next question comes from the line of Michael Carrier with Bank of America Merrill Lynch.

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Michael Roger Carrier, BofA Merrill Lynch, Research Division - Director [14]

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I guess just on the advisory and sub-advisory ex Japan, both those channels, it sounds like you guys are making and have been making some investments, given the outlook on distribution for allocations into some of the product categories. I think you guys mentioned kind of the uptick on the finalist that you're in. Just wanted to get a sense. Can you give us any numbers maybe year-over-year feel on how that's progressing, just to get some sense on if you're seeing more and more traction as you're making in these investments and as institutions are allocating more into these strategies?

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [15]

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I don't think we have any hard data in terms of year-over-year. We've -- periodically, we try to compare the volume of RFPs and things like that year-over-year. But what we're finding is that a majority of the searches that we're involved with currently don't utilize consultants. And sometimes they use RFPs, and sometimes they don't. I would say that the volume that we're seeing now easily is more diverse than we've seen in the past because we're seeing, for example, preferred securities strategies which heretofore have been virtually exclusively a retail product. We're seeing institutional interest both domestically and internationally in preferreds. We are also seeing, as I mentioned in my comments, a major uptick in interest in listed infrastructure, probably in part due to all of the discussions about fiscal stimulus here and elsewhere. And along the way -- and I think one of our other home-court advantages is some of these newer strategies, whether it's low-duration preferreds or logistics subset of global infrastructure public works, the home-court advantage is no one else does this. We don't have any competition yet. And so it's exciting that we have both new and existing relationships who want to explore with us the possibilities of these new strategies. So we're working with these institutions. We're working with CIOs at wealth management firms who themselves are trying to define real assets, define listed infrastructure. And we're in the room with these folks helping to refine exactly how to capitalize on the trends in infrastructure and elsewhere. And so that's our real home-court advantage. And that's what's exciting about this pipeline, the diversity of it and how it's evolving.

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Joseph Martin Harvey, Cohen & Steers, Inc. - President and CIO [16]

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I'd add too. In terms of the diversity of the 11 mandates that were in the finals [4], it represents 7 different investment strategies. So that's one area of diversity. But there's another area of diversity, and that's the type of institution that we're engaging with. And this spans a spectrum of public funds, sovereign wealth funds, health care organizations, insurance companies and endowments. And I think that speaks more to the investments we've made in people to target some of these markets in the advisory space.

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [17]

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And I would add, we're still -- we're just beginning to see some green shoots in our more recent commitments to rebuild our European staff last year and the DCIO efforts, which also include institutional efforts. And virtually none of these mandates or searches in the current pipeline M&A from those sources. So we're fully expecting incremental growth from those newer endeavors.

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Michael Roger Carrier, BofA Merrill Lynch, Research Division - Director [18]

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Okay. That's helpful. And then a quick follow-up. Just on Japan, I think some of the products in the market distributions have been reduced. Just wanted to get a sense on when that occurs, how you expect that to kind of impact maybe the demand given other competing products in the market? And I know you guys don't control that, but just wanted to get a sense on how you're seeing that progress over time?

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [19]

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Sure. So as you point out, it wouldn't be a surprise to see a reduction in the distributions there. As you point out, we're not involved in the process. So we can't handicap when or if. But when distributions are reduced, the outcome is pretty clear. You see a uptick in redemptions, which is somewhat offset by the lower outflows from distributions. We -- I'll be going over to Asia this weekend, and we've been through this process before. So again, if and when it happens, we have ramped up and are prepared to accelerate our support activities with the distributors in Japan to explain to them current fundamentals, valuations, the outlook and so forth. So we're prepared in the event that distributions are reduced. And we're hopeful given the fact that our relationships in Japan distribute somewhat differently than the other REIT managers there which are mainly through wirehouse-type channels whereas we're predominantly distributed through regional banks which tends to be somewhat less volatile.

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Operator [20]

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(Operator Instructions) Our next question comes from the line of Ann Dai with KBW.

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Ann Dai, Keefe, Bruyette, & Woods, Inc., Research Division - Assistant VP, Equity Research [21]

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Just looking at trend in inflows maybe from fourth quarter, it looks like gross inflows were a little bit slower in the quarter. And I understand some of that comes from timing around the institutional mandates. But maybe just on the open-end mutual fund side of things, do you think some of that slowdown is related to the December rate hike based on conversations with your various distributors? Do you think you expect to see some kind of similar effects from March and subsequent hikes?

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [22]

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I don't think -- I think flows were affected by the environment postelection. And the bond market, the 10-year move, not really -- the Fed really I don't think is much of a factor. It's really I think expectations for economic growth and substantially higher interest rates. So in that December-January period, we saw weakness in our preferred and other income-oriented strategies. And as that has abated if not reversed, we've seen the underlying securities like REITs have for the last month or more have outperformed dramatically and flows have improved accordingly. So we're not really watching the Fed. We're really watching the macroeconomy and where long-term interest rates are going.

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Ann Dai, Keefe, Bruyette, & Woods, Inc., Research Division - Assistant VP, Equity Research [23]

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Okay, understood. And one quick one on large cap value. Can you just give us maybe some more color on what those assets are today? Is it a couple billion?

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Matthew Scott Stadler, Cohen & Steers, Inc. - CFO and EVP [24]

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We'll get that exact number, but it's about $1.1 billion.

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [25]

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It's included in other.

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Operator [26]

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Our next question comes from the line of Mac Sykes with Gabelli.

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Macrae Sykes, G. Research, LLC - Research Analyst [27]

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Joe, would you expand a little bit more about the Amazon effect on retail sales and mall traffic? I mean, I understand it may be a relative advantage for REIT investing as you suggested in terms of positioning. But could you just talk about the effects in terms of the overall impact to the REIT index in general, in terms of just the health of commercial, retail stocks?

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Joseph Martin Harvey, Cohen & Steers, Inc. - President and CIO [28]

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That's a really good question. Just to frame it quickly, about 18% of the market capitalization is represented by retail real estate companies. Part of them are big regional malls and closed mall stores and then the remainder in neighborhood community shopping centers, which are typically anchored by a food store and pharmacy, et cetera. So what's really important is the quality of the retail property and, said more simply, how much barrier to competition or new supply in the physical space. So within the regional mall sector, properties and companies that own malls that have a lot of competition are frankly going out of business. And that's been happening very slowly as we build supply of real estate here in the United States, but it's been accelerated by the market share gains of e-commerce. These are secular trends. It's going to continue. We think that physical retail has an important presence, but it's going to be shrinking, and it's going to get concentrated into the properties that are in dense markets, that are in high-income markets that have natural barriers to supply. So I've been reading in the press a lot of these scare stories about what's going on in retail, and we're going to see more retailer bankruptcies, which obviously are critical elements of the cash flows for retail real estate. It's a secular trend. Right now, it's taken another leg down. There will be survivors. Our job is to know when the market over shoots and the types of companies that will be survivors and the profit from the volatility in share prices and the psychological concerns in the market.

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Macrae Sykes, G. Research, LLC - Research Analyst [29]

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And Matt, could you just remind us for a -- what percentage change in the corporate rate the impact to EPS? I know we're still all kind of playing taxes, but I just want to keep up of that.

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Robert Hamilton Steers, Cohen & Steers, Inc. - Co-Founder, CEO and Director [30]

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Tax reduction trend.

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Matthew Scott Stadler, Cohen & Steers, Inc. - CFO and EVP [31]

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The 38% that we're seeing for non-GAAP versus what we booked for GAAP?

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Macrae Sykes, G. Research, LLC - Research Analyst [32]

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No, no. If there was a 1% change in the corporate tax rate, what would that mean in terms of the increase in EPS?

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Matthew Scott Stadler, Cohen & Steers, Inc. - CFO and EVP [33]

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I think we said it's about $0.04 a share. I'll have to refresh my notes and get back to you on that.

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Operator [34]

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Thank you. And there are no further questions at this time. I'll now turn the call back to the presenters.

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Matthew Scott Stadler, Cohen & Steers, Inc. - CFO and EVP [35]

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Great. Well, thank you all for joining us this morning, and we look forward to speaking to you again in July. Thank you.

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Operator [36]

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Thank you, ladies and gentlemen. That does conclude the conference call. We thank you for your participation and ask that you please disconnect your lines.