Q1 2025 Cohen & Steers Inc Earnings Call

April 17, 2025

Operator: 2025 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode, and afterwards we will conduct a question-and-answer session. At that time, if you have a question, please press the star followed by the one on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, this conference is being recorded Thursday, April 17, 2025. I would now like to turn the conference over to Brian Heller, Senior Vice President and Deputy General Counsel of Cohen & Steers. Please go ahead.

During the presentation, all participants will be in a listen only mode and afterwards, we will conduct a question and answer session.

Unknown Executive: Ladies and gentlemen, thank you for standing by.

Unknown Executive: Welcome to the Cohen & Steers first quarter 2025 earnings conference call. During the presentation, all participants will be in a listen-only mode, and afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the star followed by the 1 on your telephone. If at any time during the conference you need to reach an operator, please press star 0.

At that time, if you have a question. Please press star followed by the one on your telephone.

If at any time during the conference you need to reach an operator, Please press star zero.

As a reminder, this conference is being recorded Thursday April 17th 2025.

Speaker Change: I would now like to turn the conference over to Brian Heller Senior Vice President and Deputy General Counsel of Cohen <unk> Steers. Please go ahead.

Unknown Executive: As a reminder, this conference is being recorded Thursday, April 17, 2025.

Speaker Change: Thank you and welcome to the Cohen <unk> Steers first quarter 2025 earnings conference call.

Brian Heller: Thank you, and welcome to the Cohen & Steers Q1 2025 Earnings Conference Call. Joining me are Joe Harvey, our Chief Executive Officer, Raja Dakkuri, our Chief Financial Officer, and Jon Cheigh, our President and Chief Investment Officer. I want to remind you that some of our comments and answers to your questions may include forward-looking statements. We believe these statements are reasonable based on information currently available to us, but actual outcomes could differ materially due to a number of factors, including those described in our accompanying first quarter earnings release and presentation, our most recent annual report on Form 10-K, and our other SEC filings. We assume no duty to update any forward-looking statement. Further, none of our statements constitute an offer to sell or the solicitation of an offer to buy the securities of any fund or other investment vehicle.

Brian Heller: I would now like to turn the conference over to Brian Heller, Senior Vice President and Deputy General Counsel of Cohen & Steers. Please go ahead.

Speaker Change: Joining me are Joe Harvey, our Chief Executive Officer.

Joe Harvey: Considering that most of our strategy categories have been in outflows according to Morningstar Open End Fund data. Our positive differential, to me, comes down to a combination of our outstanding investment performance. brand recognition, and strong client relationship. Accordingly, our market share of active open-end fund AUM continued to increase in U.S. real estate, global real estate, preferreds, and global listed infrastructure. Leading flows in the quarter was Global Listed Infrastructure, which had $586 million of net inflows. All set by net outflows and US real estate of $217 million. Global Real Estate at $166 million and Preferreds at $76 million.

Speaker Change: Roger Corey our Chief Financial Officer.

Brian Heller: Thank you and welcome to the Cohen & Steers first quarter 2025 earnings conference call.

Speaker Change: John <unk>, our president and Chief investment Officer.

Speaker Change: I want to remind you that some of our comments and answers to your questions may include forward looking statements.

Brian Heller: Joining me are Jill Harvey, our Chief Executive Officer. Raja Dakkuri, Chief Financial Officer John Cheigh, President and Chief Investment Officer I want to remind you that some of our comments and answers to your questions may include forward-looking statements. We believe these statements are reasonable based on information currently available to us, but actual outcomes could differ materially due to a number of factors. Including those described in our accompanying first quarter earnings release and presentation. Our most recent annual report on Form 10-K and our other SEC filings. Assume no duty to update any forward-looking statements.

Speaker Change: We believe these statements are reasonable based on information currently available to us, but actual outcomes could differ materially due to a number of factors, including those described in our accompanying first quarter earnings release and presentation.

Speaker Change: Our most recent annual report on Form 10-K, and our other SEC filings, we assume no duty to update any forward looking statements.

Speaker Change: Further none of our statements constitute an offer to sell or the solicitation of an offer to buy the securities of any fund or other investment vehicles.

Speaker Change: Our presentation also contains non-GAAP financial measures referred to as adjusted financial measures that we believe are meaningful in evaluating our performance.

Brian Heller: Further, none of our statements constitute an offer to sell or the solicitation of an offer to buy the securities of any fund or other investment vehicle. Our presentation also contains non-GAAP financial measures, referred to as as-adjusted financial measures, that we believe are meaningful in evaluating our performance. Non-GAAP Financial Measures should be read in conjunction with our GAAP results. The reconciliation of these non-GAAP financial measures is included in the earnings release and presentation. is to some extent reasonably available.

Brian Heller: Our presentation also contains non-GAAP financial measures referred to as-adjusted financial measures that we believe are meaningful in evaluating our performance. These non-GAAP financial measures should be read in conjunction with our GAAP results. A reconciliation of these non-GAAP financial measures is included in the earnings release and presentation to the extent reasonably available. The earnings release and presentation, as well as links to our SEC filings, are available in the investor relations section of our website at www.cohenandsteers.com. With that, I'll turn the call over to Raja.

Joe Harvey: Highlights for open-end funds include the breadth and flows across most key segments such as wirehouses, RIAs, independent and regional broker-dealers, bank trusts, and defined contributions. Our gross sales for open-end funds annualized at $12.8 billion, in line with our average over the past several years. SMAs and models had outflows of $44 million and offshore sea calves had inflows of $71 million. And we had modest inflows into our newly launched active ETFs, which I will discuss in a moment. Institutional advisories net outflows of $108 million were comprised of five new mandates totaling $347 million, offset by two account terminations totaling $231 million, and negative rebalancing of $223 million by existing clients.

Speaker Change: These non-GAAP financial measures should be read in conjunction with our GAAP results.

Speaker Change: A reconciliation of these non-GAAP financial measures is included in the earnings release and presentation to the extent reasonably available.

Speaker Change: The earnings release and presentation as well as links to our SEC filings are available in the Investor Relations section of our website at Www Dot Cohen <unk> steers dot com with that I'll turn the call over to Roger. Thank you, Brian and good morning, everyone. My remarks today will focus on our as adjusted results a reconciliation.

Brian Heller: The earnings release and presentation, as well as links to our SEC filings, are available in the Investor Relations section of our website at www.cohenandsteers.com.

Raja Dakkuri: Thank you, Brian, and good morning, everyone. My remarks today will focus on our as-adjusted results. A reconciliation of GAAP to as-adjusted results can be found in the earnings release and presentation. Yesterday, we reported earnings of $0.75 per share compared to $0.78 sequentially. Revenue for Q1 decreased from the prior quarter to $133.8 million. The change in revenue from the prior quarter was driven by several items. The primary driver was lower average AUM during the quarter. Also impacting revenue was lower day count compared to the prior quarter. As a reminder, we had also recognized performance fees in Q4 related to certain institutional accounts. These items were partially offset by improvement in our effective fee rate. Our effective fee rate was 59 basis points, which was slightly higher than the prior quarter.

Speaker Change: You should have gapped as adjusted results can be found in the earnings release and presentation.

Raja Dakkuri: With that, I'll turn the call over to Raja. Thank you, Brian, and good morning, everyone. My remarks today will focus on our as-adjusted results.

Speaker Change: Yesterday, we reported earnings of 75 cents per share compared to seven days sequentially.

Speaker Change: Revenue for Q1 decreased from the prior quarter to $133 8 million.

Raja Dakkuri: A reconciliation of GAAP as-adjusted results can be found in the earnings release and presentation. Yesterday, we reported earnings of $0.75 per share compared to $0.78 sequentially. Revenue for Q1 decreased from the prior quarter to $133.8 million. The change in revenue from the prior quarter was driven by several items. The primary driver was lower average AUM during the quarter. Also impacting revenue was lower day count compared to the prior quarter. As a reminder, we had also recognized performance fees in Q4 related to certain institutional These items were partially offset by improvement in our effective fee rate.

Speaker Change: The change in revenue from the prior quarter was driven by several items.

Speaker Change: Primary driver was lower average AUM during the quarter also impacting revenue was lower day count compared to the prior quarter.

Joe Harvey: The weak spot in the quarter is our one unfunded pipeline which ended the quarter at $61 million compared with $531 million last quarter. Obviously, that is a low number for us. It reflects a lot of completed fundings and the timing of a number of finals competitions we are anticipating, plus some customized mandates we continue to work on. While it is tempting to attribute a low pipeline to the market environment, the regime change in interest rates has already occurred and thus we need to translate the solid level of activity in institutional advisory to win.

Speaker Change: As a reminder, we had also recognized performance fees in Q4 related to certain institutional accounts.

Speaker Change: These items were partially offset by improvement in our effective fee rates, our effective fee rate was 59 basis points, which was slightly higher than the prior quarter.

Speaker Change: The primary driver of this was mix change in our average AUM.

Raja Dakkuri: The primary driver of this was mix change in our average AUM. Our operating margin was 34.7% compared to 35.5% in the prior quarter. As noted, we experienced lower average AUM as compared to the prior quarter. However, ending AUM increased compared to Q4. AUM was $87.6 billion as of Q1, compared to $85.8 billion at prior quarter end. The change in ending AUM was driven by a number of factors. We generated overall net inflows during Q1, primarily due to open-end funds. These open-end fund flows were partially offset by institutional outflows that were anticipated. This is the third consecutive quarter of net inflows. In terms of our strategies, global listed infrastructure experienced strong flows during the quarter. Lastly, end-of-period AUM was positively impacted by market appreciation during the quarter.

Speaker Change: Our operating margin was 34, 7% compared to 35, 5% in the prior quarter.

Raja Dakkuri: Our effective fee rate was 59 basis points, which was slightly higher than the prior quarter. The primary driver of this was mixed change in our average AUM. Our operating margin was 34.7% compared to 35.5% in the prior quarter. As noted, we experienced lower average AUM as compared to the prior quarter. However, ending AUM increased compared to Q4. AUM was $87.6 billion as of Q1, compared to $85.8 billion at prior quarter end. The change in ending AUM was driven by a number of factors. We generated overall net inflows during Q1 primarily due to open-end funds. These open end fund flows were partially upset by institutional outflows that were anticipated.

Speaker Change: As noted we experienced lower average AUM as compared to the prior quarter.

Speaker Change: However, ending AUM increased compared to Q4.

Joe Harvey: Last quarter, we indicated that we had approximately $800 million in pending redemption. The majority of those have occurred, and the known redemptions now stand at $290 million after the addition of one pending rebalancing outflow of $64 million.

Speaker Change: AUM was $87 6 billion as of Q1 compared to $85 8 billion at prior quarter end.

Speaker Change: The change in ending AUM was driven by a number of factors.

Speaker Change: We generated overall net inflows during Q1, primarily due to open end funds.

Speaker Change: Open end fund flows were partially offset by institutional outflows that were anticipated.

Joe Harvey: Turning to Strategic Initiatives. In February, we launched our first three active ETFs in real estate, preferreds, and natural resource equities. The strategies are compelling, differentiated, and, by design, not thematic, but core strategies for asset allocators. They were seeded with firm capital and we have begun to see inflows. We're pleased with the pace of flows, particularly for the natural resource equities ETF. We believe these vehicles will open access to investors who use them exclusively and thus expand our addressable market considerably. given that AUM and active ETFs have surpassed $1 trillion industry-wide. At the same time, there are advisors who are converting their business away from open-end funds to ETFs.

Speaker Change: This is the third consecutive quarter of net inflows.

Speaker Change: In terms of our strategies global listed infrastructure experienced strong flows during the quarter Lastly end of period AUM was positively impacted by market appreciation during the quarter, Joe Harvey who will provide additional insights regarding flows and pipeline.

Raja Dakkuri: This is the third consecutive quarter of net income. In terms of our strategies, global illicit infrastructure experienced strong flows during the quarter. Lastly, end of period AUM was positively impacted by market appreciation during the quarter.

Raja Dakkuri: Joseph Harvey will provide additional insights regarding flows and pipeline. Total expenses were lower than the prior quarter, primarily due to a decrease in compensation and benefits. During the quarter, the change in comp and benefits was in line with the sequential decrease in revenue. As a result, the compensation ratio for the quarter was 40.5%, consistent with our planning. To a lesser extent, expenses were also impacted by decreases in distribution and service fees, while G&A expense levels remained consistent with the prior quarter. Regarding taxes, our effective rate was 25.3% for the quarter. Our earnings material presents liquidity at the end of Q1 and prior quarters. Our liquidity totaled $295 million at quarter end, which represents a decrease versus the prior period. This quarterly change is in line with prior years and driven by our annual incentive compensation cycle.

Speaker Change: Total expenses were lower than the prior quarter, primarily due to a decrease in compensation and benefits during the quarter the change in comp and benefits was in line with the sequential decrease in revenue.

Raja Dakkuri: Joe Harvey will provide additional insights regarding flows and pipelines. Total expenses were lower than the prior quarter, primarily due to a decrease in compensation and benefits. During the quarter, the change in comp and benefits was in line with the sequential decrease in revenue. As a result, the compensation ratio for the quarter was 40.5%, consistent with our plan To a lesser extent, expenses were also impacted by decreases in distribution and service fees, while G&A expense levels remained consistent with the prior quarter.

Speaker Change: As a result, the compensation ratio for the quarter was 45% consistent with our planning to a lesser extent expenses were also impacted by decreases in distribution and service fees, while G&A expense levels remain consistent with the prior quarter.

Joe Harvey: These vehicles will help us retain those assets, particularly with RIAs who have growing assets. Our long-term strategy includes the development of ETFs for all of our core strategies, and we're working on round two. Understanding that implementation from here could vary based on how the market adopts different structures, such as ETFs as a share class of open-end funds.

Speaker Change: Regarding taxes, our effective rate was 25, 3% for the quarter.

Speaker Change: Our earnings material presents liquidity at the end of Q1 and prior quarters, our liquidity totaled 295 million at quarter end, which represents a decrease versus the prior period. This quarterly changes in line with prior years and driven by our annual incentive compensation cycle.

Raja Dakkuri: Regarding taxes, our effective rate was 25.3% for the Our earnings material presents liquidity at the end of Q1 and prior quarters. Our liquidity totaled $295 million at quarter end, which represents a decrease versus the prior period. This quarterly change is in line with prior years and driven by our annual incentive compensation cycle.

Speaker Change: Let me now touch on a few items regarding rest of year guidance.

Joe Harvey: One small but percolating market for us is the offshore wealth market. We now have six CCAV vehicles with $1.2 billion in AUM. and which have had inflows in 19 of the past 21 quarters. We launched our sixth CTF sub fund in the quarter, a short duration preferred stock strategy. This strategy's investment universe has attractive attributes with $1.3 trillion in size and yields of 7.7%. duration less than three years, and an average credit rating of triple B. We've had a lot of positive feedback and pre-marketing and look forward to being in the market. We are making good progress on our private real estate initiative.

Raja Dakkuri: Let me now touch on a few items regarding rest of year guidance. With respect to comp and benefits, we would expect our compensation ratio to remain at 40.5%, in line with Q1. We expect G&A to increase in the range of 6 to 7% as compared to the prior year. This is driven by continued infrastructure investments, including completion of our foreign office upgrades. Also impacting G&A are expenses related to our recent ETF rollout, as well as business development activities. Lastly, regarding 2025 guidance, we expect our effective tax rate to remain at 25.3% on an as adjusted basis. I'll now turn over to Jon Cheigh, who will discuss investment performance.

Speaker Change: With respect to comp and benefits, we would expect our compensation ratio to remain at 45% in line with Q1.

Raja Dakkuri: Let me now touch on a few items regarding rest-of-year guidance. With respect to comp and benefits, we would expect our compensation ratio to remain at 40.5% in line with Q1.

Speaker Change: We expect G&A to increase in the range of 6% to 7% as compared to the prior year.

Speaker Change: This is driven by continued infrastructure investments, including completion of our foreign office upgrades.

Raja Dakkuri: We expect G&A to increase in the range of 6-7% as compared to the prior year. This is driven by continued infrastructure investments, including completion of our foreign office upgrades. Also impacting G&A are expenses related to our recent ETF rollout, as well as business development activities.

Speaker Change: Also impacting G&A are expenses related to our recent ETF rollout as well as business development activities.

Speaker Change: Lastly, regarding 2025 guidance, we expect our effective tax rate to remain at 25, 3% on an as adjusted basis I'll now turn it over to John Shay, who will discuss investment performance central.

Raja Dakkuri: Lastly, regarding 2025 guidance, we expect our effective tax rate to remain at 25.3% on an as-adjusted I'll now turn over to John Cheigh, who will discuss investment performance.

John Shay: Thanks, Roger I'll cover three topics first our performance scorecard second the market environment in the first quarter and last our investment outlook and how we see our asset classes and strategies, playing a bigger role in client portfolios.

Jon Cheigh: Thanks, Raja. I'll cover three topics. First, our performance scorecard. Second, the market environment in Q1. Last, our investment outlook and how we see our asset classes and strategies.

Joe Harvey: Opportunities REIT, or CNS REIT, is the top-performing non-traded REIT for the 12 months ended February. CNS REIT returned 13.4% compared with 4.4% for the average non-traded REIT over that period. Among private wealth alternative choices, private credit has been the most popular, certainly compared with real estate recently, but we're seeing early signs of caution in credit and emerging interest in the bottoming of the commercial real estate cycle. We continue to work on additional anchor investors while ramping up our engagement with RIA. We are live on the Schwab, Herjavec, and Fidelity platforms, which provide access to the majority of RIAs.

John Cheigh: Thanks, Raja. I'll cover three topics. First, our performance scorecard. Second, the market environment in the first quarter. And last, our investment outlook and how we see our asset classes and strategies playing a bigger role in client portfolios. Beginning with our performance scorecard, the first quarter saw 81% of our AUM outperformance benchmark. On a 1-year basis, 89% of our AUM has outperformed, while our 3-, 5-, and 10-year rates are all above 95%. Our 1, 3, and 5-year excess returns of 257 basis points, 189 basis points, and 254 basis points, respectively, are near or above our expectations.

Jon Cheigh: Playing a bigger role in client portfolios. Beginning with our performance scorecard, Q1 saw 81% of our AUM outperformed the benchmark. On a 1-year basis, 89% of our AUM has outperformed, while our 3-, 5-, and 10-year rates are all above 95%. Our 1-, 3-, and 5-year excess returns of 257 basis points, 189 basis points, and 254 basis points respectively, are near or above our expectations. 92% of our open-end fund AUM is rated four or five star by Morningstar. In short, we continue to provide meaningful long-term alpha for our investors. Turning to market conditions. In Q1, US equities declined 4.3%, while developed market ex-US equities rose 5.4% in dollar terms. US REITs gained 2.8%, and global listed infrastructure rose 4.8%.

John Shay: Beginning with our performance scorecard in the first quarter saw 81% of our AUM outperformed its benchmark on a one year basis, 89% of our AUM has outperformed while our three five and 10 year rates are all above 95%.

John Shay: Our one three and five year excess returns of 257 basis points 189 basis points and 254 basis points respectively.

John Shay: Our near or above our expectations.

John Shay: 92% of our open end fund AUM is rated four or five star by Morningstar.

Joe Harvey: CNS REITs portfolio now comprises 5 shopping centers with a mix of power centers and grocery anchored centers. Shopping centers should be better equipped to defend against a more challenging economy, and we still believe they are mispriced considering their fundamentals.

John Shay: In short we continued to provide meaningful long term alpha for our investors.

John Cheigh: 92% of our open-end fund AUM is rated 4 or 5 star by Morningstar. In short, we continue to provide meaningful long-term alpha for our investors.

John Shay: Turning to market conditions in the first quarter U S. Equities declined four 3% while developed markets ex U S equities rose five 4% in dollar terms.

Joe Harvey: In the category of expanding our real estate franchise, we expect to launch late in the second quarter, a strategy to provide a better way for institutions to invest in core real estate using both listed and core private real estate. We expect to announce a partnership with a sub-advisor to collaborate on a vehicle designed for institutional real estate allocation. which tend to be a larger share of the real estate portfolio. Our aim is to provide better risk-adjusted returns than core private real estate, along with better liquidity and broader property sector allocation. John and I have been highlighting Global List Infrastructure as a strategy that is generating a lot of interest and that began to show in our flows this quarter.

John Cheigh: Turning to Market Conditions. In the first quarter, U.S. equities declined 4.3%, while developed market ex-U.S. equities rose 5.4% in dollar terms. U.S. REITs gained 2.8% and Global Listed Infrastructure rose 4.8%, in both cases outperforming the corresponding broad equity index. Additionally, listed real assets performed well as investors rotated into more defensive or attractively valued hard assets, ranging from utilities to gold, as anticipation of tariffs and sticky inflation raised macro concerns. This rotation, in our view, is not an anomaly. In November of last year, we published a paper called FOMO reversals of fortune and the opportunity in real assets.

John Shay: U S. Reits gained two 8% and global listed infrastructure Rose four 8% in both cases outperforming the corresponding broad equity index.

Jon Cheigh: In both cases, outperforming the corresponding broad equity index. Additionally, listed real assets performed well as investors rotated into more defensive or attractively valued hard assets, ranging from utilities to gold, as anticipation of tariffs and sticky inflation raised macro concerns. This rotation, in our view, is not an anomaly. In November of last year, we published a paper called FOMO: Reversals of Fortune and the Opportunity in Real Assets. The punchline being that decade-long market leadership tends to mean revert. To us, this one quarter rotation is a harbinger of what the new market leadership might look like, spearheaded by real assets and potentially non-US equities. A shift built on a mix of attractive valuations and macro forces. Either way, we believe that diversification and a balanced strategic asset allocation is a requirement in a world of macro and geopolitical change.

John Shay: Additionally, listed real assets performed well as investors rotated into more defensive or attractively valued hard assets ranging from utilities to gold as anticipation of tariffs sticky inflation raised macro concerns.

John Shay: This rotation in our view is not an anomaly.

John Shay: November of last year, we published a paper called Fomo reversals of fortune and the opportunity in real assets.

Joe Harvey: We'll be seeing more behind it with demand from new allocations and takeaways from underperforming managers. Private infrastructure still dominates the allocation landscape, but we believe, just as in real estate, that listed infrastructure complements private allocation. resulting in better portfolio construction and performance. Fundamentally, secular trends, including digitalization of the world's economies, rebuilding core infrastructure, higher power demand, decarbonization, and deglobalization. combined are accelerating infrastructure spending. An estimated $94 trillion of infrastructure investment is needed globally by 2040. If more angst about the stickiness of inflation and now tariffs, we're seeing more interest in real assets from the retirement segments, model builders, and target date managers.

John Shay: The punch line being that decades long market leadership tends to mean revert.

John Shay: To us this one quarter rotation is a harbinger of what the new market leadership might look like.

John Cheigh: The punchline being that decades-long market leadership tends to mean reverse. To us, this one-quarter rotation is a harbinger of what the new market leadership might look like. Spearheaded by real assets and potentially non-U.S. A shift built on a mix of attractive valuations and macro forces.

John Shay: Spearheaded by real assets and potentially non U S equities.

John Shay: A shift built on a mix of attractive evaluations and macro forces.

John Shay: Either way, we believe that diversification and a balanced strategic asset allocation is a requirement in a world of macro and geopolitical change.

John Shay: Of course Q1 performance has taken a backseat to what has transpired in the first few weeks of the second quarter.

John Cheigh: Either way, we believe that diversification and a balanced strategic asset allocation is a requirement in a world of macro and geopolitical change. Of course, Q1 performance has taken a backseat to what has transpired in the first few weeks of the second quarter. So what's our interpretation of what has happened and where do we go from here? Coming into the year, we expected a slowdown. due to a combination of a tiring consumer, fiscal tightening, immigration reversals, and trade impacts. offset by economic benefits from deregulation. When combined with U.S. equities at all-time highs, tight credit spreads, and expensive price-to-earnings multiples, financial markets were vulnerable to a negative surprise.

Jon Cheigh: Of course, Q1 performance has taken a back seat to what has transpired in the first few weeks of Q2. What's our interpretation of what has happened, and where do we go from here? Coming into the year, we expected a slowdown due to a combination of a tiring consumer, fiscal tightening, immigration reversals, and trade impacts offset by economic benefits from deregulation. When combined with US equities at all-time highs, tight credit spreads, and expensive price-to-earnings multiples, financial markets were vulnerable to a negative surprise. Global investors had become complacent. The April 2 tariff announcements represented just such a surprise, and in our view, will lead to a meaningful stagflationary impact on the US, at least in the short run.

John Shay: So what's our interpretation of what has happened and where do we go from here.

John Shay: Coming into the year, we expected a slowdown.

John Shay: Due to a combination of a tiring consumer fiscal tightening immigration reversals and trade impacts offset by economic benefits from deregulation.

Joe Harvey: This is welcome and overdue, in my opinion, considering the preponderance of financial assets in 401k plans. Notably, the private equity firms are pushing for private allocations in these plans. Aside from the plumbing in these plans, which cannot even accommodate ETFs at this point, our view is that private allocations are difficult in 401ks and listed real assets are a smart solution. With our multi-strategy real assets portfolio, for example, 401ks can have a single line item turnkey allocation to real assets and have efficient pricing and daily liquidity. The only potential negative is the perceived volatility compared with private.

John Shay: When combined with U S equities at all time highs tight credit spreads and expensive price to earnings multiples financial markets were vulnerable to a negative surprise.

John Shay: Global investors had become complacent.

John Shay: The April 2nd tariff announcements represented just such a surprise and in our view will lead to a meaningful stagflationary impact on the U S at least in the short run.

John Cheigh: Global Investors Have Become Complacent April 2nd tariff announcements represented just such a surprise and in our view will lead to a meaningful stagflationary impact on the US at least in the short run. As we've seen over the last few weeks, it's a fluid situation. The impact of tariffs and business uncertainty has meaningfully boosted the odds of a U.S. recession, although our base case is that we narrowly avoid a recession. We continue to expect core U.S. inflation to remain above the Fed's long-term target. Tariffs and potential trade wars only add to this pressure, certainly in the short and likely in the medium term.

John Shay: As we've seen over the last few weeks, it's a fluid situation.

Jon Cheigh: As we've seen over the last few weeks, it's a fluid situation, but the impact of tariffs and business uncertainty has meaningfully boosted the odds of a US recession. Although our base case is that we narrowly avoid a recession. We continue to expect core US inflation to remain above the Fed's long-term target. Tariffs and potential trade wars only add to this pressure, certainly in the short and likely in the medium term. US equities have recently stabilized, but were down approximately 17% on the year at one point. Despite the correction, US equities still look relatively expensive and appear to have gone from trading at roughly 22x earnings to about 20x today. Although after some expected negative earnings revision, that 20x may still be closer to 22x.

John Shay: But the impact of tariffs and business uncertainty has meaningfully boosted the odds of a U S recession.

Joe Harvey: But given the long-term investment horizon for most retirement savers, volatility should not be a major concern.

John Shay: Although our base case is that we narrowly avoided recession.

Joe Harvey: I will close with a reminder that this year and next, we are focusing on investment in our distribution capabilities, with the Wealth Channel being a high priority and more resources planned for the RIA and multifamily office segments specifically. Our new vehicles and strategies have been designed for these advisors and allocators, which represent the leading investment models in the wealth channel and where AUM is growing the fastest.

John Shay: We continue to expect core U S inflation to remain above the fed's long term target.

John Shay: Tariffs and potential trade wars, only add to this pressure certainly in the short and likely in the medium term.

John Shay: U S equities have recently stabilized but were down approximately 17% on the year at one point.

John Shay: Despite the correction U S equity still look relatively expensive and appear to have gone from trading at roughly 22 times earnings So about 20 times today.

Joe Harvey: We look forward to reporting our second quarter results in July.

John Cheigh: U.S. equities have recently stabilized, but we're down approximately 17% on the year at one point. Despite the correction, U.S. equities still look relatively expensive and appear to have gone from trading at roughly 22X earnings to about 20X today, although after some expected negative earnings revision, that 20X may still be closer to 22X. We would expect some combination of both earnings and multiple contraction over time to drive disappointing U.S. listed equity performance. In contrast, we believe listed real assets combine three highly important actions. Less sensitivity to tariffs and slowing growth. Attractive relative valuations and liquidity at a time when both the explicit and opportunity costs of illiquidity are high.

Operator: Meantime, please call us with any questions.

John Shay: Although after some expected negative earnings revision that 20 times may still be closer to 22 times.

Operator: And now I'll turn the call back to Abby to facilitate Q&A. Thank you.

John Dunn: And we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the If you would like to withdraw your question, simply press star 1 a second time.

John Shay: We would expect some combination of both earnings and multiple contraction over time.

Jon Cheigh: We would expect some combination of both earnings and multiple contraction over time to drive disappointing U.S.-listed equity performance. In contrast, we believe listed real assets combine three highly important attributes, less sensitivity to tariffs and slowing growth, attractive relative valuations, and liquidity at a time when both the explicit and opportunity cost of illiquidity are high. To the first point, listed real assets are likely to feel less of the brunt of the negative impact of tariffs. To illustrate this point, estimates of the impact of tariffs on S&P 500 earnings are around 10%. Based on our current estimates by comparison, U.S. REIT earnings are likely to be down only 0 to 1%, and infrastructure down 2 to 3% because of the direct impact of tariffs. Real estate and infrastructure companies largely are not importers or exporters.

John Shay: Drive disappointing U S listed equity performance.

John Shay: In contrast, we believe listed real assets combined three highly important attributes.

Operator: If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

John Shay: Sensitivity to tariffs since loan growth.

John Shay: Attractive relative valuations and liquidity at.

Joe Harvey: And your first question comes from the line of John Dunn with Evercore ISI. Your line is open. Hi, guys. I'm wondering, get maybe a little more color on the wealth management channel and kind of like the temperature there, you know, so far in April, and maybe what areas, your areas, maybe are seeing, you know, flow, like a flow bid or maybe not. And where do you think the redemption trends could go if we, you know, the status quo sticks around for for a while? Well, obviously, as John and we all know, post quarter end, the markets have been very volatile.

John Shay: At a time when both the explicit an opportunity cost of illiquidity are high.

John Shay: To the first point listed real assets are likely to feel less of the brunt of the negative impact of tariffs to illustrate this point estimates of the impact of tariffs on S&P 500 earnings or around 10%.

John Cheigh: To the first point, listed real assets are likely to feel less of the brunt of the negative impact of tariffs. To illustrate this point, estimates of the impact of tariffs on S&P 500 earnings are around 10%. Based on our current estimates by comparison, U.S. re-earnings are likely to be down only 0 to 1%. and infrastructure down 2% to 3% because of the direct impact of tariffs. Real estate and infrastructure companies largely are not importers or exporters. Within real assets, natural resource equities face the biggest headwinds, with direct pressure to EPS of around 10-15%. but with wide divergences between winners and losers.

John Shay: Based on our current estimates by comparison U S. REIT earnings are likely likely to be down only zero to 1%.

John Shay: And infrastructure down 2% to 3% because of the direct impact of tariffs real.

John Shay: Real estate and infrastructure companies largely are not importers or exporters.

Joe Harvey: And that creates uncertainty and starts to stem decision making. So it's not been a robust, slow environment. But what we've been seeing, you know, more broadly is interest in US REITs, in particular, because, you know, we've, as we've been talking about the past several quarters that investors are have been anticipating the bottoming of the commercial real estate cycle, which is happening. And at the same time, you know, continued easing by the Federal Reserve, and those historically have been positive conditions. for Unearned Business. been talking about, as I mentioned, more interested in listed infrastructure, and for the Wealth Channel.

John Shay: Within real assets natural resource equities base, the biggest headwinds with direct pressure to EPS of around 10% to 15%.

Jon Cheigh: Within real assets, natural resource equities face the biggest headwinds, with direct pressure to EPS of around 10% to 15%, but with wide divergences between winners and losers, though higher commodity prices could provide some offset. As it relates to slowing growth, real asset companies also tend to generate more predictable revenues due to longer-term leases or contracts, or less economically sensitive demand. On valuation, in contrast to US equities, all four real asset categories are either neutrally or attractively valued versus history. We see companies in the space as positioned for higher profitability levels, driven by factors such as commodity undersupply and a move away from globalization or to onshoring and re-industrialization. Persistent inflationary pressures, as well as geopolitical uncertainty, also support real assets.

John Shay: But with wide divergences between winners and losers.

John Shay: Higher commodity prices could provide some offset.

John Shay: As it relates to slowing growth real asset companies also tend to generate more predictable revenues due to longer term leases for contracts or less economically sensitive demand.

John Cheigh: though higher commodity prices could provide some offset. As it relates to slowing growth, real asset companies also tend to generate more predictable revenues. to Longer-Term Leases or Contracts for Less Economically Sensitive Demand. On valuation, in contrast to U.S. equities, all core real asset categories are either neutrally or attractively valued versus history. We see companies in the space as positioned for higher profitability levels driven by factors such as commodity undersupply and a move away from globalization or onshore and reindustrialization. Persistent inflationary pressures as well as geopolitical uncertainty also support real assets. As the fomal piece I referenced earlier highlights, Primary reason why decade-long mean reversion occurs is because investors get too complacent over a period of years Evaluations move too far in one direction or the other.

John Shay: On valuation in contrast to U S equities, all core real asset categories are either neutrally or attractively valued versus history.

John Shay: When you see companies in this space is positioned for higher proper profitability levels, driven by factors such as commodity under supply.

John Shay: And the move away from globalization.

John Shay: Onshoring and Reindustrialization.

Joe Harvey: listed as a way to invest in it. There are some private solutions too, but that's not been as developed as some of the choices in real estate or in private credit. But The other attraction of infrastructure is that the portfolios tend to be less economically sensitive than other things, and so we've seen some of that dynamic in the institutional market, and it could also flow through to the market. Wealth Channel.

John Shay: Persistent inflationary pressures as well as geopolitical uncertainty also support real assets.

John Shay: As the formal piece I referenced earlier highlights.

Jon Cheigh: As the FOMO piece I referenced earlier highlights, the primary reason why decade-long mean reversion occurs is because investors get too complacent over a period of years, and valuations move too far in one direction or the other. In our conversations with our clients, we see growing evidence that investors are beginning to embrace this idea of new market leaders, a potential market rotation, and fund flows towards the valuation laggards of the last 10 years, like real assets. My last comment relates to the importance of liquidity and how investors value it. First, we believe the costs of illiquidity have not been analyzed or discussed sufficiently, so we will publish our in-depth research on it in the second half of the year. At a high level, we believe the presence of the illiquidity return premium is taken as a given.

John Shay: The primary reason why decade long mean reversion occurs is because investors get too complacent over a period of years and valuations move too far in one direction or the other.

John Shay: In our conversations with our clients, we see growing evidence that investors are beginning to embrace this idea of new market leaders and a potential market rotation and fund flows towards the value issue laggards of the last 10 years like real assets.

Joe Harvey: What we have not been saying are https://www.josephharvey.com And that's been a little bit of a surprise. We've actually had some outflows in the preferred stock vehicles. There's been a resurgence in fixed income allocations and investor portfolios. But I think there's a little bit of a still a little bit of a hangover with the many regional banking crisis a couple years ago and how that affected some preferred securities. And there's more choices in fixed income as well. But our preferred portfolios have performed very well for the past year and a half on an absolute basis and on a relative basis.

John Cheigh: In our conversations with our clients, we see growing evidence that investors are beginning to embrace this idea of new market. and a potential market rotation and fund flows towards the valuation laggards of the last 10 years, like Real Assets.

John Shay: My last comment relates to the importance of liquidity.

John Shay: How investors value it.

John Shay: First we believe the cost of illiquidity have not been analyzed or discussed sufficiently so we will publish our in depth research on it in the second half of the year.

John Cheigh: My last comment relates to the importance of liquidity and how investors value it.

John Cheigh: First, we believe the costs of illiquidity have not been analyzed or discussed sufficiently, so we will publish our in-depth research on it in the second half of the year. At a high level, we believe the presence of the illiquidity return premium is taken as a given. But the data indicates it has been more inconsistent than reported across different asset classes. Specifically, the historical data indicates a negative illiquidity return premium in private real estate and a more neutral premium in infrastructure. that the explicit cost of illiquidity is only one element.

At a high level, we believe the presence of the illiquidity return premium is taken as a given.

But the data indicates it has been more inconsistent than reported across different asset classes, specifically the historical data indicate a negative illiquidity return premium in private real estate.

Jon Cheigh: The data indicates it has been more inconsistent than reported across different asset classes. Specifically, the historical data indicates a negative illiquidity return premium in private real estate and a more neutral premium in infrastructure. The explicit cost of illiquidity is only one element. The opportunity cost of illiquidity happens in three ways. First, investors not being able to rebalance when their illiquid assets don't provide realizations as planned. Second, needing to sell their liquid assets when needed in a major market downturn, as opposed to when optimal. And last, the frictional costs of the J-curve that occurs in most private closed-end funds. Only recently, we see university endowments having to contend with questions about significant uncertainty around both the revenue side and potential endowment taxation. In a regime of high uncertainty, the opportunity cost of liquidity is high.

Speaker Change: More neutral premium and infrastructure.

Joe Harvey: And so And if there is, if there's One of our strategies, and it's not so affected by tariffs, it's certainly preferred market with are mostly issued by banks, which are terrific capital positions and insurance companies. So those are some of my thoughts.

Speaker Change: But the explicit cost of illiquidity is only one element.

Speaker Change: The opportunity cost of illiquidity happens in three ways.

Speaker Change: First investors not being able to rebalance when they're illiquid assets don't provide realizations as planned.

John Cheigh: The opportunity cost of illiquidity happens in three ways. First, investors not being able to rebalance when their illiquid assets don't provide realizations as planned. Second, needing to sell their liquid assets when needed in a major market downturn as opposed to an optimal one. And last, the frictional costs of the J-curve that occurs in most private closed-end funds.

Speaker Change: Second needing to sell their liquid assets when needed in a major market downturn as opposed to an optimal.

John Cheigh: © The Bulletproof Executive 2013 Okay, great. And then you guys took us through the impacts of tariffs on your different strategy areas, but, and that listed real infrastructure doesn't have most of it doesn't have much direct exposure. But could you I wonder if you could talk about kind of the second order impacts from tariffs that you might see coming down the pike? Well, from a investment standpoint, as you say, it's much more second order effects or indirect effects. So that'll be economic growth. Interest rates. and Inflation. Generally speaking, we think economic growth was already going to be a little bit slow and now will be slower and inflation will be a bit higher.

Speaker Change: And last the frictional cost of the J curve that occurs in most private closed end funds.

Speaker Change: Only recently, we see University endowments, having to contend with questions about significant uncertainty around both the revenue side and potential endowment taxation.

John Cheigh: Only recently we see university endowments having to contend with questions about significant uncertainty around both the revenue side and potential endowment taxation. in a regime of high uncertainty. The opportunity cost of liquidity is high.

Speaker Change: Anniversary of high uncertainty the opportunity cost of liquidity is high.

Speaker Change: To summarize as always economic uncertainty and financial market dislocations create opportunities to identify winners and losers.

Jon Cheigh: To summarize, as always, economic uncertainty and financial market dislocations create opportunities to identify winners and losers. Across all of our markets, we believe active management can capitalize on these divergences and is important to boost returns. Combined with a more favorable backdrop for asset allocation, we remain positive about the environment for real assets. With that, let me turn the call over to Joe.

John Cheigh: To summarize, as always, economic uncertainty and financial market dislocations create opportunities to identify winners and losers. Across all of our markets, we believe active management can capitalize on these divergences and is important to boost returns. combined with a more favorable backdrop for asset allocation. We remain positive about the environment for real assets.

Speaker Change: Across all of our markets. We believe active management can capitalize on these divergences and is important to boost returns.

John Cheigh: infrastructure really stands out, frankly, as being the stagflationary strategy, if you will. And that's why, despite everything that's going on so far this year, you know, infrastructure, as a category still positive on the year, it's up roughly 5% on the year. So, yeah, we think the economy is going to slow. So that will have a negative impact most on natural resource equities being relatively more cyclical. Second, most insulated would be on real estate, and then areas like preferreds and On the infrastructure, as Joe talked about, we don't really see any kind of major impact. So, it's all very indirect impacts as opposed to direct impact.

Speaker Change: Bind with a more favorable backdrop for asset allocation.

Speaker Change: We remain positive about the environment for real assets with that let me turn the call over to Joe.

Joe Harvey: Thank you John and good morning.

Joe Harvey: I'll start by addressing the current state of our business and review our key business trends in the quarter and close with a discussion of our strategic priorities.

Joseph Harvey: Thank you, John, and good morning. I will start by addressing this current state of our business, then review our key business trends in the quarter and close with a discussion of our strategic priorities. Four weeks ago, we published our 2024 annual report to shareholders entitled Positioned for Growth. On 2 April, so-called Liberation Day, the administration announced a tariff policy that was more severe than expected and turned the global economic and geopolitical regimes on their heads, with the financial markets following suit with powerful volatility. Everyone quickly recognized that business decision-making would slow or cease entirely, raising the specter of recession. As a firm, we're still positioned for growth, notwithstanding the post-quarter setbacks in markets and asset levels. Our relative investment performance, as John reviewed, is still strong and is the leading edge of our optimism.

Joe Harvey: With that, let me turn the call over to Joe. Thank you, John. And good morning.

Joe Harvey: Four weeks ago, we published our 2024 annual report to shareholders entitled positioned for growth.

Joe Harvey: I will start by addressing this current state of our business, then review our key business trends in the quarter, and close with a discussion of our strategic priorities.

Joe Harvey: On April 2nd So called Liberation Day, the administration announced the tariff policy. If there was more severe than I expected and turn the global economic and geopolitical regimes on their heads with a financial markets following suit with powerful volatility.

Joe Harvey: Four weeks ago, we published our 2024 annual report to shareholders entitled Positioned for Growth. On April 2nd, so-called Liberation Day, the administration announced a tariff policy that was more severe than expected and turned the global economic and geopolitical regimes on their heads. The Financial Markets Following Suit with Powerful Volatility. Everyone quickly recognized that business decision making would slow or cease entirely, raising the spectrum of recession. As a firm, we're still positioned for growth, notwithstanding the post-quarter setbacks in markets and asset levels. Our relative investment performance, as John reviewed, is still strong and is the leading edge of our optimism.

Joe Harvey: Everyone quickly recognized that business decision, making would slow or cease entirely raising the spectrum out of recession.

John Cheigh: And John, if your question was getting at what are we doing as a firm? The first order of business is always to interact with our clients to help them. share our best thinking on what's going on with them. We're not going to make any rash short term changes in how we're operating. As I said in my comments, clearly have our eye on the potential for recession and so one of the reactions to that would be to raise the bar on hiring. Until we see how all of this plays out, you know, we're not stopping on the strategic hires that we need to make, but if we have things that are more...

Joe Harvey: As a firm we're still positioned for growth notwithstanding the post quarter setbacks in markets and asset levels.

Joe Harvey: Our relative investment performance as John reviewed is still strong and is the leading edge of our optimism.

Joe Harvey: As I will discuss further our institutional advisory unfunded pipeline declined in the quarter, but our business activity remains healthy.

Joseph Harvey: As I will discuss further, our institutional advisory unfunded pipeline declined in the quarter, but our business activity remains healthy. Our wealth channel has led the way to firm-wide net inflows for the past three quarters. In addition, the case for real assets is gaining momentum as the reality of a nagging inflation backdrop gains wider acceptance. Meantime, portfolio liquidity has become a priority for clients as the cost of illiquidity and private allocations have become increasingly evident. Depending on how long the tariff roulette wheel spins, and considering its knock-on effects, our eyes are on potential for recession. While this could slow the ramp-up of some of our recent vehicle launches, we are committed to these initiatives, which we view as must-dos to enhance our market position. As our habit, we would expect to further innovate to capitalize on any dislocations and opportunities that emerge.

Joe Harvey: Our wealth channel has led the way to firm wide net inflows for the past three quarters.

Joe Harvey: As I will discuss further, our institutional advisory unfunded pipeline declined in the quarter, but our business activity remains healthy. Our wealth channel has led the way to firm wide net inflows for the past three quarters. In addition, the case for real assets is gaining momentum as the reality of a nagging inflation backdrop gains wider acceptance. Meantime, portfolio liquidity has become a priority for clients as the cost of illiquidity in private allocations has become increasingly evident. Depending on how long the tariff roulette wheel spins, and considering its knock-on effects, our eyes are on potential for recession.

Joe Harvey: In addition, the case for real assets is gaining momentum as the reality of a nagging inflation backdrop gains wider acceptance.

Joe Harvey: Meantime portfolio liquidity has become a priority for our clients as a cost of illiquidity and private allocations have become increasingly evident.

Joe Harvey: Nice to have you all. Thank you. Installment Corporations Inc. really bear down on the new launches that we have because those are Critical Time. And we'll see what happens. I don't know, for the ETF launch, for example, you know, we've, our head of wealth has seen and other examples, how volatility, you know, can create some activity . for ETS because investors are more apt to switch if they can take a tax loss or move in a down market to a better vehicle. So those are some of the things that we're thinking about. Right. Yeah, maybe on active ETFs.

Joe Harvey: Depending on how long the tariff roulette wheel spins and considering its knock on effects.

Joe Harvey: Our eyes are on potential for recession.

Joe Harvey: While this could slow the ramp up of some of our recent vehicle launches. We are committed to these initiatives, which we view as must dos to enhance our market position.

Joe Harvey: While this could slow the ramp up of some of our recent vehicle launches, we are committed to these initiatives, which we view as must-dos to enhance our market position. And as our habit, we would expect to further innovate to capitalize on any dislocations and opportunities that emerge.

Joe Harvey: And as our habit, we would expect to further innovate to capitalize on any dislocations and opportunities that emerge.

Joe Harvey: Behind behind this executive summary is well organized and highly motivated leadership team that is backed by a very strong balance sheet.

Joseph Harvey: Behind this executive summary is a well-organized and highly motivated leadership team that is backed by a very strong balance sheet. Looking at key fundamentals, in Q1, we had our third consecutive quarter of net inflows firm-wide at $222 million, which followed $860 million in the preceding quarter and $1.3 billion in Q3 of last year when the Federal Reserve commenced its rate-cutting cycle. Leading flows in the quarter were open-end funds with $585 million of net inflows, offset by outflows in both advisory at $108 million and all sub-advisory at $258 million. Our inflows stand out considering that most of our strategy categories have been in outflows according to Morningstar Open-End Fund data.

Joe Harvey: Looking at key fundamentals in the first quarter, we had our third consecutive quarter of net inflows firm wide at $222 million, which followed $860 million in the preceding quarter and $1 3 billion in the third quarter of last year when the federal reserve commenced its rate cutting cycle.

Joe Harvey: Behind this executive summary is a well-organized and highly motivated leadership team that is backed by a very strong balance.

Joe Harvey: Looking at key fundamentals, in the first quarter, we had a third consecutive quarter of net inflows firm-wide at $222 million, which followed $860 million in the preceding quarter and $1.3 billion in the third quarter of last year, when the Federal Reserve commenced its rate-cutting cycle. Leading flows in the quarter were open-end funds with $585 million of net inflows. offset by outflows in both advisory at $108 million and all sub-advisory at $258 million. Our infos stand out. Considering that most of our strategy categories have been in outflows, according to Morningstar Open End Fund data. Our positive differential, to me, comes down to a combination of our outstanding investment performance.

Joe Harvey: Leaving flows in the corner were open end funds with $595 million of net inflows.

Joe Harvey: Offset by outflows in both advisory and $108 million and all sub advisory at $258 million.

Joe Harvey: Our inflows stand out.

Joe Harvey: <unk> that most of our strategy categories have been in outflows. According to Morningstar Open end fund data.

Joe Harvey: Our positive differential to me comes down to a combination of our outstanding investment performance.

Joe Harvey: Well, in terms of quote unquote selling, I mean, it's it's it starts with a process of helping are our advisors. make allocations to the things we do. So it's education about our asset classes, how they fit into a portfolio, how they enhance the return and risk profile of a portfolio. What is different is that the initial investors will come from the RIA market. They won't come from the wire houses, which have criteria to gain, you know, Go through a research process, although, you know, for all the strategies we have. pretty much got that box check with the wire houses.

Joseph Harvey: Our positive differential, to me, comes down to a combination of our outstanding investment performance, brand recognition, and strong client relationships. Accordingly, our market share of active open-end fund AUM continued to increase in US real estate, global real estate, preferreds, and global-listed infrastructure. Leading flows in the quarter was global-listed infrastructure, which had $586 million of net inflows, offset by net outflows in US real estate of $217 million, global real estate at $166 million, and preferreds at $76 million. Highlights for open-end funds include the broad inflows across most key segments such as wirehouses, RIAs, independent and regional broker-dealers, bank trusts, and defined contribution. Our gross sales for open-end funds annualized at $12.8 billion, in line with our average over the past several years.

Joe Harvey: Brand recognition and strong client relationships.

Joe Harvey: Accordingly, our market share of active open end fund AUM continued to increase in U S real estate global real estate.

Joe Harvey: brand recognition, and strong client relationship. Accordingly, our market share of active open-end fund AUM continued to increase in U.S. real estate, global real estate, preferreds, and global listed infrastructure. Leading flows in the quarter was Global Listed Infrastructure, which had $586 million of net inflows, offset by net outflows in U.S. real estate of $217 million . Global Real Estate at $166 million and Preferreds at $76 million. Highlights for open-end funds include the breadth and flows across most key segments such as wirehouses, RIAs, independent and regional broker-dealers, bank trusts, and defined contributions. Our gross sales for open-end funds annualized at $12.8 billion, in line with our average over the past several years.

Joe Harvey: Preferred and global listed infrastructure.

Joe Harvey: Leading fluids in the quarter was global listed infrastructure, which had $586 million of net inflows offset by net outflows in U S real estate of $217 million.

Joe Harvey: Global real estate at $166 million and preferreds at $76 million.

Joe Harvey: Highlights for open end funds include the breadth influence across most key segments, such as warehouses R. I S.

Joe Harvey: But what's different is, you know, they're Initial investors in the ETFs are RIAs that we maybe don't have relationships with, so it's building relationships with model builders and RIA allocator specialists to active ETFs. As I said in my comments, our strategy revolves around not thematic approaches to strategies in ETFs, which some firms do. core allocations that that we're known for that that could be Substitute for one of our open-end mutual funds. So, as it relates to...

Speaker Change: Independent and regional broker dealers Bank Trust.

Joe Harvey: And defined contribution.

Joe Harvey: Our gross sales for open end funds annualized at $12 8 billion in line with our average over the past several years.

Joe Harvey: S M A's and models had outflows of $44 million.

Joseph Harvey: SMAs and models had outflows of $44 million, and offshore CCAPEs had inflows of $71 million. We had modest inflows into our newly launched active ETFs, which I will discuss in a moment. Institutional advisories net outflows of $108 million were comprised of five new mandates totaling $347 million, offset by two account terminations totaling $231 million, and negative rebalancings of $223 million by existing clients. The weak spot in the quarter is our one unfunded pipeline, which ended the quarter at $61 million, compared with $531 million last quarter. Obviously, that is a low number for us, and reflects a lot of completed fundings and the timing of a number of finance competitions we are anticipating, plus some customized mandates we continue to work on.

Joe Harvey: And offshore C cavs had inflows of $71 million.

Joe Harvey: And we had modest inflows into our newly launched active Etfs, which I'll discuss in a moment.

Joe Harvey: SMAs and models had outflows of $44 million and offshore sea calves had inflows of $71 million. And we had modest inflows into our newly launched active ETFs, which I will discuss in a moment. Institutional Advisory's net outflows of $108 million were comprised of five new mandates totaling $347 million, offset by two account terminations totaling $231 million, and negative rebalancing of $223 million by existing clients.

Joe Harvey: Institutional advisory net outflows of $108 million were comprised of five new mandates totaling $347 million.

Joe Harvey: Set by two account terminations totaling $231 million and negative rebalancing of $223 million by existing clients.

Joe Harvey: The weak spot in the quarter as our one unfunded pipeline, which ended the quarter at $61 million compared with $531 million last quarter.

Joe Harvey: , Unknown Executive, Brian Heller, Raja Dakkuri, Cohen & Steers Inc, Unknown Executive, Brian that that is money that we would never have ever seen before. So it's a great validation of our launch and gives us confidence. Because we're kind of seeing this type of thing more and more in the industry. There will be examples where we have existing open end fund investors who have been converting their business to using only ETFs, and we've seen an example of two where they're swapping out of our open-end funds into ETFs, because that's what they've chosen for their business models.

Joe Harvey: Obviously that is a low number for us and reflects a lot of completed fundings and the timing of a number of final competitions. We are anticipating plus some customized mandates we continue to work on.

Joe Harvey: The weak spot in the quarter is our one unfunded pipeline which ended the quarter at $61 million compared with $531 million last quarter. Obviously, that is a low number for us. It reflects a lot of completed fundings and the timing of a number of finals competitions we are anticipating, plus some customized mandates we continue to work on. While it is tempting to attribute the low pipeline to the market environment, the regime change in interest rates has already occurred and thus we need to translate the solid level of activity in institutional advisory to win. Last quarter, we indicated that we had approximately $800 million in pending redemption.

Joe Harvey: While it is tempting to attribute a low pipeline to the market environment.

Joseph Harvey: While it is tempting to attribute the low pipeline to the market environment, the regime change in interest rates has already occurred, and thus we need to translate the solid level of activity in institutional advisory to wins. Last quarter, we indicated that we had approximately $800 million in pending redemptions. The majority of those have occurred, and the known redemptions now stand at $290 million after the addition of one pending rebalancing outflow of $64 million. Turning to strategic initiatives. In February, we launched our first three active ETFs in real estate, preferreds, and natural resource equities. The strategies are compelling, differentiated, and by design, not thematic, but core strategies for asset allocators. They were seeded with firm capital, and we have but begun to see inflows. We're pleased with the pace of flows, particularly for the natural resource equities ETF.

Joe Harvey: Rajeev change in interest rates has already occurred and thus we need to translate the solid level of activity and institutional advisory two wins.

Joe Harvey: Last quarter, we indicated that we had approximately $800 million in pending redemptions.

Joe Harvey: The majority of those have occurred and the known redemptions now stand at $290 million. After the addition of one pending rebalancing outflow of $64 million.

Joe Harvey: The majority of those have occurred, and the known redemptions now stand at $290 million after the addition of one pending rebalancing outflow of $64 million.

Joe Harvey: Turning to strategic initiatives in.

Joe Harvey: So in that case, we say, okay, great. So we've retained assets, but more importantly, these advisors are growing, and had we not these vehicles, we would have ultimately lost a client and lost another growth engine. So in our underwriting, we factored in some Swapping of Open-End Fund Assets for ETFs, but it's too early to start to try to quantify all of that. As it relates to what pace we would like, I would like it to be a lot, but the market is what's going to tell us what the right pace is. But we've been pleasantly surprised with the activity we've seen so far.

Joe Harvey: In February we launched our first three active Etfs and real estate preferred and natural resource equities.

Joe Harvey: The strategies are compelling differentiated and by design not thematic but core strategies for asset allocators.

Joe Harvey: Turning to Strategic Initiatives. In February, we launched our first three active ETFs in Real Estate, Preferreds, and Natural Resource Equity. The strategies are compelling, differentiated, and, by design, not thematic, but core strategies for asset allocators. They were seeded with firm capital and we have begun to see inflow. We're pleased with the pace of flows, particularly through the Natural Resource Equities ETF. We believe these vehicles will open access to investors who use them exclusively and thus expand our addressable market considerably. given that AUM and active ETFs have surpassed $1 trillion industry-wide. At the same time, there are advisors who are converting their business away from open-end funds to ETFs.

Joe Harvey: They receded with firm capital and we have begun to see inflows.

Joe Harvey: We're pleased with the pace of flows, particularly through the natural resource equities ETF. We believe these vehicles will open access to investors, who use them exclusively and thus expand our addressable market considerably.

Joseph Harvey: We believe these vehicles will open access to investors who use them exclusively, and thus expand our addressable market considerably given that AUM in active ETFs has surpassed $1 trillion industry-wide. At the same time, there are advisors who are converting their business away from open-end funds to ETFs. These vehicles will help us retain those assets, particularly with RIAs who have growing asset bases. Our long-term strategy includes the development of ETFs for all of our core strategies, and we're working on round two, understanding that implementation from here could vary based on how the market adopts different structures such as ETFs with as a share class of open-end funds. One small but percolating market for us is the offshore wealth market. We now have six CCAF vehicles with $1.2 billion in AUM, and which have had inflows in 19 of the past 21 quarters.

Joe Harvey: Given that AUM and active Etfs and surpassed one trillion industry wide.

Joe Harvey: At the same time, there are advisors, who are converting their business away from an open end funds to Etfs. These.

Joe Harvey: These vehicles will help us retain those assets, particularly with Ais who have growing asset bases.

Joe Harvey: Gotcha. And in your prepared remarks, you talked about looking to further innovate to take advantage of, you know, dislocation. Was that a reference to maybe like working on round two of ETS or were there other things you kind of had in mind? Um, it could be round two of VTF. You know, it could be, you know, potentially. inorganic growth. We've been going through a process to identify Strategies for what's next, several years down the road. And one of the things that's happening in the industry with the interest in the wealth channel is that... There are more small asset managers who want to get access to wealth and they're realizing in light of the competition and race to gain share from the private equity funds, that that's going to be increasingly difficult.

Joe Harvey: Our long term strategy includes the development of each yet for all of our core strategies.

Joe Harvey: These vehicles will help us retain those assets, particularly with RIAs who have growing assets.

And we're working on round two.

Joe Harvey: Understanding that implemented implementation from here could vary based on how the market adopts different structures, such as Etfs as a share class of open end funds.

Joe Harvey: Our long-term strategy includes the development of ETFs for all of our core strategies, and we're working on round two. Understanding that implementation from here could vary based on how the market adopts different structures such as ETFs as a share class of open-end funds.

Joe Harvey: One small, but percolating market for us is the offshore offshore wealth market.

Joe Harvey: We now have six CCAR vehicles with $1 2 billion in AUM.

Joe Harvey:

Joe Harvey: And which have had inflows in 19 of the past 21 quarters.

Joe Harvey: We launched our sixth E T F.

Joseph Harvey: We launched a CCAF sub-fund in the quarter, a short-duration preferred stock strategy. This strategy's investment universe has attractive attributes with $1.3 trillion in size and yields of 7.7%, duration less than three years, and an average credit rating of BBB. We've had a lot of positive feedback in pre-marketing and look forward to being in the market. We are making good progress on our private real estate initiative. Cohen & Steers Income Opportunities REIT, or CNS REIT, is the top-performing non-traded REIT for the 12 months ended February. CNS REIT returned 13.4% compared with 4.4% for the average non-traded REIT over that period. Among private wealth alternative choices, private credit has been the most popular, certainly compared with real estate recently.

Joe Harvey: <unk> excuse me <unk> in the quarter, a short duration preferred stock strategy.

Joe Harvey: This strategy is investment universe has attractive attributes with one three trillion in size and yields of seven 7%.

Joe Harvey: We launched our sixth CTF sub fund in the quarter, a short duration preferred stock strategy. This strategy's investment universe has attractive attributes with $1.3 trillion in size and yields of 7.7%. Duration, less than three years and an average credit rating of triple B. We've had a lot of positive feedback in pre-marketing and look forward to being in the market.

Joe Harvey: Duration less than three years and an average.

Joe Harvey: We have a strong market position and wealth and that's pretty well known in the industry. So there might be a firm with a strategy that would meet our criteria. We would be open to looking at some acquisitions. So that could come by way of dislocations. with the market environment right now. And then maybe one on the pipeline. Do you think, you know, we'll look back and look at this quarter as kind of an anomaly? Or are we, you know, could we hang out at a low level versus because for quite a while you'd, you know, been kind of leveled up to the more than a billion level, you think it's just The timing or are we in this period for a little bit?

Joe Harvey: Credit rating of Triple B we've.

Joe Harvey: We've had a lot of positive feedback and pre marketing and look forward to being in the market.

Joe Harvey: We are making good progress on our private real estate initiative.

Joe Harvey: <unk> steers income opportunities REIT or CNS REIT is the top performing non traded REIT for the 12 months ended February.

Joe Harvey: We are making good progress on our private real estate initiative. Opportunities REIT, or CNS REIT, is the top-performing non-traded REIT for the 12 months ended February. CNS REIT returned 13.4% compared with 4.4% for the average non-traded REIT over that period. Among private wealth alternative choices, private credit has been the most popular, certainly compared with real estate recently, but we're seeing early signs of caution in credit and emerging interest in the bottoming of the commercial real estate cycle. We continue to work on additional anchor investors while ramping up our engagement with RIA. We are live on the Schwab, Pershing, and Fidelity platforms, which provide access to the majority of RIAs.

Joe Harvey: CNS REIT returned 13, 4% compared with four 4% for the average non traded REIT over that period.

Joe Harvey: Among private wealth alternative choices.

Joe Harvey: That credit has been the most popular certainly compared with real estate recently, but we're seeing early signs of caution in credit and emerging interest and the bottoming of the commercial real estate cycle.

Joseph Harvey: We're seeing early signs of caution in credit and emerging interest in the bottoming of the commercial real estate cycle. We continue to work on additional anchor investors while ramping up our engagement with RIAs. We are live on the Schwab, Heritage, and Fidelity platforms, which provide access to the majority of RIAs. CNSREIT's portfolio now comprises five shopping centers with a mix of power centers and grocery-anchored centers. Shopping centers should be better equipped to defend against a more challenging economy, and we still believe they are mispriced considering their fundamentals. In the category of expanding our real estate franchise, we expect to launch late in Q2 a strategy to provide a better way for institutions to invest in core real estate using both listed and core private real estate.

Joe Harvey: We continue to work on additional anchor investors, while ramping up our engagement with our as.

Joe Harvey: We are live on the Schwab.

Joe Harvey: And fidelity platforms, which provide access to the majority of our eyes.

Joe Harvey: You know, as I've been talking about on these calls, you know, we have good levels of activity, but we need to translate those into real. Unknown Executive, Brian Heller, Joseph Harvey, John Dunn, Adam Beatty, John Cheigh, Benjamin in a minute. In the institutional market, there's been more stresses on portfolios with the high levels of private allocations. Unknown Executive, Brian Heller, Joseph Harvey, John Dunn, Adam Beatty, John Cheigh, Benjamin That's been a thing out in the market, but I feel like we're We're getting through that phase, you know, the interest rate regime change and the restoration of fixed income allocations.

Joe Harvey: C. N S reached portfolio now comprises five shopping centers with a mix of power centers and grocery anchored centers.

Joe Harvey: Shopping centers should be better equipped to defend against a more challenging economy and we still believe they are mispriced considering their fundamentals.

Joe Harvey: CNS REITs portfolio now comprises five shopping centers with a mix of power centers and grocery anchored centers. Shopping centers should be better equipped to defend against a more challenging economy, and we still believe they are mispriced considering their fundamentals.

Joe Harvey: In the category of expanding our real estate franchise, we expect to launch late in the second quarter, our strategy to provide a better way for institutions to invest in core real estate using both listed and core private real estate.

Joe Harvey: In the category of expanding our real estate franchise, we expect to launch late in the second quarter a strategy to provide a better way for institutions to invest in core real estate using both listed and core private real estate. We expect to announce a partnership with a sub-advisor to collaborate on a vehicle designed for institutional real estate allocations, which tend to be a larger share of the real estate portfolio. Our aim is to provide better risk-adjusted returns than core private real estate, along with better liquidity and broader property sector allocation.

Joe Harvey: We expect to announce a partnership with a sub advisor to collaborate on a vehicle designed for institutional real estate allocations, which tend to be a larger share of the real estate portfolio.

Joseph Harvey: We expect to announce a partnership with a sub-advisor to collaborate on a vehicle designed for institutional real estate allocations, which tend to be a larger share of the real estate portfolio. Our aim is to provide better risk-adjusted returns than core private real estate, along with better liquidity, and broader property sector allocations. Jon and I have been highlighting global listed infrastructure as a strategy that is generating a lot of interest, and that began to show in our flows at this quarter. We see more behind it with demand from new allocations and takeaways from underperforming managers. Private infrastructure still dominates the allocation landscape, but we believe, just as in real estate, that listed infrastructure complements private allocations, resulting in better portfolio construction and performance.

Joe Harvey: Our aim is to provide better risk adjusted returns than core private real estate, along with better liquidity and broader property sector allocations.

Speaker Change: John and I have been highlighting global listed infrastructure is a strategy that is generating a lot of interest and that began to show in our flows this quarter we.

Speaker Change: We see more behind it with demand from new allocations and takeaways from underperforming managers.

Joe Harvey: John and I have been highlighting global listed infrastructure as a strategy that is generating a lot of interest and that began to show in our flows this quarter. We see more behind it with demand from new allocations and takeaways from underperforming managers.

Joe Harvey: So, you know, and as John laid out, We believe that the future looks better for allocations to real assets, so we need to go make that happen. Our activity is solid and it's got nice dimensions to it, as I said, which means, to me, There are new allocations, there are new allocations, not just in the US, but also outside of the US, there are underperforming managers, but also there are investors who want to work with us to collaborate to do something differentiated. I mentioned real estate strategy that we've been working on to combine listed and private.

Speaker Change: Private infrastructure is still dominates the allocation landscape, but we believe just as in real estate that listed infrastructure complements private allocations, resulting in better portfolio construction and performance.

Joe Harvey: Private infrastructure still dominates the allocation landscape, but we believe, just as in real estate, that listed infrastructure complements private allocations, resulting in better portfolio construction and performance. Fundamentally, secular trends, including digitalization of the world's economies, rebuilding core infrastructure, higher power demand, decarbonization, and deglobalization. combined are accelerating infrastructure spending. An estimated $94 trillion of infrastructure investment is needed globally by 2040. With more angst about the stickiness of inflation and now tariffs, we're seeing more interest in real assets from the retirement segments, model builders, and target date managers. This is welcome and overdue, in my opinion, considering the preponderance of financial assets in 401k plans.

Speaker Change: Fundamentally secular trends, including digitalization of the world's economies rebuilding core infrastructure higher power demand, the carbonization and D globalization.

Joseph Harvey: Fundamentally, secular trends, including digitalization of the world's economies, rebuilding core infrastructure, higher power demand, decarbonization, and de-globalization combined are accelerating infrastructure spending. An estimated 94 trillion of infrastructure investment is needed globally by 2040. With more angst about the stickiness of inflation and now tariffs, we're seeing more interest in real assets from the retirement segments, model builders, and target date managers. This is welcome and overdue, in my opinion, considering the preponderance of financial assets in 401(k) plans. Notably, the private equity firms are pushing for private allocations in these plans. Aside from the plumbing in these plans, which cannot even accommodate ETFs at this point, our view is that private allocations are difficult in 401(k)s, and listed real assets are a smart solution.

Speaker Change: Combined our accelerating infrastructure spending and estimated 94 trillion of infrastructure investment is needed globally by 2040.

Speaker Change: With more angst about the stickiness of inflation and now tariffs, we're seeing more interest in real assets and the retirement segments model builders and target date managers.

Joe Harvey: Listed private core real estate and you know, we'll be we'll be launching that and announcing it of the year. And so we look forward to talking more about that because it's pretty exciting and that that can be a another another way. Get in front of more institutions and do something that's different with them. Gotcha. And maybe just one more on, you know, I think it's smart to, you know, see if you can take advantage of this location by adding, you know, maybe getting a better price on a deal, but you haven't done a deal in a long time.

Speaker Change: This is welcome and overdue in my opinion, considering the preponderance of financial assets and 401k plans.

Speaker Change: Notably the private equity firms are pushing for private allocations in these plans.

Speaker Change: Aside from the plumbing in these plans, which cannot even accommodate etfs at this point.

Joe Harvey: Notably, the private equity firms are pushing for private allocations in these plans.

Speaker Change: Our view is that private allocations are difficult and 401k.

Speaker Change: And listed real assets or a smart solution.

Joe Harvey: Aside from the plumbing in these plans, which cannot even accommodate ETFs at this point, our view is that private allocations are difficult in 401ks and listed real assets are a smart solution. With our multi-strategy real assets portfolio, for example, 401ks can have a single line item turnkey allocation to real assets and have efficient pricing and daily liquidity. The only potential negative is the perceived volatility compared with private, but given the long-term investment horizon for most retirement savers, volatility should not be a major concern.

Joe Harvey: So that's a bit of a change. Maybe talk through like, whole deals versus team lift outs versus maybe some of the areas you might be interested in just any more color there would be great. Well, it could be a bit a spectrum of things, you know, including We are working on a partnership with another firm where we would sponsor a vehicle, in the case of this real estate vehicle, combined listed and private. This has been a vision of ours. I'm pleased to see some of our peers announce some of these types of arrangements. the easier, short term easier, maybe longer term harder ways to bring on new capabilities.

Speaker Change: With our multi strategy real asset portfolio. For example, 401k case can have a single line item turnkey allocation to real assets.

Joseph Harvey: With our multi-strategy real asset portfolio, for example, 401(k)s can have a single line item, turnkey allocation to real assets, and have efficient pricing and daily liquidity. The only potential negative is the perceived volatility compared with private. Given the long-term investment horizon for most retirement savers, volatility should not be a major concern. I will close with a reminder that this year and next, we are focusing on investment in our distribution capabilities, with the wealth channel being a high priority, and more resources planned for the RIA and multi-family office segments specifically. Our new vehicles and strategies have been designed for these advisors and allocators, which represent the leading investment models in the wealth channel and where AUM is growing the fastest. We look forward to reporting our Q2 results in July. Meantime, please call us with any questions.

Speaker Change: And have an efficient pricing and daily liquidity.

Speaker Change: The only potential negative is the perceived volatility compared with private.

Speaker Change: But given the long term investment horizon for most retirement savers volatility should not be a major concern.

Speaker Change: I'll close with a reminder, that this year and next we are focusing on investment in our distribution capabilities with the wealth channel being a high priority and more resources planned for the RIAA and multifamily office segment specifically.

Speaker Change: New vehicles and strategies have been designed for these advisors and allocators, which represent a leading investment models in the wealth channel and where.

Speaker Change: M is growing the fastest.

Joe Harvey: But in terms of You're right. We've not been an acquisitive firm historically. There have been many reasons for that, including The fact that we've had a Great opportunity to build out our capabilities and broader real assets investing. But also looking backward, there's been an environment where firms. weren't so interested in selling majority interest. They would, there are a lot of players that would buy a minority interest and let them do their thing on their own. But the dynamics that I talked about in the Wealth Channel and firms wanting to get access. well channel are changing the equation a bit.

Speaker Change: We look forward to reporting our second quarter results in July.

Speaker Change: Meantime, please call us with any questions.

Speaker Change: And now I'll talk I'll turn the call back to Abbvie to facilitate Q&A.

Joseph Harvey: I'll turn the call back to Abby to facilitate Q&A.

Speaker Change: Thank you and we will now begin the question and answer session.

Unknown Executive: Meantime, please call us with any questions.

Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from the line of John Dunn with Evercore ISI. Your line is open.

Speaker Change: Have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Unknown Executive: And now I'll turn the call back to Abby to facilitate Q&A. Thank you.

Speaker Change: If you would like to withdraw your question simply press Star one a second time.

Speaker Change: If you were called upon to ask your question and our listening via Speakerphone on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: And your first question comes from the line of John Dunn with Evercore ISI. Your line is open.

Unknown Executive: If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

John Dunn: Hi, guys.

Speaker Change: I wanted to.

John Dunn: Hi, guys. Wanted to get maybe a little more color on the wealth management channel and kind of like the temperature there, you know, so far in April, and maybe what areas or your areas maybe are seeing, you know, flow, like a flow bid or maybe not. Where do you think the redemption trends could go if, you know, the status quo sticks around for a while?

Speaker Change: Get them, maybe a little more color on the wealth management channel and kind of like the temperature.

Joe Harvey: So We'll see, you know, we're We're thinking about the things that we would be interested in, you know, but we're Unknown Speaker 0 As you know, very conservative and disciplined. and have a very strict set of criteria. Spending some time.

Speaker Change: There you know so far in April and maybe what areas of your areas, maybe we're seeing them.

Speaker Change: Float like a flow bidder or maybe not.

Speaker Change: And where do you think the redemption trends could go if we you know the status quo sticks around for for a while.

Speaker Change: Well, obviously as Jon and we all know post quarter end that the markets have been very volatile and that.

Joseph Harvey: Well, obviously, as John and we all know, post quarter-end, the markets have been very volatile, and that, you know, creates uncertainty and starts to stymie decision making. It's not been a robust flow environment. But, you know, what we've been seeing, you know, more broadly is interest in U.S. REITs in particular, because, you know, we've been, as we have been talking about the past several quarters, that investors have been anticipating the bottoming of the commercial real estate cycle, which is happening. At the same time, you know, continued easing by the Federal Reserve. Those historically have been positive conditions for real estate securities performance.

Operator: Great. Thank you very much.

Speaker Change: Uncertainty and starts to stem to decision, making so.

Joe Harvey: And that concludes our question and answer session. I will now turn the conference back to Mr. Joe Harvey for closing remarks. Well, thank you everyone for listening. I look forward to touching base with you in July and Abby, thank you for the call. And ladies and gentlemen, that concludes today's call and we thank you for your participation. You may now disconnect.

Speaker Change: Got it.

Speaker Change: So it's not been a road robust slow environment, but you know what we've been saying more broadly as our interest in U S. Reits in particular.

Joe Harvey: So it's not been a robust, slow environment. But, you know, what we've been seeing, you know, more broadly is interest in US REITs, in particular, because, you know, we've been, as we've been talking about the past several quarters that investors are have been anticipating the bottoming of the commercial real estate cycle, which is happening. And at the same time, you know, continued easing by the Federal Reserve, and those historically have been positive conditions for real estate securities performance. And we've seen some of that play out, but we would expect investors to continue to be most focused on that.

Speaker Change: Because.

Speaker Change: As we have been talking about the past several quarters that our.

Speaker Change: Investors are.

Speaker Change: Anticipating the bottoming of the commercial real estate cycle, which is happening.

Speaker Change: And at the same time.

Speaker Change: Continued easing by the federal reserve and those historically have been positive conditions for a real estate securities performance and we've seen some of that play out, but we would expect investors to continue to be most focused on that.

Joseph Harvey: You know, we've seen, you know, some of that play out, but, you know, we would expect investors to continue to be most focused on that. Secondly, you know, we've been talking about, and as I mentioned, more interest in listed infrastructure. For the wealth channel, you know, listed is a way to invest in it. There are some private solutions too, but that's not been as developed as some of the choices in real estate or in private credit. The other attraction of infrastructure is that, you know, the portfolios tend to be less economically sensitive than other things.

Speaker Change: Secondly, we've.

Speaker Change: And talking about it and as I mentioned are more interesting and listed infrastructure and for the wealth channel.

Joe Harvey: Secondly, we've been talking about, as I mentioned, more interested in listed infrastructure, and for the wealth channel. listed as a way to invest in it. There are some private solutions too, but that's not been as developed as some of the choices in real estate or in private credit. But The other attraction of infrastructure is that the portfolios tend to be less economically sensitive than other things, and so we've seen some of that dynamic in the institutional market, and it could also flow through to the market. Wealth Channel. What we have not been saying are And that's been a little bit of a surprise.

Speaker Change: This is a way to invest in it there are some private solutions too, but that's not been developed and some of the choices in our real estate or in private credit but.

Speaker Change: The other you know.

Speaker Change: Attraction of our infrastructure is that you know that.

Speaker Change: The portfolios tend to be less economic sense economically sensitive than other things and so we've.

Speaker Change: We've seen some of that dynamic in the institutional market and it could.

Joseph Harvey: We've seen some of that dynamic in the institutional market, and it could, you know, also, you know, flow through to the wealth channel. What we have not been seeing are, you know, strong flows into our preferred stock strategies. You know, and that's been a little bit of a surprise. We've actually had some outflows in the preferred stock vehicles. You know, there's been a resurgence in fixed income allocations in investor portfolios. But I think there's a little bit of a still a little bit of a hangover with the many regional banking crisis a couple of years ago and how that affected some preferred securities. There's just more choices in fixed income as well.

Speaker Change: Also flow through to the to the.

Speaker Change: Our wealth channel.

Speaker Change: What we have not been saying are.

Speaker Change: Strong flows into our preferred stock strategies, and that's been a little bit of a surprise and we've actually had some outflows in the preferred the preferred stocks vehicles.

Speaker Change: There's been a resurgence in fixed income allocations of investor portfolios.

Joe Harvey: We've actually had some outflows in the preferred stock vehicles. There's been a resurgence in fixed income allocations in investor portfolios, but I think there's a little bit of a, still a little bit of a hangover with the many regional banking crisis a couple of years ago and how that affected some preferred securities. And there's just more choices in fixed income as well. But our preferred portfolios have performed very well for the past year and a half on an absolute basis and on a relative basis. And if there's One of our strategies that's not so affected by tariffs, it's certainly preferred market, which are mostly issued by banks which are in terrific capital positions and insurance companies.

Speaker Change: But I think there's a little bit of a.

Speaker Change: Still a little bit of a hangover with.

Speaker Change: Many regional banking crisis, a couple of years ago, and how that affected.

Speaker Change: Some are preferred securities.

Speaker Change: And there's just more choices in fixed income as well, but our preferred portfolios have performed very well over the past year and a half on an absolute basis and on a on a relative basis.

Joseph Harvey: Our preferred portfolios have performed very well in the past year and a half on an absolute basis and on a relative basis. If there's one of our strategies that's not so affected by tariffs, it's certainly the preferred market, which are mostly issued by banks, which are in terrific capital positions, and insurance companies. Those are some of my thoughts. I'll ask anybody else in the room if they can add to it.

Speaker Change: And so you know.

Speaker Change: And if there is if there is.

Speaker Change: One of our strategies, it's not so affected by tariffs, it's certainly the preferred market, which you know.

Speaker Change: Our mostly issued by banks, which are in terrific capital positions and.

Speaker Change: In insurance companies so.

Speaker Change: Those are some of my thoughts on it.

Speaker Change: Ask anybody else and I mean, I think we can add to it.

John Cheigh: So, those are some of my thoughts. Transcription by Trans-Expert at Fiverr.com Okay, great. And then you guys took us through the impacts of tariffs on your different strategy areas, but and that listed real infrastructure doesn't have most of it doesn't have much direct exposure. But could you I wonder if you could talk about kind of the second order impacts from tariffs that you might see coming down the pike? Well, from a investment standpoint, as you say, it's much more second order effects or indirect effects. So that'll be economic growth. Interest rates. and Inflation. Generally speaking, we think economic growth was already going to be a little bit slow and now it will be slower and inflation will be a bit higher.

Speaker Change: Okay great.

Speaker Change: And then you guys took us through the impact of tariffs on new different stated strategy areas, but and and it listed real infrastructure.

John Dunn: Okay, great. You guys took us through the impacts of tariffs on your different strategy areas. That listed real infrastructure, most of it doesn't have much direct tariff exposure. I wonder if you could talk about kind of the second order impacts from tariffs that you might see coming down the pike.

Speaker Change: It doesn't it most of it doesn't have much direct type of exposure, but could you I wonder if you could talk about kind of the second order impacts from tariffs that you might see coming down the pike.

Speaker Change: Well from a investment standpoint, as you say, it's much more second order effects or indirect effects, so that'll be economic growth inter.

Jon Cheigh: Well, from an investment standpoint, as you say, it's much more second order effects or indirect effects. That'll be economic growth, interest rates, and inflation. Generally speaking, we think economic growth was already gonna be a little bit slow, and now it'll be slower, and inflation will be a bit higher. Infrastructure really stands out, frankly, as being the stagflationary strategy, if you will. That's why, despite everything that's going on, so far this year, you know, infrastructure, as a category is still positive on the year. It's up roughly 5% on the year. Yeah, we think the economy's gonna slow, so that'll have a negative impact most on natural resource equities, being relatively more cyclical.

Speaker Change: Interest rates and.

Speaker Change: And inflation.

Speaker Change: Generally speaking, we think economic growth was already and it would be a little bit slow and now it will be slower and inflation will be a bit higher.

Speaker Change: Infrastructure really stands out frankly as being the Stagflationary strategy.

Speaker Change: If you will and that's why despite everything that's going on so far this year infra.

John Cheigh: infrastructure really stands out, frankly, as being the stagflationary strategy, if you will. And that's why, despite everything that's going on, so far this year, you know, infrastructure as a category still positive on the year, it's up roughly 5% on the year. So, yeah, we think the economy is going to slow. So that will have a negative impact most on natural resource equities being relatively more cyclical. Second, most insulated would be on real estate. And then areas like preferreds and Infrastructure, as Joe talked about, we don't really see any kind of major impact. So it's all very indirect impacts as opposed to direct impact.

Speaker Change: Infrastructure.

Speaker Change: As a category is still positive on the year, it's up roughly 5% on the year.

Speaker Change: So.

Speaker Change: Yeah, we think the economy is going to slow so that'll have a negative impact most on natural resource equities being relatively more cyclical.

Second.

Speaker Change: Most insulated would be on real estate, and then areas like preferreds and.

Jon Cheigh: Second, most insulated would be on real estate, and then areas like preferreds and infrastructure, as Joe Harvey talked about. We don't really see any kind of major impact. It's all very indirect impacts as opposed to direct impacts.

Speaker Change: Realized oh, sorry, and it infrastructure.

Joe Harvey: Joe talked about we don't really see any kind of major impact. So it's it's all very indirect impacts as opposed to a direct impacts.

Joe Harvey: And John If your question was getting at what are we doing as a firm Oh, it's the first order of business is always to Taiwan.

Joseph Harvey: John, if your question was getting at what are we doing as a firm, you know, it's you know the first order of business is always to interact with our clients to help share our best thinking on what's going on with them. You know, we're not gonna make any you know rash short-term you know changes in how we're operating. As I said in my comments, clearly have our eye on the potential for recession. You know, one of the reactions to that would be to raise the bar on hiring, you know, until we see how all of this plays out. You know, we're not stopping on the strategic hires that we need to make.

Joe Harvey: With our clients to help them.

Joe Harvey: And John, if your question was getting at what are we doing as a firm? It's the first sort of business is always to interact with our clients to help. share our best thinking on what's going on with them. We're not going to make any rash short term changes in how we're operating. As I said in my comments, clearly have our eye on the potential for recession and so, you know, one of the reactions to that would be to raise the bar on hiring. Investments for a couple of years down the road. We'll we'll put the brakes on that As you know, our balance sheet is extremely strong.

Joe Harvey: Sure our best thinking on what's going on with them, but.

Joe Harvey: We're not going to make any rash.

Joe Harvey: Rash short term changes in how we're operating but as I said in my comments clearly have have around the potential for recession and so you know one of the reactions to that would be to raise the bar on hiring.

Joe Harvey: Until we see how all this plays out.

Joe Harvey: We're not stopping on the strategic hires that we need to make but if.

Joe Harvey: If we if we have things that are more.

Joseph Harvey: If we have things that are more nice to haves or, you know, investments for a couple of years down the road, we'll put the brakes on that. As you know, our balance sheet is extremely strong, so, you know, we're prepared for whatever, you know, comes down the pike. You know, we'll continue to focus on portfolios and really bear down on the new launches that we have because, you know, those are. You know, it's a critical time and it. We'll see what happens.

Joe Harvey: Nice to haves or.

Joe Harvey: Yeah.

Joe Harvey: Now investments for a couple of years down the road book will put the brakes on that.

Joe Harvey: As you know our balance sheet is extremely strong so we're.

Joe Harvey: Our prepared for whatever.

Joe Harvey: Whatever comes down the Pike, but.

Joe Harvey: The focus on portfolios in and.

Joe Harvey: So, you know, we're prepared for you know, whatever comes down the pike but you know, we'll continue to focus on portfolios and and really bear down on the new launches that we have because, you know, those are Critical Time. And we'll see what happens. I don't know, for the ETF launch, for example, our head of wealth is seeing in other examples, how volatility can create some activity for ETFs, because investors are more apt to switch, if they can take a tax loss or move in a down market to a better vehicle. So those are some of the things that we're thinking about.

Joe Harvey: Really bear down on the new launches that we have because.

Joe Harvey: Those are that's a critical time in it and we'll see what happens I don't know for the ETF launch for example.

Joseph Harvey: I don't know, for the ETF launch, for example, you know, our head of wealth has seen in other examples how volatility, you know, can create some activity for ETFs because investors are more apt to switch if they can take a tax loss or, you know, move in a down market to a better vehicle. Those are some of the things that we're thinking about.

Joe Harvey: We are.

Joe Harvey: Our head of wealth or seen in another and other examples how volatility can create some activity.

Joe Harvey: For Etfs, because investors are more apt to switch if they can take a tax loss or a move in the in a in a down market to have a better a better vehicle. So so.

Joe Harvey: Those are some of the things that we're thinking about.

Joe Harvey: Right.

Joe Harvey: Yeah, maybe maybe on active Etfs.

John Dunn: Right. Yeah, maybe on active ETFs. Is there a difference in selling those products versus the, you know, the open-end funds? You mentioned that some of it is keeping assets in-house. Are there also new people coming in to that, you know, kind of vehicle? Maybe you know, it's early days, but like, do you have any idea of what, like, kind of steady state level of flows you'd like to, you know, like to get to?

Joe Harvey: Is there a difference in selling those products versus the you know.

Joe Harvey: The open end funds and you mentioned some of it is keeping about keeping assets in house or Theyre also new people coming in today that you know kind of vehicle and maybe it's early days, but like do you have any idea of what kind of steady state level of flows you'd like to.

Joe Harvey: Right. Yeah, maybe on active ETFs. Is there a difference in selling those products versus the, you know, the open end funds? And you mentioned some of it is keeping about keeping assets in house. Are there also new people coming in to that, you know, kind of vehicle? And maybe, you know, it's early days, but like, do you have any idea of what kind of steady state level flows you'd like to, you know, like, like to get to? Well, in terms of quote unquote selling, I mean, it's it's it's it starts with a process of helping are our advisors.

Joe Harvey: You know like like to get to.

Joe Harvey: Well in terms of the quote.

Joe Harvey: Quote unquote selling because it's it's it's starts with the process of helping.

Joseph Harvey: Well, in terms of quote-unquote selling, I mean, it starts with a process of helping our advisors make allocations to the things we do. So it's education about our asset classes, how they fit into a portfolio, how they enhance the return and risk profile of a portfolio. What is different is that the initial investors will come from the RIA market. They won't come from the wirehouses, which have criteria to gain size and scale in the vehicles, and in some cases, go through a research process. Although, for all the strategies we have, we're pretty much got that box checked with the wirehouses.

Joe Harvey: Helping them.

Joe Harvey: Our advisors.

Joe Harvey: Make allocations to the to the things, where we do them. So its education about our asset classes, how they fit into our portfolio holiday enhanced the return and risk profile of our.

Joe Harvey: The portfolio what is different is that the initial investors will come from the R. I a market they won't come from the wire houses, which have criteria to.

Joe Harvey: Game.

Joe Harvey: Size and scale of independent vehicles and in some cases go through research process. Although you know for all of the strategies we have.

Joe Harvey: You know pretty much got.

Joe Harvey: Got that box checked with the wire houses, but what's different is there.

Joe Harvey: Transcripts provided by Transcription Outsourcing, LLC. We're, you know, pretty much got that box checked with the wirehouses. But what's different is, you know, they're The Initial Investors in the ETFs are RIAs that we maybe don't have relationships with, so it's building relationships with model builders and RIA allocator specialists to active ETFs, but in terms of the © The Bulletproof Executive 2013 . core allocations that that we're known for that. could be. Substitute for one of our open end mutual funds. So, as it relates to... have some of that initial activity. And it's still early days, I wouldn't say we have a statistically significant sample set yet to, to really bear down on.

Joseph Harvey: What's different is, you know, they're the initial investors in the ETFs are RIAs that, you know, we maybe don't have relationships with. It's building relationships with model builders and RIA allocator specialists to active ETFs. In terms of the so-called sales process, it's no different than what we do, you know, everywhere in wealth. As I said in my comments, you know, our strategy revolves around, you know, not thematic approaches to strategies in ETFs, which, you know, some firms do. It's rather, you know, core allocations that we're known for that could be, you know, a substitute for one of our open-end mutual funds.

Joe Harvey: The initial investors in the Etfs or Rnas that we maybe don't have relationships with so it's building relationships with mom.

Joe Harvey: Model builders and you know.

Joe Harvey: Allocator specialists to active Etfs, but in terms of the.

Joe Harvey: So called sales process. So it's no different than what we do.

Everywhere in wealth.

Joe Harvey: And as I said in my comments, you know our strategy revolves around.

Joe Harvey: Not thematic.

Joe Harvey: Approaches to our strategies and Etfs, which some firms do.

Joe Harvey: It's rather.

Joe Harvey: Core allocations that were known for that that could be.

Joe Harvey: Substitute for.

Joe Harvey: One of our open end mutual funds, so as it relates to <unk>.

Joseph Harvey: As it relates to kind of some of the initial activity, and it's still early days, I wouldn't say we have a statistically significant sample set yet to really, you know, bear down on. We've seen situations where there are RIA allocators who only use ETFs. You know, that is money that we would never have ever seen before. It's a great validation of our launch and, you know, gives us confidence, 'cause we're kinda, you know, seeing this type of thing more and more in the industry. There will be examples where we have existing open-end fund investors who have been converting their business to using only ETFs.

Joe Harvey: Some of the initial activity and it's still early days I wouldn't say, we have a statistically significant sample set yet.

Joe Harvey: So really bear.

Joe Harvey: Bear down on but we've.

Joe Harvey: We've seen situations, where there are I E.

Joe Harvey: Allocators, who only use etfs and <unk>.

Joe Harvey: That is money that we would never ever seen before so that's a great validation of our launch and it gives us confidence.

Joe Harvey: But we've seen situations where there are RIA allocators who only use ETFs and that that is money that we would never have ever seen before. So it's a great validation of our launch and, you know, gives us confidence, because we're kind of seeing this type of thing more and more in the industry. There will be examples where we have existing open end fund investors who been converting their business to using only ETFs. We've seen an example of two where they're swapping out of our open-end funds into ETFs because that's what they've chosen for their business models.

We're kind of seeing this type of thing more and more in the industry.

Joe Harvey: There will be examples where we have existing open end fund investors who.

Joe Harvey: It had been converting their business to using only etfs.

Joe Harvey: We've seen an example, or two where they're swapping out of our open end funds into E.

Joseph Harvey: We've seen an example of 2 where they're swapping out of our open-end funds into ETFs because that's, you know, what they've chosen for their business models. In that case, we say, "Okay, great." We've retained assets, but more importantly, these advisors are growing. You know, had we not, you know, provided these vehicles, we would have ultimately, you know, lost a client and lost another growth engine. In our underwriting, you know, we factored in some, you know, swapping of open-end fund assets for ETFs. But it's too early to start to try to quantify, you know, all of that. As it relates to what pace we would like, that's.

Joe Harvey: E T S. Because that's what they've chosen for their business models. So in that case, we say okay. Great. So we've retained assets, but more importantly, these advisors or are growing.

Joe Harvey: Had we not provide these vehicles, we would've ultimately.

Joe Harvey: So in that case, we say, okay, great, so we've retained assets, but more importantly, these advisors are growing and had we not provided these vehicles, we would have ultimately lost a client and lost another growth engine. So in our underwriting, we factored in some Swapping of Open-End Fund Assets for ETFs, but it's too early to start to try to quantify all of that. As it relates to what pace we would like, I would like it to be a lot but, you know, the market is what's going to tell us what the right pace is. But we've been pleasantly surprised with the activity we've seen so far.

Joe Harvey: Lost a client and a.

Joe Harvey: Last one another growth engine so in.

Joe Harvey: In our underwriting and we've factored in some.

Joe Harvey: Swapping of open end fund assets for Etfs.

Joe Harvey: It's too early to start to try to quantify all of that as it relates to.

Joe Harvey: What what pace, we would like.

Joe Harvey: That's that's.

Joe Harvey: I would like it to be a lot, but you know.

Joe Harvey: The market is what's going to tell us what the right places, but we've been pleasantly surprised with the activity we've seen so far in some.

Joseph Harvey: I would like it to be a lot, but, you know, the market is what's gonna tell us what the right pace is. We've been pleasantly surprised with the activity we've seen so far in some volatile conditions.

Joe Harvey: Volatile conditions.

Speaker Change: Got you and in your prepared remarks, you talked about looking to further innovate to take advantage of a dislocation was that a reference to maybe like working on round two of active Etfs or were there. Other things you have to kind of had in mind.

John Dunn: Gotcha. In your prepared remarks, you talked about looking to further innovate to take advantage of, you know, dislocation. Was that a reference to like working on round two of ETFs, or were there other things you kind of had in mind?

Joe Harvey: volatile condition. Gotcha. And in your prepared remarks, you talked about looking to further innovate to take advantage of, you know, dislocation. Was that a reference to maybe like working on round two of ETS or were there other things you kind of had in mind? Um, it could be round two of VTFs. You know, it could be, you know, potentially. Inorganic growth, we've been going through a process to identify strategies for, you know, what's next, you know, several years down the road. And one of the things that's happening happening in the industry with the interest in the wealth channel is that There are more small asset managers who want to get access to wealth and they're realizing in light of the competition and race to gain share from the private equity funds, that that's going to be increasingly difficult.

Joe Harvey: Yeah.

Joe Harvey:

Joe Harvey: It can be round two of of Etfs.

Joseph Harvey: It could be round two of ETFs. You know, it could be, you know, potentially, inorganic growth. You know, we've been going through a process to identify strategies for, you know, what's next, you know, several years down the road. You know, one of the things that's happening in the industry with the interest in the wealth channel is that there are more small asset managers who want to get access to wealth, and they're realizing, in light of the competition and race to gain share from the private equity funds, that that's gonna be increasingly difficult. We have a strong market position in wealth, and that's pretty well known in the industry.

Joe Harvey:

Joe Harvey: No.

Could be a potentially.

Joe Harvey: Potentially.

Joe Harvey: Inorganic growth.

Joe Harvey: Been going through a process to identify a.

Joe Harvey: Strategies for.

Joe Harvey: What's next several years down the road.

Joe Harvey: And.

Joe Harvey: One of the things that's happening happening in the industry with the.

Joe Harvey: Interest in the wealth channel is that.

Joe Harvey: Uh huh.

Joe Harvey: There are more small asset managers, who want to get access to wealth and they're realizing in light of the.

Joe Harvey: Competition and race to gain share from the private equity funds that that's going to be increasingly difficult.

Joe Harvey: We have a strong market position and wealth.

Joe Harvey: That's pretty well known in the industry, so there might be.

Joseph Harvey: There might be, you know, a firm with a strategy that would meet our criteria. We would be, you know, open to looking at some acquisitions. That could come by way of dislocations with the market environment right now.

Joe Harvey: No.

Joe Harvey: Firm with a strategy that we would meet our criteria.

Joe Harvey: So.

Joe Harvey: We would be.

Joe Harvey: And I'm looking at some some acquisitions, so that could come by way of dislocations.

Joe Harvey: Uh huh.

Joe Harvey: The market environment right now.

Joe Harvey: Yeah.

Joe Harvey: Gotcha.

Joe Harvey: And then maybe one on the pipeline.

John Dunn: Gotcha. Then maybe one on the pipeline. Do you think, you know, we'll look back and look at this quarter as kind of an anomaly, or are we. You know, could we hang out at a low level versus, 'cause for quite a while you'd, you know, been kind of leveled up to the more than a billion level. You think it's just the timing or are we in it this period for a while, a little bit?

Joe Harvey: Do you think we'll look back and look at this quarter as kind of an anomaly or are we you know could we hang out at.

Joe Harvey: And then maybe one on the pipeline.

Joe Harvey: A low level versus cause for quite a while.

Joe Harvey: Do you think, you know, we'll look back and look at this quarter as kind of an anomaly? Or are we, you know, could we hang out at a low level versus because for quite a while you'd been, you know, been kind of leveled up to the more than a billion level? You think it's just The timing or are we in this period for a little bit? As I've been talking about on these calls, we have good levels of activity, but we need to translate those into real...

Joe Harvey: Ben.

Joe Harvey: We've kind of leveled up to the more than 1 billion level or you think it's just the timing or so in this period for what little bit.

Joe Harvey:

Joe Harvey: And as I've been talking about on these calls we have good levels of activity, but.

Joseph Harvey: You know, as I've been talking about on these calls, you know, we have good levels of activity, but we need to translate those into real, you know, won mandates. When you look at the history, it shows consistency and strength in the pipeline. I'm not looking over this data point, and we're gonna dig in and do everything that we can to drive it. You know, one of the things that I talked about a little bit is that in the institutional market, there's been more, you know, stresses on portfolios with the high levels of private allocations.

Joe Harvey: But we need to translate those into real you know.

Joe Harvey: One mandates.

Joe Harvey: When you look at the history of the shows.

Joe Harvey: <unk> and <unk>.

Strength in there.

Joe Harvey: And in the pipeline.

Joe Harvey: Unknown Executive, Brian Heller, Joseph Harvey, John Dunn, Adam Beatty, John Cheigh, Benjamin Rubin, Unknown Executive, Brian Heller, Raja Dakkuri, Cohen & Steers Inc and others. In the institutional market, there's been more stresses on portfolios with the high levels of private allocations, and of course, the regime change in interest rate, which caused plans to up their fixed income allocations, and that had to come from somewhere. That's been a thing out in the market, but I feel like we're We're getting through that phase, you know, the interest rate regime change and the restoration of fixed income allocations.

Joe Harvey: So I'm not I'm not.

Joe Harvey: Looking over a stay at a point too and we're going to dig in and.

Joe Harvey: You do all in everything that we can to drive it.

Joe Harvey: One of the things that I talked about a little bit is it.

Joe Harvey: In the institutional market.

Joe Harvey: Been more stresses on portfolios with the high levels of private allocations and of course, the regime change in interest rate, which.

Joseph Harvey: Of course, the regime change in interest rate, which you know, caused plans to up their fixed income allocations, and that had to come from somewhere. That you know, that's been a thing out in the market. You know, I feel like we're getting through that phase, you know, the interest rate regime change and the restoration of fixed income allocations. You know, and as Jon laid out, you know, we believe that the future looks better for allocations to real assets, so we need to go make that happen. You know, our activity is solid, and it's you know, it's got nice dimensions to it, as I said, which means to me that there are new allocations.

Joe Harvey: Caused plans to up their fixed income allocations and that had to come from somewhere so that's oh, but you know that.

Joe Harvey: That's been a thing out in the market, but I.

I I feel like we are.

Joe Harvey: Sure.

Joe Harvey: We're getting through that phase.

Joe Harvey: Interest rate regime change and the restoration of fixed income allocation. So.

Jon: And as Jon laid out.

Joe Harvey: We believe that that.

Joe Harvey: The future looks better for our allocations to real assets. So we need to go make that happen.

Joe Harvey: So, you know, and as John laid out. We believe that the future looks better for allocations to real assets, so we need to go make that happen. Our activity is solid, and it's got nice dimensions to it, as I said, which means to me... There are new allocations. There are new allocations, not just in the U.S., but also outside of the U.S. There are underperforming managers, but also there are investors who... want to work with us to collaborate to do something differentiated. I mentioned real estate strategy that we've been working on to combine listed and private.

Joe Harvey: Yes.

Joe Harvey: Our activity is is solid and its you know its got nice dimension to it as I said, which means to me.

Joe Harvey: Yes, there are new allocations their allocations not just in the U S. But also outside of the U S.

Joseph Harvey: There are new allocations, not just in the US, but also outside of the US. There are underperforming managers, but also there are investors who want to work with us to collaborate to do something differentiated. I mentioned the real estate strategy that we've been working on to combine listed and private core real estate. You know, we'll be launching that and announcing it before the middle of the year. We look forward to talking more about that because it's pretty exciting and, you know, that can be another way to get in front of more institutions and do something that's different with them.

Joe Harvey: There are underperforming managers, but also there are.

Joe Harvey: Investors, who who.

Joe Harvey: I want to work with us to collaborate to do something differentiated I mentioned.

Joe Harvey: The the real estate strategy that we've been working on to combine listed and private.

Joe Harvey: Listen private core real estate.

Joe Harvey: And we'll be we'll be launching that in announcing it.

Joe Harvey: Before the middle of the year and so we look forward to talking more about that because it was pretty exciting in that that can be on another.

Joe Harvey: listed in private core real estate. And you know, we'll be we'll be launching that and announcing it. Before the middle of the year, and so we look forward to talking more about that because it's pretty exciting and that that can be a another another way we Get in front of more institutions and do something that's different with them. Gotcha.

Joe Harvey: Another way we.

Joe Harvey: To get in front of more institutions and.

Joe Harvey: Something thats different with them.

Joe Harvey: Got you and then maybe just one more on the.

John Dunn: Gotcha. Then maybe just one more on the. You know, I think it's smart to, you know, see if you can take advantage of diversification by adding, you know, maybe getting a better price on a deal, but you haven't done a deal in a long time, so it's a bit of a change. Maybe talk through like whole deals versus team lift outs versus maybe some of the areas you might be interested in. Just any more color there would be great.

I think it's smart to T.

Joe Harvey: See if you could take advantage of dislocation by adding.

Joe Harvey: You know, maybe getting a better price on the deal, but you haven't done a deal in a long time. So it's a bit of a change maybe talk through like whole deals versus team lift outs versus maybe some of the areas you might be interested in just any more color there would be great.

Joe Harvey: And then maybe just one more on the, you know, I think it's smart to, you know, see if you can take advantage of duplication by adding, you know, maybe getting a better price on a deal, but you haven't done a deal in a long time. So it's a bit of a change, maybe talk through like, whole deals versus team lift outs versus maybe some of the areas you might be interested in just any more color there would be great. I could be a spectrum of things, you know, including We are working on a partnership with another firm where we would sponsor a vehicle, in the case of this real estate vehicle, combined listed and private.

Joe Harvey: I can be at best a spectrum of things.

Joseph Harvey: Well, it could be a spectrum of things, you know, including, you know, working, you know, a partnership with another firm, where we would sponsor a vehicle and, in the case of this real estate vehicle, combine listed and private. You know, it's been a vision of ours, and we're pleased to see some of our peers announce some of these types of arrangement. That would be one of the easier, short-term easier, maybe longer-term harder ways to bring on new capabilities. In terms of. You're right. We've not been an acquisitive firm historically.

Joe Harvey: Including.

Speaker Change: Uh huh.

Joe Harvey: We're working.

Joe Harvey: Our partnership with another firm.

Joe Harvey: Where we would sponsor a vehicle and.

Joe Harvey: In the case of this real estate vehicle.

Joe Harvey: Combined listed in private and you know that's been a vision of ours.

Joe Harvey: We're pleased to see some of our peers.

Joe Harvey: <unk> announced some of these types of arrangement and so that would be the.

Joe Harvey: This has been a vision of ours. I'm pleased to see some of our peers announce some of these types of arrangements and so that would be it. of the easier, short term easier, maybe longer term harder ways to bring on new new cape of capabilities. But in terms of You're right, we've not been an acquisitive firm historically. There have been many reasons for that, including The fact that we've had a Great opportunity to build out our capabilities and broader real assets investing, but also looking backward, it's been an environment where firms The Wealth Channel. are changing the equation a bit.

Joe Harvey: One of the easier [laughter] short term easier maybe longer term harder ways too.

Joe Harvey: Bringing on new cases, our capabilities.

Joe Harvey: But.

Joe Harvey: In terms of.

Joe Harvey: You're right we have not.

Speaker Change: Oh acquisitive firm historically, there have been many reasons for that including <unk>.

Joseph Harvey: There have been many reasons for that, including the fact that we've had a great opportunity to build out our capabilities in a, you know, broader real assets investing. Also looking backward, it's been an environment where, you know, firms weren't so interested in, you know, selling majority interest. There are a lot of players who would buy a minority interest and let them do their thing on their own. The dynamics that I talked about in the wealth channel and, you know, firms wanting to get access to the wealth channel are changing the equation a bit. We'll see.

Joe Harvey: The fact that we've had.

Joe Harvey: Great opportunity to build out our capabilities and a broader real assets.

Joe Harvey: Investing.

Joe Harvey: But also looking backward.

Joe Harvey: It's been an environment where firms.

Joe Harvey: Weren't so interested in selling majority interesting, but there are a lot of players who would buy a minority interest and let that let them do their thing on their own.

Joe Harvey: But the dynamics in the <unk>.

Joe Harvey: That I talked about in the wealth channel and firms wanting to get access to the wealth channel.

Joe Harvey: Our changing the equation of that so.

Joe Harvey: Yeah.

Joe Harvey: We'll see.

Joe Harvey: Sure.

Joe Harvey: When thinking about the things that we would be interested in.

Joseph Harvey: You know, we're thinking about the things that we would be interested in, you know, but we're, as you know, very conservative and disciplined, and have a very strict set of criteria. We're spending some time on it.

Joe Harvey: But where we are.

Joe Harvey: Uh huh.

As you know very conservative and disciplined.

Joe Harvey: We'll see, you know, we're Unknown Executive, Brian Heller, Joseph Harvey, John Dunn, Adam Beatty, John Cheigh, Benjamin Rubin, Unknown Executive, Brian Heller, Raja Dakkuri, Cohen & Steers Inc As you know, very conservative and disciplined. and have a very strict set of criteria. Spending some time on. Great. Thank you very much.

Joe Harvey: Uh huh.

Joe Harvey: Have a very strict set of criteria and so.

Oh, we're spending some time on it.

Joe Harvey: Great. Thank you very much.

John Dunn: Great. Thank you very much.

Joe Harvey: Yeah.

Joe Harvey: And that concludes our question and answer session I will now turn the conference back to Mr. Joe Harvey for closing remarks.

Operator: That concludes our question and answer session. I will now turn the conference back to Mr. Joseph Harvey for closing remarks.

Joe Harvey: Well. Thank you everyone for listening and look forward to touching base with you on July and Abby. Thank you for the call today.

Joe Harvey: And that concludes our question and answer session. I will now turn the conference back to Mr. Joe Harvey for closing remarks. Well, thank you everyone for listening. Look forward to touching base with you in July and Abby, thank you for the call. And ladies and gentlemen, that concludes today's call and we thank you for your participation. You may now disconnect.

Joseph Harvey: Well, thank you everyone for listening. We look forward to touching base with you in July. Abby, thank you for the call today.

Joe Harvey: And ladies and gentlemen that concludes today's call and we thank you for your participation you may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call, and we thank you for your participation. You may now disconnect.

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