Q2 2025 Cohen & Steers Inc Earnings Call
Standing by.
Unknown Executive: Welcome to the Cohen & Steers second quarter 2025 earnings conference call. During the presentation, all participants will be in a listen-only mode.
Ladies and gentlemen, thank you for standing by, welcome to the Coen and steer second quarter 2025 earnings conference call.
Unknown Executive: 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 zero.
Unknown Executive: As a reminder, this conference is being recorded Friday, July 18, 2025.
During the presentation, all participants will be in a listen-only mode 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 zero
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.
As a reminder, this conference is being recorded Friday, July 18th 2025.
Brian Heller: Thank you and welcome to the Cohen & Steers second quarter 2025 earnings conference call.
I would now like to turn the conference over to Brian her senior vice president and Deputy general counsel of Cohen and steers, please go ahead.
Brian Heller: Joining me are Joe Harvey, our Chief Executive Officer, Raja Dakkuri, our Chief Financial Officer, and John 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 second quarter earnings release and presentation. most recent annual report on Form 10-K, and our other SEC biographies. do no duty to update any forward-looking statements.
Speaker Change: Thank you and welcome to the Conan. Steers second quarter 2025 earnings conference call.
Joining me are Joe Harvey. Our chief executive officer Raja Dory, our Chief Financial Officer and John Shea, 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.
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. Second quarter earnings release in presentation.
Speaker Change: Our most recent annual report on form 10K and our other SEC files.
Brian Heller: Further, none of our statements constitute an offer to sell, or the solicitation of an offer to buy, securities of any fund or other investment vehicle. Our presentation also contains non-GAAP financial measures, referred to as as-adjusted financial measures. believe are meaningful in evaluating our performance. These non-GAAP financial measures should be read in conjunction with our GAAP results. Reconciliation of these non-GAAP financial measures is included in the earnings release and presentation. The earnings release and presentation, as well as links to our SEC file. available in the Investor Relations section of our website at www.cohenandsteers.com.
Speaker Change: We assume no duty to update any forward-looking statement.
Speaker Change: None of our statements constitute an offer to sell with a solicitation of an offer to buy Securities of any fund or other investment vehicle.
Speaker Change: Our presentation also contains non-gaap Financial measures referred to as as adjusted Financial measures that we believe are meaningful and evaluating our performance.
Speaker Change: These non-gaap Financial measures should be read in conjunction with our Gap results.
Speaker Change: A Reconciliation of these non-gaap Financial measures is included in the earnings release and presentation to the extent reasonably available.
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: 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.coins.com.
Raja: With that, I'll turn the call over to Raja.
Raja Dakkuri: A reconciliation of GAAP to as-adjusted results can be found in the earnings material. Yesterday, we reported earnings of $0.73 per share compared to $0.75 sequentially. Revenue for Q2 increased 1.1% from the prior quarter to $135 million. The change in revenue from the prior quarter was driven by a few items, including higher average AUM and day-care. Our effective fee rate was 59 basis points, which was in line with the prior quarter. Our operating margin was 33.6% compared to 34.7% in the prior quarter. As noted, we experienced higher average AUM compared to the prior quarter. In addition, ending AUM increased compared to Q1.
Raja: Thank you, Brian. And good morning everyone. My remarks today will focus on our as adjusted results. A Reconciliation of gaap has adjusted results can be found in the earnings material.
Yesterday, we reported earnings of 73 cents per share compared to 75 cents sequentially.
Raja: Revenue for Q2 increased 1.1% from the prior quarter to 135 million.
Raja: The change in revenue from the prior quarter, was driven by a few items, including higher, average, AUM and day count.
Raja: Our effective fee rate was 59 basis points, which was in line with the prior quarter.
Our operating margin was 33.6% compared to 34.7% in the prior quarter.
Raja Dakkuri: Ending AUM was $88.9 billion as of Q2, compared to $87.6 billion at prior quarter end. End of period AUM was positively impacted by market appreciation during the quarter. It is worth noting that the market events of April negatively impacted our average AUM during the quarter. However, AUM more than recovered by the end of Q2. Net inflows into our open-end funds were offset by institutional net outflows. Our open-end funds have experienced positive net flows in the last four consecutive quarters.
Raja: As noted we experienced higher average AUM, compared to the prior quarter. In addition, ending AUM increased compared to q1
Raja: Ending in was 88.9 billion as of Q2 compared to 87.6% at prior quarter end.
End of period AUM was positively impacted by market appreciation during the quarter.
It is worth noting that the market events of April negatively impacted our average AUM during the quarter however AUM more than recovered by the end of Q2.
Raja Dakkuri: Joe Harvey will provide additional insights regarding our flows and pipelines. Total expenses during Q2 were 2.9% higher than the prior quarter due to a number of drivers. compensation and benefits increased during the quarter. The change in comp and benefits was in line with the sequential increase in our revenue. As a result, the compensation ratio for the quarter remained at 40.5%. Distribution and service fees were impacted by higher average AUM in our open-end funds. G&A expense levels increased versus the prior quarter. G&A was impacted by travel and other business development activities, including, for example, the launch of our active ETF.
Raja: Net inflows into our open-end funds. Were offset by institutional net. Outflows our open-end funds have experienced positive, net Flows In the last 4 consecutive quarters.
Speaker Change: Joe Harvey will provide additional insights regarding our flows and Pipelines.
Speaker Change: Total expenses during Q2 were 2.9% higher than the prior quarter due to a number of drivers.
Speaker Change: Compensation and benefits increased during the quarter, the change in comp and benefits was in line with the sequential increase in our Revenue.
Speaker Change: as a result, the compensation ratio for the quarter remained at 40.5%
Speaker Change: distribution and service fees were impacted by higher, average AUM in our open-end funds.
Raja Dakkuri: This activity is consistent with our focus on sales and distribution. As a result of our efforts, we generated a meaningful increase in our one but unfunded pipeline as a quarter end.
Speaker Change: Gene expense of increased versus the prior quarter GNA, was impacted by travel and other business development activities. Including for example, the launch of our active ETFs.
Speaker Change: This activity is consistent with our focus on sales and distribution.
Raja Dakkuri: We will detail this later in the call. In addition, regarding expenses, we experienced higher levels of talent acquisition costs during the quarter. The primary driver was recruiting for our sales and distribution. Regarding taxes, our effective rate was 25.3% for the quarter. Our earnings material presents liquidity at the end of Q2 and prior quarters. Our liquidity totaled $323 million at quarter end, which compares positively to $295 million in the prior quarter.
Speaker Change: As a result of our efforts, we generated a meaningful increase in our 1, but unfunded pipeline as a quarter end. We will detail this later in the call.
Speaker Change: In addition regarding expenses, we experienced higher levels of talent acquisition costs during the quarter.
Speaker Change: The primary driver was recruiting for our sales and distribution functions.
Regarding taxes are effective rate, was 25.3% for the quarter.
Speaker Change: Our earnings material presents liquidity, at the end of Q2 and prior quarters.
Raja Dakkuri: Let me now touch on a few items regarding 2025 guidance. With respect to comp and benefits for 2025, we expect our compensation ratio to remain at 40.5% in line with our prior guidance. We expect full year DNA to increase in the 7 to 8% range as compared to full year 2024. The change in G&A is primarily driven by talent acquisition costs during 2025, as well as travel and other business development activities. Also impacting G&A are expenses related to our active ETF. Other drivers of GNA include infrastructure investments such as our Foreign Office upgrades. During Q2, we moved into our new Hong Kong office.
Speaker Change: Our liquidity to about 323 million act Border in which Compares positively to 295 million in the prior quarter.
Speaker Change: Let me now touch on a few items regarding 2025 guidance.
Speaker Change: With respect to comp and benefits. For 2025, we expect our compensation ratio to remain at 40.5% in line with our prior guidelines.
We expect full year GNA to increase in the 7 to 8% range as compared to full year 2024.
Speaker Change: The change in GNA, is primarily driven by Talent acquisition cost during 2025 as well as travel and other business development activities.
Speaker Change: also, impacting GNA are expenses related to our active ETFs launch
Speaker Change: Other drivers of GNA include infrastructure Investments such as our foreign office upgrades.
Raja Dakkuri: This relocation represents the last of our planned foreign office upgrades. We remain focused on expense management and will be disciplined while continuing to make selective investments in our business. After this year, we expect annual G&A changes to moderate from 2025 growth levels to being in the mid-single-digit percentage range. Lastly, we expect our effective tax rate to remain at 25.3% on an as-adjusted basis for 2025.
Speaker Change: during Q2 we moved into our new Hong Kong office,
this relocation represents the last of our planned foreign office upgrades.
Speaker Change: Business. After this year, we expect annual G&A changes to moderate from 2025 growth levels to being in the mid single digit percentage range.
John Cheigh: I'll now turn it over to John Cheigh, who will discuss investment performance. Thank you, Raja. Today, I will first review our performance scorecard. Second, I'll share our views on the market environment, the importance of diversification in the state of the real estate market. And last, I'll highlight our recently launched tactical listed and private real estate strategy. Beginning with our performance scorecard, the second quarter saw 89% of our AUM outperformance benchmark. On a one-year basis, 94% of our AUM has outperformed its benchmark, while our 3, 5, and 10-year outperformance rates are all above 95%, highlighted by 99% of AUM outperforming over 10 years.
Lastly, we expect our effective tax rate to remain at 25.3% on an as adjusted basis for a 2025.
Speaker Change: I'll now turn it over to John Chase, who will discuss investment performance.
Thank you, Raja today. I will first review our performance scorecard second. I'll share our views on the market environment, the importance of diversification, and the state of the real estate market. And last I'll highlight our recently launched tactical listed and private real estate strategy.
John Cheigh: Our 1, 3, and 5-year excess returns are all well in excess of 200 basis points and above our target. From a competitive standpoint, 90% of our open-end fund AUM is rated 4 or 5 star by Morningstar.
Speaker Change: Beginning with our performance scorecard. The second quarter saw 89% of our AUM outperformance Benchmark on a 1 year basis. 94% of our AUM has outperformed its Benchmark. While our 3 5 and 10 year, outperformance rates are all above 95%, highlighted by 99% of AUM, outperforming over 10 years.
Speaker Change: Our 1 3 and 5 year excess returns for all well and excess of 200 basis points and above our targets.
John Cheigh: In short, our investment franchise remains as strong as ever, and as our asset classes continue to gain favor, we remain well positioned to take advantage of new opportunities.
Speaker Change: From a competitive standpoint, 90% of our open-end fund. AUM is rated 4 or 5 Star by Morning Star.
John Cheigh: Transitioning to the market environment, in the first days of the quarter, markets were rattled by escalating trade tensions and geopolitical uncertainty, leading to sharp declines in equities and heightened bond market volatility. However, some backtracking and a pause on tariffs helped restore investor confidence, driving a sharp risk-on rally with mega-cap tech stocks leading the recovery as the S&P 500 and the MSCI All-Country World Indices returned 10.9 and 11.7% respectively in the quarter. For our asset classes, absolute performance was generally positive for the quarter, but underperformed broader equity and fixed income markets.
Speaker Change: In short, our investment franchise remains as strong as ever, and as our asset classes, continue to gain favor, we remain, well, positioned to take advantage of new opportunities.
Speaker Change: Transitioning to the market environment in the first days of the quarter markets were rattled by escalating trade tensions and geopolitical uncertainty.
Speaker Change: Leading to Sharp declines in equities and heightened bond market volatility.
Speaker Change: However, some backtracking and a pause on tariffs helped restore investor confidence, driving, a sharp risk on rally with mega cap, tech stocks leading the recovery as the S&P 500 and the msci all country World indices returned 10.9 and 11.7% respectively in the quarter.
For our asset classes, absolute performance, was generally positive for the quarter.
John Cheigh: As we talk with our investors about the current environment and outlook, we have focused on two critical points. One, the importance of a disciplined approach to diversification and valuation, and second, that real estate values have bottomed and valuations are attractive, representing an increasingly compelling risk-reward opportunity for new investors. On diversification, a topic we've spoken about throughout the year, it's worth noting that having a properly diversified portfolio continues to serve investors well. Indeed, despite the robust gains in the S&P 500 and Q2, global equities still outperform the U.S. and similarly, Global Real Estate outperformed U.S. Real Estate.
Speaker Change: But underperformed broader equity and fixed income markets.
As we talked with our investors about the current environments and Outlook, we have focused on 2 critical points.
Speaker Change: 1, the importance of a disciplined approach to diversification and valuation. And second that real estate values have bottoms and valuations are attractive, representing and increasingly compelling risk-reward opportunity for new investors.
On diversification, a topic we've spoken about throughout the year. It's worth noting that having a properly Diversified portfolio continues to serve investors. Well,
Speaker Change: Indeed, despite the robust gains in the S&P 500 in Q2.
Speaker Change: Global equities. Still outperformed the US.
John Cheigh: While it may seem like cap-weighted U.S. equities have regained the spotlight, in fact, real assets outperformed broader markets over the first half of 2025. Taking a closer look at year-to-date returns, global equities, global listed infrastructure, and natural resource equities with gains newer or greater than 10% each have all substantially outperformed the S&P 500's 6.2% gain year-to-date. Global Real Estate and Commodity Returns have trailed only slightly.
Speaker Change: And similarly Global real estate. Outperformed us real estate.
While it may seem like cap weighted us, equities have regained Spotlight. In fact, real assets outperformed broader markets over the first half of 2025,
Speaker Change: taking a closer look at year-to-date returns Global, equities, global listed infrastructure and natural resource activities with gains new or greater than 10%, each.
Speaker Change: Of all substantially outperforming the S&P 500 6.2%, gain year to date.
John Cheigh: Six months ago, all the talk was about U.S. exceptionalism. But only three months later, investors began to question and take action on their major overweights to U.S. assets. Our high conviction and advice to investors is that they need to strategically allocate to listed real assets prospectively and not after the fact. before the inflation risks in their portfolios become apparent. We believe the outlook remains favorable for real assets. where valuations are at more attractive starting points than equities. The error of ultra-low interest rates is gone, inflation is stickier, fixed income allocations have been re-established given higher yields, and there is a greater need for true diversification in portfolios that is not solved by stocks, bonds, and private assets alone.
Global real estate. And commodity returns have trailed only slightly.
Speaker Change: 6 months ago, all the talk was about us exceptionalism.
Speaker Change: But only 3 months later investors began to question and take action on their M major overweight to us assets.
Speaker Change: Our high conviction advice to investors is is that they need to strategically allocate to listed real assets prospectively. And not after the fact,
Speaker Change: Before the inflation risk in their portfolios become apparent.
Speaker Change: We believe the Outlook remains favorable for real assets. Where valuations are at more attractive starting points than equities.
Speaker Change: The error of ultra low interest rates is gone. Inflation is stickier, fixed income allocations, have been reestablished given higher yields.
John Cheigh: Moving specifically to real estate, after a nearly two year downturn, private real estate prices have reached a clear turning point. seven consecutive quarters of negative returns that started in 2022, have now given way to four consecutive positive. We believe prices across several property types have bottomed and are beginning to appreciate with a leader being open-air, necessity-driven shopping centers, which have been the focus of our private real estate strategies. While the broader private market has bottomed, some existing private real estate funds must still work through portfolios built at peak valuations and in sectors concentrated in last cycle's winners of multifamily and industrial.
And there is a greater need for True diversification in portfolios, that is not solved by stocks bonds and private assets alone.
moving specifically to real estate after a nearly 2-year downturn,
Private real estate prices have reached a clear Turning Point.
Speaker Change: Negative returns that started in 2022. How now given way to 4 consecutive positive quarters?
Speaker Change: We Believe prices across several property types. Have bottomed and are beginning to appreciate with a leader. Being open are necessity driven shopping centers which have been the focus of our private real estate strategies.
John Cheigh: forward real estate performance will be heavily driven by property type and geographic exposure. And we expect those last cycle winners to be this cycle's laggards.
Speaker Change: While the broader private Market has bottomed. Some existing private real estate funds must still work through portfolios built at Peak valuations and in sectors, concentrated in last Cycles. Winners of multi family and Industrial
Ford real estate performance will be heavily driven by property type and Geographic exposure, and we expect those last cycle winners.
John Cheigh: The reason for real estate bottoming is twofold and relates both to the listed and private market. One, stable long-term interest rates, even if at a higher level than several years ago. And two, improving rental growth with the magnitude depending upon the property type. Many observers focus solely on interest rates, and I believe that's an incomplete assessment of what's happened the last few years. Lower interest rates may help valuations in the short run. But over time, they encourage new supply. can lead to lower rent. The 2021 cycle perfectly demonstrates this, as low interest rates helped valuations but also drove fund flows into the sector and encouraged development and excess industrial and apartment supply in 2023 that still exists today.
Speaker Change: To be this Cycle's laggers.
The reason for Real Estate bottoming is twofold and relates both to the listed and private markets.
1 stable, long-term interest rates. Even if at a higher level than several years ago and 2 improving rental growth with the magnitude depending upon the property type.
Speaker Change: Many observers, Focus solely on interest rates, and I believe that's an incomplete assessment of what's happened. The last few years
Speaker Change: lower interest rates may help valuations in the short run.
Speaker Change: But over time, they encourage new Supply.
Which can lead to lower rents.
Speaker Change: The 2021 cycle perfectly demonstrates this as low interest rates.
John Cheigh: REITs have underperformed equities the last few years, partially because of interest rates, but just as much because new supply led to slowing earnings growth versus tech-led equities delivering double-digit earnings growth. Today, supply has slowed down. and the four plus percent interest rate regime of the last three years has directly led to supply and demand coming back into balance. We strongly believe that too much is made of the higher-for-longer story impact on valuation. And not enough is being made of the positive impact higher rates has on discouraging new supply and the normalization and return of rental growth, which we project in 2025 and beyond.
Helped valuations, but also drove fund flows into the sector and encouraged development, and excess industrial, and apartment Supply in 2023 that still exists today.
Speaker Change: Rates. Have underperformed equities the last few years.
Partially because of interest rates.
Speaker Change: but just as much
Speaker Change: because new Supply led to slowing earnings growth versus tech-led equities delivering double digit earnings growth.
Speaker Change: Today.
Speaker Change: Supply has slowed down.
Speaker Change: And the 4 plus percent interest rate regime of the last 3 years, has directly led to supply and demand coming back into balance.
Speaker Change: We strongly believe that too much is made of the higher for longer story impact on valuations.
John Cheigh: I'd like to finish by highlighting the mid-May announcement regarding our launch of a tactical listed and private real estate strategy. We believe this strategy can be a compelling solution for both large and small institutional real estate investors who tend to focus the majority of their real estate investment on the core and core plus part of the risk return spectrum. Historically, investors viewed their listed-in-course real estate allocations in separate silos. But there are several key benefits to combining listed and private real estate allocations into one integrated strategy. This recognition of the power of an integrated strategy is what prompted Cohen & Steers to partner with IDR Investment Management to launch a real estate strategy designed to tactically allocate to both listed real estate securities and core private real estate in a single portfolio.
Speaker Change: And not enough is being made of the positive impact. Higher rates has on discouraging new Supply and the normalization and return of rental growth which we project in 2025 and Beyond.
I'd like to finish by highlighting the midday announcement regarding our launch the Tactical listed and private real estate strategy.
Speaker Change: We believe this strategy can be a compelling solution for both large and small, institutional Real Estate Investors. Who tend to focus the majority of their real estate investment on the core and core Plus part of the risk return Spectrum.
Speaker Change: Historically investors viewed their listed in course, real estate. Allocations in separate silos.
Speaker Change: But there are several key benefits to combining listed and private real estate allocations into 1 integrated strategy.
John Cheigh: IDR has a patented process to replicate the NACREF odyssey fund in We believe that such an integrated strategy has several advantages over legacy strategies. First, this blend has historically led to higher returns, reduced risk, and lower drawdowns over a full cycle when compared to core private real estate alone. Second is improved liquidity. By definition, private allocations constrain liquidity more than listed REITs. The additional challenge is that Those conditions often tighten when liquidity needs are greatest. But our strategy, in partnership with IDR, should create significantly more liquidity than stand-alone private allocations. Third, an allocation to an active listed reach strategy has strong potential for alpha as our historical performance demonstrates.
Speaker Change: This recognition of the power of an integrated strategy is what prompted cone and steers to partner with iDrive Investment Management to launch a. Real estate strategy, designed to tactically allocate to both listed real estate Securities and core private real estate in a single portfolio.
IDrive has a patented process to replicate the nerve Odyssey fund index.
Speaker Change: We believe that such an integrated strategy has several advantages over Legacy strategies.
Speaker Change: First, this blend has historically Led You Higher returns reduced risk?
Speaker Change: and lower draw Downs, over a full cycle, when compared to core private, real estate alone,
Speaker Change: Second is improved liquidity.
Speaker Change: By definition private allocations. Constrain liquidity more than listed REITs.
Speaker Change: the additional challenge is that
Speaker Change: those conditions often tighten when liquidity needs are greatest.
John Cheigh: And finally, a blended listed and private real estate strategy gives us as manager the ability to tactically allocate between the strategy. While listed REITs and private real estate generally move together over long periods of time, REITs historically lead private real estate repricing in both downturns and recoveries, particularly at market turning points. This lead-lag dynamic in real estate is important because it creates timing-based windows of opportunity for knowledgeable investors with the governance and structure to take advantage. Our early discussions with investors confirm that this combination of returns, reduced drawdowns, and enhanced liquidity may be very compelling for large and smaller institutions, and we expect to provide regular updates on the strategy over time.
Third in allocation to an active listed. Reach strategy has strong potential for Alpha as our historical performance demonstrates.
Speaker Change: And finally, a blended listed and private real estate strategy gives us as manager, the ability to tactically allocate between the strategies
Speaker Change: while listed reads and private real estate generally move together over long periods of time.
Speaker Change: Reads historically lead private real estate repricing in both downturns and recoveries particularly at Market turning points.
Speaker Change: This lead lag dynamic in real estate is important because it creates timing based Windows of opportunity for knowledgeable investors with the governance and structure to take advantage.
John Cheigh: I strongly believe that we have innovated something that didn't exist before, that is complicated, but that the industry desperately needs. Any innovation is hard work. And I want to thank our partners at IDR and our team members across our legal tax accounting, product distribution and investments for being entrepreneurs and creating something we believe will be impactful.
Speaker Change: Our early discussions with investors confirm that this combination of returns reduced draw downs and enhanced liquidity may be very compelling for large and smaller Institutions and we expect to provide regular updates on the strategy over time.
Speaker Change: I strongly believe that we have innovated something that didn't exist before, that is complicated but that the industry desperately needs.
Joe Harvey: With that, let me turn the call over to Joe. Thank you, John, and good morning.
Speaker Change: Any Innovation is hard work and I want to thank our partners at iDrive and our team members across our legal tax accounting product distribution and Investments for being entrepreneurs and creating something we believe will be impactful.
Joe Harvey: With that, let me turn the call over to Joe.
Joe Harvey: I'll begin by apologizing for the fire alarm in the background. I can assure you we're all safe and we're back on track. Today, I will review our key business trends in the second quarter and then provide an update on our strategic priorities. Starting with a top-down recap of the quarter. Our relative investment performance is strong, fee rates are stable, our asset classes market performance range from slightly negative for U.S. REITs to in line with market for international REITs and infrastructure strategies. Our flows turned slightly negative after three quarters of inflows. Our one unfunded pipeline has built back up.
Joe Harvey: Thank you, John, and uh, good morning. Uh, I'll begin by apologizing for the fire alarm and that the background I can assure you. We're all safe and we're back on track. Uh, today, I will review our key business Trends in the second quarter and then provide an update on our strategic priorities.
Starting with a top-down recap of the quarter.
Joe Harvey: Our relative investment performance is strong.
Fee rates are stable our asset classes market. Performance range from slightly negative for us reach to in line with market for international reads and infrastructure strategies.
Our flows turned slightly negative after 3 quarters of inflows.
Joe Harvey: and we made good progress with our growth initiative. The market provided a strong quarter of financial returns after April's Liberation Day drawdown. Stocks outperform bonds and real assets, and global strategies outperform U.S. strategies. The resiliency in the economy and markets has been impressive and reflects, in my opinion, a combination of demographics, high productivity, strong private sector balance sheets with broad liquidity, as well as hope on the policy front. Now, let's dive into some details.
Joe Harvey: Our 1 une pipeline has built back up and we made good progress with our growth initiatives.
Joe Harvey: The market provided a strong quarter of financial returns after April's Liberation day, draw Downs.
Stocks outperformed bonds and real assets and Global strategies, outperformed us strategies.
Joe Harvey: The resiliency and the economy and markets has been impressive and reflects. In my opinion, a combination of demographics, High productivity, strong, private sector balance, sheets with broad liquidity, as well as Hope on the policy front.
Joe Harvey: In the second quarter, we had net outflows of $131 million after three consecutive quarters of inflows starting in the third quarter of last year when the Fed began to cut interest rates. Year to date, our overall flows are positive, which stands out in light of the fact that Morningstar flows in our categories for both active and passive have been modestly negative, except for infrastructure. Our largest flows for the quarter by strategy include $349 million in net inflows into U.S. real estate. and $489 million in outflows from Preferred Security. About two-thirds of the preferred outflows was attributable to one of our preferred open-end funds being removed from a model run by a large private wealth allocator.
Joe Harvey: Now, let's dive into some details.
Joe Harvey: In the second quarter, we had net, outflows of 131 million. After 3 consecutive quarters of inflows starting in the third quarter of last year, when the FED began to cut interest rates.
Joe Harvey: Year to date. Our overall flows are positive which stands out in light of the fact that morning star flows in our categories for both active and passive have been modestly negative except for infrastructure.
Our largest flows for the quarter by strategy include 349 million in net inflows into US, real estate.
Joe Harvey: And 489 million and outflows from Preferred Securities.
Joe Harvey: We continue to see good activity in global listed infrastructure, yet those flows were partially offset by some account rebalancing. Open end funds had net inflows of $285 million, the fourth consecutive quarter of inflows. Closed End Funds had inflows of $103 million as we drew on our line of credit to make additional investments in our Infrastructure Closed End Fund, UTF. Advisory had net outflows of $412 million and sub-advisory had outflows of $107 million. Breaking down open-end fund flows, the $285 million of inflows in the quarter results in a 12-month inflow total of $3.2 billion. U.S. Open End Funds had $124 million in net inflows.
Joe Harvey: About 2/3 of the preferred. Outflows was attributable to 1 of our preferred open-end funds being removed from a model, run by a large private wealth allocator.
Joe Harvey: We continue to see good activity in global listed infrastructure yet. Those flows were partially offset by some account rebalancing.
Open-end funds had net inflows of 285 million. The fourth consecutive quarter of inflows.
Closed and funds had inflows of 103 million. As we drew on our line of credit to make additional investments in our infrastructure closed end fund UTF.
Joe Harvey: Advisory had net. Outflows of 412 million and sub-advisory had outflows of 107 million.
Joe Harvey: Breaking down, open-ended fund flows, the 285 million of inflows in the quarter results in a 12-month inflow total of 3.2 billion.
Joe Harvey: Our offshore sea calves had net inflows of $121 million. second highest flow quarter ever and continuing a positive trend for the 19 of the past 20 quarters. and active ETFs had inflows of $54 million. In U.S. open-end funds, our market share continues to expand in U.S. and global real estate and infrastructure categories, and it is holding steady in preferred. In advisory, the $412 million of outflows were attributable to account rebalancing for various reasons including selling down to strategic allocation targets, taking gains to offset losses elsewhere, and the restructuring of a defined contribution plan. These outflows were partially offset by three new mandates totaling $69 million.
Joe Harvey: US Open end funds had 124 million in net inflows.
Joe Harvey: The second highest flow quarter ever. And continuing a positive trend for the uh 19 of the past, 20 quarters.
Joe Harvey: And active ETFs had inflows of 54 million.
Joe Harvey: In US open-end funds are market. Share continues to expand in us and Global real estate and infrastructure categories.
Joe Harvey: And is holding steady and preferreds.
In advisory, the 412 million of outflows were attributable to account rebalancing for various reasons, including selling down to strategic targets, taking gains, to offset losses, elsewhere. And the restructuring of a defined contribution plan.
Joe Harvey: Sub-advisory was relatively quiet with $77 million of rebalancing out and $30 million in net outflows from Japan. None of the redemptions were related to our investment performance.
Joe Harvey: These outflows were partially offset by 3, new mandates totaling 69 million.
Joe Harvey: Sub advisory was relatively quiet with 77 million of rebalancing out, and 30 million, and net. Outflows from Japan.
Joe Harvey: Last quarter, we noted that our one unfunded pipeline was $61 million, a low watermark historically. I'm pleased to report the pipeline has since built back up and stands at $776 million, which compares with a three-year average of $845 million. We also have one awarded and funded Band-Aid of $135 million in the quarter. 52% of the pipeline is in U.S. real estate, 26% is in global listed infrastructure, 15% is U.S. real estate, and the balance is in various real asset strategies. Two of the largest mandates were so-called takeaways from competitors, in one case for the sleeve of an open-end real assets vehicle in Canada, and the other for a corporate-defined contribution plan that transformed a global allocation into a U.S.
Joe Harvey: None of the redemptions were related to our investment performance.
Joe Harvey: last quarter, we noted that our 1 UNF pipeline was 61 million a low Watermark historically
Joe Harvey: I'm pleased to report the pipeline has since built back up and stands at 776 million which Compares with the 3 year average of 845 million.
Joe Harvey: We also have 1 awarded and funded Band-Aid of 135 million in the quarter.
Joe Harvey: 52% of the pipeline is in us, real estate. 26% is in global listed infrastructure. 15% is us uh, real estate. And the balance uh is in various real asset strategies.
Joe Harvey: REIT allocation. Last quarter, we indicated that we had approximately $290 million of impending redemption. Of that, $200 million occurred in the quarter. We have been apprised of another $400 million to be redeemed, resulting in total prospective redemptions of approximately $500 million. Therefore, with the one unfunded pipeline at $776 million, and taking into account these known redemptions, the net pipeline is $275 million. We've flagged these known redemptions for several quarters now, and the main reasons for them have been tactical adjustments to get allocations down to target weights and outflows from sleeves of what I call old architecture strategies or vehicles which are less competitive.
Joe Harvey: 2 of the largest mandates were so-called takeaways from competitors. In 1, case for the sleeve of an open end, real assets vehicle and Canada. And the other for a corporate defined contribution plan that transformed a global allocation into a US Reed allocation
Joe Harvey: Last quarter, we indicated that we had approximately 290 million of impending redemptions.
Joe Harvey: Of that 200 million Accord in the quarter.
Joe Harvey: We have been apprised of another 400 million to be redeemed. Resulting in total perspective. Redemptions of approximately 500 million,
Joe Harvey: Therefore with a 1 un pipeline at 776 million and taking into account, these known redemptions, the net pipeline is 275 million.
Joe Harvey: And again, none of these prospective redemptions are performance related.
Joe Harvey: We flagged these known redemptions for several quarters now and the main reasons for them have been tactical adjustments to get allocations down to Target weights and outflows from sleeves of what I call Old architecture strategies or Vehicles which are less competitive.
Joe Harvey: Turning to strategic initiatives, as you know, in February, we launched our first three active ETFs.
Joe Harvey: And again, none of these prospective redemptions are performance related.
Joe Harvey: We are very pleased with the launch. As a reminder, our business strategy is to offer our core strategies through active ETFs. The first three being real estate, preferreds, and natural resource equities. Most importantly, investment performance is off to a strong start with attractive alpha and peer rankings in all three ETFs. consistent with our investment results broadly in these strategies. In our first full quarter, we recorded $54 million in net inflows. Total AUM is now $133 million, inclusive of our original seed of $55 million. In a survey by Broadridge, 43% of investment advisors expect that ETFs will replace most or all of their open-end mutual fund allocations.
Joe Harvey: Turning to strategic initiatives. As you know in February we launched our first 3 active ETFs. We are very pleased with the launch.
As a reminder, our business strategy is to offer our core strategies through active ETFs with the first 3 being real estate preferreds and natural resource, equities
Joe Harvey: Most importantly, investment performance is off to a strong start with attractive Alpha and peer rankings in all 3 ETFs.
Consistent with our investment results, broadly in these strategies.
Joe Harvey: In our first full quarter, we recorded 54 million in net inflows.
Total AUM is now. 133 million inclusive of our Original Seed of 55 million.
Joe Harvey: Based on our early success with the launch and the trends underlying the Broad-Ridge Survey, we plan to launch more active ETFs in the coming months. We have not filed for ETFs as a share class of open-end funds. And for now, we believe we can execute our plans with stand-alone launch.
In a survey by broderie 43% of investment, advisors expect that ETFs will replace most or all of their open-end Fund, mutual fund allocations.
Based on our early success with the launch and the trends underlying the broad Ridge. Survey we plan to launch more active ETFs in the coming months.
Joe Harvey: We have not 5 for ETFs as a share class of open-end funds.
Joe Harvey: We continue to make progress with our private real estate initiative. Cohen & Steers Income Opportunities REIT continues to be the best performing non-traded REIT as measured by total return for the year ended May. CNS REIT returned 12.2% for that period compared with 5% for the average non-traded REIT. Our strategy of investing in open-air shopping centers has been differentiated and alpha-generated. We believe our listed real estate franchise will continue to provide investment connections to our private strategy. in that the listed market leads the private market and provides clues as to where the private market is headed fundamentally and valuation-wise.
And uh, for now, we believe we can execute our plans with Standalone launches
We continue to make progress with our private real estate initiative.
Joe Harvey: Conus Sears income opportunities, reap continues to be the best performing non-traded. Reit as measured by total return for the year ended May
CNS reap returns 12.2% for that period, compared with 5% for the average non-traded rate.
Our strategy of investing in open air shopping centers has been differentiated and Alpha generating.
Joe Harvey: Investment connections to our private strategies.
Joe Harvey: In that the listed Market leads the private market and provides Clues as to where the private Market is headed.
Joe Harvey: Among private wealth alternative strategies, private credit continues to be the most popular while real estate moves through its fundamental evaluation cycle. As John articulated, we believe that commercial real estate prices generally have bottomed. On the capital raising front, while private credit has outpaced real estate by a large margin, we believe the more real estate price trends demonstrate that a trough has been performed, the closer we'll be to a capital shift towards real estate. We continue to identify additional seed capital investors while ramping our engagement with RIAs. We are live on the Schwab, Pershing, and Fidelity platforms, which provides access to the majority of the RIA market.
Fundamentally and valuation wise.
among private, wealth alternative, strategies, private credit continues to be the most popular, while real estate moves through, its fundamental, and valuation Cycles,
Joe Harvey: As John articulated, we believe that commercial real estate, prices generally have bottomed.
Joe Harvey: On the capital raising front while private credit has outpaced real estate by a large margin. We believe the the more real estate price trends demonstrate that a trough has been performed. The closer. We'll be to a capital shift towards real estate.
Joe Harvey: We continue to identify additional seed, Capital investors while ramping our engagement with raas.
Joe Harvey: We have also been recently approved for distribution at a regional broker-dealer and at a significant enterprise wealth platform, both important milestones as we move to broader distribution.
Joe Harvey: We are live on the Schwab persing and Fidelity platforms. Which provides access to the majority of the ra Market.
Joe Harvey: We have also been recently approved for distribution at a regional broker dealer and that a significant Enterprise wealth platform.
Joe Harvey: John talked about our new listed private core real estate strategy designed for institutional investors. There's not a lot to report at this point on capital raising, but as we have begun investing, we're in discussions with several institutions. More to come, but the strategy's rationale as an improvement to core investing and to better integrate listed and private is resonating.
Joe Harvey: both important Milestones, as we move to broader distribution,
Joe Harvey: John talked about our new listed private core real estate D strategy designed for institutional investors.
Joe Harvey: We would like to find a similar partnership arrangement for infrastructure and are in discussions with several managers. This is driven by our passion for building better portfolios with listed and private allocations.
there's not a lot of a lot to report at this point on Capital raising but as we have begun investing, we're in discussions with several institutions more to come but the strategies rationale as an improvement to core investing and to better integrate listed and private is resonating
Joe Harvey: We would like to find a similar partnership arrangement for infrastructure and are in discussions with several managers.
Joe Harvey: Last quarter, we also discussed investing in our distribution capabilities as a strategic priority for this year and next. This includes not only additional talent in areas that support growth, but also investments in data and data analysis. With regard to talent, we have made additions to expand our wealth channel presence, particularly in the RIA and multifamily office segment. for the ETF launch and for our offshore funds and for the institutional team both in the U.S. and internationally. We continue to see opportunities for asset owners to add real asset allocations to their portfolios and we believe additional resources will help us gain market share with those investors.
This is driven by our passion for building better portfolios with listed and private allocations.
Joe Harvey: last quarter, we also discussed investing in our distribution capabilities as a strategic priority for this year and next
Joe Harvey: This includes not only additional talent and areas that support growth, but also investments in data and data analysis.
Joe Harvey: With regard to Talent, we have made additions to expand our wealth Channel, presence, particularly in the Raa and multi family office segments.
Joe Harvey: For the ETF launch and for our offshore funds and for the institutional team, both in the US and the internationally.
Joe Harvey: The vehicles we are launching, along with the extensions of our investment capabilities, are designed to reach these growing investor segments.
Joe Harvey: We continued to see opportunities for asset owners to add real asset allocations to their portfolios and we believe additional resources will help us gain market share with those investors.
Joe Harvey: We have more work to do here, but our objectives are clear.
Joe Harvey: The vehicles, we are launching along with the extensions of our investment capabilities are designed to reach these growing investor segments.
Joe Harvey: We look forward to reporting our third quarter results in October. Meantime, please call us with any questions.
Joe Harvey: We have more work to do here but our objectives are clear.
Unknown Executive: Now I'll turn the call back to Operator Abbey to facilitate Q&A. Thank you.
Joe Harvey: We look forward to reporting our third, quarter results in October. Uh meantime please uh, call us with any questions. Uh, now I'll turn the call back to operator. Abby to facilitate Q&A.
Unknown Executive: Pardon me, 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 line. If you would like to withdraw your question, simply press star 1.
Joe Harvey: Thank you.
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. Again, it is star one if you would like to join the queue.
Speaker Change: Pardon me, 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 queue. If you would like to withdraw, your questions simply press star 1 a second time,
John Dunn: And our first question comes from John Dunn with Evercore ISI. Your line is open.
If you are called upon to ask your question and are listening via speaker phone on your device. Please pick up your handset and ensure that your phone is not on mute. When asking your question again, it is star 1. If you would like to join the queue,
And our first question comes from John Dunn with evercore isi, your line is open.
Joe Harvey: Hi, maybe just on what you were kind of wrapping up with, maybe could you give some color on the temperature of the Wealth Management Channel, you know, like, has the appetite for gross sales and which strategies are in and out of favor? And, you know, looking forward to the second half, do you expect any seasonality to play out over the course of the next six months? Thanks, John. Well, you know, the wealth channel is very important for us and as a percentage of our AUM and as we've talked about with the growth in the RIA segment and the growth in wealth overall, we're continuing to invest to reach more broadly, particularly into the independent RIA segment of it.
John Dunn: Hi. Um, maybe just on the what you were kind of wrapping up with. Um, maybe could you give us some color on the temperature of the wealth management Channel, you know, like, has the appetite for gross sales and which strategies are in and out of favor? And, you know, looking forward to the second half. Do you expect any seasonality to play out over the course of the next 6 months?
Uh thanks. Thanks John. Well, you know the wealth channel is a very important for us. And as a percentage of our AUM and as we've talked about with the growth,
Joe Harvey: And on that front, I'd say we are making good progress at gaining some allocations with some very sophisticated RIAs and that's happened in real estate, it's happened in multi-strategy real assets and it's happened in infrastructure. You know, we've talked about the flows, we've continued to be positive in wealth, they've been a little bit less in the second quarter. If you look at our gross sales in the second quarter, you know, they've been lower, about 10% lower than what they've recently been. But, you know, there's particularly in the second quarter with the liberation day volatility early in the quarter, I think it dampened some overall activity.
Uh in the ra segment and and and the growth in wealth. Overall we're continuing to invest to uh reach more broadly, particularly into the uh independent Ria segment of it. Uh and and on that front I I'd say we are making good progress at gaining some allocations with some you know, very sophisticated.
Joe Harvey: But, you know, we feel very good about our team and what we're doing and the potential to continue to drive real asset allocations. This channel, particularly with the active ETFs and increasingly as we gain platformings with our non-traded REITs, our team has a lot more to talk about with these investment advisors. Gotcha.
John Dunn: The the the flows we've continued to be positive and wealth. They've been a little bit less in the second quarter. If you look at our, our growth sales and and the second quarter, uh, uh, you know, they're they're been lower about 10% lower than what, what they've recently been. But I do think there's some seasonality to that we've had a dip in the second quarter. And, and the past 3, 3 to 4 years. I wouldn't call that a statistically significant. But uh, you know, there's there's particularly in the second quarter with uh, the The Liberation day of volatility earlier in the quarter at. I think it it dampened uh, some overall activity. Uh, but uh you know, we're we're we feel very good about our team uh and what we're doing. And and and the potential to continue to drive uh real asset allocations just to expand a little bit more, you know, on that. You know, we we, uh, you know, continue to have more vehicles to
John Dunn: Offer to.
Uh, this channel, uh, particularly with the active uh ETFs and increasingly as we as we gain.
Uh, a platforming, uh, with our non-traded Reit. Uh, our, our team has a lot more to talk about, uh, with uh, these, uh, these Investment Advisors
Unknown Executive: Yeah, maybe on Active ETFs, you know, some have really taken off in material drivers.
Joe Harvey: Maybe you just talk a little more about how you're finding the early days of marketing and selling, you know, your suite. Is it being looked at by new investors or existing ones? And what's kind of the profile of who, you know, where you're seeing the best results, like which segments of the channel? Well, this is really exciting because we feel like we're off to a very good start, and we can see the flows, you know, starting to build. They're still relatively small, but the people that we have brought in from other firms who have done these launches before are very excited about what we have, and Based on the anecdotes that we've seen so far, we've had RIAs who only allocate to ETFs make some allocations.
John Dunn: Gotcha. Uh, yeah, maybe maybe an active ETFs, you know, some, uh, have really taken off and material drivers. Uh, maybe you could just talk a little more about how you're finding the early days of marketing and selling, you know, your Suite is it, is it being looked at by new investors or existing ones and what's kind of the profile of uh, who you, you know, where you're seeing the best results, like which segments of the the channel?
John Dunn: Well, this is really exciting and it's because, uh, you know, we we feel like we're off to a very good start and uh, we we can see the flows, uh, you know, starting to build. They're still relatively small. But uh, you know, the the people that we have brought in uh from other firms who have done these launches before uh are very excited about what we have and
John Dunn: uh, based on the, the anecdotes that we've seen so far, uh, we've had uh,
Unknown Executive: So this is money that we wouldn't otherwise have touched. We also have heard stories about advisors in wire houses who are converting their books of business from open-end 40-act funds to ETFs. So when I hear stories like that, it really motivates us to continue to launch new active ETFs in our core strategies so that we can Thanks very much.
John Dunn: Ria's who only allocate to, uh, ETFs, uh, make some allocations. So this is money that we wouldn't otherwise have touched. We also have heard stories about advisors in wire houses who are converting their uh books of business.
John Dunn: From open-end, uh, 40x funds to ETFs. So, when I hear stories like that, it really motivates us to uh continue to
uh, launched new active, ETFs in our core strategies, so that we can uh, you know, retain and grow assets as uh, you know, wealth grows with these, uh, types of advisors
John Dunn: Thanks very much.
Unknown Executive: And as a reminder, it is star one if you would like to ask a question.
Rodrigo: And our next question comes area with Bank of America. Good morning. Thank you for taking my questions. Global listed infrastructure saw strong flows in the first quarter, and that seems to have weakened a little bit in the second quarter with the higher level of outflows. Can you talk about what drove that and your early views on the strategy in the third quarter?
Speaker Change: And as a reminder, it is star 1. If you would like to ask a question,
Speaker Change: And our next question comes from the line of Rodrigo ferraria, with Bank of America. Your line is open
Good morning. Thank you for taking my questions.
Speaker Change: Um Global listed infrastructure saw strong flows in the first quarter and that seems to have weakened a little bit in the second quarter with the higher level of outflows. Can you talk about what drove that in your early views on the strategy in the third quarter?
Joe Harvey: Well, thanks for joining the call, Rodrigo. Our GLI strategy was positive in the quarter, but it was at the lower end compared with what it's been trending at. We've had some good additions to the strategy, but we had two relatively large redemptions from institutional investors who have had very large allocations to infrastructure, and they pared back some of those weightings closer to their target levels. And in one case, it was an international institution which wanted to take some gains to offset some losses in another part of their portfolio. So this is good news, bad news.
Speaker Change: Sure. Well, uh, well, thanks for joining the call Rodrigo. Um, you know, our our GLI strategy was positive in the quarter but it was, you know, at the lower end as what it compared with what it's been trending at. Uh, we've had some some good additions to the uh, strategy. But we had 2 relatively large uh Redemption redemptions from institutional investors who have had uh very large allocations to infrastructure and uh they paired.
Speaker Change: Back some of those weightings closer to their target, uh, levels.
Joe Harvey: The good news is that we really did our job in performing for this client, but the bad news is that they needed to create some liquidity, but longer term. They're still a client and we'll be looking forward to them reallocating at some point.
Speaker Change: And in 1 case, uh, it was an international institution uh, which uh, wanted to take uh, some gains to offset some losses and and another part of their portfolio. So this is good news, bad news. The good news is that we, we really did our job and, and Performing, uh, for this client. But, you know, the bad news is that they needed to create some liquidity. Uh, but, but, uh, you know, longer term
Joe Harvey: You know, we really don't comment on early trends in the next quarter, but I would say broadly, infrastructure is one of the most popular asset classes, particularly in the private markets. And that's helping to generate interest in the listed markets as well, because there is a very good case for putting listed and private together. This is a strategy that we're going to continue to invest in in terms of additional vehicles. talked about active ETFs. With infrastructure being a core strategy, we certainly should have an active ETF for infrastructure. And as I referred to in my remarks, we think there's opportunities to create other vehicles that could combine private infrastructure along with listed.
Joe Harvey: So we're very bullish on the on the on the strategy, and as a business driver for Cohen & Steers.
Unknown Executive: Thank you.
Speaker Change: Broadly infrastructure is 1 of the most popular asset classes uh uh particularly in the private markets and uh that's helping to uh generate interest in the listed markets as well because there is a very good case for putting listed and private, uh, together. And, uh, you know, this is a, a strategy that we're going to continue to invest in, in terms of additional vehicles. Um, uh, uh, I talked about active ETFs, uh, with infrastructure. Being a core strategy, we certainly should have an active ETF for infrastructure. And, as I referred to, in my remarks, we, we think there's opportunities to create other vehicles that that could combine private list, uh, infrastructure along with listed. So, uh, we're we're very bullish on the, on the, on the strategy. And as a business driver for Co and the stairs,
Joe Harvey: And for my follow up, flows in global real estate were stronger than US real estate in the second quarter. Can you talk about if that demand is from US or international investors? And have you seen any shift away from US real estate after Liberation Day? That's a very astute observation, and we have had some flows into global strategies. And the global real estate strategy has been less active, it's just going back a little bit further. One of the reasons is that the international components of the markets have not performed as well as the U.S. have.
Thank you and for my follow-up flows in uh Global real estate. We're stronger than us real estate in the second quarter. Can you talk about if that demand is from us or International investors and have you seen any shift away from us real estate after Liberation day?
Joe Harvey: So there's certainly been an American exceptionalism dynamic in the allocations to those real estate strategies. So there's certainly been an American exceptionalism dynamic in the allocations to those real estate So I would expect there to be more interest in global when you look at our pipeline that we're working on, there are more global allocators in that pipeline.
Speaker Change: Uh, that that's a, that's a very astute observation. And, uh, we have had some flows into Global strategies. Uh, and the global real estate strategy has been less active. Is this going back a little bit further? Uh, 1 of the reasons is that the international components of the markets have not performed as well as the US have. So there's certainly been a
Speaker Change: American exceptionalism dynamic in the, in the allocations to, uh, those those real estate strategies. Um,
Joe Harvey: I guess the last... comment I would make is that we've seen very little reverberations from all of the policy questions around things like the revenge tax. We have recently had one European institution redeem partly a U.S. strategy. do to concerns and questions about U.S. policy, but that is not a broad trend at all. Unfortunately, the revenge tax was taken out of the, the, the, the, the, the tax, uh, regulation and so that should help clear things up a little bit.
Speaker Change: So, I would expect there to be more interesting Global when you look at our, our back, you know, our pipeline that that's, that's, that we're working on there. There there, there are more, uh, Global, uh, allocators, uh, in that pipeline. Uh, I guess the, the, the, the last, um,
Speaker Change: You know, Common I would I would I would make. Is that uh we've seen very little Ari reverberations from all of the policy questions around.
Speaker Change: Uh, things like the Revenge tax.
Speaker Change: Um, uh, we have recently had 1, uh, European institution. Uh, redeem, a, a partly, uh, a US strategy.
Unknown Executive: Understood. Thank you very much.
Speaker Change: Due to concerns about and questions about us policy. But that is not a broad uh, Trend at all. And fortunately, the the Revenge tax was taken out of the the the the the tax uh uh regulation and and uh, so so that should help clear things up a little bit.
Understood, thank you very much.
John Dunn: We will take follow-up questions from John Dunn with Evercore ISI. Your line is open. Thanks.
Speaker Change: We'll take follow-up questions from John Dunn with evercore, isi. Your line is open.
Joe Harvey: Maybe taking that last question a little further, any differences to call in terms of like geographical demand from the different regions, particularly on the advisory side, and then maybe if you can give it give us an update on the dynamics of the US advisory effort in particular. Well, in terms of size and activity, the U.S. continues to be the largest and most active market. but we have burgeoning activity in Asia. say Europe is a little bit slower and the Middle East, you know, while it's been very active three to four years ago. is less active right now, but there's still opportunities in the Middle East.
John Dunn: Thanks. Um, maybe taking that last question, a little further, any differences to call out in terms of like, geographical demand from the different regions, particularly in The Advisory side and then maybe if you can give give us an update on the Dynamics of the, the US advisory effort in particular,
John Dunn: Well, in terms of size and activity, uh, us, uh, continues to be the, the largest and, and mo most active Market. Uh, but we, uh, have budgeting activity in, uh, in Asia.
John Dunn: Say Europe is as as a little bit, uh, uh, slower, uh, and, and the Middle East, uh, you know, while I've been very active, you know, 3 to 4 years ago, uh, as as less active right now, but there's still opportunities, uh, in, in the Middle East.
Unknown Executive: Great, thanks.
John Dunn: Great, thanks.
Joe Harvey: And that concludes our question and answer session.
Joe Harvey: I will now turn the conference back over to Mr. Joe Harvey for closing remarks. Well, thank you, Abby, and thank you all for participating. We look forward to reporting a third quarter in October and.
John Dunn: and that concludes our
counter in the conference back over to Mr. Joe Harvey for closing remarks.
Unknown Executive: Have a great day.
Unknown Executive: And ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect.
Well, uh, thank you Abby and thank you all for participating. Uh, we uh look forward to reporting a third quarter in October and uh, so have a great day.
John Dunn: And ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect