Cohen & Steers Reports Strong Q2 2026 Results with Record Inflows and Margin Expansion

Cohen & Steers (NYSE:CNS) delivered robust second-quarter 2026 financial results, achieving increased adjusted earnings and expanding assets under management as the company capitalized on renewed investor appetite for real estate, infrastructure, preferred securities, and diversified real assets strategies.

During the earnings call, Chief Financial Officer Amit Muni reported adjusted earnings per share of $0.85, representing an increase from $0.79 in the first quarter and $0.73 in the prior-year period. Net income reached $44 million, marking an 8% sequential improvement and 18% year-over-year growth.

Assets under management rose approximately 8% to exceed $100 billion, propelled by favorable market movements and net client inflows. Muni highlighted that the firm attracted $1.3 billion in net inflows during the quarter, describing it as “one of the strongest flow quarters in our recent history,” with the institutional pipeline totaling $1.6 billion.

Revenue Growth Outpaces Expense Growth

Revenue climbed 5% from the previous quarter to $152 million, driven by elevated average assets under management resulting from market appreciation and client inflows. Operating expenses totaled $97 million, reflecting 3% growth primarily from increased incentive compensation linked to revenue expansion.

The adjusted operating margin expanded to 36.3%, demonstrating operational leverage as revenue growth outstripped expense increases. Muni confirmed the firm maintains its expense guidance framework, targeting compensation and benefits at approximately 40% of revenue, mid-single-digit growth in general and administrative expenses versus 2025, and a pro forma effective tax rate between 25% and 26%.

Cohen & Steers concluded the quarter with $219 million in cash and U.S. Treasuries on its balance sheet, complemented by roughly $136 million in liquid seed investments across its fund lineup. This strong liquidity position provides the company with “substantial financial flexibility” to pursue capital management initiatives and strategic growth opportunities.

Open-End Funds Drive Inflows

Net client inflows were predominantly sourced from open-end funds, encompassing mutual funds, exchange-traded funds, and SICAVs. The advisory segment experienced modest outflows largely attributed to institutional client portfolio rebalancing, while the sub-advisory business recorded slight net inflows as new mandates exceeding $500 million partially offset redemptions.

U.S. real estate emerged as the primary driver of flows, supported by investor interest in preferred securities and global listed infrastructure strategies.

CEO Joseph Harvey characterized the quarter as demonstrating continued “broad positive business momentum,” noting that the $1.3 billion in net inflows marked the highest level in four and a half years and represented the seventh inflow period in the last eight quarters.

U.S. real estate led with $833 million in net inflows, while the multi-strategy real assets portfolio attracted $380 million in flows, bringing strategy-level assets to $3 billion and achieving a 29% compound annual growth rate since 2021.

Global listed infrastructure secured its sixth consecutive quarter of inflows and maintained institutional client engagement. Preferred securities, representing the firm’s second-largest asset category, posted inflows for the second straight quarter, with assets totaling $18 billion compared to the previous peak of $27 billion.

Investment Performance Mixed Over One Year, Stronger Longer Term

President and Chief Investment Officer Jon Cheigh reported that 41%, 91%, and 97% of assets under management outperformed benchmarks over one-, three-, and five-year timeframes, respectively. He explained that one-year underperformance was an “outlier” stemming exclusively from U.S. REIT relative returns, while other strategies including international real estate maintained strong performance records.

Within the U.S. REIT category, Cheigh noted that most short-term underperformance resulted from positions in cell tower REITs amid reduced carrier spending following the initial 5G deployment phase and concerns regarding satellite technology potentially displacing tower infrastructure. The firm anticipates returning to its historical two percentage points of alpha generation in U.S. REITs.

Global listed infrastructure delivered 370 basis points of outperformance over the trailing year, according to Cheigh, who emphasized infrastructure as an increasing focus area for investors.

U.S.-listed real estate returned 10.7% during the quarter and gained 14.9% year-to-date, while global real estate rose 9.6% over the same period. Infrastructure investments returned 2.3% quarterly and 10.7% year-to-date. Diversified real assets, despite subdued second-quarter performance from energy price declines and precious metals weakness, advanced 9.9% through the first half, outpacing the approximately 6% return of a traditional 60/40 portfolio.

Executives See Recovery in Real Estate and Real Assets

Cheigh asserted that the real estate recovery remains undervalued by markets, pointing to improving fundamentals across property sectors, notably senior housing and data centers. Additional positive developments included return-to-office trends in New York and San Francisco markets, strong retail performance amid constrained new supply over the past decade, recovering industrial demand, and absorption of excess residential inventory.

U.S. and global REITs have generated annualized returns of 10.1% and 10.7%, respectively, over the past three years. Management believes double-digit returns remain achievable for listed real estate strategies despite current or modestly elevated interest rate environments.

Private real estate valuations have stabilized following an extended market correction, with transaction volumes continuing to recover. The NFI-ODCE Index has delivered seven consecutive quarters of positive total returns through the first quarter and appears positioned for an eighth.

Cheigh further noted that Cohen & Steers Income Opportunities REIT, the company’s non-traded REIT vehicle, has produced 12.3% annualized total returns since its 2024 launch through May, representing industry-leading performance.

Growth Initiatives Gain Traction

Harvey announced that the active ETF platform surpassed $1 billion in assets under management, with its real estate-focused ETF holding $450 million in assets. The company plans to introduce its seventh ETF by fall, featuring a multi-strategy real assets portfolio.

The SICAV fund platform reached $2 billion in assets under management, recording record net inflows of $326 million during the quarter. Inflows were led by multi-strategy real assets and global listed infrastructure, with notable international traction across the United Kingdom, Japan, and South Africa markets.

The unfunded institutional pipeline maintained broad diversification across strategies and geographic regions, totaling $1.6 billion and encompassing allocations to global listed infrastructure, TREF, U.S. real estate, global real estate, multi-strategy real assets, and private real estate spanning 11 countries.

During the question-and-answer session, Harvey indicated improving demand for U.S. real estate strategies among both wealth management and institutional clients, supported by recent REIT performance and strengthening fundamentals. The company identified global sub-advisory opportunities in the U.S., Canada, Australia, and New Zealand, though Japan presents challenges due to local macroeconomic conditions and equity market sentiment.

Harvey concluded the call by introducing Muni as the company’s new CFO and recognizing Mike Donohue’s service as interim CFO during the transition period.

Cohen & Steers, Inc. is a publicly traded investment management firm specializing in real estate securities and alternative income strategies. Established in 1986 by Martin Cohen and Robert Steers, the company has developed expertise in listed real estate investment trusts (REITs) and related equities. Headquartered in New York City, Cohen & Steers employs a research-driven methodology to identify value and income opportunities across global property markets.

The firm offers a comprehensive suite of investment products, including mutual funds, closed-end funds, and exchange-traded funds (ETFs).

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