Cohen & Steers, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual filing; the supplied text does not provide clear standalone fourth-quarter results. Cohen & Steers is a global investment manager specializing in real assets and alternative income. Its fee revenue is primarily tied to assets under management (AUM).
Key financial metrics
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Revenue | $566.9 million | $583.8 million | Down 2.9% |
| Operating income | $215.9 million | $260.4 million | Down 17.1% |
| Operating margin, GAAP | 38.1% | 44.6% | Down 6.5 percentage points |
| Net income attributable to common stockholders | $171.0 million | $211.4 million | Down 19.1% |
| Diluted EPS | $3.47 | $4.31 | Down 19.5% |
| Operating cash flow | $61.7 million | $242.9 million | Down $181.2 million |
| Cash and cash equivalents, year-end | $247.4 million | $184.4 million | Up $63.0 million |
| Net liquid assets | $271.6 million | $212.7 million | Up $58.9 million |
| Total AUM, year-end | $80.4 billion | $106.6 billion | Down 24.6% |
Investment advisory and administration fees were $529.3 million, down 2.6%. Total expenses rose 8.5% to $351.0 million, including compensation and benefits of $208.8 million. The filing reports no drawn debt at the report date: the company entered into a $100 million revolving credit facility in January 2023 but had not borrowed under it. Closed-end funds sponsored by the company had approximately $3.4 billion of leverage, which is fund-level leverage, not company debt.
Material changes versus FY2021
- AUM declined by $26.2 billion, reflecting $20.9 billion of market depreciation, $1.6 billion of net outflows and $3.6 billion of distributions. Average AUM decreased 2.7% to $91.6 billion.
- U.S. real estate remained the largest strategy, at $35.1 billion of year-end AUM; preferred securities AUM fell to $19.8 billion from $27.0 billion.
- Market depreciation and lower average institutional and closed-end fund AUM reduced fee revenue. Institutional performance fees also declined.
- Non-operating results shifted to a $19.0 million loss from $21.6 million of income, mainly reflecting net investment losses of $25.1 million, versus net gains of $18.8 million in 2021.
- Cash dividends paid were $107.4 million, compared with $147.6 million in 2021, which included a special dividend. A $0.57-per-share quarterly dividend was declared in February 2023.
Outlook, commentary, risks and unusual items
- Management did not provide quantified financial guidance in the supplied filing text. It said inflation and rising interest rates had reduced AUM and put pressure on compensation and operating costs; continued market volatility could further affect fee revenue.
- FY2022 adjusted results were $182.3 million of net income attributable to common stockholders, $3.70 diluted EPS and a 43.0% operating margin. These are non-GAAP measures; adjustments included $15.2 million of RLTY IPO costs, $10.3 million of accelerated RSU vesting and seed-investment and foreign-currency items.
- The company signed a 16-year New York headquarters lease, with a stated commitment of approximately $210.1 million. It expects $40 million–$50 million of build-out costs, net of lease incentives. The old headquarters lease runs through January 2024.
- Unfunded investment commitments at year-end included $32.6 million for REOF and $124.8 million for CNSREIT. Funding timing is determined by the investment vehicles.
- Key business risks include concentration in real estate securities (62.1% of AUM) and preferred securities (24.6%), market and interest-rate sensitivity, client and fund concentration, fee competition, distribution-channel dependence, cyber and operational risks, regulatory changes, and valuation uncertainty in private real estate investments.
- Daiwa Asset Management represented approximately 5.0% of total FY2022 revenue and 9.9% of total year-end AUM. No pending legal matter was identified by the company as likely to have a material adverse effect. Gross unrecognized tax benefits were approximately $5.0 million; management expected a possible $3.2 million–$3.8 million reduction within 12 months.
Important facts for investors to verify
- Whether subsequent AUM flows, market performance and redemptions have improved from the 2022 decline, particularly in real estate and preferred securities.
- Whether expense growth, IPO-related costs and headquarters transition costs affect margins and cash generation in later periods.
- The amount and timing of funding for REOF and CNSREIT commitments, and the purpose and terms of any future revolver borrowing.
- The sustainability of dividends relative to earnings, cash flow, investment commitments and other capital needs.
- How client concentration, including Daiwa and significant affiliated funds, and fund-level leverage evolve.