Cohen and Steers 3Q16 Earnings Call Notes

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Cohen & Steers’ (CNS) CEO Robert Steers on Q3 2016 Results

Active managers are battling significant headwinds

“most active managers are battling significant headwinds. Disruptive innovation, waves of new regulations and unprecedented market interventions are adversely affecting broad swath of active only, active long only and alternative managers. This has manifested itself in persistent organic decay and fee pressures for a majority of these managers, but especially for those that are focused on core style boxes. We are anticipating that going forward these trends will intensify rather than abate.”

Wirehouses are looking for big brands

“Philosophically, I think you’re either an active manager or you’re a passive manager. We obviously have a viewpoint. We think that the supermarket approach no longer will be effective because when partners like the wires and our partners abroad are looking to fulfill asset allocations, they’re going to go with the industry leaders or the category killers and the brands and the folks who are delivering.”

Active managers are not prepared to win the race to zero

“Passive, as you all know as well or better than us, is just a very different business, and we and I think most active managers are not prepared or equipped to win the race to zero, and fees are going to go to zero in many passive strategies and we’re not equipped and we’re not interested in competing in that business.”