Cohen & Steers

Cohen & Steers ended July 2026 with $102.5 billion in assets under management, or AUM, up 15.7% year over year on solid market gains and positive flows.

Why it matters: Higher short-term rates, equity and credit market headwinds, and increased competition from private real estate investment vehicles have affected Cohen & Steers' flows and level of managed assets over the past several years. Net inflows (exclusive of distributions) of $1.8 billion during the first half of 2026 were a step up from the $0.1 billion picked up during the first half of 2026, with most of the gains driven by the firm's retail fund offerings. Cohen & Steers reported $0.7 billion in more broad-based inflows for July 2026. While it will take slightly lower rates over the next couple of years to get REITs looking more attractive than risk-free assets, we expect the $7.9 trillion that was parked in money market funds at the end of July 2026 to eventually be dislodged and put to work in riskier assets with higher capital appreciation and yield potential.

The Bottom Line: After incorporating the company's second-quarter results, as well as the firm's most recent preliminary AUM figures, into our valuation model, we have increased our fair value estimate for narrow-moat Cohen & Steers to $80 per share from $77. Our revised fair value estimate for Cohen & Steers implies a price/earnings multiple of 22.1 and 19.8 times our adjusted earnings estimates for 2026 and 2027, respectively. For some perspective, during the past five (10) years, the company's shares have traded at an average of 23.4 (22.6) times trailing earnings on an adjusted basis, with the highest (lowest) multiple during the past decade being 34.8 (14.3) times. Our forecast includes higher levels of AUM in the near to medium term, revenue expanding at a 9.2% CAGR during fiscal 2026-30 (up from 6.5% previously), and adjusted operating margins in a 34%-42% range.

For more insight into the trends and other issues affecting the traditional asset managers, which influence our long-term forecasts for firms like Cohen & Steers, please see our latest Industry Pulse, "US Traditional Asset Managers: 2026 Q2," which was published on June 24, 2026. We also have a broader industry primer available for the US-based asset managers in our annually updated Industry Landscape, "US Asset Managers," which was last published on Dec. 18, 2025.

We've increased our fair value estimate for Cohen & Steers to $80 per share from $77 to account for improved near-term expectations for AUM, revenue, and profitability since our last update. Our new fair value estimate implies a price/earnings multiple of 22.1 and 19.8 times our adjusted earnings estimate for 2026 and 2027, respectively. For some perspective, during the past five (10) years, the company's shares have traded at an average of 23.4 (22.6) times trailing earnings on an adjusted basis, with the highest (lowest) multiple during the past decade being 34.8 (14.3) times. We use a 21% US statutory corporate tax rate and a 10.0% (9.8%) cost of equity (weighted average cost of capital, or WACC) in our valuation.

Cohen & Steers ended the second quarter of 2026 with $100.1 billion in AUM, up 12.6% year over year. Net inflows (exclusive of distributions) of $1.8 billion during the first half of 2026 were reflective of a 4.0% annualized rate of organic AUM growth, much better than the 1.8% average annual rate of organic AUM growth that the firm generated during 2021-25. The company closed out July 2026 with $102.5 billion in AUM, driven by $0.7 billion in inflows and $1.9 billion in market gains.

We envision Cohen & Steers generating organic AUM growth (when adjusted for distributions) of 2% to 16% (0% to 13%) during 2026-30. Our forecast includes expectations for increased competition for listed real estate investment products from private real estate investment vehicles offered by alternative-asset managers that have not only increased their share of the institutional market but expect to make inroads into the retail-advised channel—noting that Cohen & Steers has private offerings of their own.

With market returns for REITs expected to be in a mid- to high-single-digit range on average annually, Cohen & Steers' total and average AUM are likely to expand at a similar rate on average annually during 2026-30, even after being affected by an equity market correction during our initial five-year forecast. As a result, we see the company, which has not fully escaped the fee compression affecting its traditional asset management peers, increasing its top-line at a 9.2% compound annual growth rate during 2026-30 (up from 6.5% previously).

We also expect to see adjusted non-GAAP operating margins in a 34%-42% range during our initial five-year forecast period, compared with 35.2% last year and 39.2% on average annually during 2021-25. Much of the compression in margins the past couple of years has been due to negative operating leverage as AUM levels fell during 2022-23 (from a high of $106.6 billion at the end of 2021), which has been slowly reversing as the firm's managed assets continue to move closer to year-end 2021 levels.

We project a bull-case fair value estimate of $124 per share and a bear-case valuation of $48 per share. The key factors affecting our scenario analysis include the degree of success that the firm has in capturing open-end fund business, while keeping its institutional outflows to a minimum, as well as the level of performance of its funds.

Our upside scenario implies a price/earnings multiple of 25.3 and 22.7 times our adjusted earnings estimate for 2026 and 2027, respectively. In this case, revenue expands at a high-single-digit to double-digit rate on average during our five-year forecast, with the net result being a 13.7% CAGR for revenue during 2026-30. We also assume adjusted operating margins exceed 40% by the end of our projection period.

Our downside case implies a price/earnings multiple of 15.6 and 14.0 times our adjusted earnings estimate for 2026 and 2027, respectively. This scenario assumes revenue growth stumbles during our projection period, with net result being a 3.7% CAGR for revenue during 2026-30. We also assume adjusted operating margins remain below 35% of revenue annually on average throughout our projection period.

We believe the asset management business can be conducive to establishing economic moats, with switching costs and intangible assets being the most durable sources of competitive advantage. Although the switching costs might not be explicitly high, inertia, the uncertainty of achieving better results by moving from one manager to another, and the potential tax consequences of selling a fund with significant gains tend to keep investors in place.

For the industry overall, the average narrow retention rate, which does not include exchange redemptions, has been 75% or greater annually in the past 5-, 10-, 15-, 20-, 25-, and 30-year periods. Including exchange redemptions, the rate has been just over 70%. Firms offering niche products with significantly higher switching costs—like retirement accounts, funds with lockup periods, and tax-managed strategies—have tended to hold on to assets longer.

In Cohen & Steers' case, the firm's average annual retention rate was 79% (80%) over the past five (10) calendar years, comfortably above the industry average. During 2021-25, Cohen & Steers' organic AUM growth rate (inclusive of distributions) averaged 1.8% (negative 1.8%) annually, with a standard deviation of 5.8% (5.2%), indicating that, in most years, the firm leveraged its below-average redemption rate to generate positive flows. Results were a bit mixed over the past 10 calendar years, with the firm's organic AUM growth rate (inclusive of distributions) averaging 4.7% (negative 0.6%) annually with a standard deviation of 6.7% (5.7%).

While we don't envision much change in Cohen & Steers' retention rate, given that performance remains solid, relative to strategy benchmarks, and tax considerations create headwinds when retail investors consider selling mutual funds, our current forecast for annual organic AUM growth (when adjusted for distributions) is 9.1% (6.5%) during 2026-30, with a standard deviation of 6.8% (6.8%).

We think more traditional asset managers, such as Cohen & Steers, can use their switching costs advantage by leveraging their product variety, distribution networks, and global presence, along with their strong brand names, reputations for beating the market, and a record of generating above-average investment performance relative to peers. While the barriers to entry are not particularly significant, the barriers to success are extremely high. It takes time and skill to not only put together a long enough record of investment performance to start gathering assets but to build the scale necessary to be competitive.

This has meant that larger, more established asset managers have tended to have an advantage over smaller players, especially in gaining cost-effective access to distribution platforms. That said, we do not think a cost advantage moat source applies to the traditional asset managers—except in the case of index fund and ETF providers—as scale does not always confer better-than-average operating profitability and the industry tends to behave as an oligopoly when it comes to pricing.

Competition for investor flows can be stiff and has traditionally centered on investment performance. Although institutional investors and retail gatekeepers are exerting pressure on pricing, price-based competition has been rare, aside from what we've seen in the US market for exchange-traded funds. While compensation remains the single largest expense for most traditional asset managers, supplier power has been manageable, as many firms have reduced their reliance on star managers and tied manager and analyst pay to both portfolio and overall firm performance.

Asset managers that have demonstrated the ability to gather and retain investor assets across different market cycles have tended to produce more stable profitability, with returns exceeding their cost of capital for longer periods. While the more broadly diversified asset managers are structurally set up to hold on to assets regardless of market conditions, it has been firms with solid product sets across asset classes (built on repeatable investment processes), charging reasonable fees, and with singular corporate cultures dedicated to a common purpose that have done a better job.

We assign Cohen & Steers a narrow moat rating. Although the company has some attractive attributes, such as a well-respected brand, well-established distribution ties, and a profitable investment strategy, we have found that firms that are heavily skewed toward a single asset class or category have a more challenging time generating consistent returns for investors. The firm's product mix is heavily tied to REITs, with domestic and global/international real estate securities making up around two-thirds of Cohen & Steers' total AUM of $102.5 billion at the end of July 2026.

The firm has made some strides toward diversification but has yet to gain the scale necessary in its non-REIT offerings. The company does garner some credit for its geographic diversification, with 22% (12%) of its AUM (total revenue) coming from outside of the US—with Europe, the Middle East, and Africa accounting for 6% (4%), Japan at 10% (5%), and the Asia-Pacific region accounting for 6% (3%). During the past four calendar quarters, the company garnered 39% (25%) of its managed assets (base management fees) from institutional relationships, which tend to be stickier than retail AUM.

Cohen & Steers also generated 13% (20%) of their AUM (base management fees) from closed-end funds, which differ from open-end funds in that they cannot be redeemed back to the fund manager, providing the firm with a greater hold over this portion of its managed assets. While these attributes have provided the firm with a slightly higher degree of asset stickiness than most of its peers in stable and rising markets, the concentration risk that continues to exist in its investment portfolio ultimately inhibits the firm from developing more than a narrow economic moat.

A reputation for successful REIT investing has allowed Cohen & Steers to tap into demand for listed alternatives offering diversification from more traditional fund offerings.

Cohen & Steers garners 39% of its AUM from institutional clients and 12% from closed-end funds and is well positioned with broker/dealers, providing it with a stable base of assets.

At the end of June 2026, Cohen & Steers had $4.21 per share in cash and cash equivalents (including T-bills), capital that could be used to fund a special dividend, strategic acquisitions, or share repurchases.

Given the firm's heavier exposure to real estate-related investments, Cohen & Steers lives and dies by the state of commercial real estate markets and the specialty finance firms that make a living from them.

Cohen & Steers has faced increased pressure from private real estate investment vehicles offered by alternative-asset managers and other traditional asset managers.

Higher short-term rates have made less risky fixed-income securities and money market funds more attractive to investors than REITs, affecting flows for Cohen & Steers.