Ladies and gentlemen, thank you for standing by and welcome to the Cohen & Steers’ Fourth Quarter 2012 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mr. Salvatore Rappa, Senior Vice President and Associate General Counsel. Please go ahead, sir.

Thank you and welcome to the Cohen & Steers Fourth Quarter and Full Year 2012 Earnings Conference Call. Joining me is our Co-Chairman and Co-Chief Executive Officer, Bob Steers our President Joe Harvey and our Chief Financial Officer Matt Stadler. Before I turn the call over to Matt, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that some of these factors are described in the Risk Factors section of our 2011 Form 10-K, which is available on our website at cohenandsteers.com. I want to remind you that the Company assumes no duty to update any forward-looking statements. Also, the presentation we make today contains pro forma or non-GAAP financial measures, which we believe are meaningful in evaluating the Company's performance. For detailed disclosures on these pro forma metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued yesterday as well as in our previous earnings releases, each available on our website. Finally, this presentation may contain information with respect to the investment performance of certain of our funds and strategies. I want to remind you that past performance is not a guarantee of future performance. This presentation will also contain information about funds that have filed the registrations segment with the SEC which have not yet become effective. This communication shall not constitute an offer to sell or the solicitation of any offer to buy the securities. For more complete information about these funds, including charges, expenses and risks, please call 1-800-330-7348 for a prospectus. With that, I'll turn the call over to Matt.

Thanks very much, Sal, good morning, everyone and thanks for joining us today. Yesterday, we reported net income of $0.49 per share compared with $0.36 in the prior year and $0.23 sequentially. The third quarter of 2012 included an after tax expense of $0.21 per share, primarily due to costs associated with the offering of Cohen & Steers Limited Duration Preferred and Income Fund, a closed-end mutual fund. After adjusting for these items, earnings per share were $0.44. Revenue for the quarter was $71.1 million compared with $59.4 million in the prior year and $71.3 million sequentially. The increase in revenue from the prior year was attributable to higher average assets under management, resulting from market appreciation partially offset by net outflows primarily from sub-advised accounts. Average assets for the quarter were $44.9 billion compared with $40.3 billion in the prior year and $45.2 billion sequentially. Our effective fee rate for the quarter was 56.3 basis points, up from 55.7 basis points in the sequential quarter. The increase was primarily due to a currency adjustment. Operating income for the quarter was $32.7 million compared with $22.8 million in the prior year and $12.2 million sequentially. Excluding the closed-end fund offering costs, operating income for the third quarter of 2012 was $27.9 million. Our operating margin increased to 46% from 39.1% last quarter after adjusting for the offering costs. The margin expansion was primarily due to lower compensation and benefits. Pre-tax income for the quarter was $33.9 million net of non controlling interest, which represents third party interest in the funds we have consolidated, compared with $25.2 million in the prior year and $15.2 million sequentially. Excluding the offering costs, pre-tax income for the third quarter of 2012 was $30.9 million. For the year we reported net income of $1.49 per…

Great. Thanks, Matt, and good morning, everyone. Before I start with my comments you may have noticed that Marty is not with us on the call today. Unfortunately, he contracted a severe case of the flu and is home in bed, and we wish him a speedy recovery and I expect he'll back in the office tomorrow or Monday. I am going to run through the usual update on investment performance and asset gathering and then just wrap up with a few thoughts about the important trends that we are seeing and expecting for the coming year. First off, investment performance in the fourth quarter was really strong and we're very pleased about that. Starting with the REIT space our global and international strategies, which have previously been lagging had a very strong fourth quarter beating their benchmarks by 107 and 157 basis points respectively. As you'll probably recall, we reorganized our global real estate team early last year and we've been seeing steadily improving investment performance ever since. U.S. REITS performed about in line with their benchmark, and our global long-short strategy had a solid fourth quarter and finished the year with a 13% total return. As we've come to expect, our preferred securities team generated outstanding returns for the quarter, up 3.8%, beating their benchmark by over 150 basis points. Even more impressive is that this is the ninth consecutive year of relative outperformance. Bill's team beat their benchmark by over 580 basis points while generating a 23% return for the year. Global infrastructure also had another strong quarter, up 3.6%, and beat their benchmark by over 110 basis points. For the year the team's 15.4% total return represented over 360 basis points of outperformance. Lastly, our new real assets fund performed roughly in line with its benchmark…

[Operator Instructions] And our first question comes from the line of Jeff Hopson with Stifel, Nicolaus.

So just a couple of questions on the U.S. real estate you did have outflows. Were those related to Japan, as well? And you mentioned about the real asset issue. Just kind of curious, as investors look at mixed issues, I guess, one, real assets on the positive side, dividend yields attractive, but what about concern of rates? How are investors would you say looking at all those issues in total?

Well, real assets are of interest to investors because they tend to outperform in an environment where you see economic expansion along with rising inflation and interest rates. U.S. REITs, for example, historically have had virtually 0 correlation to rising rates. So if rates are rising because of a global economic expansion, that's probably the single most positive variable that affects real assets. So we don't see rising interest rates as being problematic for real asset strategies. They're certainly problematic for virtually all fixed income strategies and probably would not be a positive long term for our preferred fund. But our other real asset strategies would probably be significant beneficiaries of that.

Okay. And the U.S. real estate outflows, which were modest I guess, but was that coming from Japanese products as well?

Yes, I mean we had inflows into our U.S. REIT fund domestically. The outflows are strictly from Japan. Demand for U.S. REITs on the part of U.S. investors remains high.

Okay, and preferred securities flows were down I am assuming that some of the perhaps interest or focus was on the closed-end fund. Is that fair?

No, I don't think so. This is just my opinion, but I think late in the fourth quarter I think we saw some not insignificant profit taking, investors booking capital gains in advance of rising tax rates and we saw that I think both in real estate but in a year where preferred securities generated returns in excess of 20%, late last year we had some profit taking.

And our next question comes from the line of Adam Beatty with Bank of America Merrill Lynch.

Just a question about the retail environment in Japan, especially given that you have some folks over there doing seminars. I know top management has made some trips. Appreciating that, with distribution on unequal footing at this point, how would you characterize retail demand for real estate versus other types of listed securities?

That's a great question and I recently got an update on that. The reception, and these seminars are mainly, with the ultimate investor it's real retail not intermediaries. And the interest in REITs is still very high, but as you can imagine the investors are focused mainly on how sustainable the current level of distributions are. They've come down quite a bit, and frankly the appreciation in the securities in addition to the weakness of the yen has made those dividends more sustainable and more solid. So I would say interest is still high, yields are still very attractive and there aren't a lot of alternatives over there, and frankly the fund distributors there, really haven't been able to identify and exploit strategies that are more popular than REITs. So they're still among the best selling funds over there.

Great, that's interesting color, thank you. And then turning to the global real-state strategies, maybe a 2-part question. One is in terms of improving performance, is there a certain way that they've been positioned recently that has done especially well. And then looking forward, as looking across the globe to different regions and what have you -- where do you see the opportunities, right now?

Well, this is Joe Harvey. Bob mentioned earlier, the reorganization that we executed last year to make Jon Cheigh the head of our global team, and we made some additions in -- and other personnel, a portfolio manager and an analyst in Asia. So we think that the decision-making is improved by virtue of the players. And more specifically, our -- we've been overweight in the Asia region and that's been among the best performing that's been a big contributor to the performance. But I'd say, there are no major changes, just better day-to-day decision-making that resulted from a change in the team. Just in terms of where we see the opportunities today, we're at a good point in time in the real state cycle in just about every region of the world, because we've had significant easing by central banks around the world, and now with China starting to improve on an economic front, things are looking good fundamentally. We still like Asia regionally, Europe still not out of woods but out of the crisis mode, and in the U.S. fundamentals are very, very strong for real estate securities.

One more if I could. Just in terms of the comp guidance for the coming year, is the little bit of step down entirely due to the shift in mix towards restricted stock or is there something else going on there?

No, I think, look, we would have had a margin expansion from a lower comp ratio just by virtue of modeling in higher revenues for 2013. During the first 9 months of 2012, we were assuming a certain mix and as the year-end got closer, we decided not to embrace that. So stock is an important component of compensation for a senior people. And we elected to stay the course of the last 2 years in that regards. So all that did was accelerate what would have been some -- a lower comp ratio anyway, and even though we finished at about 32.5 we're thinking for 2013 and it will be 32.

Adam, if I could also just add some strategic or philosophic color to that. As you can piece together from the year we've had, though we finished, with respect to investment performance, on a very strong note and I would add that it carried over into this year. But it was our judgment that the majority of the improvement not all of it, but the bulk of the improvement in our financial results were mainly beta and not as much alpha as we expect. And so as a result we try to be extremely disciplined in our approach to year-end compensation. I think maybe in years gone by managements in the industry might have been willing to pass on the financial benefits of a beta rally but industry is facing tougher of fundamentals. And when there is alpha generation then we should all be rewarded for that. But if it's mainly beta then that shouldn't flow through, so that was sort of the over-arching philosophy behind compensation.

Gentlemen, there are no further questions at this time. I will turn the call back over to you please continue with your presentation or closing remarks.

Great. Well, thanks again for joining us this morning and we look forward to speaking with you after the first quarter. Thank you.

Thank you, ladies and gentlemen. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.