Set forth on the following pages is management's discussion and analysis of our financial condition and results of operations for the three months ended March 31, 2009 and March 31, 2008. Such information should be read in conjunction with our condensed consolidated financial statements together with the notes to the condensed consolidated financial statements. The interim condensed consolidated financial statements of the Company, included herein, are unaudited. When we use the terms "Cohen & Steers," the "Company," "we," "us," and "our," we mean Cohen & Steers, Inc., a Delaware corporation, and its consolidated subsidiaries.

Overview

We are a manager of income-oriented equity portfolios specializing in U.S. and international real estate securities, large cap value stocks, utilities and listed infrastructure, and preferred securities. We also offer alternative investment strategies such as hedged real estate securities portfolios and private real estate multimanager strategies. We serve individual and institutional investors through a broad range of investment vehicles.

Assets Under Management

We manage three types of accounts: closed-end mutual funds, open-end mutual funds and institutional separate accounts.

The following table sets forth information regarding the net flows and appreciation/(depreciation) of assets under management for the periods presented (in millions):

                                                         Three Months Ended
                                                     March 31,       March 31,
                                                        2009           2008
      Closed-End Mutual Funds
      Assets under management, beginning of period   $    4,278     $    10,274

      Net outflows                                         (395 )            -
      Market depreciation                                  (854 )          (550 )

      Total decrease                                     (1,249 )          (550 )

      Assets under management, end of period         $    3,029     $     9,724

      Average daily net assets for period            $    3,723     $     9,839

      Open-End Mutual Funds
      Assets under management, beginning of period   $    4,280     $     8,900

      Inflows                                               324             888
      Outflows                                             (400 )        (1,131 )

      Net outflows                                          (76 )          (243 )
      Market depreciation                                (1,102 )          (225 )

      Total decrease                                     (1,178 )          (468 )

      Assets under management, end of period         $    3,102     $     8,432

      Average daily net assets for period            $    3,357     $     8,167

--------------------------------------------------------------------------------
                                                         Three Months Ended
                                                     March 31,       March 31,
                                                        2009           2008
      Institutional Separate Accounts
      Assets under management, beginning of period   $    6,544     $    10,612

      Inflows                                               522             317
      Outflows                                             (127 )          (600 )

      Net inflows (outflows)                                395            (283 )
      Market (depreciation) appreciation                 (1,470 )            85

      Total decrease                                     (1,075 )          (198 )

      Assets under management, end of period         $    5,469     $    10,414

      Average daily net assets for period            $    5,605     $    10,500

      Total
      Assets under management, beginning of period   $   15,102     $    29,786

      Inflows                                               846           1,205
      Outflows                                             (922 )        (1,731 )

      Net outflows                                          (76 )          (526 )
      Market depreciation                                (3,426 )          (690 )

      Total decrease                                     (3,502 )        (1,216 )

      Assets under management, end of period         $   11,600     $    28,570

      Average daily net assets for period            $   12,685     $    28,506

Assets under management were $11.6 billion at March 31, 2009, a 59% decrease from $28.6 billion at March 31, 2008. The decrease was a result of market depreciation of $14.1 billion and net outflows of $2.9 billion.

A significant majority of our revenue, approximately 90% and 87% for the three months ended March 31, 2009 and 2008, respectively, is derived by providing asset management services to our sponsored open-end and closed-end mutual funds and to institutional separate accounts. This revenue is earned pursuant to the terms of the underlying advisory contract, and is based on a contractual investment advisory fee applied to the assets in the client's portfolio. Given the recent market decline in general, and real estate securities specifically, our assets under management have decreased since March 31, 2008, generally in line with the markets. Further, as a result of the declining net asset values in certain of the closed-end mutual funds we manage, we have redeemed a portion of the closed-end mutual fund preferred shares in order to maintain the required leverage ratios.

Average daily assets under management were $12.7 billion for the three months ended March 31, 2009, a decrease of 56% from $28.5 billion for the three months ended March 31, 2008.

Closed-end mutual funds

Closed-end mutual fund assets under management decreased 69% to $3.0 billion at March 31, 2009, compared with $9.7 billion at March 31, 2008. The decrease in assets under management was attributable to market depreciation of $4.2 billion and $2.5 billion of net deleveraging during the prior twelve month period.

Average daily assets under management were $3.7 billion for the three months ended March 31, 2009, a decrease of 62% from $9.8 billion for the three months ended March 31, 2008.

Open-end mutual funds

Open-end mutual fund assets under management decreased 63% to $3.1 billion at March 31, 2009 from $8.4 billion at March 31, 2008. The decrease in assets under management was due to market depreciation of $4.3 billion and net outflows of $1.0 billion during the prior twelve month period.

Average daily assets under management were $3.4 billion for the three months ended March 31, 2009, a decrease of 59% from $8.2 billion for the three months ended March 31, 2008.

Net outflows for open-end mutual funds were $76 million in the three months ended March 31, 2009, compared with net outflows of $243 million in the three months ended March 31, 2008. Gross inflows were $324 million in the three months ended March 31, 2009, compared with $888 million in the three months ended March 31, 2008. Gross outflows totaled $400 million in the three months ended March 31, 2009, compared with $1.1 billion in the three months ended March 31, 2008. Market depreciation was $1.1 billion in the three months ended March 31, 2009, compared with market depreciation of $225 million in the three months ended March 31, 2008.

Institutional separate accounts

Institutional separate account assets under management decreased 47% to $5.5 billion at March 31, 2009 from $10.4 billion at March 31, 2008. The decrease in assets under management was due to market depreciation of $5.6 billion partially offset by net inflows of $619 million during the prior twelve month period.

Average daily assets under management were $5.6 billion for the three months ended March 31, 2009, a decrease of 47% from $10.5 billion for the three months ended March 31, 2008.

Institutional separate accounts had net inflows of $395 million in the three months ended March 31, 2009, compared with net outflows of $283 million in the three months ended March 31, 2008. Gross inflows were $522 million in the three months ended March 31, 2009, compared with $317 million in the three months ended March 31, 2008. Gross outflows totaled $127 million in the three months ended March 31, 2009, compared with $600 million in the three months ended March 31, 2008. Market depreciation was $1.5 billion in the three months ended March 31, 2009, compared with market appreciation of $85 million in the three months ended March 31, 2008.

Results of Operations

Three Months Ended March 31, 2009 compared with Three Months Ended March 31,
2008



                                                                  Three Months Ended
                                                             March 31,         March 31,
(in thousands)                                                  2009              2008
Results of operations
Total revenue                                                $   23,500        $   53,587
Total expenses                                                  (23,363 )         (33,450 )
Total non-operating (loss) income                               (16,328 )           2,009

(Loss) income from continuing operations before
provision for income taxes                                   $  (16,191 )      $   22,146

Total revenue decreased 56% to $23.5 million in the three months ended March 31, 2009 from $53.6 million in the three months ended March 31, 2008. This decrease was primarily attributable to lower average daily assets under management primarily from market depreciation. Average daily assets under management for the three months ended March 31, 2009 were $12.7 billion compared with $28.5 billion for the three months ended March 31, 2008.

In the three months ended March 31, 2009, total investment advisory and administration revenue from closed-end mutual funds decreased 60% to $7.0 million from $17.6 million in the three months ended March 31, 2008. The decrease in closed-end mutual fund revenue was attributable to lower levels of average daily net assets under management resulting from market depreciation of $4.2 billion and net deleveraging of approximately $2.5 billion during the fourth quarter of 2008 and the first quarter of 2009. Average daily assets under management for the three months ended March 31, 2009 were $3.7 billion compared with $9.8 billion for the three months ended March 31, 2008.

In the three months ended March 31, 2009, total investment advisory and administration revenue from open-end mutual funds decreased 58% to $7.5 million from $18.1 million in the three months ended March 31, 2008. The decrease was attributable to lower levels of average daily net assets resulting from market depreciation of $4.3 billion and net outflows of $1.0 billion. Average daily assets under management for the three months ended March 31, 2009 were $3.4 billion compared with $8.2 billion for the three months ended March 31, 2008.

In the three months ended March 31, 2009, total investment advisory and administration revenue from institutional separate accounts decreased 41% to $6.5 million from $10.9 million in the three months ended March 31, 2008. The decrease was attributable to market depreciation of $5.6 billion partially offset by net inflows of $619 million. Average daily assets under management for the three months ended March 31, 2009 were $5.6 billion compared with $10.5 billion for the three months ended March 31, 2008.

Distribution and service fee revenue decreased 70% to $1.6 million in the three months ended March 31, 2009 from $5.4 million in the three months ended March 31, 2008. This decrease in distribution and service fee revenue was primarily due to lower levels of average daily assets in 2009.

Expenses

Total operating expenses decreased 30% to $23.4 million in the three months ended March 31, 2009 from $33.5 million in the three months ended March 31, 2008, primarily due to decreases in employee compensation and benefits, distribution and service fees and amortization of deferred commissions.

Employee compensation and benefits decreased 24% to $12.2 million in the three months ended March 31, 2009 from $16.1 million in the three months ended March 31, 2008. This decrease was primarily due to lower incentive bonus, net of deferrals, of approximately $4.3 million.

Distribution and service fee expenses decreased 54% to $3.1 million in the three months ended March 31, 2009 from $6.6 million in the three months ended March 31, 2008. This decrease in distribution and service fee expense was primarily due to lower average daily assets under management levels in 2009.

Amortization of deferred commissions decreased 87% to $266,000 in the three months ended March 31, 2009 from $2.0 million in the three months ended March 31, 2008. This decrease was primarily attributable to lower subscriptions in class C shares in our open-end load mutual funds for which commissions are capitalized and amortized.

Non-operating loss was $16.3 million in the three months ended March 31, 2009, compared with non-operating income of $2.0 million in the three months ended March 31, 2008. The first quarter 2009 results included an other-than-temporary impairment charge of $18.2 million recorded on available-for-sale securities, primarily from investments in preferred securities. Excluding this item, non-operating income would have been $1.9 million for the three months ended March 31, 2009.

Income Taxes

We recorded an income tax benefit of $1.8 million in the three months ended March 31, 2009, compared with an income tax expense of $8.3 million in the three months ended March 31, 2008. The benefit for income taxes in the three months ended March 31, 2009 includes U.S. federal, state, local and foreign taxes at an approximate effective tax rate of 11%. The effective tax rate for the three months ended March 31, 2008 was approximately 37%. The effective tax rate for the first quarter 2009 was reduced by approximately 29% due to a valuation allowance established as a result of capital losses related to the other-than-temporary impairment charge taken on preferred securities. We expect our tax rate for the full year 2009 to approximate between 36% and 37%, excluding discrete items. At March 31, 2009, we had capital loss carry-forwards of approximately $10.0 million for which a valuation allowance was established. These capital loss carry-forwards will expire in tax years 2013 and 2014. At March 31, 2009, we had net unrealized capital losses of approximately $40.6 million for which a valuation allowance had been established on the associated deferred tax asset.

Liquidity and Capital Resources

Our investment advisory business does not require us to maintain significant capital balances. Our current financial condition is highly liquid, with a significant amount of our assets comprised of cash and cash equivalents, accounts receivable and investments, available-for-sale. Our cash flows generally result from the operating activities of our business, with investment advisory and administrative fees being the most significant contributor. Cash, cash equivalents, accounts receivable and investments, available-for-sale were 63% and 64% of total assets as of March 31, 2009 and December 31, 2008, respectively. As of March 31, 2009, we had gross unrealized losses of $28.9 million on our investments, available-for-sale. We believe we have sufficient liquidity to hold these investments until a recovery of fair value. Included in investments, available-for-sale were approximately $5.9 million of auction rate preferred securities and approximately $1.2 million of corporate debt securities which were classified as level 2 investments in accordance with Statement of Financial Accounting Standards ("SFAS") No. 157, Fair Value Measurements ("SFAS 157") at March 31, 2009. See Note 4 to the condensed consolidated financial statements relating to investments.

Cash and cash equivalents decreased by $7.0 million, excluding the effect of exchange rate changes, in the three months ended March 31, 2009. Net cash used in operating activities was $6.4 million in the three months ended March 31, 2009. Net cash of $1.8 million was provided by investing activities, primarily from proceeds from sales and maturities of investments, available-for-sale in the amount of $8.5 million, partially offset by the purchase of $5.9 million of investments, available-for-sale and the purchase of $923,000 of property and equipment. Net cash of $2.3 million was used in financing activities, primarily from an excess tax expense associated with restricted stock awards of $3.2 million and the repurchase of common stock of $1.4 million to satisfy employee withholding tax obligations on the delivery of restricted stock units, partially offset by proceeds from redeemable noncontrolling interest of $2.1 million.

Cash and cash equivalents decreased by $37.7 million, excluding the effect of exchange rate changes, in the three months ended March 31, 2008. Net cash used in operating activities was $19.1 million in the three months ended March 31, 2008. Net cash of $7.0 million was provided by investing activities, primarily from the proceeds from sales and maturities of investments, available-for-sale in the amount of $19.5 million, partially offset by the purchase of $10.5 million of investments, available-for-sale and the purchase of $2.0 million of property and equipment. Cash of $25.5 million was used in financing activities, primarily for the repurchase of common stock

It is our policy to continuously monitor and evaluate the adequacy of our capital. We have consistently maintained net capital in excess of the regulatory requirements for our broker/dealers, as prescribed by the Securities and Exchange Commission ("SEC"). At March 31, 2009, we exceeded our aggregate minimum regulatory capital requirements by approximately $21.6 million. The SEC's Uniform Net Capital Rule 15c3-1 imposes certain requirements that may have the effect of prohibiting a broker/dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital. On April 30, 2009, in connection with the sale of our membership interest in Cohen & Steers Capital Advisors LLC ("Advisors") to an entity controlled by the former managing directors of Advisors, we withdrew $15.8 million of capital from Advisors in the form of a cash dividend. Our non-U.S. subsidiaries are regulated outside the U.S. by the Hong Kong Securities and Future Commission, the United Kingdom Financial Securities Authority, and the Belgium Banking, Finance and Insurance Commission. At March 31, 2009, our non-U.S. subsidiaries exceeded their aggregate minimum regulatory requirements by $29.8 million. We believe that our cash flows from operations will be more than adequate to meet our anticipated capital requirements and other obligations as they become due.

Contractual Obligations

We have contractual obligations to make future payments in connection with our
non-cancelable operating lease agreements for office space and capital leases
for office equipment. The following summarizes our contractual obligations as of
March 31, 2009 (in thousands):



                                                                                          2014
                                      2009      2010      2011      2012      2013      and after     Total
Operating leases                     $ 5,604   $ 7,593   $ 7,240   $ 6,990   $ 7,190   $     1,619   $ 36,236
Capital lease obligations, net            17         3        -         -         -             -          20

Total contractual obligations        $ 5,621   $ 7,596   $ 7,240   $ 6,990   $ 7,190   $     1,619   $ 36,256

Off-Balance Sheet Arrangements

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any leasing activities that expose us to any liability that is not reflected in our condensed consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under current circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. We evaluate our estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

A thorough understanding of our accounting policies is essential when reviewing our reported results of operations and our financial position. Our management considers the following accounting policies critical to an informed review of our condensed consolidated financial statements. For a summary of these and additional

Investments

Management determines the appropriate classification of its investments at the time of purchase and re-evaluates such determination at each statement of financial condition date. Securities owned and securities sold but not yet purchased are classified as trading securities and are measured at fair value based on quoted market prices with unrealized gains and losses reported as
(loss) gain from marketable securities in our condensed consolidated statements of operations. Trading securities are attributable to the consolidation of our investment in our long-short global real estate fund. Investments classified as available-for-sale are primarily comprised of investment-grade preferred instruments and investments in our sponsored open-end and closed-end mutual funds. These investments are carried at fair value based on quoted market prices or market prices obtained from independent pricing services engaged by management, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive loss. We periodically review each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other than temporary. If we believe an impairment on a security position is other than temporary, the loss will be recognized in our condensed consolidated statement of operations.

Goodwill and Intangible Assets

Goodwill represents the excess of the cost of our investment in the net assets of an acquired company over the fair value of the underlying identifiable net assets at the date of acquisition. Goodwill and indefinite lived intangible assets are not amortized but are tested at least annually for impairment by comparing the fair value to their carrying amount. Finite lived intangible assets are amortized over their useful lives.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. We recognize the current and deferred tax consequences of all transactions that have been recognized in the condensed consolidated financial statements using the provisions of the enacted tax laws. Deferred tax assets are recognized for temporary differences that will result in deductible amounts in future years. Deferred tax liabilities are recognized for temporary differences that will result in taxable income in future years. We record a valuation allowance, when necessary, to reduce deferred tax assets to an amount that more likely than not will be realized. The effective tax rate for interim periods represents our best estimate of the effective tax rate expected to be applied to the full fiscal year.

Stock-based Compensation

We account for stock-based compensation awards in accordance with SFAS No. 123(R), Share-Based Payment ("SFAS 123(R)"), which requires public companies to recognize compensation expense for the grant-date fair value of awards of equity instruments granted to employees. This expense is recognized over the period during which employees are required to provide service. SFAS 123(R) also requires us to estimate forfeitures.

Recently Issued Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51, ("SFAS 160"). SFAS 160 amends ARB No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for noncontrolling interests in subsidiaries and for the deconsolidation of subsidiaries. SFAS 160 is effective for the 2009 fiscal year. The adoption of SFAS 160 did not have a material impact on our condensed consolidated

In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities-an amendment of SFAS No. 133 ("SFAS 161"). SFAS 161 requires enhanced disclosures about an entity's derivative and hedging activities. SFAS 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008. The adoption of SFAS 161 did not have a material impact on our condensed consolidated financial statements.

In April 2009, the FASB issued three Staff Positions:

• FASB Staff Position ("FSP") FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments ("FSP 107-1"), which requires disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements.

• FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly ("FSP 157-4"), which provides guidance to determine when the volume and level of activity for assets or liabilities have significantly decreased and identify transactions that are not representative of an orderly market where quoted prices may not be determinative of fair value.

• FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments ("FSP 115-2"), which amends the other-than-temporary impairment evaluation model for debt securities.

. . .