Set forth on the following pages is management's discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2009 and September 30, 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, listed infrastructure and utilities, and preferred securities. We also manage alternative investment strategies such as hedged real estate securities portfolios and private real estate multimanager strategies for qualified investors. We serve individual and institutional investors through a broad range of investment vehicles.

We manage three types of accounts: open-end mutual funds, closed-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             Nine Months Ended
                                                     September 30,                  September 30,
                                                  2009            2008           2009           2008
Open-End Mutual Funds
Assets under management, beginning of period    $   4,238       $  7,644       $  4,280       $  8,900

Inflows                                               747            622          1,502          2,170
Outflows                                             (361 )         (943 )       (1,031 )       (2,892 )

Net inflows (outflows)                                386           (321 )          471           (722 )
Market appreciation (depreciation)                  1,279           (374 )        1,152         (1,229 )

Total increase (decrease)                           1,665           (695 )        1,623         (1,951 )

Assets under management, end of period          $   5,903       $  6,949       $  5,903       $  6,949

Average assets under management for period      $   5,122       $  7,288       $  4,094       $  7,968

Closed-End Mutual Funds
Assets under management, beginning of period    $   4,213       $  9,531       $  4,278       $ 10,274

Inflows                                               180             -             628             -
Outflows                                               -              -            (395 )           -

Net inflows                                           180             -             233             -
Market appreciation (depreciation)                    799           (961 )          681         (1,704 )

Total increase (decrease)                             979           (961 )          914         (1,704 )

Assets under management, end of period          $   5,192       $  8,570       $  5,192       $  8,570

Average assets under management for period      $   4,759       $  9,191       $  4,112       $  9,710

Institutional Separate Accounts
Assets under management, beginning of period    $   7,869       $  9,785       $  6,544       $ 10,612

Inflows                                             1,634            314          3,110          1,407
Outflows                                             (449 )         (458 )         (748 )       (1,676 )

Net inflows (outflows)                              1,185           (144 )        2,362           (269 )
Market appreciation (depreciation)                  2,344           (536 )        2,492         (1,238 )

Total increase (decrease)                           3,529           (680 )        4,854         (1,507 )

Assets under management, end of period          $  11,398       $  9,105       $ 11,398       $  9,105

Average assets under management for period      $   9,583       $  9,706       $  7,386       $ 10,293

Total
Assets under management, beginning of period    $  16,320       $ 26,960       $ 15,102       $ 29,786

Inflows                                             2,561            936          5,240          3,577
Outflows                                             (810 )       (1,401 )       (2,174 )       (4,568 )

Net inflows (outflows)                              1,751           (465 )        3,066           (991 )
Market appreciation (depreciation)                  4,422         (1,871 )        4,325         (4,171 )

Total increase (decrease)                           6,173         (2,336 )        7,391         (5,162 )

Assets under management, end of period          $  22,493       $ 24,624       $ 22,493       $ 24,624

Average assets under management for period      $  19,464       $ 26,185       $ 15,592       $ 27,971

A significant majority of our revenue, approximately 91% and 89% for the three months ended September 30, 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 generally applied to the average assets under management in the client's portfolio. Given the recent market decline in general, and real estate securities specifically, our average assets under management have decreased since September 30, 2008, generally in line with the markets.

Average assets under management were $19.5 billion for the three months ended September 30, 2009, a decrease of 26% from $26.2 billion for the three months ended September 30, 2008. Average assets under management were $15.6 billion for the nine months ended September 30, 2009, a decrease of 44% from $28.0 billion for the nine months ended September 30, 2008.

Open-end mutual funds

Open-end mutual fund assets under management decreased 15% to $5.9 billion at September 30, 2009 from $6.9 billion at September 30, 2008. The decrease in assets under management was due to market depreciation of $1.0 billion during the prior twelve month period.

Average assets under management were $5.1 billion for the three months ended September 30, 2009, a decrease of 30% from $7.3 billion for the three months ended September 30, 2008.

Net inflows for open-end mutual funds were $386 million for the three months ended September 30, 2009, compared with net outflows of $321 million for the three months ended September 30, 2008. Gross inflows were $747 million for the three months ended September 30, 2009, compared with $622 million for the three months ended September 30, 2008. Gross outflows were $361 million for the three months ended September 30, 2009, compared with $943 million for the three months ended September 30, 2008. Market appreciation was $1.3 billion for the three months ended September 30, 2009, compared with market depreciation of $374 million for the three months ended September 30, 2008.

Net inflows for open-end mutual funds were $471 million for the nine months ended September 30, 2009, compared with net outflows of $722 million for the nine months ended September 30, 2008. Gross inflows were $1.5 billion for the nine months ended September 30, 2009, compared with $2.2 billion for the nine months ended September 30, 2008. Gross outflows were $1.0 billion for the nine months ended September 30, 2009, compared with $2.9 billion for the nine months ended September 30, 2008. Market appreciation was $1.2 billion for the nine months ended September 30, 2009, compared with market depreciation of $1.2 billion for the nine months ended September 30, 2008.

Closed-end mutual funds

Closed-end mutual fund assets under management decreased 39% to $5.2 billion at September 30, 2009, compared with $8.6 billion at September 30, 2008. The decrease in assets under management was attributable to $1.9 billion of net deleveraging and market depreciation of $1.5 billion during the prior twelve month period.

Average assets under management were $4.8 billion for the three months ended September 30, 2009, a decrease of 48% from $9.2 billion for the three months ended September 30, 2008.

Closed-end mutual funds had net inflows of $233 million for the nine months ended September 30, 2009 due to line of credit borrowings achieved through the funds' credit facilities. The drawdown of the funds' credit facilities was the result of market appreciation and not a change in the funds' target leverage ratio. Market appreciation was $681 million for the nine months ended September 30, 2009, compared with market depreciation of $1.7 billion for the nine months ended September 30, 2008.

Institutional separate accounts

Institutional separate account assets under management increased 25% to $11.4 billion at September 30, 2009 from $9.1 billion at September 30, 2008. The increase in assets under management was due to net inflows of $2.6 billion partially offset by market depreciation of $279 million during the prior twelve month period.

Average assets under management were $9.6 billion for the three months ended September 30, 2009, a decrease of 1% from $9.7 billion for the three months ended September 30, 2008.

Institutional separate accounts had net inflows of $1.2 billion for the three months ended September 30, 2009, compared with net outflows of $144 million for the three months ended September 30, 2008. Gross inflows were $1.6 billion for the three months ended September 30, 2009, compared with $314 million for the three months ended September 30, 2008. Gross outflows were $449 million for the three months ended September 30, 2009, compared with $458 million for the three months ended September 30, 2008. Market appreciation was $2.3 billion for the three months ended September 30, 2009, compared with market depreciation of $536 million for the three months ended September 30, 2008.

Institutional separate accounts had net inflows of $2.4 billion for the nine months ended September 30, 2009, compared with net outflows of $269 million for the nine months ended September 30, 2008. Gross inflows were $3.1 billion for the nine months ended September 30, 2009, compared with $1.4 billion for the nine months ended September 30, 2008. Gross outflows were $748 million for the nine months ended September 30, 2009, compared with $1.7 billion for the nine months ended September 30, 2008. Market appreciation was $2.5 billion for the nine months ended September 30, 2009, compared with market depreciation of $1.2 billion for the nine months ended September 30, 2008.

Results of Operations

Three Months Ended September 30, 2009 compared with Three Months Ended
September 30, 2008



                                                                Three Months Ended
                                                                   September 30,
(in thousands)                                                2009              2008
Results of operations
Total revenue                                               $  33,827         $  48,937
Total expenses                                                (28,012 )         (34,933 )
Total non-operating income (loss)                               4,212           (10,030 )

Income from continuing operations before provision for
income taxes                                                $  10,027         $   3,974

Total revenue decreased 31% to $33.8 million for the three months ended September 30, 2009 from $48.9 million for the three months ended September 30, 2008. This decrease was primarily attributable to lower investment advisory and administration fees resulting from lower average assets under management, primarily from market depreciation, and lower effective fee rates. The overall effective fee rate declined to 63.5bps for the three months ended September 30, 2009 from 66.5bps for the three months ended September 30, 2008 was primarily due to a shift of assets under management from open-end and closed-end mutual funds to institutional separate accounts. Investment advisory and administration fees decreased 29% to $30.9 million for the three months ended September 30, 2009, compared with $43.6 million for the three months ended September 30, 2008. Average assets under management for the three months ended September 30, 2009 were $19.5 billion compared with $26.2 billion for the three months ended September 30, 2008.

For the three months ended September 30, 2009, total investment advisory and administration revenue from open-end mutual funds decreased 32% to $11.3 million from $16.5 million for the three months ended September 30, 2008. The decrease was attributable to lower levels of average assets under management resulting from market depreciation of $1.0 billion during the previous twelve months. Average assets under management for the three months ended September 30, 2009 were $5.1 billion compared with $7.3 billion for the three months ended September 30, 2008.

For the three months ended September 30, 2009, total investment advisory and administration revenue from closed-end mutual funds decreased 44% to $9.4 million from $16.8 million for the three months ended September 30, 2008. The decrease was attributable to lower levels of average assets under management resulting from net deleveraging of approximately $1.9 billion and market depreciation of $1.5 billion. Average assets under management for the three months ended September 30, 2009 were $4.8 billion compared with $9.2 billion for the three months ended September 30, 2008.

For the three months ended September 30, 2009 and 2008, total investment advisory and administration revenue from institutional separate accounts was $10.3 million. Average assets under management for the three months ended September 30, 2009 were $9.6 billion compared with $9.7 billion for the three months ended September 30, 2008.

Distribution and service fee revenue decreased 52% to $2.0 million for the three months ended September 30, 2009 from $4.2 million for the three months ended September 30, 2008. The decrease was attributable to lower levels of average assets under management in open-end load mutual funds.

Expenses

Total operating expenses decreased 20% to $28.0 million for the three months ended September 30, 2009 from $34.9 million for the three months ended September 30, 2008, primarily due to decreases in employee compensation and benefits, distribution and service fees, general and administrative and amortization of deferred commissions.

Employee compensation and benefits decreased 10% to $16.0 million for the three months ended September 30, 2009 from $17.8 million for the three months ended September 30, 2008. This decrease was primarily due to lower salary of approximately $543,000 and an adjustment to estimated forfeitures of approximately $1.0 million recorded in the third quarter of 2008.

Distribution and service fee expenses decreased 45% to $3.8 million for the three months ended September 30, 2009 from $7.0 million for the three months ended September 30, 2008. This decrease was primarily due to lower average assets under management in open-end load mutual funds.

Amortization of deferred commissions decreased 75% to $157,000 for the three months ended September 30, 2009 from $624,000 for the three months ended September 30, 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 Income

Non-operating income was $4.2 million for the three months ended September 30, 2009, compared with non-operating loss of $10.0 million for the three months ended September 30, 2008. The third quarter 2009 results included approximately $3.1 million of net trading gains from our consolidated long-short global real estate funds. The third quarter 2008 results included $10.5 million of losses recorded on available-for-sale securities, primarily from investments in Federal National Mortgage Association preferred securities. Excluding this item, non-operating income would have been $464,000 for the three months ended September 30, 2008.

Income Taxes

We recorded income tax expense of $2.1 million for the three months ended September 30, 2009, compared with income tax expense of $4.7 million for the three months ended September 30, 2008. The provision for income taxes for the three months ended September 30, 2009 includes U.S. federal, state, local and foreign taxes at an approximate effective tax rate of 21%. The provision for income taxes for the three months ended September 30, 2008 included a $3.2 million valuation allowance associated with available-for-sale securities and a $1.6 million expense reduction due to an adjustment from the estimated provision to the actual 2007 U.S. federal tax return. The effective tax rate for the three months ended September 30, 2008 was approximately 38%, excluding the items mentioned above. We expect our tax rate for the full year 2009 to approximate 21%, excluding discrete items. At September 30, 2009, we had net unrealized capital losses of approximately $18.1 million for which a valuation allowance had been established on the associated deferred tax asset.

Nine Months Ended September 30, 2009 compared with Nine Months Ended September 30, 2008

                                                                 Nine Months Ended
                                                                   September 30,
(in thousands)                                                2009               2008
Results of operations
Total revenue                                               $  83,682         $  156,934
Total expenses                                                (77,307 )         (101,501 )
Total non-operating loss                                      (17,479 )           (6,630 )

(Loss) income from continuing operations before
provision for income taxes                                  $ (11,104 )       $   48,803

Revenue

Total revenue decreased 47% to $83.7 million for the nine months ended September 30, 2009 from $156.9 million for the nine months ended September 30, 2008. This decrease was primarily attributable to lower investment advisory and administration fees resulting from lower average assets under management, primarily from market depreciation. Investment advisory and administration fees decreased 45% to $76.0 million for the

For the nine months ended September 30, 2009, total investment advisory and administration revenue from open-end mutual funds decreased 49% to $27.2 million from $53.4 million for the nine months ended September 30, 2008. The decrease was attributable to lower levels of average assets under management resulting from market depreciation of $1.0 billion. Average assets under management for the nine months ended September 30, 2009 were $4.1 billion compared with $8.0 billion for the nine months ended September 30, 2008.

For the nine months ended September 30, 2009, total investment advisory and administration revenue from closed-end mutual funds decreased 54% to $24.0 million from $52.6 million for the nine months ended September 30, 2008. The decrease was attributable to lower levels of average assets under management resulting from market depreciation of $1.5 billion and net deleveraging of approximately $1.9 billion. Average assets under management for the nine months ended September 30, 2009 were $4.1 billion compared with $9.7 billion for the nine months ended September 30, 2008.

For the nine months ended September 30, 2009, total investment advisory and administration revenue from institutional separate accounts decreased 23% to $24.8 million from $32.1 million for the nine months ended September 30, 2008. The decrease was attributable to lower levels of average assets under management resulting from the timing of net inflows of $2.6 billion and market depreciation of $279 million. The majority of the net inflows into institutional separate accounts occurred during the second and third quarters of 2009, with almost half of the net inflows occurring during the third quarter of 2009. Similarly, $4.2 billion of market depreciation occurred during the first quarter of 2009 and the fourth quarter of 2008, which was partially offset by $4.0 billion of market appreciation during the second and third quarter of 2009. Average assets under management for the nine months ended September 30, 2009 were $7.4 billion compared with $10.3 billion for the nine months ended September 30, 2008.

Distribution and service fee revenue decreased 64% to $5.3 million for the nine months ended September 30, 2009 from $14.8 million for the nine months ended September 30, 2008. The decrease was attributable to lower levels of average assets under management in open-end load mutual funds.

Expenses

Total operating expenses decreased 24% to $77.3 million for the nine months ended September 30, 2009 from $101.5 million for the nine months ended September 30, 2008, primarily due to decreases in employee compensation and benefits, distribution and service fees, general and administrative and amortization of deferred commissions.

Employee compensation and benefits decreased 15% to $43.0 million for the nine months ended September 30, 2009 from $50.4 million for the nine months ended September 30, 2008. This decrease was primarily due to lower incentive bonus, net of deferrals, of approximately $4.9 million, lower salary of approximately $1.0 million, and lower production-based compensation of approximately $748,000.

Distribution and service fee expenses decreased 51% to $10.0 million for the nine months ended September 30, 2009 from $20.4 million for the nine months ended September 30, 2008. This decrease was primarily due to lower average assets under management in open-end load mutual funds.

General and administrative decreased 16% to $20.5 million for the nine months ended September 30, 2009 from $24.3 million for the nine months ended September 30, 2008. This decrease was primarily due to lower travel and entertainment of approximately $1.7 million, lower professional fees of approximately $1.4 million, and lower office expenses of approximately $845,000.

Non-operating Income

Non-operating loss was $17.5 million for the nine months ended September 30, 2009, compared with non-operating loss of $6.6 million for the nine months ended September 30, 2008. The 2009 results include other-than-temporary impairment charges of $32.7 million recorded on available-for-sale securities, primarily from investments in preferred securities and seed money investments in our sponsored mutual funds. Excluding this item, non-operating income would have been $14.7 million for the nine months ended September 30, 2009, of which approximately $11.6 million was related to net trading gains from our consolidated long-short global real estate fund. The 2008 results included $10.5 million of losses recorded on available-for-sale securities, primarily from investments in Federal National Mortgage Association preferred securities. Excluding this item, non-operating income would have been $3.9 million for the nine months ended September 30, 2008.

Income Taxes

We recorded an income tax expense of $1.2 million for the nine months ended September 30, 2009, compared with an income tax expense of $21.7 million for the nine months ended September 30, 2008. The provision for income taxes for the nine months ended September 30, 2009 includes U.S. federal, state, local and foreign taxes at an approximate effective tax rate of 10%. The provision for income taxes for the nine months ended September 30, 2009 includes the reversal of an approximate $3.2 million valuation allowance associated with available-for-sale securities recorded in 2008 and approximately $7.0 million related to non-deductible impairment charges recorded during the 2009 period. Excluding the items mentioned above, the effective tax rate was approximately 21% for the nine months ended September 30, 2009. The provision for income taxes for the nine months ended September 30, 2008 included the $3.2 million valuation allowance mentioned above and a $1.6 million expense reduction due to an adjustment from the estimated provision to the actual 2007 U.S. federal tax return. The effective tax rate for the nine months ended September 30, 2008 was approximately 38%, excluding the items mentioned above. We expect our tax rate for the full year 2009 to approximate 21%, excluding discrete items. At September 30, 2009, we had net unrealized capital losses of approximately $18.1 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, investments, available-for-sale and accounts receivable. Our cash flows generally result from the operating activities of our business, with investment advisory and administrative fees being the most significant contributor. Cash and cash equivalents, investments, available-for-sale and accounts receivable were 62% and 64% of total assets as of September 30, 2009 and December 31, 2008, . . .