COHEN & STEERS INC (Form: S-1/A, Received: 05/13/2004 17:23:50)

As filed with the Securities and Exchange Commission on May 13 , 2004.

Registration No. 333-114027

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1
TO
F ORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

COHEN & STEERS, INC.*
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

6282
(Primary Standard
Industrial Classification
Code Number)

14-1904657
(I.R.S. Employer
Identification No.)

757 Third Avenue
New York, NY 10017
Telephone: (212) 832-3232
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

Lawrence B. Stoller, Esq.
Senior Vice President and General Counsel
Cohen & Steers, Inc.
757 Third Avenue
New York, NY 10017
Telephone: (212) 832-3232
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:

Vincent Pagano, Jr., Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017-3954
Telephone: (212) 455-2000
Facsimile: (212) 455-2502

Leonard B. Mackey, Jr., Esq.
Clifford Chance US LLP
200 Park Avenue
New York, NY 10166
Telephone: (212) 878-8000
Facsimile: (212) 878-8375

Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after the Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Prior to the consummation of the offering registered by this Registration Statement and pursuant to the reorganization for the purpose of redomestication and reorganization into a holding company structure described in this Registration Statement, Cohen & Steers, Inc. will become the parent holding company of Cohen & Steers Capital Management, Inc. and, together with its direct and indirect subsidiaries (including Cohen & Steers Capital Management, Inc.), succeed to the business now conducted by Cohen & Steers Capital Management, Inc. and its subsidiaries.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated May 13 , 2004

PROSPECTUS

Shares

Cohen & Steers, Inc.
Common Stock

This is Cohen & Steers, Inc.'s initial public offering. Cohen & Steers, Inc. is selling shares and the selling stockholders are selling shares.

We expect the public offering price to be between $ and $ per share. Currently, no public market exists for the shares. After pricing of the offering, we expect that the shares will trade on the New York Stock Exchange under the symbol “CNS.”

Investing in the common stock involves risks that are described in the “Risk Factors” section beginning on page 14 of this prospectus.

	Per Share	Total
Public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to Cohen & Steers, Inc.	$	$
Proceeds, before expenses, to the selling stockholders	$	$

The underwriters may also purchase up to additional shares from us and up to additional shares from the selling stockholders at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover overallotments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The shares will be ready for delivery on or about , 2004.

Merrill Lynch & Co.
UBS Investment Bank		Wachovia Securities
Bear, Stearns & Co. Inc.

The date of this prospectus is , 2004.

TABLE OF CONTENTS

	Page
Summary		1
Risk Factors		14
Forward-Looking Statements		22
Use of Proceeds		23
Dividend Policy		23
Reorganization and S Corporation Status		24
Capitalization		26
Dilution		27
Selected Consolidated Financial Data		28
Management's Discussion and Analysis of Financial Condition and Results of Operations		31
Business		51
Management		68
Related Party Transactions		79
Principal and Selling Stockholders		82
Description of Capital Stock		83
Shares Eligible for Future Sale		86
Material U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock		88
Underwriting		90
Legal Matters		93
Experts		93
Where You Can Find More Information		93
Index to Financial Statements		F-1

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus.

All share amounts and per share data contained in this prospectus will be adjusted to reflect a for one stock split that we intend to effect prior to the consummation of this offering.

Unless indicated otherwise, the information included in this prospectus assumes no exercise by the underwriters of the overallotment option to purchase up to additional shares from us and up to additional shares from the selling stockholders and that the shares to be sold in this offering are sold at $ per share, which is the midpoint of the range indicated on the front cover of this prospectus.

(This page intentionally left blank)

SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the section entitled “Risk Factors” and our consolidated financial statements and the notes to those statements before you decide to invest in our common stock.

Cohen & Steers

We are the nation's largest manager of real estate mutual funds, based on our proprietary real estate mutual fund assets under management , and we are a focused manager of income oriented equity securities portfolios. Our co-chairmen and co-chief executive officers and principals, Martin Cohen, 55, and Robert H. Steers, 51, founded Cohen & Steers as an investment advisor in 1986. While we continue to depend on the efforts of Mr. Cohen and Mr. Steers, we have built a deep and experienced team of professionals who are also vitally important to our success.

The foundation of our company is our investment department . We were founded on the belief that fundamental research and analysis and active portfolio management can generate excess returns for our clients . Our dedication to research and active portfolio management has enabled us to provide attractive returns for our institutional clients and mutual fund shareholders for over 18 years. We have also developed an effective distribution network that has contributed, along with our investment performance, to the rapid growth in our assets under management.

Our assets under management have increased at a compound annual rate of growth of nearly 40% , to $15.5 billion at March 31 , 2004 from $3.8 billion at December 31, 1999. In addition, as of March 31 , 2004, we provided portfolio consulting services for more than $1.5 billion in assets, which are not included in our assets under management. As a complement to our asset management business, we also provide investment banking services to companies in real estate and real estate intensive businesses.

We operate in two distinct business segments:

	•	Asset Management . Asset Management primarily derives revenue from investment advisory, administration, distribution and service fees received from our mutual funds and investment advisory fees received from our institutional separate accounts. Fees earned by Asset Management are based on the net assets of each client's portfolio and on the net assets that underlie the investment products for which we provide portfolio consulting services.

	•	Investment Banking. Investment Banking derives revenue primarily from advising our clients on mergers, acquisitions, corporate restructurings, recapitalizations and similar corporate finance transactions and placing securities as agent for our clients. These fees are generally earned upon the consummation of the transaction pursuant to the terms of individual agreements.

The following table provides a breakdown of our consolidated and segment revenue and operating expenses for the years ended December 31, 2001, 2002 and 2003, and for the three months ended March 31, 2003 and 2004.

	Year Ended December 31,						Three Months Ended March 31,
	2001		2002		2003		2003		2004
	($ in thousands)
Revenue
Asset Management Revenue	$	32,441	$	42,169	$	59,062	$	10,765	$	22,846
Investment Banking Revenue		2,853		13,077		11,279		978		4,463

Consolidated Revenue	$	35,294	$	55,246	$	70,341	$	11,743	$	27,309

Operating Expenses
Asset Management Operating Expenses	$	23,598	$	37,633	$	50,510	$	10,843	$	14,278
Investment Banking Operating Expenses		4,891		8,964		7,959		1,100		2,992

Consolidated Operating Expenses	$	28,489	$	46,597	$	58,469	$	11,943	$	17,270

Asset Management

As of March 31 , 2004, we managed $4.5 billion in four open-end mutual funds, $7.7 billion in seven closed-end investment companies (“closed-end mutual funds”) and $3.4 billion in 39 institutional separate account portfolios for institutional investors, including some of the world's largest pension and endowment funds. We also serve as portfolio consultant for non-proprietary unit investment trusts. Our investment vehicles and strategies currently focus on the following areas:

	•	Real Estate Investment Trust (“REIT”) common and preferred stocks

	•	Utility common stocks

	•	Corporate preferred stocks

Throughout our history we have been innovators in developing income oriented equity portfolios and investment vehicles. Our principals, while employed at another firm, organized and managed the first open-end real estate mutual fund in 1985. We launched the first closed-end real estate mutual fund in 1988 and the first leveraged, closed-end real estate mutual fund in 2001. As of March 31 , 2004, we managed five of the ten largest open-end and closed-end real estate mutual funds. We were the first firm to segment REIT investing into separate, distinct investment strategies and in 1996 we began managing REIT preferred stock portfolios. We are a leader in combining complementary asset classes within a single investment vehicle, such as REITs with corporate preferred stocks or REITs with utility common stocks. In addition, we have developed a proprietary index for passive investment strategies. Our proprietary index is now the basis for the iShares Cohen & Steers Realty Majors Index Fund, the largest exchange traded real estate index fund. We also developed a hedging strategy for leveraged, closed-end mutual funds that has become a model for the industry.

Our Assets Under Management

The following table sets forth the breakdown of our total assets under management by account and security type as of the dates shown, and the compound annual growth rates (CAGR) for our assets under management since December 31, 1999.

Assets Under Management

	December 31,										March 31 ,		December 31, 1999 to March 31 , 2004
	1999		2000		2001		2002		2003		2004 (2)		CAGR
	($ in millions)
Breakdown by Account Type
Closed-end Mutual Funds	$	98.0	$	114.2	$	600.7	$	2,114.3	$	4,790.6	$	7,664.5		179.0%
Open-end Mutual Funds		1,571.5		2,077.5		2,314.6		2,452.4		3,897.1		4,514.0		28.2%
Institutional Separate Accounts		2,092.6		2,566.8		2,782.2		2,057.1		2,992.4		3,360.8		11.8%

Total Assets Under Management	$	3,762.1	$	4,758.5	$	5,697.5	$	6,623.8	$	11,680.1	$	15,539.3		39.6%

Breakdown by Security Type
Real Estate Common Stocks	$	3,606.1	$	4,536.0	$	5,259.4	$	5,908.9	$	9,892.6	$	11,835.3		32.3%
Utility Common Stocks		—		—		—		—		—		1,296.1		n/a
Real Estate Preferred Stocks		32.4		55.7		266.6		597.1		836.0		1,205.1		134.2%
Corporate Preferred Stocks *		—		—		—		—		683.9		895.2		n/a
Fixed Income (1)		2.3		2.5		6.2		13.5		109.1		118.3		154.0%
Cash and Short-Term Investments		121.3		164.3		165.3		104.3		158.5		189.3		n/m

Total Assets Under Management	$	3,762.1	$	4,758.5	$	5,697.5	$	6,623.8	$	11,680.1	$	15,539.3		39.6%

(1)		Includes corporate bonds.
(2)		Assumes that (i) the $338 million of cash in the Cohen & Steers REIT & Utility Income Fund has been invested based on the following portfolio composition: 40% in utility common stocks, 40% in real estate common stocks, 13% in real estate preferred stocks and 7% in corporate preferred stocks and (ii) the $581 million of cash in the Cohen & Steers Select Utility Fund has been invested based on the following portfolio composition: 78% in utility common stocks, 12% in real estate preferred stocks and 10% in corporate preferred stocks. Cohen & Steers REIT & Utility Income Fund and Cohen & Steers Select Utility Fund are funds which commenced operations during 2004 and as of March 31, 2004 had not yet fully invested their assets in accordance with these funds' stated policies.
*		Corporate preferred stocks include traditional preferred stocks as well as “hybrid-preferred securities.” Hybrid-preferred securities are forms of subordinated debt with many features, such as exchange listing and deferral, that replicate those of traditional preferred stock.

The following table sets forth the breakdown of our revenue from investment advisory and administration fees by account type.

	Year Ended December 31,									Three Months Ended March 31,
	2001			2002			2003			2003			2004
	($ in thousands)
Investment advisory and administration fees:
Closed-end mutual funds	$	2,009	6.5%	$	7,837	20.4%	$	18,575	36.0%	$	2,741	28.8%	$	8,801	44.6%
Open-end mutual funds		18,019	58.5%		20,871	54.3%		24,225	46.9%		4,806	50.5%		8,282	42.0%
Institutional separate accounts		10,794	35.0%		9,707	25.3%		8,808	17.1%		1,973	20.7%		2,646	13.4%

Total	$	30,822	100.0%	$	38,415	100.0%	$	51,608	100.0%	$	9,520	100.0%	$	19,729	100.0%

As of March 31, 2004 , approximately 49% of our assets under management was in closed-end mutual funds. For the three months ended March 31, 2004, 45% of our investment advisory and administration fees and 36% of Asset Management revenue were from closed-end mutual funds. Unlike open-end mutual funds, closed-end mutual funds are not subject to shareholder redemptions that can result in greater volatility in asset levels. As a result, a large proportion of our assets under management is relatively stable, providing us with similarly stable revenue under normal market conditions with respect to that part of our current business. Beginning in 2006 and continuing through 2012, certain investment advisory fee waivers on five of our closed-end mutual funds are scheduled to begin to expire, subject to approval by the fund's board of directors. We expect the expiration of these fee waivers to result in higher revenue, assuming constant asset levels.

Subsequent to March 31, 2004, the stock and bond markets have declined amid concerns that the Federal Reserve would raise interest rates in response to an increase in payroll employment and other economic indicators suggesting a growing U.S. economy. In particular, REIT stock prices declined by approximately 15%. As a result, our assets under management decreased to $13.5 billion on April 30, 2004 from $15.5 billion on March 31, 2004.

Our Investment Process

Our investment process is based on fundamental portfolio and company research. Our investment committees and portfolio managers formulate strategies that take into account the economy, industry fundamentals and the valuation landscape for each portfolio strategy. A dedicated investment committee oversees the portfolio manager and research team responsible for each of our portfolio strategies. Mr. Cohen, Mr. Steers and Joseph M. Harvey, our president, head our investment committees .

Our research analysts, each of whom is a specialist in certain industry sectors, must subject the companies that he or she covers to a rigorous fundamental analysis. We also require our research analysts to spend a significant amount of time interacting with and visiting company management, as well as talking to competitors, vendors, analysts and other industry participants. Investment performance is a primary determinant of incentive compensation for our investment professionals.

We have developed in-house valuation models that are unique to each of our portfolio strategies. These models use valuation methodologies that have proven, through both back-testing and actual results, to be highly effective in identifying relative value. We use our valuation models daily for portfolio construction and to manage portfolios with the strict discipline to which we adhere.

Our Historical Investment Performance

under management over the periods presented, since the inception date of each strategy and compares this performance to the returns of the benchmark and the S&P 500 Index over the same periods. We believe this presentation allows you to evaluate our ability to manage client assets over long periods of time.

Investment Performance
Inception through March 31 , 2004

		Annualized Excess Return (2) vs.
Strategy (Inception Date)	Total Return(1) (Annualized)	Benchmark*	S&P 500 Index
Total Return (3/85)	13.0%	1.1%	0.1%
Equity Income (8/88)	14.1%	1.9%	2.0%
Equity Income with Leverage (7/01)	24.8%	5.4%	26.2%
Special Equity (6/97)	13.6%	2.3%	8.4%
REIT Preferred Stocks (8/96)	14.8%	4.1%	5.6%

(1)		Returns since inception before deduction of investment advisory fees and other expenses. Investment advisory fees and other expenses reduce returns to our clients. Calculated by computing the weighted average performance for all of our accounts that have the same objective and strategy. Past performance is not a guarantee of future performance.
(2)		Represents the average annual amount for the stated period that the strategy's returns exceeded the returns for the benchmark and S&P 500 Index.
*		National Association of Real Estate Investment Trusts (NAREIT) Equity REIT Index; and for REIT Preferred Stocks, Morgan Stanley REIT Preferred Index.

Our Distribution Network

Our distribution network encompasses the major channels in the asset management industry , including large brokerage firms, registered investment advisors (RIAs) and institutional investors. We are a leading sponsor in the market for closed-end mutual funds, and our open-end mutual funds are available for purchase through the major broker-dealers, the significant networks serving financial advisors and the no-load investment community, and certain “wrap fee” platforms. We provide advisory and administration services to four open-end and seven closed-end mutual funds under the Cohen & Steers brand name, which collectively have over 375,000 individual investors. Our institutional separate account relationships extend to institutions such as pension and endowment funds and insurance companies, and to high net worth individuals. In addition, we provide sub-advisory services in the variable annuity channel and to several products that are distributed outside of the United States, including Canada and Japan.

Asset Management Strategy

As a firm dedicated to creating portfolios of income producing equity securities with growth potential, we have capitalized, and we believe we are well positioned to continue to capitalize, on the increase in demand for these portfolios.

As the U.S. population ages and retirement savings continue to increase, we believe individuals will reallocate assets in their investment accounts in a manner that reduces volatility and produces higher levels of current income. We believe this change will also be true for many institutional investors, such as pension and endowment funds that are seeking higher yielding, lower volatility investments to meet their investment objectives. Additionally, recently enacted federal tax legislation has removed the long held advantage that long-term capital gains have held over corporate dividends, furthering demand for dividend income. Accordingly, we believe U.S. investors will continue to seek out current income opportunities. We expect mutual funds to be a primary vehicle for this investment.

Our business strategy includes the following key elements:

•

Capitalize on the Cohen & Steers Brand. As the nation's largest manager of real estate mutual funds, a leading sponsor of closed-end mutual funds and as a result of our strong historical investment performance, we have developed a recognized brand name that has enabled us to expand our product offerings to include corporate preferred securities and utility common stocks. We believe that becoming a public company, along with our planned increases in marketing, product offerings, distribution and targeted advertising, will further strengthen our brand and enable us to continue to increase our market share with respect to many of our existing product and service offerings. We also believe we can leverage this brand awareness to offer new products and services that complement our existing offerings.

• Diversify Product Offerings. We have diversified our business beyond our historical strength in real estate securities to include corporate preferred securities and utility common stocks and have raised $2.4 billion in assets in these areas since 2003 . We intend to continue to expand our offerings in these security types, as well as in other high dividend yielding common stocks, by developing new proprietary open-end and closed-end mutual funds, sub-advising other firms' investment products and by offering our expertise to institutional investors.

• Expand Wholesaling Sales Force. We have built relationships with the major national and regional brokerage firms and have experienced success marketing and raising assets in our open-end and closed-end mutual funds. We believe these relationships will help us continue to attract assets as we launch new open-end mutual funds and, in order to further leverage these relationships, our near term plan includes adding several wholesalers to facilitate our mutual fund expansion.

• Pursue New Areas of Distribution. We plan to further penetrate several distribution areas, such as the international and the RIA markets. While we believe we have a strong presence in the RIA channel, the launch of new open-end mutual funds should enable us to penetrate this market further. The international arena also offers a significant opportunity to manage money for non-U.S. investors in Europe and Asia through both locally marketed collective investment vehicles and direct relationships with large institutions.

• Pursue Acquisitions. We selectively consider strategic acquisitions of asset management operating companies, either for cash or stock. This strategy may include “lift-outs” of teams of professionals from other asset management organizations, which may require nominal cash consideration. Our objectives include adding complementary asset management expertise to our business that provides additional growth opportunities and leverages our existing capabilities.

Investment Banking

As a complement to Asset Management , and to capitalize on our extensive expertise in public real estate securities and companies, in 1999 we established a highly specialized investment banking practice that services companies in real estate and real estate intensive businesses, such as the health care and hospitality businesses.

We have assembled a highly experienced team of investment banking professionals with a long-standing transactional track record in the real estate and health care industries. Since 1999, we have completed 44 transactions representing over $5 billion in value. Our professionals have developed long-standing relationships with many companies and have established a strong presence in our targeted market. As a result, we believe we are well positioned to take advantage of new advisory opportunities.

Our investment banking strategy focuses on providing a full range of services to a focused universe of companies in select real estate intensive businesses, including the following areas:

Mergers & Acquisitions —We provide a full range of merger and acquisition advisory services involving the purchase or sale of public or private companies or their business units . We also facilitate leveraged buyouts and strategic capital infusions, and provide our clients with advice relating to takeover defenses. We have advised clients in 11 merger and acquisition transactions representing over $900 million in value.

Restructurings — We have developed a broad range of corporate restructuring advisory services. These services include advice with respect to debt and lease restructurings, recapitalization transactions, exchange offers and bankruptcy advisory services. We have advised clients in five restructuring assignments encompassing 17 transactions representing over $3.3 billion in value.

Capital Raising —We provide capital raising services as agent, and have completed 16 transactions which raised over $860 million, primarily SEC -registered direct placements of equity and preferred securities.

Dividend Policy

We intend to pay cash dividends on a quarterly basis and expect to declare our first quarterly dividend payment at an initial rate of $ per share in the quarter of 2004. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition and earnings, legal requirements and other factors as our board of directors deems relevant. See “Dividend Policy.”

Our business is presently conducted by Cohen & Steers Capital Management, Inc. and its subsidiaries. Cohen & Steers Capital Management, Inc. was incorporated as a New York corporation in 1986 and is wholly owned by our principals and two trusts benefiting their families. Cohen & Steers, Inc. is a Delaware corporation that was formed on March 17, 2004. Cohen & Steers, Inc. has not engaged in any business or other activities except in connection with its formation and the reorganization whereby Cohen & Steers, Inc. will become the parent holding company of Cohen & Steers Capital Management, Inc. and, together with its direct and indirect subsidiaries (including Cohen & Steers Capital Management, Inc.), continue to conduct the business now conducted by Cohen & Steers Capital Management, Inc. and its subsidiaries. Completion of the reorganization is a condition to the consummation of this offering. See “Reorganization and S Corporation Status—Reorganization.”

Our principal executive offices are located at 757 Third Avenue, New York, NY 10017, and our telephone number is (212) 832-3232. Our Web site is located at www.cohenandsteers.com. The information on our Web site is not a part of this prospectus.

The Offering

Common stock offered:
By Cohen & Steers, Inc.		shares
By the selling stockholders		shares

Total		shares
Shares outstanding after the offering		shares

Use of proceeds		We estimate that our net proceeds from this offering will be approximately $ million. We intend to use these net proceeds to continue to expand our asset management platform, to establish new investment vehicles, to make strategic acquisitions and for general corporate purposes.
		We will not receive any proceeds from the sale of shares by the selling stockholders.
Dividend policy		We intend to pay cash dividends on a quarterly basis and expect to declare our first quarterly dividend payment at an initial rate of $ per share in the quarter of 2004. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition and earnings, legal requirements and other factors as our board of directors deems relevant. See “Dividend Policy.”
Voting rights		Each share of common stock will entitle its holder to one vote per share.
Risk factors		See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in shares of our common stock.
Determination of initial public offering price		Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations among us, the selling stockholders and the representatives of the underwriters. See “Underwriting—New York Stock Exchange Listing.”
Proposed New York Stock Exchange symbol		CNS

The number of shares of common stock outstanding after the offering excludes shares reserved for issuance under the 2004 Stock Incentive Plan and shares reserved for issuance under the 2004 Employee Stock Purchase Plan. We expect to grant certain employees an aggregate of restricted stock units pursuant to the 2004 Stock Incentive Plan on the date of the consummation of this offering . See “Management—IPO Date Employee Awards.”

All share amounts and per share data contained in this prospectus will be adjusted to reflect a for one stock split that we intend to effect prior to the consummation of this offering.

Summary Consolidated Financial and Other Data

The following tables present summary consolidated financial and other data as of the dates and for the periods indicated. We derived the consolidated statement of financial condition data as of December 31, 2002 and 2003 and the consolidated statement of income data for each of the three years in the period ended December 31, 2003 from our consolidated financial statements audited by Deloitte & Touche LLP which are included elsewhere in this prospectus.

We derived the consolidated statement of financial condition data as of December 31, 1999, 2000 and 2001 and the consolidated statement of income data for each of the two years in the period ended December 31, 2000 from our unaudited consolidated financial statements which are not included in this prospectus. The unaudited consolidated financial statements have been prepared on substantially the same basis as the audited consolidated financial statements and include all adjustments that we consider necessary for a fair presentation of our consolidated financial position and results of operations for all periods presented.

We derived the consolidated statement of financial condition data as of March 31, 2004 and the consolidated statement of income data for each of the three months ended March 31, 2003 and 2004 from our unaudited interim consolidated financial statements which are included elsewhere in this prospectus. In the opinion of management, the unaudited interim consolidated financial statements financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are of a normal recurring nature, that we consider necessary for a fair presentation of our consolidated financial position and results of operations for the interim periods presented.

Our wholly owned subsidiary, Cohen & Steers Securities, LLC, commenced operations on July 1, 2002. On the same date, Cohen & Steers Securities, LLC succeeded to the business of Cohen & Steers Securities, Inc. (previously wholly owned by our principals) pursuant to a transaction accounted for as a merger of entities under common control and recorded in a manner similar to a pooling-of-interests. Accordingly, the previously separate historical financial position and results of operations of Cohen & Steers Securities, Inc. are combined with our consolidated financial position and results of operations for all periods presented.

For all periods presented, we operated as an S corporation and were not subject to U.S. federal and certain state income taxes. Our historical income tax expense consisted of New York State and New York City income taxes. Upon completion of this offering, we will become subject to U.S. federal and certain state and local income taxes applicable to C corporations. See “—Unaudited Consolidated Pro Forma Financial Information” and “Reorganization and S Corporation Status.”

The historical consolidated results for “Employee compensation and benefits” include salaries and bonuses paid to our co-chief executive officers during our status as an S corporation that are not indicative of the salaries and bonuses to be expected for any future accounting periods. See “—Unaudited Consolidated Pro Forma Financial Information.”

You should read this summary consolidated financial and other data together with the other information contained in this prospectus, including “Management's Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes to those statements.

Consolidated Statement of Income Data

	Year Ended December 31,															Three Months Ended March 31,
	1999			2000			2001			2002			2003			2003			2004
	($ in thousands, except per share data)
Revenue
Investment advisory and administration fees:
Closed-end mutual funds	$	743		$	729		$	2,009		$	7,837		$	18,575		$	2,741		$	8,801
Open-end mutual funds		15,291			15,102			18,019			20,871			24,225			4,806			8,282
Institutional separate accounts		9,749			11,288			10,794			9,707			8,808			1,973			2,646

Total investment advisory and administration fees		25,783			27,119			30,822			38,415			51,608			9,520			19,729
Distribution and service fee revenue		211			397			1,112			3,071			5,880			974			2,408
Portfolio consulting and other		1,618			1,104			507			683			1,574			271			709
Investment banking fees		3,375			8,097			2,853			13,077			11,279			978			4,463

Total revenue		30,987			36,717			35,294			55,246			70,341			11,743			27,309

Expenses
Employee compensation and benefits		12,715			15,571			16,719			32,312			37,193			7,754			8,980
General and administrative		4,385			5,568			6,651			6,916			8,007			1,719			2,757
Distribution and service fee expenses		2,973			2,721			4,069			4,744			9,190			1,427			4,195
Amortization, deferred commissions		162			170			533			1,698			3,077			810			1,057
Depreciation and amortization		257			402			517			927			1,002			233			281

Total operating expenses		20,492			24,432			28,489			46,597			58,469			11,943			17,270

Operating income (loss)		10,495			12,285			6,805			8,649			11,872			(200	)		10,039
Non-operating income (expense)
Interest and dividend income		369			692			513			525			435			97			101
Interest expense		(32	)		(42	)		(60	)		(127	)		(156	)		(36	)		(42	)

Total non-operating income		337			650			453			398			279			61			59

Income (loss) before income taxes		10,832			12,935			7,258			9,047			12,151			(139	)		10,098
Income tax expense (benefit) (1)		1,089			1,297			654			611			100			(24	)		767

Net income (loss)	$	9,743		$	11,638		$	6,604		$	8,436		$	12,051		$	(115	)	$	9,331

Net income (loss) per share—basic and diluted	$	108.14		$	129.17		$	73.30		$	92.83		$	131.50		$	(1.25	)	$	101.82
Weighted average shares outstanding—
basic and diluted		90,100			90,100			90,100			90,871			91,642			91,642			91,642

(1)

See “Management's Discussion and Analysis of Financial Condition and Results of Operations” for the explanation of the decrease in income tax expense from the year ended December 31, 2002 to the year ended December 31, 2003.

Consolidated Statement of Income Data by Segment

	Year Ended December 31,												Three Months Ended March 31,
	1999		2000		2001			2002		2003			2003			2004
	($ in thousands)
Asset Management
Total revenue	$	27,612	$	28,506	$	32,441		$	42,169	$	59,062		$	10,765		$	22,846
Total operating expenses		17,542		18,197		23,598			37,633		50,510			10,843			14,278

Operating income (loss)		10,070		10,309		8,843			4,536		8,552			(78	)		8,568
Total non-operating income		333		426		396			325		249			53			53

Income (loss) before income taxes		10,403		10,735		9,239			4,861		8,801			(25	)		8,621
Income tax expense (benefit)		1,046		1,067		865			205		(46	)		90			666

Net income (loss)	$	9,357	$	9,668	$	8,374		$	4,656	$	8,847		$	(115	)	$	7,955

Investment Banking
Total revenue	$	3,375	$	8,211	$	2,853		$	13,077	$	11,279		$	978		$	4,463
Total operating expenses		2,950		6,235		4,891			8,964		7,959			1,100			2,992

Operating income (loss)		425		1,976		(2,038	)		4,113		3,320			(122	)		1,471
Total non-operating income		4		224		57			73		30			8			6

Income (loss) before income taxes		429		2,200		(1,981	)		4,186		3,350			(114	)		1,477
Income tax expense (benefit)		43		230		(211	)		406		146			(114	)		101

Net income (loss)	$	386	$	1,970	$	(1,770	)	$	3,780	$	3,204		$	—		$	1,376

Consolidated Statement of Financial Condition Data

	December 31,										March 31,
	1999		2000		2001		2002		2003		2004
					($ in thousands)
Cash and cash equivalents	$	4,699	$	4,737	$	2,750	$	6,090	$	7,526	$	8,574
Total assets		14,343		16,547		17,853		24,394		34,523		39,927
Total current liabilities		2,019		2,370		2,712		2,904		7,257		14,419
Total long-term liabilities		500		500		1,430		4,798		6,492		6,324
Total liabilities		2,519		2,870		4,142		7,702		13,749		20,743
Total stockholders' equity		11,824		13,677		13,711		16,692		20,774		19,184

Component Changes in Assets Under Management (AUM)

	Year Ended December 31,													Three Months Ended March 31,
	1999			2000			2001		2002			2003		2004
	($ in millions)
Total accounts
Beginning AUM	$	3,991.4		$	3,762.1		$	4,758.5	$	5,697.5		$	6,623.8	$	11,680.1
Net flows		(260.1	)		9.5			648.5		808.3			2,633.8		2,683.9
Net appreciation		30.8			986.9			290.5		118.0			2,422.5		1,175.3

Total assets under management	$	3,762.1		$	4,758.5		$	5,697.5	$	6,623.8		$	11,680.1	$	15,539.3


Closed-end mutual funds
Beginning AUM	$	113.6		$	98.0		$	114.2	$	600.7		$	2,114.3	$	4,790.6
Net flows		0.0			0.0			479.8		1,563.7			1,977.9		2,474.6
Net appreciation		(15.6	)		16.2			6.7		(50.1	)		698.4		399.3

Total closed-end mutual funds		98.0			114.2			600.7		2,114.3			4,790.6		7,664.5

Open-end mutual funds
Beginning AUM		2,043.6			1,571.5			2,077.5		2,314.6			2,452.4		3,897.1
Net flows		(484.8	)		113.5			138.7		121.3			528.9		199.2
Net appreciation		12.7			392.5			98.4		16.5			915.8		417.7

Total open-end mutual funds		1,571.5			2,077.5			2,314.6		2,452.4			3,897.1		4,514.0

Institutional separate accounts
Beginning AUM		1,834.2			2,092.6			2,566.8		2,782.2			2,057.1		2,992.4
Net flows		224.7			(104.0	)		30.0		(876.7	)		127.0		10.1
Net appreciation		33.7			578.2			185.4		151.6			808.3		358.3

Total institutional separate accounts		2,092.6			2,566.8			2,782.2		2,057.1			2,992.4		3,360.8

Total assets under management	$	3,762.1		$	4,758.5		$	5,697.5	$	6,623.8		$	11,680.1	$	15,539.3

Total net flows/beginning AUM (%)		-6.5%			0.3%			13.6%		14.2%			39.8%		23.0%

Total change in AUM (%)		-5.7%			26.5%			19.7%		16.3%			76.3%		33.0%

Unaudited Consolidated Pro Forma Financial Information

The following unaudited pro forma condensed consolidated financial statements have been derived by applying pro forma adjustments to our historical consolidated financial statements included elsewhere in this prospectus.

The unaudited pro forma condensed consolidated statements of income for the year ended December 31, 2003 and the three months ended March 31, 2004 give effect to:

	•	the reduction in “Employee compensation and benefits” of $7.1 million for the year ended December 31, 2003 and $0.3 million for the three months ended March 31, 2004 relating to the revocation of our S corporation status to reflect the reduced compensation which would have been payable to our co-chief executive officers if the employment agreements with these individuals described in “Management—Employment Agreements” had been in effect since January 1, 2003; and

	•	the additional income taxes of $8.0 million for the year ended December 31, 2003 and $3.6 million for the three months ended March 31, 2004 which would have been payable if we had revoked our S corporation tax status and elected to be taxed as a C corporation on January 1, 2003, based on an estimated combined effective tax rate of 42% . Please see “Management's Discussion and Analysis of Financial Condition and Results of Operations” for a description of our historical income tax expense.

The unaudited pro forma condensed consolidated statement of financial condition as of March 31, 2004 gives effect to:

	•	the recognition of the additional net deferred tax liability and corresponding deferred income tax expense of $0.5 million that would have been recorded had we revoked our S corporation tax status and elected to be taxed as a C corporation on March 31, 2004 ; and

	•	the accrual of the $14 million S corporation distribution to our stockholders described in “Reorganization and S Corporation Status—S Corporation Status” that would have been recorded had this distribution been declared on March 31, 2004 .

The adjustments necessary to fairly present the unaudited pro forma condensed consolidated financial statements have been based on available information and assumptions that we believe are reasonable. The unaudited pro forma condensed consolidated statements of income and financial condition are presented for illustrative purposes only and do not purport to represent our consolidated results of operations or financial position that would actually have occurred had the transactions referred to above been consummated on January 1, 2003 for the consolidated statements of income and on March 31, 2004 for the consolidated statement of financial condition, or to project our consolidated results of operations or financial position for any future date or period.

The unaudited pro forma condensed consolidated statements of income and financial condition do not give effect to accounting for the termination of our existing Stock Appreciation Rights Plan, which we refer to as our SAR plan, described in “Management—Stock Appreciation Rights Plan,” and the grant of restricted stock units on the date of the consummation of this offering, described in “Management—IPO Date Employee Awards.” We will record compensation expense in connection with the grant of these restricted stock units based on the initial public offering price of the underlying common stock, as adjusted for cumulative compensation cost recorded on the existing SAR plan. Assuming an initial public offering price of $ per share, we expect to record compensation expense of approximately $ million on the date of the consummation of this offering. If the initial public offering price per share is higher than $ , we will record a greater amount of compensation expense.

As described in “Reorganization and S Corporation Status—Reorganization,” prior to the consummation of this offering, we will effect a reorganization whereby Cohen & Steers Inc. will become the parent holding company of Cohen & Steers Capital Management, Inc., and, together

with its direct and indirect subsidiaries (including Cohen & Steers Capital Management, Inc.), continue to conduct the business now conducted by Cohen & Steers Capital Management, Inc. and its subsidiaries. This reorganization does not have an impact on our pro forma consolidated results of operations or financial position. Please see “Reorganization and S Corporation Status—Reorganization” for a further description of the reorganization as well as of the terms of the merger agreement.

You should read this unaudited pro forma condensed consolidated financial information together with the other information contained in this prospectus, including “Reorganization and S Corporation Status,” “Management's Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements and the notes thereto , including Note 3—Pro Forma Financial Information (unaudited), and our unaudited interim consolidated financial statements and the notes thereto, including Note 2—Pro Forma Financial Information .

Unaudited Pro Forma Condensed Consolidated Statements of Income

	Historical Year Ended December 31, 2003		Pro Forma Adjustments			Pro Forma Adjusted Year Ended December 31, 2003		Historical Three Months Ended March 31, 2004		Pro Forma Adjustments			Pro Forma Three Months Ended March 31, 2004
	($ in thousands, except per share data)							($ in thousands, except per share data)
Revenue
Investment advisory and administration fees	$	51,608				$	51,608	$	19,729				$	19,729
Distribution, portfolio consulting and other revenue		7,454					7,454		3,117					3,117
Investment banking fees		11,279					11,279		4,463					4,463

Total revenue		70,341					70,341		27,309					27,309

Expenses
Employee compensation and benefits		37,193		(7,116	)(a)		30,077		8,980		(270	) (a)		8,710
General and administrative		8,007					8,007		2,757					2,757
Distribution and service fee expenses		9,190					9,190		4,195					4,195
Amortization, deferred commissions		3,077					3,077		1,057					1,057
Depreciation and amortization		1,002					1,002		281					281

Total operating expenses		58,469		(7,116	)		51,353		17,270		(270	)		17,000

Operating income		11,872		7,116			18,988		10,039		270			10,309
Non-operating income		279					279		59					59

Income before income taxes		12,151		7,116			19,267		10,098		270			10,368
Income taxes		100		7,992	(b)		8,092		767		3,588	(b)		4,355

Net income	$	12,051	$	(876	)	$	11,175	$	9,331	$	(3,318	)	$	6,013

Earning per share
Net income per share—basic and diluted	$	131.50				$	121.94	$	101.82				$	65.61
Weighted average shares outstanding—basic and diluted		91,642					91,642		91,642					91,642

(a)		Gives effect to the reduction in our co-chief executive officers' total compensation relating to the revocation of our S corporation status to reflect the reduced compensation which would have been payable to our co-chief executive officers if the new employment agreements with these individuals had been in effect since January 1, 2003. For the year ended December 31, 2003, the $7.1 million pro forma adjustment is calculated as the total historical co-chief executive officers' compensation of $10.1 million (consisting of $2.1 million salary and $8 million bonus) less the total pro forma co-chief executive officers' compensation of $3 million (consisting of $1 million salary and $2 million bonus) per the new employment agreements. For the three months ended March 31, 2004, the $0.3 million pro forma adjustment is calculated as the total historical co-chief executive officers' compensation of $0.5 million (consisting of salary only) less the total pro forma co-chief executive officers' compensation of $0.2 million (consisting of salary only) per the new employment agreements.
(b)		Gives effect to additional income taxes which would have been payable if we had been a C corporation instead of an S corporation, based on an estimated combined effective tax rate of 42% .

Unaudited Pro Forma Condensed Consolidated Statement of Financial Condition

	Historical March 31, 2004		Pro Forma Adjustments			Pro Forma March 31, 2004
Assets
Current assets:
Cash and cash equivalents	$	8,574				$	8,574
Accounts receivable		10,818					10,818
Marketable securities available-for-sale		7,390					7,390
Due from affiliates		889					889
Income tax refunds receivable		398					398
Prepaid expenses and other current assets		1,962					1,962

Total current assets		30,031					30,031
Property and equipment—net		3,082					3,082
Other assets		6,814					6,814

Total	$	39,927				$	39,927

Liabilities and stockholders' equity
Current liabilities:
Accrued expenses and compensation	$	13,423				$	13,423
Current portion of long-term debt and obligations under capital leases		132					132
Deferred income tax liability		136		518	(a)		654
Other current liabilities		728		14,000	(b)		14,728

Total current liabilities		14,419		14,518			28,937
Long-term liabilities:
Bank line of credit		4,584					4,584
Long-term debt		1,632					1,632
Obligations under capital leases and other long-term liabilities		108					108

Total long-term liabilities		6,324					6,324
Stockholders' equity:
Common stock		92					92
Additional paid-in capital		3,867					3,867
Retained earnings		13,026		(14,518	) (c)		(1,492	)
Accumulated other comprehensive income		2,199					2,199

Total stockholders' equity		19,184		(14,518	)		4,666

Total	$	39,927	$	—		$	39,927

(a)		Gives effect to the revocation of our S corporation election and the recognition of the additional net deferred tax liability and corresponding deferred income tax expense that would have been recorded had we elected to be taxed as a C corporation on March 31, 2004.
(b)		Gives effect to the accrual of the S corporation distribution to our stockholders that would have been recorded had this distribution been declared on March 31, 2004.
(c)		Gives effect to: (i) deferred income tax expense as disclosed in footnote (a) above and (ii) the accrual of the S corporation distribution as disclosed in footnote (b) above.

RISK FACTORS

An investment in our common stock involves risks. You should carefully consider the following information about these risks, together with the other information contained in this prospectus, before investing in our common stock.

Risks Related to Our Business

We depend on Mr. Cohen and Mr. Steers, and the loss of their services would have a material adverse effect on us.

We depend on the efforts of Mr. Cohen and Mr. Steers, our co-chairmen and co-chief executive officers. Mr. Cohen and Mr. Steers head each of our investment committees with our president, Mr. Harvey, and they oversee the portfolio manager and research teams responsible for each of our portfolio strategies.

In August 2003, we instituted certain organizational changes that, among other things, were designed to address future succession issues. Pursuant to these changes, Mr. Cohen and Mr. Steers each assumed the titles of co-chairman and co-chief executive officer, Mr. Harvey was appointed president and Adam M. Derechin was appointed chief operating officer. These changes created an organizational structure that is designed to function effectively without Mr. Cohen and/or Mr. Steers. Although we expect Mr. Cohen and Mr. Steers to continue to act in their current positions, the loss of their services would have a material adverse effect on us.

Our ability to operate our company effectively could be impaired if we lose key personnel.

The market for qualified portfolio managers is extremely competitive. We anticipate that it will be necessary for us to add portfolio managers and investment analysts as we further diversify our investment products and strategies. See “Business—Asset Management Strategy.” There can be no assurance, however, that we will be successful in our efforts to recruit and retain the required personnel. In addition, our investment professionals and senior marketing personnel have direct contact with our institutional separate account clients, which can lead to a strong client relationship. The loss of these personnel could jeopardize our relationships with certain institutional separate account clients, and result in the loss of such accounts. Further, investment banking relies on the expertise, business origination efforts and client relationships of our senior investment banking professionals. The loss of these professionals could jeopardize our relationships with Investment Banking clients and could result in the loss of such clients. Moreover, when we become a public company, we intend to employ compensation mechanisms involving the use of equity compensation that may not be effective, especially if the market price of our common stock declines. The loss of key personnel or the inability to recruit and retain portfolio managers, marketing personnel and investment banking professionals could have a material adverse effect on our business.

A decline in the prices of securities could lead to a decline in our assets under management, revenue and earnings.

A significant majority of our revenue—approximately 73% for the year ended December 31, 2003—is derived from investment advisory and administration agreements with our clients. Under these agreements, the investment advisory and administration fees we receive are typically based on the market value of assets under management. Accordingly, a decline in the prices of securities generally, and real estate securities in particular, may cause our revenue and income to decline by:

	•	causing the value of our assets under management to decrease, which would result in lower investment advisory and administration fees; or

	•	causing our clients to withdraw funds in favor of investments they perceive as offering greater opportunity or lower risk, which would also result in lower investment advisory and administration fees.

The securities markets are highly volatile, and securities prices may increase or decrease for many reasons, including economic, financial or political events, that we cannot control.

A general decline in the performance of securities in the real estate sector could have an adverse effect on our assets under management and revenue.

A high proportion of the assets managed by us are concentrated in real estate securities. Real estate securities and real property investments owned by the issuers of real estate securities are subject to varying degrees of risk. The returns from investments in real estate depend on the amount of income and capital appreciation generated by the related properties. Income and real estate values may also be adversely affected by such factors as applicable laws (e.g., Americans with Disabilities Act and tax laws), interest rate levels, and the availability of financing. If the properties do not generate sufficient income to meet operating expenses, the income and ability of the real estate company to make payments of any interest and principal on debt securities or any dividends on common or preferred stocks will be adversely affected. In addition, real property and loans on real property may be subject to the quality of credit extended and defaults by borrowers and tenants. In addition, real estate investments are relatively illiquid and, therefore, the ability of real estate companies to vary their portfolios promptly in response to changes in economic or other conditions is limited. A real estate company may also have joint venture investments in certain properties and, consequently, its ability to control decisions relating to such properties may be limited. Declines in the performance of real estate securities could reduce our assets under management and our revenue .

Our growth may be constrained by the limited size and number of issuers in the real estate securities market .

Real estate securities investment continues to play an important role in the overall prospects of our business. Our ability to continue our growth in real estate securities management depends in part on growth in the size and number of issuers in the real estate securities market, particularly in the United States. For example, due to the constraints in the size and number of U.S. public real estate securities and issuers, we have in the past and may in the future stop accepting new assets in real estate securities institutional separate account portfolios in certain strategies and in certain of our open-end mutual funds. We also may be constrained in our ability to sponsor new closed-end mutual funds that invest primarily or significantly in domestic real estate securities. Such constraints may impair our ability to increase our assets under management and our revenue.

A decline in the market for closed-end mutual funds could reduce our ability to raise future assets under management.

Market conditions may preclude us from increasing our assets under management in closed-end mutual funds. A significant portion of our recent growth in assets under management has resulted from public offerings of the shares of our closed-end mutual funds. The market conditions for these offerings may not be as favorable in the future, which could adversely impact our ability to grow our assets under management and our revenue .

Our clients can remove the assets we manage on short notice, making our future client and revenue base unpredictable.

Our investment advisory and administration agreements are generally terminable upon 60 or fewer days' notice. In addition, open-end mutual fund investors may redeem their investments in the mutual funds at any time without prior notice. Moreover, each investment advisory agreement,

including the fees payable thereunder, with an investment company is subject to annual approval by the investment company's board, as well as by a majority of the directors who are not interested persons, which approval may not occur. Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationships with us, reduce the aggregate amount of our assets under management or shift their funds to other types of accounts with different rate structures for any of a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance. In a declining stock market the pace of mutual fund redemptions could accelerate. Poor performance relative to other asset management firms tends to result in decreased purchases of mutual fund shares, increased redemptions of mutual fund shares, and the loss of institutional or individual accounts or strategic alliances. Under certain circumstances, stockholder activists may pressure one or more of our closed-end mutual funds to tender for its shares, open-end, liquidate or take other actions that may adversely affect the fees we receive from the affected closed-end mutual funds. The decrease in revenue that could result from any such event could have a material adverse effect on our business.

In addition, as required by the Investment Company Act of 1940 and the Investment Advisers Act of 1940 , each of our investment advisory agreements automatically terminates upon its “assignment.” A sale of a sufficient number of shares of our voting securities to transfer control of us could be deemed an “assignment” in certain circumstances. An assignment, actual or constructive, will trigger these termination provisions and may adversely affect our ability to continue managing our open-end and closed-end mutual funds and our institutional separate accounts .

Loss of significant institutional separate accounts would decrease our revenue.

We managed 39 institutional separate account portfolios at March 31 , 2004, of which the five largest represented approximately 53% of our assets under management in institutional separate accounts and approximately 11% of our total assets under management. Approximately 7% of our total revenue during 2003 was derived from these five largest institutional separate account portfolios. Loss of any of these institutional separate accounts would reduce our revenue. We have, from time to time, lost institutional separate accounts because of decisions by our clients to reallocate their assets to different asset classes or to move their assets to our competitors. In the future we could lose accounts under these or other circumstances, such as adverse market conditions or poor investment performance.

Future investment performance could reduce our assets under management, revenue and income.

Success in the asset management business is dependent on investment performance as well as distribution and client service. Relatively poor performance tends to result in decreased sales, increased withdrawals and redemptions in the case of the open-end mutual funds, and in the loss of separately managed accounts, with corresponding decreases in revenue . Many analysts of the mutual fund business believe that investment performance is the most important factor for the growth of open-end mutual funds. Failure of our investment products to perform well could, therefore, have a material adverse effect on our current performance and future growth.

Rising interest rates could negatively impact our business.

Asset Management could be negatively impacted by rising interest rates. Rising interest rates could reduce the value of the securities in our client portfolios, which would reduce our revenue. Rising interest rates also may negatively impact our ability to raise assets for our current mutual funds or to offer new mutual funds. In addition, a rise in interest rates may cause investors in our open-end mutual funds to redeem their shares and may result in our institutional separate account clients withdrawing assets or terminating their advisory relationship with us.

The inability to access clients through intermediaries could have a material adverse effect on our business .

Our ability to distribute our mutual funds and subadvisory services is highly dependent on access to the client base of national and regional securities firms, banks, insurance companies, defined contribution plan administrators and other intermediaries which generally offer competing investment products. To a lesser extent, our institutional separate account asset management business depends on referrals from financial planners and other professional advisors, as well as our existing clients. We cannot be sure that we will continue to gain access to these channels. The inability to have this access could have a material adverse effect on our business.

While we continue to diversify and add new distribution channels for our open-end and closed-end mutual funds, a significant portion of the growth in our assets under management in our mutual funds in recent years has been accessed through intermediaries, including Merrill Lynch & Co., UBS and Wachovia. Loss of any of these distribution channels, and the inability to access clients through new distribution channels, could adversely affect our results of operations and business prospects.

Fee pressures could reduce profit margins.

There has been a trend toward lower fees in some segments of the asset management business. In order for us to maintain our fee structure in a competitive environment, we must be able to provide clients with investment returns and service that will encourage them to be willing to pay such fees. Accordingly, there can be no assurance that we will be able to maintain our current fee structure or take advantage of scheduled fee increases. Fee reductions on existing or future new business could have an adverse impact on our profit margins and results of operations.

Our business strategy may not be successful.

Our business strategy involves diversifying Asset Management to include products and services outside the real estate securities area. This may entail hiring additional portfolio managers in areas in which we do not have significant prior experience or acquiring other asset management firms. We may not be successful in locating and hiring or acquiring such portfolio managers or asset management firms and any such hiring activity or acquisitions may not be successful. In addition, in the event the recently enacted U.S. federal income tax legislation, which generally provides for a 15% maximum tax rate on dividends, is rescinded or is not extended beyond its January 1, 2009 expiration date, our business strategy could be adversely impacted as a result of diminished demand for income producing equity securities.

We could experience losses and significant volatility in connection with the activities of Investment Banking .

Investment Banking has historically earned revenue almost exclusively from advisory and placement fees paid to us by our clients. These fees are based in large part upon the successful completion of the client's merger, acquisition, restructuring or capital raising transaction. Our investment banking clients generally retain us on a non-exclusive, short term, engagement-by-engagement basis rather than under exclusive long-term agreements. As these transactions are singular in nature and our engagements are not likely to recur, we must seek out new investment banking engagements when our current engagements are completed or are terminated. As a result, high investment banking activity levels in any period are not necessarily indicative of continued high levels of activity in the next succeeding or any other period. In addition, when an investment banking engagement is terminated, whether due to the cancellation of a transaction due to market reasons or otherwise, we may earn limited or no fees and may not be able to recover the costs that we incurred prior to that termination.

Moreover, each year we advise a limited number of investment banking clients. The composition of the group comprising our largest clients varies significantly from year to year. We expect that our investment banking engagements will continue to be limited to a relatively small number of clients and that an even smaller number of those clients will account for a high

percentage of revenue in any particular year. For example, four of our clients represented 97% of Investment Banking revenue in 2003. Consequently , the adverse impact on the results of Investment Banking of one lost mandate or the failure of one transaction or restructuring on which we are advising to be completed could be significant.

Compliance failures and changes in regulation could adversely affect us.

Asset Management is subject to client guidelines and our mutual fund business involves compliance with numerous investment, asset valuation, distribution and tax requirements. A failure to adhere to these guidelines or satisfy these requirements could result in losses which could be recovered by the client from us in certain circumstances.

Our businesses are subject to extensive regulation in the United States, including by the Securities and Exchange Commission and the National Association of Securities Dealers, Inc. (“NASD”). We are also subject to the laws of non-U.S. jurisdictions and non-U.S. regulatory agencies or bodies. Our failure to comply with applicable laws or regulations could result in fines, suspensions of personnel or other sanctions, including revocation of the registration of any of our subsidiaries as an investment advisor or broker-dealer. Changes in laws or regulations or in governmental policies could have a material adverse effect on us. See “Business—Regulation.”

In response to recent scandals in the financial services business regarding late trading, market timing, selective disclosure of portfolio information, and advisory and distribution fees, various legislative and regulatory proposals are pending in or before, or have been approved by, Congress, the legislatures in states in which we conduct operations and the various regulatory agencies that supervise our operations. These proposals, if enacted or adopted, could have a substantial impact on the regulation and operation of our mutual funds and could adversely affect our assets under management . Additionally, the Securities and Exchange Commission, the NASD and other regulators, as well as Congress, are investigating certain practices within our industry.

Failure to comply with new Securities and Exchange rules may result in a prohibition on our activities.

We and our mutual funds are subject to new Securities and Exchange Commission rules that require investment companies and investment advisors registered with the Securities and Exchange Commission to adopt and implement comprehensive compliance policies and procedures, review those policies and procedures at least annually for their adequacy and the effectiveness of their implementation and designate a chief compliance officer. Failure to satisfy these rules could result in fines or temporary or permanent prohibition on our activities.

Failure to comply with “fair value” pricing and late trading policies and procedures may adversely affect us.

Recently adopted Securities and Exchange Commission rules will require mutual funds to adopt “fair value” pricing procedures to address time zone arbitrage, selective disclosure procedures to protect mutual fund portfolio information and procedures to ensure compliance with a mutual fund's disclosed market timing policy. The Securities and Exchange Commission has also proposed further rule amendments to eliminate late trading of mutual fund shares. New Securities and Exchange Commission rules will also require our funds to ensure compliance with their own market timing policies. Our funds are subject to these rules and, in the event of non-compliance, we may be required to disgorge certain revenue. In addition, we could have penalties imposed on us, be required to pay fines or be subject to private litigation which could decrease our future income .

New regulations restricting the use of “soft dollars” could result in an increase of our expenses.

On behalf of our mutual fund and investment advisory clients, we make decisions to buy and sell securities for each portfolio, select broker-dealers to execute trades and negotiate brokerage commission rates. In connection with these transactions, we may receive “soft dollar credits” from

broker-dealers that we can use to defray certain of our expenses. If regulations are adopted revising or eliminating the ability of asset managers to receive rebates of brokerage commissions through “soft dollars,” our operating expenses would increase.

The asset management and investment banking industries are intensely competitive.

The asset management industry is intensely competitive, with competition based on a variety of factors, including:

	•	investment performance,

	•	the quality of service provided to clients,

	•	the level of fees and commissions charged for services,

	•	brand recognition and business reputation,

	•	the range of products offered,

	•	the level of expenses paid to financial intermediaries related to administration and/or distribution, and

	•	financial strength.

Investment Banking faces intense competition from other investment banking and financial advisory firms. We compete with these firms on the basis of a number of factors, including:

	•	transaction execution skills,

	•	range of services,

	•	innovation,

	•	reputation, and

	•	price.

In recent years there has been substantial consolidation and convergence among companies in the financial services industry. In particular, a number of large commercial banks, insurance companies and other broad-based financial services firms have established or acquired broker-dealers or have merged with other financial institutions. Many of these firms have the ability to offer a wider range of products, from loans, deposit-taking and insurance to brokerage and investment banking services, which may enhance their competitive position.

We compete in all aspects of our business with a large number of asset management firms, commercial banks, investment banks, broker-dealers, insurance companies and other financial institutions. A number of factors serve to increase our competitive risks:

	•	A number of our competitors have greater capital and other resources, and offer more comprehensive lines of products and services, than we do.

	•	The recent trend toward consolidation within the asset management industry , and the securities business in general, has served to increase the size and strength of a number of our competitors.

	•	There are relatively few barriers to entry by new asset management firms, including a relatively low cost of entering the asset management industry , and the successful efforts of new entrants into our various lines of business, including major banks, insurance companies and other financial institutions, have resulted in increased competition.

	•	Other industry participants will from time to time seek to recruit our Asset Management and Investment Banking professionals and other employees away from us.

	•	Our competitors are seeking to expand market share in the products and services we offer or intend to offer in the future.

This competitive pressure could reduce our revenue and earnings.

Our business is heavily dependent upon computer based systems to process transactions; systems failures may disrupt our business and limit our growth.

Our business is highly dependent on communications and information systems and those of our key service vendors. Any failure or interruption of such systems could have a material adverse effect on our operating results. Operational risk arises from mistakes made in the confirmation or settlement of transactions or from the improper recording or accounting of transactions. We are highly dependent on our ability to process a large number of transactions on a daily basis, and rely heavily on financial, accounting and other data processing systems. If any of these do not function properly, we could suffer financial loss, business disruption, liability to clients, regulatory intervention or damage to our reputation. If systems are unable to accommodate an increasing volume of transactions, our ability to expand could be affected. Although we have back-up systems in place, we cannot be sure that a failure or interruption of any such systems, whether caused by a fire, other natural disaster, power or telecommunications failure, act of war, terrorist act or otherwise, will not occur, or that back-up procedures and capabilities in the event of any such failure or interruption will be adequate.

We expect to record a substantial net loss in the fiscal quarter ending , 2004 due to the grant of restricted stock units on the date of the consummation of this offering.

We expect to record a substantial loss in the quarter ending , 2004 as the result of the grant of restricted stock units on the date of the consummation of this offering described in “Management—IPO Date Employee Awards.” We will record compensation expense in connection with the grant of these restricted stock units based on the initial public offering price of the underlying common stock, as adjusted for cumulative compensation cost recorded on our existing Stock Appreciation Rights Plan, which we will terminate at that time. Assuming an initial public offering price of $ per share, we expect to record compensation expense of approximately $ million on the date of the consummation of this offering. If the initial public offering price per share is higher than $ , we will record a greater amount of compensation expense .

Risks Related to Our Common Stock and This Offering

We will continue to be controlled by Mr. Cohen and Mr. Steers, whose interests may differ from those of other stockholders.

Upon completion of the offering, our principals, Mr. Cohen and Mr. Steers, will beneficially own , in the aggregate, approximately % of our common stock. As long as Mr. Cohen and Mr. Steers control a majority of the common stock, they will have the ability to elect all of the members of our board of directors and thereby control our management and affairs, including compensation decisions and determinations with respect to acquisitions, dispositions, borrowings, issuances of common stock or other securities and the declaration and payment of dividends on the common stock. In addition, they will be able to determine the outcome of matters submitted to a vote of our stockholders for approval. The control exerted by our principals could preclude any unsolicited acquisition of us and, consequently, adversely affect the market price of the common stock or prevent our stockholders from realizing a premium on their shares. The interests of our principals could differ from those of other stockholders in instances where, for example, our principals' compensation is being determined or where an unsolicited acquisition of us could result in a change in our management.

There may not be an active trading market for shares of our common stock, which may cause our common stock to trade at a discount from its initial offering price and make it difficult to sell the shares you purchase.

Prior to this offering, there has been no public trading market for shares of our common stock. It is possible that, after this offering, an active trading market will not develop or continue. The initial public offering price per share of our common stock will be determined by agreement among us, the selling stockholders and the representative of the underwriters, and may not be

indicative of the price at which the shares of our common stock will trade in the public market after this offering.

Sales of a substantial number of shares of our common stock following this offering may adversely affect the market price of our common stock; and the issuance of additional shares will dilute all other stockholdings.

Sales of a substantial number of shares of our common stock in the public market or otherwise following this offering, or the perception that such sales could occur, could adversely affect the market price of our common stock. Our principals, who will beneficially own, in the aggregate, shares of our common stock immediately following the offering (or shares assuming the underwriters exercise their overallotment option in full), have advised us that they intend to sell additional shares of our common stock over a period of time, subject to the restrictions referred to in “Underwriting.” Subject to the restrictions referred to in “Underwriting,” we may also issue substantial amounts of common stock in the future, including pursuant to employee benefit plans, which would dilute the percentage ownership held by the investors who purchase our shares in this offering. We expect to grant to certain employees an aggregate of fully vested restricted stock units pursuant to the 2004 Stock Incentive Plan on the date of the consummation of this offering in connection with the termination of our existing Stock Appreciation Rights Plan. In general, subject to a participant's compliance with certain restrictive covenants, the shares of common stock underlying the restricted stock units will be delivered to each participant as follows: 20% will be delivered on the last business day in January 2006; 40% will be delivered on the last business day in January 2007; and 40% will be delivered on the last business day in January 2008. We also expect to grant certain other employees an aggregate of restricted stock units pursuant to the 2004 Stock Incentive Plan on the date of the consummation of this offering. In general, subject to a participant's continued employment with us and compliance with certain restrictive covenants, the restricted stock units will vest, and the shares of common stock underlying the restricted stock units will be delivered, on the last business day in January 2008. See “Management—IPO Date Employee Awards.” In addition, concurrently with the reorganization, we will grant our principals and two trusts benefiting their families, their affiliates and certain of their transferees, the right to require us to register under the Securities Act of 1933 shares of our common stock (and other securities convertible into or exchangeable or exercisable for shares of common stock) held by them under certain circumstances and subject to the restrictions referred to in “Underwriting.” See “Related Party Transactions—Registration Rights Agreement,” “Shares Eligible for Future Sale” and “Underwriting” for further information regarding circumstances under which additional shares of our common stock may be sold.

Anti-takeover provisions in our charter documents and Delaware law could delay or prevent a change in control.

Our certificate of incorporation may delay or prevent a merger or acquisition that a stockholder may consider favorable by permitting our board of directors to issue one or more series of preferred stock. In addition, provisions of the Delaware General Corporation Law restrict certain business combinations with interested stockholders. These provisions may also discourage acquisition proposals or delay or prevent a change in control, which could harm our stock price.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, those described under “Risk Factors.” These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

USE OF PROCEEDS

We estimate that our net proceeds from the offering, at an assumed initial public offering price of $ per share and after deducting estimated underwriting discounts, commissions and offering expenses, will be approximately $ , or $ if the underwriters exercise their overallotment option in full. We intend to use these net proceeds to continue to expand our asset management platform, to establish new investment vehicles, to make strategic acquisitions and for general corporate purposes.

We will not receive any proceeds from the sale of shares by the selling stockholders.

DIVIDEND POLICY

We intend to pay cash dividends on a quarterly basis and expect to declare our first quarterly dividend payment at an initial rate of $ per share in the quarter of 2004.

The declaration and payment of dividends to holders of our common stock by us, if any, are subject to the discretion of our board of directors. Our board of directors will take into account such matters as general economic and business conditions, our strategic plans, our financial results and condition, contractual, legal and regulatory restrictions on the payment of dividends by us and our subsidiaries and such other factors as our board of directors may consider to be relevant.

REORGANIZATION AND S CORPORATION STATUS

Reorganization

Our business is presently conducted by Cohen & Steers Capital Management, Inc. and its subsidiaries. Cohen & Steers Capital Management, Inc. was incorporated as a New York corporation in 1986 and is wholly owned by our principals and two trusts benefiting their families. Cohen & Steers, Inc. is a Delaware corporation that was formed on March 17, 2004 and is a wholly owned subsidiary of Cohen & Steers Capital Management, Inc. CSCM Merger Sub , Inc. is a New York corporation that was formed on May 7 , 2004 and is a wholly owned subsidiary of Cohen & Steers, Inc . Cohen & Steers, Inc. and CSCM Merger Sub , Inc. have not engaged in any business or other activities except in connection with their respective formations and the reorganization described below.

Prior to the consummation of this offering, we will effect a reorganization whereby Cohen & Steers, Inc. will become the parent holding company of Cohen & Steers Capital Management, Inc. and, together with its direct and indirect subsidiaries (including Cohen & Steers Capital Management, Inc.), continue to conduct the business now conducted by Cohen & Steers Capital Management, Inc. and its subsidiaries.

The reorganization will be accomplished through a merger pursuant to which:

	•	CSCM Merger Sub, Inc. will merge with and into Cohen & Steers Capital Management, Inc.;

	•	each outstanding share of common stock in Cohen & Steers Capital Management, Inc. will be converted into the right to receive a newly issued share of common stock from Cohen & Steers, Inc.;

	•	the shares of common stock of Cohen & Steers, Inc. held by Cohen & Steers Capital Management, Inc. will be cancelled; and

	•	each share of CSCM Merger Sub, Inc. will be converted into and exchanged for a share of common stock of Cohen & Steers Capital Management, Inc.

The reorganization will be effected pursuant to a merger agreement among Cohen & Steers, Inc., CSCM Merger Sub, Inc. and Cohen & Steers Capital Management, Inc. , the form of which will be filed as an exhibit to the registration statement of which this prospectus forms a part. The reorganization will not result in a change of control of Cohen & Steers Capital Management, Inc. Completion of the reorganization is a condition to the consummation of this offering.

S Corporation Status

Since we were organized in 1986, we have elected to be treated for U.S. federal and certain state income tax purposes as an S corporation under Subchapter S of the Internal Revenue Code of 1986 and comparable state laws. As a result, our earnings have been taxed for U.S. federal and, in the case of certain states, state income tax purposes directly to our stockholders rather than to us, leaving our stockholders responsible for paying income taxes on these earnings. Prior to the closing of this offering, we will revoke our status as an S corporation and will be taxed as a C corporation. As a result of the revocation of our S corporation status, we will record a net deferred tax liability and corresponding deferred income tax expense effective upon the revocation date. The deferred tax liability and the related deferred tax expense represent the future tax consequences of temporary differences between the book bases and tax bases of assets and liabilities as of the revocation date, which arise primarily as a result of the conversion from cash basis to accrual basis accounting. The amount of the additional net deferred tax liability would have been approximately $0.5 million if the revocation date had been March 31, 2004 , and we estimate that the deferred tax liability will be approximately $ . The actual amount of the

deferred tax liability will be determined after giving effect to our operating results through the revocation date.

In connection with the revocation of our S corporation tax status, we expect to make a distribution to our current stockholders representing payment of undistributed S corporation accumulated earnings for tax purposes at and through the date of revocation. The distribution would have been approximately $14 million if the revocation date had been March 31, 2004 , and we estimate that the distribution will be approximately $ . The actual amount of the distribution will depend on the amount of our earnings through the revocation date.

We will also enter into a tax indemnification agreement with our current stockholders, the form of which will be filed as an exhibit to the registration statement of which this prospectus forms a part. Although we believe that we have met the requirements for an S corporation, the agreement will provide for, among other things, our current stockholders to indemnify us for any additional U.S. federal and state income taxes, including interest and penalties, incurred by us if for any reason we are deemed to have been a C corporation during any period in which we reported our taxable income as an S corporation. The tax indemnification obligation of our current stockholders will be limited to the aggregate amount of all distributions we made to them to pay taxes during any time that we reported our taxable income as an S corporation but are deemed to have been a C corporation. The agreement will also provide for payment by our current stockholders to us and by us to our current stockholders to adjust for any increases or decreases in tax liability arising from a tax audit that affects our tax liability and results in a corresponding adjustment to the tax liability of our current stockholders. We will increase, or gross up, our indemnification payments to the stockholders to the extent necessary to take into account the increase in current tax liability incurred by these stockholders on account of the indemnification payments. The amount of any payment cannot exceed the amount of benefit received by us or our current stockholders attributable to the adjustment in tax liability. If we are required to make substantial payments under this tax indemnification agreement, it could adversely affect our financial condition.

CAPITALIZATION

The following table sets forth our consolidated capitalization and cash and cash equivalents as of March 31, 2004 :

	•	on an actual basis; and

	•	on a pro forma as adjusted basis to give effect to the following events, which will take place at or shortly before the closing of the offering:

		—		the recognition of an additional net deferred tax liability and a corresponding deferred income tax expense of $ that we expect to record upon revocation of S corporation tax status and election to be taxed as a C corporation;
		—		the payment of a $ S corporation distribution to our stockholders as described in “Reorganization and S Corporation Status—S Corporation Status”; and
		—		the issue and sale by us of shares of common stock in this offering, at an assumed initial public offering price of $ per share and after deducting estimated underwriting discounts, commissions and offering expenses.

You should read this table together with the other information contained in this prospectus, including “Reorganization and S Corporation Status,” “Management's Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements and the notes thereto, including Note 3—Pro Forma Financial Information (unaudited) , and our unaudited interim consolidated financial statements and the notes to those statements, including Note 2 —Pro Forma Financial Information .

	March 31, 2004
			Pro Forma
	Actual		As Adjusted
	($ in thousands, except par value )
Cash and cash equivalents	$	8,574

Debt:
Bank line of credit	$	4,584
Long-term debt, including current portion		1,748
Obligations under capital leases, including current portion		39

Total debt		6,371

Stockholders' equity:
Common stock, $1 par value, 50,000 voting shares authorized,
issued and outstanding and 50,000 non-voting shares
authorized, 41,642 issued and outstanding		92
Additional paid-in capital		3,867
Retained earnings		13,026
Accumulated other comprehensive income		2,199

Total stockholders' equity		19,184

Total capitalization	$	25,555	$

DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the net tangible book value per share of our common stock after this offering.

As of March 31, 2004, our net tangible book value was $19.2 million, or $209 per share . Net tangible book value per share represents total tangible assets (total assets less intangible assets) less total liabilities, divided by the number of shares of our common stock outstanding.

After giving effect to our sale of shares of common stock in this offering, at an assumed initial public offering price of $ per share and after deducting estimated underwriting discounts, commissions and offering expenses, our net tangible book value as of March 31, 2004 would have been $ , or $ per share of common stock. This represents an immediate increase in net tangible book value to existing stockholders of $ per share and an immediate dilution in net tangible book value to new investors of $ per share.

The following table illustrates this per share dilution:

Assumed initial public offering per share		$
Net tangible book value per share as of March 31, 2004	$
Increase in net tangible book value per share attributable to new investors

Net tangible book value per share after giving effect to this offering

Dilution in net tangible book value per share to new investors	$

SELECTED CONSOLIDATED FINANCIAL DATA

The following tables present selected consolidated financial data as of the dates and for the periods indicated. We derived the consolidated statement of financial condition data as of December 31, 2002 and 2003 and the consolidated statement of income data for each of the three years in the period ended December 31, 2003 from our consolidated financial statements audited by Deloitte & Touche LLP which are included elsewhere in this prospectus.

We derived the consolidated statement of financial condition data as of March 31, 2004 and the consolidated statement of income data for each of the three months ended March 31, 2003 and 2004 from our unaudited interim consolidated financial statements which are included elsewhere in this prospectus. In the opinion of management, the unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and include all adjustments, which are of a normal recurring nature, that we consider necessary for a fair presentation of our consolidated financial position and results of operations for the interim periods presented.

For all periods presented, we operated as an S corporation and were not subject to U.S. federal and certain state income taxes. Our historical income tax expense consisted of New York State and New York City and local income taxes. Upon completion of this offering, we will become subject to U.S. federal and certain state income taxes applicable to C corporations. See “—Unaudited Consolidated Pro Forma Financial Information” and “Reorganization and S Corporation Status.”

You should read this selected consolidated financial data together with the other information contained in this prospectus, including “Management's Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes to those statements.

Consolidated Statement of Income Data

	Year Ended December 31,															Three Months Ended March 31,
	1999			2000			2001			2002			2003			2003			2004
	($ in thousands, except per share data)
Revenue
Investment advisory and administration fees:
Closed-end mutual funds	$	743		$	729		$	2,009		$	7,837		$	18,575		$	2,741		$	8,801
Open-end mutual funds		15,291			15,102			18,019			20,871			24,225			4,806			8,282
Institutional separate accounts		9,749			11,288			10,794			9,707			8,808			1,973			2,646

Total investment advisory and administration fees		25,783			27,119			30,822			38,415			51,608			9,520			19,729
Distribution and service fee revenue		211			397			1,112			3,071			5,880			974			2,408
Portfolio consulting and other		1,618			1,104			507			683			1,574			271			709
Investment banking fees		3,375			8,097			2,853			13,077			11,279			978			4,463

Total revenue		30,987			36,717			35,294			55,246			70,341			11,743			27,309

Expenses
Employee compensation and benefits		12,715			15,571			16,719			32,312			37,193			7,754			8,980
General and administrative		4,385			5,568			6,651			6,916			8,007			1,719			2,757
Distribution and service fee expenses		2,973			2,721			4,069			4,744			9,190			1,427			4,195
Amortization, deferred commissions		162			170			533			1,698			3,077			810			1,057
Depreciation and amortization		257			402			517			927			1,002			233			281

Total operating expenses		20,492			24,432			28,489			46,597			58,469			11,943			17,270

Operating income (loss)		10,495			12,285			6,805			8,649			11,872			(200	)		10,039
Non-operating income (expense)
Interest and dividend income		369			692			513			525			435			97			101
Interest expense		(32	)		(42	)		(60	)		(127	)		(156	)		(36	)		(42	)

Total non-operating income		337			650			453			398			279			61			59

Income (loss) before income taxes		10,832			12,935			7,258			9,047			12,151			(139	)		10,098
Income tax expense (benefit)		1,089			1,297			654			611			100			(24	)		767

Net income (loss)	$	9,743		$	11,638		$	6,604		$	8,436		$	12,051		$	(115	)	$	9,331

Net income (loss) per share—basic and diluted	$	108.14		$	129.17		$	73.30		$	92.83		$	131.50		$	(1.25	)	$	101.82
Weighted average shares outstanding—
basic and diluted		90,100			90,100			90,100			90,871			91,642			91,642			91,642

Consolidated Statement of Income Data by Segment

	Year Ended December 31,												Three Months Ended March 31,
	1999		2000		2001			2002		2003			2003			2004
					($ in thousands)
Asset Management
Total revenue	$	27,612	$	28,506	$	32,441		$	42,169	$	59,062		$	10,765		$	22,846
Total operating expenses		17,542		18,197		23,598			37,633		50,510			10,843			14,278

Operating income (loss)		10,070		10,309		8,843			4,536		8,552			(78	)		8,568
Total non-operating income		333		426		396			325		249			53			53

Income (loss) before income taxes		10,403		10,735		9,239			4,861		8,801			(25	)		8,621
Income tax expense (benefit)		1,046		1,067		865			205		(46	)		90			666

Net income (loss)	$	9,357	$	9,668	$	8,374		$	4,656	$	8,847		$	(115	)	$	7,955

Investment Banking
Total revenue	$	3,375	$	8,211	$	2,853		$	13,077	$	11,279		$	978		$	4,463
Total operating expenses		2,950		6,235		4,891			8,964		7,959			1,100			2,992

Operating income (loss)		425		1,976		(2,038	)		4,113		3,320			(122	)		1,471
Total non-operating income		4		224		57			73		30			8			6

Income (loss) before income taxes		429		2,200		(1,981	)		4,186		3,350			(114	)		1,477
Income tax expense (benefit)		43		230		(211	)		406		146			(114	)		101

Net income (loss)	$	386	$	1,970	$	(1,770	)	$	3,780	$	3,204		$	—		$	1,376

Consolidated Statement of Financial Condition Data

	December 31,										March 31,
	1999		2000		2001		2002		2003		2004
					($ in thousands)
Cash and cash equivalents	$	4,699	$	4,737	$	2,750	$	6,090	$	7,526	$	8,574
Total assets		14,343		16,547		17,853		24,394		34,523		39,927
Total current liabilities		2,019		2,370		2,712		2,904		7,257		14,419
Total long-term liabilities		500		500		1,430		4,798		6,492		6,324
Total liabilities		2,519		2,870		4,142		7,702		13,749		20,743
Total stockholders' equity		11,824		13,677		13,711		16,692		20,774		19,184

Component Changes in Assets Under Management (AUM)

	Year Ended December 31,
	1999			2000			2001		2002			2003		Three Months Ended March 31, 2004
	($ in millions)
Total accounts
Beginning AUM	$	3,991.4		$	3,762.1		$	4,758.5	$	5,697.5		$	6,623.8	$	11,680.1
Net flows		(260.1	)		9.5			648.5		808.3			2,633.8		2,683.9
Net appreciation		30.8			986.9			290.5		118.0			2,422.5		1,175.3

Total assets under management	$	3,762.1		$	4,758.5		$	5,697.5	$	6,623.8		$	11,680.1	$	15,539.3


Closed-end mutual funds
Beginning AUM	$	113.6		$	98.0		$	114.2	$	600.7		$	2,114.3	$	4,790.6
Net flows		0.0			0.0			479.8		1,563.7			1,977.9		2,474.6
Net appreciation		(15.6	)		16.2			6.7		(50.1	)		698.4		399.3

Total closed-end mutual funds		98.0			114.2			600.7		2,114.3			4,790.6		7,664.5

Open-end mutual funds
Beginning AUM		2,043.6			1,571.5			2,077.5		2,314.6			2,452.4		3,897.1
Net flows		(484.8	)		113.5			138.7		121.3			528.9		199.2
Net appreciation		12.7			392.5			98.4		16.5			915.8		417.7

Total open-end mutual funds		1,571.5			2,077.5			2,314.6		2,452.4			3,897.1		4,514.0

Institutional separate accounts
Beginning AUM		1,834.2			2,092.6			2,566.8		2,782.2			2,057.1		2,992.4
Net flows		224.7			(104.0	)		30.0		(876.7	)		127.0		10.1
Net appreciation		33.7			578.2			185.4		151.6			808.3		358.3

Total institutional separate accounts		2,092.6			2,566.8			2,782.2		2,057.1			2,992.4		3,360.8

Total assets under management	$	3,762.1		$	4,758.5		$	5,697.5	$	6,623.8		$	11,680.1	$	15,539.3

Total net flows/beginning AUM (%)		-6.5%			0.3%			13.6%		14.2%			39.8%		23.0%

Total change in AUM (%)		-5.7%			26.5%			19.7%		16.3%			76.3%		33.0%

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We operate in two distinct business segments:

	•	Asset Management

	•	Investment Banking

	Year Ended December 31,						Three Months Ended March 31,
	2001		2002		2003		2003		2004
	($ in thousands)
Revenue
Asset Management Revenue	$	32,441	$	42,169	$	59,062	$	10,765	$	22,846
Investment Banking Revenue		2,853		13,077		11,279		978		4,463

Consolidated Revenue	$	35,294	$	55,246	$	70,341	$	11,743	$	27,309

Operating Expenses
Asset Management Operating Expenses	$	23,598	$	37,633	$	50,510	$	10,843	$	14,278
Investment Banking Operating Expenses		4,891		8,964		7,959		1,100		2,992

Consolidated Operating Expenses	$	28,489	$	46,597	$	58,469	$	11,943	$	17,270

Asset Management

Asset Management provides:

	•	investment advisory and administration services to proprietary open-end and closed-end mutual funds and institutional separate accounts for investors such as pension and endowment funds;

	•	sub-advisory services for investment companies and serves as a portfolio consultant for non-proprietary unit investment trusts; and

	•	distribution services for our open-end mutual funds.

Asset Management furnishes an investment program, makes day-to-day investment decisions and generally manages investments in accordance with the stated investment policies of our mutual funds and our institutional separate accounts. Asset Management also provides certain administrative , accounting and distribution oversight functions for our funds. Asset Management also acts as portfolio consultant for a series of unit investment trusts offered by third parties and maintains a proprietary index listed on the American Stock Exchange. Asset Management's investment vehicles and strategies focus on REIT common and preferred stocks, utility common stocks and corporate preferred stocks .

Asset Management primarily derives revenue from investment advisory, administration, distribution and service fees received from our mutual funds and investment advisory fees received from institutional separate accounts. Fees earned by Asset Management are principally based on the net asset value of each client's portfolio. These fees fluctuate with changes in the total value of the portfolios and are recognized over the period that the assets are managed. The levels of our assets under management are, in turn, driven by our relative investment performance, market conditions and the success of our marketing efforts. We generally charge our fees in arrears on a monthly or quarterly basis. We benefit from significant monthly cash flow and liquidity as a result of receiving mutual fund fees on a monthly basis.

The most significant expenses for Asset Management are employee compensation and benefits. In addition to their base salary, we generally pay our Asset Management employees year-end bonuses that depend on, among other things, our profitability, employee performance and market

conditions. Expenses related to the distribution of our mutual funds, including the amortization of deferred sales commissions for our open-end load mutual funds, are other significant Asset Management expenses.

Asset Management has experienced significant growth, with our assets under management increasing by over 172% to $15.5 billion at March 31, 2004 from $5.7 billion at December 31, 2001. Much of this growth can be attributed to our strong market presence in the real estate securities market. REIT securities have experienced strong market appreciation over the last three years and have gained a wider acceptance by investors as both an important asset class and a financial instrument. We launched four closed-end mutual funds during the three-year period ended December 31, 2003 and two additional closed-end mutual funds in the first quarter of 2004 and have generated net subscriptions in our open-end mutual funds. Market appreciation has also increased our assets under management over the last three years.

Asset Management develops and manages income oriented equity portfolios and investment vehicles. We believe that investors view income producing equities more favorably today than in previous periods as a result of, among other factors, demographic trends that are resulting in increased retirement savings, recently enacted federal legislation favorable to dividend income and a continued increase in mutual fund ownership among U.S. households. We believe these trends will continue and we intend to capitalize on them by offering an array of high income producing equity securities through both current and new product offerings.

Investment Banking

Investment Banking provides financial advisory services to companies in real estate and real estate intensive businesses, such as the health care and hospitality businesses. Revenue is derived primarily from advising our clients on mergers, acquisitions, corporate restructurings, recapitalizations and similar corporate finance transactions and placing securities as agent for our clients . We generally earn these fees upon the consummation of the transaction pursuant to terms of individual agreements. Investment Banking revenue also includes reimbursement from our clients for certain expenses we have incurred in connection with providing our services, such as legal and other professional fees and travel related expenses.

The number and size of our client engagements drives Investment Banking revenue , which in turn is influenced by the level of mergers and acquisitions, capital raising and restructuring activity by the companies in our targeted markets, and by the success of our investment banking professionals' business origination efforts. The principal component of our operating expenses for Investment Banking is employee compensation and benefits, including salaries and bonuses for our senior investment banking professionals . The three senior investment banking professionals of this segment contractually earn a year-end bonus based on the income of the business segment. Investment Banking operates in a highly competitive environment where there are no long term contracted sources of revenue. In addition, each revenue generating engagement may relate to only one potential transaction. Our list of clients, and our list of clients with whom there is a currently active revenue generating engagement, changes continually. We gain new assignments each year primarily through the relationships of our highly experienced team of investment banking professionals. At the same time, we lose prospective engagements each year primarily as a result of competition from other investment banks, many of which have significantly greater resources and offer a broader range of services.

IPO Date Employee Awards

Assets Under Management

Our principal business is asset management of income-oriented equity securities portfolios. We have experienced significant growth in assets under management over the past three years as a result of a strong market for REIT securities, the launch of closed-end mutual funds that specialize in income oriented equity securities and net subscriptions into our open-end mutual funds. The following table sets forth the breakdown of our total assets under management by account and security type as of the dates shown, and the changes in our assets under management between such dates.

Assets Under Management

	December 31,						March 31,
	2001		2002		2003		2003		2004 (1)		2002 vs. 2001 (%)			2003 vs. 2002 (%)			March 31, 2004 vs. March 31, 2003 (%)
	($ in millions)
Breakdown by Account Type
Closed-end Mutual Funds	$	600.7	$	2,114.3	$	4,790.6	$	2,087.4	$	7,664.5		252	%		127	%		267	%
Open-end Mutual Funds		2,314.6		2,452.4		3,897.1		2,459.2		4,514.0		6	%		59	%		84	%
Institutional Separate Accounts		2,782.2		2,057.1		2,992.4		2,094.5		3,360.8		-26	%		46	%		61	%

Total Assets Under Management	$	5,697.5	$	6,623.8	$	11,680.1	$	6,641.1	$	15,539.3		16	%		76	%		134	%

Breakdown by Security Type
Real Estate Common Stocks	$	5,259.4	$	5,908.9	$	9,892.6	$	5,899.8	$	11,835.3		12	%		67	%		101	%
Real Estate Preferred Stocks		266.6		597.1		836.0		612.1		1,205.1		124	%		40	%		97	%
Utility Common Stocks		—		—		—		—		1,296.1		n/a			n/a			n/a
Corporate Preferred Stocks		—		—		683.9		0.0		895.2		n/a			n/a			n/a
Fixed Income ( 2 )		6.2		13.5		109.1		32.6		118.3		118	%		708	%		263	%
Cash and Short-Term Investments		165.3		104.3		158.5		96.6		189.3		37	%		52	%		96	%

Total Assets Under Management	$	5,697.5	$	6,623.8	$	11,680.1	$	6,641.1	$	15,539.3		16	%		76	%		134	%

(1)		Assumes that the (i) the $338 million of cash in the Cohen & Steers REIT & Utility Income Fund has been invested based on the following portfolio composition: 40% in utility common stocks, 40% in real estate stocks, 13% in corporate preferred stocks and 7% in real estate preferred stocks and (ii) the $581 million of cash in the Cohen & Steers Select Utility Fund has been invested based on the following portfolio composition: 78% in utility common stock, 12% in corporate preferred stocks and 10% in real estate preferred stocks. Cohen & Steers REIT & Utility Income Fund and Cohen & Steers Utility Fund are funds which commenced operations during 2004 and have not yet fully invested their assets in accordance with these funds' stated policies.
(2)		Includes corporate bonds.

Our Accounts

We manage assets for clients in three types of accounts:

	•	closed-end mutual funds,

	•	open-end mutual funds and

	•	institutional separate accounts.

Closed-end mutual funds sell a finite number of shares to investors in underwritten offerings. Shares of these funds are traded on an exchange and such funds are not subject to shareholder subscriptions or redemptions. Accordingly, revenue from closed-end mutual funds varies solely due to market appreciation or depreciation. Leveraged closed-end mutual funds may issue additional preferred stock or borrow additional capital to make additional investments, and a reduction in the leverage of our closed-end mutual funds could adversely impact our revenue.

Open-end mutual funds are continually offered and are not listed on an exchange. Our open-end mutual funds will issue new shares to meet any subscriptions and redeem shares from those shareholders wishing to sell. The share price for purchases and redemptions of each of our open-end mutual funds is determined by each fund's net asset value, which is calculated at the end of each business day. Some of our open-end mutual funds carry a load, or commission, which is

paid to the broker-dealer who acts as an agent for the investor. Such funds are called load mutual funds. These commissions are either borne by the investor or by us, depending on the specific class of shares that the investor buys. There are certain instances when we will waive the loads on certain load mutual fund purchases. Currently, we offer three no-load mutual funds and two load mutual funds. Revenue from such funds vary with both market appreciation and depreciation and the level of new purchases into or withdrawals from a fund.

Institutional separate accounts are private accounts for institutional investors such as pension and endowment funds. We typically maintain full investment discretion over such accounts although the client retains the ability to terminate our advisory relationship . Revenue from these accounts vary primarily with market appreciation and depreciation. Flows into and out of such accounts also affect our fees, although to a lesser extent than with our open-mutual fund assets because such flows are not a regular occurrence.

For all account types, we receive a management fee based on the contract which governs our relationship with each mutual fund or institutional separate account client. This contract typically remains in place until it is terminated. Our mutual funds pay their fees on a monthly basis, which provides us with stable cash flows and ample liquidity to meet our daily business needs. Our institutional separate accounts are billed on a quarterly basis .

Net Flows and Appreciation of Assets Under Management

Net flows are the aggregate net flows in assets under management during a particular time period. They are comprised of:

	•	net flows into newly offered closed-end mutual funds or new preferred share offerings from our leveraged closed-end mutual funds;

	•	total subscriptions minus total redemptions for our open-end mutual funds; and

	•	net flows for our institutional separate accounts.

Total net flows represents the dollar amount by which investors have increased or decreased our assets under management for that particular time period.

Net appreciation represents the change in market value of our assets under management during a particular time period due our investment decisions and market conditions.

Net flows as a percentage of beginning AUM is a measure of how much a change in our assets under management for a given time period is driven by investor decisions, as opposed to market appreciation or depreciation in our assets under management.

We launched four closed-end mutual funds during the three-year period ended December 31, 2003 and two additional closed-end mutual funds in the first quarter of 2004 . The following table provides the name, assets under management as of March 31, 2004 and inception date for our recently-launched closed-end mutual funds:

Fund	Assets Under Management as of March 31, 2004		Date of Inception
	(in millions)
Cohen & Steers Advantage Income Realty Fund, Inc.	$	776.6		2001
Cohen & Steers Quality Income Realty Fund, Inc.	$	1,147.7		2002
Cohen & Steers Premium Income Realty Fund, Inc.	$	985.4		2002
Cohen & Steers REIT and Preferred Income Fund, Inc.	$	2,074.6		2003
Cohen & Steers REIT and Utility Income Fund, Inc.	$	1,721.5		2004
Cohen & Steers Select Utility Fund, Inc.	$	786.8		2004

We also experienced positive net subscriptions into our open-end mutual funds for each of the last three years and in the first quarter of 2004. In April 2004, we launched Cohen & Steers Utility Fund, our first open-end mutual fund that invests in utility common stocks.

Institutional separate accounts experienced net outflows in 2002 as four major institutional clients either decreased their allocation to real estate securities in general, or invested with other managers. Institutional separate accounts experienced positive net flows in 2003 and in the first quarter of 2004 .

The following table sets forth information regarding the net flows and appreciation of assets under management for the periods presented.

Net Flows and Appreciation of Assets Under Management (AUM)

	December 31,									March 31,
	2001			2002			2003			2003			2004			2002 vs. 2001 ($)			2003 vs. 2002 ($)			March 31, 2004 vs. March 31, 2003 ($)
	($ in millions)
Total accounts
Beginning AUM	$	4,758.5		$	5,697.5		$	6,623.8		$	6,623.8		$	11,680.1		$	939.0		$	926.3		$	5,056.3
Net flows		648.5			808.3			2,633.8			26.9			2,683.9			159.8			1,825.5			2,657.0
Net appreciation		290.5			118.0			2,422.5			(9.6	)		1,175.3			(172.5	)		2,304.5			1,184.9

Total assets under management	$	5,697.5		$	6,623.8		$	11,680.1		$	6,641.1		$	15,539.3		$	926.3		$	5,056.3		$	8,898.2


Closed-end mutual funds
Beginning AUM	$	114.2		$	600.7		$	2,114.3		$	2,114.3		$	4,790.6		$	486.5		$	1,513.6		$	2,676.3
Net flows		479.8			1,563.7			1,977.9			0.0			2,474.6			1,083.9			414.2			2,474.6
Net appreciation		6.7			(50.1	)		698.4			(26.9	)		399.3			(56.8	)		748.5			426.2

Total closed-end mutual funds		600.7			2,114.3			4,790.6			2,087.4			7,664.5			1,513.6			2,676.3			5,577.1

Open-end mutual funds
Beginning AUM		2,077.5			2,314.6			2,452.4			2,452.4			3,897.1			237.1			137.8			1,444.7
Total subscriptions		732.3			900.9			1,207.8			158.8			424.8			168.6			306.9			266.0
Total redemptions		(593.6	)		(779.6	)		(678.9	)		(149.0	)		(225.6	)		(186.0	)		100.7			(76.6	)
Net appreciation		98.4			16.5			915.8			(3.0	)		417.7			(81.9	)		899.3			420.7

Total open-end mutual funds		2,314.6			2,452.4			3,897.1			2,459.2			4,514.0			137.8			1,444.7			2,054.8

Institutional separate accounts
Beginning AUM		2,566.8			2,782.2			2,057.1			2,057.1			2,992.4			215.4			(725.1	)		935.3
Inflows		569.5			390.3			268.4			37.1			110.6			(179.2	)		(121.9	)		73.5
Outflows		(539.5	)		(1,267.0	)		(141.4	)		(20.0	)		(100.5	)		(727.5	)		1,125.6			(80.5	)
Net appreciation		185.4			151.6			808.3			20.3			358.3			(33.8	)		656.7			338.0

Total institutional separate accounts		2,782.2			2,057.1			2,992.4			2,094.5			3,360.8			(725.1	)		935.3			1,266.3

Total assets under management	$	5,697.5		$	6,623.8		$	11,680.1		$	6,641.1		$	15,539.3		$	926.3		$	5,056.3		$	8,898.2

Total net flows/beginning AUM(%)		13.6%			14.2%			39.8%			0.4%			23.0%

Total change in AUM(%)		19.7%			16.3%			76.3%			0.3%			33.0%

We offer both no-load and load open-end mutual funds. Cohen & Steers Realty Shares, Cohen & Steers Institutional Realty Shares and Cohen & Steers Special Equity Fund are, collectively, our no-load open-end mutual funds. Cohen & Steers Equity Income Fund and Cohen & Steers Utility Fund , our load open-end mutual funds, are available under four primary pricing structures:

	•	Class A shares, under which the investor generally pays a sales charge at the time of investment. The sales charge is deducted from the initial amount invested;

	•	Class B and Class C shares, under which the investor does not pay the sales charge at the time of investment. Instead, the investor pays higher ongoing annual fees than compared to Class A shares; and

	•	Class I shares, under which the investor pays no initial sales charge or ongoing distribution fees. Class I shares require a minimum investment of $100,000 and are generally available only to institutional investors.

Our load open-end mutual funds do not charge a sales load on Class A share investments of $1 million or more. We pay the selling firm a 1% commission on these purchases at the time of investment and receive a deferred sales charge of 1% of the lesser of net asset value at the time of sale or the initial cost of the investment if the investor redeems within one year. In addition, our load open-end mutual funds do not assess a sales charge on Class A shares sold to certain investors, including advisors and financial planners who place orders for their clients and charge management, consulting or other fees for their services. Investors in Class B and Class C shares of our load open-end mutual funds do not pay a sales charge at the time of investment. However, we pay a commission directly to the selling firm when the investment is made. We receive a deferred sales charge on Class B and Class C shares if the investor redeems within six years and one year, respectively. In addition, we collect shareholder service fees on Class B shares and retain such fees for one year before beginning to disburse these fees to the selling firm. In the case of both load and no-load mutual funds, we also may pay ongoing fees for administrative and distribution

services. As our open-end mutual fund assets continue to grow, we expect such expenses to increase.

The following table sets forth information regarding the composition of our open-end mutual fund assets.

Composition of Open-End Mutual Fund Assets

	December 31,						March 31,
	2001		2002		2003		2003		2004		2002 vs. 2001 (%)			2003 vs. 2002 (%)			March 31, 2004 vs. March 31, 2003
	($ in millions)
Load fund—Class A	$	93.3	$	164.6	$	397.1	$	178.0	$	495.3		76	%		141	%		178%
Load fund—Class B		85.2		133.0		251.3		143.0		281.4		56	%		89	%		97%
Load fund—Class C		115.4		228.6		534.7		249.3		649.5		98	%		134	%		161%
Load fund—Class I		19.2		36.9		115.6		40.2		125.9		92	%		213	%		213%
No-load funds		2,001.5		1,889.3		2,598.4		1,848.7		2,961.9		-6	%		38	%		60%

	$	2,314.6	$	2,452.4	$	3,897.1	$	2,459.2	$	4,514.0		6	%		59	%		84%

March 31, 2004 compared to March 31, 2003

Assets under management were $15.5 billion at March 31, 2004, a 134% increase from $6.6 billion at March 31, 2003. We experienced growth in every asset category and every account type during the three months ended March 31, 2004, reflecting the launch of two closed-end mutual funds, a strong market for REIT securities and positive net subscriptions into our open-end mutual funds.

By product type, at March 31, 2004, 49% of assets under management were held in closed-end mutual funds, 29% were held in open-end mutual funds and 22% were held in separately managed institutional accounts. At March 31, 2003, 31% of assets under management were held in closed-end mutual funds, 37% were held in open-end mutual funds and 32% were held in separately managed institutional accounts.

Real estate common stocks represented 76% of assets under management at March 31, 2004, compared to 89% of assets under management at March 31, 2003. During the three months ended March 31, 2004, we completed two closed-end mutual funds offerings that represented our first utility common stock assets under management. As a result, utility common stocks represented 8% of assets under management at March 31, 2004. Real estate preferred and corporate preferred stocks comprised 14% of assets under management at March 31, 2004, compared to 9% at March 31, 2003. The remaining assets were held in fixed income and cash and short-term investments. These investments were relatively constant as a percentage of assets under management over the three month period ending March 31, 2004 and 2003.

Net subscriptions into our open-end mutual funds increased 1933% to $199.2 million in the three months ended March 31, 2004 from $9.8 million in the three months ended March 31, 2003, as subscriptions increased 168% to $424.8 million in the three months ended March 31, 2004 from $158.8 million in the three months ended March 31, 2003 and redemptions increased 51% to $225.6 million in the three months ended March 31, 2004 from $149.0 million in the three months ended March 31, 2003. Market appreciation in the open-end mutual funds was significant and totaled $417.7 million in the three months ended March 31, 2004 due primarily to the strong real estate securities market.

Closed-end mutual funds contributed $2.5 billion to our net inflows in the three months ended March 31, 2004. These assets were raised in two closed-end mutual fund offerings. No closed-end mutual fund assets were raised in the three months ended March 31, 2003. Market appreciation in the closed-end mutual funds was $399.3 million, again consistent with the strong real estate securities market during three months ended March 31, 2004.

Institutional separate accounts had net inflows of $10.1 million in the three months ended March 31, 2004, as compared to net inflows of $17.1 million in the three months ended March 31, 2003. Market appreciation for institutional separate accounts was $358.3 million for the three

months ended March 31, 2004 compared to $20.3 million for the three months ended March 31, 2003.

At March 31, 2004, no-load mutual funds comprised 66% of all open-end mutual fund assets, compared to 75% of all such assets at March 31, 2003. A load mutual fund, Cohen & Steers Equity Income Fund, represented 34% of total open-end mutual fund assets at March 31, 2004 compared to 25% at March 31, 2003. Within this fund, 42% of the fund's assets were represented by Class C shares, 32% by Class A shares, 18% by Class B shares and 8% by Class I shares. This compares to 41% by Class C shares, 29% by Class A shares, 23% by Class B shares and 7% by Class I shares at March 31, 2003.

2003 compared to 2002

Assets under management were $11.7 billion at December 31, 2003, a 76% increase from $6.6 billion at December 31, 2002. We experienced growth in every asset category and every account type in 2003, due to a strong market for REIT securities, a closed-end mutual fund offering which included our first corporate preferred assets under management and positive net subscriptions into our open-end mutual funds.

By product type, at December 31, 2003, 41% of assets under management were held in closed-end mutual funds, 33% were held in open-end mutual funds and 26% were held in separately managed institutional accounts. At December 31, 2002, 32% of assets under management were held in closed-end mutual funds, 37% were held in open-end mutual funds and 31% were held in separately managed institutional accounts.

Real estate common stocks represented 85% of assets under management at December 31, 2003, compared to 89% of assets under management at December 31, 2002. Real estate and corporate preferred stocks comprised 13% of assets under management at the end of 2003, compared to 10% at December 31, 2002. The remaining assets were held in fixed income securities and cash and short-term investments. These investments were relatively constant as a percentage of assets under management over the two-year period ended December 31, 2003.

Net subscriptions into our open-end mutual funds increased 336% to $528.9 million in 2003 from $121.3 million in 2002. Subscriptions increased 34% to $1.2 billion in 2003 from $900.9 million in 2002 and redemptions decreased 13% to $678.9 million in 2003 from $779.6 million in 2002. Market appreciation in the open-end mutual funds was significant and totaled $915.8 million in 2003 due primarily to the strong real estate securities market.

Closed-end mutual funds contributed $2.0 billion to our net inflows in 2003, an increase of 26% over the $1.6 billion raised in 2002. These assets were raised in one closed-end mutual fund offering. Market appreciation in the closed-end mutual funds was $698.4 million, again consistent with the strong real estate securities market during 2003.

Institutional separate accounts had net inflows of $127.0 million in 2003, compared to net outflows of $876.7 million in 2002. Market appreciation for such accounts was $808.3 million for 2003.

At December 31, 2003, no-load mutual funds comprised 67% of all open-end mutual fund assets, compared to 77% of all such assets at December 31, 2002. Our load mutual fund, Cohen & Steers Equity Income Fund, represented 33% of total open-end mutual fund assets at December 31, 2003 compared to 23% in 2002. Within this fund, 41% of the fund's assets were represented by Class C shares, 31% by Class A shares, 19% by Class B shares and 9% by Class I shares. This compares to 41% by Class C shares, 29% by Class A shares, 24% by Class B shares and 6% by Class I shares at December 31, 2002. The increase in assets in the load mutual fund channel is due primarily to the increased net subscriptions that Cohen & Steers Equity Income Fund experienced in 2002 and 2003. Net subscriptions totaled $497.2 million for Cohen & Steers Equity Income Fund and $31.7 million for the no-load mutual funds in 2003. Net subscriptions were $262.8 million for Cohen & Steers Equity Income Fund in 2002 and the no-load mutual funds experienced $141.5 million in net outflows for that year.

2002 compared to 2001

Assets under management increased 16% to $6.6 billion at December 31, 2002 from $5.7 billion at December 31, 2001. This increase in assets was primarily due to closed-end mutual fund offerings. Moderately positive net subscriptions into open-end mutual funds were offset by net outflows from institutional accounts.

By product type, at December 31, 2002, 32% of assets under management were held in closed-end mutual funds, 37% were held in open-end mutual funds and 31% were held in institutional separate accounts. At December 31, 2001, 10% of assets under management were held in closed-end mutual funds, 41% were held in open-end mutual funds and 49% were held in separately managed institutional accounts.

Real estate common stocks represented 89% of assets under management at December 31, 2002, compared to 92% of assets under management at December 31, 2001. Real estate preferred securities represented 10% of assets under management at the end of 2002, compared to approximately 5% a year earlier. The remaining assets were held in fixed income securities and cash and short-term investments. Such investments were relatively constant as a percentage of total assets under management over the two-year period ended December 31, 2002.

Net subscriptions into the open-end mutual funds decreased 13% to $121.3 million in 2002 from $138.7 million in 2001. Subscriptions increased 23% to $900.9 million in 2002 from $732.3 million in 2001. Offsetting this increase, however, redemptions increased 31% to $779.6 million in 2002 from $593.6 million in 2001. Market appreciation in the open-end mutual funds was minimal during 2002.

Closed-end mutual funds inflows were $1.6 billion in 2002, an increase of 226% over the $479.8 million raised in 2001. These assets were raised in two closed-end mutual fund offerings in 2002.

Institutional separate accounts had net outflows of $876.7 million in 2002 compared to net inflows of $30.0 million in 2001. During 2002, four major institutional clients withdrew $910 million as they either decreased their allocation to real estate securities or invested with other managers. Market appreciation in the institutional separate accounts during 2002 was $151.6 million, compared to $185.4 million during 2001.

At December 31, 2002, no-load mutual funds comprised 77% of all open-end mutual fund assets, compared to 86% of all such assets at December 31, 2001. Our load mutual fund, Cohen & Steers Equity Income Fund, represented 23% of total open-end mutual fund assets in 2002, compared to 14% in 2001. At December 31, 2002, 41% of this fund's assets were represented by Class C shares, 29% by Class A shares, 24% by Class B shares and 6% by Class I shares. This compared to 37% of the fund's assets represented by Class C shares, 30% by Class A shares, 27% by Class B shares and 6% by Class I shares at December 31, 2001.

Results of Operations

The table below provides a breakdown of consolidated and segment revenue for the years ended December 31, 2001, 2002 and 2003 and for the three months ended March 31, 2003 and 2004.

	Year Ended December 31,						Three Months Ended March 31,
	2001		2002		2003		2003		2004		2002 vs. 2001 (%)			2003 vs. 2002 (%)			March 31, 2004 vs. March 31, 2003 (%)
	($ in thousands)
Asset Management Business Segment:
Investment advisory and administration fees	$	30,822	$	38,415	$	51,608	$	9,520	$	19,729		25	%		34	%		107	%
Distribution and service fees		1,112		3,071		5,880		974		2,408		176	%		91	%		147	%
Portfolio consulting and other		507		683		1,574		271		709		35	%		130	%		162	%

Asset Management Revenue		32,441		42,169		59,062		10,765		22,846		30	%		40	%		112	%

Investment Banking Revenue		2,853		13,077		11,279		978		4,463		358	%		-14	%		356	%

Consolidated Revenue	$	35,294	$	55,246	$	70,341	$	11,743	$	27,309		57	%		27	%		133	%

The table below provides a breakdown of consolidated and segment operating expenses for the years ended December 31, 2001, 2002 and 2003 and for the three months ended March 31, 2003 and 2004.

	Year Ended December 31,						Three Months Ended March 31,
	2001		2002		2003		2003		2004		2002 vs. 2001 (%)			2003 vs. 2002 (%)			March 31, 2004 vs. March 31, 2003 (%)
	($ in thousands)
Consolidated:
Employee compensation and benefits	$	16,719	$	32,312	$	37,193	$	7,754	$	8,980		93	%		15	%		16	%
General and administrative		6,651		6,916		8,007		1,719		2,757		4	%		16	%		60	%
Distribution and service fee expenses		4,069		4,744		9,190		1,427		4,195		17	%		94	%		194	%
Amortization, deferred commissions		533		1,698		3,077		810		1,057		219	%		81	%		30	%
Depreciation and amortization		517		927		1,002		233		281		79	%		8	%		21	%

Consolidated Operating Expenses	$	28,489	$	46,597	$	58,469	$	11,943	$	17,270		64	%		25	%		45	%

Asset Management:
Employee compensation and benefits	$	13,572	$	24,913	$	30,838	$	7,003	$	6,698		84	%		24	%		-4	%
General and administrative		4,930		5,374		6,416		1,373		2,050		9	%		19	%		49	%
Distribution and service fee expenses		4,069		4,744		9,190		1,427		4,195		17	%		94	%		194	%
Amortization, deferred commissions		533		1,698		3,077		810		1,057		219	%		81	%		30	%
Depreciation and amortization		494		904		989		230		278		83	%		9	%		21	%

Asset Management Operating Expenses	$	23,598	$	37,633	$	50,510	$	10,843	$	14,278		59	%		34	%		32	%

Investment Banking:
Employee compensation and benefits	$	3,147	$	7,399	$	6,355	$	751	$	2,282		135	%		-14	%		204	%
General and administrative		1,721		1,542		1,591		346		707		-10	%		3	%		104	%
Depreciation and amortization		23		23		13		3		3		0	%		-43	%		0	%

Investment Banking Operating Expenses	$	4,891	$	8,964	$	7,959	$	1,100	$	2,992		83	%		-11	%		172	%

March 31, 2004 compared to March 31, 2003

Consolidated Results

Our total revenue increased by 133% to $27.3 million in the three months ended March 31, 2004 from $11.7 million in the three months ended March 31, 2003. This increase was primarily the result of an $8.9 billion net increase in assets under management at March 31, 2004 as compared to March 31, 2003. This increase in assets under management led to growth in Asset Management revenue of 112% to $22.8 million in the three months ended March 31, 2004 from $10.8 million in the three months ended March 31, 2003. Revenue from Investment Banking

increased by 356% to $4.5 million in the three months ended March 31, 2004 from $1.0 million in the three months ended March 31, 2003.

Our operating expenses increased by 45% to $17.3 million in the three months ended March 31, 2004 from $12.0 million in the three months ended March 31, 2003. This increase was primarily a result of higher employee compensation and benefits and greater distribution and service fee expenses, which represented 23% and 52%, respectively, of the total operating expense increase for the three months ended March 31, 2004. We had operating income of $10.0 million for the three months ended March 31, 2004 compared to an operating loss of $0.2 million for the three months ended March 31, 2003. The operating loss for the three months ended March 31, 2003 was the result of a shareholder bonus accrual of $2 million.

Our income tax expense consists of New York State and New York City income taxes. Income tax expense was $0.8 million in the three months ended March 31, 2004 compared to a nominal income tax benefit in the three months ended March 31, 2003. Net income increased to $9.3 million in the three months ended March 31, 2004 from a net loss of $0.1 million in the three months ended March 31, 2003.

Prior to the closing of this offering, we will revoke our status as an S corporation and will be taxed as a C corporation, which we expect will result in additional income taxes payable by us. If we had revoked our S corporation tax status and elected to be taxed as a C corporation on January 1, 2003, based on an estimated combined effective tax rate of 42%, we would have paid $3.6 million in additional income taxes for the three months ended March 30, 2004.

Asset Management

Revenue. Asset Management revenue increased 112% to $22.8 million in the three months ended March 31, 2004 from $10.8 million in the three months ended March 31, 2003. Investment advisory and administration fees increased 107% to $19.7 million in the three months ended March 31, 2004, compared to $9.5 million in the three months ended March 31, 2003.

In the three months ended March 31, 2004, total revenue from closed-end mutual funds was $8.8 million, compared to $2.7 million in the three months ended March 31, 2003. In the three months ended March 31, 2004, we launched Cohen & Steers REIT and Utility Income Fund and Cohen and Steers Select Utility Fund, two closed-end mutual funds. Additional assets under management that resulted from these funds' offerings resulted in a revenue increase of $1.5 million in the first quarter of 2004 , which represented 25% of the $6.1 million increase in total closed-end mutual fund revenue for the three months ended March 31, 2004.

In the three months ended March 31, 2004, total revenue from open-end mutual funds was $8.3 million, compared to $4.8 million in the three months ended March 31, 2003. Net subscriptions into Cohen & Steers Equity Income Fund were $120.5 million during the three months ended March 31, 2004. These net subscriptions, together with market appreciation, accounted for the 147% growth in distribution and service fee revenue. Distribution and service fee revenue totaled $2.4 million for the three months ended March 31, 2004, compared to $1.0 million in the three months ended March 31, 2003.

Expenses. Asset Management operating expenses increased 32% to $14.3 million in the three months ended March 31, 2004 from $10.8 million in the three months ended March 31, 2003, partially from increases in distribution and service fee expenses and partially from increases in general and administrative expense and amortization of deferred commissions . Substantial growth in net inflows into our new closed-end and existing open-end mutual funds was the primary contributor to the 194% increase of distribution and service fee expenses to $4.2 million in the three months ended March 31, 2004 from $1.4 million in the three months ended March 31, 2003 and the 30% increase in amortization of deferred commissions to $1.1 million in the three months ended March 31, 2004 from $0.8 million in three months ended March 31, 2003. Employee compensation and benefits expense decreased by 4% to $6.7 million in the three months ended March 31, 2004 from $7.0 million in the three months ended March 31, 2003 primarily as a result of no shareholder bonus accrual in the three months ended March 31, 2004, compared to a $2

million shareholder bonus accrual during the three months ended March 31, 2003. However, Asset Management other compensation increased by $1.6 million during the three months ended March 31 , 2004 due to additional hiring as a result of growth and business expansion.

Included in Asset Management operating expenses were expenses incurred to operate and maintain our two fractional aircraft interests in the amounts of $0.2 million and $0.2 million for the three months ended March 31, 2003 and 2004 , respectively, which comprised 2% and 2% of total operating expenses for those periods, respectively. These expenses include monthly management fees and flight activity.

Investment Banking

Revenue. Investment Banking revenue increased 356% to $4.5 million in the three months ended March 31, 2004 from $1.0 million in the three months ended March 31, 2003, primarily as a result of increased transaction volume and average revenue per client from both new and existing clients. Average revenue per revenue generating client increased 291% to $0.6 million in the three months ended March 31, 2004 from $0.2 million in the three months ended March 31, 2003. Investment Banking generated revenue from seven clients during the three months ended March 31, 2004 compared to six clients during the three months ended March 31, 2003. Of the seven clients during the three months ended March 31, 2004, three were new clients. For the three months ended March 31, 2004, three of our clients represented 97% of revenue. For the three months ended March 31, 2003, two clients represented 85% of revenue.

Expenses. Investment Banking operating expenses increased 172% to $3.0 million in the three months ended March 31, 2004 from $1.1 million in the three months ended March 31, 2003. The increase in total expenses is due to an increase of $1.5 million in employee compensation and benefits expense relating primarily to the accrual of year-end incentive bonuses reflecting the increased profitability of the business segment in the three months ended March 31, 2004 compared to the three months ended March 31, 2003. Employee compensation and benefits for Investment Banking constituted 51% of revenue during the three months ended March 31, 2004, compared to 77% during the three months ended March 31, 2003. Other operating expenses increased to $0.7 million in the three months ended March 31, 2004 from $0.3 million in the three months ended March 31, 2003. Other operating expenses primarily include overhead such as allocated costs from Asset Management for office space, professional fees, travel and meals, market data, network and computer and other office expenses.

2003 compared to 2002

Consolidated Results

Our total revenue increased by 27% to $70.3 million in 2003 from $55.2 million in 2002. This increase was primarily the result of a $5.1 billion net increase in assets under management. This increase in assets under management led to growth in Asset Management revenue of 40% to $59.1 million in 2003 from $42.2 million in 2002. Revenue from Investment Banking declined by 14% to $11.3 million in 2003 from $13.1 million in 2002. The reduction in Investment Banking revenue in 2003 compared to 2002 was due to lower average revenue per revenue generating client in 2003 compared to 2002.

Our operating expenses increased by 25% to $58.5 million in 2003 from $46.6 million in 2002. This increase was primarily a result of higher employee compensation and benefits and greater distribution and service fee expenses, which represented 41% and 37%, respectively, of the total operating expense increase for 2003. Our operating income increased by 37% to $11.9 million in 2003 from $8.6 million in 2002.

Income taxes declined to $0.1 million in 2003 from $0.6 million in 2002, primarily as a result of accrued income tax refunds on amended tax returns filed or expected to be filed for prior period state and local income taxes. These returns will be filed utilizing more advantageous apportionment rules allowed under New York State and New York City tax regulations . Net income increased by 43% to $12.1 million in 2003 from $8.4 million in 2002.

Following this offering, we expect that we will incur additional annual expenses of approximately $3 million as a result of becoming a public company, for, among other things, D&O insurance, director fees, Securities and Exchange Commission reporting, transfer agent fees, professional fees and similar expenses. Prior to the closing of this offering, we will revoke our status as an S corporation and will be taxed as a C corporation, which we expect will result in additional income taxes payable by us. If we had revoked our S corporation tax status and elected to be taxed as a C corporation on January 1, 2003, based on an estimated combined effective tax rate of 42% , we would have paid $8 million in additional income taxes for the year ended December 31, 2003 .

Asset Management

Revenue. Asset Management revenue increased 40% to $59.1 million in 2003 from $42.2 million in 2002. Investment advisory and administration fees increased 34% to $51.6 million in 2003, compared to $38.4 million in 2002.

In 2003, total revenue from closed-end mutual funds was $18.6 million, compared to $7.8 million in 2002. In 2003, we launched Cohen & Steers REIT and Preferred Income Fund, a closed-end mutual fund. Additional assets under management that resulted from this fund's offerings resulted in revenue increases of $5.8 million, which represented 54% of the $10.7 million increase in total closed-end mutual fund revenue for 2003. We also raised $162 million in auction market preferred shares in follow-on offerings for three of our closed-end mutual funds, Cohen & Steers Advantage Income Realty Fund, Cohen & Steers Quality Income Realty Fund and Cohen & Steers Premium Income Realty Fund. These three funds collectively generated an additional $4.8 million in closed-end mutual fund revenue for 2003, compared to the revenue generated by these funds for 2002.

Net subscriptions into Cohen & Steers Equity Income Fund were $497.2 million during 2003. These net subscriptions, together with market appreciation, accounted for the 91% growth in distribution and service fees. Distribution and service fee revenue totaled $5.9 million for 2003, compared to $3.1 million in 2002.

Expenses. Asset Management operating expenses increased 34% to $50.5 million in 2003 from $37.6 million in 2002, partially from an increase in employee compensation and benefits expense and partially from increases in distribution and service fee expense, general and administrative expense and amortization of deferred commissions . Employee compensation and benefits expense increased by 24% to $30.8 million in 2003 from $24.9 million in 2002. This was a result of increased salaries, greater employee incentive compensation and additional hiring as a result of growth and business expansion. Employee incentive compensation increased by $3.5 million, representing 60% of the total employee compensation and benefits increase. The increase in incentive compensation for Asset Management was attributable to performance , growth and business expansion.

Substantial growth in net inflows into our new and existing open-end and closed-end mutual funds was the primary contributor to the 94% increase of distribution and service fee expenses to $9.2 million in 2003 from $4.7 million in 2002 and the 81% increase in amortization of deferred commissions to $3.1 million in 2003 from $1.7 million in 2002.

Expenses incurred to operate and maintain the two aircraft for the years ended December 31, 2003 and 2002 were $0.8 million and $0.7 million, respectively, which comprised 1% and 2% of the total operating expenses for those periods, respectively.

Investment Banking

Revenue. Investment Banking revenue declined 14% to $11.3 million in 2003 from $13.1 million in 2002 primarily as a result of lower average revenue per revenue generating client. Average revenue per revenue generating client decreased 15% to $1.1 million in 2003 from $1.3 million in 2002. Investment Banking generated revenue from ten clients in 2003 and ten clients in 2002. Of the ten clients in 2003, five were new clients in 2003. For 2003, four of our clients

represented 97% of revenue. For 2002, two clients represented 71% of revenue. Investment Banking revenue can vary significantly from year to year and may be adversely impacted by a number of factors in any given year, including but not limited to the general market conditions and the number and the average size of client engagements. In addition, as Investment Banking revenue is typically recorded only at the time of the successful consummation of a client's transaction, our operating results may vary significantly from quarter to quarter and from year to year.

Expenses. Investment Banking operating expenses declined 11% to $8.0 million in 2003 from $9.0 million in 2002. The decrease in total expenses is due to a decrease of $1.0 million in employee compensation and benefits expense relating primarily to a reduction in year-end incentive bonuses paid to our senior investment banking professionals , reflecting lower profitability of the business segment in 2003. Employee compensation and benefits for Investment Banking constituted 56% of revenue during 2003, compared to 57% in 2002. Other operating expenses remained constant at $1.6 million in 2003 and 2002. Other operating expenses primarily include overhead such as allocated costs from Asset Management for office space, professional fees, travel and meals, market data, network and computer and other office expenses.

2002 compared to 2001

Consolidated Results

Our total revenue increased 57% to $55.2 million in 2002 from $35.3 million in 2001. Asset Management accounted for 49% of the increase, with revenue growing to $42.2 million in 2002 from $32.4 million in 2001. This increase was primarily the result of growth in assets under management of $926 million. Investment Banking, which increased revenue to $13.1 million in 2002 from $2.9 million in 2001, accounted for the remaining 51% increase in total revenue. Much of the growth in revenue in Investment Banking during 2002 related to success fees generated for transactions involving two restructuring and recapitalization engagements which we commenced in January 2001 .

Our operating expenses increased 64% to $46.6 million in 2002 from $28.5 million in 2001. This increase in expenses was primarily due to an increase in employee compensation and benefits, which represented 86% of the total operating expense increase, and increased amortization of deferred commissions for Cohen & Steers Equity Income Fund, which represented 6% of the increase. Total compensation increased as a result of general business expansion in Asset Management and increased incentive bonuses in Investment Banking. Additionally, in August 2001, we began internally financing commissions for the Class B shares of Cohen & Steers Equity Income Fund. This resulted in an increase in amortization of deferred commissions to $1.7 million in 2002 from $0.5 million in 2001. Our operating income increased by 27% to $8.6 million in 2002 from $6.8 million in 2001.

Income taxes remained relatively constant at $0.6 million in 2002 and $0.7 million in 2001. Net income increased by 28% to $8.4 million in 2002 from $6.6 million in 2001.

Asset Management

Revenue. Asset Management revenue increased 30% to $42.2 million in 2002 from $32.4 million in 2001. Investment advisory and administration fees increased 25% to $38.4 million in 2002 from $30.8 million in 2001.

In 2001, we launched a closed-end mutual fund, Cohen & Steers Advantage Income Realty Fund, which raised $478 million in 2001 and an additional $50 million in auction market preferred shares in 2002. Additional assets under management from this fund's offerings resulted in revenue increases of $1 million in 2002. This represented 17% of the $5.8 million increase in total closed-end mutual fund revenue in 2002.

During 2002, we launched Cohen & Steers Quality Income Realty Fund and Cohen & Steers Premium Income Realty Fund, which raised $1.0 billion and $513.7 million in common and auction

market preferred shares, respectively. The additional assets under management raised during 2002 from these funds resulted in an additional $4.7 million in revenue, or 81% of the $5.8 million increase in total closed-end mutual fund revenue for 2002.

In addition, net subscriptions into Cohen & Steers Equity Income Fund were $262.8 million during 2002. These net subscriptions were primarily responsible for the increase in distribution and service fee revenue which increased to $3.1 million in 2002 from $1.1 million in 2001.

Expenses. Asset Management operating expenses increased 59% to $37.6 million in 2002 from $23.6 million in 2001, primarily due to an increase in the segment's employee compensation and benefits expenses. Higher salaries and incentive compensation, as well as an increase in employees due to business expansion, resulted in an 84% increase in total employee compensation and benefits expense , which totaled $24.9 million for 2002 compared to $13.6 million in 2001. The $7.8 million increase in bonuses for our co-chief executive officers to $10.0 million in 2002 from $2.2 million in 2001 accounted for 68% of the increase in total employee compensation and benefits in 2002. In addition, employee incentive compensation increased by $1.6 million in 2002, representing 14% of the total employee compensation and benefits increase.

In August 2001, we began internally financing the commissions of the Class B shares of Cohen and Steers Equity Income Fund. This, as well as increased net subscriptions into this fund, resulted in a 219% increase in amortization of deferred commissions to $1.7 million in 2002 from $0.5 million in 2001.

Expenses incurred to operate and maintain the two aircraft for the years ended December 31, 2002 and 2001 were $0.7 million and $0.2 million, respectively, which comprised 2% and 1% of the total operating expenses for those periods, respectively.

Investment Banking

Revenue. Investment Banking revenue increased by 358% to $13.1 million in 2002 from $2.9 million in 2001 primarily as a result of increased transaction volume and average revenue per revenue generating client from both new and existing clients. Average revenue per revenue generating client increased to $1.3 million in 2002 from $0.3 million in 2001. A majority of the increase in revenue related to success fees generated for transactions consummated in 2002 involving two restructuring and recapitalization engagements entered into in early 2001. Investment Banking generated revenue from ten clients in 2002, compared to nine clients in 2001. Of the ten clients in 2002, five were new clients in 2002. For 2002, two of our clients represented 71% of revenue. For 2001, three clients represented 73% of revenue.

Expenses. Investment Banking operating expenses increased 83% to $9.0 million in 2002 from $4.9 million in 2001. The increase in operating expenses is primarily due to an increase of $4.3 million in employee compensation and benefits expense relating primarily to year-end incentive bonuses reflecting the increased profitability of the business segment in 2002 compared to 2001. As a result of the loss incurred by the business segment in 2001, no incentive bonuses were paid to our senior investment banking professionals in 2001. Employee compensation and benefits for Investment Banking constituted 56% of revenue during 2002, compared to 110% during 2001. Other operating expenses remained relatively constant at $1.6 million for 2002 and $1.7 million for 2001.

Liquidity and Capital Resources

The following table summarizes key statement of financial condition data relating to our liquidity and capital resources as of December 31, 2002 and 2003 and March 31, 2004, and cash flow data for the years ended December 31, 2001, 2002 and 2003 and for the three months ended March 31, 2003 and 2004 :

	December 31 ,
	2002		2003		March 31, 2004
	($ in thousands)
Statement of financial condition data:
Cash and cash equivalents	$	6,090	$	7,526	$	8,574
Accounts receivable—Company-sponsored mutual funds		2,713		5,179		6,637
Deferred commissions, net		3,954		6,523		6,772
Current portion of long-term debt		141		120		116
Current portion of obligations under capital leases		12		16		16
Bank line of credit		3,020		4,713		4,584
Long-term debt		1,774		1,661		1,632
Obligations under capital leases		4		27		23

	Year Ended December 31,									Three Months Ended March 31,
	2001			2002			2003			2003			2004
	($ in thousands)
Cash flow data:
Operating cash flows	$	5,759		$	7,146		$	10,721		$	5,368		$	13,112
Investing cash flows		(2,303	)		(1,432	)		(1,589	)		(141	)		(398	)
Financing cash flows		(5,443	)		(2,374	)		(7,696	)		(1,530	)		(11,666	)

We are highly liquid. Cash, cash equivalents and current accounts receivable from our mutual funds remained relatively constant at 36% , 37% and 38% of our total assets as of December 31, 2002 and 2003 and as of March 31, 2004 , respectively. Our principal uses of cash have historically been to pay salaries and bonuses to our employees and other operating expenses, including fees and sales commissions associated with the distribution of our mutual funds. We have also historically made cash distributions to our stockholders. Our cash and liquidity requirements for these and our other uses of cash have primarily been met through cash generated by operations and we expect that this will continue to be the case following the offering.

Operating Cash Flows

Net cash provided by operating activities increased 142% to $13.1 million in the three months ended March 31, 2004 from $5.4 million in the three months ended March 31, 2003 as a result of higher levels of assets under management and increased Investment Banking revenue. Net cash provided by operating activities increased 50% to $10.7 million in 2003 from $7.1 million in 2002 primarily because of additional Asset Management revenue from higher levels of assets under management despite decreases in Investment Banking revenue . Net cash provided by operating activities increased 24% to $7.1 million in 2002 from $5.8 million in 2001 due to higher levels of assets under management and increased Investment Banking revenue.

Deferred sales commission paid to broker-dealers for the distribution of Cohen & Steers Equity Income Fund's Class B and Class C shares increased by 122% to $1.3 million in the three months ended March 31, 2004 from $0.6 million in the three months ended March 31, 2003 due to an overall increase in net subscriptions into Class B and Class C shares of the fund . Deferred sales commissions increased by 37% to $5.6 million in 2003 from $4.1 million in 2002 due to an increase in net subscriptions into the Class B and Class C shares of the fund . Deferred sales commissions increased by 95% to $4.1 million in 2002 from $2.1 million in 2001 as we began internally financing the Class B share deferred sales commissions in August 2001. The payment of deferred sales commissions will likely continue to increase if sales of Class B and Class C shares continue to increase. The amortization of deferred sales commissions will be similarly affected.

Employee compensation and benefits, general and administrative expenses and distribution and service fee expenses are significant uses of cash and will increase as we continue to expand our product offerings and our assets under management. We intend to reduce our co-chief executive officers' compensation as a result of the conversion from an S corporation to a C corporation. We also expect that following this offering we will incur additional annual expenses of approximately $3 million as a result of becoming a public company for, among other things, D&O insurance, director fees, Securities and Exchange Commission reporting, transfer agent fees, professional fees and similar expenses.

Investing Cash Flows

Investing activities consist primarily of the purchases of property and equipment and purchases of investments in our sponsored mutual funds. Cash used in such investing activities in the three months ended March 31, 2004 was $0.3 million, compared to $0.1 million in the three months ended March 31, 2003. Cash used in such investing activities was $1.6 million in 2003, compared to $1.4 million in 2002 and $2.3 million in 2001.

Purchases of other property and equipment increased 268% to $1.1 million in 2003 from $0.3 million in 2002, primarily due to the purchases of computer equipment totaling $0.4 million. This equipment will be utilized for our backup facility and disaster recovery plan. In 2001, purchases of other property and equipment totaled $0.5 million. In 2001, we purchased a 6.25% fractional ownership interest in an aircraft for $1.4 million. In 2002, we purchased a 6.25% fractional interest in a second aircraft for $0.6 million. The two aircraft are included in property and equipment. The aircraft were purchased as a means to reduce overall travel time and to increase the efficiency of the business trips of our principals and executives . We believe these benefits outweigh the expenses incurred to operate and maintain the aircraft.

Purchases of investments in sponsored mutual funds totaled $0.3 million in the three months ended March 31, 2004, compared to $0.1 million in the three months ended March 31, 2003. In the three months ended March 31, 2004, we provided the initial seed investments for one sponsored mutual fund in the total amount of $0.2 million, compared to no such seed investments in the three months ended March 31, 2003. Purchases of investments in sponsored mutual funds totaled $0.5 million in 2003, $0.5 million in 2002 and $0.4 million in 2001. In each of 2002 and 2003, we provided the initial seed investments for two sponsored mutual funds, compared to one such seed investment in 2001. The amounts seeded in 2002 and 2003 totaled approximately $200,000 in each year, compared to $100,000 in 2001. We anticipate investing in future sponsored mutual funds and the investments may increasingly become more of a significant use of cash.

Financing Cash Flows

Net cash used in financing activities increased 663% to $11.7 million in the three months ended March 31, 2004 from $1.5 million in the three months ended March 31, 2003. Net cash used in financing activities increased 224% to $7.7 million in 2003 from $2.4 million in 2002, which was a 56% decrease from cash used in financing activities of $5.4 million in 2001.

S corporation cash distributions to stockholders were $11.5 million in the three months ended March 31, 2004, compared to $1.5 million in the three months ended March 31, 2003. S corporation cash distributions to stockholders were $9.3 million in 2003, $7.3 million in 2002 and $8.6 million in 2001. Following the offering we intend to pay quarterly cash dividends to holders of our common stock. See “Dividend Policy.”

In March 2002, we entered into a $5 million credit agreement with State Street Bank. This line of credit is used exclusively for internally financing the deferred sales commissions of the Class B shares of Cohen & Steers Equity Income Fund. At March 31, 2004, $4.6 million was outstanding on this line of credit compared to $4.7 million at December 31, 2003 and $3.0 million at December 31, 2002. This line of credit bears interest at the federal funds rate (1.25%, 0.96% and 1.05% at December 31, 2002, 2003 and March 31, 2004 , respectively) plus 1% per annum and requires the payment of an annual commitment fee of approximately $12,000. The line of credit is collateralized by distribution fees and contingent deferred sales charge revenue associated with the Class B shares of Cohen & Steers Equity Income Fund and certain of our assets. In December

2003, State Street increased the line of credit to $7 million. We are currently in negotiations with State Street to increase the line of credit to $10 million.

In September 2001, we financed the purchase of a 6.25% fractional ownership interest in an aircraft by obtaining a loan in the amount of $1.4 million. The loan is secured by the interest in the aircraft. The loan is payable in 60 fixed monthly installments of approximately $12,800, including principal and interest (adjusted monthly) at the one month LIBOR rate ( 1.38%, 1.12% and 1.09% at December 31, 2002, and 2003, and March 31, 2004, respectively) plus 2.50% per annum, with the remaining balance payable upon the maturity date, November 4, 2006. In May 2002, we financed the purchase of a 6.25% fractional ownership interest in a second aircraft by obtaining a loan in the amount of $0.6 million. The loan is secured by the interest in the second aircraft. The loan is payable in 60 fixed monthly installments of approximately $3,200 in principal, plus interest (adjusted monthly) at the one month LIBOR rate plus 2.98% per annum, with the remaining balance payable upon the maturity date, May 1, 2007.

During 2001 and 2002, our principals, as the stockholders of Cohen & Steers Securities, Inc. made capital contributions to that company of $2.0 million and $1.7 million, respectively. On July 1, 2002, Cohen & Steers Securities, Inc. was succeeded by Cohen & Steers Securities, LLC, a wholly owned subsidiary of Cohen & Steers Capital Management, Inc. No additional capital contributions subsequent to that date have been made.

During 2002 Investment Banking repaid, in full, subordinated loans owed to each of its three senior investment banking professionals . The total principal amount repaid was $0.5 million, plus accrued interest. These loans bore interest at an annual rate of 8%. These loans were originated in 1999 at the inception of the Investment Banking business, and were used for start up costs and general corporate and regulatory capital requirements.

Prior to the closing of this offering, we will revoke our status as an S corporation and will be taxed as a C corporation, which we expect will result in additional income taxes payable by us. If we had revoked our S corporation tax status and elected to be taxed as a C corporation on January 1, 2003, based on an estimated combined effective tax rate of 42% , we would have paid $8.0 million and $3.6 million in additional income taxes for the year ended December 31, 2003 and the three months ended March 31, 2004, respectively .

Contractual Obligations

We have contractual obligations to make future payments in connection with our non-cancelable operating lease agreements for office space, long-term debt on aircraft, bank line of credit and capital leases for office equipment. The following summarizes our contractual obligations as of December 31, 2003:

	2004		2005		2006		2007		2008 and after		Total
	($ in thousands)
Operating leases	$	1,008	$	1,157	$	1,163	$	1,163	$	—	$	4,491
Long-term debt		120		118		1,104		439		—		1,781
Bank line of credit(1)		785		1,571		1,571		786		—		4,713
Capital lease obligations, net		17		13		13		—		—		43

Total Contractual Obligations	$	1,930	$	2,859	$	3,851	$	2,388	$	—	$	11,028

(1)

During March 2004, the conversion date on our $7 million line of credit with State Street Bank was extended until May 18, 2004 at which time it will convert into a three year term loan. We are currently in negotiations with State Street Bank to extend the conversion date for this line of credit for one year until May 18, 2005 and increase the line of credit to $10 million.

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 consolidated financial statements.

Market Risk

We had a total of approximately $6.5 million and $7.4 million invested in sponsored equity funds as of December 31, 2003 and March 31, 2004 , respectively . In addition, a significant majority of our revenue—approximately 73% and 72% for the year ended December 31, 2003 and the three months ended March 31, 2004 —is derived from investment advisory agreements with our clients. Under these agreements, the investment advisory and administration fee we receive is typically based on the market value of assets under management. Accordingly, a decline in the prices of securities generally, and real estate securities in particular, may cause our revenue and income to decline by:

	•	causing the value of our assets under management to decrease, which would result in lower investment advisory and administration fees; or

	•	causing our clients to withdraw funds in favor of investments that they perceive as offering greater opportunity or lower risk, which would also result in lower investment advisory and administration fees.

In addition, market conditions may preclude us from increasing assets under management in closed-end mutual funds. A significant portion of our recent growth in assets under management has resulted from public offerings of the shares of our closed-end mutual funds. The market conditions for these offerings may not be as favorable in the future, which could adversely impact our ability to grow our assets under management and realize higher fee revenue associated with such growth.

The returns for REIT common stocks have demonstrated little correlation with interest rates over longer periods of time. However, an increase in interest rates could have a negative impact on the valuation of REITs and other securities in our clients' portfolios, which could reduce our revenue. In addition, an increase in interest rates could negatively impact our ability to increase our open-end mutual fund assets and to offer new mutual funds .

Due to the nature of our business and our limited investments in short-term cash vehicles, we believe that we do not face any material interest rate risk, credit risk or foreign currency exchange rate risk.

Regulatory Compliance

Asset Management is subject to extensive government regulation. See “Business-Regulation We will, to the extent necessary, incur additional annual expenses to comply with the rules and regulatory requirements recently adopted by the Securities and Exchange Commission under the Investment Company Act of 1940 and the Investment Advisers Act of 1940. These requirements require us, among other things, to:

	•	adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws;

	•	review those policies and procedures annually for their adequacy and the effectiveness of their implementation; and

	•	designate a chief compliance officer to be responsible for administering the policies and procedures.

The Securities and Exchange Commission also has adopted amendments to require open-end mutual funds to disclose in their prospectuses the risks to shareholders of frequent purchases and redemptions of mutual fund shares. An open-end mutual fund must also disclose its policies and procedures with respect to such frequent purchases and redemptions, including its use of fair value pricing and of portfolio holdings information.

We are working with counsel to our funds as well as with counsel to the independent directors of such funds to ensure that we will be in compliance with all new regulatory requirements no later than the effective compliance date mandated by the Securities and Exchange Commission. We have not yet experienced, and do not foresee, any material affects on our operating results due to the implementation of these regulatory initiatives.

The Securities and Exchange Commission has proposed regulations that could revise or eliminate the ability of asset managers to use “soft dollars.” If the use of “soft dollars” was eliminated in 2003, our operating expenses would have increased by $1.3 million. We would expect a similar increase in operating expenses for future periods if the use of “soft dollars” was eliminated.

Critical Accounting Policies and Estimates

The preparation of our 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.

Accounting policies are an integral part of our consolidated financial statements. A thorough understanding of these accounting policies is therefore 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 consolidated financial statements. For a summary of these and additional accounting policies, see Note 2 of the notes to the audited consolidated financial statements beginning on page F-9 .

Amortization, Deferred Commissions

We capitalize and amortize sales commissions paid to broker-dealers in connection with the sale of Class B and Class C shares of Cohen & Steers Equity Income Fund and Cohen & Steers Utility Fund over the period during which the shareholders of these funds are subject to contingent deferred sales charges, none of which exceeds six years. We record in revenue distribution plan payments received from these funds as earned. We record additional amortization expense on Class B and Class C shares at a rate commensurate with the redemption rate of these funds for each class.

Should we lose our ability to recover such sales commissions through distribution plan payments and contingent deferred sales charges, the value of these assets would decline, as would future cash flows. We periodically review the amortization period for deferred sales commission assets and determine whether any adjustments to the useful lives of the assets are required if events or circumstances should cause the carrying amount of the deferred sales commission assets to not be recoverable over their amortization period.

Investment Advisory and Administration Fees

We earn revenue from asset management services provided to sponsored open-end and closed-end mutual funds and to institutional separate accounts. This revenue is based on the net assets of each client's portfolio and is earned pursuant to the terms of the underlying contract and is charged in arrears on a monthly or quarterly basis. We also earn revenue from administration fees paid by certain sponsored open-end and closed-end mutual funds, based on the average daily net assets of such funds. We recognize this revenue at various intervals throughout the year as we earn such fees.

We invoice our institutional separate accounts based on actual assets under management. Typically, these invoices are not prepared until we reconcile such assets under management to our internal records. Prospectively, as a public company, we intend to estimate investment advisory fees for our institutional separate accounts prior to this reconciliation process in order to enable us to prepare our financial statements more quickly on a timetable appropriate for a public company. We will prepare our estimates based on our internal records of our institutional separate accounts, which we currently maintain on a daily basis. We intend to set up accounts receivable based on these estimates, and reconcile, in a timely manner, when we finalize the institutional separate

account assets under management and invoices. There could be a significant adjustment in revenue if our estimates differ in a material manner from actual invoiced amounts.

Recently Issued Accounting Pronouncements

Effective January 1, 2003, we adopted Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 45, Guarantor's Accounting and Disclosure Requirements of Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). This interpretation clarifies the requirements of Statements of Financial Accounting Standards No. 5, Accounting for Contingencies , relating to a guarantor's accounting for, and disclosure of, the issuance of certain types of guarantees. FIN 45 requires that, upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. The adoption of FIN 45 did not have a material effect on our consolidated financial statements.

In January 2003, the FASB issued FIN No. 46, Consolidation of Variable Interest Entities (“FIN 46”), which establishes guidance for consolidation of variable interest entities that function to support the activities of the primary beneficiary. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or is entitled to receive a majority of the entity's residual returns. An entity that consolidates a variable interest entity is called the primary beneficiary of that entity. In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights, or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 also requires various disclosures about variable interest entities that a company is not required to consolidate but in which it has a significant variable interest.

In December 2003, the FASB further revised FIN 46 through FIN No. 46R, Consolidation of Variable Interest Entities (“FIN 46R”). FIN 46R changes the effective date of FIN 46 for certain entities and makes other significant changes to FIN 46 based on implementation issues that arose during 2003. Application of FIN 46R is required for periods ending after December 15, 2003 for all interests in special purpose entities and for periods ending after March 15, 2004 for interests in other entities. The adoption of FIN 46R did not have a material effect on our consolidated financial statements.

BUSINESS

Overview

We are the nation's largest manager of real estate mutual funds, based on our proprietary real estate mutual fund assets under management and we are a focused manager of income oriented equity securities portfolios. Our principals founded Cohen & Steers as an investment advisor in 1986 . While we continue to depend on the efforts of our principals, we have built a deep and experienced team of professionals who are also vitally important to our success.

The foundation of our company is our investment department. We were founded on the belief that fundamental research and analysis and portfolio management can generate excess returns for our clients . Our dedication to research and active portfolio management has enabled us to provide attractive returns for our institutional clients and mutual fund shareholders for over 18 years. We have also developed an effective distribution network that has contributed, along with our investment performance, to the rapid growth in our assets under management.

Our assets under management have increased at a compound annual rate of growth of nearly 40% , to $15.5 billion at March 31 , 2004 from $3.8 billion at December 31, 1999. In addition, as of March 31 , 2004, we provided portfolio consulting services for more than $1.5 billion in assets, which are not included in our assets under management. As a complement to Asset Management , we also provide investment banking services to companies in real estate and real estate intensive businesses.

We operate in two distinct business segments:

	•	Asset Management . Asset Management primarily derives revenue from investment advisory, administration, distribution and service fees received from our mutual funds and investment advisory fees received from our institutional separate accounts. Fees earned by Asset Management are based on the net assets of each client's portfolio and on the net assets that underlie the investment products for which we provide portfolio consulting services.

	•	Investment Banking. Investment Banking derives revenue primarily from advising our clients on mergers, acquisitions, corporate restructurings, recapitalizations and similar corporate finance transactions and placing securities as agent for our clients. These fees are generally earned upon the consummation of the transaction pursuant to the terms of individual agreements.

The following table provides a breakdown of our consolidated and segment revenue and net income for the years ended December 31, 2001, 2002 and 2003, and for the three months ended March 31, 2003 and 2004.

	Year Ended December 31,							Three Months Ended March 31,
	2001			2002		2003		2003			2004
	($ in thousands)
Revenue
Asset Management Revenue	$	32,441		$	42,169	$	59,062	$	10,765		$	22,846
Investment Banking Revenue		2,853			13,077		11,279		978			4,463

Consolidated Revenue	$	35,294		$	55,246	$	70,341	$	11,743		$	27,309

Net Income (Loss)
Asset Management Net Income (Loss)	$	8,374		$	4,656	$	8,847	$	(115	)	$	7,955
Investment Banking Net Income (Loss)		(1,770	)		3,780		3,204		—			1,376

Consolidated Net Income (Loss)	$	6,604		$	8,436	$	12,051	$	(115	)	$	9,331

Asset Management

Our asset management business is fully integrated and organized into the following areas: investment research (portfolio management, research and trading), marketing and client servicing, account administration and legal/compliance. As of March 31 , 2004, we managed $4.5 billion in four open-end mutual funds, $7.7 billion in seven closed-end mutual funds and $3.4 billion in 39 institutional separate account portfolios for institutional investors, including some of the world's largest pension and endowment funds. We also serve as portfolio consultant for non-proprietary unit investment trusts.

Throughout our history we have been innovators in developing income oriented equity portfolios and investment vehicles. Our principals, while employed at another firm, organized and managed the first open-end real estate mutual fund in 1985. We launched the first closed-end real estate mutual fund in 1988 and the first leveraged, closed-end real estate mutual fund in 2001. As of March 31 , 2004, we managed five of the ten largest open-end and closed-end real estate mutual funds. We were the first firm to segment REIT investing into separate, distinct investment strategies , and in 1996 we began managing REIT preferred stock portfolios. We are a leader in combining complementary asset classes within a single investment vehicle, such as REITs with corporate preferred stocks or REITs with utility common stocks. In addition, we have developed a proprietary index for passive investment strategies. Our proprietary index is now the basis for the iShares Cohen & Steers Realty Majors Index Fund, the largest exchange traded real estate index fund. We also developed a hedging strategy for leveraged, closed-end mutual funds that has become a model for the industry.

While we have maintained our position as the nation's largest manager of real estate mutual funds, we have also diversified our asset management capabilities. In 2003, we built a capability in corporate preferred securities by attracting a team of investment professionals that includes a leading preferred securities strategist. As of March 31 , 2004, our preferred securities team managed $2.1 billion in real estate and corporate preferred stocks . In addition, we serve as portfolio consultant for several non-proprietary unit investment trusts that have more than $210 million in preferred securities. In December 2003, we formed a utility securities team led by one of the leading portfolio managers in this sector. As of March 31 , 2004, we managed $1.3 billion in utility common stocks in two closed-end mutual funds.

Our investment vehicles and strategies currently focus on the following areas:

	•	REIT common and preferred stocks

	•	Utility common stocks

	•	Corporate preferred stocks

Our Products

We manage assets in three account types:

	•	Closed-end mutual funds

	•	Open-end mutual funds

	•	Institutional separate accounts

The following table provides a breakdown of our revenue from investment advisory and administration fees by account type for the years ended December 31, 2001, 2002 and 2003, and for the three months ended March 31, 2003 and 2004.

	Year Ended December 31,									Three Months Ended March 31,
	2001			2002			2003			2003			2004
	($ in thousands)
Investment advisory and administration fees:
Closed-end mutual funds	$	2,009	6.5%	$	7,837	20.4%	$	18,575	36.0%	$	2,741	28.8%	$	8,801	44.6%
Open-end mutual funds		18,019	58.5%		20,871	54.3%		24,225	46.9%		4,806	50.5%		8,282	42.0%
Institutional separate accounts		10,794	35.0%		9,707	25.3%		8,808	17.1%		1,973	20.7%		2,646	13.4%

Total	$	30,822	100.0%	$	38,415	100.0%	$	51,608	100.0%	$	9,520	100.0%	$	19,729	100.0%

We also provide a variety of portfolio consulting services.

Closed-End Mutual Funds. Our seven closed-end mutual funds are investment companies that have issued a fixed number of shares through public offerings. These shares are listed on the New York Stock Exchange and cannot be redeemed by their shareholders. The trading price of the shares of a closed-end mutual fund is determined by supply and demand in the market place, which means the shares may trade at a premium or discount to the net asset value of the funds.

The following table provides a breakdown of our revenue from closed-end mutual fund investment advisory and administration fees for the years ended December 31, 2001, 2002 and 2003, and for the three months ended March 31, 2003 and 2004.

	Year Ended December 31,						Three Months Ended March 31,
	2001		2002		2003		2003		2004
	($ in millions)
Closed-end mutual fund advisory fees	$	1.9	$	7.5	$	17.7	$	2.6	$	8.3
Closed-end mutual fund administration fees		0.1		0.3		0.9		0.1		0.5

Total closed-end mutual fund investment advisory and administration fees	$	2.0	$	7.8	$	18.6	$	2.7	$	8.8

As of March 31 , 2004, we provided advisory and administrative services to the following seven closed-end mutual funds, each of which is listed on the New York Stock Exchange:

Fund	New York Stock Exchange Symbol	Assets under management as of March 31 , 2004			Year of Inception
		($ in millions)
Cohen & Steers Total Return Realty Fund, Inc.	RFI	$	171.9	*	1993
Cohen & Steers Advantage Income Realty Fund, Inc.	RLF	$	776.6		2001
Cohen & Steers Quality Income Realty Fund, Inc.	RQI	$	1,147.7		2002
Cohen & Steers Premium Income Realty Fund, Inc.	RPF	$	985.4		2002
Cohen & Steers REIT and Preferred Income Fund, Inc.	RNP	$	2,074.6		2003
Cohen & Steers REIT and Utility Income Fund, Inc.	RTU	$	1,721.5		2004
Cohen & Steers Select Utility Fund, Inc.	UTF	$	786.8		2004

Pursuant to investment advisory agreements, we furnish a continuous investment program for each of our closed-end mutual funds, make day-to-day investment decisions for each fund, and generally manage each fund's investments in accordance with such fund's stated policies. In addition, pursuant to the investment advisory agreements, we provide persons satisfactory to the fund's directors to serve as officers of the fund. For services under the investment advisory agreement, our closed-end mutual funds pay us a monthly fee based on a percentage of each fund's average assets under management as follows:

Fund	Advisory Fee* (% of average assets under management)
Cohen & Steers Total Return Realty Fund, Inc.		0.70%
Cohen & Steers Advantage Income Realty Fund, Inc.		0.85%
Cohen & Steers Quality Income Realty Fund, Inc.		0.85%
Cohen & Steers Premium Income Realty Fund, Inc.		0.80%
Cohen & Steers REIT and Preferred Income Fund, Inc.		0.65%
Cohen & Steers REIT and Utility Income Fund, Inc.		0.85%
Cohen & Steers Select Utility Fund, Inc.		0.85%

Advisory fee calculated based on average daily managed assets for all funds except Cohen & Steers Total Return Realty Fund, for which the advisory fee is calculated based on average weekly net assets .

For certain of our closed-end mutual funds, we have agreed to waive a portion of the investment advisory fee for a certain period of their initial operations as follows:

Investment Management Fee Waiver
(Fee waived as % of average daily managed assets )

Fund (Year of Inception)	First 5 years		Year 6		Year 7		Year 8		Year 9		Year 10
Cohen & Steers Advantage Income Realty Fund, Inc.(2001)		0.42%		0.35%		0.28%		0.21%		0.14%		0.07%
Cohen & Steers Quality Income Realty Fund, Inc. (2002)		0.32%		0.26%		0.20%		0.14%		0.08%		0.02%
Cohen & Steers Premium Income Realty Fund, Inc. (2002)		0.25%		0.20%		0.15%		0.10%		0.05%		—
Cohen & Steers REIT and Utility Income Fund, Inc. (2004)		0.20%		0.15%		0.10%		0.05%		—		—
Cohen & Steers Select Utility Fund, Inc. (2004)		0.20%		0.15%		0.10%		0.05%		—		—

Beginning in 2006, and continuing through 2012, certain management fee waivers on each of our closed-end mutual funds other than Cohen & Steers Total Return Realty Fund, and Cohen & Steers REIT and Preferred Income Fund, are scheduled to begin to expire, subject to approval by each such fund's board of directors. We expect the expiration of these fee waivers to result in higher revenue, assuming constant asset levels. These fee waivers provide a direct benefit to fund investors by lowering the expenses associated with investing in our funds and improving each fund's potential performance for the term of the waiver . As a result, we believe the fee waivers aided the sales efforts for each fund.

Pursuant to administration agreements, we provide certain administration and accounting oversight functions for each of our closed-end mutual funds, including providing administration services necessary for the operations of each fund and furnishing office space and facilities required for conducting the business of each such fund. For these services, certain of these funds pay us a monthly administration fee based on a percentage of each fund's average daily managed assets. Each of our closed-end mutual funds has entered into a fund accounting and administration agreement with State Street Bank and Trust Company to provide each fund with certain additional fund administration services for a monthly administration fee computed on the basis of the net assets of that fund.

We oversee administrative services that State Street provides to each fund. For example, in the case of the daily pricing of each fund, State Street calculates each fund's net asset value. Independently, we calculate each fund's net asset value and reconcile with State Street following the close of trading each day on fund pricing. This serves as a control on the fund's daily net asset value calculation. We also oversee State Street in its capacity as administrator and custodian for each fund, as well oversee the services provided by each fund's transfer agent.

Our investment advisory and administration agreements with our closed-end mutual funds are generally terminable upon 60 or fewer days' notice, and each investment advisory agreement, including the fees payable thereunder, is subject to annual approval by the closed-end mutual fund's board of directors, as well as by a majority of the directors who are not interested persons.

Each closed-end mutual fund board currently consists of eight directors. Mr. Cohen and Mr. Steers serve as a director of each fund. The other six members of the board are independent directors. The Investment Company Act of 1940 and Securities and Exchange Commission rules and interpretations require that at least a majority of the independent directors approve certain items, such as the entry into and continuation of investment advisory agreements between the fund and the investment advisor.

All of our closed-end mutual funds, other than Cohen & Steers Total Return Realty Fund, are leveraged. Cohen & Steers Total Return Realty Fund has the authority to use leverage, although there is no current intention to do so. A closed-end mutual fund is considered leveraged if it borrows money or issues debt or preferred securities to increase its total assets. Our leveraged

closed-end mutual funds have issued preferred securities in an effort to increase returns for their shareholders by investing the additional capital raised through leverage in securities that produce a higher rate of return than the cost of using leverage. When our closed-end mutual funds use leverage, the fees paid to us for investment advisory and administration services are higher than if such funds did not use leverage because the fees paid are calculated based on each such fund's managed assets, which includes the liquidation preference of the preferred securities and the principal amount of any outstanding borrowings used for leverage. Leverage, however, can increase a fund's volatility, as a leveraged fund's net asset value per share will fall at a greater rate when the fund's portfolio securities decline in value. We have not recommended to the Cohen & Steers Total Return Realty Fund's board of directors that this fund add leverage, as this provides investors with the option of selecting a non-leveraged closed-end real estate mutual fund if that is more consistent with their risk profile.

Open-End Mutual Funds. Our open-end mutual funds offer and issue new shares continuously as investors invest new money, and redeem shares when investors withdraw money. The share price for purchases and redemptions of each of our open-end mutual funds is determined by each fund's net asset value, which is calculated at the end of each business day. The net asset value per share is the current value of a fund's assets less liabilities, divided by the fund's total shares outstanding.

The following table provides a breakdown of our revenue from open-end mutual fund investment advisory and administration fees for the years ended December 31, 2001, 2002 and 2003, and for the three months ended March 31, 2003 and 2004.

	Year Ended December 31,						Three Months Ended March 31,
	2001		2002		2003		2003		2004
	($ in millions)
Open-end mutual fund advisory fees	$	17.7	$	20.5	$	23.8	$	4.7	$	8.1
Open-end mutual fund administration fees		0.3		0.4		0.4		0.1		0.2

Total open-end mutual fund investment advisory and administration fees	$	18.0	$	20.9	$	24.2	$	4.8	$	8.3

As of March 31 , 2004, we provided advisory and administrative services to the following four Cohen & Steers open-end mutual funds .

Fund	Primary Objective	Assets as of March 31 , 2004 ($ in millions)		Year of Inception
Cohen & Steers Realty Shares, Inc.	Total return	$	1,888.1	1991
Cohen & Steers Special Equity Fund, Inc.	Capital appreciation	$	35.3	1997
Cohen & Steers Equity Income Fund, Inc.	High current income	$	1,552.2	1997
Cohen & Steers Institutional Realty Shares, Inc.	Total return	$	1,038.4	2000

As with our closed-end mutual funds, pursuant to investment advisory agreements, we furnish a continuous investment program for each of our open-end mutual funds, make day-to-day investment decisions for each fund, and generally manage each fund's investments in accordance with such fund's stated policies. In addition, pursuant to the investment advisory agreements, we provide persons satisfactory to each fund's directors to serve as that fund's officers. For these services, each of our open-end mutual funds pays us a monthly management fee based on a percentage of the average daily net asset value of that fund.

The annual advisory and administration fees for each of our open-end mutual funds are payable on a monthly basis and are calculated as follows:

Fund		Advisory and Administration Fees
		(as % of average daily net assets)
Cohen & Steers Realty Shares, Inc.		0.87% up to $1.5 billion. 0.77% in excess of $1.5 billion
Cohen & Steers Institutional Realty Shares, Inc.(1)		0.75%
Cohen & Steers Special Equity Fund, Inc.		0.92%
Cohen & Steers Equity Income Fund, Inc.		0.77% up to $1.5 billion. 0.67% in excess of $1.5 billion
Cohen & Steers Utility Fund, Inc.(2)		0.77% up to $1.5 billion. 0.67% in excess of $1.5 billion

(1) We bear all of this fund's ordinary operating expenses.
(2) Launched in April 2004.

We currently have agreed to waive our investment advisory fee and/or reimburse our open-end mutual funds as follows:

	•	we reimburse Cohen & Steers Institutional Realty Shares, Inc. so that its total annual operating expenses never exceed 0.75% of average daily net assets, a commitment that will remain in place for the life of the fund.

	•	we waive our investment advisory fee and/or reimburse Cohen & Steers Special Equity Fund, Inc. for expenses incurred in order to limit the fund's total expense ratio to 1.50% of the fund's net assets through December 31, 2004.

	•	we waive our investment advisory fee and/or reimburse Cohen & Steers Utility Fund, Inc. for expenses incurred in order to limit the fund's total expense ratio through December 31, 2004 to 1.50% of the fund's Class A share net assets, 2.15% of the Class B shares and Class C shares net assets and 1.15% of the fund's Class I shares net assets.

As in the case of our closed-end mutual funds, these fee waivers and expense reimbursements provide a direct benefit to fund investors by lowering the expenses associated with investing in our funds and improving each fund's potential performance for the term of the waiver. As a result, we believe the fee waivers aid in the sales efforts for each fund.

Pursuant to administration agreements, we provide certain administration and accounting functions to each of our open-end mutual funds, including providing administration services necessary for the operations of each fund and furnishing office space and facilities required for conducting the business of each fund. For these services, each of our open-end mutual funds pays us a monthly administration fee based on a percentage of the fund's average daily net assets. Each of our open-end mutual funds has entered into a fund accounting and administration agreement with a third party to provide each fund with certain additional fund administration services for a monthly administration fee computed on the basis of the net assets of that fund.

As with our closed-end mutual funds, we oversee administrative services that State Street provides to each open-end mutual fund. For example, in the case of the daily pricing of each fund, State Street calculates each fund's net asset value. Independently, we calculate each fund's net asset value and reconcile with State Street following the close of trading each day on fund pricing. This serves as a control on the fund's daily net asset value calculation. We also oversee State Street in its capacity as administrator and custodian for each fund, as well oversee the services provided by each fund's transfer agent.

Our investment advisory and administration agreements with our open-end mutual funds are generally terminable upon 60 or fewer days' notice, and each investment advisory agreement , including the fees payable thereunder, is subject to annual approval by the open-end mutual fund's board, as well as by a majority of the directors who are not interested persons.

Each open-end mutual fund board currently consists of seven directors except for Cohen & Steers Utility Fund, which consists of eight directors. Our principals serve as a director of each fund. The other five members of the board are independent directors. The Investment Company Act of 1940 and Securities and Exchange Commission rules and interpretations require that at least a majority of the independent directors approve certain items, such as the entry into and continuation of investment advisory agreements between the fund and the investment advisor.

Institutional Separate Accounts. Our institutional separate accounts are customized, custodial portfolios of securities we manage for institutional clients. In each institutional separate account, unlike with our mutual funds , we manage the assets in a manner tailored to the investment preferences of that individual client and as clearly defined within each client's individual investment advisory agreement. Our institutional separate account advisory fee schedules are also subject to wider variation than our mutual funds. Our investment advisory agreements with our institutional separate account clients are generally terminable upon 60 or fewer days' notice. As of March 31 , 2004, we had 39 institutional separate accounts, which held $3.4 billion in assets on behalf of some of the world's largest pension and endowment funds and insurance companies. Revenue from our institutional separate accounts was $8.8 million in 2003 and $9.7 million in 2002.

Our sub-advisory and wrap-fee assets are included in our institutional separate account assets. Sub-advisory assets represent accounts for which we have been named as a sub-adviser by the investment advisor to that account. We currently serve as sub-advisor for a portfolio of the American Skandia Trust, as well as certain funds sponsored by Assante Corporation and Daiwa Asset Management. As sub-advisor, we have responsibility for managing the portfolio's investments, while the investment advisor oversees our performance as sub-advisor. Wrap fee assets represent assets received from wrap fee programs. Wrap fee programs bundle a number of investment services together for one fee. The sponsor of the wrap fee program will work with the client in helping the client select one or more firms to manage the client's account. We are currently an investment manager in two wrap fee programs.

Portfolio Consulting Services. As portfolio consultant, we provide several services in connection with investment products, such as unit investment trusts (UITs), that contain relatively static portfolios of securities. A unit investment trust is a registered investment company that holds a portfolio of securities that generally does not change during the life of the product except that the sponsor of the UIT may sell portfolio securities under certain narrowly defined circumstances. As portfolio consultant to a number of UITs, we construct a portfolio of securities that we believe is well suited to satisfying the investment objective of the UIT. We also provide ongoing supervisory services related to the portfolio. Finally, we also provide a license to certain firms to use our name in connection with their investment products.

We act as portfolio consultant for a series of UITs offered by Van Kampen and Morgan Stanley . We currently provide consulting services for nine REIT UITs and three preferred stock UITs, which collectively had an aggregate of $564 million in assets as of March 31, 2004 . Most of the UITs have two to five year terms.

In addition, we maintain our proprietary index, Cohen & Steers Realty Majors Index (RMP), listed on the American Stock Exchange, which is the basis for the iShares Cohen & Steers Realty Majors Index Fund (ICF) sponsored by Barclays. With assets of $922 million as of March 31, 2004 , this fund is currently the largest sector iShare sponsored by Barclays. We earn a licensing fee based on the fund's assets for the use of our index.

Our fee schedules for these relationships vary widely based on the type of services we provide for each relationship. Our total revenue from our portfolio consulting services was $0.8 million in 2003 and $0.3 million in 2002.

Our Assets Under Management

Our revenue is based on our assets under management and the asset value of investment products that underlie our portfolio consulting services . The following table sets forth the breakdown of our total assets under management by account and security type as of the dates shown, and the compound annual growth rates (CAGR) for our assets under management since December 31, 1999.

Assets Under Management

	December 31,												December 31, 1999 to March 31 , 2004
	1999		2000		2001		2002		2003		March 31 , 2004(2)		CAGR
	($ in millions)
Breakdown by Account Type
Closed-end Mutual Funds	$	98.0	$	114.2	$	600.7	$	2,114.3	$	4,790.6	$	7,664.5		179.0	%
Open-end Mutual Funds		1,571.5		2,077.5		2,314.6		2,452.4		3,897.1		4,514.0		28.2	%
Institutional Separate Accounts		2,092.6		2,566.8		2,782.2		2,057.1		2,992.4		3,360.8		11.8	%

Total Assets Under Management	$	3,762.1	$	4,758.5	$	5,697.5	$	6,623.8	$	11,680.1	$	15,539.3		39.6	%

Breakdown by Security Type
Real Estate Common Stocks	$	3,606.1	$	4,536.0	$	5,259.4	$	5,908.9	$	9,892.6	$	11,835.3		32.3	%
Utility Common Stocks		—		—		—		—		—		1,296.1		n/a
Real Estate Preferred Stocks		32.4		55.7		266.6		597.1		836.0		1,205.1		134.2	%
Corporate Preferred Stocks		—		—		—		—		683.9		895.2		n/a
Fixed Income(1)		2.3		2.5		6.2		13.5		109.1		118.3		154.0	%
Cash and Short-Term Investments		121.3		164.3		165.3		104.3		158.5		189.3		n/m

Total Assets Under Management	$	3,762.1	$	4,758.5	$	5,697.5	$	6,623.8	$	11,680.1	$	15,539.3		39.6	%

(1)		Includes corporate bonds.
(2)		Assumes that (i) the $338 million of cash in Cohen & Steers REIT & Utility Income Fund has been invested based on the following portfolio composition: 40% in utility common stocks, 40% in real estate common stocks, 13% in real estate preferred stocks and 7% in corporate preferred stocks and (ii) the $581 million of cash in Cohen & Steers Select Utility Fund has been invested based on the following portfolio composition: 78% in utility common stocks, 12% in real estate preferred stocks and 10% in corporate preferred stocks. Cohen & Steers REIT & Utility Income Fund and Cohen & Steers Select Utility Fund are funds which commenced operations during 2004 and as of March 31, 2004 had not yet fully invested their assets in accordance with these funds's stated policies.

As of March 31, 2004 , approximately 49% of our assets under management was in closed-end mutual funds. For the three months ended March 31, 2004, 45% of our investment advisory and administration fees and 36% of Asset Management revenue were from closed-end mutual funds. Unlike open-end mutual funds, closed-end mutual funds are not subject to shareholder redemptions that can result in greater volatility in asset levels. As a result, a large proportion of our assets under management are relatively stable, providing us with similarly stable revenue under normal market conditions with respect to that part of our current business. Beginning in 2006 and continuing through 2012, certain investment advisory fee waivers on five of our closed-end mutual funds are scheduled to begin to expire, subject to approval by the fund's board of directors. We expect the expiration of these fee waivers to result in higher revenue, assuming constant asset levels.

Our Investment Process

Our investment process is based on fundamental portfolio and company research. Our investment committees and portfolio managers formulate investment strategies that take into account the economy, industry fundamentals and the valuation landscape for each portfolio strategy. A dedicated investment committee oversees the portfolio manager and research team responsible for each of our portfolio strategies. Mr. Cohen, Mr. Steers and Mr. Harvey head our investment committees . Our seven portfolio managers have an average of 17 years experience as portfolio managers or analysts.

Our research analysts, each of whom is a specialist in certain industry sectors, have an average of eight years of research experience. Each analyst must subject the companies that he or she covers to a rigorous fundamental analysis. Our research analysts focus on a company's management, business plan, balance sheet, industry segment and corporate governance. We also require our research analysts to spend a significant amount of time interacting with and visiting company management, as well as talking to competitors, vendors, analysts and other industry participants. Investment performance is a primary determinant of incentive compensation for our investment professionals.

We have developed in-house valuation models that are unique to each of our four portfolio strategies. These models use valuation methodologies that have proven, through both back-testing and actual results, to be highly effective in identifying the relative value. We use our valuation models daily for portfolio construction and to manage portfolios with the strict discipline to which we adhere.

While the investment process described above generally applies to each of our portfolio strategies , each such strategy also requires a distinct focus.

Real Estate Securities. Following is a description of our four primary real estate securities portfolio strategies: total return, equity income, special equity and REIT preferred.

	•	Total Return is a strategy for investing primarily in REITs that utilizes a “growth at a reasonable price” approach, with the objective of maximizing total return by balancing capital appreciation and current income for the investor . The Total Return strategy includes investments in all major property sectors, such as office, industrial, retail and multi-family residential, while opportunistically investing in other sectors such as hotel. The Total Return portfolios typically have 30 to 40 holdings.

	•	Equity Income is a strategy for investing in REITs that utilizes a value oriented approach, with a primary objective of providing above average current income for the investor . The Equity Income strategy includes investments in the major property sectors, opportunistically investing in other sectors, and may have an allocation of up to 15% in REIT preferred stocks. The Equity Income portfolios typically hold 40 to 50 common stocks and 10 to 20 preferred stocks.

	•	Special Equity is a highly focused, quantitative strategy for investing in REITs and real estate companies that is driven by a proprietary valuation and portfolio construction model, and has a primary objective of maximizing capital appreciation for the investor . The Special Equity strategy includes investments among property sectors, geographic regions and individual companies, and typically has 20 to 25 holdings.

	•	REIT Preferred portfolios generate high current income through a value oriented approach that focuses on the credit quality and relative value of the securities in which it invests . The REIT Preferred strategy is well diversified across property sectors.

Utility Common Stocks. Our utility investment process is based on a bottom-up fundamental analysis of each individual company. Critical to the analysis is an assessment of state and federal regulatory and political trends, which influence the rate making process in the industry. Common stocks are evaluated for their potential to provide secure current dividend income and capital appreciation . We review each company's potential for success in light of general economic industry and regulatory trends, as well as a company's current or forecasted financial condition, business plan, industry and sector market position, dividend payout ratio, quality of management and

corporate governance. Our value oriented approach emphasizes relative price/cash flow and price/earnings multiples, dividend yield and earnings and dividend growth rates.

Corporate Preferred Stocks . Our preferred investment process combines a top-down and bottom-up fundamental methodology. We construct an overall investment strategy based on macroeconomic, industry and regulatory trends, but then evaluate an individual company's credit quality, management, profitability, and other company specific factors. Since corporate preferred stock is often issued by large, structurally complex organizations and most frequently represents subordinated capital positions, our analysis places great weight on a stock's standing within the capital and corporate structure . Our proprietary “fair value” credit curve model, which values over 1,300 securities, is utilized to identify relative value.

Our Historical Investment Performance

Our investment process and the experience of our investment team have helped us to establish a long track record of delivering attractive returns for our clients . The following table presents the performance of our primary portfolio strategies, which comprised 98% of our assets under management over the periods presented since the inception date of each strategy and compares this performance to the return of the benchmark and the S&P 500 Index over the same periods. We believe this presentation allows you to evaluate our ability to manage client assets over long periods of time.

Investment Performance
Inception through March 31 , 2004

		Annualized Excess Return (2) vs.
Strategy (Inception Date)	Total Return(1) (Annualized)	Benchmark*	S&P 500 Index
Total Return (3/85)	13.0%	1.1%	0.1%
Equity Income (8/88)	14.1%	1.9%	2.0%
Equity Income with Leverage (7/01)	24.8%	5.4%	26.2 %
Special Equity (6/97)	13.6%	2.3%	8.4%
REIT Preferred Stocks (8/96)	14.8%	4.1%	5.6%

(1)		Returns since inception before deduction of investment advisory fees and other expenses. Investment advisory fees and other expenses reduce returns to our clients. Calculated by computing the weighted average performance for all of our accounts that have the same objective and strategy. Past performance is not a guarantee of future performance.
(2)		Represents the average annual amount for the stated period that the strategy's returns exceeded the returns for the benchmark and S&P 500 Index.
*		NAREIT Equity REIT Index; and for REIT Preferred Stocks, Morgan Stanley REIT Preferred Index.

Our Distribution Network

Our distribution network encompasses the major channels in the asset management industry , including large brokerage firms, RIAs and institutional investors. We are a leading sponsor in the market for closed-end mutual funds, and our open-end mutual funds are available for purchase through the major broker-dealers, the significant networks serving financial advisors and the no-load investment community, and certain “wrap fee” platforms. These distribution channels include Merrill Lynch & Co., Charles Schwab & Co., Inc., Fidelity Global Brokerage Group, Inc., UBS, Wachovia, A.G. Edwards & Sons, Inc., Raymond James Financial Services, Inc. and Smith Barney. We provide advisory and administration services to four open-end and seven closed-end mutual funds under the Cohen & Steers brand name, which collectively have over 375,000 individual investors. Our institutional separate account relationships extend to institutions such as pension and endowment funds and insurance companies, and to high net worth individuals. In addition, we provide sub-advisory services in the variable annuity channel and to several products that are distributed outside of the United States, including Canada and Japan.

Our marketing department is organized by the following distribution channels: broker-dealers, fee based advisors, and institutions.

Our broker-dealer group is comprised of external and internal wholesalers who are responsible for marketing both closed-end and load open-end mutual funds. We believe that our success with closed-end mutual funds has significantly enhanced our penetration and brand in the broker-dealer

channel. We intend to capitalize on this success by expanding our wholesaler sales force and diversifying our product offerings to include new closed-end mutual funds and new load open-end mutual funds.

Our fee based advisor group services RIAs and financial planners who utilize our open-end mutual funds. These mutual funds are marketed primarily through mutual fund supermarkets such as Charles Schwab & Co., Inc., Fidelity Global Brokerage Group, Inc., and T.D. Waterhouse. For example, Cohen & Steers Realty Shares was a founding member of the Schwab Mutual Fund Marketplace. We expect to capitalize on our existing relationships we have with several of the largest mutual fund supermarkets to offer new open-end mutual fund products targeted to the fee based advisor. These mutual fund supermarkets also give us access to individual investors.

Our institutional group services institutional separate account clients for a broad range of public and corporate pension funds, endowment funds and foundations and insurance companies, among others. They also service institutional clients who may invest through our existing mutual funds, the growing 401(k) market, and variable annuities. Our institutional group also maintains relationships with key institutional consultants.

Asset Management Strategy

We believe that investors view income producing equities more favorably today than at any time in the last 25 years. According to the U.S. Census Bureau, the proportion of the U.S. population that is 55 years of age and older is expected to increase from less than 22% in 2003 to nearly 29% by 2020. In addition to this demographic trend, tax incentives should continue to stimulate savings. The projected incremental new flows to 401(k)s and IRA accounts are expected, according to Cerulli Associates, to increase from a combined amount of $8 billion in 2003 to approximately $28 billion in 2007. As the U.S. population ages and investment savings continue to increase, we believe individuals will reallocate assets in their investment accounts in a manner that reduces volatility and produces higher levels of current income. We believe this change will also be true for many institutional investors, such as pension and endowment funds that are seeking higher yielding, lower volatility investments to meet their investment objectives.

Additionally, recently enacted federal tax legislation has removed the long held advantage that long-term capital gains have held over corporate dividends, furthering demand for dividend income. For the first time in recent history, both dividend income and long-term capital gains may now be taxed equally at a 15% federal rate. We believe the volatility the stock market has experienced, combined with the low inflation and low interest rate environment that has prevailed for several years, has encouraged investors to seek a higher proportion of long-term total returns from current income. Accordingly, we believe U.S. investors will continue to seek out current income opportunities. We expect mutual funds to be a primary vehicle for this investment. As evidence of this trend, the Investment Company Institute 2003 Mutual Fund Fact Book estimates that the percentage of U.S. households owning mutual funds increased from 27% in 1992 to 50% in 2002.

Our business strategy includes the following key elements:

	•	Capitalize on the Cohen & Steers Brand. As the nation's largest manager of real estate mutual funds, a leading sponsor of closed-end mutual funds and as a result of our strong historical investment performance, we have developed a recognized brand name that has enabled us to expand our product offerings to include corporate preferred securities and utility common stocks. We believe that becoming a public company, along with our planned increases in marketing, product offerings, distribution and targeted advertising, will further strengthen our brand and enable us to continue to increase our market share with respect to many of our existing product and service offerings. We also believe we can leverage this brand awareness to offer new products and services that complement our existing offerings.

	•	Diversify Product Offerings. We have diversified our business beyond our historical strength in real estate securities to include corporate preferred stocks and utility common stocks and have raised $2.4 billion in assets in these areas since 2003 . We intend to continue to expand our offerings in these security types, as well as in other high dividend yielding common stocks, by developing new proprietary open-end and closed-end mutual funds, sub-advising other firms' investment products and by offering our expertise to institutional investors.

• Expand Wholesaling Sales Force. We have built relationships with the major national and regional brokerage firms and have experienced success marketing and raising assets in our open-end and closed-end mutual funds. We believe these relationships will help us continue to attract assets as we launch new open-end mutual funds and, in order to further leverage these relationships, our near term plan includes adding several wholesalers to facilitate our mutual fund expansion.

• Pursue New Areas of Distribution. We plan to further penetrate several distribution areas, such as the international and the RIA markets. While we believe we have a strong presence in the RIA channel, the launch of new open-end mutual funds should enable us to penetrate this market further. Fund supermarkets such as Charles Schwab & Co., Inc. and Fidelity Global Brokerage Group, Inc., where we are already well recognized, provide an established platform for us to offer our new products on a “load waived” basis for advisors. The international arena also offers a significant opportunity to manage money for non-U.S. investors in Europe and Asia through both locally marketed collective investment vehicles and direct relationships with large institutions.

• Pursue Acquisitions. We selectively consider strategic acquisitions of asset management operating companies, either for cash or stock. This strategy may include “lift-outs” of teams of professionals from other asset management organizations, which may require nominal cash consideration. Our objectives include adding complementary asset management expertise to our business that provides additional growth opportunities and leverages our existing capabilities.

Investment Banking

We have assembled a highly experienced team of investment banking professionals with a long-standing transactional track record in the real estate and health care industries. Since 1999, we have completed over 44 transactions representing over $5 billion in value. Our professionals have developed long-standing relationships with many companies and have established a strong presence in our targeted market. As a result, we believe we are well positioned to take advantage of new advisory opportunities.

Our investment banking business strategy focuses on providing a full range of services to a focused universe of companies in select real estate intensive businesses, including the following areas:

Mergers & Acquisitions— We provide a full range of merger and acquisition advisory services involving the purchase or sale of public or private companies or their business units through a combination of broad auctions or highly targeted negotiations. We also facilitate leveraged buyouts and strategic capital infusions, and provide our clients with advice relating to takeover defenses. We have advised clients in 11 merger and acquisition transactions representing over $900 million in value. These transactions included the acquisition of ARV Assisted Living, Inc. by Prometheus Assisted Living LLC, a Lazard Freres Real Estate Investors LLC controlled entity, and the sale of the ILM I Senior Living, Inc. and ILM II Senior Living, Inc. companies to Capital Senior Living Corporation and Five Star Quality Care Inc. in combination with Senior Housing Property Trust, respectively.

Restructurings— We have developed a broad range of corporate restructuring advisory services. These services include advice with respect to debt and lease restructurings, recapitalization transactions, exchange offers and bankruptcy advisory services. We have advised clients in five

restructuring assignments encompassing 17 transactions representing over $3.3 billion in value. These assignments included advising Alterra Healthcare Corporation through its bankruptcy proceedings and advising American Retirement Corporation in the refinancing of its obligations and in its exchange offer of its convertible subordinated debentures.

Capital Raising— We provide capital raising services as agent in connection with the sale of public and private debt, preferred, equity linked and equity securities. We have completed 16 transactions which raised over $860 million, primarily SEC- registered direct placements of equity and preferred securities. These transactions included a $100 million issuance of preferred shares by LTC Properties, Inc., a $118.5 million issuance of preferred shares by Omega Healthcare Investors, Inc., a $60.0 million issuance of preferred shares by Kramont Realty Trust and a $115.5 million issuance of common shares by Nationwide Health Properties, Inc.

Competition

Asset Management

We face substantial competition in every aspect of Asset Management business. Factors affecting our business include brand recognition, business reputation, investment performance, quality of service and the continuity of client relationships. Fee competition also affects the business, as do compensation, administration, commissions and/or other expenses paid to intermediaries.

We compete with a large number of global and U.S. asset management companies, commercial banks, brokerage firms and broker-dealers, insurance companies and other financial institutions. We believe there are more than 950 investment managers that have assets under management in excess of $1 billion and, according to the Investment Company Institute, there are more than 300 mutual fund managers in the United States. We are considered a small to mid-sized firm within the asset management universe. Many competing firms are parts of larger financial services companies and attract business through numerous means including retail bank offices, investment banking and underwriting contacts, insurance agencies and broker-dealers. U.S. banks and insurance companies can now affiliate with securities firms. This has accelerated consolidation within the money management and financial services businesses. It has also increased the variety of competition for traditional money management firms, which businesses are limited to investing assets on behalf of institutional and individual clients. Foreign banks and investment firms have entered the U.S. money management business, either directly or through partnerships or acquisitions.

Our competitors seek to expand their market share among the same client base that we serve. Financial intermediaries that provide our products to their clients may also provide competing products. Many current and potential competitors have greater brand name recognition and more extensive client bases, which could be to our disadvantage. In addition, our larger competitors have more resources and may have more leverage to expand their distribution channels and capture market share through ongoing business relationships and extensive marketing efforts. Conversely, relative to our larger competitors, we are able to grow our business at a faster rate from a smaller asset base. In addition, we believe we are better able to shift resources to respond to changing market conditions more quickly than many larger asset management firms.

The regulated open-end mutual funds for which we provide advisory and administration services face significant competition from other registered open-end mutual funds. They vary both in size and investment philosophy. Their shares are offered to the public on a load and no load basis. Advertising, sales promotions, the type and quality of services offered and investment performance influence competition for mutual fund sales.

We also face intense competition in attracting and retaining qualified employees. The ability to continue to compete effectively in our businesses depends in part on our ability to compete effectively in the labor market.

Investment Banking

Investment Banking faces intense competition from other investment banking and financial advisory firms. We compete with them on the basis of a number of factors, including transaction execution skills, range of services, innovation, reputation and price.

Regulation

Our business and the securities business in general are subject to extensive regulation in the United States at both the federal and state level, as well as by self regulatory organizations. The financial services business is one of the nation's most extensively regulated businesses. The Securities and Exchange Commission is responsible for enforcing the federal securities laws and serves as a supervisory body for all federally registered investment advisors, as well as for national securities exchanges and associations. Our subsidiaries, Cohen & Steers Capital Advisors, L.L.C. and Cohen & Steers Securities, LLC, are broker-dealers. The regulation of broker-dealers has, to a large extent, been delegated by the federal securities laws to self regulatory organizations (“SROs”). These SROs include all the national securities and commodities exchanges and the NASD. Subject to approval by the Securities and Exchange Commission and the Commodity Futures Trading Commission (“CFTC”), the SROs adopt rules that govern the industry. The SROs regularly conduct periodic examinations of the operations of Cohen & Steers Capital Advisors, L.L.C. and Cohen & Steers Securities, LLC. The NASD is the designated SRO for Cohen & Steers Capital Advisors, L.L.C. and Cohen & Steers Securities, LLC. In addition, these subsidiaries are subject to regulation under the laws of the 50 states, and the District of Columbia and certain foreign countries in which they are registered to conduct securities or investment advisory businesses.

Cohen & Steers Capital Management, Inc. is registered as an investment advisor with the Securities and Exchange Commission. As a registered investment advisor, we are subject to the requirements and regulations of the Investment Advisers Act of 1940. Such requirements relate to, among other things, recordkeeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an advisor and advisory clients, as well as general anti-fraud prohibitions. Moreover, we are subject to the Investment Company Act and its rules and regulations. The Investment Company Act regulates the relationship between a mutual fund and its investment advisor and prohibits or severely restricts principal transactions and joint transactions.

Broker-dealers are subject to regulations which cover all aspects of the securities business, including sales practices, market making and trading among broker-dealers, use and safekeeping of clients' funds and securities, capital structure, recordkeeping and the conduct of directors, officers and employees. Violation of applicable regulations can result in the revocation of broker-dealer licenses, the imposition of censures or fines and the suspension or expulsion of a firm, its officers or employees.

Our registered broker-dealer subsidiaries are each subject to certain net capital requirements under the Securities Exchange Act of 1934, as amended. The net capital requirements, which specify minimum net capital levels for registered broker-dealers, are designed to measure the financial soundness and liquidity of broker-dealers. Cohen & Steers Capital Advisors, L.L.C. and Cohen & Steers Securities, LLC are also subject to “Risk Assessment Rules” imposed by the Securities and Exchange Commission which require, among other things, that certain broker-dealers maintain and preserve certain information, describe risk management policies and procedures and report on the financial condition of certain affiliates whose financial and securities activities are

reasonably likely to have material impact on the financial and operational condition of broker-dealers.

The USA Patriot Act of 2001 (the “Patriot Act”), enacted in response to the terrorist attacks on September 11, 2001, contains anti-money laundering and financial transparency laws and mandates the implementation of various new regulations applicable to broker-dealers and other financial services companies, including standards for verifying client identification at account opening, and obligations to monitor client transactions and report suspicious activities. Through these and other provisions, the Patriot Act seeks to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. Anti-money laundering laws outside of the United States contain some similar provisions. The increased obligations of financial institutions to identify their customers, watch for and report suspicious transactions, respond to requests for information by regulatory authorities and law enforcement agencies, and share information with other financial institutions, requires the implementation and maintenance of internal practices, procedures and controls which may subject us to liability.

Recent financial scandals may have led to insecurity and uncertainty in the financial markets and may have contributed to periodic declines in capital markets. In response to these scandals, the Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange Commission, the New York Stock Exchange and NASDAQ necessitate significant changes to corporate governance and public disclosure. These provisions generally apply to companies with securities listed on U.S. securities exchanges, and some provisions apply to non-U.S. issuers with securities listed on U.S. securities exchanges.

	•	The Mutual Fund Reform Act of 2004 would, among other things, eliminate fees for services pursuant to distribution plans adopted under provisions of Rule 12b-1 of the Investment Company Act.

	•	The Senate recently proposed a Mutual Fund Oversight Board similar to the Public Company Accounting Oversight Board.

	•	The Securities and Exchange Commission, the NASD and other regulators, as well as Congress, are investigating certain practices within our industry.

	•	New Securities and Exchange Commission rules require each investment company and each investment advisor registered with the Securities and Exchange Commission to adopt and implement comprehensive, written policies and procedures reasonably designed to prevent violation of the federal securities laws, and review those policies and procedures annually for their adequacy and the effectiveness of their implementation. Some important areas that these policies and procedures should address include:


	-	pricing of portfolio securities and investment company shares, including monitoring of circumstances that may necessitate the use of fair value prices, criteria for determining when market quotations are no longer reliable for a particular portfolio security, a methodology to determine the current fair value of the portfolio security, and the regular review of the appropriateness and accuracy of the method used in valuing securities;

	-	protection of nonpublic information against potential misuse, including the disclosure to third parties of material information about portfolio holdings, trading strategies or pending transactions and the purchase or sale of investment company shares by advisers or their personnel based on material, nonpublic information about the investment company's portfolio;

- market timing, including compliance with disclosed policies regarding market timing, monitoring of shareholder trades or investment company share flows, consistent enforcement of market timing policies and a quarterly report to the board of all waivers of market timing policies; and

- trading practices, including procedures by which the investment adviser satisfies its best execution obligation, uses client brokerage to obtain research and other services (soft dollar arrangements) and allocates aggregated trades among clients.

The new Securities and Exchange Commission rules also require each investment company and each investment adviser registered with the Securities and Exchange Commission to designate a chief compliance officer who:

	•	will be responsible for administering these adopted and implemented policies and procedures;

	•	is competent and knowledgeable regarding the federal securities laws; and

	•	has sufficient seniority and authority to develop and enforce the compliance program.

Recently adopted Securities and Exchange Commission rules also will require mutual funds to adopt:

	•	“fair value” pricing procedures to address time zone arbitrage and to explain both the circumstances under which they will use fair value pricing and the effects of using fair value pricing, all of which is intended to clearly reflect that investment companies are required to use fair value pricing any time that market quotations for portfolio securities are not readily available or are unreliable;

	•	selective disclosure procedures to protect mutual fund portfolio information, which are intended to provide greater transparency of investment company practices with respect to the disclosure of portfolio holdings and to reinforce investment companies' obligations to prevent the misuse of material, non-public information; and

	•	procedures to ensure compliance with a mutual fund's disclosed market timing policy, which are intended to enable investors to assess the risks, policies and procedures of the investment company in this area and determine whether they are in line with their expectations .

The Securities and Exchange Commission has proposed further rule amendments to eliminate late trading of mutual fund shares. In addition, if regulations are adopted revising or eliminating the ability of asset managers to receive rebates of brokerage commissions through “soft dollars,” whereby the brokers pay certain expenses of asset managers, such as those involved in research reports, our overhead expenses could increase.

Additional legislation and regulations, including those relating to the activities of investment advisors and broker-dealers, changes in rules imposed by the Securities and Exchange Commission or other U.S. or foreign regulatory authorities and self regulatory organizations or changes in the interpretation or enforcement of existing laws and rules may adversely affect our business and profitability. Our businesses may be materially affected not only by regulations applicable to it as an investment advisor or broker-dealer, but also by regulations of general application. For example, the volume of our principal investment advisory business in a given time period could be affected by, among other things, existing and proposed tax legislation and other governmental regulations and policies (including the interest rate policies of the Federal Reserve Board) and changes in the interpretation or enforcement of existing laws and rules that affect the business and financial communities.

Use of Soft Dollars

On behalf of our mutual fund shareholders and investment advisory clients, we make decisions to buy and sell securities for each portfolio and negotiate brokerage commission rates. Transactions on U.S. stock exchanges involve the payment of negotiated brokerage commissions. There is generally no stated commission in the case of securities traded in the over-the-counter market but

the price paid by an account usually includes an undisclosed dealer commission or mark-up. In certain instances, a portfolio may make purchases of underwritten or agency placed issues at prices that reflect underwriting or placement fees. In selecting a broker-dealer to execute each particular transaction, we take the following into consideration:

	•	the best net price available;

	•	the reliability, integrity and financial condition of the broker-dealer;

	•	the size and difficulty in executing the order; and

	•	the value of the expected contribution of the broker-dealer to the investment performance of each portfolio on a continuing basis.

Accordingly, the cost of the brokerage commissions to a portfolio in any transaction may be greater than that available from other broker-dealers if the difference is reasonably justified by other aspects of the portfolio execution services offered.

We have adopted a policy of paying standard brokerage commission rates that vary based on certain factors, including the type of execution provided by a particular broker-dealer channel. While we may receive research services from a broker-dealer in connection with initiating portfolio transactions for a portfolio, we will not enter into any arrangements by which our portfolio accounts pay a broker-dealer a commission that is greater than our standard commission rate in connection with such transactions. We receive research and investment information from these broker-dealers at no cost to us and this information is available for the benefit of all accounts we advise. Although we will not necessarily use all of this information in connection with any one particular account we consider the extent to which we make use of statistical, research and other services furnished by broker-dealers in allocating client brokerage business.

For the fiscal year ended December 31, 2003, our client accounts paid a total of $11.4 million in brokerage commissions. Of this amount, $2.6 million in brokerage commissions was placed with broker-dealers that provided $1.3 million in research and investment information. Such expenses are borne entirely by our advisory clients and are not reflected in our financial statements. At the end of each reporting period, we record a payable and a related expense for the total amount of our unpaid research related costs that various broker-dealers have committed to pay on our behalf based on the arrangements described in the preceeding paragraphs. When these research costs are subsequently paid, we reverse our accrual. To date, all soft-dollar related costs have been paid in full by the respective broker-dealers.

Intellectual Property

Currently we own a federal trademark registration for the marks “Cohen & Steers Realty Majors,” “The Authoreity,” “Authoreity,” and “Realty Majors,” and we are awaiting federal registration of the name “Cohen & Steers”.

Facilities

Our principal executive offices are located in leased office space at 757 Third Avenue, New York, New York. We do not own any real property. We consider these arrangements to be adequate for our present needs.

Employees

As of March 31 , 2004, we had 74 employees. None of our employees are subject to any collective bargaining agreements. We believe we have good relations with our employees.

Legal Proceedings

We are not party to any material legal proceedings.

MANAGEMENT

Directors and Executive Officers

The following table sets forth the names, ages and positions of our current directors and executive officers, as well as our nominees for our board of directors .

Name	Age		Position
Martin Cohen		55	Co-chairman, co-chief executive officer and director
Robert H. Steers		51	Co-chairman, co-chief executive officer and director
Richard E. Bruce		66	Director nominee
Peter L. Rhein		62	Director nominee
Richard P. Simon		58	Director nominee
Edmond D. Villani		57	Director nominee
Joseph M. Harvey		40	President
Adam M. Derechin		39	Chief operating officer
Victor M. Gomez		39	Chief financial officer
John J. McCombe		43	Executive vice president
Lawrence B. Stoller		40	Senior vice president, general counsel and secretary

Martin Cohen , co-founder, co-chairman and co-chief executive officer, is a senior portfolio manager for all Cohen & Steers clients and co-heads the firm's investment committee. Prior to co-founding the firm in 1986, Mr. Cohen was a senior vice president and portfolio manager at National Securities and Research Corporation from 1984 to 1986, where in 1985 he and Mr. Steers organized and managed the nation's first real estate securities mutual fund. From 1976 to 1981, Mr. Cohen was a vice president at Citibank, where in 1980 he organized and managed the Citibank Real Estate Stock Fund. Mr. Cohen has a BS degree from the City College of New York and an MBA degree from New York University. He has served as a member of the Board of Governors of the National Association of Real Estate Investment Trusts. In 2001, he was the recipient of the National Association of Real Estate Investment Trusts Industry Achievement Award. Mr. Cohen serves as a director of each of the Cohen & Steers open-end and closed-end mutual funds.

Robert H. Steers , co-founder, co-chairman and co-chief executive officer, is a senior portfolio manager for all Cohen & Steers clients and co-heads the firm's investment committee. Prior to co-founding the firm in 1986, Mr. Steers was a senior vice president and the chief investment officer of National Securities and Research Corporation from 1982 to 1986, where in 1985 he and Mr. Cohen organized and managed the nation's first real estate securities mutual fund. From 1977 to 1982, Mr. Steers was a vice president at Citibank, serving as an analyst and portfolio manager of Citibank's Emerging Growth Stock Fund. Mr. Steers has a BS degree from Georgetown University and an MBA degree from George Washington University. Mr. Steers serves as a director of each of the Cohen & Steers open-end and closed-end mutual funds.

Richard E. Bruce , director nominee, has been a Director in the Equity Capital Markets department at Merrill Lynch since 1992. Mr. Bruce has a BA degree in economics from Union College and an MBA from the Wharton School of the University of Pennsylvania.

Peter L. Rhein , director nominee, has been a general partner of Sarlot and Rhein, a real estate investment and development partnership, since 1967. From 1970 until 1984, he was employed in various capacities by Wells Fargo Realty Advisors and its affiliates. From 1976 until 1984, he was Vice President, Treasurer and Chief Financial Officer of Wells Fargo Mortgage and Equity Trust, a real estate investment trust. Mr. Rhein is a Certified Public Accountant. Mr. Rhein serves on the board of directors and as chairman of the audit committee for Health Care Property Investors, Inc. and on board of governors of the Fulfillment Fund, a non-profit organization which supports education for disadvantaged students.

Richard P. Simon , director nominee, retired from Goldman Sachs & Co. in 2004 and is currently a consultant with New Leaf Associates, which he formed in 2004. From 1978 until his retirement, he was an equity research analyst at Goldman Sachs. Between 1990 and 2002, Mr. Simon coordinated Goldman's global media, publishing, advertising, broadcasting, and cable research and served as a Managing Director from 1996 until his retirement. Prior to retiring from Goldman Sachs, Mr. Simon also mentored analysts and was deputy director of research. He is currently a member of the board of directors of Visions, a not for profit organization for the visually impaired and blind. Mr. Simon has an MBA from New York University.

Edmond D. Villani , director nominee, is Vice Chairman of Deutsche Asset Management, North America . Between 1997 and 2002 he was the Chief Executive Officer of Scudder, Stevens & Clark, Inc. and its successor entities . He is chairman of the board of Georgetown University and serves on the boards of Rockefeller Brothers Fund (chairman of the finance committee) and Colonial Williamsburg Foundation. In addition, he serves on the advisory board of the Penn Institute for Economic Research at the University of Pennsylvania and is a member of the International Capital Markets Advisory Committee of the Board of the New York Stock Exchange. Mr. Villani has a B.A. in Mathematics from Georgetown University and a Ph.D. degree in Economics from the University of Pennsylvania.

Joseph M. Harvey , president, is responsible for the firm's investment and marketing departments and is a co-portfolio manager of Cohen & Steers Special Equity portfolios. Prior to joining Cohen & Steers in 1992, he was a vice president with Robert A. Stanger Co. for five years, where he was an analyst specializing in real estate and related securities for the firm's research and consulting activities. Mr. Harvey has a BSE degree from Princeton University.

Adam M. Derechin, CFA , chief operating officer, is responsible for the firm's investment administration, accounting and finance, legal and systems departments. Prior to joining Cohen & Steers in 1993, he worked for the Bank of New England, where he supervised mutual fund accounts. Mr. Derechin has a BA degree from Brandeis University and an MBA degree from the University of Maryland.

Victor M. Gomez, CPA , chief financial officer, oversees the firm's accounting and finance department. Prior to joining the firm in 1999, he worked as a senior audit manager at Prager and Fenton, Certified Public Accountants for ten years. Mr. Gomez has a BS degree in accounting from Brooklyn College.

John J. McCombe , executive vice president and director of marketing, oversees the firm's sales efforts for its open-end and closed-end mutual funds, as well as institutional separate accounts. Prior to joining Cohen & Steers in 1997, he worked for Merrill Lynch for 14 years. Mr. McCombe has a BS degree from Fordham University and an MBA degree from Pace University.

Lawrence B. Stoller , senior vice president, general counsel and secretary, oversees the firm's legal and compliance department. Prior to joining Cohen & Steers in 1999, he was associate general counsel at Neuberger Berman Management Inc., assistant general counsel at The Dreyfus Corporation, an associate at the law firm of Dechert LLP and special counsel at the Securities and Exchange Commission. Mr. Stoller has a BS degree from Cornell University and a JD degree from Georgetown University. He is a member of the Bar in New York and Washington, D.C.

All of our officers are appointed by and serve at the discretion of our board of directors. There are no family relationships among any of our directors or executive officers.

Composition of the Board of Directors After the Offering

Prior to the closing of this offering, we intend to appoint Richard E. Bruce, Richard P. Simon, Peter L. Rhein and Edmond D. Villani as directors and each of them has consented to so serve .

Our Amended and Restated Bylaws provide that our board of directors shall consist of such number of directors as shall from time to time be fixed exclusively by resolution of the board of directors. Each director will serve until our next annual meeting.

Committees of the Board of Directors

We anticipate that, prior to the closing of the offering, our board of directors will establish an Audit Committee, Compensation Committee and a Nominating and Corporate Governance Committee, and our board of directors intends to adopt new charters for its committees that comply with current federal and New York Stock Exchange rules relating to corporate governance matters. We anticipate that each of Messrs. Bruce, Simon, Rhein and Villani will be appointed to each of these committees. Following the closing of the offering, we intend to make copies of the committee charters, as well as our Corporate Governance Guidelines and our Code of Ethics, available on our Web site at www.cohenandsteers.com.

Audit Committee . Upon the closing of the offering, our board of directors will establish an Audit Committee. We anticipate that Mr. Rhein will chair the Audit Committee . The purpose of the Audit Committee will be to assist our board of directors in overseeing and monitoring (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent auditor's qualifications and independence and (iv) the performance of our internal audit function and its independent auditors. The Audit Committee will also be responsible for preparing the Audit Committee report that is included in our annual proxy statement.

Compensation Committee . Upon the closing of the offering, our board of directors will establish a Compensation Committee. The Compensation Committee will be responsible for approving, administering and interpreting our compensation and benefit policies, including our executive incentive programs. It will review and make recommendations to our board of directors to ensure that our compensation and benefit policies are consistent with our compensation philosophy and corporate governance guidelines. The Compensation Committee will also be responsible for establishing the compensation of our co-chief executive officers.

Nominating and Corporate Governance Committee . Upon the closing of the offering, our board of directors will establish a Nominating and Corporate Governance Committee. The purpose of the Nominating and Corporate Governance Committee will be to oversee our governance policies, nominate directors for election by stockholders, nominate committee chairpersons and, in consultation with the committee chairpersons, nominate directors for membership on the committees of the board. In addition, the Nominating and Corporate Governance Committee will assist our board of directors with the development of our Corporate Governance Guidelines.

Compensation Committee Interlocks and Insider Participation

Prior to the closing of this offering, our board of directors will form a Compensation Committee as described above. Mr. Cohen and Mr. Steers, as the sole members of our board of directors prior to the closing of the offering, have historically made all determinations regarding executive officer compensation.

Director Compensation

Our policy is not to pay director compensation to directors who are also our employees. We anticipate that outside directors will enter into compensation arrangements to be determined.

Executive Compensation

As an independent company, we have established executive compensation practices that link compensation with our performance as a company. We will continually review our executive compensation programs to ensure that they are competitive.

Summary Compensation Table

The following table sets forth certain summary information concerning compensation paid or accrued by us for services rendered in all capacities during the fiscal year ended December 31, 2003 for our principals and each of the next three most highly compensated executive officers. These individuals are referred to as the “named executive officers” in other parts of this prospectus.

Long-Term Compensation

Awards

Payouts

Name and
Principal Position

Year

Salary

Bonus

Other Annual
Compensation(1)

Restricted
Stock
Awards

Securities
Underwriting
Options/
SARS

LTIP
Payouts

All Other
Compensation

($) ($) ($) ($) (#) ($) ($)

Martin Cohen
  Co-Chairman and
  Co-CEO(2)    2003    1,058,000    4,000,000    —    —    —    —    7,000

Robert H. Steers
  Co-Chairman and
  Co-CEO(2)    2003    1,058,000    4,000,000    68,946 (3)    —    —    —    7,000

Joseph M. Harvey
  President    2003    276,154    2,250,000    —    —    —    —    6,000

John J. McCombe
  Executive Vice
  President    2003    200,769    1,750,000    —    —    —    —    6,000

Adam M. Derechin
  Chief Operating
  Officer    2003    238,462    700,000    —    —    —    —    6,000

(1)		Except as otherwise provided below, perquisites and other personal benefits to the named executive officers were less than both $50,000 and 10% of the total annual salary and bonus reported for the named executive officers, and therefore, information regarding perquisites and other personal benefits has not been included.
(2)		Salaries and bonuses paid to Mr. Cohen and Mr. Steers during our status as an S corporation are not indicative of the salaries and bonuses to be expected for any future accounting periods.
(3)		Amount reflects personal use of company aircraft.

Aggregate compensation paid to key employees who are not named executive officers may exceed that paid to the named executive officers.

Stock Appreciation Rights Plan

Effective January 1, 2000, we implemented the Cohen & Steers Capital Management, Inc. Stock Appreciation Rights Plan, which we refer to as our SAR plan, for certain of our employees. The SAR plan provides for grants of stock appreciation rights, which generally vest, with respect to one-eighth of the stock appreciation rights granted, on the next June 30 or December 31 following the grant date and on each subsequent June 30 or December 31. In general, each stock appreciation right represents the right to receive a cash payment from us equal to the excess, if any, of the value (based upon a valuation formula set forth in the SAR plan) of a share of common stock on the applicable valuation date based upon a notional number of shares of common stock of 100,000 over the exercise price of the stock appreciation right. We did not grant any stock appreciation rights in 2003, but we did grant stock appreciation rights in January 2004.

2003 Year-End SAR Values

Name	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Securities Underlying Unexercised SARs at Fiscal Year-End (#)		Value of Unexercised In-The-Money SARs at Fiscal Year-End ($)
			Exercisable (Vested)	Unexercisable (Unvested)	Exercisable (Vested)	Unexercisable (Unvested)
Martin Cohen	—	—	—	—	—	—
Robert H. Steers	—	—	—	—	—	—
Joseph M. Harvey	—	—	3,450	250	433,550	36,750
John J. McCombe	—	—	1,450	550	182,300	76,700
Adam M. Derechin	—	—	1,100	400	145,600	58,800

In connection with the offering, we are terminating the SAR plan and canceling the outstanding stock appreciation rights. In exchange for each participant's consent to cancel his or her stock appreciation rights, the participant will receive a grant of restricted stock units pursuant to the 2004 Stock Incentive Plan, as described below, on the date of the consummation of the offering.

IPO Date Employee Awards

Restricted Stock Unit Grants to Former SAR Holders . On the date of the consummation of the offering, we intend to grant awards of restricted stock units to certain of our employees and employees of our affiliates in replacement of such employees' outstanding stock appreciation rights which are being cancelled. The restricted stock units will be granted under the 2004 Stock Incentive Plan described below. Each restricted stock unit awarded to an employee will represent an unfunded, unsecured right, which is nontransferable, except in the event of death, of the employee to receive a share of common stock on a date set forth in the employee's award agreement. An employee who receives an award of restricted stock units will not have any rights as a stockholder with respect to such restricted stock units until the shares of common stock underlying the award are issued. However, holders of vested restricted stock units will be provided with dividend equivalent payments in amounts equal to dividends, if any, we pay to holders of our common stock.

On the date of the consummation of the offering, each former participant in the SAR plan will be granted a number of restricted stock units equal to the quotient of (1) the product of (a) the number of stock appreciation rights held by the individual immediately prior to the cancellation of such stock appreciation rights, times (b) the excess, if any, of the “unit value” of the phantom share underlying the stock appreciation right at the time of the consummation of the offering over the exercise price of the stock appreciation right, divided by (2) the initial public offering price. For this purpose, the “unit value” will be deemed to equal the quotient of (i) (a) the product of the initial public offering price times the number of shares of common stock outstanding on the pricing date of the offering, less (b) the total underwriting discounts incurred by us and the selling stockholders in connection with the offering, divided by (ii) 100,000. Based on an assumed initial public offering price per share of $ , we expect to grant an aggregate of restricted stock units to former SAR holders on the date of the consummation of the offering. If the initial public offering price per share is less than $ , the number of restricted stock units we will grant to former SAR holders will be greater. The restricted stock units will be 100% vested on the date of the consummation of the offering . Subject to a participant's compliance with certain restrictive covenants described below, the shares of common stock underlying the restricted stock units granted on the date of the consummation of the offering will be delivered to each participant as follows: 20% will be delivered on the last business day in January 2006; 40% will be delivered on the last business day in January 2007; and 40% will be delivered on the last business day in January 2008. Notwithstanding the foregoing, if a participant's employment with us and our affiliates is terminated by the participant for “good reason” or by us without “cause” within the two-year period following a change in control (as defined in the 2004 Stock Incentive Plan), the shares underlying all restricted stock units then held by the participant will be delivered to the participant. In consideration of the grant of such restricted stock units, each participant will be prohibited during his or her employment and for a period commencing on his or her termination of employment with us and any of our affiliates for any reason and ending on the last business day in January 2008 from: competing with us and our affiliates; providing investment advisory services to certain of our clients and clients of our affiliates; interfering with certain of our business relationships and soliciting our employees or employees of our affiliates to discontinue employment with us or our affiliates or to hire or employ such employees. In the event of a participant's breach of such restrictive covenants, in addition to any other remedies available to us, the participant will forfeit any then undelivered shares underlying restricted stock units .

Restricted Stock Unit Grants to Other Employees. Based on an assumed initial public offering price per share of $ , we expect to grant an aggregate of restricted stock units to certain of our other employees on the date of the consummation of the offering pursuant to the 2004 Stock Incentive Plan described below. If the initial public offering price per share is less than $ , the number of restricted stock units we will grant to these other employees will be greater. In general, subject to a participant's continued employment with us and compliance with certain restrictive covenants (as described above), the restricted stock units will vest, and the shares of common stock underlying the restricted stock units will be delivered, on the last business

day in January 2008. Notwithstanding the foregoing, if a participant's employment with us and our affiliates is terminated by the participant for “good reason” or by us without “cause” within the two-year period following a change in control, all restricted stock units then held by the participant which are unvested will automatically vest and the shares underlying such restricted stock units will be delivered to the participant. In the event of a participant's breach of the restrictive covenants, in addition to any other remedies available to us, the participant will forfeit any then undelivered shares underlying restricted stock units.

2004 Stock Incentive Plan

The following description of the Cohen & Steers, Inc. 2004 Stock Incentive Plan, which we refer to as our stock incentive plan, is not complete and is qualified by reference to the full text of the stock incentive plan, which has been filed as an exhibit to the registration statement of which this prospectus forms a part.

The stock incentive plan permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to our employees, directors or consultants or those of our affiliates. A maximum of shares of common stock may be subject to awards under the stock incentive plan. The maximum number of shares of common stock for which options and stock appreciation rights may be granted during a calendar year to any participant shall be . The number of shares of common stock issued or reserved pursuant to the stock incentive plan, or pursuant to outstanding awards, is subject to adjustment on account of mergers, consolidations, reorganizations, stock splits, stock dividends and other dilutive changes in the shares of common stock. Shares of common stock covered by awards that expire, terminate or lapse will again be available for grant under the stock incentive plan.

Administration . The stock incentive plan is administered by a committee of our board of directors, which may delegate its duties and powers in whole or in part as it determines. However, our board of directors may take any action designated to the committee under the stock incentive plan as it may deem necessary. The committee has the sole discretion to determine the employees, directors and consultants to whom awards may be granted under the stock incentive plan and the manner in which such awards will vest. Options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards will be granted by the committee to employees, directors and consultants in such numbers and at such times during the term of the stock incentive plan as the committee shall determine. The committee is authorized to interpret the stock incentive plan, to establish, amend and rescind any rules and regulations relating to the stock incentive plan, and to make any other determinations that it deems necessary or desirable for the administration of the stock incentive plan. The committee may correct any defect, supply any omission or reconcile any inconsistency in the stock incentive plan in the manner and to the extent the committee deems necessary or desirable.

Options . The committee shall determine the exercise price for each option; provided, however, that an option must have an exercise price that is at least equal to the fair market value of a share of common stock on the date the option is granted. An option holder may exercise an option by written notice and payment of the exercise price (1) in cash, (2) to the extent permitted by the committee, by the surrender of a number of shares of common stock already owned by the option holder for at least six months, or other period consistent with applicable accounting rules, with a fair market value equal to the exercise price, (3) in a combination of cash and shares of common stock (as qualified by clause (2)), or (4) through the delivery of irrevocable instructions to a broker to sell shares obtained upon the exercise of the option and deliver to us an amount equal to the exercise price for the shares of common stock being purchased. Option holders who are subject to the withholding of federal and state income tax as a result of exercising an option may satisfy the income tax withholding obligation through the withholding of a portion of the shares of common stock to be received upon exercise of the option.

Stock Appreciation Rights . The committee may grant stock appreciation rights independent of or in connection with an option. The exercise price per share of a stock appreciation right shall be

an amount determined by the committee. Generally, each stock appreciation right shall entitle a participant upon exercise to an amount equal to the product of (1) the excess of (A) the fair market value on the exercise date of one share of common stock over (B) the exercise price per share, times (2) the number of shares of common stock covered by the stock appreciation right. Payment shall be made in shares of common stock or in cash, or partly in shares of common stock and partly in cash, all as shall be determined by the committee.

Restricted Stock Units and Other Stock-Based Awards . The committee may grant awards of restricted stock units, shares of common stock, restricted stock and awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, shares. The restricted stock units and other stock-based awards will be subject to the terms and conditions established by the committee.

During any period when Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), is applicable to us and the stock incentive plan, certain other stock-based awards may be granted in a manner designed to make them deductible by us under Section 162(m) of the Code (“Performance-Based Awards”). Such Performance-Based Awards will be determined based on the attainment of written objective performance goals approved by the committee for a performance period of between one and five years. The committee will establish the performance goals applicable to a performance period (1) while the outcome for that performance period is substantially uncertain and (2) no more than 90 days after the commencement of the performance period to which the performance goals relate or, if less, the number of days which is equal to 25% of the relevant performance period. The performance goals will based upon one or more of the following criteria: (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per share; (v) book value per share; (vi) return on shareholders' equity; (vii) expense management; (viii) return on investment; (ix) improvements in capital structure; (x) profitability of an identifiable business unit or product; (xi) maintenance or improvement of profit margins; (xii) stock price; (xiii) market share; (xiv) revenue or sales; (xv) costs; (xvi) cash flow; (xvii) working capital; (xviii) return on assets; (xix) assets under management; and (xx) total return. The maximum amount of a Performance-Based Award payable to any one participant under the stock incentive plan for a performance period is shares of common stock or, in the event the Performance-Based Award is paid in cash, the equivalent cash value thereof on the last day of the performance period to which such Performance-Based Award relates.

Transferability . Unless otherwise determined by the committee, awards granted under the stock incentive plan are not transferable other than by will or by the laws of descent and distribution.

Change in Control . In the event of a change in control (as defined in the stock incentive plan), (1) if determined by the committee, any outstanding awards then held by participants which are unexercisable or otherwise unvested or subject to lapse restrictions shall automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions, as the case may be, as of immediately prior to the change in control and (2) the committee may (A) cancel the awards for fair value as determined by the committee, (B) provide for the issuance of substitute awards that will substantially preserve the otherwise applicable terms of any affected awards previously granted under the stock incentive plan, as determined by the committee, or (C) provide that for a period of at least 15 days prior to the change in control, the options will be exercisable as to all shares subject to such options and that the options will terminate upon the occurrence of the change in control. If a participant's employment with us and our affiliates is terminated by the participant for “good reason” or by us without “cause” within the two-year period following a change in control, any outstanding awards then held by the participant which are unexercisable or otherwise unvested or subject to lapse restrictions shall automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions, as the case may be, as of the date of such termination of employment.

Amendment and Termination . Our board of directors may amend, alter or discontinue the stock incentive plan in any respect at any time, but no amendment, alteration or discontinuance

may diminish any of the rights of a participant under any awards previously granted, without his or her consent.

2004 Employee Stock Purchase Plan

The following description of the Cohen & Steers, Inc. 2004 Employee Stock Purchase Plan, which we refer to as our employee stock purchase plan, is not complete and is qualified by reference to the full text of the employee stock purchase plan, which has been filed as an exhibit to the registration statement of which this prospectus forms a part.

A maximum of shares of common stock may be issued under the employee stock purchase plan. The number of shares issued or reserved pursuant to the employee stock purchase plan (or pursuant to outstanding awards) is subject to adjustment on account of stock splits, stock dividends and other dilutive changes in our common stock. The shares may consist of unissued shares or previously issued shares.

Administration . The employee stock purchase plan will be administered by a committee of our board of directors. The committee will have the authority to make rules and regulations for the administration of the plan and its interpretations, and decisions with regard to the employee stock purchase plan, and such rules and regulations will be final and conclusive.

Eligibility . Each of our employees will be eligible to participate in the employee stock purchase plan, except that the committee may exclude employees (1) whose customary employment is for less than five months per calendar year or for less than 20 hours per week, (2) who have been employed for less than two years, or (3) who are highly compensated employees under the Code. Our employees will not be granted an option under the employee stock purchase plan if, immediately after the grant, such employee would own stock possessing 5% or more of the total combined voting power or value of all classes of our stock.

Participation in the Plan . Eligible employees may participate in the employee stock purchase plan by electing to participate in a given offering period pursuant to procedures set forth by the committee. A participant's participation in the employee stock purchase plan will continue until the participant makes a new election or withdraws from an offering period or the employee stock purchase plan.

Payroll Deductions . Payroll deductions will be made from the compensation paid to each participant for each offering period in such whole percentage from 1% to 10% as elected by the participant; provided that no participant will be entitled to purchase, during any calendar year, shares with an aggregate fair market value in excess of $25,000.

Termination of Participation in the Plan . The committee will determine the terms and conditions under which a participant may withdraw from an offering period or the employee stock purchase plan. A participant's participation in the employee stock purchase plan will be terminated upon the termination of such participant's employment for any reason. Upon a termination of a participant's employment, all payroll deductions credited to such participant's plan account will be returned without interest to the participant or the participant's beneficiary.

Purchase of Shares . With respect to an offering period, each participant will be granted an option. On the last day of each offering period (each, a “purchase date”), we will apply the funds in each participant's account to purchase shares; provided that no participant will be entitled to purchase more than a maximum number of shares determined by the committee on any given purchase date . The purchase price will be set by the committee, but cannot be less than 85% of the lesser of the fair market value of the shares on the grant date of the option or the purchase date. As soon as practicable after each purchase date, the number of shares purchased by each participant will be deposited in a brokerage account established in such participant's name. The participant may thereafter (1) transfer the shares to another brokerage account or (2) request in writing that a share certificate be issued to the participant with respect to the whole shares in the participant's brokerage account and that any fractional shares remaining in such account be paid in cash to the participant. Notwithstanding the foregoing, a participant will not be permitted to

dispose of shares purchased pursuant to the employee stock purchase plan for at least three months following the applicable purchase date.

Amendment and Termination . Our board of directors may amend, alter or discontinue the employee stock purchase plan; provided, however, that no amendment, alteration or discontinuation will be made which, without shareholder approval, would increase the number of shares authorized for the employee stock purchase plan, or, without a participant's consent, would impair such participant's rights and obligations under the plan.

The employee stock purchase plan will terminate upon the earlier of (1) the termination of the employee stock purchase plan by our board of directors, (2) the issuance of all of the shares reserved for issuance under the plan, or (3) the tenth anniversary of the effective date.

Withholding . We reserve the right to withhold from shares or cash distributed to a participant any amounts which we are required by law to withhold.

Change in Control . In the event of a change in control (as defined in the employee stock purchase plan), the committee may take any actions it deems necessary or desirable with respect to any option or offering period as of the date of the consummation of the change in control.

Other Information . As of March 31 , 2004, approximately 72 of our employees would have been eligible for participation in the employee stock purchase plan. Because the benefits conveyed under the employee stock purchase plan are contingent upon, among other things, the amount of contributions participating employees make on a voluntary basis, it is not possible to predict what benefits eligible employees will receive under the employee stock purchase plan.

2004 Annual Incentive Plan

The following description of the Cohen & Steers, Inc. 2004 Annual Incentive Plan, which we refer to as our annual incentive plan, is not complete and is qualified by reference to the full text of the annual incentive plan, which has been filed as an exhibit to the registration statement of which this prospectus forms a part.

Purpose . The annual incentive plan is a bonus plan designed to provide certain of our employees with incentive compensation based upon the achievement of pre-established performance goals. The annual incentive plan is designed to comply with the performance based compensation exemption from Section 162(m) of the Code during any period during which Section 162(m) of the Code is applicable. The purpose of the annual incentive plan is to attract, retain, motivate and reward participants by providing them with the opportunity to earn competitive compensation directly linked to our performance.

Administration . The annual incentive plan is administered by a committee of our board of directors. The committee may delegate its authority under the annual incentive plan except in cases where such delegation would disqualify compensation paid under the annual incentive plan intended to be exempt under Section 162(m) of the Code.

Eligibility; Awards . Awards may be granted to our officers and key employees in the sole discretion of the committee. The annual incentive plan provides for the payment of incentive bonuses, in the form of cash, restricted stock, restricted stock units, stock appreciation rights, stock options (of equivalent value) and/or some combination of the foregoing. Any equity-based awards will be made pursuant to the 2004 Stock Incentive Plan described above .

Performance Goals . The committee establishes the performance periods over which performance objectives will be measured. A performance period may be for a fiscal year or a multi-year cycle, as determined by the committee. Within 90 days after each performance period begins (or such other date as may be required by Section 162(m) of the Code), the committee will establish (1) the performance objective or objectives that must be satisfied for a participant to receive a bonus for such performance period, and (2) the target incentive bonus for each participant. Performance objectives will be based upon one or more of the following criteria, as determined by the committee: (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per share; (v) book value per share; (vi) return on shareholders' equity; (vii) expense

management; (viii) return on investment; (ix) improvements in capital structure; (x) profitability of an identifiable business unit or product; (xi) maintenance or improvement of profit margins; (xii) stock price; (xiii) market share; (xiv) revenue or sales; (xv) costs; (xvi) cash flow; (xvii) working capital; (xviii) return on assets; (xix) assets under management; and (xx) total return. The foregoing criteria may relate to us, one or more of our subsidiaries or one or more of our divisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the committee shall determine. The performance measures and objectives established by the committee may be different for different fiscal years and different objectives may be applicable to different officers and employees.

As soon as practicable following the applicable performance period, the committee will determine (i) whether and to what extent any of the performance objectives established for such performance period have been satisfied, and (ii) for each participant employed as of the last day of the performance period for which the bonus is payable, the actual bonus to which such participant shall be entitled, taking into consideration the extent to which the performance objectives have been met and such other factors as the committee may deem appropriate. No participant may receive a bonus under the annual incentive plan, with respect to any fiscal year, in excess of $5 million. The committee has absolute discretion to reduce or eliminate the amount otherwise payable to any participant under the annual incentive plan and to establish rules or procedures that have the effect of limiting the amount payable to each participant to an amount that is less than the maximum amount otherwise authorized as that participant's target incentive bonus.

Change in Control . If there is a change in control (as defined in the annual incentive plan), our board of directors, as constituted immediately prior to the change in control, shall determine in its discretion whether the performance criteria have been met or will be deemed to have been met for the year in which the change in control occurs.

Termination of Employment . If a participant dies or becomes disabled prior to the last day of a performance period, the participant may receive an annual bonus equal to the bonus otherwise payable to the participant based upon actual company performance for the applicable performance period or, if determined by the committee, based upon achieving targeted performance objectives , pro-rated for the days of employment during the performance period.

Payment of Awards . Payment of any bonus amount is made to participants as soon as practicable after the committee certifies that one or more of the applicable objectives has been attained, or, where the committee will reduce, eliminate or limit the bonus, as described above, the committee determines the amount of any such reduction.

Amendment and Termination of Plan . Our board of directors or the committee may at any time amend, suspend, discontinue or terminate the annual incentive plan, subject to stockholder approval if such approval is necessary to maintain the annual incentive plan in compliance with Section 162(m) of the Code or any other applicable law or regulation. Unless earlier terminated, the annual incentive plan will expire on the tenth anniversary of its effective date .

401(k) and Profit Sharing Plan

We sponsor a profit sharing plan covering all employees who meet certain age and service requirements. Subject to limitations, this plan permits participants to defer up to 70% of their compensation pursuant to Section 401(k) of the Code. We match employee contributions at $0.50 per $1.00 deferred. The plan also allows us to make discretionary contributions, which are integrated with the taxable wage base under the Social Security Act.

Forfeitures are created when participants terminate employment before becoming entitled to their full benefits under the plan. Forfeited amounts are used to reduce our contributions to the plan.

Employment Agreements

Prior to the commencement of the offering, we expect to enter into substantially similar employment agreements with Martin Cohen and Robert H. Steers (each, an “Executive”). Each employment agreement provides for the Executive's employment as our co-chief executive officer and co-chairman of the board of directors for a term of three years, subject to automatic, successive one-year extensions thereafter unless either party gives the other 60 days prior notice that the term will not be extended.

Each employment agreement provides for an annual base salary of $500,000 and an annual bonus payment of at least $1,000,000, but no more than $5,000,000, as determined by the Compensation Committee, except that the bonus amount for 2004 will be limited to $1,000,000 . During the term, each Executive will be entitled to (1) employee benefits that are no less favorable than those employee benefits provided to him prior to the commencement of the offering and (2) participate in all of our employee benefit programs on a basis which is no less favorable than is provided to any of our other executives.

Pursuant to each employment agreement, if the Executive's employment terminates prior to the expiration of the term due to his death or disability, the Executive will be entitled to receive (i) a payment equal to his target annual bonus for the fiscal year in which the termination occurs and (ii) any accrued, but unpaid, base salary through the date of termination and any accrued and earned, but unpaid, annual bonus for any previously completed fiscal year (the “accrued obligations”).

If an Executive's employment is terminated prior to the expiration of the term by us without “cause” (as defined in the employment agreement) or by the Executive for “good reason” (as defined in the employment agreement) (or if the Company elects not to extend the term) (each a “qualifying termination”), the Executive will be entitled, subject to his compliance with certain restrictive covenants, to a lump sum payment equal to two times (three times in the case of a qualifying termination that occurs on or following a change in control (as defined in the employment agreement)) the sum of his annual base salary and his target annual bonus for the fiscal year in which the termination occurs. Any termination by us without cause within six months prior to the occurrence of a change in control will be deemed to be a termination of employment on the date of such change in control.

In the event of a termination of an Executive's employment which is not a qualifying termination or a termination due to the Executive's death or disability, the Executive will be entitled to receive only the accrued obligations.

Each employment agreement generally provides that, if the Executive's employment terminates for any reason other than by us for cause, the Executive and his spouse and dependents will be entitled to continued coverage under our medical plans in which he was participating at the time of such termination for the remainder of his life, subject to payment by the Executive of the same premiums he would have paid during such period of coverage if he were an active employee.

Pursuant to each employment agreement, the Executive will be subject to certain restrictions on competition (1) during the term and (2) if the Executive's employment is terminated by us for cause or by the Executive without good reason or the Executive elects not to extend the term, for one year following such termination of employment. In addition, each Executive will be subject to customary confidentiality, intellectual property and non-disclosure covenants.

If a dispute arises out of the employment agreement with an Executive, we will pay the Executive's reasonable legal fees and expenses incurred in connection with such dispute if the Executive prevails in substantially all material respects on the issues presented for resolution. In addition, each employment agreement provides that, in the event payments under an employment agreement or otherwise result in a parachute excise tax to the Executive, he will be entitled to a gross up payment equal to the amount of the excise tax, as well as the excise tax and income tax on the gross up payment.

Each employment agreement also provides that upon a termination of the Executive's employment for any reason, in general, the Executive will retain the right to use his name in connection with future business ventures.

RELATED PARTY TRANSACTIONS

The Reorganization

	•	CSCM Merger Sub, Inc. will merge with and into Cohen & Steers Capital Management, Inc.;

	•	each outstanding share of common stock in Cohen & Steers Capital Management, Inc. will be converted into the right to receive a newly issued share of common stock from Cohen & Steers, Inc.;

	•	the shares of common stock of Cohen & Steers, Inc. held by Cohen & Steers Capital Management, Inc. will be cancelled; and

	•	each share of CSCM Merger Sub, Inc. will be converted into and exchanged for a share of common stock of Cohen & Steers Capital Management, Inc.

Following the merger , our principals and their family trusts will be the sole stockholders of Cohen & Steers, Inc., and Cohen & Steers Capital Management, Inc. will be a wholly owned subsidiary of Cohen & Steers, Inc. The reorganization will be effected pursuant to a merger agreement among Cohen & Steers, Inc., CSCM Merger Sub , Inc. and Cohen & Steers Capital Management, Inc. , the form of which will be filed as an exhibit to the registration statement of which this prospectus forms a part. See “Reorganization and S Corporation Status—Reorganization.”

S Corporation Distributions and Tax Indemnification Agreement

Since we were organized in 1986, we have been treated for federal and certain state income tax purposes as an S corporation under Subchapter S of the Internal Revenue Code and comparable state laws. As a result, our earnings have been taxed, with certain exceptions, directly to our stockholders rather than to us, leaving our stockholders responsible for paying income taxes on these earnings. We have historically paid distributions to our stockholders to enable them to pay their income tax liabilities as a result of our status as an S corporation and, from time to time, to distribute previously undistributed S corporation earnings and profits. We made aggregate cash S corporation distributions to our stockholders of $8.6 million during 2001, $7.3 million during 2002, $9.3 million during 2003 and $11.5 million during the first quarter of 2004 . We will revoke our S corporation status prior to the closing of this offering. We expect to make a distribution to our current stockholders representing payment of undistributed S corporation earnings for tax purposes at and through the date of revocation. The actual amount of the distribution of S corporation earnings to our current stockholders will depend on the amount of our earnings through the revocation date. We will also enter into a tax indemnification agreement with our current stockholders, the form of which will be filed as an exhibit to the registration statement of which this prospectus forms a part. See “Reorganization and S Corporation Status—S Corporation Status.”

Registration Rights Agreement

Concurrently with the reorganization, the existing stockholders' agreement among Cohen & Steers Capital Management, Inc. and our principals, which governs the disposition of the shares of Cohen & Steers Capital Management, Inc., will be terminated and Cohen & Steers, Inc. will enter into a registration rights agreement with our principals and two trusts benefiting their families, pursuant to which we will grant to them, their affiliates and certain of their transferees the right, as described below, to require us to register under the Securities Act shares of common stock (and other securities convertible into or exchangeable or exercisable for shares of common stock) held

by them. Such registration rights are generally available to the rights holders until registration under the Securities Act is no longer required to enable them to resell the registrable securities owned by them. The registration rights agreement provides, among other things, that we will pay all expenses in connection with the first ten demand registrations requested by the rights holders and in connection with any registration commenced by us in which the rights holders participate through “piggyback” registration rights granted under such agreement. We have the right to postpone any demand registration if to register would require an audit of us other than our regular audit, if another registration statement which was not effected on Form S-3 has been declared effective under the Securities Act within 180 days or, for a period of 90 days, if we determine that it is in our best interests to do so. The rights of the Rights Holders to exercise their “piggyback” registration rights are subject to our right to reduce on a pro rata basis among all requesting holders the number of requested shares of common stock to be registered if in the opinion of the managing underwriter the total number of shares to be so registered exceeds that number which may be sold without having an adverse effect on the price, timing or distribution of the offering of the shares.

Fee Waiver Agreements

Our open-end and closed-end mutual funds pay us a monthly management fee based on the fund's average daily assets under management pursuant to an investment management agreement. We have contractually agreed with several of these funds to waive a portion of our investment management fees for an initial period of the fund's operations. The board of directors of each mutual fund considers the fee waivers in connection with its responsibility under the Investment Company Act of 1940 to approve the investment management agreement for its initial term and annually thereafter. Mr. Cohen and Mr. Steers serve as directors of each of the Cohen & Steers open-end and closed-end mutual funds.

We currently waive investment advisory fees on the following closed-end mutual funds:

Investment Management Fee Waiver
(Fee waived as % of average daily managed assets )

Fund (Year of Inception)	First 5 years	Year 6		Year 7		Year 8		Year 9		Year 10
Cohen & Steers Advantage Income Realty Fund, Inc. (2001)	0.42%		0.35%		0.28%		0.21%		0.14%		0.07%
Cohen & Steers Quality Income Realty Fund, Inc. (2002)	0.32%		0.26%		0.20%		0.14%		0.08%		0.02%
Cohen & Steers Premium Income Realty Fund, Inc. (2002)	0.25%		0.20%		0.15%		0.10%		0.05%		—
Cohen & Steers REIT and Utility Income Fund, Inc. (2004)	0.20%		0.15%		0.10%		0.05%		—		—
Cohen & Steers Select Utility Fund, Inc. (2004)	0.20%		0.15%		0.10%		0.05%		—		—

We currently have agreed to waive our investment advisory fee and/or reimburse our open-end mutual funds as follows:

	•	we reimburse Cohen & Steers Institutional Realty Shares, Inc. so that its total annual operating expenses never exceed 0.75% of average daily net assets, a commitment that will remain in place for the life of the fund.

	•	we waive our investment advisory fee and/or reimburse Cohen & Steers Special Equity Fund, Inc. for expenses incurred in order to limit the fund's total expense ratio to 1.50% of the fund's net assets through December 31, 2004.

	•	we waive our investment advisory fee and/or reimburse Cohen & Steers Utility Fund, Inc. for expenses incurred in order to limit the fund's total expense ratio through December 31, 2004 to 1.50% of the fund's Class A share net assets, 2.15% of the Class B shares and Class C shares net assets and 1.15% of the fund's Class I shares net assets.

These fee waivers and expense reimbursements provide a direct benefit to our mutual fund investors by lowering the expenses associated with investing in our funds and improving each

fund's potential performance for the term of the waiver. As a result, we believe the fee waivers aided the sales efforts for each fund.

Internet Realty Partners, L.P.

Since March 2000, we have provided investment advisory and management services to Internet Realty Partners, L.P. (“IRP”), a limited partnership formed to invest in real estate-related technology companies. A number of our employees, including Mr. Cohen, Mr. Steers, Mr. Harvey, Mr. Derechin, Mr. McCombe and Mr. Stoller, have invested in and/or act in the capacity of directors or officers of IRP. In addition, Mr. Cohen and Mr. Steers, and certain family trusts of Mr. Cohen and Mr. Steers, own in the aggregate a 50% interest in IRP Management, LLC (“IRP Management”), the general partner to IRP. Mr. Harvey owns a less than 5% interest in the General Partner. We are contractually entitled to a management fee for our services as investment advisor and manager equal to 2% of the value of the total commitments of the partners of IRP less the cost basis of any investments sold by IRP and distributed to the IRP partners. However, because it has been doubtful that IRP will be able to pay us our management fee, we did not record any revenue for this arrangement in 2003 and do not expect to record any revenue in 2004. In addition, IRP Management is entitled to receive 25% of IRP's profits after repayment of the Partners' capital contributions (“Carried Interest Distributions”). As of this date, IRP Management has not received any Carried Interested Distributions and there is no current expectation that any Carried Interest Distributions will be made to IRP Management. As of December 31, 2003, the total assets of IRP were approximately $8 million.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our common stock by Mr. Cohen and Mr. Steers immediately prior to the consummation of the offering, but after giving effect to the reorganization described under “Reorganization and S Corporation Status—Reorganization.” Except as set forth in the following table, no other person is known by us to beneficially own any shares of our common stock.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission.

	Shares Beneficially Owned Prior to the Offering			Shares Beneficially Owned After the Offering(1)
Name and Address of Beneficial Owner	Number	Percentage	Number of Shares to be Sold in the Offering	Number	Percentage
Martin Cohen(2)	(3)	50%		(3)	%
Robert H. Steers(2)	(4)	50%		(4)	%

(1	)	Does not take into account shares that may be sold by the selling stockholders in the event the underwriters' overallotment option is exercised. If the underwriters' overallotment option is exercised in full, Mr. Cohen will beneficially own shares ( %) and Mr. Steers will beneficially own shares ( %) of our common stock after the offering.
(2	)	c/o Cohen & Steers, Inc., 757 Third Avenue, New York, NY 10017.
(3	)	Includes shares held prior to the offering and shares to be held after the offering by The Martin Cohen 1998 Family Trust. Mr. Cohen disclaims beneficial ownership of the shares held by this trust.
(4	)	Includes shares held prior to the offering and shares to be held after the offering by Robert H. Steers Family Trust. Mr. Steers disclaims beneficial ownership of the shares held by this trust.

DESCRIPTION OF CAPITAL STOCK

Upon consummation of this offering, our authorized capital stock will consist of 500,000,000 shares of common stock, par value $.01 per share, and 50,000,000 shares of preferred stock. The following description of our capital stock as it will be in effect upon the consummation of this offering is a summary and is qualified in its entirety by reference to our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, the forms of which will be filed as exhibits to the registration statement of which this prospectus forms a part, and by applicable law.

Common Stock

All outstanding shares of our common stock are, and all shares of common stock to be outstanding immediately following this offering will be, fully paid and nonassessable.

Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

Holders of our common stock are entitled to receive dividends when and if declared by our board of directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our common stock will be entitled to receive pro rata our remaining assets available for distribution.

Holders of our common stock do not have preemptive, subscription, redemption or conversion rights.

Preferred Stock

Our Amended and Restated Certificate of Incorporation authorizes our board of directors to establish one or more series of preferred stock (including convertible preferred stock). Unless required by law or by any stock exchange, the authorized shares of preferred stock will be available for issuance without further action by you. Our board of directors is able to determine, with respect to any series of preferred stock, the terms and rights of that series, including:

	•	the designation of the series;

	•	the number of shares of the series, which our board may, except where otherwise provided in the preferred stock designation, increase or decrease, but not below the number of shares then outstanding;

	•	whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;

	•	the dates at which dividends, if any, will be payable;

	•	the redemption rights and price or prices, if any, for shares of the series;

	•	the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;

	•	the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of our company;

	•	whether the shares of the series will be convertible into shares of any other class or series, or any other security, of our company or any other corporation, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made;

• restrictions on the issuance of shares of the same series or of any other class or series; and

• the voting rights, if any, of the holders of the series.

We have no intention at the present time of issuing any preferred stock, and would make any determination to issue preferred stock only based on our judgment as to the best interests of the company and our stockholders. Moreover, our policy is that we would only issue preferred stock for capital raising purposes and would not issue preferred stock with voting or other rights that are disproportionate to the economic interests of such preferred stock. Nevertheless, we could issue a series of preferred stock that could, depending on the terms of the series, impede or discourage an acquisition attempt or other transaction that some, or a majority, of you might believe to be in your best interests or in which you might receive a premium for your common stock over the market price of the common stock.

Authorized but Unissued Capital Stock

Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the New York Stock Exchange, which would apply so long as the common stock remains listed on the New York Stock Exchange, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of common stock. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices.

Anti-Takeover Effects of Provisions of Delaware Law

We are a Delaware corporation subject to Section 203 of the Delaware General Corporation Law. Section 203 provides that, subject to certain exceptions specified in the law, a Delaware corporation shall not engage in certain “business combinations” with any “interested stockholder” for a three year period following the time that the stockholder became an interested stockholder unless:

	•	prior to such time, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

	•	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or

	•	at or subsequent to that time, the business combination is approved by our board of directors and by the affirmative vote of holders of at least 66 ² / 3 % of the outstanding voting stock that is not owned by the interested stockholder.

Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person's affiliates and associates, owns, or within the previous three years did own, 15% or more of our voting stock.

Under certain circumstances, Section 203 makes it more difficult for a person who would be an “interested stockholder” to effect various business combinations with a corporation for a three year period. The provisions of Section 203 may encourage companies interested in acquiring our company to negotiate in advance with our board of directors because the stockholder approval requirement would be avoided if our board of directors approves either the business combination or the transaction that results in the stockholder becoming an interested stockholder. These

provisions also may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Mellon Investor Services LLC.

Listing

We propose to list our common stock on the New York Stock Exchange, subject to official notice of issuance, under the symbol “CNS.”

SHARES ELIGIBLE FOR FUTURE SALE

No prediction can be made as to the effect, if any, future sales of shares, or the availability for future sales of shares, will have on the market price of our common stock prevailing from time to time. The sale of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of our common stock.

Upon completion of the offering we will have a total of shares of our common stock outstanding (or shares assuming the underwriters exercise their overallotment option in full). All of the shares sold in the offering will be freely tradable without restriction or further registration under the Securities Act by persons other than our “affiliates.” Under the Securities Act, an “affiliate” of a company is a person that directly or indirectly controls, is controlled by or is under common control with that company. The remaining shares of our common stock outstanding will be “restricted securities” within the meaning of Rule 144 under the Securities Act and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemptions contained in Rule 144. Our principals and two trusts benefiting their families will own, in the aggregate, all of the remaining outstanding shares of our common stock immediately following the offering (or shares assuming the underwriters exercise their overallotment option in full) and have advised us that they intend to sell additional shares of our common stock over a period of time. As a result of the registration rights agreement and the lock-up arrangements described below, all of these shares may be eligible for future sale following the 180-day period after the date of this prospectus.

In addition, we expect to grant to certain employees an aggregate of fully vested restricted stock units pursuant to the 2004 Stock Incentive Plan on the date of the consummation of this offering in connection with the termination of our existing Stock Appreciation Rights Plan. In general, subject to a participant's compliance with certain restrictive covenants, the shares of common stock underlying the restricted stock units will be delivered to each participant as follows: 20% will be delivered on the last business day in January 2006; 40% will be delivered on the last business day in January 2007; and 40% will be delivered on the last business day in January 2008. We also expect to grant certain other employees an aggregate of restricted stock units pursuant to the 2004 Stock Incentive Plan on the date of the consummation of this offering. In general, subject to a participant's continued employment with us and compliance with certain restrictive covenants, the restricted stock units will vest, and the shares of common stock underlying the restricted stock units will be delivered, on the last business day in January 2008. See “Management—IPO Date Employee Awards.” Prior to the consummation of this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register common stock issued or reserved for issuance under our 2004 Stock Incentive Plan and our 2004 Employee Stock Purchase Plan. Any such Form S-8 registration statement will automatically become effective upon filing. Accordingly, shares registered under such registration statement will be available for sale in the open market, unless such shares are subject to vesting restrictions with us or the lock-up restrictions described below. We expect that the registration statement on Form S-8 will cover shares.

Registration Rights

Concurrently with the reorganization, we will enter into a registration rights agreement with our principals and the two trusts benefiting their families, pursuant to which we will grant them, their affiliates and certain of their transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of our common stock (and other securities convertible into or exchangeable or exercisable for shares of common stock) held by them. Such securities registered under any registration statement will be available for sale in the open market unless restrictions apply. See “Related Party Transactions—Registration Rights Agreement.”

Lock-Up Arrangements

Notwithstanding the foregoing, our principals and the two trusts benefiting their families will agree, with exceptions, not to sell or transfer any common stock for 180 days after the date of this prospectus without first obtaining the written consent of Merrill Lynch. Those persons who purchase common stock through our reserved share program will be subject to restrictions on transfer for 30 days after the date of this prospectus. See “Underwriting.”

Rule 144

In general, under Rule 144, a person (or persons whose shares are aggregated), including any person who may be deemed our affiliate, is entitled to sell within any three month period, a number of restricted securities that does not exceed the greater of 1% of the then outstanding common stock and the average weekly trading volume during the four calendar weeks preceding each such sale, provided that at least one year has elapsed since such shares were acquired from us or any affiliate of ours and certain manner of sale, notice requirements and requirements as to availability of current public information about us are satisfied. Any person who is deemed to be our affiliate must comply with the provisions of Rule 144 (other than the one year holding period requirement) in order to sell shares of common stock which are not restricted securities (such as shares acquired by affiliates either in the offering or through purchases in the open market following the offering). In addition, under Rule 144(k), a person who is not our affiliate, and who has not been our affiliate at any time during the 90 days preceding any sale, is entitled to sell such shares without regard to the foregoing limitations, provided that at least two years have elapsed since the shares were acquired from us or any affiliate of ours.

MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR
NON-U.S. HOLDERS OF COMMON STOCK

The following summary describes the material U.S. federal income and estate tax consequences of the purchase, ownership and disposition of our common stock by a Non-U.S. Holder (as defined below) as of the date hereof. This discussion does not address all aspects of U.S. federal income and estate taxes and does not deal with foreign, state and local consequences that may be relevant to such Non-U.S. Holders in light of their personal circumstances. Special rules may apply to certain Non-U.S. Holders, such as U.S. expatriates, “controlled foreign corporations,” “passive foreign investment companies,” “foreign personal holding companies,” corporations that accumulate earnings to avoid U.S. federal income tax, and investors in pass-through entities that are subject to special treatment under the Internal Revenue Code of 1986, as amended (the “Code”). Such Non-U.S. Holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them. Furthermore, the discussion below is based upon the provisions of the Code, and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those discussed below. Persons considering the purchase, ownership or disposition of our common stock should consult their own tax advisors concerning the U.S. federal income and estate tax consequences in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.

If a partnership holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Persons who are partners of partnerships holding our common stock should consult their tax advisors.

As used herein, a “Non-U.S. Holder” of our common stock means a beneficial owner (other than a partnership) that is not any of the following for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation or partnership created or organized in or under the laws of the United States or any political subdivision thereof, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if it (X) is subject to the primary supervision of a court within the United States and one or more U.S. persons (as defined in the Code) have the authority to control all substantial decisions of the trust or (Y) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

Dividends

Dividends paid to a Non-U.S. Holder of our common stock generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the Non-U.S. Holder within the United States and, where a tax treaty applies, are attributable to a U.S. permanent establishment of the Non-U.S. Holder, are not subject to the withholding tax, but instead are subject to U.S. federal income tax on a net income basis at applicable graduated individual or corporate rates. Certain certification and disclosure requirements must be satisfied for effectively connected income to be exempt from withholding. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

A Non-U.S. Holder of our common stock who wishes to claim the benefit of an applicable income tax treaty rate (and avoid backup withholding as discussed below) for dividends, will be required to (a) complete Internal Revenue Service (“IRS”) Form W-8BEN (or other applicable form) and certify under penalties of perjury that such holder is not a U.S. person or (b) if our common stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other requirements apply to certain Non-U.S. Holders that are entities rather than individuals.

A Non-U.S. Holder of our common stock eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS.

Gain on Disposition of Common Stock

A Non-U.S. Holder generally will not be subject to U.S. federal income tax with respect to gain recognized on a sale or other disposition of our common stock unless (i) the gain is effectively connected with a trade or business of the Non-U.S. Holder in the United States, and, where an income tax treaty applies, is attributable to a U.S. permanent establishment of the Non-U.S. Holder, (ii) in the case of a Non-U.S. Holder who is an individual and holds our common stock as a capital asset, such holder is present in the United States for 183 or more days in the taxable year of the sale or other disposition and certain other conditions are met, or (iii) we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes.

An individual Non-U.S. Holder described in clause (i) above will be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates. An individual Non-U.S. Holder described in clause (ii) above will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by U.S. source capital losses (even though the individual is not considered a resident of the United States). If a Non-U.S. Holder that is a foreign corporation falls under clause (i) above, it will be subject to tax on its gain under regular graduated U.S. federal income tax rates and, in addition, may be subject to the branch profits tax equal to 30% of its effectively connected earnings and profits or at such lower rate as may be specified by an applicable income tax treaty.

We believe we are not and do not anticipate becoming a “United States real property holding corporation” for U.S. federal income tax purposes. Even if we become a “United States real property holding corporation,” so long as the common stock continues to be regularly traded on an established securities market, gain from the disposition of the common stock will not be treated as effectively connected with a trade or business of a Non-U.S. Holder in the United States unless such Non-U.S. Holder holds or held (at any time during the shorter of the five year period preceding the date of disposition or the holder's holding period) more than 5% of the common stock.

Federal Estate Tax

Our common stock that is held by an individual Non-U.S. Holder at the time of death will be included in such holder's gross estate for U.S. federal estate tax purposes and may be subject to U.S. federal estate tax, unless an applicable estate tax treaty provides otherwise.

Information Reporting and Backup Withholding

We must report annually to the IRS and to each Non-U.S. Holder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the Non-U.S. Holder resides under the provisions of an applicable income tax treaty.

A Non-U.S. Holder will be subject to backup withholding on the payment of dividends unless applicable certification requirements are met.

Information reporting and, depending on the circumstances, backup withholding, will apply to the proceeds of a sale of our common stock within the United States or conducted through U.S.-related financial intermediaries unless the beneficial owner certifies under penalties of perjury that it is a Non-U.S. Holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a U.S. person) or the holder otherwise establishes an exemption.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against such holder's U.S. federal income tax liability provided the required information is furnished to the IRS.

UNDERWRITING

Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Wachovia Capital Markets, LLC and Bear, Stearns & Co. Inc. are acting as representatives of each of the underwriters named below. Subject to the terms and conditions described in a purchase agreement among us, the selling stockholders and the underwriters, we and the selling stockholders have agreed to sell to the underwriters, and the underwriters severally have agreed to purchase from us and the selling stockholders, the number of shares set forth opposite their names below.

	Underwriter		Number of Shares
	Merrill Lynch, Pierce, Fenner & Smith Incorporated
	UBS Securities LLC
	Wachovia Capital Markets, LLC
	Bear, Stearns & Co. Inc.

	Total

The underwriters have agreed to purchase all of the shares sold under the purchase agreement if any of these shares are purchased. If an underwriter defaults, the purchase agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the purchase agreement may be terminated.

We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares and other conditions contained in the purchase agreement, such as the receipt by the underwriters of officers' certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commissions and Discounts

The representatives have advised us and the selling stockholders that the underwriters propose initially to offer the shares to the public at the initial public offering price on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. The underwriters may allow, and the dealers may reallow, a discount not in excess of $ per share to other dealers. After the initial public offering, the public offering price, concession and discount may be changed.

The following table shows the public offering price, underwriting discount and proceeds before expenses to us and the selling stockholders. The information assumes either no exercise or full exercise by the underwriters of their overallotment option.

Per Share

Without Option

With Option

Public offering price

Underwriting discount

Proceeds, before expenses, to Cohen & Steers, Inc.

Proceeds, before expenses, to
the selling stockholders

The expenses of the offering, not including the underwriting discount, are estimated at $ and are payable by us.

Overallotment Option

We and the selling stockholders have granted an option to the underwriters to purchase up to additional shares at the public offering price less the underwriting discount. The underwriters may exercise this option for 30 days from the date of this prospectus solely to cover any overallotments. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the purchase agreement, to purchase a number of additional shares proportionate to that underwriter's initial amount reflected in the above table.

Reserved Shares

At our request, the underwriters have reserved for sale, at the initial public offering price, up to 5% of the shares offered by this prospectus for sale to our directors, officers and employees and their immediate families. If these persons purchase reserved shares, this will reduce the number of shares available for sale to the general public. Any reserved shares that are not orally confirmed for purchase within one day of the pricing of this offering will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus. Purchasers of reserved shares will be subject to restrictions on transfer, similar to those described in the next paragraph, for 30 days after the date of this prospectus.

No Sales of Similar Securities

We and all existing stockholders have agreed, with exceptions, not to sell or transfer any common stock for 180 days after the date of this prospectus without first obtaining the written consent of Merrill Lynch. Specifically, we and these other persons have agreed not to directly or indirectly

	•	offer, pledge, sell or contract to sell any common stock;

	•	sell any option or contract to purchase any common stock;

	•	purchase any option or contract to sell any common stock;

	•	grant any option, right or warrant for the sale of any common stock;

	•	lend or otherwise dispose of or transfer any common stock;

	•	request or demand that we file a registration statement related to the common stock; or

	•	enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

This lockup provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.

New York Stock Exchange Listing

We expect the shares to be approved for listing on the New York Stock Exchange under the symbol “CNS”. In order to meet the requirements for listing on that exchange, the underwriters will undertake to sell lots of 100 or more shares to a minimum of 2,000 beneficial holders and thereby establish at least 1,100,000 shares in the public float having a minimum aggregate market value of $60,000,000.

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations among us, the selling stockholders and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:

•

the valuation multiples of publicly traded companies that the representatives believe to be comparable to us;

• our financial information;

• our history and the prospects for us and the industry in which we compete;

• an assessment of our management, our past and present operations, and the prospects for, and timing of, our future revenue;

• the present state of our development; and

• the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also possible that, after the offering, the shares will not trade in the public market at or above the initial public offering price.

The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of the shares is completed, Securities and Exchange Commission rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.

If the underwriters create a short position in the common stock in connection with the offering, i.e., if they sell more shares than are listed on the cover of this prospectus, the representatives may reduce that short position by purchasing shares in the open market. The representatives may also elect to reduce any short position by exercising all or part of the overallotment option described above. Purchases of the common stock to stabilize its price or to reduce a short position may cause the price of the common stock to be higher than it might be in the absence of such purchases.

The representatives may also impose a penalty bid on underwriters and selling group members. This means that if the representatives purchase shares in the open market to reduce the underwriter's short position or to stabilize the price of such shares, they may reclaim the amount of the selling concession from the underwriters and selling group members who sold those shares. The imposition of a penalty bid may also affect the price of the shares in that it discourages resales of those shares.

Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor any of the underwriters makes any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us and our mutual funds. They have received customary fees and commissions for these transactions. Some of the underwriters have also acted and may in the future act as underwriters for our various mutual fund offerings. In connection therewith they have received and may in the future receive underwriting discounts and commissions. In addition, in our capacity as investment advisor of our closed-end mutual funds, we are obligated to pay some of the underwriters additional compensation. These additional payments are made by us quarterly based on a mutual fund's managed assets as long as we serve as investment advisor of such mutual fund.

LEGAL MATTERS

The validity of the common stock will be passed upon for us by Simpson Thacher & Bartlett LLP , New York, New York. Certain legal matters in connection with this offering will be passed upon for the underwriters by Clifford Chance US LLP .

EXPERTS

The statement of financial condition of Cohen & Steers, Inc. as of May 10, 2004 included in this prospectus has been audited by Deloitte & Touche LLP , independent auditors, as stated in their report appearing herein, and is included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The consolidated financial statements of Cohen & Steers Capital Management, Inc. and subsidiaries as of December 31, 2002 and 2003 and for each of the three years in the period ended December 31, 2003 included in this prospectus have been audited by Deloitte & Touche LLP , independent auditors, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the common stock offered in this prospectus. This prospectus, filed as part of the registration statement, does not contain all of the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the Securities and Exchange Commission. For further information about us and our common stock, we refer you to the registration statement and to its exhibits and schedules. Statements in this prospectus about the contents of any contract, agreement or other document are not necessarily complete and, in each instance, we refer you to the copy of such contract, agreement or document filed as an exhibit to the registration statement, with each such statement being qualified in all respects by reference to the document to which it refers. Anyone may inspect the registration statement and its exhibits and schedules without charge at the public reference facilities the Securities and Exchange Commission maintains at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of all or any part of these materials from the Securities and Exchange Commission upon the payment of certain fees prescribed by the Securities and Exchange Commission. You may obtain further information about the operation of the Securities and Exchange Commission's Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. You may also inspect these reports and other information without charge at a Web site maintained by the Securities and Exchange Commission. The address of this site is http://www.sec.gov.

Upon completion of this offering, we will become subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and will be required to file reports, proxy statements and other information with the Securities and Exchange Commission. You will be able to inspect and copy these reports, proxy statements and other information at the public reference facilities maintained by the Securities and Exchange Commission at the address noted above. You also will be able to obtain copies of this material from the Public Reference Room of the Securities and Exchange Commission as described above, or inspect them without charge at the Securities and Exchange Commission's Web site. We intend to furnish our stockholders with annual reports containing consolidated financial statements audited by an independent accounting firm.

INDEX TO FINANCIAL STATEMENTS

Cohen & Steers, Inc.
Independent Auditors' Report			F-2
Statement of Financial Condition as of May 10, 2004			F-3
Cohen & Steers Capital Management, Inc.
Independent Auditors' Report			F-4
Consolidated Statements of Financial Condition as of December 31, 2002 and 2003			F-5
Consolidated Statements of Income for each of the three years in the period ended December 31, 2003			F-6
Consolidated Statements of Stockholders' Equity for each of the three years in the period ended December 31, 2003			F-7
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2003			F-8
Notes to Consolidated Financial Statements			F-9
Consolidated Statements of Financial Condition as of December 31, 2003 and March 31, 2004 (unaudited)			F-22
Consolidated Statements of Income for the three months ended March 31, 2003 and 2004 (unaudited)			F-23
Consolidated Statement of Stockholders' Equity for the three months ended March 31, 2004 (unaudited)			F-24
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2004 (unaudited)			F-25
Notes to Consolidated Financial Statements (unaudited)			F-26

F-1

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
C OHEN & S TEERS , I NC .:

We have audited the accompanying statement of financial condition of Cohen & Steers, Inc. (the “Company”) as of May 10 , 2004. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of financial condition is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of financial condition. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement of financial condition presentation. We believe that our audit of the statement of financial condition provides a reasonable basis for our opinion.

In our opinion, such statement of financial condition presents fairly, in all material respects, the financial position of the Company at May 10 , 2004, in conformity with accounting principles generally accepted in the United States of America.

/ S / D ELOITTE & T OUCHE LLP

New York, New York
May 11 , 2004

F-2

COHEN & STEERS, INC.
STATEMENT OF FINANCIAL CONDITION
At May 10 , 2004

Assets—Cash	$	1.00

Stockholders' equity—Common stock	$	1.00

NOTES TO STATEMENT OF FINANCIAL CONDITION OF COHEN & STEERS, INC.

1. Organization and Purpose

Cohen & Steers, Inc. was incorporated in Delaware on March 17, 2004 and is currently a wholly owned subsidiary of Cohen & Steers Capital Management, Inc. Pursuant to a reorganization for the purpose of redomestication and reorganization into a holding company structure, Cohen & Steers, Inc. is expected to become the parent holding company of Cohen & Steers Capital Management, Inc. and, together with its direct and indirect subsidiaries (including Cohen & Steers Capital Management, Inc.), succeed to the business now conducted by Cohen & Steers Capital Management, Inc. and its subsidiaries.

2. Summary of Significant Accounting Policies and Basis of Presentation

The statement of financial condition has been prepared in accordance with accounting principles generally accepted in the United States of America. Separate statements of income, changes in stockholders' equity and cash flows have not been presented in the financial statements because there have been no activities of this entity.

3. Stockholders' Equity

Cohen & Steers, Inc. is authorized to issue 100,000 shares of common stock, par value $0.01 per share. Cohen & Steers, Inc. has issued 100 shares of common stock in exchange for $1.00, all of which were held by Cohen & Steers Capital Management, Inc. at May 10 , 2004.

F-3

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
C OHEN & S TEERS C APITAL M ANAGEMENT , I NC .:

We have audited the accompanying consolidated statements of financial condition of Cohen & Steers Capital Management, Inc. and subsidiaries (the “Company”) as of December 31, 2002 and 2003, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Cohen & Steers Capital Management, Inc. and subsidiaries at December 31, 2002 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

/s/ D ELOITTE & T OUCHE LLP
New York, New York
March 17, 2004

F-4

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31, 2002 and 2003
($ in thousands, except par value)

	2002		2003
ASSETS
Current assets:
Cash and cash equivalents	$	6,090	$	7,526
Accounts receivable:
Company-sponsored mutual funds		2,713		5,179
Other		2,814		3,669
Marketable securities available-for-sale		4,593		6,497
Due from affiliates		61		282
Income tax refunds receivable		—		441
Prepaid expenses and other current assets		865		1,003

Total current assets		17,136		24,597

Property and equipment—net		3,262		3,361

Other assets:
Deferred commissions—net of accumulated amortization of $2,657 and $5,398, respectively		3,954		6,523
Deposits		42		42

Total other assets		3,996		6,565

Total	$	24,394	$	34,523

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses and compensation	$	2,313	$	6,626
Current portion of long-term debt		141		120
Current portion of obligations under capital leases		12		16
Deferred income tax liability		364		366
Other current liabilities		74		129

Total current liabilities		2,904		7,257

Long-term liabilities:
Bank line of credit		3,020		4,713
Long-term debt		1,774		1,661
Obligations under capital leases and other long-term liabilities		4		118

Total long-term liabilities		4,798		6,492

Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value, 50,000 voting shares authorized, issued and outstanding and 50,000 non-voting shares authorized, 41,642 shares issued and outstanding		92		92
Additional paid-in capital		3,867		3,867
Retained earnings		12,399		15,195
Accumulated other comprehensive income		334		1,620

Total stockholders' equity		16,692		20,774

Total	$	24,394	$	34,523

See notes to consolidated financial statements.

F-5

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2001, 2002 and 2003
($ in thousands, except per share data)

	2001			2002			2003			Pro Forma 2003
										(Unaudited)
Revenue:
Investment advisory and administration fees:
Closed-end mutual funds	$	2,009		$	7,837		$	18,575		$	18,575
Open-end mutual funds		18,019			20,871			24,225			24,225
Institutional separate accounts		10,794			9,707			8,808			8,808

Total investment advisory and administration fees		30,822			38,415			51,608			51,608
Distribution and service fee revenue		1,112			3,071			5,880			5,880
Portfolio consulting and other		507			683			1,574			1,574
Investment banking fees		2,853			13,077			11,279			11,279

Total revenue		35,294			55,246			70,341			70,341

Expenses:
Employee compensation and benefits		16,719			32,312			37,193			30,077
General and administrative		6,651			6,916			8,007			8,007
Distribution and service fee expenses		4,069			4,744			9,190			9,190
Amortization, deferred commissions		533			1,698			3,077			3,077
Depreciation and amortization		517			927			1,002			1,002

Total expenses		28,489			46,597			58,469			51,353

Operating income		6,805			8,649			11,872			18,988

Non-operating income (expense):
Interest and dividend income		513			525			435			435
Interest expense		(60	)		(127	)		(156	)		(156	)

Total non-operating income		453			398			279			279

Income before income taxes		7,258			9,047			12,151			19,267
Income taxes		654			611			100			8,092

Net income	$	6,604		$	8,436		$	12,051		$	11,175

Earnings per share—basic and diluted	$	73.30		$	92.83		$	131.50		$	121.94
Weighted average shares outstanding—basic and diluted		90,100			90,871			91,642			91,642

See notes to consolidated financial statements.

F-6

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2001, 2002 and 2003
(Amounts in thousands)

	Common Stock— Voting				Common Stock— Non-Voting
	Shares		Amount		Shares		Amount		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, January 1, 2001		50	$	50		40	$	40	$	976		$	12,505		$	41		$	13,612
Net income													6,604						6,604
Other comprehensive income, unrealized gain on securities available-for-sale (net of tax expense of $39)																359			359

Total comprehensive income																			6,963

Capital contributions										1,703									1,703
Distributions to stockholders													(8,567	)					(8,567	)

Balance, December 31, 2001		50		50		40		40		2,679			10,542			400			13,711
Net income													8,436						8,436
Other comprehensive loss, unrealized loss on securities available-for-sale (net of tax benefit of $18)																(66	)		(66	)

Total comprehensive income																			8,370

Securities reorganization (see Note 1)						2		2		(762	)		760						—
Capital contributions										1,950									1,950
Distributions to stockholders													(7,339	)					(7,339	)

Balance, December 31, 2002		50		50		42		42		3,867			12,399			334			16,692
Net income													12,051						12,051
Other comprehensive income, unrealized gain on securities available-for-sale (net of tax expense of $101)																1,286			1,286

Total comprehensive income																			13,337

Distributions to stockholders													(9,255	)					(9,255	)

Balance, December 31, 2003		50	$	50		42	$	42	$	3,867		$	15,195		$	1,620		$	20,774

See notes to consolidated financial statements.

F-7

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2001, 2002 and 2003
($ in thousands)

	2001			2002			2003
Cash Flows from Operating Activities:
Net income	$	6,604		$	8,436		$	12,051
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		517			927			1,002
Amortization, deferred commissions		533			1,698			3,077
Deferred rent		6			6			126
Deferred income taxes		7			(52	)		(98	)
Loss on disposal of property and equipment		7			4			—
Changes in operating assets and liabilities:
Accounts receivable, Company-sponsored mutual funds		(483	)		(621	)		(2,466	)
Accounts receivable, others		964			14			(855	)
Due from affiliates		77			(44	)		(221	)
Income tax refunds receivable		—			—			(441	)
Prepaid expenses and other current assets		(196	)		228			(138	)
Deferred commissions		(2,059	)		(4,058	)		(5,646	)
Deferred tax liability		—			(9	)		9
Other long-term liabilities		—			(15	)		(47	)
Accrued expenses		(218	)		632			4,313
Other current liabilities		—			—			55

Net cash provided by operating activities		5,759			7,146			10,721

Cash Flows from Investing Activities:
Purchases of marketable securities available-for-sale		(364	)		(513	)		(527	)
Purchases of property and equipment		(1,939	)		(919	)		(1,062	)

Net cash used in investing activities		(2,303	)		(1,432	)		(1,589	)

Cash Flows from Financing Activities:
Distributions to stockholders		(8,567	)		(7,339	)		(9,255	)
Proceeds from bank line of credit		—			3,020			1,693
Proceeds from long-term debt		1,440			620			—
Principal payments on long-term debt		(19	)		(125	)		(134	)
Capital contributions		1,703			1,950			—
Payment of subordinated notes payable		—			(500	)		—

Net cash used in financing activities		(5,443	)		(2,374	)		(7,696	)

Net Increase (Decrease) in Cash and Cash Equivalents		(1,987	)		3,340			1,436
Cash and Cash Equivalents—Beginning of year		4,737			2,750			6,090

Cash and Cash Equivalents—End of year	$	2,750		$	6,090		$	7,526

Cash paid for interest	$	59		$	122		$	150

Cash paid for taxes, net	$	735		$	443		$	361

Non-cash transactions:
Acquisition of property and equipment under capital leases	$	31		$	—		$	39

Securities, Inc. reorganization	$	—		$	760		$	—

See notes to consolidated financial statements.

F-8

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003
($ in thousands, except per share amounts)

1. Organization and Nature of Operations

Cohen & Steers Capital Management, Inc. (“Management”) is a registered investment advisor under the Investment Advisers Act of 1940, specializing in the management of income-oriented equity securities portfolios. Its clients include Company-sponsored open-end and closed-end mutual funds and domestic corporate and public pension plans, foreign pension plans, endowment funds and individuals. Management also serves as portfolio consultant for non-proprietary unit investment trusts.

Cohen & Steers Securities, LLC (“Securities, LLC”) (successor to Cohen & Steers Securities, Inc. (“Securities, Inc.”)) (both hereinafter referred to as “Securities”) is a wholly-owned subsidiary which was formed as a Delaware limited liability company. Securities is a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and is a member of the National Association of Securities Dealers, Inc. (“NASD”). Securities provides distribution services for Cohen & Steers Realty Shares, Inc., Cohen & Steers Institutional Realty Shares, Inc., Cohen & Steers Special Equity Fund, Inc. and Cohen & Steers Equity Income Fund, Inc. (“CSI”), all of which are Company-sponsored open-end mutual funds.

In accordance with the terms of the Agreement and Plan of Reorganization (the “Agreement”), Securities, LLC commenced operations on July 1, 2002 and succeeded to the business of Securities, Inc., acquiring 100% of the outstanding voting common stock of Securities, Inc. In accordance with the Agreement, Securities, Inc. transferred all of its assets to Securities, LLC and Securities, LLC assumed all of Securities, Inc.'s liabilities. In connection with the Agreement, the Company issued an additional 1,642 shares of its non-voting common stock to the owners of Securities, Inc. The transaction has been accounted for as a merger of entities under common control and has been recorded in a manner similar to a pooling-of-interests. Accordingly, the previously separate historical financial position and results of operations of Securities, Inc. have been combined with the consolidated financial position and results of operations for all periods presented.

Cohen & Steers Capital Advisors, L.L.C. (“Advisors”), a wholly-owned subsidiary which was formed as a Delaware limited liability company, commenced operations on March 4, 1999. Advisors is a broker-dealer registered with the SEC and is a member of the NASD. Advisors provides advisory and administration services in connection with mergers and acquisitions, leveraged buyouts and recapitalizations, and the placement of securities as agent.

Cohen & Steers Holdings, LLC (“Holdings”), a wholly owned subsidiary which was formed as a Delaware limited liability company, commenced operations on September 24, 2001. Holdings was organized to retain fractional ownership interests in two aircraft.

2. Summary of Significant Accounting Policies

Principles of Consolidation— The consolidated financial statements include Management and its wholly-owned subsidiaries, Securities, Advisors and Holdings (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.

Cash Equivalents— Cash equivalents consist of short-term, highly liquid investments, which are readily convertible into cash and have original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value.

Marketable Securities Available-for-Sale— The management of the Company determines the appropriate classification of its investments in publicly traded, Company-sponsored open-end and closed-end mutual funds at the time of purchase and reevaluates such determination at each statement of financial condition date. Marketable securities available-for-sale are carried at fair

F-9

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003—(Continued)
($ in thousands, except per share amounts)

value at the last reported sales price on the last business day of the accounting period, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income. Unrealized losses are recorded in earnings when a decline in fair value is determined to be other than temporary. The Company uses the specific identification method to determine realized gains and losses.

Prepaid Expenses and Other Current Assets— Included in prepaid expenses and other current assets are shareholder service fees paid in advance to selling firms in connection with the sale of B shares of CSI. Such fees are capitalized and amortized over a period not to exceed one year.

The Company collects 0.25% shareholder service fees on B shares of CSI and retains them for one year before beginning to disburse these fees to the selling firm beginning in the second year . However, while the Company retains such fees, it treats such payments as prepayments to the selling firm of the 0.25% of this shareholder service fee via its initial commission payment on the sale of B shares. These fees are paid to the selling firms for the servicing of such shares.

The Company's load mutual funds offer four pricing structures:

		(1)		Class A shares (“A shares”) : Class A investors pay a maximum front-end sales charge of 4.50% on the initial purchase at the time of investment. Of this amount, the selling firm receives 4% and the Company receives a maximum of 0.50%. The fund pays to the Company an ongoing annual distribution fee of 0.25% of the fund's net assets, which the Company disburses to the selling firm. The fund also pays to the Company an ongoing annual shareholder servicing fee of 0.10%, which the Company retains .
		(2)		Class B shares (“B shares”) : Class B investors do not pay a front-end sales charge. Instead, the Company pays 4.0% of the initial purchase to the selling firm. The fund pays to the Company an annual distribution fee of 0.75% of the fund's net assets for seven years, which the Company retains . After eight years , shares are converted to Class A shares. The fund also pays to the Company an ongoing annual shareholder servicing fee of 0.25% of the fund's average daily net assets , which the Company retains in the first year and subsequently disburses to the selling firm.
		(3)		Class C shares (“C shares”) : Class C investors do not pay a front-end sales charge. Instead the Company pays 1.0% of the initial purchase to the selling firm. The fund pays to the Company an annual distribution fee of 0.75% of the fund's average daily net assets , which the Company retains in the first year and subsequently disburses to the selling firm. The fund also pays to the Company an ongoing annual shareholder servicing fee of 0.25% of the fund's average daily net assets , which the Company retains in the first year and subsequently disburses to the selling firm.
		(4)		Class I shares (“I shares”) : Class I shares require a minimum investment of $100,000 and are generally purchased by institutional investors. The investor pays no initial sales charge or ongoing distribution fees.

Property and Equipment— Property and equipment is stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization on a straight-line basis as follows:

F-10

	Asset		Estimated Useful Lives
	Furniture and fixtures		7 years
	Office and other equipment		5 years
	Aircraft interests		5 years
	Computer software		3 years
	Leasehold improvements		Terms of lease

Maintenance and repairs are charged to expense as incurred. Upon sale or other disposition, the applicable amounts of asset cost and accumulated depreciation and amortization are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to income.

The Company owns fractional ownership interests of 6.25% each in two aircraft. The Company periodically assesses the carrying value of the aircraft for impairment and would write down the asset to net realizable value if deemed necessary. The Company has determined that there has been no impairment during the years reported.

Long-Lived Assets— The Company reviews the carrying value of its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company assesses the recoverability of the carrying value of long-lived assets by first grouping its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the asset group) and, secondly, by estimating the undiscounted future cash flows that are directly associated with and that are expected to arise from the use of and eventual disposition of such asset group. The Company estimates the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, the Company records an impairment charge to the extent the carrying value of the long-lived asset exceeds its fair value. The Company determines fair value through quoted market prices in active markets or, if quoted market prices are unavailable, through the performance of internal analyses of discounted cash flows or external appraisals. There were no impairments of long-lived assets during the years ended December 31, 2001, 2002 or 2003.

Deferred Commissions— Deferred commissions on B shares represent commissions paid in advance to broker-dealers upon the sale of B shares of CSI and are capitalized and amortized over a period not to exceed six years. Through July 31, 2001, the Company contracted with a third party to finance the payout of upfront commissions on B shares. Subsequent to July 31, 2001, the Company began directly paying the commissions on the B shares. The Company records additional amortization of deferred commissions on B shares at a rate commensurate with the rate of redemptions of B shares of CSI.

Deferred commissions on Class C shares consist of commissions paid in advance to broker-dealers in connection with the sale of C shares of CSI and are capitalized and amortized over a period not to exceed one year. The Company records additional amortization of deferred commissions on C shares at a rate commensurate with the rate of redemptions of C shares of CSI.

Investment Advisory and Administration Fees— The Company earns revenue by providing asset management services to Company-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. The Company also earns revenue from administration fees paid by certain Company-sponsored open-end and closed-end mutual funds, based on the average daily net assets

F-11

of such funds. This revenue is recognized at various intervals throughout the year as such fees are earned.

Distribution and Service Fee Revenue— Distribution and service fee revenue is recognized as the services are performed, generally based on contractually-predetermined percentages of the average daily net assets of the funds. Distribution and service fee revenue is recorded gross of any third-party distribution and service arrangements; the expenses associated with these third-party distribution and service arrangements are recorded in distribution and service fee expenses.

Portfolio Consulting Fees —The Company earns revenue for various portfolio consulting services provided to clients, as well as for providing a license to use its name. This revenue is recognized pursuant to the terms of individual agreements and is based on the net assets of the clients' funds.

Investment Banking Fees— The Company earns revenue from advisory services provided to clients and the placement of securities. Revenue is generally recognized when the transaction being consulted on is completed pursuant to the terms of the individual agreements. Included in investment banking fees on the accompanying consolidated statements of income for the years ended December 31, 2001, 2002 and 2003 are reimbursed client expenses of $322, $702 and $829, respectively.

Distribution and Service Fee Expenses— The Company pays to broker-dealers certain amounts of the distribution fees earned on A shares and C shares of the CSI. The Company also pays to broker-dealers certain amounts of the service fees earned on B and C shares of the CSI, for servicing and maintaining shareholder accounts and for providing personal services to shareholders of the CSI. In addition, the Company pays fees to selling firms for the sale and distribution of shares of the CSI.

The Company also pays commissions to selling firms of 1% on purchases in excess of $1 million of A shares of the Equity Income Fund.

The Company pays to various firms distribution assistance payments for the sale and distribution of several of its Company-sponsored open-end and closed-end mutual funds.

Soft Dollars— The Company pays standard brokerage commission rates that vary based on certain factors, including the type of execution provided by a particular broker-dealer channel. While the Company sometimes receives research services from broker-dealers in connection with initiating portfolio transactions for a portfolio, the Company does not enter into any arrangement by which portfolio accounts pay broker-dealers a commission that is greater than the Company's standard commission rate in connection with such transactions. The Company receives research and investment information from these broker-dealers at no cost to us and this information is available for the benefit of all accounts the Company advises. Only research related costs are included in these arrangements.

At the end of each reporting period, the Company records a payable and a related expense for the total amount of our unpaid research related costs that various broker-dealers have committed to pay on the Company's behalf based on the arrangements described in the paragraph above. When these research costs are subsequently paid, the Company reverses the accrual. At December 31, 2002 and 2003, the Company accrued $4 and $128, respectively, for soft-dollar transactions.

Income Taxes— Management, with the consent of its stockholders, has elected to be taxed under applicable provisions of Subchapter S of the Internal Revenue Code. Under those provisions, Management does not pay federal corporate income taxes on its taxable income. Instead, the stockholders are liable individually for such taxes. The provision for state and local

F-12

taxes provided is based on income for financial accounting purposes. As single member Limited Liability Companies, Securities, LLC, Advisors and Holdings do not file stand-alone income tax returns. Instead, their operations are included within the income tax filings of Management.

Securities, Inc., with the consent of its stockholders, elected to be taxed under applicable provisions of Subchapter S of the Internal Revenue Code. Under those provisions, Securities, Inc. did not pay federal corporate income taxes on its taxable income. Instead, the stockholders were liable individually for such taxes. The provision for state and local taxes provided was based on income for financial accounting purposes.

Deferred income tax assets and liabilities are computed annually for differences between the consolidated financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities.

Earnings per Share— Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during each year. Shares issued during the year are weighted for the portion of the year that they were outstanding. Diluted earnings per share is equivalent to basic earnings per share because there are no common stock equivalents outstanding during any of the years presented.

Use of Estimates— The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

New Accounting Pronouncements— Effective January 1, 2003, the Company adopted Financial Accounting Standards Board (“FASB”) Interpretation No. (“FIN”) 45, Guarantor's Accounting and Disclosure Requirements of Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). FIN 45 clarifies the requirements of Statement of Financial Accounting Standards (“SFAS”) No. 5, Accounting for Contingencies, relating to a guarantor's accounting for, and disclosure of, the issuance of certain types of guarantees. FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. The adoption of FIN 45 did not have a material effect on the Company's consolidated financial statements.

F-13

during 2003. Application of FIN 46R is required for periods ending after December 15, 2003 for interests in special purpose entities and for periods that end after March 15, 2004 for interests in other entities. The Company does not believe the implementation of FIN 46R will have a material effect on the Company's consolidated financial statements.

3. Pro Forma Financial Information (unaudited)

Cohen & Steers, Inc., a Delaware corporation, intends to file a registration statement on Form S-1 with the Securities and Exchange Commission for an initial public offering (“IPO”) of its common stock. Prior to consummation of the IPO, the Company's stockholders will contribute all of their interests in the Company to Cohen & Steers, Inc. in exchange for newly issued shares of common stock of Cohen & Steers, Inc. In addition, the Company's Subchapter S corporation status will terminate and it will become subject to federal and certain state income taxes applicable to C corporations. The Company will distribute the earned, but undistributed, accumulated S corporation earnings through the date the Company becomes a C corporation to its stockholders.

The unaudited pro forma consolidated statement of income is presented for illustrative purposes only and does not purport to represent the Company's consolidated results of operations that actually would have occurred had the transactions discussed herein been consummated on January 1, 2003 , or to project the Company's consolidated results of operations for any future period.

The pro forma consolidated statement of income for the year ended December 31, 2003 gives effect to:

	•	the $7.1 million reduction in “Employee compensation and benefits” relating to the revocation of the Company's S corporation status to reflect the reduced compensation which would have been payable to the Company's co-chief executive officers if the new employment agreements with these individuals had been in effect on January 1, 2003; and

	•	the additional income taxes of $8.0 million which would have been payable if the Company had revoked its S corporation tax status and elected to be taxed as a C corporation on January 1, 2003, based on an estimated combined effective tax rate of 42% for the year ended December 31, 2003.

4. Marketable Securities Available-For-Sale

Marketable securities available-for-sale consist primarily of investments in Company-sponsored open-end and closed-end mutual funds. The Company received dividend income from these funds of $191, $276 and $254 for the years ended December 31, 2001, 2002 and 2003, respectively. There were no sales of marketable securities available-for-sale and therefore no realized gains or losses during the years ended December 31, 2001, 2002 and 2003.

Marketable securities available-for-sale consisted of the following as of December 31, 2002 and 2003:

	2002			2003
Cost	$	4,236		$	4,763
Unrealized appreciation, gross		367			1,734
Unrealized depreciation, gross		(10	)		—

Market value	$	4,593		$	6,497

F-14

5. Property and Equipment

Property and equipment as of December 31, 2002 and 2003 consisted of the following:

	2002		2003
Furniture and fixtures	$	978	$	1,051
Office and other equipment		1,611		2,394
Aircraft interests		2,060		2,060
Computer software		251		444
Leasehold improvements		686		738

		5,586		6,687
Less accumulated depreciation and amortization		2,324		3,326

Property and equipment-net	$	3,262	$	3,361

6. 401(k) and Profit-Sharing Plan

The Company sponsors a profit-sharing plan (the “Plan”) covering all employees who meet certain age and service requirements. Subject to limitations, the Plan permits participants to defer up to 70% of their compensation pursuant to Section 401(k) of the Internal Revenue Code. Employee contributions are matched by the Company at $0.50 per $1.00 deferred. The Plan also allows the Company to make discretionary contributions, which are integrated with the taxable wage base under the Social Security Act.

Matching contributions to the Plan amounted to $196, $225 and $228 for the years ended December 31, 2001, 2002, and 2003, respectively.

Forfeitures are created when participants terminate employment before becoming entitled to their full benefits under the Plan. Forfeited amounts are used to reduce the Company's contributions to the Plan. Forfeitures used to reduce the Company's contributions amounted to $40, $15 and $5 for the years ended December 31, 2001, 2002, and 2003, respectively.

7. Bank Line of Credit

On March 21, 2002, Management entered into a $5 million Credit Agreement with a financial institution (the “lender”). The Credit Agreement provides Management with a revolving line of credit through May 18, 2004 (the “conversion date”), at which time the line of credit converts into a three-year term loan. The Company is currently in negotiations with the lender to extend the conversion date of the line of credit. The line of credit is to be used exclusively for the purpose of internally financing the commissions paid on sales of B shares of CSI. Advances under the line are made in accordance with certain borrowing base reports as defined in the Credit Agreement which requires that the Company be in compliance with certain covenants regarding tangible net worth and consistency of earnings before interest, taxes, depreciation and amortization (“EBITDA”) as defined in the Credit Agreement. On December 22, 2003, the lender increased the line of credit to $7 million.

As of December 31, 2002 and 2003, $3,020 and $4,713, respectively, were outstanding pursuant to the line of credit. The line of credit bears interest at the federal funds rate (0.96% as of December 31, 2003) plus 1% per annum and requires the payment of an annual commitment fee of $12. The line of credit is collateralized by distribution fees and contingent deferred sales charge (“CDSC”) revenue associated with the B shares of CSI and certain assets of Holdings. Interest expense related to the line of credit was $42 and $84 for the years ended December 31, 2002 and

F-15

2003, respectively. The fair value of this loan as of December 31, 2002 and 2003 approximated its carrying values.

8. Long-Term Debt

As of December 31, 2002 and 2003, long-term debt included a loan payable with original principal of $1,440 which bears interest at the one month LIBOR rate (1.38% and 1.12% at December 31, 2002 and 2003, respectively) plus 250 basis points, which matures November 4, 2006. Interest on this loan is reset monthly. This loan is collateralized by fractional ownership interests in certain aircraft. The fair value of this loan as of December 31, 2002 and 2003 approximated its carrying values. Amounts outstanding pursuant to this loan as of December 31, 2002 and 2003 were $1,324 and $1,228, respectively, of which $103 and $82, respectively, were current.

Also included in long-term debt is a loan payable with original principal of $620 which bears interest at the one month LIBOR rate plus 298 basis points, which matures May 1, 2007. Interest on this loan is reset monthly. This loan is collateralized by fractional ownership interests in certain aircraft. The fair value of this loan as of December 31, 2002 and 2003 approximated its carrying values. Amounts outstanding pursuant to this loan as of December 31, 2002 and 2003 were $591 and $553, respectively, of which $38 and $38, respectively, were current.

Aggregate future required principal payments as of December 31, 2003 are as follows:

Year Ending December 31
2004	$	120
2005		118
2006		1,104
2007		439

	$	1,781

9. Income Taxes

The deferred income tax liability as of December 31, 2002 and 2003 included the following components:

	2002		2003
Cash/accrual differences principally related to receivables and compensation	$	339	$	240
Unrealized gain on marketable securities		25		126

	$	364	$	366

The provision for income taxes for the years ended December 31, 2001, 2002 and 2003 consisted of the following:

	2001		2002			2003
Current provision—state and local	$	647	$	663		$	199
Deferred provision (benefit)—state and local		7		(52	)		(99	)

Total provision	$	654	$	611		$	100

In 2003, the Company determined that it had overpaid its income taxes for prior years. Accordingly, amended tax returns were and are expected to be filed for such years. The related refunds which have been estimated based on the actual amounts filed on the amended returns for

F-16

1998 and 1999 and the actual return filed for, 2002, have been recorded as a tax benefit and a receivable, where applicable.

10. Related Party Transactions

The Company acts as investment advisor to and has administration agreements with Company-sponsored open-end and closed-end mutual funds in which the stockholders and certain employees are officers and/or directors. For the years ended December 31, 2001, 2002, and 2003, Management earned advisory and administration fee income of $19,662, $28,053 and $41,488, respectively, and administration fee income of $366, $655, and $1,312, respectively. For the years ended December 31, 2001, 2002 and 2003, distribution and service fee revenue from such funds aggregated $1,112, $3,071 and $5,880, respectively.

For the years ended December 31, 2001, 2002 and 2003, Management had investment advisory agreements with Company-sponsored closed-end mutual funds, pursuant to which Management has contractually waived in the aggregate $1,078, $4,660 and $7,170, respectively, of advisory and administration fees it was otherwise entitled to receive. These investment advisory agreements contractually require Management to continue to waive a declining portion of the advisory and administration fees it is otherwise entitled to receive for the first ten years from the commencement date (May 2001, February 2002, and August 2002) of the respective fund.

Management has an agreement with a Company-sponsored open-end mutual fund, which contractually requires Management to absorb expenses of the fund so that the fund's total annual operating expenses do not exceed 0.75% of its average daily net assets. This commitment will remain in place for the life of the fund. For the years ended December 31, 2001, 2002, and 2003, included in various expense categories are $856, $722, and $937, respectively, of expenses paid by Management pursuant to this agreement.

The Company provides investment management services to Internet Realty Partners, L.P. (“IRP”), a private limited partnership. Certain employees and officers of the Company have investments in and/or act in the capacity of directors or officers of Internet Realty Partners, L.P. In addition certain employees and officers of the Company have investments in and/or act in the capacity of directors or officers in IRP Management, LLC, the general partner of Internet Realty Partners, L.P. Because it has been doubtful that IRP will be able to pay the Company its management fee, the Company did not record any revenue in 2003 and does not expect to record any revenue in 2004.

11. Stock Appreciation Rights Plan

The Cohen & Steers Capital Management, Inc. Stock Appreciation Rights (“SARs”) Plan (the “SARs Plan”) provides selected key employees of the Company with an opportunity to share in the growth of the Company, align the long-term interests of the Company with those of its key employees, and attract, retain, motivate and reward employees of superior ability, training and experience. A SAR's value is generally based on the excess of the unit value (formula-derived value of the unit underlying the SAR) of the unit (a hypothetical share of stock) underlying the SAR for the valuation date (normally December 31st) immediately preceding the date on which such SAR is exercised over the exercise price of the unit underlying the SAR, but not less than zero. The value of the SAR at the valuation date is derived from an EBITDA calculation for that period. The vesting period for participants is over a period of four years, with 12.5% of issued SARs vesting every six months.

At December 31, 2003, 17,300 SARs have been granted, of which 13,200 are outstanding, 4,100 SARs were forfeited or exercised and 10,850 SARs are vested. The SARs had no value at

F-17

December 31, 2001. The December 31, 2000 SARs expense accrual of $566 was completely reversed during 2001 with a corresponding decrease to the related expense, net of a $14 payout to a former employee. At December 31, 2002 and 2003, the accrual for the SARs plan was $207 and $1,522, respectively, of which approximately $147 and $1,318, respectively, was vested. For the years ended December 31, 2002 and 2003, the Company recognized compensation expense of $207 and $1,315, respectively.

A summary of activity under the SARs Plan for the years ended December 31, 2001, 2002 and 2003 is as follows:

	Rights			Weighted Average Exercise Price
Outstanding as of January 1, 2001		11,800		$	805
Granted January 1, 2001		1,600			865
Forfeited in 2001		(975	)		805
Exercised in 2001		(225	)		805

Outstanding as of December 31, 2001		12,200			813
Granted January 1, 2002		3,900			782
Forfeited in 2002		(2,900	)		805
Exercised in 2002		—			—

Outstanding as of December 31, 2002		13,200			805
Granted January 1, 2003		—			—
Forfeited in 2003		—			—
Exercised in 2003		—			—

Outstanding as of December 31, 2003		13,200		$	805

12. Net Capital Requirements

Securities and Advisors are subject to the SEC Uniform Net Capital Rule 15c3-1. This Rule requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 and that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. As of December 31, 2003, Securities and Advisors net capital was $384 and $2,724, respectively, which was $295 and $2,671, respectively, in excess of their minimum requirements of $89 and $53, respectively.

13. Exemption from Rule 15c3-3

Securities and Advisors are exempt from the SEC Rule 15c3-3 and, therefore, are not required to maintain a “Special Reserve Bank Account for the Exclusive Benefit of Customers.”

14. Commitments and Contingencies

Operating Leases— The Company is obligated under non-cancelable operating leases for its office space. The leases provide for rent escalations based upon increases in real estate taxes and certain other costs incurred by the lessor. The leases have an expiration date of December 31, 2007 with an option to extend the leases for five years.

Rent expense for the years ended December 31, 2001, 2002 and 2003 was $818, $818 and $1,006, respectively.

F-18

Future minimum lease payments under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2003 are as follows:

Year Ending December 31
2004	$	1,008
2005		1,157
2006		1,163
2007		1,163

	$	4,491

Capital Leases— The Company leases certain office equipment under capital leases with lease terms through April 2004 and January 2007. As of December 31, 2002 and 2003, property and equipment included $31 and $70, respectively, related to assets under capital leases. Accumulated depreciation and amortization related to these assets was $11 and $18 as of December 31, 2002 and 2003, respectively.

Future minimum lease payments under capital leases as of December 31, 2003 are as follows:

Year Ending December 31
2004	$	17
2005		13
2006		13
2007		1

Total future minimum lease payments		44
Less amount representing interest		1

Present value of future minimum lease payments		43
Less current portion		16

Noncurrent portion	$	27

Advisors Bonus Plan— Advisors maintains a Bonus Plan (the “Bonus Plan”). In accordance with the terms of this Bonus Plan, Advisors' managing directors are contractually entitled to receive 50% of the excess, if any, of Advisors' income before compensation payable under the Bonus Plan and income taxes, subject to certain restrictions on the distribution of such compensation. Advisors may defer payment of any award under the Bonus Plan for any fiscal year if the payment of such award would cause Advisors either (i) not to qualify to meet its net capital requirements pursuant to Rule 15c3-1 under the Securities Exchange Act of 1934, as amended, or (ii) to have a cash and cash equivalent balance of less than $1 million. For the years ended December 31, 2002 and 2003, compensation expense under the Bonus Plan amounted to $4,186 and $3,350, respectively, of which $258 and $425, respectively, were accrued at year end. For the year ended December 31, 2001, no compensation expense was recorded under the Bonus Plan.

15. Stockholders' Agreement

The Company and the stockholders have a stockholders' agreement (the “Agreement”) which governs the disposition of shares. In the event of disability of a voting stockholder, the Company is obligated to purchase his stock and the stock of his permitted transferees at prices and on terms set forth in the Agreement. In the event of the death of a voting stockholder, the remaining voting stockholder is obligated to purchase such shares of common stock held by the decedent and such shares of the decedent's permitted transferees. The Company will remain obligated to purchase the remaining shares, if any, not purchased by the remaining voting stockholder at a

F-19

price and on terms set forth in the Agreement. The Agreement also sets forth terms, conditions and restrictions concerning other share transfers.

16. Segment Reporting

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes disclosure requirements relating to operating segments in financial statements. The management of the Company has determined that the Company operates in two business segments: asset management and investment banking.

The Company's reportable segments are strategic divisions that offer different services and are managed separately as each division requires different resources and marketing strategies. The Company's principal business is in asset management which includes providing investment advisory and administration services to affiliated investment companies and non-affiliated domestic corporate and public pension plans, foreign pension plans, endowment funds and individuals. The investment banking segment provides advisory services to real estate companies, leveraged buyouts and recapitalizations, and the placement of securities as agent.

The accounting policies of the segments are consistent with those described in the summary of significant accounting policies in Note 2.

The asset management business segment incurs certain expenses on behalf of the investment banking business including rent, payroll, office, telephone, professional fees, network and computer and similar types of expenses. Such expenses are allocated to the investment banking business segment based on time spent, space occupied, headcount and similar criteria.

Substantially all revenue is generated in North America. In addition, all long-lived assets are located in North America.

Statement of Financial Condition Segment Data

December 31,	Asset Management		Investment Banking		Consolidated
2002
Capital expenditures	$	919	$	—	$	919
Property and equipment		3,231		31		3,262
Total assets		20,995		3,399		24,394
Current liabilities		1,991		913		2,904
Long-term liabilities		4,798		—		4,798
Total liabilities		6,789		913		7,702
2003
Capital expenditures	$	1,101	$	—	$	1,101
Property and equipment		3,343		18		3,361
Total assets		30,021		4,502		34,523
Current liabilities		6,442		815		7,257
Long-term liabilities		6,492		—		6,492
Total liabilities		12,934		815		13,749

F-20

Statement of Income Segment Data

Years Ended December 31,	Asset Management		Investment Banking			Consolidated
2001
Total revenue	$	32,441	$	2,853		$	35,294
Operating income (loss)		8,843		(2,038	)		6,805
Interest expense		20		40			60
Interest income		9		14			23
Depreciation and amortization		1,027		23			1,050
Net income (loss)		8,374		(1,770	)		6,604
2002
Total revenue	$	42,169	$	13,077		$	55,246
Operating income		4,536		4,113			8,649
Interest expense		122		5			127
Interest income		12		4			16
Depreciation and amortization		2,602		23			2,625
Net income		4,656		3,780			8,436
2003
Total revenue	$	59,062	$	11,279		$	70,341
Operating income		8,552		3,320			11,872
Interest expense		156		—			156
Interest income		5		—			5
Depreciation and amortization		4,066		13			4,079
Net income		8,847		3,204			12,051

17. Concentration of Credit Risk

The Company maintains its cash balances at various financial institutions. These balances are insured by the Federal Deposit Insurance Corporation up to $100 per institution. The Company's cash and cash equivalents are principally on deposit with three major financial institutions. The Company is subject to credit risk should these financial institutions be unable to fulfill their obligations.

For the year ended December 31, 2001, 50% of asset management revenue was earned from two affiliated entities. For the year ended December 31, 2002, 40% of asset management revenue was earned from two affiliated entities. For the year ended December 31, 2003, 32% of asset management revenue was earned from two affiliated entities.

For the year ended December 31, 2001, 73% of investment banking revenue was earned from three entities. For the year ended December 31, 2002, 71% of investment banking revenue was earned from two entities. For the year ended December 31, 2003, 83% of investment banking revenue was earned from three entities.

18. Subsequent Events

On January 26, 2004, the Company distributed $4,000 to its stockholders. Also during January 2004, 3,350 additional SARs were granted to employees at an exercise price of $929.

F-21

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31, 2003 and March 31, 2004
($ in thousands )
(Unaudited)

	December 31, 2003		March 31, 2004		Pro Forma March 31, 2004

ASSETS
Current assets:
Cash and cash equivalents	$	7,526	$	8,574	$	8,574
Accounts receivable:
Company-sponsored mutual funds		5,179		6,637		6,637
Other		3,669		4,181		4,181
Marketable securities available-for-sale		6,497		7,390		7,390
Due from affiliates		282		889		889
Income tax refunds receivable		441		398		398
Prepaid expenses and other current assets		1,003		1,962		1,962

Total current assets		24,597		30,031		30,031

Property and equipment—net		3,361		3,082		3,082
Other assets:
Deferred commissions—net		6,523		6,772		6,772
Deposits		42		42		42

Total other assets		6,565		6,814		6,814

Total	$	34,523	$	39,927	$	39,927

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses and compensation	$	6,626	$	13,423	$	13,423
Current portion of long-term debt		120		116		116
Current portion of obligations under capital leases		16		16		16
Deferred income tax liability		366		136		654
Other current liabilities		129		728		14,728

Total current liabilities		7,257		14,419		28,937

Long-term liabilities:
Bank line of credit		4,713		4,584		4,584
Long-term debt		1,661		1,632		1,632
Obligations under capital leases and other long-term liabilities		118		108		108

Total long-term liabilities		6,492		6,324		6,324

Commitments and contingencies
Stockholders' equity:
Common stock		92		92		92
Additional paid-in capital		3,867		3,867		3,867
Retained earnings (deficit)		15,195		13,026		(1,492	)
Accumulated other comprehensive income		1,620		2,199		2,199

Total stockholders' equity		20,774		19,184		4,666

Total	$	34,523	$	39,927	$	39,927

See notes to consolidated financial statements

F-22

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2003 and 2004
($ in thousands, except per share data)
(Unaudited)

	Three Months Ended March 31,
	2003			2004			Pro Forma 2004
Revenue:
Investment advisory and administration fees:
Closed-end mutual funds	$	2,741		$	8,801		$	8,801
Open-end mutual funds		4,806			8,282			8,282
Institutional separate accounts		1,973			2,646			2,646

Total investment advisory and administration fees		9,520			19,729			19,729
Distribution and service fee revenue		974			2,408			2,408
Portfolio consulting and other		271			709			709
Investment banking fees		978			4,463			4,463

Total revenue		11,743			27,309			27,309

Expenses:
Employee compensation and benefits		7,754			8,980			8,710
General and administrative		1,719			2,757			2,757
Distributions and service fee expenses		1,427			4,195			4,195
Amortization, deferred commissions		810			1,057			1,057
Depreciation and amortization		233			281			281

Total expenses		11,943			17,270			17,000

Operating income (loss)		(200	)		10,039			10,309

Non-operating income (expense):
Interest and dividend income		97			101			101
Interest expense		(36	)		(42	)		(42	)

Total non-operating income		61			59			59

Income (loss) before income taxes		(139	)		10,098			10,368
Income tax expense (benefit)		(24	)		767			4,355

Net income (loss)	$	(115	)	$	9,331		$	6,013

Earnings per share—basic and diluted	$	(1.25	)	$	101.82		$	65.61
Weighted average shares outstanding—basic and diluted		91,642			91,642			91,642

See notes to consolidated financial statements

F-23

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Three Months Ended March 31, 2004
(Amounts in thousands)
(Unaudited)

	Common Stock— Voting				Common Stock— Non-Voting
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income		Total
Balance, January 1, 2004		50	$	50		42	$	42	$	3,867	$	15,195		$	1,620	$	20,774
Net income												9,331					9,331
Other comprehensive income, unrealized gain on securities available-for-sale (net of tax expense of $30 )															579		579

Total comprehensive income																	9,910
Distributions to stockholders												(11,500	)				(11,500	)

Balance, March 31, 2004		50	$	50		42	$	42	$	3,867	$	13,026		$	2,199	$	19,184

See notes to consolidated financial statements

F-24

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2003 and 2004
($ in thousands)
(Unaudited)

	Three Months Ended March 31,
	2003			2004

Net cash provided by operating activities	$	5,367		$	13,112

Net cash used in investing activities		(141	)		(398	)

Cash Flows from Financing Activities:
Distributions to stockholders		(1,500	)		(11,500	)
Principal payments on long-term debt and bank line of credit		(30	)		(166	)

Net cash used in financing activities		(1,530	)		(11,666	)

Net Increase in Cash and Cash Equivalents		3,696			1,048
Cash and Cash Equivalents— Beginning of period		6,090			7,526

Cash and Cash Equivalents— End of period	$	9,786		$	8,574

See notes to consolidated financial statements

F-25

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2003 AND 2004
(Dollar amounts in thousands)

1. Basis of Presentation

The unaudited interim consolidated financial statements of Cohen & Steers Capital Management, Inc. (“Management”) and its subsidiaries (collectively, “the Company”) included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information and, accordingly, do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2003 .

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP and reflect all adjustments, in the opinion of management, which are of a normal recurring nature, necessary for a fair presentation of results for the interim periods presented. The results of operations for the three months ended March 31, 2004, are not necessarily indicative of the results that may be expected for the year ending December 31, 2004.

In preparing the unaudited interim consolidated financial statements, management is required to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates.

All intercompany balances and transactions have been eliminated in consolidation.

2. Pro Forma Financial Information

Cohen & Steers, Inc., a Delaware corporation, has filed a registration statement on Form S-1 with the Securities and Exchange Commission for an initial public offering (“IPO”) of its common stock. Prior to consummation of the IPO, the Company's stockholders will contribute all of their interests in the Company to Cohen & Steers, Inc. in exchange for newly issued shares of common stock of Cohen & Steers, Inc. In addition, the Company's Subchapter S corporation status will terminate and it will become subject to federal and certain state income taxes applicable to C corporations. The Company will distribute the earned, but undistributed, accumulated S corporation earnings (the “S corporation distribution”) through the date the Company becomes a C corporation to its stockholders.

The unaudited pro forma consolidated statements of financial condition and of income are presented for illustrative purposes only and do not purport to represent the Company's consolidated financial position or results of operations that actually would have occurred had the transactions discussed herein been consummated on March 31, 2004 for the consolidated statement of financial condition or on January 1, 2003 for the consolidated statement of income, or to project the Company's consolidated financial position or results of operations for any future date or period.

Pro Forma Consolidated Statement of Financial Condition

The pro forma consolidated statement of financial condition as of March 31, 2004 gives effect to:

•

the recognition of the additional net deferred tax liability and corresponding deferred income tax expense of $0.5 million that would have been recorded had the Company revoked its S corporation tax status and elected to be taxed as a C corporation on March 31, 2004; and

F-26

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2003 AND 2004—(Continued)
(Dollar amounts in thousands)

•

the accrual of the $14.0 million S corporation distribution to the stockholders in “Other current liabilities” that would have been recorded had this distribution been declared on March 31, 2004.

Pro Forma Consolidated Statement of Income

The pro forma consolidated statement of income for the three months ended March 31, 2004 gives effect to:

	•	the $0.3 million reduction in “Employee compensation and benefits” relating to the revocation of the Company's S corporation status to reflect the reduced compensation which would have been payable to the Company's co-chief executive officers if the new employment agreements with these individuals had been in effect on January 1, 2003; and

	•	the additional income taxes of $3.6 million which would have been payable if the Company had revoked its S corporation tax status and elected to be taxed as a C corporation on January 1, 2003, based on an estimated combined effective tax rate of 42%.

3. Bank Line of Credit

As of March 31, 2004, $4,584 was outstanding on the line of credit. During March 2004, the lender agreed to extend the conversion date of the line of credit to May 18, 2004. The Company is currently in negotiations with the lender to extend the conversion date for one year to May 18, 2005 and increase the line of credit to $10 million from $7 million. The line of credit bears interest at the federal funds rate (1.05% as of March 31, 2004) plus 1% per annum and requires the payment of an annual commitment fee of $12. The line of credit is used exclusively for the purpose of internally financing the commissions paid on sales of B shares of CSI and is collateralized by distribution fees and contingent deferred sales charge (“CDSC”) revenue associated with the B shares of CSI and certain assets of Holdings. The fair value of the line of credit as of March 31, 2004 approximated its carrying value.

4. Income Taxes

The deferred income tax liability as of March 31, 2004 included the following components:

Cash/accrual differences principally related to receivables and compensation	$	(20	)
Unrealized gain on marketable securities		156

	$	136

The provision for income taxes for the quarters ended March 31, 2003 and 2004 consisted of the following:

	Three Months Ended March 31,
	2003			2004
Current provision—state and local	$	378		$	1,027
Deferred benefit—state and local		(402	)		(260	)

Total provision	$	(24	)	$	767

F-27

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2003 AND 2004—(Continued)
(Dollar amounts in thousands)

5. Related Party Transactions

The Company acts as investment adviser to investment companies in which the stockholders and certain employees are officers and/or directors. The Company also has administration agreements with affiliated entities in which the stockholders and certain employees are officers and/or directors. For the three months ended March 31, 2003 and 2004, Management earned advisory fee income of $7.3 million and $16.5 million, respectively, and administration fee income of $0.2 million and $0.6 million, respectively.

For the three months ended March 31, 2003 and 2004, Management had investment advisory agreements with affiliated investment companies, pursuant to which Management has contractually waived in the aggregate $1.5 million, and $2.6 million, respectively, of advisory fees it was otherwise entitled to receive. These investment advisory agreements contractually require Management to continue to waive a declining portion of the advisory fees it is otherwise entitled to receive for the first ten years from the commencement date (May 2001, February 2002, August 2002, January 2004 and March 2004) of the respective investment company.

Management has an agreement with an affiliated investment company, which contractually requires Management to absorb expenses of the investment company so that the investment company's total annual operating expenses do not exceed 0.75% of its average daily net assets. This commitment will remain in place for the life of the investment company. For the three months ended March 31, 2003 and 2004, included in various expense categories are $0.2 million and $0.3 million, respectively, of expenses paid by Management pursuant to this agreement.

6. Segment Reporting

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes disclosure requirements relating to operating segments in financial statements. Management has determined that the Company operates in two business segments: asset management and investment banking.

The Company's reportable segments are strategic divisions that offer different services and are managed separately as each division requires different resources and marketing strategies. The Company's principal business is in asset management which includes providing investment advisory services to affiliated investment companies and non-affiliated domestic corporate and public pension plans, foreign pension plans, endowment funds and individuals. The investment banking segment provides advisory services to real estate companies, leveraged buyouts and recapitalizations, and the placement of securities as agent.

F-28

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2003 AND 2004—(Continued)
(Dollar amounts in thousands)

Statement of Financial Condition Segment Data

December 31, 2003	Asset Management		Investment Banking		Consolidated
Capital expenditures	$	1,101	$	—	$	1,101
Property and equipment		3,343		18		3,361
Total assets		30,021		4,502		34,523
Current liabilities		6,442		815		7,257
Long-term liabilities		6,492		—		6,492
Total liabilities		12,934		815		13,749
March 31, 2004
Property and equipment	$	3,061	$	21	$	3,082
Total assets		33,335		6,592		39,927
Current liabilities		11,489		2,930		14,419
Long-term liabilities		6,324		—		6,324
Total liabilities		17,813		2,930		20,743

Statement of Income Segment Data

Quarters Ending March 31,	Asset Management			Investment Banking			Consolidated
2003
Total revenue	$	10,765		$	978		$	11,743
Operating loss		(78	)		(122	)		(200	)
Interest expense		36			—			36
Interest income		89			8			97
Depreciation and amortization		230			3			233
Net loss		(115	)		—			(115	)
2004
Total revenue	$	22,846		$	4,463		$	27,309
Operating income		8,569			1,470			10,039
Interest expense		42			—			42
Interest income		95			6			101
Depreciation and amortization		278			3			281
Net income		7,956			1,375			9,331

7. Subsequent Events

On April 7, 2004, in accordance with the terms of the borrowing base agreement with its lender, the Company made principal payments on the line of credit in the amount of $72.

On April 13, 2004, the Company distributed $2,500 to its stockholders.

On May 6, 2004, the Company invested $900 in Cohen & Steers Utility Fund.

Conversion of Stock Appreciation Rights to Restricted Stock Units

On the date of the consummation of the IPO, the Company intends to grant awards of restricted stock units to certain employees pursuant to the 2004 Stock Incentive Plan (the “SIP”). Such awards will replace the employees' outstanding stock appreciation rights which are being cancelled. Each restricted stock unit awarded to an employee will represent an unfunded, unsecured right, which is nontransferable, except in the event of death, of the employee to receive

F-29

COHEN & STEERS CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2003 AND 2004—(Continued)
(Dollar amounts in thousands)

a share of common stock on a date set forth in the employee's award agreement. An employee who receives an award of restricted stock units will not have any rights as a stockholder with respect to such restricted stock units until the shares of common stock underlying the award are issued. However, holders of vested restricted stock units will be provided with dividend equivalent payments in amounts equal to dividends, if any, we pay to holders of our common stock.

2004 Stock Incentive Plan

In connection with the consummation of the offering, the Company will adopt the SIP, which permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to our employees, directors or consultants or those of our affiliates.

2004 Employee Stock Purchase Plan

Also in connection with the consummation of the offering, the Company will adopt the 2004 Employee Stock Purchase Plan (the “ESPP”) pursuant to which shares of common stock may be issued. The purchase price of shares under the ESPP will be set by the committee, but cannot be less than the lesser of 85% of the fair market value of the shares on the date of grant or the last day of the Offering Period, as defined. Employees meeting certain eligibility requirements may designate between 1% and 10% of their annual compensation, not to exceed $25 in any given year, for the purchase of stock under the ESPP.

2004 Annual Incentive Plan

Also in connection with the offering, the Company will adopt the 2004 Annual Incentive Plan (the “AIP”) which is a bonus plan designed to provide certain of our employees with incentive compensation based upon the achievement of pre-established performance goals as defined in the plan.

The value of awards granted pursuant to the SIP, ESPP and AIP will be determined using the fair value method in accordance with the provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation.

Employment Agreements

The Company expects to enter into an employment agreement with Martin Cohen and Robert H. Steers (each, an “Executive”). Each employment agreement provides for the Executive's employment as our co-chief executive officer and co-chairman of the board of directors for a term of three years, subject to automatic, successive one-year extensions thereafter unless either party gives the other 60 days prior notice that the term will not be extended.

Each employment agreement provides for an annual base salary of $500 and an annual bonus payment of at least $1,000, but no more than $5,000, as determined by the Compensation Committee, except that the bonus amount for 2004 shall be limited to $1,000. During the term, each Executive will be entitled to (1) employee benefits that are no less favorable than those employee benefits provided to him prior to the commencement of the offering and (2) participate in all of the Company's employee benefit programs on a basis which is no less favorable than is provided to any of our other executives.

F-30

Through and including , 2004 (the 25th day after the day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Shares

Cohen & Steers, Inc.
Common Stock

PROSPECTUS

Merrill Lynch & Co.

UBS Investment Bank

Wachovia Securities

Bear, Stearns & Co. Inc.

, 2004

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the expenses payable by the Registrant in connection with the issuance and distribution of the common stock being registered hereby. All of such expenses are estimates, other than the filing and listing fees payable to the Securities and Exchange Commission, the New York Stock Exchange and the National Association of Securities Dealers, Inc.

Filing Fee—Securities and Exchange Commission	$	12,670
Listing Fee—New York Stock Exchange		*
Fee—National Association of Securities Dealers		30,500
Fees and Expenses of Counsel		*
Printing Expenses		*
Fees and Expenses of Accountants		*
Blue Sky Fees and Expenses		*
Transfer Agent Fees and Expenses		*
Miscellaneous Expenses		*

Total	$	*

* To be provided by amendment.

Item 14. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law provides, in summary, that directors and officers of Delaware corporations are entitled, under certain circumstances, to be indemnified against all expenses and liabilities (including attorneys' fees) incurred by them as a result of suits brought against them in their capacity as a director or officer, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to our best interests, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful; provided that no indemnification may be made against expenses in respect of any claim, issue or matter as to which they shall have been adjudged to be liable to us, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, they are fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Any such indemnification may be made by us only as authorized in each specific case upon a determination by the stockholders, disinterested directors or independent legal counsel that indemnification is proper because the indemnitee has met the applicable standard of conduct.

Our certificate of incorporation and by-laws provide that we will indemnify our directors and officers to the fullest extent permitted by law and that no director shall be liable for monetary damages to us or our stockholders for any breach of fiduciary duty, except to the extent provided by applicable law.

We currently maintain liability insurance for our directors and officers. In connection with the offering, we will obtain additional liability insurance for our directors and officers. Such insurance would be available to our directors and officers in accordance with its terms.

Reference is made to the form of purchase agreement to be filed as Exhibit 1.1 hereto for provisions providing that the underwriters and Cohen & Steers, Inc. are obligated under certain circumstances, to indemnify our directors, officers and controlling persons against certain liabilities under the Securities Act of 1933, as amended.

Item 15. Recent Sales of Unregistered Securities.

As part of the reorganization described in this Registration Statement, the Registrant will enter into a definitive binding agreement to issue shares of the Registrant's common stock, par value $0.01 per share, to the stockholders of Cohen & Steers Capital Management, Inc. upon the

II-1

merger of CSCM Merger Sub, Inc., a wholly owned subsidiary of the Registrant, with and into Cohen & Steers Capital Management, Inc. The issuance of the shares of common stock to the stockholders of Cohen & Steers Capital Management, Inc. will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), because the shares will have been offered and sold in a transaction exempt from registration under Section 4(2) of the Securities Act .

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibit Index

1.1		Purchase Agreement*
3.1		Form of Amended and Restated Certificate of Incorporation of the Registrant
3.2		Form of Amended and Restated Bylaws of the Registrant
4.1		Specimen Common Stock Certificate *
4.2		Form of Registration Rights Agreement among the Registrant, Martin Cohen, Robert H. Steers, The Martin Cohen 1998 Family Trust and Robert H. Steers Family Trust
5.1		Opinion of Simpson Thacher & Bartlett LLP *
10.1		Form of Merger Agreement among the Registrant, Cohen & Steers Capital Management, Inc. and CSCM Merger Sub, Inc. *
10.2		Form of Tax Indemnification Agreement among Cohen & Steers Capital Management, Inc. , Martin Cohen, Robert H. Steers, The Martin Cohen 1998 Family Trust and Robert H. Steers Family Trust
10.3		Form of Employment Agreement between Cohen & Steers Capital Management, Inc. and Martin Cohen
10.4		Form of Employment Agreement between Cohen & Steers Capital Management, Inc. and Robert H. Steers
10.5		Cohen & Steers, Inc. 2004 Stock Incentive Plan *
10.6		Cohen & Steers, Inc. 2004 Annual Incentive Plan
10.7		Cohen & Steers, Inc. 2004 Employee Stock Purchase Plan *
21.1		Subsidiaries of the Registrant **
23.1		Consent of Deloitte & Touche LLP
23.2		Consent of Simpson Thacher & Bartlett LLP (included as part of Exhibit 5.1) *
23.3		Consent of Richard E. Bruce to be named as a director nominee
23.4		Consent of Peter L. Rhein to be named as a director nominee
23.5		Consent of Richard P. Simon to be named as a director nominee
23.6		Consent of Edmond D. Villani to be named as a director nominee
24.1		Power of Attorney (included on signature pages to this Registration Statement) **

* To be filed by amendment.
** Previously filed.

(b) Financial Statement Schedules

Item 17. Undertakings

(a) The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(b) The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

II-2

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on the 11th day of May , 2004.

		C OHEN & S TEERS , I NC .


		By: /s/ M ARTIN C OHEN Name: Martin Cohen Title: Co-Chairman, Co-Chief Executive Officer and Director

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated on the 11th day of May , 2004.

Signature		Title
/s/ M ARTIN C OHEN Martin Cohen		Co-Chairman, Co-Chief Executive Officer and Director (principal executive officer)
* Robert H. Steers		Co-Chairman, Co-Chief Executive Officer and Director (principal executive officer)
* Victor M. Gomez		Chief Financial Officer (principal financial and accounting officer)

*By: /s/ M ARTIN C OHEN Name: Martin Cohen Title: Attorney-in-fact

II-4

EXHIBIT INDEX

1.1		Purchase Agreement*
3.1		Form of Amended and Restated Certificate of Incorporation of the Registrant
3.2		Form of Amended and Restated Bylaws of the Registrant
4.1		Specimen Common Stock Certificate *
4.2		Form of Registration Rights Agreement among the Registrant, Martin Cohen, Robert H. Steers, The Martin Cohen 1998 Family Trust and Robert H. Steers Family Trust
5.1		Opinion of Simpson Thacher & Bartlett LLP *
10.1		Form of Merger Agreement among the Registrant, Cohen & Steers Capital Management, Inc. and CSCM Merger Sub, Inc. *
10.2		Form of Tax Indemnification Agreement among Cohen & Steers Capital Management, Inc. , Martin Cohen, Robert H. Steers, The Martin Cohen 1998 Family Trust and Robert H. Steers Family Trust
10.3		Form of Employment Agreement between Cohen & Steers Capital Management, Inc. and Martin Cohen
10.4		Form of Employment Agreement between Cohen & Steers Capital Management, Inc. and Robert H. Steers
10.5		Cohen & Steers, Inc. 2004 Stock Incentive Plan *
10.6		Cohen & Steers, Inc. 2004 Annual Incentive Plan
10.7		Cohen & Steers, Inc. 2004 Employee Stock Purchase Plan *
21.1		Subsidiaries of the Registrant **
23.1		Consent of Deloitte & Touche LLP
23.2		Consent of Simpson Thacher & Bartlett LLP (included as part of Exhibit 5.1) *
23.3		Consent of Richard E. Bruce to be named as a director nominee
23.4		Consent of Peter L. Rhein to be named as a director nominee
23.5		Consent of Richard P. Simon to be named as a director nominee
23.6		Consent of Edmond D. Villani to be named as a director nominee
24.1		Power of Attorney (included on signature pages to this Registration Statement) **

* To be filed by amendment.
** Previously filed.

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

COHEN & STEERS, INC.

The present name of the corporation is Cohen & Steers, Inc. The corporation was incorporated under the name "Cohen & Steers Capital Management Holdings, Inc." by the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware on March 17, 2004. This Amended and Restated Certificate of Incorporation of the corporation, which both restates and further amends the provisions of the corporation's Certificate of Incorporation, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. The Certificate of Incorporation of the corporation is hereby amended and restated to read in its entirety as follows:

FIRST: The name of the corporation is Cohen & Steers, Inc.

SECOND: The registered office of the corporation in the State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801, New Castle County; and the name of the corporation's registered agent at such address is The Corporation Trust Company.

THIRD: The purposes of the corporation are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH: (1) The total number of shares of all classes of stock which the corporation shall have authority to issue is 550,000,000, consisting of (i) 50,000,000 shares of Preferred Stock, par value $.01 per share ("Preferred Stock"), and (ii) 500,000,000 shares of Common Stock, par value $.01 per share ("Common Stock"). The number of authorized shares of any of the Common Stock or the Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of Delaware (or any successor provision thereto), and no vote of the holders of any of the Common Stock or the Preferred Stock voting separately as a class shall be required therefor.

(2) The Board of Directors is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the powers, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.

(3) (a) Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders

generally are entitled to vote; provided, however, that, to the fullest extent permitted by law, holders of Common Stock, as such, shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to this Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of Delaware.

(b) Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted thereto by this Amended and Restated Certificate of Incorporation (including any certificate of designations relating to such series).

(c) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the payment of dividends, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.

(d) Upon the dissolution, liquidation or winding up of the corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the distribution of assets of the corporation upon such dissolution, liquidation or winding up of the corporation, the holders of the Common Stock, as such, shall be entitled to receive the assets of the corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them.

FIFTH: The Board of Directors shall be authorized to make, amend, alter, change, add to or repeal the By-Laws of the corporation in any manner not inconsistent with the laws of the State of Delaware, subject to the power of the stockholders to amend, alter, change, add to or repeal the By-Laws made by the Board of Directors.

SIXTH: Except as otherwise provided by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, to the fullest extent permitted by law, no director of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any amendment, modification or repeal of this Article SIXTH shall not adversely affect any right or protection of a director of the corporation existing at the time of such amendment, modification or repeal.

SEVENTH: (1) The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors with the exact number of directors to be determined from time to time by resolution adopted by affirmative vote of a majority of the Board of Directors.

(2) Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal, filling of vacancies and other features of such directorships shall be governed by the terms of this Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) applicable thereto.

(3) Unless and except to the extent that the By-Laws of the corporation shall so require, the election of the directors of the corporation need not be by written ballot.

EIGHTH: Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of stockholders of the corporation may be called only by the Chief Executive Officer or, if applicable, the co-Chief Executive Officers of the corporation or by the Board of Directors pursuant to a resolution approved by the Board of Directors. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated by the Board of Directors or in the By-Laws of the corporation.

IN WITNESS WHEREOF, Cohen & Steers, Inc. has caused this certificate to be signed by ________________, its ________________ this ____ day of _____________, 2004.

COHEN & STEERS, INC.

By:

Name:

Title:

AMENDED AND RESTATED

BY-LAWS

COHEN & STEERS, INC.

ARTICLE I.

STOCKHOLDERS

Section 1. The annual meeting of the stockholders of the corporation for the purpose of electing directors and for the transaction of such other business as may properly be brought before the meeting shall be held on such date, and at such time and place, if any, within or without the State of Delaware as may be designated from time to time by the Board of Directors.

Section 2. Special meetings of the stockholders of the corporation may be called only by the Chief Executive Officer of the corporation or by the Board of Directors pursuant to a resolution approved by the Board of Directors.

Section 3. Except as otherwise provided by law, notice of the time, place (if any) and, in the case of a special meeting, the purpose or purposes of the meeting of stockholders shall be given not earlier than sixty, nor less than ten, days previous thereto, to each stockholder of record entitled to vote at the meeting at such address as appears on the records of the corporation.

Section 4. The holders of a majority in voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the Amended and Restated Certificate of Incorporation; but if at any meeting of stockholders there shall be less than a quorum present, the stockholders present may adjourn the meeting from time to time without further notice other than announcement at the meeting until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if, after the adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 5. The Chairman of the Board, or in the Chairman's absence or at the Chairman's direction, the Chief Executive Officer, or in the Chief Executive Officer's absence or at the Chief Executive Officer's direction, any officer of the corporation shall call all meetings of the stockholders to order and shall act as Chairman of such meeting. The Secretary of the corporation or, in such officer's absence, an Assistant Secretary shall act as secretary of the meeting. If neither the Secretary nor an Assistant Secretary is present, the Chairman of the

meeting shall appoint a secretary of the meeting. Unless otherwise determined by the Board of Directors prior to the meeting, the Chairman of the meeting shall determine the order of business and shall have the authority in his or her discretion to regulate the conduct of any such meeting, including, without limitation, by imposing restrictions on the persons (other than stockholders of the corporation or their duly appointed proxies) who may attend any such meeting, whether any stockholder or stockholders' proxy may be excluded from any meeting of stockholders based upon any determination by the Chairman, in his or her sole discretion, that any such person has unduly disrupted or is likely to disrupt the proceedings thereat, and the circumstances in which any person may make a statement or ask questions at any meeting of stockholders.

Section 6. At all meetings of stockholders, any stockholder entitled to vote thereat shall be entitled to vote in person or by proxy, but no proxy shall be voted after three years from its date, unless such proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for the stockholder as proxy pursuant to the General Corporation Law of the State of Delaware, the following shall constitute a valid means by which a stockholder may grant such authority: (1) a stockholder may execute a writing authorizing another person or persons to act for the stockholder as proxy, and execution of the writing may be accomplished by the stockholder or the stockholder's authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; or (2) a stockholder may authorize another person or persons to act for the stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other electronic transmissions are valid, the inspector or inspectors of stockholder votes or, if there are no such inspectors, such other persons making that determination shall specify the information upon which they relied.

Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to the preceding paragraph of this Section 6 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

Proxies shall be filed with the Secretary of the meeting prior to or at the commencement of the meeting to which they relate.

Section 7. When a quorum is present at any meeting, the vote of the holders of a majority in voting power of the stock present in person or represented by proxy and entitled to vote on the matter shall decide any question brought before such meeting, unless the question is one upon which by express provision of the Amended and Restated Certificate of Incorporation, these By-Laws, the rules or regulations of any stock exchange applicable to the corporation or

applicable law or regulation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 8. In order that the corporation may determine the stockholders (a) entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or (b) entitled to consent to corporate action in writing without a meeting, or (c) entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date (i) in the case of clause (a) above, shall not be more than sixty nor less than ten days before the date of such meeting, (ii) in the case of clause (b) above, shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors, and (iii) in the case of clause (c) above, shall not be more than sixty days prior to such action. If for any reason the Board of Directors shall not have fixed a record date for any such purpose, the record date for such purpose shall be determined as provided by law. Only those stockholders of record on the date so fixed or determined shall be entitled to any of the foregoing rights, notwithstanding the transfer of any such stock on the books of the corporation after any such record date so fixed or determined.

Section 9. The officer who has charge of the stock ledger of the corporation shall prepare and make at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, the principal place of business of the corporation. The list shall also be produced at the time and kept at the place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 10. The Board of Directors, in advance of all meetings of the stockholders, shall appoint one or more inspectors, who may be employees of the corporation or stockholders or their proxies, but not directors of the corporation or candidates for office. In the event that the Board of Directors fails to so appoint inspectors or, in the event that one or more inspectors previously designated by the Board of Directors fails to appear or act at the meeting of stockholders, the Chairman of the meeting may appoint one or more inspectors to fill such vacancy or vacancies. Inspectors appointed to act at any meeting of the stockholders, before entering upon the discharge of their duties, shall be sworn faithfully to execute the duties of inspector with strict impartiality and according to the best of their ability and the oath so taken shall be subscribed by them. Inspectors shall, subject to the power of the Chairman of the meeting to open and close the polls, take charge of the polls, and, after the voting, shall make a certificate of the result of the vote taken.

Section 11. (A) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors of the corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the corporation's notice of meeting (or any supplement thereto) delivered

pursuant to Article I, Section 3 of these By-Laws, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the corporation who is entitled to vote at the meeting, who complied with the notice procedures set forth in subparagraphs (2) and (3) of this paragraph (A) of this By-Law and who was a stockholder of record at the time such notice is delivered to the Secretary of the corporation.

(2) For nominations or other business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation, and, in the case of business other than nominations, such other business must be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than twenty days, or delayed by more than seventy days, from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made; and provided further, that for purposes of the application of Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (or any successor provision), the date for notice specified in this paragraph (A)(2) shall be the earlier of the date calculated as hereinbefore provided or the date specified in paragraph (c)(1) of Rule 14a-4. For purposes of the first annual meeting of stockholders of the corporation held after 2004, the anniversary date shall be deemed to be May 15, 2005.

Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act, including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the by-laws of the corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporation's books, and of such beneficial owner, (ii) the class and number of shares of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder intends to appear in person or by proxy at the meeting to propose such business or nomination, and (iv) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation's outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (B) otherwise to solicit proxies from stockholders in support of such proposal or nomination. The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the corporation of his or her intention to

present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such stockholder's proposal has been included in a proxy statement that has been prepared by the corporation to solicit proxies for such annual meeting. The corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the corporation.

(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this By-Law to the contrary, in the event that the number of directors to be elected to the Board of Directors of the corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the corporation at least eighty days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this By-Law shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the corporation.

(B) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the corporation's notice of meeting pursuant to Article I, Section 3 of these By-Laws. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in this By-Law and who is a stockholder of record at the time such notice is delivered to the Secretary of the corporation. Nominations of stockholders of persons for election to the Board of Directors may be made at such a special meeting of stockholders if the stockholder's notice as required by paragraph (A)(2) of this By-Law shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.

(C) General. (1) Only persons who are nominated in accordance with the procedures set forth in this By-Law shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this By-Law. Except as otherwise provided by law, the Amended and Restated Certificate of Incorporation or these By-Laws, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this By-Law and, if any proposed nomination or business is not in compliance with this By-Law, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 11, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a nomination or business, such

nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation. For purposes of this Section 11, to be considered a qualified representative of the stockholder, a person must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(2) For purposes of this By-Law, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed or furnished by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3) For purposes of this By-Law, no adjournment or postponement nor notice of adjournment or postponement of any meeting shall be deemed to constitute a new notice of such meeting for purposes of this Section 11, and in order for any notification required to be delivered by a stockholder pursuant to this Section 11 to be timely, such notification must be delivered within the periods set forth above with respect to the originally scheduled meeting.

(4) Notwithstanding the foregoing provisions of this By-Law, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this By-Law. Nothing in this By-Law shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.

ARTICLE II.

BOARD OF DIRECTORS

Section 1. The Board of Directors of the corporation shall consist of such number of directors as shall from time to time be fixed exclusively by resolution of the Board of Directors. Directors shall (except as hereinafter provided for the filling of vacancies and newly created directorships) be elected by the holders of a plurality of the voting power present in person or represented by proxy and entitled to vote. A majority of the total number of directors then in office (but not less than one-third of the number of directors constituting the entire Board of Directors) shall constitute a quorum for the transaction of business and, except as otherwise provided by law or by the Amended and Restated Certificate of Incorporation, the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. Directors need not be stockholders.

Section 2. Meetings of the Board of Directors shall be held at such place, if any, within or without the State of Delaware as may from time to time be fixed by resolution of the Board or as may be specified in the notice of any meeting. Regular meetings of the Board of Directors shall be held at such times as may from time to time be fixed by resolution of the Board and special meetings may be held at any time upon the call of the Chairman of the Board or the Chief Executive Officer, by oral or written notice, including, telegraph, telex or transmission of a telecopy, e-mail or other means of transmission, duly served on or sent or

mailed to each director to such director's address or telecopy number as shown on the books of the corporation not less than one day before the meeting. The notice of any meeting need not specify the purposes thereof. A meeting of the Board may be held without notice immediately after the annual meeting of stockholders at the same place at which such meeting is held. Notice need not be given of regular meetings of the Board held at times fixed by resolution of the Board. Notice of any meeting need not be given to any director who shall attend such meeting in person (except when the director attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened), or who shall waive notice thereof, before or after such meeting, in writing.

Section 3. Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the corporation shall have the right, voting separately by series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal, and other features of such directorships shall be governed by the terms of the Certificate of Incorporation applicable thereto. The number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed by or pursuant to the By-Laws. Except as otherwise expressly provided in the terms of such series, the number of directors that may be so elected by the holders of any such series of stock shall be elected for terms expiring at the next annual meeting of stockholders, and vacancies among directors so elected by the separate vote of the holders of any such series of Preferred Stock shall be filled by the affirmative vote of a majority of the remaining directors elected by such series, or, if there are no such remaining directors, by the holders of such series in the same manner in which such series initially elected a director.

Section 4. If at any meeting for the election of directors, the corporation has outstanding more than one class of stock, and one or more such classes or series thereof are entitled to vote separately as a class to elect directors, and there shall be a quorum of only one such class or series of stock, that class or series of stock shall be entitled to elect its quota of directors notwithstanding absence of a quorum of the other class or series of stock.

Section 5. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law shall have and may exercise all the powers and authority provided in the resolution of the Board of Directors in the management of the business and affairs of the corporation.

Section 6. Unless otherwise restricted by the Amended and Restated Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors.

Section 7. The members of the Board of Directors or any committee thereof may participate in a meeting of such Board or committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such a meeting.

Section 8. The Board of Directors may establish policies for the compensation of directors and for the reimbursement of the expenses of directors, in each case, in connection with services provided by directors to the corporation.

ARTICLE III.

OFFICERS

Section 1. The Board of Directors, after each annual meeting of the stockholders, shall elect officers of the corporation, including a Chief Executive Officer and a Secretary. The Board of Directors may also from time to time elect such other officers (including one or more Presidents, Chief Operating Officers, Vice Presidents, a Treasurer, one or more Assistant Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers) as it may deem proper or may delegate to any elected officer of the corporation the power to appoint and remove any such other officers and to prescribe their respective terms of office, authorities and duties. Any Vice President may be designated Executive, Senior or Corporate, or may be given such other designation or combination of designations as the Board of Directors may determine. Any two or more offices may be held by the same person. The Board of Directors may also elect or appoint a Chairman of the Board who may or may not be an officer of the corporation. The Board of Directors may elect or appoint co-Chairmen of the Board or co-Chief Executive Officers and, in such case, references in these By-Laws to the Chairman of the Board or to the Chief Executive Officer shall refer to either such co-Chairman of the Board or co-Chief Executive Officer, as the case may be.

Section 2. All officers of the corporation elected by the Board of Directors shall hold office for such term as may be determined by the Board of Directors or until their respective successors are chosen and qualified. Any officer may be removed from office at any time either with or without cause by the affirmative vote of a majority of the members of the Board then in office, or, in the case of appointed officers, by any elected officer upon whom such power of removal shall have been conferred by the Board of Directors.

Section 3. Each of the officers of the corporation elected by the Board of Directors or appointed by an officer in accordance with these By-Laws shall have the powers and duties prescribed by law, by the By-Laws or by the Board of Directors and, in the case of appointed officers, the powers and duties prescribed by the appointing officer, and, unless otherwise prescribed by the By-Laws or by the Board of Directors or such appointing officer, shall have such further powers and duties as ordinarily pertain to that office. The Chief Executive Officer shall have the general direction of the affairs of the corporation.

Section 4. Unless otherwise provided in these By-Laws, in the absence or disability of any officer of the corporation, the Board of Directors may, during such period,

delegate such officer's powers and duties to any other officer or to any director and the person to whom such powers and duties are delegated shall, for the time being, hold such office.

ARTICLE IV.

CERTIFICATES OF STOCK

Section 1. The shares of stock of the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the corporation's stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the Chairman of the Board of Directors, or the Chief Executive Officer or a President or Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation, or as otherwise permitted by law, representing the number of shares registered in certificate form. Any or all the signatures on the certificate may be a facsimile.

Section 2. Transfers of stock shall be made on the books of the corporation by the holder of the shares in person or by such holder's attorney upon surrender and cancellation of certificates for a like number of shares, or as otherwise provided by law with respect to uncertificated shares.

Section 3. No certificate for shares of stock in the corporation shall be issued in place of any certificate alleged to have been lost, stolen or destroyed, except upon production of such evidence of such loss, theft or destruction and upon delivery to the corporation of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board of Directors in its discretion may require.

ARTICLE V.

CORPORATE BOOKS

The books of the corporation may be kept outside of the State of Delaware at such place or places as the Board of Directors may from time to time determine.

ARTICLE VI.

CHECKS, NOTES, PROXIES, ETC.

All checks and drafts on the corporation's bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers or agent or agents as shall be authorized from time to time by the Board of Directors. Proxies to vote and consents with respect to securities of other corporations owned by or standing in the name of the corporation may be executed and

delivered from time to time on behalf of the corporation by the Chairman of the Board, the Chief Executive Officer, or by such officers as the Board of Directors may from time to time determine.

ARTICLE VII.

FISCAL YEAR

The fiscal year of the corporation shall begin on the first day of January in each year and shall end on the thirty-first day of December following.

ARTICLE VIII.

CORPORATE SEAL

The corporate seal shall have inscribed thereon the name of the corporation. In lieu of the corporate seal, when so authorized by the Board of Directors or a duly empowered committee thereof, a facsimile thereof may be impressed or affixed or reproduced.

ARTICLE IX.

AMENDMENTS

These By-Laws may be amended, added to, rescinded or repealed at any meeting of the Board of Directors or of the stockholders, provided notice of the proposed change was given in the notice of the meeting of the stockholders or, in the case of a meeting of the Board of Directors, in a notice given not less than two days prior to the meeting.

ARTICLE X.

INDEMNIFICATION

Section 1. To the fullest extent permitted by the laws of the State of Delaware as it presently exists or may hereafter be amended, the corporation shall indemnify any person (and such person's heirs, executors or administrators) who was or is made or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding (brought in the right of the corporation or otherwise), whether civil, criminal, administrative or investigative, and whether formal or informal, including appeals, by reason of the fact that such person, or a person for whom such person was the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, limited liability company, nonprofit entity or other enterprise, for and against all loss and liability suffered and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement reasonably incurred by such person or such heirs, executors or administrators in connection with such action, suit or proceeding, including appeals. Notwithstanding the preceding sentence, except as otherwise provided in Article X, Section 3 of these By-Laws, the corporation shall be required to

indemnify a person described in such sentence in connection with any action, suit or proceeding (or part thereof) commenced by such person only if the commencement of such action, suit or proceeding (or part thereof) by such person was authorized by the Board of Directors of the corporation.

Section 2. To the fullest extent permitted by the laws of the State of Delaware, the corporation shall promptly pay expenses (including attorneys' fees) incurred by any person described in Article X, Section 1 of these By-Laws in appearing at, participating in or defending any action, suit or proceeding in advance of the final disposition of such action, suit or proceeding, including appeals, upon presentation of an undertaking on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified under this Article X or otherwise.

Section 3. If a claim for indemnification (following the final disposition of such action, suit or proceeding) or advancement of expenses under this Article X is not paid in full within thirty days after a written claim therefor by any person described in Article X, Section 1 of these By-Laws has been received by the corporation, such person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the corporation shall have the burden of proving that such person is not entitled to the requested indemnification or advancement of expenses under applicable law.

Section 4. To the fullest extent permitted by the laws of the State of Delaware, the corporation may purchase and maintain insurance on behalf of any person described in Article X, Section 1 of these By-Laws against any liability asserted against such person, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Article X or otherwise.

Section 5. The provisions of this Article X shall be applicable to all actions, claims, suits or proceedings made or commenced after the adoption hereof, whether arising from acts or omissions to act occurring before or after its adoption. The provisions of this Article X shall be deemed to be a contract between the corporation and each director or officer (or legal representative thereof) who serves in such capacity at any time while this Article X and the relevant provisions of the laws of the State of Delaware and other applicable law, if any, are in effect, and any amendment, modification or repeal hereof shall not affect any rights or obligations then existing with respect to any state of facts or any action, suit or proceeding then or theretofore existing, or any action, suit or proceeding thereafter brought or threatened based in whole or in part on any such state of facts. If any provision of this Article X shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof. The rights of indemnification provided in this Article X shall neither be exclusive of, nor be deemed in limitation of, any rights to which any person may otherwise be or become entitled or permitted by contract, the Amended and Restated Certificate of Incorporation, these By-Laws, vote of stockholders or directors or otherwise, or as a matter of law, both as to actions in such person's official capacity and actions in any other capacity, it being the policy of the corporation that indemnification of any person whom the corporation is obligated to indemnify pursuant to Article X, Section 1 of these By-Laws shall be made to the fullest extent permitted by law.

Section 6. For purposes of this Article X, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries.

Section 7. This Article X shall not limit the right of the corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to, and purchase and maintain insurance on behalf of, persons other than persons described in Article X, Section 1 of these By-Laws.

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of ________ ___, 2004, among Cohen & Steers, Inc., a Delaware corporation (the "Company"), Martin Cohen, Robert H. Steers, The Martin Cohen 1998 Family Trust and Robert H. Steers Family Trust (each an "Investor" and together the "Investors").

RECITALS

WHEREAS, the Investors are the sole stockholders of Cohen & Steers Capital Management, Inc., a New York corporation ("CSCM");

WHEREAS, pursuant to the Merger Agreement (the "Merger Agreement"), dated as of the date hereof, among the Company, CSCM and CSCM Merger Sub, Inc., a New York corporation ("CSCM Merger Sub"), the parties thereto have agreed that CSCM Merger Sub will merge with and into CSCM (the "Merger") and that each outstanding share of CSCM will be converted into the right to receive a share of newly-issued shares of Common Stock (as defined below) of the Company, whereupon CSCM will become a wholly-owned subsidiary of the Company and the Investors will be the sole stockholders of the Company; and

WHEREAS, it is a condition to the Merger that the Company enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and agreements contained in this Agreement, the parties agree as follows:

1. Definitions. As used in this Agreement, the following capitalized terms shall have the following respective meanings:

"Affiliate": as applied to any Person, shall mean any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities (the ownership of more than 50% of the voting securities of an entity shall for purposes of this definition be deemed to be "control"), by contract or otherwise. A natural person shall be considered an "Affiliate" of another natural person if such other natural person is a relative or spouse of such natural person, or any relative of such spouse, any one of whom has the same home as such natural person.

"Common Stock": The shares of Common Stock, $0.01 par value per share, of the Company and any stock into which such common stock may thereafter be converted or exchanged.

"Demand Party": (a) each of the Investors and (b) any other Holder or Holders, including, without limitation, any Person that may become an assignee of any of the Investor's rights hereunder; provided that to be a Demand Party under this clause (b), a Holder or Holders must either individually or in aggregate with all other Holders with whom it is acting together to demand registration, own at least 1% of the total number of Registrable Securities.

"Exchange Act": The Securities Exchange Act of 1934, as amended, or any similar federal statute then in effect, and a reference to a particular section thereof shall be deemed to include a reference to the comparable section, if any, of any such similar federal statute.

"Holder": (i) Each of the Investors (including the executors, administrators, testamentary trustees, legatees or beneficiaries of any of Martin Cohen or Robert H. Steers upon the death of such Person), (ii) any Affiliate of any of the Investors (which shall not, for the avoidance of doubt, include the Company) and (iii) any other Person to whom any of the foregoing transfer Registrable Securities and assign their rights hereunder, but only to the extent of the terms of the assignment of such rights; provided that such Person agrees in writing to be bound by the provisions of this Agreement.

"Person": Any individual, partnership, joint venture, corporation, trust, unincorporated organization or government or any department or agency thereof.

"Registrable Securities": shall mean (i) any Common Stock held or acquired by any Holder, including shares issued or issuable upon the conversion, exchange or exercise of any security convertible, exchangeable or exercisable into Common Stock, (ii) any security of the Company held or acquired by any Holder which is convertible, exchangeable or exercisable into Common Stock and (iii) any Common Stock or any security convertible, exchangeable or exercisable into Common Stock which may be issued or distributed in respect thereof by way of stock dividend or stock split or other distribution, recapitalization or reclassification. As to any particular Registrable Securities, once issued, such Registrable Securities shall cease to be Registrable Securities when (a) a registration statement with respect to the sale by the Holder of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) such securities shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, (c) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent disposition of such securities shall not require registration or qualification of such securities under the Securities Act or any state securities or blue sky law then in force, or
(d) such securities shall have ceased to be outstanding. For purposes of this Agreement, any required calculation of the amount of, or percentage of, Registrable Securities shall be based on the number of shares of Common Stock which are Registrable Securities, including shares issuable upon the conversion, exchange or exercise of any security convertible, exchangeable or exercisable into Common Stock.

-2-

"Registration Expenses": Any and all expenses incident to performance of or compliance with this Agreement, including, without limitation, (i) all SEC and stock exchange or National Association of Securities Dealers, Inc. (the "NASD") registration and filing fees (including, if applicable, the fees and expenses of any "qualified independent underwriter," as such term is defined in Rule 2720 of the NASD, and of its counsel), (ii) all fees and expenses of complying with securities or blue sky laws (including fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities), (iii) all printing, messenger and delivery expenses, (iv) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange pursuant to clause (viii) of Section 4 hereof and all rating agency fees, (v) the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits and/or "cold comfort" letters required by or incident to such performance and compliance, (vi) the reasonable fees and disbursements of counsel selected pursuant to Section 7 hereof by the Holders of the Registrable Securities being registered to represent such Holders in connection with each such registration, (vii) any fees and disbursements of underwriters customarily paid by the issuers or sellers of securities, including liability insurance if the Company so desires or if the underwriters so require, and the reasonable fees and expenses of any special experts retained in connection with the requested registration, but excluding underwriting discounts and commissions and transfer taxes, if any, and (viii) other reasonable out-of-pocket expenses of Holders (provided, that such expenses shall not include expenses of counsel other than those provided for in clause (vi) above).

"Securities Act": The Securities Act of 1933, as amended, or any similar federal statute then in effect, and a reference to a particular section thereof shall be deemed to include a reference to the comparable section, if any, of any such similar federal statute.

"SEC": The Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.

2. Incidental Registrations. (a) Right to Include Registrable Securities. If the Company at any time after the date hereof proposes to register its Common Stock (or any security which is convertible or exchangeable into or exercisable for Common Stock) under the Securities Act (other than a registration on Form S-4 or S-8, or any successor or other forms promulgated for similar purposes), whether or not for sale for its own account, in a manner which would permit registration of Registrable Securities for sale to the public under the Securities Act, it will, at each such time, give prompt written notice to all Holders of Registrable Securities of its intention to do so and of such Holders' rights under this Section 2. Upon the written request of any such Holder made within 15 days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such Holder), the Company will use its best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Holders thereof, to the extent requisite to permit the disposition of the Registrable Securities to be so registered; provided, that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to proceed with the proposed

-3-

registration of the securities to be sold by it, the Company may, at its election, give written notice of such determination to each Holder of Registrable Securities and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith), and (ii) if such registration involves an underwritten offering, all Holders requesting to be included in the Company's registration must sell their Registrable Securities to the underwriters selected by the Company on the same terms and conditions as apply to the Company, with such differences, including any with respect to indemnification and liability insurance, as may be customary or appropriate in combined primary and secondary offerings. If a registration requested pursuant to this Section 2(a) involves an underwritten public offering, any Holder requesting to be included in such registration may elect, in writing prior to the effective date of the registration statement filed in connection with such registration, not to register such securities in connection with such registration. Nothing in this Section 2 shall operate to limit the right of any Holder to (i) request the registration of Common Stock issuable upon conversion, exchange or exercise of securities held by such Holder notwithstanding the fact that at the time of request such Holder does not hold the Common Stock underlying such securities or (ii) request the registration at one time of both securities convertible, exchangeable or exercisable into Common Stock and the Common Stock underlying any such securities.

(b) Expenses. The Company will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this Section 2.

(c) Priority in Incidental Registrations. If a registration pursuant to this Section 2 involves an underwritten offering and the managing underwriter advises the Company in writing that, in its opinion, the number of Registrable Securities requested to be included in such registration exceeds the number which can be sold in such offering, so as to be reasonably likely to have an adverse effect on the price, timing or distribution of the securities offered in such offering, then the Company will include in such registration (i) first, 100% of the securities proposed to be sold by the Company and (ii) second, to the extent of the number of securities requested to be included in such registration which, in the opinion of such managing underwriter, can be sold without having the adverse effect referred to above, which number of securities shall be allocated pro rata among all such requesting Holders of Registrable Securities, on the basis of the relative number of shares of Registrable Securities then held by each such Holder of Registrable Securities (provided, that any such amount thereby allocated to any such Holder that exceeds such Holder's request shall be reallocated among the remaining requesting Holders in like manner).

3. Registration on Request. (a) Request by the Demand Party. At any time upon the written request of a Demand Party requesting that the Company effect the registration under the Securities Act of all or part of such Demand Party's Registrable Securities and specifying the amount and intended method of disposition thereof, the Company will promptly give written notice of such requested registration to all other Holders of all other Registrable Securities of the same class or series as are to be registered at the request of such Demand Party, and thereupon will, as expeditiously as possible, use its best efforts to effect the registration under the Securities Act of:

-4-

(i) such Registrable Securities which the Company has been so requested to register by the Demand Party; and

(ii) all other Registrable Securities of the same class or series as are to be registered at the request of a Demand Party and which the Company has been requested to register by any other Holder thereof by written request given to the Company within 15 days after the giving of written notice by the Company,

all to the extent necessary to permit the disposition (in accordance with the intended method thereof as aforesaid) of the Registrable Securities to be so registered; provided that, with respect to any Demand Party other than the Investors, the Company shall not be obligated to effect any registration under this Section 3(a) unless such Demand Party requests that the Company register at least 1% of the total number of Registrable Securities; and provided, further, that the Company shall not be obligated to file a registration statement relating to any registration request under this Section 3(a):

(x) within a period of 180 days after the effective date of any other registration statement relating to any registration request under this
Section 3(a) which was not effected on Form S-3 (or any successor or similar short-form registration statement) or relating to any registration effected under Section 2;

(y) if with respect thereto the managing underwriter, the SEC, the Securities Act or the rules and regulations thereunder, or the form on which the registration statement is to be filed, would require the conduct of an audit other than the regular audit conducted by the Company at the end of its fiscal year, in which case the filing may be delayed until the completion of such audit (and the Company shall, upon request of the requesting Demand Holder, use its best efforts to cause such audit to be completed expeditiously and without unreasonable delay), unless the Holders of the Registrable Securities to be registered agree to pay the expenses of the Company in connection with such an audit other than the regular audit; or

(z) if the Company is in possession of material non-public information and the Board of Directors of the Company determines in good faith that disclosure of such information would not be in the best interests of the Company and its stockholders, in which case the filing of the registration statement may be delayed until the earlier of (i) the second business day after such conditions shall have ceased to exist and (ii) the 90th day after receipt by the Company of the written request from a Demand Party to register Registrable Securities under this Section 3(a), provided that, the Company shall not be permitted to postpone registration pursuant to this clause (z) more than once in any 360-day period.

Nothing in this Section 3 shall operate to limit the right of any Holder to (i) request the registration of Common Stock issuable upon conversion, exchange or exercise of securities held by such Holder notwithstanding the fact that at the time of request such Holder does not hold the Common Stock underlying such securities or (ii) request the registration at one time of both securities convertible, exchangeable or exercisable into Common Stock and the Common Stock underlying any such securities. Notwithstanding anything to the contrary herein, no Person shall

-5-

be entitled to include Registrable Securities in the Registration Statement on Form S-1 (Registration Statement No. 333-114027) filed by the Company in respect of the initial public offering of the Common Stock (the "IPO Registration Statement") and the Company shall not be obligated to file a registration statement relating to any registration request under this Section 3(a) within a period of 180 days from the effective date of the IPO Registration Statement.

(b) Registration Statement Form. If any registration requested pursuant to this Section 3 which is proposed by the Company to be effected by the filing of a registration statement on Form S-3 (or any successor or similar short-form registration statement) shall be in connection with an underwritten public offering, and if the managing underwriter shall advise the Company in writing that, in its opinion, the use of another form of registration statement is of material importance to the success of such proposed offering, then such registration shall be effected on such other form.

(c) Expenses. The Company will pay all Registration Expenses in connection with the first ten (10) registrations of each class or series of Registrable Securities pursuant to this Section 3 upon the written request of any of the Holders, provided that, for purposes hereof, a request to register Common Stock into which a convertible security is convertible in conjunction with a registration of such convertible security shall be deemed to be one request for registration of a class or series of Registrable Securities. All expenses for any subsequent registrations of Registrable Securities pursuant to this Section 3 shall be paid pro rata by the Company and all other Persons (including the Holders) participating in such registration on the basis of the relative number of shares of Common Stock of each such Person whose Registrable Securities are included in such registration.

(d) Effective Registration Statement. A registration requested pursuant to this Section 3 will not be deemed to have been effected unless it has become effective; provided that, if within 180 days after it has become effective, the offering of Registrable Securities pursuant to such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court, such registration will be deemed not to have been effected.

(e) Selection of Underwriters. If a requested registration pursuant to this Section 3 involves an underwritten offering, the Holders of a majority of the shares of Registrable Securities which are held by Holders and which the Company has been requested to register shall have the right to select the investment banker or bankers and managers to administer the offering; provided, however, that such investment banker or bankers and managers shall be reasonably satisfactory to the Company.

(f) Priority in Requested Registrations. If a requested registration pursuant to this Section 3 involves an underwritten offering and the managing underwriter advises the Company in writing that, in its opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in such offering, so as to be reasonably likely to have an adverse effect on the price, timing or distribution of the securities offered in such offering, then the Company will include in such registration the number of shares of Registrable Securities requested to be included in such registration which, in the opinion of such managing underwriter, can be sold without having the adverse effect referred to above, which number shall

-6-

be allocated pro rata among all such requesting Holders of Registrable Securities on the basis of the relative number of shares of Registrable Securities then held by each such Holder. In the event that the number of Registrable Securities entitled to registration rights with respect to such Registrable Securities requested to be included in such registration is less than the number which, in the opinion of the managing underwriter, can be sold, the Company may include in such registration securities it proposes to sell for its own account up to the number of securities that, in the opinion of the underwriter, can be sold.

(g) Additional Rights. If the Company at any time grants to any other holders of securities any rights to request the Company to effect the registration under the Securities Act of any such securities on terms more favorable to such holders than the terms set forth in this Section 3, the terms of this Section 3 shall be deemed amended or supplemented to the extent necessary to provide the Holders such more favorable rights and benefits.

4. Registration Procedures. If and whenever the Company is required to use its best efforts to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement, the Company will, as expeditiously as possible:

(i) prepare and, in any event within 120 days after the end of the period within which a request for registration may be given to the Company, file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, provided, however, that the Company may discontinue any registration of its securities which is being effected pursuant to Section 2 at any time prior to the effective date of the registration statement relating thereto;

(ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period not in excess of 270 days and to comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations of the SEC thereunder with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement; provided that before filing a registration statement or prospectus, or any amendments or supplements thereto, the Company will furnish to counsel selected pursuant to Section 7 hereof by the Holders of the Registrable Securities covered by such registration statement to represent such Holders copies of all documents proposed to be filed, which documents will be subject to the review of such counsel;

(iii) furnish to each seller of such Registrable Securities such number of copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits filed therewith, including any documents incorporated by reference), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and summary prospectus), in conformity with the requirements of the Securities Act, and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities by such seller;

-7-

(iv) use its best efforts to register or qualify such Registrable Securities covered by such registration in such jurisdictions as each seller shall reasonably request, and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where, but for the requirements of this clause (iv), it would not be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

(v) use its best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities;

(vi) notify each seller of any such Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act within the appropriate period mentioned in clause (ii) of this Section 4, of the Company's becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the request of any such seller, prepare and furnish to such seller a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(vii) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable (but not more than eighteen months) after the effective date of the registration statement, an earnings statement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;

(viii) (a) if such Registrable Securities are Common Stock (including Common Stock issuable upon conversion, exchange or exercise of another security), use its best efforts to list such Registrable Securities on any securities exchange on which the Common Stock is then listed if such Registrable Securities are not already so listed and if such listing is then permitted under the rules of such exchange; (b) if such Registrable Securities are convertible, exchangeable or exercisable into Common Stock, upon the reasonable request of sellers of a majority of such Registrable Securities, use its best efforts to list such securities and, if requested, the Common Stock underlying such securities, notwithstanding that at the time of request such sellers hold only such securities, on any securities exchange so requested, if such Registrable Securities are not already so listed and if such listing is then permitted under the rules of such exchange; and (c) use its best efforts to provide a transfer agent and registrar for such Registrable

-8-

Securities covered by such registration statement not later than the effective date of such registration statement;

(ix) enter into such customary agreements (including an underwriting agreement in customary form), which may include indemnification provisions in favor of underwriters and other persons in addition to, or in substitution for the provisions of Section 5 hereof, and take such other actions as sellers of a majority of shares of such Registrable Securities or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

(x) obtain a "cold comfort" letter or letters from the Company's independent public accounts in customary form and covering matters of the type customarily covered by "cold comfort" letters as the seller or sellers of a majority of shares of such Registrable Securities shall reasonably request (provided that Registrable Securities constitute at least 25% of the securities covered by such registration statement);

(xi) make available for inspection by any seller of such Registrable Securities covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company's officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement;

(xii) notify counsel (selected pursuant to Section 7 hereof) for the Holders of Registrable Securities included in such registration statement and the managing underwriter or agent, immediately, and confirm the notice in writing (i) when the registration statement, or any post-effective amendment to the registration statement, shall have become effective, or any supplement to the prospectus or any amendment prospectus shall have been filed, (ii) of the receipt of any comments from the SEC, (iii) of any request of the SEC to amend the registration statement or amend or supplement the prospectus or for additional information, and (iv) of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the registration statement for offering or sale in any jurisdiction, or of the institution or threatening of any proceedings for any of such purposes;

(xiii) make every reasonable effort to prevent the issuance of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the use of any preliminary prospectus and, if any such order is issued, to obtain the withdrawal of any such order at the earliest possible moment;

(xiv) if requested by the managing underwriter or agent or any Holder of Registrable Securities covered by the registration statement, promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or agent or such Holder reasonably requests to be included therein, including,

-9-

without limitation, with respect to the number of Registrable Securities being sold by such Holder to such underwriter or agent, the purchase price being paid therefor by such underwriter or agent and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after being notified of the matters incorporated in such prospectus supplement or post-effective amendment;

(xv) cooperate with the Holders of Registrable Securities covered by the registration statement and the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter or agent, if any, or such Holders may request;

(xvi) obtain for delivery to the Holders of Registrable Securities being registered and to the underwriter or agent an opinion or opinions from counsel for the Company in customary form and in form, substance and scope reasonably satisfactory to such Holders, underwriters or agents and their counsel; and

(xvii) cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD.

The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company with such information regarding such seller and pertinent to the disclosure requirementst relating to the registration and the distribution of such securities as the Company may from time to time reasonably request in writing.

Each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (vi) of this Section 4, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by clause (vi) of this
Section 4, and, if so directed by the Company, such Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period mentioned in clause (ii) of this
Section 4 shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to clause (vi) of this
Section 4 and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by clause (vi) of this Section 4.

5. Indemnification. (a) Indemnification by the Company. In the event of any registration of any securities of the Company under the Securities Act pursuant to Section 2 or 3,

-10-

the Company will, and it hereby does, indemnify and hold harmless, to the extent permitted by law, the seller of any Registrable Securities covered by such registration statement, each affiliate of such seller and their respective directors and officers or general and limited partners or members and managing members (including any director, officer, affiliate, employee, agent and controlling Person of any of the foregoing), each other Person who participates as an underwriter in the offering or sale of such securities and each other Person, if any, who controls such seller or any such underwriter within the meaning of the Securities Act (collectively, the "Indemnified Parties"), against any and all losses, claims, damages or liabilities, joint or several, and expenses (including reasonable attorney's fees and reasonable expenses of investigation) to which such Indemnified Party may become subject under the Securities Act, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof, whether or not such Indemnified Party is a party thereto) arise out of or are based upon (a) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or (b) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and the Company will reimburse such Indemnified Party for any legal or any other expenses reasonably incurred by it in connection with investigating or defending against any such loss, claim, liability, action or proceeding; provided that the Company shall not be liable to any Indemnified Party in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or amendment or supplement thereto or in any such preliminary, final or summary prospectus in reliance upon and in conformity with written information furnished to the Company with respect to such seller through an instrument duly executed by such seller specifically stating that it is for use in the preparation thereof;

(b) Indemnification by the Seller. The Company may require, as a condition to including any Registrable Securities in any registration statement filed in accordance with Section 4 herein, that the Company shall have received an undertaking reasonably satisfactory to it from the prospective seller of such Registrable Securities or any underwriter to indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this
Section 5) the Company and all other prospective sellers with respect to any untrue statement or alleged untrue statement in or omission or alleged omission from such registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement, if such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company with respect to such seller through an instrument duly executed by such seller or underwriter specifically stating that it is for use in the preparation of such registration statement, preliminary, final or summary prospectus or amendment or supplement, or a document incorporated by reference into any of the foregoing. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any of the prospective sellers, or any of their respective affiliates, directors, officers or controlling Persons and shall survive the transfer of such securities by such seller. In no event shall the liability of any selling Holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds

-11-

received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(c) Notices of Claims, Etc. Promptly after receipt by an Indemnified Party hereunder of written notice of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Section 5, such Indemnified Party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; provided that the failure of the Indemnified Party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subdivisions of this
Section 5, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an Indemnified Party, unless in such Indemnified Party's reasonable judgment a conflict of interest between such Indemnified Party and indemnifying parties may exist in respect of such claim, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the indemnifying party to such Indemnified Party of its election so to assume the defense thereof, the indemnifying party will not be liable to such Indemnified Party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof, the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

(d) Contribution. If the indemnification provided for in this Section 5 from the indemnifying party is unavailable to an Indemnified Party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to herein, then the indemnifying party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and Indemnified Parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and Indemnified Parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or Indemnified Parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party under this Section 5(d) as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the

-12-

meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(e) Other Indemnification. Indemnification similar to that specified in the preceding subdivisions of this Section 5 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.

(f) Non-Exclusivity. The obligations of the parties under this Section 5 shall be in addition to any liability which any party may otherwise have to any other party.

6. Rule 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Securities, make publicly available such information), and it will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding anything contained in this Section 6, the Company may deregister under Section 12 of the Exchange Act if it then is permitted to do so pursuant to the Exchange Act and the rules and regulations thereunder.

7. Selection of Counsel. In connection with any registration of Registrable Securities pursuant to Sections 2 or 3 hereof, the Holders of a majority of the Registrable Securities covered by any such registration may select one counsel to represent all Holders of Registrable Securities covered by such registration; provided, however, that in the event that the counsel selected as provided above is also acting as counsel to the Company in connection with such registration, the remaining Holders shall be entitled to select one additional counsel to represent all such remaining Holders.

8. Miscellaneous. (a) Holdback Agreement. If any registration of Registrable Securities pursuant to Sections 2 or 3 hereof shall be in connection with an underwritten public offering, each Holder of Registrable Securities agrees not to effect any public sale or distribution, including any sale pursuant to Rule 144 under the Securities Act, of any equity securities of the Company, or of any security convertible into or exchangeable or exercisable for any equity security of the Company (in each case, other than as part of such underwritten public offering), within 7 days before or such period not to exceed 180 days as the underwriting agreement may require (or such lesser period as the managing underwriters may permit) after the closing date of such underwritten public offering.

(b) Amendments and Waivers. This Agreement may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such

-13-

amendment, action or omission to act, of the Holders of a majority of the Registrable Securities then outstanding; provided, however, that no amendment, waiver or consent to the departure from the terms and provisions of this Agreement that is adverse to the Investors or any of their respective successors and assigns shall be effective as against any such Person for so long as such Person holds any Registrable Securities unless consented to in writing by such Person. Each Holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any consent authorized by this Section 8(b), whether or not such Registrable Securities shall have been marked to indicate such consent.

(c) Successors, Assigns and Transferees. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. In addition, and whether or not any express assignment shall have been made, the provisions of this Agreement which are for the benefit of the parties hereto other than the Company shall also be for the benefit of and enforceable by any subsequent Holder of any Registrable Securities, subject to the provisions contained herein. Without limitation to the foregoing, in the event that any of The Martin Cohen 1998 Family Trust or Robert H. Steers Family Trust distributes or otherwise transfers any shares of the Registrable Securities to any of its beneficiaries, the Company hereby acknowledges that the registration rights granted pursuant to this Agreement shall be transferred to any such beneficiaries on a pro rata basis, and that at or after the time of any such distribution or transfer, any such beneficiary may designate a Person to act on their behalf in delivering any notices or making any requests hereunder.

(d) Notices. All notices and other communications provided for hereunder shall be in writing and shall be sent by first class mail, telex, telecopier or hand delivery:

(i) if to the Company, to:

Cohen & Steers, Inc. 757 Third Avenue New York, NY 10017 Attn: General Counsel

with copies to:

Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Fax: (212) 455-2502 Attention: Vincent Pagano, Jr., Esq.

(ii) if to Martin Cohen, to:

c/o Cohen & Steers, Inc. 757 Third Avenue New York, NY 10017 Attention: Martin Cohen

-14-

(iii) if to Robert H. Steers, to:

c/o Cohen & Steers, Inc. 757 Third Avenue New York, NY 10017 Attention: Robert H. Steers

(iv) if to The Martin Cohen 1998 Family Trust, to:

c/o Cohen & Steers, Inc. 757 Third Avenue New York, NY 10017 Attention: Michele Cohen, as Trustee

(v) if to Robert H. Steers Family Trust, to:

c/o Cohen & Steers, Inc. 757 Third Avenue New York, NY 10017 Attention: Lauren J. Steers, as Trustee

(vi) if to any other holder of Registrable Securities, to the address of such other holder as shown in the stock record book of the Company, or to such other address as any of the above shall have designated in writing to all of the other above.

All such notices and communications shall be deemed to have been given or made (A) when delivered by hand, (B) five business days after being deposited in the mail, postage prepaid, (C) when telexed answer-back received or (D) when telecopied, receipt acknowledged.

(e) Descriptive Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein.

(f) Severability. In the event that any one or more of the provisions, paragraphs, words, clauses, phrases or sentences contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision, paragraph, word, clause, phrase or sentence in every other respect and of the remaining provisions, paragraphs, words, clauses, phrases or sentences hereof shall not be in any way impaired, it being intended that all rights, powers and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law.

(g) Counterparts. This Agreement may be executed in counterparts, and by different parties on separate counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.

(h) Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to contracts made and to be performed therein. The parties to this Agreement hereby

-15-

agree to submit to the jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof in any action or proceeding arising out of or relating to this Agreement.

(i) Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that they shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which they may be entitled at law or in equity.

[Remainder of page intentionally left blank.]

-16-

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused this Agreement to be duly executed on its behalf as of the date first written above.

Cohen & Steers, Inc.

By:

Title:

Martin Cohen

Robert H. Steers

Michele Cohen, as Trustee for
The Martin Cohen 1998 Family Trust

Lauren J. Steers, as Trustee for Robert H. Steers Family Trust

-17-

TAX INDEMNIFICATION AGREEMENT

TAX INDEMNIFICATION AGREEMENT, dated as of ______, 2004 (the "Agreement"), among Cohen & Steers Capital Management, Inc., a New York corporation (the "Company"), Cohen & Steers, Inc., a Delaware corporation (the "Parent") and the persons listed on the signature page hereto (individually, a "Stockholder" and, collectively, the "Stockholders").

WHEREAS, the Company has been an "S corporation" (as defined in section 1361(a)(1) of the Code (as hereinafter defined)) for federal tax purposes since July 1, 1986.

WHEREAS, the Company and the Stockholders plan to terminate the S corporation status of the Company prior to the closing of the Public Offering by way of a merger of a wholly-owned subsidiary of Parent with and into the Company with the Company becoming a wholly-owned subsidiary of Parent, and, as a result, the Company will be a "C corporation" (as defined in section 1361(a)(2) of the Code) beginning on the Termination Date (as hereinafter defined); and

WHEREAS, Parent, the Company and the Stockholders desire to address certain matters among themselves in respect of the allocation of taxable income and liability for taxes; and

WHEREAS, Parent, the Company and the Stockholders wish to provide for the termination of this Agreement such that it has no effect should the Public Offering (as hereinafter defined) not close.

NOW, THEREFORE, in consideration of the foregoing premises and the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1. DEFINITIONS.

The following terms as used herein have the following meanings:

"Adjustment Amount" means the net increase in taxable income of one or more of the Stockholders, the Company or Parent based on a Final Determination and that gives rise to a payment pursuant to Section 3.3 or 3.4 hereof.

"Affected Stockholder" means a Stockholder whose tax returns are adjusted in a manner which gives rise to an obligation of the Company pursuant to Section 3.3 hereof.

"Closing Date" means the date on which the Public Offering closes.

"Code" means the Internal Revenue Code of 1986, as amended.

"C Short Year" means that portion of the Company's year beginning on the Termination Date until and including the last day of the S Termination Year.

"C Taxable Year" means any taxable year (or portion thereof) of the Company during which the Company is a C corporation for federal income tax purposes, including the C Short Year.

"Final Determination" means the final resolution of any income or franchise tax liability (including all related interest and penalties) for a taxable period. A Final Determination shall result from the first to occur of:

(i) the expiration of 30 days after acceptance by the Internal Revenue Service of a Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment (the "Waiver") on Federal Revenue Form 870 or 870-AD (or any successor comparable form or the expiration of a comparable period with respect to any comparable agreement or form under the laws of any other jurisdiction), unless, within such period, the applicable taxpayer gives notice of that taxpayer's intention to attempt to recover all or part of any amount paid pursuant to the Waiver by filing a timely claim for refund;

(ii) a decision, judgment, decree or other order by a court of competent jurisdiction that is not subject to further judicial review (by appeal or otherwise) and has become final;

(iii) the execution of a closing agreement under section 7121 of the Code or the acceptance by the Internal Revenue Service or its counsel of an offer in compromise under section 7122 of the Code or the execution of a comparable agreement under the laws of any other jurisdiction;

(iv) the expiration of the time for filing a claim for refund or for instituting suit in respect of a claim for refund disallowed in whole or part by the Internal Revenue Service or any other relevant taxing authority;

(v) any other final disposition of the tax liability for such period by reason of the expiration of the applicable statute of limitations; or

(vi) any other event that the parties hereto agree is a final and irrevocable determination of the liability at issue.

"Public Offering" means the initial offering of shares of Common Stock, $0.01 par value per share, of Cohen & Steers, Inc. pursuant to the Registration Statement on Form S-1 originally filed by the Cohen & Steers, Inc. with the Securities and Exchange Commission on March 30, 2004.

"S Short Year" means that portion of the S Termination Year beginning on the first day of such taxable year and ending on the day immediately preceding the Termination Date.

"S Taxable Year" means any taxable year (or portion thereof) of the Company during which the Company was an S corporation, including the S Short Year.

"S Termination Year" means the taxable year of the Company that includes the Termination Date.

"Taxing Authority" means the Internal Revenue Service or any comparable state or foreign taxing authority.

"Tax Benefit" means any amount by which the tax liability of a Stockholder, Parent or the Company, as applicable, in any taxable year is actually reduced by reason of claiming, on a tax return for such year, a loss, deduction or credit for tax purposes arising from an Adjustment Amount in respect of which a payment was made pursuant to Section 3.3 or 3.4 after taking into account all other losses, deductions, credits or other tax attributes available to such Stockholder, Parent or the Company, as applicable.

"Tax Detriment" means any amount by which the tax liability of a Stockholder, Parent or the Company, as applicable, in any taxable year is actually increased by reason of an Adjustment Amount, on a tax return for such year, in respect of which a payment was made pursuant to Section 3.3 or 3.4 after taking into account all other items of income, gain, loss, deductions or other tax attributes of such Stockholder, Parent or the Company, as applicable.

"Termination Date" means the date on which the S corporation status of the Company will terminate as a result of the Company becoming a member of Parent's consolidated group in accordance with Treas. Reg. Section 1.1502-76(b)(1)(ii)(A).

ARTICLE II

TERMINATION OF S CORPORATION STATUS AND ALLOCATION OF INCOME

2.1. TERMINATION OF S CORPORATION STATUS.

The Company and the Stockholders shall cause the Company to terminate its S corporation status at least one day prior to the Closing Date.

2.2. ALLOCATION ELECTION.

Parent will elect to file a consolidated federal income tax return with the Company for the taxable year beginning on the Termination Date in accordance with Treas. Reg. Section 1.1502-75(a) and the Company shall consent to such election as required by Treas. Reg. Section 1.1502-75(b).

ARTICLE III

OBLIGATIONS

3.1. LIABILITY FOR TAXES INCURRED BY STOCKHOLDERS DURING THE S SHORT YEAR.

Each Stockholder shall (a) duly include, in his or its own federal and state income tax returns, all items of income, gain, loss, deduction or credit attributable to the S Short Year in a manner consistent with the Form 1120S and the schedules thereto (and the corresponding state income or franchise tax forms and schedules) to be filed by the Company with respect to such period, (b) file such returns no later than the due date (including extensions, if any) for filing such returns, and (c) pay any and all taxes required to be paid for such Stockholder's taxable year that includes the S Short Year.

3.2. LIABILITY FOR TAXES INCURRED BY THE COMPANY DURING THE S SHORT YEAR AND THE C SHORT YEAR.

Parent and the Company, as applicable, shall (a) be responsible for and effect the filing of all federal and state income or franchise tax returns for the Company (including any consolidated or combined tax returns filed by Parent) with respect to the S Short Year and the C Short Year, (b) accurately prepare and timely file such Company returns, and (c) pay any and all taxes required to be paid by the Company for the C Short Year and S Short Year.

3.3. COMPANY'S INDEMNIFICATION OF STOCKHOLDERS FOR TAX LIABILITIES.

In the event of an adjustment to one or more tax returns of the Company for an S Taxable Year based on a Final Determination that results in a net increase in taxable income of a Stockholder and a corresponding adjustment to one or more tax returns of Parent or the Company, as applicable, for a C Taxable Year that results in a Tax Benefit to Parent or the Company, as the case may be, Parent or the Company shall pay to any Affected Stockholder an amount equal to the Affected Stockholder's Tax Detriment; provided, however, the total amount due under this Section 3.3 shall not exceed the Tax Benefit received by Parent or the Company, as the case may be, that is attributable to the relevant adjustment. The Tax Benefit shall be paid to the Affected Stockholders in the year in which the Tax Benefit is realized. Upon notification from the Affected Stockholder that a payment is due by such party to the appropriate Taxing Authority, Parent or the Company, as applicable, shall determine its Tax Benefit and pay such amount to the Affected Stockholder within thirty (30) business days of such determination; provided, however, that if the Tax Benefit results from the creation of a net operating loss, the Company shall pay the associated Tax Benefit to the Affected Stockholder thirty (30) business days after the utilization by Parent or the Company, as the case may be, in whole or in part, of such net operating loss.

3.4. STOCKHOLDERS' INDEMNIFICATION OF THE COMPANY FOR TAX LIABILITIES.

(a) ADJUSTMENTS TO THE COMPANY'S TAXABLE INCOME. In the event of an adjustment of one or more tax returns of Parent or the Company, as the case may be, for a C Taxable Year based on a Final Determination which results in a net increase in taxable income of Parent or the Company, as applicable, for a C Taxable Year and a corresponding adjustment to one or more tax returns of the Company for an S Taxable Year which results in a Tax Benefit of the Company for the S Taxable Year, each Stockholder, severally but not jointly, agrees to contribute to the capital of Parent his pro rata share (based upon the relative amount of Company stock held by such Stockholder during the relevant time period) of an amount equal to the Tax Detriment; provided, however, the total amount due under this Section 3.4(a) shall not exceed such Stockholder's Tax Benefit that is attributable to the relevant adjustment. The Tax Benefit shall be paid to Parent in the year in which the Tax Benefit is realized.

(b) ADJUSTMENTS ATTRIBUTABLE TO THE COMPANY'S S STATUS. Unless the Internal Revenue Service has determined that the termination of S corporation status was inadvertent pursuant to Section 1362(f), if, based on a Final Determination, the Company is deemed to have been a C corporation for federal, state or local income or franchise tax purposes during any period in which it reported (or intends to report) its taxable income as an S corporation, each Stockholder, severally but not jointly and subject to the limitations contained in Section 3.4(c), shall contribute to the capital of Parent his or its pro rata share (based upon the relative amount of Company stock held by such Stockholder during the relevant time period) of an amount equal to the taxes, penalties and interest incurred by the Company as a result of the Company being deemed to have been a C corporation.

(c) LIMIT ON INDEMNIFICATION AMOUNT. Notwithstanding the provisions of this Section 3.4, all payments required to be made by any Stockholder to the Company pursuant to Section 3.4(b) shall not exceed the total distributions made to such Stockholder by the Company to pay such Stockholder's income tax liabilities related to the taxable years for which the Company has suffered a Tax Detriment as a result of it being deemed to have been a C corporation on or prior to the Termination Date.

(d) TIME OF INDEMNIFICATION PAYMENT. The Stockholders shall contribute to the capital of Parent any amounts calculated in accordance with this Section 3.4 within 30 business days after the first to occur of (i) the receipt of the refund from the appropriate Taxing Authority attributable to such adjustment, or
(ii) delivery of a notice from the Company that a payment is due by the Company to the appropriate Taxing Authority.

3.5 GROSS UP FOR ADDITIONAL TAX.

In all events and to the extent not otherwise reimbursed, the Company hereby agrees that if any payment pursuant to this Article III is deemed to be taxable income to a Stockholder, the amount of such payment to the Stockholders shall be increased by an amount necessary to equal the Stockholder's additional Tax Detriment resulting from the receipt of a payment pursuant to this Article III related to such amount (including, without limitation, any taxes on such additional amounts) so that the net payment, after reduction for any Tax Detriment associated with its receipt, is equal to the amount of the Tax Detriment in respect of which such payment pursuant to this Article III is made; provided, however, that such additional amount shall not exceed the sum of (i) the Tax Benefit to the Company from such payment under this

Article III and (ii) the excess of any Tax Benefit of the Company from the Adjustment Amount over the amount of the payment under this Article III.

ARTICLE IV

CONTESTS/COOPERATION

4.1. CONTESTS.

Whenever the Stockholders, the Company or Parent becomes aware of an issue that they or it believe could result in a Final Determination which could give rise to a payment or indemnification obligation under Article III, the Stockholders, the Company or Parent (as the case may be) shall promptly give notice of the issue to the other parties hereto. The Stockholders and their representatives, at their expense, shall be entitled to participate in all conferences and meetings with or proceedings before the Internal Revenue Service or any other Taxing Authority with respect to the issue. The parties shall consult and cooperate with each other in the negotiation and settlement or litigation of any adjustment that may give rise to any payment or indemnification obligation under Article III. All decisions with respect to such negotiation and settlement or litigation shall be made by the parties after full, good faith consultation or pursuant to the dispute resolution provisions of Section 4.2.

4.2. DISPUTE RESOLUTION.

(a) If the parties hereto are, after negotiation in good faith, unable to agree upon the appropriate application of the provisions of this Agreement, the controversy shall be settled by a "Big 4" (or equivalent) accounting firm, other than the Company's independent public accountants, chosen by the Company and a majority of the Stockholders (the "Accounting Firm"). The decision of the Accounting Firm with respect thereto shall be final, and Parent, the Company or the Stockholders, as applicable, shall immediately pay any amounts due under this Agreement pursuant to such decision. The applicable expenses of the Accounting Firm shall be borne one-half by the Company and one-half by the Stockholders unless the Accounting Firm specifies otherwise.

(b) In the event that any of the Stockholders, the Company or Parent receives notice, whether orally or in writing, of any federal, state, local or foreign tax examination, claim, settlement, proposed adjustment or related matter that may affect in any way the liability of a Stockholder under this Agreement, such Stockholder, the Company or Parent, as applicable, shall within ten days notify the other parties hereto in writing thereof; provided, however, that any failure to give such notice shall not reduce a party's right to indemnification under this Agreement except to the extent of actual damage incurred by the other parties as a result of such failure. The party or parties who would be required to indemnify ( the "Indemnifying Party") the other party or parties (the "Indemnified Party") shall be entitled in their reasonable discretion and at their sole expense to handle, control and compromise or settle the defense of any matter that may give rise to a liability under this Agreement; provided, however, that such Indemnifying Party from time to time provides assurances reasonably satisfactory to the Indemnified Party that

(i) the Indemnifying Party is financially capable of pursuing such defense to its conclusion, and (ii) such defense is actually being pursued in a reasonable manner.

4.3. COOPERATION.

The parties shall make available to each other, as reasonably requested, and to any Taxing Authority all information, records or documents relating to any liability for taxes covered by this Agreement and shall preserve such information, records and documents until the expiration of any applicable statute of limitations or extensions thereof. The party requesting such information shall reimburse the other party for all reasonable out-of-pocket costs incurred in producing such information.

4.4. COSTS.

Except to the extent otherwise provided herein, each party shall bear his own costs in connection with this Agreement.

ARTICLE V

MISCELLANEOUS

5.1. COUNTERPARTS AND FACSIMILE.

This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which counterparts collectively shall constitute a single instrument representing the agreement among the parties hereto. Transmission of facsimile copies of an executed counterpart of a signature page of this Agreement will have the same effect as delivery of the manually executed counterpart of this Agreement.

5.2. CONSTRUCTION OF TERMS.

Nothing herein expressed or implied is intended, or shall be construed, to confer upon or give any person, firm or corporation, other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

5.3. GOVERNING LAW.

This Agreement and the rights and duties of the parties hereunder shall be governed by, and construed in accordance with, the law of the State of New York.

5.4. AMENDMENT AND MODIFICATION.

This Agreement may be amended, modified or supplemented only by a writing executed by all the parties hereto.

5.5. ASSIGNMENT.

Except by operation of law or in connection with the sale of all or substantially all the assets of a party, this Agreement shall not be assignable, in whole or in part, directly or indirectly, by the Stockholders without the written consent of the Company and Parent or by the Company or Parent without the written consent of the Stockholders. Any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void. The provisions of this Agreement shall be binding upon and inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.

5.6. INTERPRETATION.

The title, article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties, and shall not in any way affect the meaning or interpretation of this Agreement.

5.7. SEVERABILITY.

In the event that any one or more of the provisions of this Agreement shall be held to be illegal, invalid or unenforceable in any respect, the same shall not in any respect affect the validity, legality or enforceability of the remainder of this Agreement, and the parties shall use their best efforts to replace such illegal, invalid or unenforceable provision with an enforceable provision approximating, to the extent possible, the original intent of the parties.

5.8. ENTIRE AGREEMENT.

This Agreement embodies the entire agreement and understanding of the parties hereto in respect to the subject matter contained herein. There are no representations, promises, warranties, covenants or undertakings other than those expressly set forth herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

5.9. FURTHER ASSURANCES.

Subject to the provisions of this Agreement, the parties shall acknowledge such other instruments and documents and take all other actions that may be reasonably required in order to effectuate the purposes of this Agreement.

5.10. WAIVERS, ETC.

No failure or delay on the part of any party in exercising any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power preclude any other or further exercise thereof or the exercise of any other right or power. No waiver of any provision of this Agreement nor consent to any departure by the parties therefrom shall in any event be effective unless it shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given.

5.11. SET-OFF.

All payments to be made by any Stockholder under this Agreement shall be made without set-off, counterclaim or withholding, all of which are expressly waived.

5.12. CHANGE OF LAW.

If, due to any change in applicable law or regulations or the interpretation thereof by any court or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement shall be impracticable or impossible, the parties shall use their best efforts to find an alternative means to achieve the same or substantially the same results as are contemplated by such provision.

5.13. NOTICES.

All notices under this Agreement shall be validly given if in writing and delivered personally or sent by registered mail, postage prepaid at the respective addresses set forth below

If to the Company or Parent, at:

Cohen & Steers Capital Management, Inc.
757 Third Avenue
New York, New York 10017

Attention: General Counsel

If to a Stockholder, at:

c/o Cohen & Steers Capital Management, Inc. 757 Third Avenue
New York, New York 10017
Attention: General Counsel

or at such other address as any party may, from time to time, designate in a written notice given in a like manner. Notice given by mail shall be deemed delivered five calendar days after the date mailed.

5.14. TERMINATION OF AGREEMENT.

This Agreement shall terminate and be void, as if it never had been executed, if the Closing Date does not occur on or before December 31, 2004.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

COHEN & STEERS CAPITAL MANAGEMENT, INC.

Name:

Title:

Martin Cohen

Robert H. Steers

Michele Cohen, as Trustee for
THE MARTIN COHEN 1998 FAMILY TRUST

Lauren J. Steers, as Trustee for
ROBERT H. STEERS FAMILY TRUST

EMPLOYMENT AGREEMENT
(Martin Cohen)

EMPLOYMENT AGREEMENT (the "Agreement") dated as of _________, 2004 (the "Effective Date") by and between Cohen & Steers Capital Management, Inc. (the "Company") and Martin Cohen (the "Executive").

The Company desires to continue to employ Executive and to enter into an agreement embodying the terms of such employment; and

Executive desires to continue such employment and enter into such an agreement.

In consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Term of Employment. Subject to the provisions of Section 7 of this Agreement, Executive shall be employed by the Company for a period commencing on the Effective Date and ending on the third anniversary of the Effective Date (the "Employment Term") on the terms and subject to the conditions set forth in this Agreement; provided, however, that commencing with the third anniversary of the Effective Date and on each anniversary thereof (each an "Extension Date"), the Employment Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto 60 days prior written notice before the next Extension Date that the Employment Term shall not be so extended.

2. Position.

a. During the Employment Term, Executive shall serve as Co-Chief Executive Officer of Cohen & Steers, Inc. ("Cohen & Steers") and the Company and Co-Chairman of the Board of Directors of Cohen & Steers (the "Board") and the Board of Directors of the Company (the "Company Board"). In such positions, Executive shall have authority commensurate with such positions and such duties, commensurate with such positions, as shall be determined from time to time by the Board and the Company Board, as applicable, and Executive shall report directly to the Board and the Company Board, as applicable.

b. During the Employment Term, Executive will devote Executive's full business time and best efforts to the performance of Executive's duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive (x) from managing Executive's personal investments, (y) from continuing to serve on any board of directors, or as trustee, of any business corporation or any charitable organization on which Executive serves as of the Effective Date and which have been previously disclosed to the Company and (z) subject to the prior approval of the Board (which shall not be unreasonably withheld), from accepting appointment to or continuing to serve on any board of directors or trustees of any business corporation or any charitable organization; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive's duties hereunder or conflict with Section 8 of this Agreement.

3. Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $500,000, payable in regular installments in accordance with the Company's usual payment practices. Executive shall be entitled to such increases in Executive's base salary, if any, as may be determined from time to time in the sole discretion of the Board. Executive's annual base salary, as in effect from time to time, is hereinafter referred to as the "Base Salary."

4. Annual Bonus. With respect to each fiscal year during the Employment Term, Executive shall be eligible to earn an annual bonus award (an "Annual Bonus") in such amount, if any, as determined in the sole discretion of the Compensation Committee of the Board; provided, however, that the Annual Bonus for each such fiscal year shall be at least $1,000,000 (the "Target Annual Bonus") and no greater than $5,000,000; provided, further, however, that the Annual Bonus for fiscal year 2004 shall be $1,000,000.

5. Benefits.

a. Employee Benefits. During the Employment Term, Executive shall be entitled to (i) employee benefits that are no less favorable than those employee benefits provided to Executive prior to the Effective Date and (ii) participate in all employee benefit programs of the Company and its affiliates maintained for the benefit of employees of the Company on a basis which is no less favorable than is provided to any other executives of the Company (collectively, the "Employee Benefits").

b. Tax Gross-Up Payment. If it shall be determined that any payment to Executive pursuant to this Agreement or any other payment or benefit from the Company or its affiliates would be subject to the excise tax imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then Executive shall receive a gross-up payment pursuant to Exhibit A attached hereto.

6. Business Expenses. During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive's duties hereunder shall be reimbursed by the Company in accordance with Company policies.

7. Termination. The Employment Term and Executive's employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least 60 days advance written notice of any resignation of Executive's employment. Notwithstanding any other provision of this Agreement, the provisions of this
Section 7 shall exclusively govern Executive's rights upon termination of employment with the Company and its affiliates.

a. By the Company For Cause or By Executive Resignation Without Good Reason.

(i) The Employment Term and Executive's employment hereunder may be terminated by the Company for Cause (as defined below) and shall terminate automatically upon Executive's resignation without Good Reason (as defined in
Section 7(c)).

(ii) For purposes of this Agreement, "Cause" shall mean (A) Executive's continued failure substantially to perform the Participant's duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company to Executive of such failure, (B) Executive's engagement in conduct inimical to the interests of the Company or any of its affiliates, including without limitation, fraud, embezzlement, theft or dishonesty in the course of Executive's employment hereunder, (C) Executive's commission of, or plea of guilty or nolo contendere to, (I) a felony or (II) a crime other than a felony, which involves a breach of trust or fiduciary duty owed to the Company or any of its affiliates, (D) Executive's disclosure of trade secrets or confidential information of the Company or any of its affiliates, or (E) Executive's breach of any agreement with the Company or any of its affiliates in respect of confidentiality, nondisclosure, non-competition or otherwise.

(iii) If Executive's employment is terminated by the Company for Cause or if Executive resigns without Good Reason, Executive shall be entitled to receive:

(A) the Base Salary through the date of termination;

(B) any Annual Bonus earned but unpaid as of the date of termination for any previously completed fiscal year;

(C) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive's termination; and

(D) such Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company and its affiliates (the amounts described in clauses (A) through (D) hereof being referred to as the "Accrued Rights").

In addition, if Executive resigns without Good Reason, Executive and Executive's spouse and dependents shall be entitled to receive continued coverage under the medical plans of the Company and its affiliates in which Executive was participating at the time of such termination for the remainder of Executive's life, subject to payment by Executive of the same premiums Executive would have paid during such period of coverage if Executive were an active employee of the Company and its affiliates (the "Continued Medical Benefits"). Following the termination of Executive's employment by the Company for Cause or resignation by Executive without Good Reason, except as set forth in Section
5(b), this Section 7(a)(iii) and Section 11(i), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

b. Disability or Death.

(i) The Employment Term and Executive's employment hereunder shall terminate upon Executive's death and may be terminated by the Company if Executive becomes physically or mentally incapacitated and is therefore unable for a period of six consecutive months or for an aggregate of nine months in any 24 consecutive month period to perform Executive's duties (such incapacity is hereinafter referred to as "Disability"). Any question as to

the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement.

(ii) Upon termination of Executive's employment hereunder due to either death or Disability, Executive or Executive's estate (as the case may be) shall be entitled to receive:

(A) the Accrued Rights;

(B) the Continued Medical Benefits, if applicable; and

(C) a lump sum payment equal to Executive's Target Annual Bonus for the fiscal year in which the termination occurs, payable when the Annual Bonus would have otherwise been payable had Executive's employment not terminated.

Following Executive's termination of employment due to death or Disability, except as set forth in Section 5(b), this Section 7(b)(ii) and
Section 11(i), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

c. By the Company Without Cause or Resignation by Executive for Good Reason.

(i) The Employment Term and Executive's employment hereunder may be terminated by the Company without Cause (which (x) shall include the Company's election not to extend the Employment Term pursuant to Section 1 of this Agreement and (y) shall not include a termination due to death or Disability) or by Executive's resignation for Good Reason (each, a "Qualifying Termination").

(ii) For purposes of this Agreement, "Good Reason" shall mean (A) the failure of the Company to pay or cause to be paid Executive's Base Salary or Annual Bonus (to the extent earned in accordance with the terms of any applicable annual bonus or annual incentive arrangement), if any, when due or (B) any substantial and sustained diminution in Executive's authority or responsibilities; provided that either of the events described in clauses (A) and (B) of this Section 7(c)(ii) shall constitute Good Reason only if the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes Good Reason; provided, further, that "Good Reason" shall cease to exist for an event on the 60th day following the later of its occurrence or Executive's knowledge thereof, unless Executive has given the Company written notice thereof prior to such date..

(iii) If Executive's employment terminates due to a Qualifying Termination, Executive shall be entitled to receive:

(A) the Accrued Rights;

(B) subject to Executive's continued compliance with the provisions of Sections 8 and 9 of this Agreement, a lump sum payment equal to, (I) if the Qualifying Termination occurs prior to a Change in Control (as defined in the Cohen & Steers, Inc. 2004 Stock Incentive Plan or any successor plan thereto), two times the sum of Executive's Base Salary and Target Annual Bonus and (II) if the Qualifying Termination occurs on the date of, or following, a Change in Control, three times the sum of Executive's Base Salary and Target Annual Bonus; provided that (x) any termination of employment by the Company without Cause within six months prior to the occurrence of a Change in Control shall be deemed to be a termination of employment on the date of such Change in Control and (y) the aggregate amount described in this clause (B) shall be reduced by the present value of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates; and

Following Executive's termination of employment by the Company due to a Qualifying Termination, except as set forth in Section 5(b), this Section 7(c)(iii) and Section 11(i), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

d. Expiration of Employment Term.

(i) Election Not to Extend the Employment Term. In the event either party elects not to extend the Employment Term pursuant to Section 1 of this Agreement, unless Executive's employment is earlier terminated pursuant to paragraphs (a), (b) or (c) of this Section 7, Executive's termination of employment hereunder (whether or not Executive continues as an employee of the Company thereafter) shall be deemed to occur on the close of business on the day immediately preceding the next scheduled Extension Date. In the event Executive elects not to extend the Employment Term, Executive shall be entitled to receive the Accrued Rights and the Continued Medical Benefits. In the event the Company elects not to extend the Employment Term, such election shall be treated as a termination by the Company without Cause and Executive shall be entitled to receive payments and benefits pursuant to Section 7(c)(iii) of this Agreement.

Following such termination of Executive's employment hereunder as a result of either party's election not to extend the Employment Term, except as set forth in this Section 7(d)(i) and Section 11(i), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(ii) Continued Employment Beyond the Expiration of the Employment Term. Unless the parties otherwise agree in writing, continuation of Executive's employment with the Company beyond the expiration of the Employment Term shall be deemed an employment at-will and shall not be deemed to extend any of the provisions of this Agreement and Executive's employment may thereafter be terminated at will by either Executive or the Company; provided that the provisions of Sections 8, 9 and 10 of this Agreement shall survive any termination of this Agreement or Executive's termination of employment hereunder.

e. Notice of Termination. Any purported termination of employment by the Company or by Executive (other than due to Executive's death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11(h) hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

f. Use of Name.

(i) Notwithstanding any other provision of this Agreement or any other Company policy, upon a termination of Executive's employment for any reason, subject to Section 7(f)(ii), Executive shall retain the right to use Executive's name in connection with future business ventures.

(ii) Executive acknowledges and agrees that the Company owns and shall continue to own exclusively all rights in and to the name and trademark "COHEN & STEERS", and any name or trademark that contains that combination of words that may exist now or at any time in the future. Executive covenants that following termination of Executive's employment, he will not use his name in conjunction with the name Steers, or in conjunction with any confusingly similar name or word.

(iii) For the avoidance of doubt, Executive hereby grants to the Company a worldwide, non-exclusive, non-transferable, non-sublicensable, perpetual, royalty-free right and license to use (A) Executive's name, and initials; and (B) Executive's likeness, photograph, portrait, signature, autographs and biographical information, solely in connection with the business of the Company or its affiliates (including, without limitation, businesses which the Company or its affiliates have specific plans to conduct in the future and as to which Executive is aware of such planning).

8. Non-Competition.

a. Executive acknowledges and recognizes the highly competitive nature of the business of the Company and its affiliates and accordingly agrees that, during the Employment Term and for a period of one year following the date Executive ceases to be employed by the Company due to (x) a termination by the Company for Cause, (y) a resignation by Executive without Good Reason or (z) Executive's election not to extend the Employment Term pursuant to Section 1 of the Agreement, Executive shall not:

(i) other than on behalf of the Company and its affiliates, initiate contact with, or seek to provide investment advisory services to, (x) during the period when Executive remains in the employment of the Company and its affiliates, any person to whom the Company or an affiliate rendered such services during Executive's employment with the Company and its affiliates and
(y) following Executive's termination of employment with the Company and its affiliates, any person to whom the Company or an affiliate rendered such services during the three-year period prior to such termination of employment;

(ii) solicit or seek to induce or actually induce any person who is employed by the Company or an affiliate during Executive's employment with the Company and its affiliates, or who becomes employed by the Company or an affiliate at any time during the three-month period following the termination of Executive's employment, to discontinue such employment, or hire or employ any such person;

(iii) directly or indirectly engage in any business that competes with the business of the Company or its affiliates (including, without limitation, businesses which the Company or its affiliates have specific plans to conduct in the future and as to which Executive is aware of such planning) within the United States or any other country in which the Company or its affiliates is conducting business at the time of determination (a "Competitive Business");

(iv) directly or indirectly enter the employ of, or render any services to, any "person" (as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, or any successor thereto) (or any division or controlled or controlling affiliate of any person) who or which engages in a Competitive Business;

(v) directly or indirectly acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; provided that nothing herein shall preclude Executive from directly or indirectly, owning, solely as an investment, securities of any person engaged in a Competitive Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market, if Executive (x) is not a controlling person of, or a member of a group which controls, such person and (y) does not, directly or indirectly, own 5% or more of any class of securities of such person; or

(vi) directly or indirectly interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between the Company or any of its affiliates and customers, clients, suppliers, partners, members or investors of the Company or its affiliates.

b. It is expressly understood and agreed that, although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

9. Confidentiality; Intellectual Property.

a. Confidentiality.

(i) Executive will not at any time (whether during or after Executive's employment with the Company) (x) retain or use for the benefit, purposes or account of

Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information --including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals -- concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis ("Confidential Information") without the prior written authorization of the Board.

(ii) "Confidential Information" shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive's breach of this covenant or any breach of other confidentiality obligations by third parties; (b) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (c) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(iii) Except as required by law, Executive will not disclose to anyone, other than Executive's immediate family and legal or financial advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Sections 8 and 9 of this Agreement provided they agree to maintain the confidentiality of such terms.

(iv) Upon termination of Executive's employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company's option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive's possession or control (including any of the foregoing stored or located in Executive's office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.

b. Intellectual Property.

(i) If Executive has created, invented, designed, developed, contributed to or improved any works of authorship, inventions, intellectual property, materials, documents or other work product (including without limitation, research, reports, software, databases, systems,

applications, presentations, textual works, content, or audiovisual materials) ("Works"), either alone or with third parties, prior to Executive's employment by the Company, that are relevant to or implicated by such employment ("Prior Works"), Executive hereby grants the Company a perpetual, non-exclusive, royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in connection with the Company's current and future business.

(ii) If Executive creates, invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Executive's employment by the Company and within the scope of such employment and/or with the use of any the Company resources ("Company Works"), Executive shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

(iii) Executive agrees to keep and maintain adequate and current written records (in the form of notes, sketches, drawings, and any other form or media requested by the Company) of all Company Works. The records will be available to and remain the sole property and intellectual property of the Company at all times.

(iv) Executive shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company's expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company's rights in the Prior Works and Company Works. If the Company is unable for any other reason to secure Executive's signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive's agent and attorney in fact, to act for and in Executive's behalf and stead to execute any documents and to do all other lawfully permitted acts in connection with the foregoing.

(v) Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive hereby indemnifies, holds harmless and agrees to defend the Company and its officers, directors, partners, employees, agents and representatives from any breach of the foregoing covenant. Executive shall comply with all relevant policies and guidelines of the Company, including regarding the protection of confidential information and intellectual property and potential conflicts of interest. Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version.

c. The provisions of Sections 8 and 9 shall survive the termination of Executive's employment for any reason.

10. Specific Performance. Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of Section 8 or Section 9 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

11. Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.

b. Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

c. No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party's rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

d. Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

e. Assignment. This Agreement, and all of Executive's rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.

f. Set Off/No Mitigation. The Company's obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or

its affiliates. Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment.

g. Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

h. Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

If to the Company:

757 Third Avenue
New York, New York 10017

Attention: General Counsel

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

i. Legal Fees and Expenses. The Company agrees to pay all legal fees and expenses which Executive may reasonably incur as a result of any contest by the Company or Executive of the validity or enforceability of, or liability under, any provision of this Agreement if Executive prevails in substantially all material respects on the issues presented for resolution.

j. Executive Representation. Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

k. Prior Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive's employment with the Company and/or its affiliates.

l. Cooperation. Executive shall provide Executive's reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive's employment hereunder. This provision shall survive any termination of this Agreement.

m. Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

n. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

COHEN & STEERS CAPITAL MANAGEMENT, INC.

By: _________________________________

Title: ______________________________

Martin Cohen

EXHIBIT A

Gross-Up Payment

In the event the provisions of Section 5(b) of the Agreement to which this Exhibit A is a part shall become applicable, then the following provisions shall apply:

(a) If it shall be determined that any amount, right or benefit paid, distributed or treated as paid or distributed by the Company or any of its affiliates to or for Executive's benefit (other than any amounts payable pursuant to this Exhibit A) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, collectively, the "Excise Tax"), then Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") equal to the amount necessary such that after payment by Executive of all federal, state and local taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) All determinations required to be made under this Exhibit A, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company's independent auditors (the "Auditor"). The Auditor shall provide detailed supporting calculations to both the Company and Executive within 15 business days of the receipt of notice from Executive or the Company that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Auditor shall be paid by the Company. Any Gross-Up Payment, as determined pursuant to this Exhibit A, shall be paid by the Company to Executive (or to the Internal Revenue Service or other applicable taxing authority on Executive's behalf) within five days of the receipt of the Auditor's determination. All determinations made by the Auditor shall be binding upon the Company and Executive; provided that following any payment of a Gross-Up Payment to Executive (or to the Internal Revenue Service or other applicable taxing authority on Executive's behalf), the Company may require Executive to sue for a refund of all or any portion of the Excise Taxes paid on Executive's behalf, in which event the provisions of paragraph (c) below shall apply. As a result of uncertainty regarding the application of Section 4999 of the Code hereunder, it is possible that the Internal Revenue Service may assert that Excise Taxes are due that were not included in the Auditor's calculation of the Gross-Up Payments (an "Underpayment"). In the event that the Company exhausts its remedies pursuant to this Exhibit A and Executive thereafter is required to make a payment of any Excise Tax, the Auditor shall determine the amount of the Underpayment that has occurred and any additional Gross-Up Payments that are due as a result thereof shall be promptly paid by the Company to Executive (or to the Internal Revenue Service or other applicable taxing authority on Executive's behalf).

(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business

days after Executive receives written notification of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall: (i) give the Company all information reasonably requested by the Company relating to such claim; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and ceasing all efforts to contest such claim; (iii) cooperate with the Company in good faith in order to effectively contest such claim; and (iv) permit the Company to participate in any proceeding relating to such claim; provided, however, that the Company shall bear and pay directly all reasonable costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expense. Without limiting the foregoing provisions of this Exhibit A, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine and direct; provided, however, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for Executive's taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after Executive's receipt of an amount advanced by the Company pursuant to this Exhibit A, Executive becomes entitled to receive any refund with respect to such claim, Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after Executive's receipt of an amount advanced by the Company pursuant to this Exhibit A, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after the Company's receipt of notice of such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

EMPLOYMENT AGREEMENT
(Robert H. Steers)

EMPLOYMENT AGREEMENT (the "Agreement") dated as of ___________, 2004 (the "Effective Date") by and between Cohen & Steers Capital Management, Inc. (the "Company") and Robert H. Steers (the "Executive").

The Company desires to continue to employ Executive and to enter into an agreement embodying the terms of such employment; and

Executive desires to continue such employment and enter into such an agreement.

In consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

2. Position.

5. Benefits.

a. By the Company For Cause or By Executive Resignation Without Good Reason.

(iii) If Executive's employment is terminated by the Company for Cause or if Executive resigns without Good Reason, Executive shall be entitled to receive:

(A) the Base Salary through the date of termination;

(B) any Annual Bonus earned but unpaid as of the date of termination for any previously completed fiscal year;

(C) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive's termination; and

b. Disability or Death.

(ii) Upon termination of Executive's employment hereunder due to either death or Disability, Executive or Executive's estate (as the case may be) shall be entitled to receive:

(A) the Accrued Rights;

(B) the Continued Medical Benefits, if applicable; and

c. By the Company Without Cause or Resignation by Executive for Good Reason.

(iii) If Executive's employment terminates due to a Qualifying Termination, Executive shall be entitled to receive:

(A) the Accrued Rights;

(B) subject to Executive's continued compliance with the provisions of Sections 8 and 9 of this Agreement, a lump sum payment equal to, (I) if the Qualifying Termination occurs prior to a Change in Control (as defined in the Cohen & Steers, Inc. 2004 Stock Incentive Plan or any successor plan thereto), two times the sum of Executive's Base Salary and Target Annual Bonus and (II) if the Qualifying Termination occurs on the date of, or following, a Change in Control, three times the sum of Executive's Base Salary and Target Annual Bonus; provided that (x) any termination of employment by the Company without Cause within six months prior to the occurrence of a Change in Control shall be deemed to be a termination of employment on the date of such Change in Control and (y) the aggregate amount described in clause (B) shall be reduced by the present value of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates; and

d. Expiration of Employment Term.

f. Use of Name.

(ii) Executive acknowledges and agrees that the Company owns and shall continue to own exclusively all rights in and to the name and trademark "COHEN & STEERS", and any name or trademark that contains that combination of words that may exist now or at any time in the future. Executive covenants that following termination of Executive's employment, he will not use his name in conjunction with the name Cohen, or in conjunction with any confusingly similar name or word.

8. Non-Competition.

9. Confidentiality; Intellectual Property.

a. Confidentiality.

(i) Executive will not at any time (whether during or after Executive's employment with the Company) (x) retain or use for the benefit, purposes or account of

Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information -- including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals -- concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis ("Confidential Information") without the prior written authorization of the Board.

b. Intellectual Property.

c. The provisions of Sections 8 and 9 shall survive the termination of Executive's employment for any reason.

11. Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.

its affiliates. Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment.

If to the Company:

757 Third Avenue
New York, New York 10017

Attention: General Counsel

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

n. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

COHEN & STEERS CAPITAL MANAGEMENT, INC.

By:

Title:

Robert H. Steers

EXHIBIT A

Gross-Up Payment

In the event the provisions of Section 5(b) of the Agreement to which this Exhibit A is a part shall become applicable, then the following provisions shall apply:

COHEN & STEERS, INC.
2004 ANNUAL INCENTIVE PLAN

1. Purpose of the Plan

The purpose of the Plan is to enable the Company and its Affiliates to attract, retain, motivate and reward executive officers and key employees by providing them with the opportunity to earn competitive compensation directly linked to the Company's performance.

2. Definitions

The following capitalized terms used in the Plan have the respective meanings set forth in this Section:

(a) "Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor thereto.

(b) "Affiliate" shall mean, with respect to the Company, any entity directly or indirectly controlling, controlled by, or under common control with, the Company or any other entity designated by the Board in which the Company or an Affiliate has an interest.

(c) "Beneficial Owner" shall mean a "beneficial owner", as such term is defined in Rule 13d-3 under the Act (or any successor rule thereto).

(d) "Board" shall mean the Board of Directors of the Company.

(e) "Change in Control" means the occurrence of any of the following events:

(i) the complete liquidation of the Company or the sale or disposition, in one or a series of related transactions, of all or substantially all, of the assets of the Company to any "person" or "group" (as such terms are defined in Sections 13(d)(3) or 14(d)(2) of the Act), other than the Permitted Holders;

(ii) any person or group, other than the Permitted Holders, is or becomes the Beneficial Owner (except that a person shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of securities of the Company (or any entity which controls the Company) representing both (I) 20% or more of the combined voting power of the then outstanding securities of the Company (or any entity which controls the Company) and (II) more of the combined voting power of the then outstanding securities of the Company (or any entity which controls the Company) than the Cohen/Steers Holders in the aggregate;

(iii) during any period of twenty-four consecutive months (not including any period prior to the date that the Company completes a registered initial public offering), individuals who at the beginning of such period constituted the Board (together with any new directors (other than a director nominated by any Person (other than the Board) who publicly announces an intention to take or to consider taking actions, including but not limited to, an actual or threatened proxy contest, which if consummated would constitute a Change in Control under clauses (i), (ii) or (iv) of this Section 2(e)) nominated by any Cohen/Steers Holder and/or whose election by such Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company, then still in office, who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board, then in office; or

(iv) the consummation of any transaction or series of transactions resulting in a merger, consolidation or amalgamation, in which the Company is involved, other than a merger, consolidation or amalgamation which would result in the shareholders of the Company immediately prior thereto continuing to own (either by remaining outstanding or by being converted into voting securities of the surviving entity), in the same proportion as immediately prior to the transaction(s), more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger, consolidation or amalgamation.

(f) "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto.

(g) "Committee" shall mean the Compensation Committee of the Board.

(h) "Company" shall mean Cohen & Steers, Inc., a Delaware corporation.

(i) "Covered Employee" shall have the meaning set forth in Section 162(m) of the Code.

(j) "Participant" shall mean each executive officer of the Company and other key employee of the Company or an Affiliate whom the Committee designates as a participant under the Plan.

(k) "Performance Period" shall mean each fiscal year or multi-year cycle as determined by the Committee.

(l) "Permitted Holder" shall mean, as of the date of determination, any and all of (i) an employee benefit plan (or trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power of its voting equity securities or

equity interest is owned, directly or indirectly, by the Company,
(ii) any entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company, (iii) any of Martin Cohen, his spouse, his siblings and their spouses, and descendants of any of them (whether natural or adopted) (collectively, the "Cohen Group"), (iv) any of Robert Steers, his spouse, his siblings and their spouses, and descendants of any of them (whether natural or adopted) (collectively, the "Steers Group"), and (v) any trust established and maintained primarily for the benefit of any member of the Cohen Group and/or Steers Group or any entity controlled by any member of the Cohen Group and/or Steers Group (a "Cohen/Steers Entity").

(m) "Person" shall mean a "person", as such term is used for purposes of Section 13(d) or 14(d) of the Act (or any successor section thereto).

(n) "Plan" shall mean the Cohen & Steers, Inc. 2004 Annual Incentive Plan, as set forth herein and as may be amended from time to time.

(o) "Share" shall mean a share of common stock of the Company.

(p) "Subsidiary" shall mean a subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section thereto).

3. Administration

The Plan shall be administered and interpreted by the Committee; provided that, to the extent Section 162(m) of the Code is applicable to the Company and the Plan, in no event shall the Plan be interpreted in a manner which would cause any award intended to be qualified as performance-based compensation under Section 162(m) of the Code to fail to so qualify. The Committee shall establish the performance objectives for any Performance Period in accordance with Section 4 and certify whether and to what extent such performance objectives have been obtained. Any determination made by the Committee under the Plan shall be final and conclusive. The Committee may employ such legal counsel, consultants and agents (including counsel or agents who are employees of the Company or an Affiliate) as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant or agent and any computation received from such consultant or agent. All expenses incurred in the administration of the Plan, including, without limitation, for the engagement of any counsel, consultant or agent, shall be paid by the Company. No member or former member of the Board or the Committee shall be liable for any act, omission, interpretation, construction or determination made in connection with the Plan other than as a result of such individual's willful misconduct. The Committee may delegate its authority under this Plan; provided that, to the extent Section 162(m) of the Code is applicable to the Company and the Plan, the Committee shall in no event delegate its authority with respect to the compensation of the Chief Executive Officer of the Company, the four most highly compensated executive officers (as determined under Section 162(m) of the Code and regulations thereunder) of the Company and any other individual whose compensation the Board or Committee reasonably believes may become subject to Section 162(m) of the Code.

4. Bonuses

(a) Performance Criteria. Within 90 days after each Performance Period begins (or such other date as may be required or permitted under Section 162(m) of the Code), the Committee shall establish the performance objective or objectives that must be satisfied in order for a Participant to receive a bonus for such Performance Period. Any such performance objectives will be based upon the relative or comparative achievement of one or more of the following criteria, as determined by the Committee: (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per Share; (v) book value per Share; (vi) return on shareholders' equity; (vii) expense management; (viii) return on investment; (ix) improvements in capital structure; (x) profitability of an identifiable business unit or product; (xi) maintenance or improvement of profit margins; (xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow;
(xvii) working capital; (xviii) return on assets; (xix) assets under management; and (xx) total return. The foregoing criteria may relate to the Company, one or more of its Subsidiaries or one or more of its divisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine.

(b) Target Incentive Bonuses. Within 90 days after each Performance Period begins (or such other date as may be required or permitted under Section 162(m) of the Code), the Committee shall establish target incentive bonuses for each individual Participant.

(c) Maximum Amount Payable. As soon as practicable after the Performance Period ends, the Committee shall determine (i) whether and to what extent any of the performance objectives established for the relevant Performance Period under Section 4(a) have been satisfied and (ii) for each Participant who is employed by the Company or one of its Affiliates on the last day of the Performance Period for which the bonus is payable, the actual bonus to which such Participant shall be entitled, taking into consideration the extent to which the performance objectives have been met and such other factors as the Committee may deem appropriate. Any provision of this Plan notwithstanding, in no event shall any Participant receive a bonus under this Plan in respect of any fiscal year of the Company in excess of $5 million.

(d) Negative Discretion. Notwithstanding anything else contained in
Section 4(c) to the contrary, the Committee shall have the right, in its absolute discretion, (i) to reduce or eliminate the amount otherwise payable to any Participant under Section 4(c) based on individual performance or any other factors that the Committee, in its discretion, shall deem appropriate

and (ii) to establish rules or procedures that have the effect of limiting the amount payable to each Participant to an amount that is less than the maximum amount otherwise authorized under
Section 4(c).

(e) Death or Disability. If a Participant dies or becomes disabled prior to the last day of the Performance Period for which the bonus is payable, such Participant may receive an annual bonus equal to the bonus otherwise payable to such Participant based upon actual Company performance for the applicable Performance Period or, if determined by the Committee, based upon achieving targeted performance objectives, multiplied by a fraction, the numerator of which is the number of days that have elapsed during the Performance Period in which the Participant's death or disability occurs prior to and including the date of the Participant's death or disability and the denominator of which is the total number of days in the Performance Period or such other amount as the Committee may deem appropriate.

(f) Change in Control. In the event of a Change in Control, the Board
(as constituted immediately prior to the Change in Control) shall, in its sole discretion, determine whether and to what extent the performance criteria have been met or shall be deemed to have been met for the year in which the Change in Control occurs.

5. Payment

(a) In General. Except as otherwise provided hereunder, payment of any bonus amount determined under Section 4 shall be made to each Participant as soon as practicable after the Committee certifies that one or more of the applicable performance objectives have been attained or, in the case of any bonus payable under the provisions of Section 4(d), after the Committee determines the amount of any such bonus.

(b) Form of Payment. The Committee shall determine whether any bonus payable under this Plan is payable in cash, or in restricted stock, restricted stock units, stock appreciation rights or options (of equivalent value) awarded under the Cohen & Steers, Inc. 2004 Stock Incentive Plan (as amended from time to time), or any combination thereof.

6. General Provisions

(a) Effective Date. The Plan shall take effect upon the effective date of the initial public offering of the Shares (the "Effective Date"); provided that the Plan has been approved by the shareholders of the Company prior to the initial public offering. The Plan shall expire on the tenth anniversary of the Effective Date.

(b) Amendment and Termination. The Board or the Committee may at any time amend, suspend, discontinue or terminate the Plan; provided,

however, that no such amendment, suspension, discontinuance or termination shall adversely affect the rights of any Participant in respect of any calendar year which has already commenced and, to the extent Section 162(m) of the Code is applicable to the Company and the Plan, no such action shall be effective without approval by the shareholders of the Company to the extent necessary to continue to qualify the amounts payable hereunder to Covered Employees as under Section 162(m) of the Code.

(c) Designation of Beneficiary. Each Participant may designate a beneficiary or beneficiaries (which beneficiary may be an entity other than a natural Person) to receive any payments which may be made following the Participant's death. Such designation may be changed or canceled at any time without the consent of any such beneficiary. Any such designation, change or cancellation must be made in a form approved by the Committee and shall not be effective until received by the Committee. If no beneficiary has been named, or the designated beneficiary or beneficiaries shall have predeceased the Participant, the beneficiary shall be the Participant's spouse or, if no spouse survives the Participant, the Participant's estate. If a Participant designates more than one beneficiary, the rights of such beneficiaries shall be payable in equal shares, unless the Participant has designated otherwise.

(d) No Right to Continued Employment or Awards. Nothing in this Plan shall be construed as conferring upon any Participant any right to continue in the employment of the Company or any of its Affiliates. No Participant shall have any claim to be granted any award, and there is no obligation for uniformity of treatment of Participants or beneficiaries. The terms and conditions of awards and the Committee's determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not the Participants are similarly situated).

(e) No Limitation on Corporate Actions. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking any corporate action which is deemed by it to be appropriate or in its best interest, whether or not such action would have an adverse effect on any awards made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any Affiliate as a result of any such action.

(f) Nonalienation of Benefits. Except as expressly provided herein, no Participant or beneficiary shall have the power or right to transfer, anticipate, or otherwise encumber the Participant's interest under the Plan. The Company's obligations under this Plan are not assignable or transferable except to (i) a corporation which acquires all or substantially all of the Company's assets or (ii) any corporation into which the Company may be merged or consolidated. The provisions of the Plan

shall inure to the benefit of each Participant and the Participant's beneficiaries, heirs, executors, administrators or successors in interest.

(g) Withholding. A Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any payment due under this Plan or from any compensation or other amount owing to the Participant, applicable withholding taxes with respect to any payment under this Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes.

(h) Severability. If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not contained in the Plan.

(i) Governing Law. The Plan shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws.

(j) Headings. Headings are inserted in this Plan for convenience of reference only and are to be ignored in a construction of the provisions of the Plan.

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 1 to Registration Statement No. 333-114027 of Cohen & Steers, Inc. of our report dated March 17, 2004 on the consolidated financial statements of Cohen & Steers Capital Management, Inc, and subsidiaries, and to the use of our report dated May 11, 2004 on the statement of financial condition of Cohen & Steers, Inc., appearing in the Prospectus, which is part of such Registration Statement.

We also consent to the reference to us under the headings "Summary Consolidated Financial and Other Data," "Selected Consolidated Financial Data" and "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP

New York, NY
May 11, 2004

CONSENT

By signature below, the undersigned hereby consents to being named in the registration statement on Form S-1 and in all subsequent amendments and post-effective amendments or supplements thereto (the "Registration Statement") of Cohen & Steers, Inc., a Delaware corporation (the "Company"), as an individual to become a director of the Company in connection with the initial public offering of the Company's shares of common stock and to the inclusion of his biographical information in the Registration Statement.

In witness whereof, this Consent is signed and dated as of the 11th day of May, 2004.

/s/ Richard E. Bruce
----------------------------------------
By: Richard E. Bruce

CONSENT

In witness whereof, this Consent is signed and dated as of the 11th day of May, 2004.

/s/ Peter L. Rhein
------------------------------------
By: Peter L. Rhein

CONSENT

In witness whereof, this Consent is signed and dated as of the 11th day of May, 2004.

/s/ Richard P. Simon
----------------------------------------
By: Richard P. Simon

CONSENT

In witness whereof, this Consent is signed and dated as of the 10th day of May, 2004.

/s/ Edmond D. Villani
----------------------------------------
By: Edmond D. Villani

	•	Diversify Product Offerings. We have diversified our business beyond our historical strength in real estate securities to include corporate preferred securities and utility common stocks and have raised $2.4 billion in assets in these areas since 2003 . We intend to continue to expand our offerings in these security types, as well as in other high dividend yielding common stocks, by developing new proprietary open-end and closed-end mutual funds, sub-advising other firms' investment products and by offering our expertise to institutional investors.

	•	Expand Wholesaling Sales Force. We have built relationships with the major national and regional brokerage firms and have experienced success marketing and raising assets in our open-end and closed-end mutual funds. We believe these relationships will help us continue to attract assets as we launch new open-end mutual funds and, in order to further leverage these relationships, our near term plan includes adding several wholesalers to facilitate our mutual fund expansion.

	•	Pursue New Areas of Distribution. We plan to further penetrate several distribution areas, such as the international and the RIA markets. While we believe we have a strong presence in the RIA channel, the launch of new open-end mutual funds should enable us to penetrate this market further. The international arena also offers a significant opportunity to manage money for non-U.S. investors in Europe and Asia through both locally marketed collective investment vehicles and direct relationships with large institutions.

	•	Pursue Acquisitions. We selectively consider strategic acquisitions of asset management operating companies, either for cash or stock. This strategy may include “lift-outs” of teams of professionals from other asset management organizations, which may require nominal cash consideration. Our objectives include adding complementary asset management expertise to our business that provides additional growth opportunities and leverages our existing capabilities.

	-	market timing, including compliance with disclosed policies regarding market timing, monitoring of shareholder trades or investment company share flows, consistent enforcement of market timing policies and a quarterly report to the board of all waivers of market timing policies; and

	-	trading practices, including procedures by which the investment adviser satisfies its best execution obligation, uses client brokerage to obtain research and other services (soft dollar arrangements) and allocates aggregated trades among clients.

										Long-Term Compensation
										Awards				Payouts
Name and Principal Position	Year		Salary		Bonus		Other Annual Compensation(1)			Restricted Stock Awards		Securities Underwriting Options/ SARS		LTIP Payouts		All Other Compensation
			($)		($)		($)			($)		(#)		($)		($)
Martin Cohen Co-Chairman and Co-CEO(2)		2003		1,058,000		4,000,000		—			—		—		—		7,000
Robert H. Steers Co-Chairman and Co-CEO(2)		2003		1,058,000		4,000,000		68,946	(3)		—		—		—		7,000
Joseph M. Harvey President		2003		276,154		2,250,000		—			—		—		—		6,000
John J. McCombe Executive Vice President		2003		200,769		1,750,000		—			—		—		—		6,000
Adam M. Derechin Chief Operating Officer		2003		238,462		700,000		—			—		—		—		6,000

	•	restrictions on the issuance of shares of the same series or of any other class or series; and

	•	the voting rights, if any, of the holders of the series.

	•	our financial information;

	•	our history and the prospects for us and the industry in which we compete;

	•	an assessment of our management, our past and present operations, and the prospects for, and timing of, our future revenue;

	•	the present state of our development; and

	•	the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.