No. of Recommendations: 7
Missash listened to a presentation by Marty Cohen and Bob Steers at the Merrill Lynch "Banking and Financial Services" conference, conducted yesterday. Very interesting, especially regarding certain factors affecting Reits on the "macro" front.They are growing their business with these macro trend drivers in mind.....1)There is and there will continue to be a growing demand for income products; this demand is outstripping current supply.....2)There is and there will continue to be increasing securitization of real estate outside the U.S. Every major capital market now recognizes the Reit product.........Thus, CNS has bought a European firm specializing in R.E.; they have an office in Australia and just opened one in Hong Kong. They have expanded their product offerings beyond U.S. Reits. Thus, they are into global Reits, utilities, preferred stocks of R.E. and non R.E. comnpanies and have recently launched a large cap value product. They remarked that interest in and demand for international Reits is currently greater than for U.S. Reits. They currently have 20 billion dollars under management, including closed end funds, open end funds and institutional business. They have been growing AUM at a 30% compound annual growth rate, while maintaing profit margins and performance. Closed end funds presently make up 50% of AUM, but they were clear that this was just because these funds have had a marketing opportunity that they do not expect to continue. Much of their future growth will come from the open end fund arena and penetration of the institutional market to a greater extent. They have ample cash on the balance sheet and no long term debt. One word of caution to those of you who own one of their closed end funds. Apparently, some of the funds have a fee waiver burn off date, after which they will profit at the expense of the shareholder.....disclosure: Missash is a shareholder in CNS, believing they are a class act.
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