Final CNS AR 2020 - Flipbook - Page 77
COHEN & STEERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest Entity (VIE) model or the Voting Interest Entity (VOE) model. In performing this analysis, all of the Company’s
management fees are presumed to be commensurate and at market and are therefore not considered variable interests.
A VIE is an entity in which either (i) the equity investment at risk is not sufficient to permit the entity to finance its
own activities without additional financial support or (ii) the group of holders of the equity investment at risk lack certain
characteristics of a controlling financial interest. The primary beneficiary is the entity that has (i) the power to direct the
activities of the VIE that most significantly affect its performance, and (ii) the obligation to absorb losses of the entity or the
right to receive benefits from the entity that could potentially be significant to the VIE. Investments and redemptions or
amendments to the governing documents of the respective entities could affect an entity's status as a VIE or the determination
of the primary beneficiary. The Company assesses whether it is the primary beneficiary of any VIEs identified by evaluating
its economic interests in the entity held either directly by the Company and its affiliates or indirectly through employees.
VIEs for which the Company is deemed to be the primary beneficiary are consolidated.
Investments in Company-sponsored funds that are determined to be VOEs are consolidated when the Company’s
ownership interest is greater than 50% of the outstanding voting interests of the fund or when the Company is the general
partner of the fund and the limited partners do not have substantive kick-out or participating rights in the fund.
The Company records noncontrolling interests in consolidated Company-sponsored funds for which the Company’s
ownership is less than 100%.
Cash and Cash Equivalents—Cash and cash equivalents are on deposit with several highly rated financial institutions
and include short-term, highly-liquid investments, which are readily convertible into cash and have original maturities of
three months or less.
Due from/to Brokers—The Company, including the consolidated Company-sponsored funds, may transact with brokers
for certain investment activities. The clearing and custody operations for these investment activities are performed pursuant
to contractual agreements. The due from/to brokers balance represents cash and/or cash collateral balances at brokers/
custodians and/or receivables and payables for unsettled securities transactions with brokers.
Investments—Management of the Company determines the appropriate classification of its investments at the time of
purchase and re-evaluates such determination no less than on a quarterly basis. At December 31, 2020, the Company's
investments were comprised of the following:
• Equity investments at fair value, which generally represent equity securities held within the consolidated
Company-sponsored funds, individual equity securities held directly for the purposes of establishing
performance track records and seed investments in Company-sponsored open-end funds where the Company
has neither control nor the ability to exercise significant influence.
• Trading investments, which generally represent debt securities held within the consolidated Companysponsored funds and individual debt securities held directly for the purposes of establishing performance
• Held-to-maturity investments, which generally represent corporate investments in U.S. Treasury securities
recorded at amortized cost. Under the CECL model, any expected credit losses are recognized as an
allowance, which represents an adjustment to the amortized costs basis. The Company did not record any
provision for credit losses on these securities during the year ended December 31, 2020.
• Equity method investments, which generally represent seed investments in Company-sponsored funds in
which the Company owns between 20-50% of the outstanding voting interests or when it is determined that
the Company is able to exercise significant influence but not control over the investments. When using the
equity method, the Company recognizes its respective share of net income or loss for the period which is
recorded as gain (loss) from investments—net in the Company's consolidated statements of operations.
Realized and unrealized gains and losses on equity investments at fair value, trading investments and equity method
investments are recorded in gain (loss) from investments—net in the Company's consolidated statements of operations.