The Cohen and Steers [profile] subadvisory channel is turning around, while the mutual fund business took a $640-million hit.

That's one key message CEO Bob Steers shared Thursday morning on the New York City-based mutual fund company's fourth-quarter 2014 earnings call with analysts [see Seeking Alpha's transcript of the call]. On Wednesday, Cohen and Steers reported Q4 net income attributable to common stockholders of $0.34 per diluted share, missing by $0.14. Yet its Q4 revenue of $81.8 million beat estimates by $2 million.

Cohen and Steers ended 2014 with $53.137 billion in assets under management, including $17.131 billion in its open-end mutual funds.

Steers told analysts on the call that the "sub-advisory channel continues to show good improvement."

New outflows improved to $169 million which is the lowest quarterly outflow since the third quarter of 2011 and compares to $845 million of outflows in the prior quarter. Excluding our large Japanese sub-advisory client, Daiwa, we actually generated $588 million of net inflows during the quarter. The inflows were spread across four different investment strategies, commodities, preferred securities, global listed real estate and global listed infrastructure. Almost half of these inflows were derived from our new distribution partners in Asia. These new distribution relationship together with additional product and marketing initiatives from our existing partners will be the key to continued progress here.

In response to a question from Adam Beatty of BofA Merrill, Steers confirmed that Cohen and Steers' two new Japanese subadvisory relationships are with Kokusai and Nomura, involving infrastructure and preferred securities funds.

"So, they are selling into the same very large income oriented Japanese wealth management market place. We're just delivering through other large distributor's new and different strategies," Steers added on the call. "And we're hopeful that we'll be able to talk about additional sub-advisory relationships in Asia that are not in Japan."

Yet when John Dunn of Sidoti pressed Steers for more details on subadvisory work in Asia outside Japan, Steers stayed mum:

There are other developed markets in Asia where wealth -- well there are significant wealth management platforms. There is several actually that we're focused on in one of which we're, we made meaningful progress. We're not at the point where we can announce or say anything, but its real and again income oriented products particularly in Asia are in huge demand. And as we talked about earlier, what we're excited about is being able to offer the full range of our income oriented capabilities, real estate, infrastructure, preferred securities, MLPs and multiple wealth management markets and institutional markets throughout Asia.

Steers added that Cohen and Steers focused on larger subadvisory mandates of at least $100 million.

On the call Steers and his chief financial officer, Matt Stadler, also painted a picture of how Cohen and Steers' retail open end mutual fund business is faring. Steers refers to that channel as "wealth management" and notes that it would've been a good quarter, except for one wealth platform eliminating its allocation to real estate, which translated into a $640-million mandate loss for Cohen and Steers. So, despite gross wealth management inflows of $1.4 billion in Q4 (and record full-year gross sales of nearly $6 billion), the channel still suffered net outflows of $526 million for the quarter.

Steers later confirmed, in response to Rod Hinze of Keypoint Capital, that each of those platform changes "was strictly an asset allocation decision." 

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