Cohen & Steers Inc., this year’s top-performing money manager, has prospered by satisfying the appetites of investors who crave higher yields.

Assets at the company, which specializes in real estate investment trusts and preferred securities, rose 17 percent to $61.5 billion in the first seven months of the year, driven by market appreciation and more than $4.5 billion in net customer deposits. The shares are up 33 percent in 2016, the best showing among 31 companies in a Bloomberg index of global money managers.

“We have been able to generate organic growth when it seems hardly anyone else in our industry can,” Robert Steers, co-founder and chief executive officer, said in an interview at the company’s headquarters in New York.

REITs and preferred shares have rallied in 2016 while offering higher yields than those available on traditional stocks and bonds. That’s put Cohen & Steers in a sweet spot among investors eager to earn income in a world of persistently low and negative interest rates.

The stock may be vulnerable to a change in the interest-rate picture. Cohen & Steers fell the most in a year Sept. 9 as bond yields rose amid speculation that the Federal Reserve is moving closer to lifting its benchmark lending rate.

Rate ‘Ding’

Rising interest rates could “ding” some of the firm’s strategies, at least temporarily, Steers acknowledged. Yet some of the firm’s other offerings, including commodities and energy, would thrive in an environment of higher rates and inflation, he said.

Most traditional active managers are struggling to hang onto money as investors, unhappy with high fees and subpar performance, turn increasingly to funds that mimic indexes. U.S. mutual and exchange-traded funds run by stock and bond pickers suffered redemptions of $131 billion this year through July, while passive funds attracted $242 billion, according to Morningstar Inc.

“It is time to acknowledge the truth,” Steers and two fellow executives wrote in the firm’s 2015 annual report. “Long-only active asset management in its current form is no longer a growth industry.”

Cohen & Steers hasn’t always been so successful. The company was started in 1986 by Steers, 63, and Martin Cohen, 67, who met as analysts at Citibank in the 1970s where they worked under Howard Marks, later the co-founder of Oaktree Capital Group LLC. The pair believed that real estate belonged in the portfolios of all institutional and individual investors and that liquid assets such as REITs were the way to make that happen.

“Our attitude was, if we build it, people will come,” Steers recalled. But few did, at least at first. By 1991 the firm managed only $500 million. It grew as REITs caught on and the co-founders added other specialties, including preferred securities, global infrastructure and commodities.

Outperforming S&P 500

The company’s oldest mutual fund, the $6 billion Cohen & Steers Realty Shares, returned more than 12 percent annualized over the past 25 years, compared with 9.2 percent for the S&P 500 Index. The fund, up 12 percent this year, has a dividend yield of 2.5 percent, superior to the payouts on the 10-year Treasury note or the S&P 500. Its performance is similar to the Vanguard REIT Index Fund over the past three and five years.

“Higher-yielding REITs are attractive in a low-yield environment,” said Alec Lucas, a Morningstar analyst who follows the real estate fund.

The attraction extends beyond the U.S. With bond yields depressed throughout the developed world, Cohen & Steers’s president and chief investment officer, Joseph Harvey, told analysts on a July conference call that investors “are scrambling for yield and we believe our strategies will continue to benefit.”

The firm pulled in $840 million during the second quarter from its subadvisory business in Japan through a partnership with Daiwa Asset Management. Most of the money went into U.S. REITs, which are popular in Japan.

The $6.8 billion Cohen & Steers Preferred Securities and Income Fund, which has a dividend yield of 5.3 percent, gathered $1.4 billion in deposits in the first seven months of 2016, data from Morningstar show. Preferred shares, considered a stock-debt hybrid, tend to appeal to income-oriented investors.

Acquisition Target

“Fixed income is in bubble land,” Steers said in the interview. “We can give you more income and better diversification.”

Cohen & Steers’s success at investing in real assets could make it a target for money managers that are struggling to grow, said Macrae Sykes, an analyst with Gabelli & Co.

“They would be an attractive acquisition candidate, because they have developed their own niche,” Sykes said in an interview.

Legg Mason Inc., a money manager that has grown through acquisitions, in 2015 bought Rare Infrastructure Ltd., a global manager specializing in infrastructure investments, and this year purchased Clarion Partners, a U.S. real estate manager.

Steers said that although the firm sometimes gets calls from potential suitors, it has chosen to stay independent. Steers owns 26 percent of the company’s shares; Cohen, chairman of the board, holds 25 percent.

“But things in our industry are changing at lightning speed,” Steers said. “Could our attitude change in the future? Sure.”

This article was provided by Bloomberg News.