Yesterday, we reported record earnings of $0.79 per share, compared with $0.61 in the prior year's quarter and $0.76 sequentially.
Revenue was a record $125.8 million for the quarter, compared with $105.8 million in the prior year's quarter and $116.6 million sequentially.
Our implied effective fee rate was 57.3 basis points in the first quarter, compared with 57 basis points in the fourth quarter.
Excluding performance fees our fourth quarter implied effective fee rate would have been 56.3 basis points.
Operating income was a record $53.2 million in the quarter, compared with $40.4 million in the prior year's quarter and $49.4 million sequentially.
Our operating margin decreased slightly to 42.3% from 42.4% last quarter.
The fourth quarter included a cumulative adjustment that reduced compensation and benefits to reflect actual incentive compensation that was paid, which increased our fourth quarter operating margin by 153 basis points.
Expenses increased to 8% compared with the fourth quarter, primarily due to higher compensation and benefits, distribution and service fees and G&A.
The compensation to revenue ratio for the first quarter was 35.5%, consistent with the guidance provided on our last call.
Our effective tax rate was 27.25% for the first quarter, in line with the guidance provided on last quarter's call.
Our firm liquidity totaled $118.8 million at quarter end, compared with $143 million last quarter.
Total assets under management was a record $87 billion at March 31, an increase of $7.1 billion or 9% from December 31.
The increase was due to net flows of $3.8 billion and market appreciation of $4 billion, partially offset by distributions of $690 million.
Advisory accounts which ended the quarter with a record $20.3 billion of assets under management, had record net inflows of $1.7 billion during the quarter.
$1.1 billion, of which were included in last quarter's pipeline.
We recorded $968 million of inflows from five new mandates and $799 million of inflows into existing accounts.
Japan subadvisory had net outflows of $204 million during the quarter, compared with net inflows of $83 million during the fourth quarter.
Subadvisory excluding Japan had net inflows of $97 million, primarily from the new Taiwanese mandate into a blended next-gen REIT digital infrastructure portfolio.
Open-end funds, which ended the quarter with a record $38.6 billion of assets under management had record net inflows of $2.2 billion during the quarter, primarily to US real estate and preferred funds.
Distributions totaled $238 million, $193 million of which was reinvested.
With respect to compensation and benefits, which includes the cost of our newly formed private real estate group that we announced earlier this week, we expect that our compensation to revenue ratio will remain at 35.5%.
We expect G&A to increase by about 9% from the $42.6 million we recorded in 2020, which is higher than where we guided to on our last call.
We expect that our effective tax rate will remain at 27.25%.
And finally, you will recall that on our last call, Bob Steers mentioned the termination of an institutional global real estate account of approximately $900 million that was expected to be withdrawn in the next quarter or two.
So markets continued their strength in the first quarter as evidenced by US and global equities being up 6.2% and 4.7% respectively.
Second, underneath the surface, the market has increasingly taken on a reflationary tone as reflected by repricing of medium-term inflation prospects and a strong performance in our more inflation sensitive investment areas, such as commodities, which were up 6.9% for the quarter and are now up 35% over the last 12 months.
Last, with a higher growth and higher inflation as the context, we saw a repricing of Fed policy expectations, which partially drove the meaningful rise in the US 10-year treasury yield, ending the quarter at around 1.7%.
That said, this flattish performance still far outpaced traditional fixed income in both income rate and total return with the Barclays Global Ag down 4.5%.
In the first quarter six of nine core strategies outperformed their benchmark, but for the last 12 months seven of nine core strategies outperformed.
As measured by AUM, 93% of our portfolios are outperforming on a one-year basis, an improvement from 84% last quarter, mostly due to our preferred portfolios.
On a three and five year basis 99% and 100% respectively are outperforming, which is marginally better than last quarter.
US and global real estate returned 8.3% and 5.8% respectively in the first quarter, both outpacing their respective equity indices.
Preferred securities returned minus 0.6% in the first quarter and we outperformed in both our core and low duration preferred strategies.
After one quarter of underperformance last year, our highly experienced and accomplished team has now outperformed the last four quarters and 10 of the last 13 quarters.
We have also been communicating to our clients for the last three to six months that interest rates were more likely to move up over time, while the 10-year has trickled down since quarter-end, our expectation is that the 10-year will move more toward 2% by the end of 2021 and 2.25% by the end of 2022.
Banks have just come off an earning season in the US where they announced their releasing nearly $10 billion in loan loss reserves, as the pandemic-related losses they had accounted for have not been realized.
The first quarter returned 3.5%, which slightly lagged global equities.
President Biden recently proposed over $2 trillion in spending and tax credits, which we see as a clear positive for listed infrastructure, tying into key themes we've highlighted over the past year.
Disappointingly, we underperformed our benchmark during Q1 and while our three-year excess return is still attractive, we have underperformed over the last 12 months, so improving our performance here is a key focus area.
I also want to mention that our real assets multi-strategy portfolio was up 6.6% in the quarter, outpacing US and global equities.
We had very good relative performance of plus 100 basis points, with strong alpha contribution from asset allocation and natural resource equities.
Number one, they're cheap and at the lowest valuations versus financial assets since 1925.
Importantly with 93% and 99% of our AUM outperforming over one and three years respectively, we are in a terrific position to retain assets and compete for new allocations which continue at a good pace.
Our AUM set a record $87 billion at quarter-end with all three of our investment vehicles setting firm records.
Starting from a record $7.5 billion of gross inflows in the first quarter, firmwide net inflows were $3.8 billion and annualized growth rate of 19%.
Open-end funds led the way on net inflows with a record $2.2 billion, driven primarily by US REITs and secondarily by preferreds.
We were awarded $460 million asset allocation model placement in US REITs from a wealth advisory firm.
Institutional advisory had record net inflows of $1.7 billion.
Subadvisory ex-Japan had net inflows of $97 million, relatively quiet, but importantly included a mandate combining two of our recently developed strategies.
For perspective, Japan subadvisory peaked in the third quarter of 2011 at 33% of our AUM, but is now just 11% of our AUM as assets have declined by 34% in Japan, while the firm's AUM and other channels has grown by 69%.
Our current won unfunded pipeline stands at $1.4 billion.
Working from last quarter's $1.8 billion pipeline, we had $1.1 billion of fundings in the quarter and won $940 million in seven new mandates and account top-ups across global real estate, infrastructure and a multi-strategy blend of US REITs and preferreds.
Our strategic rationale is to create another growth driver through private investment in the $15 trillion universe of real estate in the US that is not owned by listed REITs.
Leading the group is Jim Corl, who previously worked with us from 1997 to 2008, in his last four years as Chief Investment Officer of our listed real estate team.
Jim spent the last 11 years at Siguler Guff & Company, where he helped build and led an opportunistic real estate investment business.

Summary:
Yesterday, we reported record earnings of $0.79 per share, compared with $0.61 in the prior year's quarter and $0.76 sequentially.
The increase was due to net flows of $3.8 billion and market appreciation of $4 billion, partially offset by distributions of $690 million.
Starting from a record $7.5 billion of gross inflows in the first quarter, firmwide net inflows were $3.8 billion and annualized growth rate of 19%.