Yesterday, we reported record earnings of $1.24 per share compared with $0.76 in the prior year's quarter and $1.06 sequentially.
Revenue was a record $159.7 million for the quarter compared with $116.6 million in the prior year's quarter and $154.3 million sequentially.
Our implied effective fee rate was 58.1 basis points in the fourth quarter compared with 57.5 basis points in the third quarter.
Excluding performance fees, our fourth quarter implied effective fee rate would have been 57 basis points, and our third quarter implied effective fee rate would have been 57.3 basis points.
Operating income was a record $82.6 million in the quarter compared with $49.4 million in the prior year's quarter and $70.4 million sequentially.
Our operating margin increased to a record 51.7% from 45.6% last quarter, primarily due to the cumulative adjustment mentioned a moment ago, which reduced compensation and benefits to reflect actual amounts to be paid.
Expenses decreased 8.1% when compared with the third quarter as lower compensation and benefits was partially offset by higher G&A.
The compensation-to-revenue ratio, which included the cumulative adjustment was 26.16% for the quarter.
For the year, the compensation-to-revenue ratio was 32.22%.
Our effective tax rate, which was 25.36% for the quarter, included a cumulative adjustment to bring the rate to 26.15% for the year.
Our firm liquidity totaled $248.2 million at quarter-end, compared with $241 million last quarter.
Firm liquidity as of December 31 reflected the payment of a special cash dividend in December of $60.3 million or $1.25 per share.
Over the past 12 years, we have paid a total of $15.25 per share in special dividends, and we continue to be debt-free.
Assets under management totaled a record $106.6 billion at December 31, an increase of $9.4 billion or 10% from September 30.
The increase was due to net inflows of $1.8 billion and market appreciation of $9.1 billion, partially offset by distributions of $1.6 billion.
We intend to balance anticipated revenue growth from year-end assets under management that exceeded our full-year assets under management by about 13%.
As a result, we expect that our compensation-to-revenue ratio will increase to 33.75% and from the 32.22% recorded in 2021.
Continuing with the theme of investing in our business, we expect G&A to increase 10% to 15% from the $47.2 million we recorded in 2021.
We expect that our effective tax rate will remain at 26.15% in 2022.
And finally, you will recall that a year ago, we noted that we were anticipating the redemption of $1 billion global real estate institutional account in 2021.
Our largest asset class, U.S. REITs, was the best performing sector in the S&P, returning over 16% in the quarter.
For the full year, our asset classes performed well, with U.S. REITs up 41%, global real estate up 26%, listed infrastructure up 15%, resource equities up 24%, and preferred is up nearly 3%.
With the last reading at 7%, CPI is currently at the largest gap to the federal funds rate in our professional lifetimes.
We believe inflation could stabilize in the high 2% ZIP code or 100 basis points higher than the pre-pandemic trend line.
For the last 12 months, nine of nine core strategies outperformed.
Measured by AUM, 99% of our portfolios are outperforming benchmarks on a one-year basis compared with 79% last quarter.
The improvement was attributable primarily to global real estate, which improved from 25% outperforming in the third quarter to 95% outperforming as of year-end.
For both three and five years, 100% of AUM are outperforming.
In light of the inflation situation, I'll kick off our asset class review by highlighting our multi-strategy real assets portfolio, the benchmark for which returned 21% in 2021.
We outperformed the benchmark by 340 basis points for the year, which included outperformance in all five asset class sleeves, as well as asset allocation alpha by our portfolio manager, Vince Childers.
Valuations of these listed real assets are as cheap as they've been to equities in 20 years.
Meantime, the beta to equities is just 0.6 times.
As mentioned, global real estate returned 26% with significant dispersion by region.
The U.S. returned 41%, Europe returned 9% and Asia returned 4%.
Globally, these companies' cash flows should accelerate to an average of 12% over the next few years compared with their long-term growth rate of 5%.
U.S. REIT returns have averaged 10.8% during periods of rising bond yields accompanied by rising growth, while in periods of rising yields with declining growth, returns have been flat.
Comparatively, private real estate unleveraged returns have averaged 10.7% in high-inflation environments versus 6.5% in low-inflation environments.
The asset class returned 15% in 2021, compared with 22% for global equities lagging for the second year.
Sector dispersion was wide with over 40 percentage points best to worst.
Our portfolios are positioned defensively against increases in interest rates with duration of 2.4 years in our low-duration strategy and 4.0 years in our core preferred strategy.
By example, in the private market, dry powder and private equity funds is at $390 billion for real estate and $300 billion for infrastructure.
It marked our 35th anniversary and 17 years as a public company.
As Matt discussed, assets under management increased to a record $106 billion at year-end, driven by our 10th consecutive quarter of firmwide net inflows.
Open-end fund and advisory gross sales increased 11% and 13% to $19.5 billion and $4.9 billion, respectively.
Most notably, open-end fund net inflows rose 62% year over year to a record $8.8 billion, while the advisory channel also registered a record $1.9 billion of net inflows.
Firmwide organic growth was 12% for the year.
Net inflows in that channel were a record $2.5 billion for a 22% organic growth rate and represented our 12th consecutive quarter of positive net flows.
In addition, DCIO open-end fund net inflows were a record $476 million and marked the 14th consecutive quarter of net inflows.
DCIO assets in our open-end funds ended the year at a record $6 billion.
Our non-U.S. open-end funds registered net inflows of $45 million in the quarter and a record $202 million for the full year.
For the year, the powerful combination of strong absolute and relative performance derived from our unique and diversifying asset classes resulted in 25% organic growth in wealth and industry-leading market share as well.
Our U.S. global real estate and preferred securities funds achieved market share records of 33%, 12%, and 46%, respectively, against other comparable actively managed funds.
2021 was a record year for the institutional advisory channel as well with $1.9 billion of net inflows.
In the quarter, the advisory channel had net outflows of $456 million.
These outflows were driven by a single and unexpected client termination of $400 million.
However, not included in the headline advisory flow results was $564 million of net new mandates from institutional clients, which were invested into our open-end funds.
The pipeline of awarded but unfunded mandates has increased dramatically $900 million in September to $2.1 billion, another new record.
New awards in the quarter totaled $1.3 billion and included our first relationship in Africa, a $300 million global listed infrastructure mandate.
Net outflows in Japan were $242 million and distributions totaled $276 million.
Sub-advisory net outflows ex Japan in the quarter were a modest $56 million.
It bears repeating that virtually 100% of our AUMs are outperforming their benchmarks for the one-, three-, five- and 10-year time periods, a truly remarkable accomplishment.

Summary:
Yesterday, we reported record earnings of $1.24 per share compared with $0.76 in the prior year's quarter and $1.06 sequentially.
Assets under management totaled a record $106.6 billion at December 31, an increase of $9.4 billion or 10% from September 30.