Ladies and gentlemen, thank you for standing by. Welcome to the OMAM Earnings Conference Call and Webcast for the Second Quarter 2017. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] Please note that this call is being recorded, today, August 3 at 10:00 a.m. Eastern Time. I would now like to turn the meeting over to Brett Perryman, Head of Investor Relations. Please go ahead, Brett.

Thank you. Good morning, and welcome to OMAM's conference call to discuss our results for the second quarter and first half of 2017. Before we get started, I would like to note that certain comments made on this call may constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as expect, anticipate, may, intends, believes, estimate, project and other similar expressions. Such statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from these forward-looking statements. These factors include, but are not limited to, the factors described in OMAM's filings made with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K filed with the SEC on February 22, 2017, under the heading Risk Factors and our current report on Form 8-K filed with the SEC on May 15, 2017. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. We urge you not to place undue reliance on any forward-looking statements. During this call, we will discuss non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release, which is available in the Investor Relations section of our website, where you will also find the slides that we will use as part of our discussion this morning. Today's call will be led by Jim Ritchie, our Chairman and Interim Chief Executive Officer who will be joined by Aidan Riordan, Head of Affiliate Management; and Steve Belgrad, our Chief Financial Officer. I will now turn the call over to Jim.

Thank you, Brett. Good morning, everyone and thanks for joining us today. As many of you know, I've been on OMAM's Board since its IPO in 2014. I've known this team and our Affiliates for many years before that. I'll begin this call with some opening observations then turn it over to Aidan and Steve to walk through our results in greater detail. Of course, we'll then be pleased to answer any questions that you may have. Our results this quarter reflect a business that is executing well in many ways in a positive market environment. At $0.42 per share our ENI is up 40% over the second quarter of 2016. This reflects increased management fee revenue from strong markets and flows into higher fee products. It also includes increased performance fees, contribution from our investment in Landmark Partners and share repurchases over the past year. A key part of our focus over the past several years, as you are likely aware, has been to diversify our business by expanding our participation in higher fee products, particularly in global, international and emerging markets equities as well as alternative strategies. This quarter we see the benefits of this strategy as our weighted average fee rate increased and our margin expanded while net client cash flows were marginally negative $300 million for the quarter. The 53 basis point aggregate fee rate on inflows was almost 20 basis points greater than the 35 basis point fee rate on outflows. Going forward this provides $13.1 million of positive annualized revenue. I am particularly pleased with investment performance this quarter. It improved considerably and a favorable market environment for active managers. While our five-year performance has been consistently strong this quarter, that was joined by the one and three-year performance, now strategies representing 74%, 73%…

Thanks Jim and good morning everyone. On Slide 5 we provide an AUM progression and a breakdown by Affiliates. Our AUM has grown 18.3% over the past 12 months and 3.6% over the prior quarter. Our asset base is well diversified with only about 30% in U.S. equities, 22% in large cap-value and the remaining 9% in other equity strategies. Our participation in global, international and emerging market equities continues to expand and currently accounts for 44% of our AUM, up 3% year-over-year. We remained focused on continued diversification, particularly with an alternative investment category both in our collaborative organic growth initiatives as well as our new investments. Slide 6 shows a quarterly breakdown of our cash flows on an AUM and revenue basis. Within institutional client base our flows can be quite lumpy on an AUM basis, as you can see in the chart on the left. However, looking at the revenue impact chart on the right-hand side of the page, a line item on the lower portion shows a steady diversions in the fee rates among our inflows and outflows. The fee rate on inflows has exceeded that of outflows in 13 of the past 14 quarters. We've generated positive revenue flow in 10 of the past 14 quarters. Ordinarily, we expect this trend to continue over-time. On Slide 7, you can see a further breakdown of flows by asset class and here you can see clearly, that the bulk of our growth sales on both on asset and revenue basis are in higher fee global and non-U.S. equities and alternative products with fee rates above 40 basis points, while our outflows remain concentrated in U.S. equities earning a lower fee rate at about 25 basis points. Slide 8 provides a look at our investment performance, which was strong across a range of strategies this quarter. The fundamentally driven market our Affiliates' adherence to their proven investment disappoints [ph], has led the portfolio to perform as intended, with our one year out performance, bolster to 75% to 80% range. Within those results, on a revenue weighted basis, our top 10 products generated an average outperformance of approximately 210 basis points. Our one year performance increase was attributable to strong performance in many strategies, including large cap U.S., Global and International equities. The three and five-year results were fueled in part, by large cap U.S. and dividend focused strategies and global equities respectively. Looking ahead, with the volatility of 2016 largely out of our results, we view the current performance levels as more in line with what we would hope the portfolio would produce over the longer term. And now, Steve will provide additional commentary on our financial results. Steve?

Thanks Aidan and good morning. Turning to Slide 9, the second quarter of 2017 was a positive one for OMAM. As the earnings power the business and the growth potential for the rest of 2017 came clearly into focus. This quarter benefited from four key factors; as average AUM increased, fee rates expanded, alternative performance fees were generated and accretion from Landmark continued, as expected. We also saw the positive impact of our combined 11 million shares buy-back in December 2016 and May 2017, which decreased our share count by approximately 9%. The first half of 2017 sets us up for a strong year overall, as we saw market inflow driven growth in a higher fee Global/non-U.S. asset classes in alternatives. The EAFE an the emerging markets indices increased 13.8% and 18.4% respectively, in the first half, for more of the U.S. large cap value indices went up 4.7%. In addition, as I have indicated, a number of our larger strategies generated also during this period, further enhancing AUM growth beyond market levels. Finally, Landmark continues to raise attractive assets and generate cash flow, fee rate and earnings accretion. Given these trends and stable markets, it’s not unreasonable to expect that we can meet market expectations for 2017 despite head winds on the tax front, which I’ll cover shortly. Comparing Q2 17 to Q2 16, economic net income was up 28.7% quarter over quarter to $46.6 million at $0.42 per share, driven by $61.4 million or 38% increase in ENI revenue and a $14.2 million or 23% increase in ENI operating expenses. On a per share basis, ENI EPS increased by 40%, benefited by the share buybacks in December last year and May of this year. While market revenue increases and the acquisition of Landmark partially offset by out flows…

[Operator Instructions] Your first question comes from Bill Katz from Citigroup. Please go ahead. Your line is open.

Okay, thank you very much and I appreciate all the disclosure and your prepared commentary. Jim, just in terms of your sort of interim position, but also your overarching experience with the company, just sort of wondering if you could comment a little bit more in terms of the CEO search. You mentioned that you hoped everything wrapped up by year-end. So any sort of broad discussion you could offer us just to understand the type of profile that may be joining the firm?

Yes. Sure, Bill. I'll be happy to do that. As you can imagine in a company such as ours, a lot of people express interest in being the CEO. And what we need to do, of course, is rely on a - the professional search firm to kind of use robust selection criteria to call the list down to something that's manageable. We see in OMAM, the board sees in OMAM, a very strong company. We see a very good company. And we are looking for the next CEO to help to make it a great company. We believe in our growth strategy, which is articulated on Page 4, and particularly, the aligned partnership model. So we will be looking for an individual that understands and appreciates that model and as the valuable aspects of having operating autonomy exist at the Affiliate level, a long-term perspective and the profit-sharing model. But we're also looking for somebody that understands that this triangle exists within a greater industry. It doesn't exist in isolation. That industry has threats and opportunities, which we need to carefully consider and incorporate into each element of the triangle as we move the company forward. I think I can stop now, but I could probably go on all day on the subject.

Okay, and just one followup from me, and thanks for taking both questions. Just something about capital management for a moment, there are a number of moving parts as sort of I understand it. And now you're sort of kind of tossing a while a card of whether or not HNA can truly go through with their ownership. So the assumption that they could have or could not, how do you sort of think about the use of cash right now to buy back stock today that the CEO you're going to hire cease in? Sounds like you may not have a lot of deals in the near term and then get some deals done next year and whether or not there's any flex to work with OML to potentially cease the contract between HNA, just given a lot of the overhang that seems becoming from the Chinese regulators at this point in time for a non-U.S. ownership?

Those are lot of questions in that question. Let me kind of chop them up a little bit. One is what we see from Old Mutual and from HNA are two largest shareholders working together to try to bring tranche to closing. I would expect that to happen later this year. As I mentioned earlier, we have a CEO succession process in place and I would expect to have a CEO in place before the end of the year. And third, the Heitman-related cash, I think, likely comes in around the end of the year. So as to do we have sort of a lot going on between now and year-end. In that interim, we're actually not sitting around, waiting or having put our M&A activities on hold. If we all agree that NDAs are not leading indicators of deals, I will tell you that we have quite a few NDAs outstanding at this time. There is an interesting amount of deals going on in the marketplace. My observation is it - second quarter came off a bit from very high level of deals. I think it was over 40 in the first quarter. But nevertheless, it's a robust market and we have no intention of sitting it out. With a company our size, one would expect that the board would be fairly involved in M&A. We certainly were with Landmark. And I think that for the moment, the target is sort of get one-stop shopping in being able to come to the Chairman and CEO. But we've not, in any way, changed our selection criteria. I think you would have seen with Landmark that we are quality buyers. And we would seek a firm that would do the wonderful things for us going forward that Landmark is doing us today. I'll let Steve kind of weigh in because I probably forgot a question or two.

I think, Bill, just sort of carrying that perspective into a quantitative view of how much do we have to spend and what's our free cash over the next year, because obviously, we've talked a little bit. We have the earn-out from Landmark that gets paid at the beginning of 2019. We have the remainder of the DTA payment in the end of this year and into 2018. But I think, as we look at both the leveraging ability within the balance sheet, which, I said was about $150 million, as well as the net proceeds from the Heitman transaction, which, call it, $75 million, that would indicate that we can basically spend about $225 million using debt and cash to make a acquisition or potentially, with a little bit less, some portion of that could be used for stock buybacks. So I think we feel that, that size is certainly one we feel very comfortable with and certainly fits a wide range of potential partnership opportunities that we see in front of us, whether it's a majority deal or a minority-type investment. So that's what we're continuing to move forward on.

Okay, thank you.

Thanks.

Your next question comes from Craig Siegenthaler from Credit Suisse. Go ahead, your line is open.

Good morning, everyone. Just coming back to Heitman, I have a few modeling questions here. First, what is the business' underlying fee rate and what do you see as the overall impact to the ENI OpEx and management fee ratio, and also the firm's operating margin when this business starts running off? I think it will probably run off before 1Q 2018, so I'm thinking about 2018 here.

Yes, I mean, the – Craig the good news is because Heitman was equity accounted for always, you can get a pretty good feel of -- it's really just coming as one-line item within the other income line on our ENI revenue, which you can see on Page 8. And I think, we -- in other places in the press release, we say what the combined investment income is coming from our equity-accounted Affiliates, which is Heitman and ICM, so mostly Heitman. If you look on Page 13 of the press release, Table 12, you can see management fee revenue after excluding equity-accounted Affiliates, which is that 37.5 basis points compared to 38.1 basis points, including equity-accounted Affiliates. So I think you can model all that through with the information we've provided. And again, from a margin point of view, the last calculation I did is that because Heitman, again, is just coming in at as solely profit and revenue in that one-line item, removing it probably impacts the margin by about 1%. But I think the math is all there to do whatever you want to do. In fact, really the only thing you do is just take out 3% of - you got 3% of our ENI income for the first half, divide that by 0.6 and then take that out of the operating revenue line. That's probably a pretty good estimate of where things flow through.

And Steve, just to be clear on - in both the GAAP income statement and your ENI income statement, which a lot of us use for modeling, in both the statements, it's a non-operating income.

In the ENI, we reclassify investment income from the equity-accounted Affiliates into the other income line. So if you look at Table 8 of the press release, which is on Page 8, you can see a line that says other income including equity-accounted Affiliates. The difference between that line item and the other revenue line item on our GAAP income statement is basically the income from equity-accounted Affiliates.

Got it. And can I just ask one more here?

Yes, sure.

So now that Heitman is coming out of op bucket, how do you - and how do you think about the fundraising environment after we get beyond the 2 fund raisers at Landmark, the private equity fund to fund the real estate, fund to fund, like, which should sort of flows in fundraisers be driven by at that point?

I think, look, it is a, well, Landmark has - the two main products right now are real estate and private equity. They have additional products that they have in the pipeline. They also - in terms of the way we count net flows, we basically count only fee earning profit or fee earning AUM in our net flow. And so, to the extent that there are side pocket funds within Landmark that get drawn down or at Campbell that get drawn down, those will come in as well. So look, that sort of describes just one piece of the fundraising, which is the only alternative side. But we continue to have additional alternative products within other Affiliates. And I think we would anticipate growing in that area over time as well. And sorry, just one thing just to point out for the exact return on equity-accounted Affiliates, if you look at Table 19 of the press release on Page 15, you can see exactly the investment return from equity-accounted Affiliates, which as I said includes both Heitman and ICM. But the lion's share of that would obviously be Heitman if you were making that adjustment.

Your next question comes from Chris Harris from Wells Fargo. Please go ahead, your line is open.

Thanks. Can you guys talk to us a little bit as to why Heitman wants to separate from OMAM?

Sure. I think, number one, it was a -- this is a relationship that the first joining of Heitman, I think, happened almost 25 years ago. So I think there's a lot that changes over time. And part of that was the moving into relationship into this 50-50 venture, which, I think, indicated the direction of an independent-type relationship. And I think Heitman is very independent-oriented. That having been said, if you look at the value proposition that we provide to our Affiliates, part of what we built out is something -- is Global Distribution, part of it is providing capital. Heitman already had a full global franchise built out. So they have their own Global Distribution. And we're not -- it wasn't really a key add compared to what they had standalone. So really, a lot of the relationship was in terms of value add came in to sort of total investment capital. And I think their view was that, that was not necessarily the strategic reason that they had to stay. So look, I think it was in terms of questions that I know are obvious. The people would think about is, "Gee, is your value proposition to Affiliates meaningful if somebody wants to leave?" I think I can say personally, as we talk to new potential Affiliates and we have discussions about what we bring to the table and what they're looking for, that value proposition is very compelling to firms that haven't invested in their own Global Distribution or do want to see capital and co-investment capital. So I have no concern whatsoever about trying to extrapolate the Heitman decision into anything broader than their own view of what they thought was good for their company and their culture.

Okay, thank you.

Your next question comes from Michael Carrier from Bank of America Merrill Lynch. Please go ahead, your line is open.

All right, thanks a lot. Just on the flow outlook, I guess, on distribution. You've just give some of the initiatives that you guys have been working on, on the product side. And then just given the improvement that we've seen on the performance front, just wanted to get any sense on what the Affiliates and the distribution channel is seeing with clients, both maybe in the U.S. equity category, just given some of the industry headwinds there, but also on the international in the alternative product area?

Sure, happy to cover that one. With regard to our alternatives outlook, I mean, clearly, there is strong demand, ongoing demand for products that we're developing or acquiring or building with our Affiliates. And we continue to expect those to be strong. And as Steve mentioned earlier on the call, we do have a couple of initiatives that we are working on, which, we think, are aligned with the changing demand patterns with regard to clients, namely things like multi-asset class strategies or helping build out some hedge fund-type products. And so we will expect to see, over time, investments that we're making pay off in terms of flows. I would echo what Steve mentioned, where we do think there can be new product development opportunities once Landmark's existing fund products close. And then we definitely continue to see, and this is echoed through our - through what we see from a Global Distribution pipeline, the ongoing trends for global non-U.S. and international products, and we do have capacity that we built up in certain of our Affiliates that can generate some growth there. Naturally, the U.S. equity markets do have some secular pressure. But we have exposures to more differentiated products. I would be tempered in terms of how we think about that. But in the main, we've got capacity and positions that can generate flow. And you should expect us to work continually to develop new products with our Affiliates, leveraging both our distribution as well as our Seed Capital.

Right. That's helpful and then Steve, maybe just on performance fees. So you had a strong quarter. You mentioned on one of the alternative products, when we're looking at third quarter, fourth quarter just maybe relative to past years, any color in terms of how some of the products that you produced performance fees are performing? Or any shift in terms of products that have performance fees even if they haven't in the past?

Yes. I mean, the - so first, just a little bit of color on this $10 million alternative fee. This is an ongoing product. So it doesn't represent a liquidation of a fund or anything like that. It's a fund that pays performance fees every second quarter. At the same time, when I look at the level of performance that generated this fee, it was an unusually good year. So as you're thinking about into 2018, I would definitely not put anywhere near like $10 million coming in into 2018. In terms of the rest of the business and the rest of the year, we continue to have the challenge of the effectively management fee rebates on some of the sub-advised accounts, which continue to run at an annual rate of about $9 million, $10 million. And so whatever we're generating on the positive side first has to offset that. We - looking at what has generated performance fees in the past, I would say that I'm not expecting a huge positive performance fee quarter in the fourth quarter. I think it would be sort of moderate because we have to overcome this negative performance fee. And some of the products have - at least one product, in particular, that has generated fees in the past is not over its high watermark yet. So I think main products that we look to is performance in the emerging markets side for performance fees, that continues to be a strong performance area for us. But overall, when I think about what has to get generated to offset that $5 million of negative fees in the second half, I sort of expect something to be sort of marginally positive, hopefully, but not a huge driver.

All right, thanks a lot.

Sure.

Your next question comes from Glenn Schorr from Evercore. Please go ahead, your line is open.

Hi, this is Kaimon Chung instead of Glenn Schorr. Most of my questions have been asked and answered, but I just have one. So I heard your comments about hoping to name a new CEO by the end of the year and the Board involvement in potential acquisitions. So I just want to be clear. Do you think you could still close on the deal before naming a new CEO?

Yes, this is Jim. I mean, I do think we can close on a deal before naming a new CEO. I do think, however, it does take some time to work through the process of making an acquisition, due diligence, contracting and so forth. So I'm - I don't think you should assume that we have anything that is eminently closable in the next few months.

Just to sort of make sure we're using the right definition, when you say close on a transaction, you mean, let's say, you mean announce a transaction because obviously, because closing will take sort of four months beyond announcement. See, I mean look, it really does depend on, it clearly is tougher to have one more item that you have to get a potential partner comfortable with when you don't have the CEO name. But look, it certainly is not - it's certainly not out of the realm and it's certainly something that we hope could be achievable. But it certainly is more challenging.

And just to echo the comments made, we're not making any changes at all to our outreach. In fact, you've seen an increase in outreach and meetings that we're taking with parties in this active market.

Because at the end of the day, as Jim said, when we look at the criteria and the strategy, the board is very, very clear that acquisitions are a core part of the growth strategy. And so I think we can give a lot of comfort to anybody that we were going to talk to that, while there will obviously be a new CEO that will have their own mark on the company over time, the fundamental strategy of the way we work with our Affiliates and the focus on growing and diversifying the franchise with platform businesses is not one that the board is looking to change. They're very comfortable with it.

Okay, thank you.

Your next question comes from Kenneth Lee from RBC Capital Markets. Please go ahead, your line is open.

Hi, thanks for taking my question. I just had a question on the U.K. tax legislation. I just want to make sure that my understanding is correct. It sounds like there's going to be some impact to the current intercompany debt arrangement. And if so, is there any kind of impact to the U.K. statutory rate on interest income and, consequently, your appetite to do potential M&A?

Yes. No, it actually I mean, what it effectively is, is that what had been sort of intercompany interest in the U.S. and revenue in the U.K. previously hadn't been taxed in the U.K. At the same time, we had about $27 million of third-party interest and U.K. expenses that we didn't have any revenue to deduct against. So what we have right now is a structure where if it all came into play, we would have to pay taxes on our net interest revenue in the U.K., which will be about $50 million at a 19% statutory rate in the U.K. That statutory rate in the U.K. is scheduled to come down by 2020 to 17%. Likewise, as I said, what we're paying taxes on is a combination of revenue coming from intercompany interest net of third-party interest expense. If we made an acquisition, even though we might marginally increase our level of revenue - of intercompany interest revenue, the larger impact would be financing that with debt. And so in fact, as we made an acquisition and increased our level of external debt and external interest, the impact of that U.K. tax increase will actually go down. So if we had another $5 million of interest expense, that would basically mean that you had $1 million - the $10 million was now worth $9 million of impact. So it actually is helpful to us to have more leverage on the balance sheet.

Okay. So still a benefit then. That sounds like a lot. And just one more question. In terms of the multi-asset product, you mentioned there's some potential new products down the pipeline. Just want to get your outlook on -- overall, in terms of the multi-asset products. And would it be fair to say there's a divergence in flow trends between, like -- on the retail side versus the institutional side for multi-asset products? Thanks.

Sure. I think our view, and it's reasonably clear on the market, is that this is a large marketplace that is generating quite high growth. And we think we've got a product in place that will be suitable for that demand. I can't say that I've got the different growth rates between institutional and retail off the top of my head. But there's demand on both ends of the spectrum, for sure. And so this is one that we expect will be an important growth opportunity for us going forward. And clearly, to the extent that we ever get access to retail-oriented distribution, there will be an outlet for a product like that and a market there.

Great, thank you very much.

Thanks.

Your next question comes from Patrick Davitt from Autonomous Research. Please go ahead, your line is open.

Hey, good morning, thanks. On the sub-advised account management fee rebate, is there something you can point us to, to maybe better track those products' progress? Is it getting out of the hole or is it, you kind of sound like it might be a lost cause to try to do that at this point?

Yes, I think it's difficult because it is a - we actually are one of the number of sub-advisers on those accounts, so it's hard to track exactly what our performance is relative to the index. It is a three-year rolling calculation. But it's - I think our intention would be to sort of keep you and others updated on roughly where it stands. And right now, it's in that sort of $9 million to $10 million range. And if it improves, we'll certainly let people know. But given that it's a three-year rolling fee, it's not like it's going to sort of jump and go from sort of $10 million to $5 million in one quarter, or it's unlikely to.

So there's not, like, a period of really bad performance you see rolling off of that cancellation or anything.

No. See, the challenge is it actually is - I think, as we've indicated before, most of it comes in a product that's benchmarked from the mutual fund point of view and from our own internal perspectives against the Russell 1000 value index. Yet, the performance fee is calculated against MSCI Prime 750, which - so even though that product is actually outperforming, it's stated benchmark of the Russell 1000 value. It actually - you've actually had the Russell 1000 value underperforming the MSCI Prime. And so it's that - this is sort of, again, a bit of a legacy choice of what the right performance fee benchmark would be. And unfortunately, over the last few years, that performance fee has, in general, outperformed - that performance fee benchmark of the MSCI Prime 750 has significantly outperformed the Russell 1000 value over a 3-year basis. The MSCI Prime has outperformed the Russell 1000 value by about 200 basis points. And so even though our own performance is fine against the Russell 1000 value, that different between the two benchmarks is it hurts the purposes of the performance fee.

Okay, that makes sense. And then just a quick follow-up on something you said earlier. You mentioned the Heitman carry of $20 million. Were you suggesting you're keeping that post close or not?

Sorry. It's not carry. That's a combination of our co-investment and we get - as a result of our co-investment, we get some carry on the funds. The total is approximately $20 million. It really is our choice. We could keep it or we could sell it. It runs off over the next, say, three to five years. And I think, really - it becomes really a financing question of would we rather take a bit of a haircut and have the cash to invest or do we just keep it outstanding and let it run off over time.

Thank you.

Sure.

Your next question comes from Andrew Disdier from Sandler O'Neill. Please go ahead, your line is open.

Hey thanks, good morning everyone. So first on Heitman, appreciate the stats on ENI and AUM. And from what I can see, it looks like they have two P/E funds in the market right now. One has a number of predecessor of funds and the other looks like it could be a new product. So I guess, one, does that mean the reason in, say, last 12 months' fee earning flow contributions or net flow contributions were relatively flat? And then two, you mentioned the 33% real estate exposures through Landmark, is that a comfortable level - is that a level you're comfortable with as far as real estate? And should we anticipate a different asset class, maybe on the M&A front going forward?

Yes, let me take the second part earlier. Look, I think real estate continues to be an attractive asset class that we would want to be invested in. And in fact, one of the areas, as we look at Heitman was, we, in fact, sort of wanted more real estate exposure than that sort of 3% to 5% contribution. Yet at the same time, obviously, when you have a relationship with the real estate manager, it's not one of those things that you could have sort of two primary real estate managers. And so in a way, it is an asset class we like. We obviously like the Heitman guys. But there are certainly other managers out there that may have their business position in a way where we can actually add more value from what we're providing as a value proposition with Global Distribution and capital and that sort of thing. And I think having that blank sheet to go back and get into that market, where before we just weren't seeing deals because we had the Heitman relationship, will give us the opportunity to continue to expand in that area over time. So I think that's the - that certainly is the intention and it certainly continues to fit with what we are looking for. In terms of Heitman's contribution to flows, I think what we had indicated at one point is that basically, over the last couple of years, I think they were really sort of neutral to both asset flows and revenue flows. At least in 2016, I think that was the case. I don't have the number off the top of my head for '17. Look, the difference between there - that 3% this year and the 5% last year is a little bit of that, some good performance fees last year and they're also making a little bit more expense investments in their business this year. But look, as we think about from a dilutive point of view, from a contribution point of view, that sort of 3% to 5% range was - I think reflects the outside scope of the dilutive impact if we did nothing with the proceeds. And clearly, our view is that when you reinvest those proceeds, you'll clearly be able to really not have any financial impact from this deal. And we'll just go forward strategically to sort of expand out the real estate strategy over time.

Got it. That helps. And then focusing on Landmark, it looked like a very strong fundraising quarter. Just taking the change, that $1.2 billion, looks like that's the best quarter since they'd been online. Just given the strong backdrop for secondary funds, I mean, do you think that the Landmark funds, they could kind of hit fee earning AUM earlier than potentially the 1Q 2018 you'd alluded to in the past?

Well, just to - in terms of, I think we've talked about the way that those funds operate and the nice thing about them is that the fees, regardless of when the actual commitment comes in, the fees are earned going back to the first close of the funds, so back to December of 2016. So regardless of whether funds are raised in third quarter or fourth quarter or first quarter, from a revenue point of view, it ultimately will be the same. It just relates a little bit to the timing exercise of when it comes in. It's not a situation like a normal long-only separate account, where you begin earning fees till the client signs up because clients benefit from a fund from the very start of it and all the investments to go in. It's typical to have - within private equity overall, as Jim will comment, it's typical that you pay fees and get the benefits of a fund, regardless of when - which close you'd come in at. It's as if you came in at the first close.

Sure, yep just trying to get a feel for organic growth timing, but appreciate the color, thanks.

Sure.

This concludes our question-and-answer session. I'd like to turn the conference call back over to Jim Ritchie.