Good morning, ladies and gentlemen, thank you for standing by and welcome to the Affiliated Managers Group Q4 2007 Results Conference Call. During today's presentation all parties will be in a listen-only mode. And following the presentation, the conference will be opened for questions. [Operator Instructions]. This conference is being recorded today Wednesday, January 30th of 2008. Now I'd like to turn the conference over to Ms. Brett Perryman, Vice President of Corporate Communications. Please go ahead, ma'am.

Thank you, and thank you all for joining Affiliated Managers Group to discuss our results for the fourth quarter and full year 2007. By now, you should have received the press release we issued regarding our earnings. However, if anyone needs a copy, please contact us at 617-747-3300 and we'll fax you one immediately following the call. In this conference call, certain matters discussed will constitute forward-looking statements. Actual results could differ materially from those projected due to a number of factors, including but not limited to those referenced in the company's Form 10-K and other filings we make with the SEC from time to time. We assume no obligation to update any forward-looking statements made during this call. In this call, the investment performance of certain products will be discussed and the benchmarks are deemed by AMG to be the appropriate benchmark. AMG will provide on its website a replay of the call and a copy of our announcement of our results for this quarter as well as the reconciliation of any non-GAAP financial projection to the most directly comparable GAAP financial measure. You can access this information at www.amg.com. With us on the line to discuss the company's results for the quarter and year-to-date are Sean Healey, President and Chief Executive Officer; Nate Dalton, Executive Vice President in Charge of Affiliate Development; and Darrell Crate, Executive Vice President and Chief Financial Officer. And now I would like to turn over the call to Sean Healey, Sean?

Thanks Brett. Good morning everyone and thank you for joining. In a challenging market environment we were pleased to report strong earnings growth for both the quarter and the full year. Cash EPS was $2.15 for the fourth quarter, a 20% increase over the same period last year and for the full year cash EPS was $6.65 that's a 17% increase year-over-year. While we generated good earnings growth in the fourth quarter, we were disappointed with outflows of $7 billion and what was a tough quarter for quantitative strategy. And as Nate will discuss in a moment this figure is also a bit misleading and that almost half of these flows were related to a portfolio restructuring by one client. But more importantly we feel very good about how our business is positioned for 2008 as you will hear in our earnings guidance. We are confident in our ability to continue to generate strong earnings growth going forward. Turning to review of the quarter with a look ahead to 2008. As you know, we have substantial exposure to global and international equities which account for over 30% of AMG's EBITDA. We had strong results in most of our global and international products in 2007 and two of our largest managers, Tweedy Brown and Third Avenue just reopened their highly regarded international equity products. We believe international equities will continue to benefit from strong long term secular growth trends regardless of short term market volatility. And that AMG's broad exposure to this product area, offers a potential for meaningful earnings growth going forward. We also are well positioned in 2008 for strong results from our growth equity managers especially if the trend favoring growth continues. Growth equity is one of the largest areas of our business in terms of EBITDA contribution…

Thanks, Sean. Good morning everyone. Before I begin a more detailed discussion of our operating results, I would like to add some general themes. First we had a good quarter from our growth equity mangers, Friess, Times Square, Renaissance, Frontier really across the board and we see significant opportunities to drive the growth of these parts looking forward. We also had good investment performance from a number of our global and international products. In terms of flows in this category however several of our products were close to be not able to capture flow there which was strong across the industry. Looking forward we are very optimistic that Tweedy Browne and Third Avenue reopened products at the end of the year and other Affiliates launched international product. I will speak more about this in a minute. Now as Sean noted quantitative product, which for us includes product at a number of Affiliates to both the equities and alternative areas had mix performance and challenging flows, which I will detail in our segment breakdown. Focusing on alternatives broadly we had mix performance across both Quant and fundamental processes last quarter and even though the contribution from performances was meaningful, it was nowhere near what the potential is. Looking forward, we are especially optimistic about the increasing breadth of our alternative product set with two additional Affiliates BlueMountain and ValueAct being added to our already very diverse set of affiliates managing alternative key products. Now moving to the channel discussion, starting with the institutional channel we had outflows of $6.4 billion for the quarter. While we are not happy with the flows in institutional channel, the headline number overstates the impact on our earnings. As far as the biggest component of outflows in the quarter was one client restructuring our fund. While…

Thanks Nate. Good morning everyone, as you saw in the release we reported cash earnings per share of $2.15 for the fourth quarter and $6.65 for the full year 2007. GAAP earnings per share were $1.53 for the quarter and $4.58 for the year. And net client cash flows for the quarter resulted in an approximately $5 million decrease in EBITDA contribution for the quarter. In spite of challenging market environment the quantitative managers in the last five months of the year, performance fees made a material contribution to our earnings adding $0.63 to the fourth quarter which represents approximately 10% of total earnings for the year. The ratio of our of our EBITDA contribution to end of period assets under management was about 21 basis points in the fourth quarter reflecting the fourth quarter recognition of most of our performance for your earnings. We expect this ratio to normalize to 16.7 basis points for the first quarter of 2008 which is higher than the third quarter recognizing the low fee outflows in the quarter. Holding company expenses were $14 million for the quarter, we expect holding company expenses in 2008 to be approximately $17 million per quarter as we continue to build our global distribution platform and incorporate additional non-cash charges related to equity compensation. Our tax rate was 37% for the quarter and we expected to remain at this level through 2008. Our cash tax rate was 28.6% for the fourth quarter reflecting the fourth quarter increase in earnings related to performance fee realization. We expect this rate to decrease to about 17.5% in the first quarter trailing down by the tax benefits related to our new investment activity last quarter. Intangible related deferred taxes were $7.9 million for the fourth quarter and will increase to $9.5 million…

Thank you sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. And our first question is from the line of William Katz with Buckingham Research. Please go ahead.

Okay. Thank you very much. And... just want to sort of start with Darrell where you left off on the guidance and I guess not that surprising given what's been happening in the marketplace since but nevertheless somewhat eye opening. So, how do you balance with that as the backdrop? How do you balance more deals versus where the stock is trading right now on implied earnings and it just seems like the market has sharply already discounted this outcome but where do you get the better bank for the buck right now?

Well, I... as we looked to 2008, we feel very optimistic about our growth prospects. And what I tried to outline in our prepared remarks is that we prepared our balance sheet, so that we now have a billion dollars of capacity and quite frankly, an environment that is very attractive for us to make new investments. New investments that enhance the diversity of our existing portfolio and just under pace our strong investments to make for shareholders. So as we look forward, as you know we don't include new investments activity in our guidance range and so, any expectation for the execution on the robust pipeline would be incremental to the range that we shared. So as we said today, one you can see in our guidance range, we are very comfortable, would be earnings power that our business has in 2008 as compared to 2007 and then you add to that the opportunities of new investments, and if they also said with regards to performance fees we have made a conservative estimate as we always do, for the amount of performance fees that would be included in our earnings, but that opportunity has a material upside which is also not factored in to our guidance range.

Okay, second question, Dave, for Nate. I am so intrigued by your commentary that some of these global initiatives seem to be unlocking doors of opportunity for acquisition. Just sort of wondering if you could expand on where you are seeing some of those opportunities?

Yes actually Bill, its Sean. I think I will take that one. The answer is two-fold. We are seeing a significant number of opportunities to invest in non-U.S. firms. Obviously, we have a significant global and international exposure in part from non-U.S. firms like Genesis and Canadian Affiliates, but also from U.S.-based Affiliates like Tweedy and Third Avenue, but we obviously see the benefits of incremental diversification from investments in non-U.S. Affiliates in Europe, Australia, Asia. We are seeing opportunities in all of those places. And then, the additional advantage is I think what Nate was referring to in his remarks of our global distribution initiative is that the opportunity to enhance distribution and marketing in product line markets especially like Australia is very attractive than an additional selling feature to perspective Affiliates of all types whether they are U.S. based or non-U.S.

Okay. And then just in terms of flows, I was wondering if you could talk a little bit about the experience with Tweedy, Browne or Third Avenue in the past in terms of the incremental opportunity when you reopen something like you reopened on the international side? And then conversely, I was also wondering if you could talk a little bit in the institutional channel. What are you seeing for just general appetite for Quant given what seems to be just a bad year for Quant overall not just for AMG oriented Affiliates.

Sure. Well first starting on the Tweedy, Browne and Third Avenue. I think the... these are both firms with very-very long distinguished track records and I think there... let me do in two parts their track record of relative out performance as well as significant absolute performance after a period when they say we've been closed for a while but it's time to open because now we can see things are getting attractive and that track record is extraordinary. I think they have had backlogs of clients, obviously it's the best-in-class and enables to have outflows and they have backlogs of clients literally available to come into the product now. Their relative size and the pacing of that is hard to nail but those two things together give you just enormous confidence that and these are very long line of products getting lots of media attention and the opportunities that significantly grow this product is... if you not last [ph]. And then also we shouldn't forget, we're going to also launch a new product after incubating for long time. Launch a new product which has itself has a very long track record and has got very lot of key audience [ph] the worldwide dividend product and that's off to a great start getting little bit attention, getting lots of luck both on the retail side and on the institutional side. So, lots of opportunity there. In terms of moving to your second part of your question on what we're seeing from the that type of Quant. As you know we have several managers in the industry [ph] and finishing what we're seeing there in the institutional channel, we are seeing outflows as you mentioned of the credit mark. So, we also seeing some very large bifurcated client adding additional money in the quantitative strategies and we're seeing lots of people sort of look at how they're using quantitative strategies in the institutional space. So, I think, and our view is these are great firms and could there be whatever for little bit sure but they are great firms, great investors, the underlying premise is sound and that view is butchered by the fact that we're seeing some of these largest most sophisticated investors worldwide, we're looking at, at adding to their position.

And I would just add Bill, it was a tough five months for Quant products. I don't know, nobody knows whether it's going to be a tough year for Quant products, in some ways they are better positioned for out performance than ever and we certainly on a long-term basis are very happy with our exposure to those products through various Affiliates.

Okay thank you.

Thank you. Our next question comes from the line D.J. Neiman with William Blair & Company. Please go ahead. D. J. Neiman - William Blair & Company: Hi. Good morning.

Good morning D. J. D. J. Neiman - William Blair & Company: I was wondering if you guys could provide a few more comments on the performance fees outlook for '08, I mean it doesn't seem to me like this has come down that much relative to kind of expectations coming into the quarter. And I was wondering if you could try give what is the AUM base that can generate performance fees now.

Sure D. J. and you are just right, which is our 2008 guidance for performance fees is roughly similar to the guidance that we have given in the past. What has changed as compared to 2007 is the total amount of assets under management as that have exposure to performance fees and that number today is approximately $45 billion, $25 billion of that is in hedge product and then other $20 billion is in long only mandates that have a performance fee components. And as you can see that $45 billion is about 15% of our total assets under management and as you can see in our guidance we are saying that total earnings performance fee products should contribute about 14%. So we are taking a pretty conservative view because again if you believe in the performance of affiliates and how these contracts are structured and generally performance fee arrangements can be quite profitable in an environment of strong performance. So as we look at the total AUM that's derived across a whole series of affiliates with AQR, First Quadrant, BlueMountain, ValueAct, Genesis, Third Avenue. All having over a billion dollars of performance fee exposure and then eight other affiliates that total about $5 billion of that exposure. That also have generated performance fees in 2007 and we can have an expectation in 2008 that's not at all unreasonable. And I just... often just take a moment to run through some very simple math which is if you look at that $45 billion and imagine that all of those assets outperform either the benchmark that they must exceed or just absolute performance which is quite frankly the way many of these contracts are structured. Well that 4% out performance can lead you to a $1.8 billion and in performance and…

Yes, I would just underscore that. On a long term basis, if we are assuming lets say a dollar of earnings per share from performance fee products this year, the opportunity for incremental performance fees above that is very substantial. Another dollar or even more on top of that and that's every year, and our exposure is growing and becoming more diverse. The other thing I would say is... and I think folks are aware of this but, just to highlight the point. When we make our investments in these alternative firms, the last two that I mentioned BlueMountain and ValueAct and obviously AQR and I have indicated that we see ongoing opportunities with them to make investments in other high quality alternative firms; when we make these investments, we structure in and it varies from firm to firm. But we structure in a level of guarantee of the performances and so in the dollar that we are giving you a large portion of that, is actually guaranteed. So not at risk and in fact more certain, more stable than asset bases. That's not entirety but it's a big part of that and so we feel that we have been very conservative in the amount of performance fees that we have included in our earnings estimate and have substantial upside opportunity. Not just this year but on an ongoing basis.

And may be just evidence a little more thinking about how we model it, given as you think about what our guarantee is and when you think about what we have included in our guidance, if you were to strip away, the earned performance stay and just include the guarantee in our guidance, you would get roughly close to the bottom end of our guidance range. D. J. Neiman - William Blair & Company: Okay, okay that's very helpful. Just a couple more quick ones on that I mean. So thinking about what percentage of that $45 billion is underwater right now. I mean that was one of the concerns coming in to the quarter AQR, coming in to the 08 with AQR being under water. I mean does that... has that changed since year end? Could you peg X percent of that is under water right now?

I will let Nate speak to the specifics at the Affiliates but I would say AQR was a contributor as you can certainly see in the earnings to performance fees in the fourth quarter. So Nate looking forward.

Sure. And let me add. Just to echo that point which is AQR is a broad diverse range of products and last year some up and some not but they were they contributed to us. In terms of looking forward at about the end of the year roughly 60% of the performance fee accounts that we are talking about were sort of at or in the money and the reason I say in sort in the money is there some that are as you have seen some that are not year end pay. Right, so they were above their highlight margin and there was some not earned yet performance but there was some performances that sort of already in there that would pay at the end of the first or second or third quarter. So hopefully that gives you a sense. D. J. Neiman - William Blair & Company: Yes. No, no I could get just one more, thanks for taking my question. Just on a relative basis thinking about this $0.60 was it $0.63 of performance fees this year versus over roughly $0.30 last year. Can you just provide kind of a rough mix of where they came from on a relative basis?

I think the beauty of portfolio theory and why we really are why we are very much trying to amplify the increased diversification in the portfolio is truthfully in 2006 versus 2007 they came from different places. I mean again AQR has been a contributor, First Quadrant's been a contributor but that's all consistent with assets under management, but we've had real contribution from Genesis managing a couple of billion dollars of emerging markets. The performance fee assets ValueAct and BlueMountain now added to the stable. Particularly, BlueMountain has done very well in challenging credit markets. I think this could be a quite a year for them, Third Avenue over a billion dollars of these sorts of products as well and their performance has been very good. So all of those firms, there were 13 firms that contributed to earnings. This year a little less than a dozen last year and year before that 9 or 10. So there's a all of the firms that manage these sorts of assets are contributor to our performance fee earnings. D. J. Neiman - William Blair & Company: Great, very helpful. Thanks for taking my questions.

Thank you. Our next question comes from the line of Dan Fannon with Jefferies & Company. Please go ahead. Dan Fannon - Jefferies & Company: Good morning and thanks for taking my questions.

Hi Dan. Dan Fannon - Jefferies & Company: Can you talk about what's really driving the improved strength in your investment pipeline? You talked about it in the quarter saying you know this is somewhat of a record in terms of how you guys are looking at your pipeline and then also kind a discuss, what the expectations are from some of the people you are talking to in these types of volatile markets and in terms of valuations and toward looking at their businesses?

Sure, if you think about how markets generally work, you have a relatively large supply of investment opportunities that maybe some are countered intuitively has actually been expanding. Of course we still have numerous opportunities among succession oriented traditional firms, mostly U.S. domestic equity but there have been an increasing number of opportunities in the alternative space and among international managers. From a demand or buy side standpoint there are far fewer opportunities now for outstanding boutique asset managers to pursue transactions. The IPO market is not attractive to many managers however, appealing the market environment and currently it's obviously not a very attractive market for firms considering an IPO. And as well just changes are more broadly in the financial services sector have led to kind of beginning in the last half of last year and certainly continuing. Just a fewer competitors for us of all types. Obviously what we do is unique. And we offer a certain kind of investment, but I think in general we see a large number of opportunities, our reputation and track record has never been better. We have substantial capacity that to fund new investment and investments and we feel very optimistic about our prospects both in the near term as well as overtime. Dan Fannon - Jefferies & Company: Okay that's helpful and then talking a bit about fund flows kind of your expectations as you look out from an institutional perspective then how you think kind of building on a previous questions in terms of Quant strategies. How do you think here in terms of your guidance what you guys are assuming for fund flows for that segment?

Okay. Well first, looking at the institutional channel Broadway. We're very, very optimistic about it... we as you look at across our Affiliate group, the pipelines are generally good which coming off of a good performance quarter and years. So it's not a surprising thing here right so. If you look across our Affiliate group, most of the products are doing good development, performance, strong pipelines and you sort of got through it. We also have as I said before, have some high quality products that were closed opening and very, very optimistic about that, additional affiliates added to the mix, very strong products that are working very well in this environment. So, you look across the group we are very, very optimistic about closing institutional channels for the year. Focusing specifically on Quant, we are... I think we said, in response to other questions. We are very optimistic about these firms and think very highly of these processes over the long period of time. As you said, these products... some of these products and again some of these products, not all of these products, some of these products have been under pressure and would you be surprised to see some outflows, yes, maybe sure. But again it sounds like if you look at these firms in the way they are performing now frankly. We're optimistic that these firms will be continuing to grow and I guess one other question making that which is all of these firms are coming off of very strong growth period. So, all of these together not surprising I guess terribly to see some outflows in the last quarter and could that continue, yes sure but we're very optimistic about these firms. Dan Fannon - Jefferies & Company: Okay, great. Thank you.

Thank you.

Our next question comes from the line of Cynthia Mayer with Merrill Lynch. Please go ahead.

Hi, good morning.

Hi, Cynthia.

Just wondering in the declining margin how should we think about the... or just in general how should we think about the affiliates puts they say few... what is your thinking in terms of the patterns you have seen on those and are they still at a really attractive whatever it was seven times EBITDA and how do you feel about, do you feel you need to set aside cash for that?

Let me... let me speak to that that question its Nate. When you look at it and you got one thing you should understand is all of these have long notice provision and then so there is a high degree of confidence in this field. We are not seeing any increased activity if any thing was in decreased activity. And again in the context of these, these are guys who really care deeply about this businesses and are trying to do... drive long term growth right, you wouldn't expect to see them react to short term input. So that's the experience we are seeing. And I think as we are going I don't think there's anything special we need to be...

And I would say from capital planning perspective of course we are aware of the cumulative amount but as you mentioned Cynthia the multiple of which these fixed transactions are very attractive and many of the puts can be resolved with stock and even if these lower EBITDA multiples had AMG trades that today, these are very accretive transactions. So as we... so we don't think in any respect that that billion dollars of capacity has some reserve required out for affiliate puts.

And then the last thing is there is obviously off of this structurally, there are limits to how this stuff, how these puts can come right. So...

Only a small amount at any given point.

Right. And then just to follow up on the previous question on alternative flows. Is there any seasonality any restrictions in terms of when clients can take their money out of all and when you look at the alternatives, would you expect for instance, that you get another spike in redemptions in the first quarter just because that's the moment when clients can take their money out or would that be more fourth quarter?

Yes, again I think the answer is there is a wide range. Right, so many of these firms do have... do have multiyear lock up [ph] and all those kinds of things. But... and could see as I said all of the examples I gave before of where you see products are challenged, could you see it, yes sure, I don't think we see anything specific like that.

And the Quant firms had redemption openings. So, you would assume that anybody who would sort of thrown in the towel on quant strategies, would have done it at the end of the year, we can't predict what's going to happen next quarter but its not like there is been a held up... hold up of people wanting to get out.

Okay and in your dollar performance for your guidance are you including the firms that have high watermark issues now or are you looking just pass them for now?

No. I wouldn't characterize anyone with issues. I think in any portfolio, there are going to times where folks are above higher watermark, below high watermark. We believe that dollar... in our guidance we believe again a conservative estimate for poor performance is the amount that we be willing to include in expectations for investors as a dollar and that... looking at the whole $45 billion portfolio, and again making assessment building up from what our guarantee is, to some modest expectations, but as I run through that math you can see that as we look at that whole portfolio, the idea of having our performance, especially even in the context of Nate's data if we were to assume that we... right now... that we had no performance fees issues that aren't above high watermark which I think is no way true that would still have a very good opportunity to exceed our expectations that were including in guidance.

Alright because the base has grown is so much.

Yes the base has grown. We have the guarantee the other thing on the flip side of the... from that are below high watermark. There is a whole bunch that is well in the money on both high watermarks by bunch so.

And again we were forecasting growth and performance from 2007 to 2008 that's certainly less then the growth we forecasted from 2006 to 2007. And I think if you characterize the environment for alternative firms in 2007 into which you would be doubling performance fees in your earnings. I'm not sure folks would have had that expectation.

Alright okay. And just a question on the 40.5 million shares. What kind of pattern in shares are you expecting for that?

With regard to the share count?

Share count.

Our expectation is to again convert the two convertibles the $300 million senior floating rate convertible and the $300 million mandatory convertible where we will be issuing shares and converting those two securities that will take share count from what you see in the press release today to just over 40 million or I think I type this 40.5 million shares on weighted average basis through the year.

Okay thank you.

Thank you. Our next question comes from the line of Robert Lee with KBW. Please go ahead. Robert Lee - Keefe, Bruyette & Woods: Thanks, Good morning everyone.

Good morning. Robert Lee - Keefe, Bruyette & Woods: Darrell couple of quick questions for you, just wanted to make sure I understood some of the numbers throughout. First just on the guidance just to make sure we are on the same page assuming... basically assuming that assets are down 8% because of the market action. Correct?

Yes. We are taking asset levels at current markets today and they are going to be flat through the first quarter and then each of the third quarter, fourth quarter... I'm sorry second quarter, third quarter and fourth quarter that assets grow at 2% per quarter. Robert Lee - Keefe, Bruyette & Woods: Okay. And assets today are somewhere down 8%.

Year to-date down 8%. Robert Lee - Keefe, Bruyette & Woods: Okay. And I missed some of the guidance you gave relating to some of the amortization, the adjustments to cash earnings, could I... can you indulge may be just run through those again... quickly?

Sure. Amortization this quarter was $11.3 million and going forward in 2008 that should be about $13.5 million and from depreciation we expect to remain at about $2.9 million per quarter in 2008. And then as you look at deferred taxes that should also be at about $9.5 million per quarter. Robert Lee - Keefe, Bruyette & Woods: Okay, alright. Great. A question for Nate, could you may be trying to understand a little bit better when you talked about sort of managing risk bound and some different portfolios, if I had one or two kind quick examples could you may be flush that out a little bit more and you know how you reduce risks and the way that those changes you know moderates it.

Sure. I'll give you a couple of examples and again just be clear this is us very closely in partnership with affiliates and I think everybody is of the same mindset right which is especially giving the out certain [ph] market. We should all be looking for businesses and you know the... first of all part of it is just profitability and we can be helpful there in reviewing the businesses and our goal over time is to grow this business and profitable... profitable way but also focused on the rest. Give you a couple of specific examples, one affiliate this quarter was running some separate accounts in roughly similar strategies, it was some of alternatives fee product and relatively complicated operationally worked with them to get those things our commingle and put on to a consistent. A literally consistent investment basis. So, that two things would reduce the operational risk from having these sets of differences that they needed to build processes to drive. Also reduce just simply the cost needed to profits all that very much, you just give consisting operational consisting reporting, all that stuff off a single commingle product rather than the multiple sub accounts. Sort of another quick example would be where you might have a bunch of clients who are trying to get exposure in the investment process. Maybe at different risk levels for example, and instead of customizing the way you are approaching each client, maybe getting to a consistent, some people let you know 3% risk and some people 4%. You are getting people to have more standard sets of products but then you implement in a consistent way getting them to risk profile rather than doing it on an account by account. And so it's stuff like that where we've got a bunch of good learning at AMG, a bunch of learning from the affiliates and we can work with them getting operational with them. Also obviously try to help them improve profitability. Robert Lee - Keefe, Bruyette & Woods: Okay, thank you. That was it. Thanks guys.

Thank you. Our next question comes from the line of Marc Irizarry [ph], please go ahead.

I think that's me its Mark Irizarry.

Hey Marc.

My question is Sean for you just in terms of the deal pipeline. The composition of it. Have you seen any notable shifts by I don't know may be type of deal or the classification of the deal be at sort of succession planning versus maybe sellers who maybe have more lofty expectations heading in. And then also what's your appetite for doing a larger size deal at this point in time?

I am not sure if I was completing tracking one piece of your question. So let me respond and then if I missed a piece, you'll tell me. The market set is our opportunity set for us is quite broad and includes all types of investment opportunities. I would say on a proportionate basis relative to the past, we are seeing more alternative and more international. Both U.S. firms that manage international equities as well as non-U.S. firms and that's an... we have said that those are areas that we have a strategic interest in continuing to build. So that's attractive for us. The pricing, I would say, our story is that our pricing has been very consistent overtime and if it remain so, I think contextually we are impacted by the overall M&A environment and pricing and I would say as always to some extent and I would say today the environment is favorable for buyers pricing is relatively lower. That's not again... I don't want folks to think that we are that... that we're expecting much lower multiples they are very much in the same range which is very attractive to us and we see lots and lots of those kinds of opportunities. I don't... I am not sure if your question was something about peoples' expectations having changed dramatically. The focus that we have been in conversations with and are today their expectations are very much in line with what we would hope and expect and we are not having any problems with... with people looking back at you and saying can't you pay me what I was worth then its I would say the environment is quite attractive. Your last question was... the last piece of your question was on larger opportunities. We are always willing to be opportunistic in talking to firms that our boutique managers but at the large end of boutique with that quantifying a specific upper limit. I would say however that... we are always focused on managing the portfolio of our exposure to products and firms and geographies. And so I wouldn't expect that we wouldn't want our shareholders to expect that we are going to reach for a very large transaction. In the current environment we simply don't need to we have a very large number of a very attractive opportunities of firms that are large enough to be meaningful but not so large to seem disproportionate.

Okay. And then Darrell if you can just remind me again I might have missed this just in terms of total capacity that you have right now and just your capital priorities with capacity for acquisitions in your capital priorities?

Sure. We have a $1 billion that's available to us for new investments and share repurchase. We are as you can hear that the pipeline is robust and we should make sure that we have all the capital we need to execute on that opportunity. But we're also, as we've always said committed to share repurchases overtime because we understand that is of course another meaningful way that we can add value to shareholders.

Great. Thanks.

Thank you. [Operator Instructions]. We do have a follow up question from the line of William Katz with Buckingham Research Group. Please go ahead.

Okay thanks. First question is just down on that exact point, can you walk me through how you get to the billion dollars and where is it coming from and then I have a follow on question.

Yes, when you look after the conversions we have leverage that's a little less than one time. So the idea of taking on incremental leverage in maintaining our BBB minus rating, that gives us the opportunity to borrow close to another billion dollars. The components of that would be of course, we recently refinanced our bank facility which is not coincidently about $1 billion and that's very inexpensive capital with folks who we have known a very long time. And there is a little bit more... be a little bit more than a $0.50 billion of availability there, and then the cash flow from our business, where we will be generating between $250 million and $300 million of cash flow from the firm and we believe access to investors in the bond market is not lost on us. That's some of the longer dated paper out there it is quite cheap. And we can certainly do a good job with that. So that as we execute on our pipeline access to that market is something that we feel very, very comfortable with.

Okay and then unrelated question but just sort some of the Q&A going back and forth, your guidance reduction is linear with the market decline which I think is somewhat of an advantage versus some of your periods which so to speak for the viability of the manager managed amounts, excuse me. At what point though is it a possibility where some of the owners versus the operating allocations starts to get affected and that you might have some clawback issues with some of these affiliates.

Sure. Well again we... as we look across the group, the good news is our affiliates have been doing a very, very good job for a period of years and the cushions that are in these pushing in these [ph] are significant. So, as you look across it feels good.

I mean where we are today, even if there were a significant decline in the market, we still wouldn't have any of those issues.

Okay, terrific thank you.

Thank you and at this time there are no additional questions, I'll turn it back to management for any closing remarks.

Thank you again for joining us this morning. We're confident in the strength of our business model. The diversity of our Affiliates and our ability to generate outstanding long term growth and earnings. Thanks very much for joining.

Ladies and gentlemen, this concludes the Affiliated Managers Group Q4 2007 results conference call. If you'd like to listen to the replay of today's conference please dial 800-405-2236 or 303-590-3000 using the access code of 11107395 followed by the pound key. ACT would like to thank you for your participation. You may now disconnect.