Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Affiliated Managers Group Quarter Two 2008 Results Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. [Operator Instructions]. This call is being recorded today July 23, 2008. Now, I would 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 second quarter and first half of 2008 as well as our pending investments in Harding Loevner and Gannett Welsh & Kotler. By now you should have received the press release that we issued this morning. However, if anyone needs a copy, please contact us at 617-747-3300 and we will 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 Forms 10-K and other filing we make with 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 a 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, as well as our new investments are Sean Healy, President and Chief Executive Officer; Nate Dalton, Executive Vice President and Chief Operating Officer; Darrell Crate, Executive Vice President and Chief Financial Officer and Jay Horgen, Executive Vice President in charge of New Investment. And now, I would like to turn the call over to Sean Healy. Sean?

In what's have been and of course continues to be a highly volatile period in the equity market environment, AMG produced solid results as we reported cash earnings of a $1.43. Year-over-year, our cash earnings are down 5.9% compared to a 30% decline in the S&P 500. While we have net outflows of 2.1 billion for the quarter, we were generally pleased with the strong relative investments performance across our Affiliated Group. In the current environment, the vast majority of industry flows are obviously going to cash and short duration fixed income products To past this period of extreme volatility, retail and institutional investors will focus again on the need to generate return and move their assets to performance oriented asset generating products. And over the medium to long-term with our boutique Affiliates strong investments performance across the broad array of product areas, including domestic growth in value equities, global, international and emerging markets equity as well as a range of alternative strategies, we are very well positioned for future growth. Even during periods of market volatility, the breadth and diversity of our product offerings provide consistency and stability to our earnings. As was the case in the 2000 to 2003 period when we had stable and growing earnings even as markets declined. Over the past five years we have continue to broaden the diversity of our products and substantial increase our exposure to the international equity in alternative product categories. International equity and alternative products offer the potential for accelerated growth overtime given strong secular growth trends, favoring these areas. Our investment in Harding Loevner, obviously expands our participation in international investments to include global growth equity. Pro forma for the Harding Loevner investments, international and emerging markets equity products will generate approximately 35% of our EBITDA. In addition…

Thanks. Good morning, everyone. As Sean noted, there are several themes to focus on this quarter. First, we benefit from diversity of our business, which adds stability for our short-term results. Second, over the medium to long term, the most important driver of our business is the ongoing strong investments performance generated by our Affiliates. And third, while we continue to have good investment performance across the Affiliate Group, we have a significant basket [ph] of high quality products with very good long term track record in areas that we will continue to benefit from secular trends like international products and alternative products. As you see, we continue to add in these areas. Breaking our investment performance down and starting with global and international. Our stand up process, AQR flagship easy product, which beat it's benchmark by almost 750 basis point in the quarter and 680 basis points for the year-to-date. In addition, the emerging market product or Genesis had another strong quarter, remaining ahead of their benchmark year-to-date by between 350 to 400 basis points. Turning to alternative products; we have a diverse set of alternative products across a wide range of Affiliates. In these very volatile markets, we had good performance broadly and I will highlight that AQR had a good quarter across its alternative products and First Quadrant also performed well. In particular, however, credit alternative firm BlueMountain continues to generate outstanding returns across its range of products. Now, moving to our value products, both domestic and global. It needed to be thought of in two categories; our more relative value manager such as Systematic had a very good quarter because a majority of their strategy is outperforming their benchmarks by over 300 basis points during the quarter. On the other hand our DeepValue managers had a…

Thanks Nate. Good morning, everyone. As you can see from our results this quarter, our businesses position generates stable earning even during period of declining markets. We've a diverse range of investment products in our investment structure which provides that our Affiliates only operating leverage in their firm contributes an added level of support to our earning. In addition, as you see in our new investment announcements today, our business model provides an additional source of earnings growth for accretive new investments. Now turning to some modeling items. During the quarter we earned approximately $0.2 of performance fees principally at First Quadrant. Despite a challenging market environment, a meaningful amount of First Quadrant performance fee products are well positioned to make a strong contribution to performance fee revenue at the end of the year. As we mentioned on the last call, First Quadrant in addition to BlueMountain, a credit alternatives firm will likely to be the largest contributors to earnings from performance fees this year with additional contribution from several other firms including AQR, ValueAct, and Covington. As we review the financial results, the ratio of EBITDA contribution in this period assets under management was 17.2 basis points in the second quarter. This is higher than we had forecasted, principally because assets declined in the final weeks of the quarter. As we look to the third quarter, we expect this ratio to be 16.2 basis points, and we expect this ratio to increase in the fourth quarter as we realize the majority of our performance here. Given the operating environment, we have trimmed holding company expenses from a forecast of $17 million to $15.2 million. And we would expect holding company expenses to remain at this level for the balance for the year, as we realize the benefit of expense…

Ladies and gentlemen, we will now begin the question-and-answer-session. [Operator Instructions]. Our first question comes from Dan Fannon with Jefferies. Please go ahead. Daniel Fannon - Jefferies & Co.: Hi, good morning and thanks for taking my questions.

Good morning, Dan. Daniel Fannon - Jefferies & Co.: Can you let us know what percentage of your assets are currently above their high water mark in terms of performance fees and then also update us on what the what the actual AUM levels are for your performance fee generating managers?

Sure. When we look as I said in my comments we think as we look at our performance fee guidance for the year, we continue... we remain comfortable with that contribution to earnings for 2008 and principally the contribution to performance fees will come from First Quadrant, Mountain and several other affiliates that I mentioned. When we look to the performance fee assets, at First Quadrant and others that will contribute materially, we see about 40% of the AUM at a tight water mark and as we look at the entire portfolio it's about $40 billion. And as you recall as we.... those contracts are based on both an absolute basis as well as relative to benchmark. So we feel like the portfolio is in a position to again be consistent with our guidance this year. And we look to next year and feel that, that portfolio has a meaningful opportunity for even additional performance fee contribution. Daniel Fannon - Jefferies & Co.: Okay, that's helpful. And then you guys have been bullish on your pipeline for a long-term I mean you've announced your deals today. As you talk to your potential partners, is there an urgency amongst them in terms of getting deals done sooner then later given the potential tax law changes that are out there with change in the White House... potential changes, I should say?

It's a good question, I can't say that anybody either identifies that as a consideration, but I am sure it's in the back of the minds of some sellers, especially in succession oriented situations or in our minority investments in alternative firms. I would say there is also a different kind of urgency to the extent that a number of our opportunities in our product pipeline include the possible investments in firms that are subsidiaries, have larger diversified financial services, companies which are selling to raise capital. So we see in general, when I would take in general when sellers pursue transactions with us, once you get past a certain stage its in everybody's interest to move quickly and more certainly experienced and in position to do. Daniel Fannon - Jefferies & Co.: Okay, that's helpful, thank you very much.

Thanks, Dan.

Thank you. Our next questions from the line William Katz with Buckingham Research. Please go ahead

Thank you, and good morning.

Good morning Bill.

Just a few questions, if I may, the first one, Darrel, just sort of maybe on the guidance, just doing the fast math, so I apologize if but my math wasn't keeping up. You guys are also quick, but if you look at your prior guidance and the new guidance, it's down the mid-point level about 5% despite the $0.06 of the accretion from the deals and I am just sort of curious your assets were only down about 1% sequentially. So just trying to understand why such a deep reset on those numbers, particularly with the way you just said now in terms of the guidance on performance fees being relatively static. Is it the just the mix of assets, particularly on the mutual fund side that's driving EBITDA yield, in the second half for the year, is there something else I am missing here?

I think broadly if we thought about guidance and hopefully shine through in our comments, the only reason that we are bringing guidance down is that market. We feel very good about how the business is positioned, and you saw performance at our Affiliates was strong relative to benchmark, but that said seeing the market had a substantial influence and when we looked at last quarter and looked at what happens to the market, particularly with the declines in the market happening at the end of the second quarter. We revised guidance down, its solely based on market, I think your point about the mutual fund channel is well taken and as a component, but the material driver of guidance is only market and no other business factor that is unique to AMG.

Okay, that's helpful. The second question I have, just in terms of deal pricing, it seems like you go a little more some of the EPS bank you've bought to speak on these combined transactions, just wondering if one of you could talk about that in the concept of it seems like more supply is coming on to the market and less competition. We sort of continue to see that and then I guess the second part of it is and there is an article today in the wall Street journal about this, where are you relative to some of these big box financial opportunities, so is something is going on non-U.S. like [indiscernible] and now some of these are higher banks that pays capital cost potentially needing more capital; you can talk a little bit about that as well in your comments, thanks.

Sure, thanks Bill, the general answer to your question is that the that our competitive position as I said is stronger than ever, the supply demand balance coupled with our track record and reputation among the universe of Boutique firms is that is very favorable and we are as hopefully you can tell, quite optimistic about our continued prospects for new investments. The universe of new investments includes succession oriented opportunities like Harding Loevner, especially where firms are positioned in product categories that are continuing to grow and are relatively less affected by the market. As well, we have a number of opportunities to invest in outstanding alternative managers similar to and structured to our investments in AQR, Value-Act and Blue Mountain, and then timely as I noted and with our commenting on specific names we certainly do see opportunities to invest in partnership with the firms management in businesses that are subsidiaries of larger financial services firms, where those parent companies are selling, not because there is anything wrong with the firms. But rather they are looking to raise capital. Our approach is extremely attractive to the managers of boutique firms which especially those which anticipate strong organic growth going forward and that's a subset of the universe of this firms that are subsidiaries of the big banks and insurance companies and included in the opportunity set, a less of a focus for us are opportunities that are more consolidating acquisitions of for example mutual fund businesses that we would consolidate into managers, our preference and focus is on the pure boutiques with strong organic growth prospects and outstanding performance.

And Bill, I would say that you're just initial observation that there is more accretion on a cash basis and on a GAAP basis in these transactions then you've seen in the past is certainly true and that's what's falls out of Sean's comments being the competitive environment being what it is and the opportunity for AMG to be creative in how we are structuring these investments as they come out of large financial services firms. And as you saw our accretion as we in the past have put $100 million to work that's tended to generate around $0.10 of accretion, and certainly in this case that's approaching sort of $0.13 to $0.15 of accretion as we get money put to work. And as we look forward at our pipeline given the magnitude of number of transactions that are in it and the opportunities in this environment, I feel confident that we're entering a period that as deals get done we will be in a more favorable range for shareholders as we announce these transactions.

Okay. That's a terrific perspective. And last question is on sort of where are we on the run... or desired run off at First Quadrant and given your commentary around both the relative forms of AQR and in fact they might be part of the year end performance fee contribution, where you think you are in sort of the cycle of potential attrition from that franchise?

I think... so First Quadrant and AQR both had good quarters, AQR particularly really across the range, both their long equity products as well as across the range of alternative products. We feel very good about that. The run off point at First Quadrant, again I think we worked our way through the vast majority of that so I wouldn't expect to see....

Okay. Thank you very much.

Thanks, Bill.

Thank you. Our next question is from the line of Craig Siegenthaler with Credit Suisse. Please go ahead.

Hi Good morning.

Hi, Good morning, Craig.

Just another question kind of following up Bill's last question there on the type of improved net flows, can you comment on level of net flows as your three large subs, kind of sequentially, basically I am wondering how much fee from low redemption on the quant side and what gives you stronger flows in the non quant subs and also could you share your outlook for Quantitative first and second half?

Okay. Let me deal and later then...so when you look quarter-over-quarter, the biggest change by far was reduced efforts. So that we remember what we talked about last quarter, there were some outflows at very low margin, if you just base manage, so a reduction in those was a big decrease in it. Looking forward, there still could be some continuing fall out from some prior Quant managers sure but these are great franchises, good investments performance, again this quarter is probably eventful, good investments performance, great kind of service, royal fine basis, again I don't want to say we will never be more qualitative, but looking ahead we will prevent that.

Got it and...

And Craig as we look at flows broadly and again in the two quarters we have talked about low margin being a product at First Quadrant. I think as we seen slow than expectations around flows and you heard in Sean comment and Nate's comments that we are an environment where folks are not taking risk in long term products and I think what that means for us is that we are an environment where flows will be generally flat. And the conversation that you hear from us won't be punctuated by sort of large low margin out flows that sort of change the... or distract from the optics of the story. And so I think we are in a flat flow environment until money starts returning, you know our products are very well positioned, so that we should get more than our fair share flow when money starts to flow into long equity. So I would say that the quantitative out flow story is not going to be a material part of how we talk about our earnings going forward.

Got it, and then just on the fee rate, then, I don't know if you really saw strong impact from the first quarter outflow I knew you said that you have the first or second quarter still kind of flat, but I am wondering about the fourth quarter when both the GWK and the Harding Loevner deals close I am wondering what the fee rates probably does there because it sounds like the emerging markets businesses has a higher fee rate, so should we anticipate either in the fourth quarter or first quarter an improve fund... fee rate on your core business?

Yes, I mean we'll address all of that specifically as we get 2009 guidance but what you did here is the EBITDA contribution to assets under management at 16/2 I think you're just right, that moves up into the 20's as we recognized performance fees in the fourth quarter. Then as we move into next year given these deals Harding Loevner will certainly move that margin up, given that [indiscernible] will move that down a little bit as muni business is a lower margin business but that said we will see an improving margin trend as these deals are integrated into our financials.

Great, thanks for taking my questions.

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

Good morning, Rob.

Good morning Rob. Robert Lee - Keefe, Bruyette & Woods: I am just curious, it seems you talk of at least mention Darrell little bit more today then I... it seems you contest conference call to that of the recycling of the various credit agreements, there were any change or duration in your thoughts about recycling some of those to managers in different affiliates be thinking that over time you may actually see your ownership in some affiliates creep up some?

There is no change in how we think about the [indiscernible] obligations. I did include it in the some of our... in the early remarks now only because we had received some questions as we've been out with investors, just to understand as AMG continues to progress what do those puts mean and what's the impact and wanted to just be very clear, that we don't expect there to be significant, but we are meaningfully recycling equity at firms among many partners on an ongoing basis, that's part of what we do and that those puts when they do come back are materially accretive to us but we do not see as I said a substantial amount of puts coming back to us any time soon. Robert Lee - Keefe, Bruyette & Woods: Okay. In the press release on GWK, I don't think you mentioned if this is going to be your kind of traditional 60-40 ownership split at some... is it going to be there or is there really something different or smaller proportion or larger?

Yes, I think so I just make, if you think about it and looks for us like a normal feel in many respect look at and go back, please go the Time Square or something where we were buying something is really owned by another business and we're sort of working our way through that transition and how we describe it. The other thing I'd say in the certain statements focused on some differences I think and I try to get out of this in the remarks. I think there is also more opportunity... if you look at that its significant portion of that is concentrated in the couple of distribution or relationships and so there is more opportunity here for us to work with them with managers and again it certainly I was trying to get to in my remark, as we've been building managers this is not a bigger part of sort of like going in conversation that has been historically and so there is.... there are actually some additional leverage points in here. Robert Lee - Keefe, Bruyette & Woods: Okay. And may be if its positive skill, kind a bit of more color on the two acquisitions I know in the press release you mentioned that... Harding has that very strong asset growth in less five or six years, any color around what their business trends have been like more recently kind of similar to yours in terms of kind of flattish or how should we think of that?

I think I'll ask the Jay Horgen whose head of new investments for us and sitting in on the call to give a little more color on the two investments.

Thanks Sean. With respect to Harding, the flow trends has been strong through last several years and even year-to-date, they do their positive flows through the first six months this year. I think the other important indicators their performance each of their three largest products their international fund, their international strategy their emerging strategy, emerging market strategy and their global growth strategy, each of those strategies has leading performance both near-term and long-term, so we do expect to see additional positive flows in the future.

Okay and GWK?

And on GWK, again as Nate had said in his remarks very strong performance in the fixed income saving and particular the mini bond areas for its clients primarily high net worth clients, so in this segment we see continue trends market trends towards municipal fixed income management risk management as it relate to these high networks individuals. So we do see additional positive growth there setting aside the opportunity that we have on the distribution side to continue to introduce them to new relationships in new distribution channels.

Another to mention when we talk about the all accretion and run rate accretion of $0.35 for these deals, the accretion that we are including in our run rate calculation is really just based on the deal. But what you are certainly hearing in both of with strength of Harding Loevner's products being global growth equity and its opportunity to leverage half our global distribution platform indicates that GWK where again we' re proving diversity to the franchise with a strong fix income manager, but also able to distribute that through managers. Both of these opportunities are not included in our accretion and something we are looking forward to realizing in our earnings in 2009 and you heard talk about the strength of our distribution effort. As we look to the next year as you have heard in the past, we talked about $3 billion in flows because we look to next year I would say $5 billion and more its not an inappropriate a level of flows to come from that growing platform where we've seen lots of success to date and we'll see much more success in the future. Robert Lee - Keefe, Bruyette & Woods: All right, great, thanks a lot.

Thank you. Our next question comes from the line of Michael Kim with Sander O'Neill. Please go ahead. Michael Kim - Sandler O'Neill & Partners, L.P.: Hey guys? Good morning.

Good morning, Michele. Michael Kim - Sandler O'Neill & Partners, L.P.: First just a follow up with the guidance discussion, it doesn't sound like there was any materials change in terms of your performance, the assumptions for this year. Should I think about that in terms of the absolute dollar amount or as it relates to the kind of percentage of total earnings which I think was something in the neighborhood of 14% last quarter

That's right. And I think we look to performances on a snap to dollar amount to be the same. We see the opportunity and again as I said, the way we looked at performance fees, the portfolio where it was relative to high watermark and where was in the year on the last conference call is essentially similar to how we look at the opportunity today. There is a meaningful amount of that portfolio that satisfies watermark, there are firms that will be contributors, that are well positioned, they have demonstrated the ability to generate attractive results. During this short little time and I give another six months lest we have a strong level of optimism that our conservative guidance can be achieved. Michael Kim - Sandler O'Neill & Partners, L.P.: Okay. And then a couple of questions on the deal front. First, specifically as it relates to the GW&K deal. It seems like this is a bit different than some of your prior deals, just because there is material fixed income component here. Should we read anything into that in terms of potential future acquisitions?

I would say no. GWK is an attractive boutique manager with a broad product set, including products which are diversifying for us. And also synergistic with our distribution platform, a great team, an opportunity to buy the firm in partnership with management out of the parent company which as Darrell noted that we've done before TimesSquare had a... is the most recent but several others in the past and as I indicated other opportunities like that in prospect. Michael Kim - Sandler O'Neill & Partners, L.P.: Okay. And then I know you talked a bit about this earlier but it sounds like your scale both in terms of distribution and kind of on the operations side was really a big selling point in terms of the two deals announced today. Do you think your value preposition is really higher today just giving kind of ongoing market volatility and the rising importance of scale more generally and is this really something that could meaningfully step up deals going forward?

I think it is...it's a good question. Its certainly is an increasingly important element in the partnership opportunities that AMG brings. Fundamentally, it's our reputation and track record as a supportive partner in this environment, we are very well positioned obviously with ample capacity to fund new investments and more experience than any other entity in executing investment. So I think we have tremendous opportunities and prospects and the strength and increasing attractiveness, especially for international managers and alternative managers of our distribution efforts is just... I wouldn't say it's icing on the cake but it is incremental to what we already offer. I do think that as we think about the new investment and in areas like global growth equity not that we price them into the transactions but the opportunity for incremental growth on top of strong organic growth of these products and firms are going to experience any way is obviously another plus for us. Michael Kim - Sandler O'Neill & Partners, L.P.: Okay. And then just finally, can you give me the end of period share count and let us know if there were any buy backs during the quarter?

Yeah, we expect for next quarter 42 million shares to be the right number. And we did purchase couple of hundred thousand shares during the quarter. Again, as we as we look at how we are going to deploy capital we are very excited about our pipelines, we are hesitant to repurchase shares because we... the outstanding opportunities getting capital deployed in that... in the many opportunities that are in the pipeline that there were points during the last quarter where it was so compelling to repurchase shares that we did buy back a couple of hundred thousand. Michael Kim - Sandler O'Neill & Partners, L.P.: Okay, that's helpful, thanks.

Thank you. Our next question comes from the line of Douglas Sipkin with AMG. Please go ahead. Actually he just re-queued. So we have the next question from the line of Marc Irizarry with Goldman Sachs. Please go ahead.

Great, thanks.

Hi, Marc good morning.

Good morning everyone. Just beat that horse a little bit further here on the performance fees, so what's the sort of amount implied in the guidance here Darrell, and then I know it's a little bit picky but if you look at the range of your guidance it looks like you have taken the top end down a bit more here, if you can just may be speak about the setting-resetting sort of the range of expectations?

Yes, and I think as always been our ways as we move through the quarters, we tend to narrow the range. What we're talking about with regard to our performance fee contribution that's sort of one time recognition in the fourth quarter is approximately $0.90 as you've seen through the year we've been consistently generating a little bits of performance fees which of course indicate a larger opportunity in the fourth quarter. When we... as we've decided to narrow the guidance again, we have a $40 billion portfolio of performance fees and that can generate... be a very substantial contributor to earnings as we look at the year and how it shapes up, we give conservative performance fee guidance. And that guidance has been met in prior years and so as we look to the remainder of the year and again tend to be more conservative in how we want to communicate with investors, we think holding the $0.90 guidance is appropriate and accordingly as you look to narrowing the range this $6.40 to $7 feels right there.

And is there any percentage of at $0.90 contractually due to in anyway your confidence level on achieving a portion of that is very high?

Yes,of course and as we look to the end of the year given that we're half way through the year and seeing what the un-accrued level of performance fees are, we are comfortable that we are further along in un-accrued performance fees performance and performance fees that are guaranteed are relative to where we are in the calendar. And that's certainly a source of why we have confidence in the guidance that we're giving for the fourth quarter realization.

Okay. And then just in terms of your assumptions behind the lower range, you said you're still sticking with the 2% market expectations in the back half yet your holding company expenses are coming down, $0.06 of accretion here from the new acquisitions. Can you just a put a little bit more context around taking the range down relative to some of what or would appear to be some helpful items?

Yes, I mean I don't know how else to say it rather than when we look at our guidance and came up with the guidance range, it was driven by market and market performance. So as we narrow the range that's about narrowing the range and centering on what we believe the earnings power to be in business in 2008.

Okay. And that out of the way, Sean a question for you, I know you mentioned the competition might be lessening a little bit for some deals out there. Can you just talk about what's standing in the way potentially an accelerated pace of deal making not just for you guys but more broadly is it seller's expectations or what's standing in the way of an accelerated pace of deals in the back half?

We announced two this morning, so we think that's an acceleration, and I won't speak of other buyer's. I know that our opportunity sets and our competitive position is stronger then ever, and we've been bullish on our pipeline throughout the year and obviously to some extent the transactions are even in great environment, so inherently lumpy but we can't be more optimistic than we are, given that until the transactions are signed and executed you can't announce them. The pipeline as I said earlier includes a full range of succession oriented transactions, the alternative universe we are... is of course broader than its ever been and we are uniquely well positioned to make investments in this minority majority investment structure that we've used with our alternative investments and if you think about buyer universe just in that segment, obviously, there has been an enormous decrease in competition from other buyers or other alternative meaning the public markets. Opportunities outside the U.S. are increasingly important for us, both for the diversity of client base which non U.S. firms inevitably have as well for the products that includes more international and global products where we see strong growth and synergies with our international distribution. The reference to the story in a journal today about some banks that might be selling their money management units... we certainly see all of that but we also other opportunities that are more unique and so our view is that not withstanding extreme market volatility we are very, very well positioned.

Great thanks.

Sure.

Thank you. Our next question comes from the line of Douglas Sipkin with AMG. Please go ahead

Yeah, thank you, try again, Good morning guys.

Where have you been Douglas, what's going on.

Wachovia. You guys just followed me. Just a couple of quick question, first off, I know you guys have highlighted Harding and their strong track record, how big is that is the mutual fund product, I think its an international equity, and I would imagine obviously there's not too many capacity constraint, just looking for AUM amount on the mutual fund?

The AUM mutual fund, AUM is approximately 50%.

Okay

And there is another may be 7% that's been set by it's products I guess if you take those two together it's a little over 50%

Okay, great. You guys mentioned you've had about 25 meetings with Sovereign Wealth Funds, I guess in your UK office, any color on any mandate wins yet or is that really just several meeting process for that stuff to play out because it does seem like you are pretty well positioned there and some of your boutique managers have an opportunity to capitalize and so I am just curious have been awarded anything yet from Sovereign Wealth Funds?

So there's been one won but not yet fund to mandate it. Now admittedly that was a conversation that has started again just to back up, this office has open for five months and in the main it's been introducing first and due to these folks and then introducing specifically in the Affiliates and their products to be sold and that is sort of a couple million process, but we have had one but not yet fund to mandate and little bit background, the Affiliate had already had a little bit of concession, but was unable to sort of proceed or that mandate because they wasn't be able to service it themselves and against boutique mangers based on their fallouts, those sort of challenges and so because we were trying initiatives gain in regards to my conversation. And so there is one but I am not sure not it's fully portfolio as a deal.

Okay, great. And then just question for Darrell, you mentioned I believe that you still have about a billion dollars in capacity for transactions, I just want to be clear that assumes that incremental $200 million on the potential stock offering because I would imagine--

It actually doesn't and the billion dollars is essentially the leverage that our BBB minus status allows us. As I said, we are very comfortable in finding that billion dollars and as you can imagine given the robustness of the pipeline that's why we are putting some of these provisions in place to have additional equity available, at an attractive price should we need that in order to continue to execute on these transactions. So I would say the ability to produce a billion two of consideration for deals is well within our range.

Okay. So just as I am clear and I could be wrong, I remember last quarter you guys said you had about a billion in capacity for transactions. So I am thinking through that you have two transactions here which are going to close I'd imagine within the next quarter. So that incremental, I guess just cash flow that that's fills that void?

Yeah, that's right. Cash flow that that's been generated and the way we... yes.

Okay. So just so I am clear, $1.2 billion basically capacity all in right now?

Correct.

Okay. And I just finally, just in terms of philosophy, I think it's actually a pretty powerful trend what's going on with the banks and if I am starting that Wall Street Journal article, it make absolute sense, how is your philosophy going to be and you might have answered this already so I apologize, but lot of these are sort of just like steady eddie mutual fund businesses which maybe not have that much room for growth but maybe could be accretive for your guys given the pricing but sort of after that what happens? I mean... how you guys are thinking about those potential deals, and Andy do they make sense for you even if there is sort of just like accretive day one but not too much growth thereafter or if you think that maximizes the shareholders value, even in the short term you considering.

I commented briefly earlier but happy to expand. We certainly do look at those kinds of opportunities we think of them in the main in a different way then we would investments and standalone boutiques with a strong organic growth prospects and outstanding investment performance. The typical bank, mutual funds subsidiary I think you've characterized the dynamics of those businesses well and the typical opportunity is one that's consolidating, that involves consolidating the business into our managers investment group mutual fund platform and we have in a relatively small way made several acquisitions of just that sort and so we probably would be sensitive about how much capital we would put to use in those kinds of opportunities relative to the other kinds of opportunities that I've described where we see larger organic growth prospects. But we certainly look at those investments in very disciplined way and then and how we think about them that we'll execute them as we think it's a good fit with our business.

Okay, great. Thanks.

Thank you. And your final question comes from line of Roger Smith, FPK. Please go ahead.

Great, thanks a lot. I just want to talk about the flow expectation here and really when I know you said it's a weak environment. What kind of organic growth rate should we be thinking about in 2009 relative to the traditional distributional channels that the manager use as well as the new distribution efforts that AMG has put in there, how much can we think from either one of those channels?

Okay. Well obviously this comes with the opening caveat that Sean spoke about before which is in this environment, right we have to make a big assumption that what goes in the environment. Assuming that people returned to allocating assets to returning products. I think you should see as return our affiliate growth rates at least to sort of where they were before, right so that's and that the exact number. I think we have said that our affiliates a couple of percent from organic growth flows and so, and I think the and then the managers platforms which that accounts for about for is we've said $3 billion for this year and looking in that actually to that $5 billion number that we used, it feels like a good number. And then you should see these the global distribution platforms coming on line and that's both and this is a question of timing you could see both what we're doing in Australia, what we're doing in Middle-East and at the end the leverage while we done in London and to opening up more European distribution and we are looking some stuff in Asia, as well. So part of this is the incremental flow growth from AMG distribution platforms and the managers one that one we probably have the best sort of visibility to these others, its probably a question of the market environment and then obviously question of how fast we wrap things so

Great end note, thanks very much.

Thank you. I'd now like the turn the call back to management for any closing remarks.

Thank you. In the midst of a challenging equity market environment is often difficult to look beyond the current volatility and appreciate the opportunities for growth in medium to long term. Our Affiliates remain focused on adhering to their investment disciplines, maintaining their outstanding performance records and in addition as we've discussed we continue to focus on identifying opportunities to enhance the growth of our affiliate businesses and to insure that we participate broadly in the growth areas of the industry. And finally to underscore, even in difficult markets we have a unique opportunity to continue to generate incremental earnings growth through additional investments in outstanding Boutique firms. Thank you all very much for joining us.

Thank you, ladies and gentlemen this concludes the Affiliate Managers Group Quarter Two 2008 results conference. We thank you for your participation and you may now disconnect. Have a good day.