Good morning, my name is Clarence, and I will be the conference operator today. I would like to welcome everyone to the Virtus Investment Partners quarterly conference call. The slide presentation for this call is available in the Investor Relations section of the Virtus website, www.virtus.com. This call is also being recorded, and will be available for replay on Virtus website. At this time, all participants are in listen-only mode. After the speakers' remarks, there will be a question-and-answer period, and instructions will follow at that time. I will now turn the conference to Jeanne Hess. Ma'am you may begin.

Thank you and good morning everyone. On behalf of Virtus Investment Partners, I would like to welcome you to the discussion of our operating and financial results for the third quarter of 2016. Before we begin, I direct your attention to the important disclosures on page two of the slide presentation that accompanies this webcast. Certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not statements of facts or guarantees of future performance, and are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those discussed in this statement. These statements may be identified by such words as expect, anticipate, believe, outlook, may, and similar terms. For a discussion of these risks and uncertainties, please see the Risk Factors in Management Discussion and Analysis sections of our periodic reports that are filed with the SEC, as well as our other recent filings, which are available in the Investor Relations section of our website, Virtus.com. We do not undertake any obligation to update forward-looking statements. In addition to results presented on a GAAP basis, Virtus uses certain non-GAAP measures to evaluate its financial results. Our non-GAAP financial measures are not substitutes for GAAP financial measures, it should be read in conjunction with GAAP results. Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in our earnings press release, which is available on our website. For this call we have a presentation including an Appendix that is accessible with the webcast through the Investor Relations section of Virtus.com. Now, I would like to turn the call over to our President and CEO, George Aylward. George.

Thank you, Jeanne and good morning everyone. I'll start today by discussing assets and flows followed by an overview of the financial and operating results. I’ll also comment on yesterday announcement regarding our purchase of the shares held by Bank of Montreal. Mike will then provide a more detailed discussion of the results. So let's begin with assets under management and flows. We ended the quarter with assets under management of $46.5 billion, sequential quarter increase of 3%, which includes a positive net flows of $0.5 billion that we achieved in the continued difficult environment for active managers. Total sales of $3.1 billion increased 29% sequentially and 21% over the prior year. The sequential quarter increase illustrates the strength and attractiveness of our diverse product offerings as we increase sales in all product categories. Specifically open-end funds institutional, SMAs and ETFs. Total net flows improved by $2.6 billion over the prior quarter to a positive $485 million, making at our best quarter for net flows since the third quarter of 2014. As continued positive flows in institutional, SMAs and ETFs more than offset modest outflows in open-end funds. Mutual fund sales of $1.9 billion were up 39% sequentially, due to growth in international equity, domestic equity and taxable fixed income. The increase included $0.5 billion of higher sales in the emerging market opportunity fund of which $0.3 billion or model related. Mutual fund sales were also aided by higher sales into the multi-sector short-term bond fund and small cap sustainable growth fund. Mutual fund net outflows to improved meaningfully $2.3 billion from $2.4 billion as flows in the emerging market funds aren’t positive for the quarter from net outflows of $1.6 billion sequentially. This improvement primarily related to lower model redemption, which were $0.2 billion in the quarter compared with…

Thank you, George. Good morning everyone. Starting on slide eight assets under management. We ended the quarter with assets of $46.5 billion, which represents the increase of $1.3 billion or 3% from the prior quarter. The sequential increase in AUM is primarily attributable to net outflows and $0.5 billion and market appreciation of $0.9 billion. The $1.4 billion year-over-year decrease in AUM is primarily attributable to $5.4 billion of net outflows and $0.6 billion of dividend distributions, which were partially offset by $4.7 billion of market appreciation. Total AUM is diversified with 36% in domestic equity, 21% in international equity, 34% in fixed income, and 9% in alternatives and other. By product, open-end fund assets were 55% of total AUM, separately managed accounts were 17%, closed end funds were 15%, and institutional was 13%. Turning to Slide 9, Asset Flows. Total sales were $3.1 billion a sequential quarter increase of $0.7 billion or 29% reflecting higher sales in all product categories. Total sales also increased over the prior year quarter by 21% or $531 million due to higher sales and institutional SMA’s and mutual funds. Gross sales and open-end mutual funds were $1.9 billion, an increase of $0.5 billion from the second quarter, due to higher sales in the emerging markets fund. Third quarter total net outflows were positive $0.5 billion a meaningful change from the net outflows of $2.2 billion in the second quarter. Positive net flows in the quarter were attributable to continue higher levels of sales in institutional that more than offset modest outflows in mutual funds. Separately managed accounts in ETF ‘s also contributed positive net flows. Mutual fund flows by asset class were as follows. Fixed income strategies were relatively flat an improvement from net outflows of $0.2 billion in the prior quarter. This improvement…

Thanks Mike. That concludes our prepared remarks. Now, we will some questions. Clarence, can you open up the lines, please.

Thank you. [Operator Instructions] And our first question comes from Ari Ghosh from Credit Suisse. Your line is open.

Hey good morning, guys.

Good morning.

Hey Ari.

So can you update us on your thoughts around capital deployment for Q4 and 2017. It’s just looks like you increased your funding capacity pretty significantly earlier this quarter. So I was just wondering, if you did that the buyback in mind or if you have additional plans for the excess capacity you are now, maybe even like a strategic M&A deal down the line.

Well, I think I’ll let Mike get into some details, but fundamentally we just want make from long-term perspective that we have the flexibility to have access to what we need to execute on any of our plans. For the current facility, it was getting near to the end of its term and we certainly didn’t want to wait until that period of time to renew. So we are very pleased with results we have got in terms of the size and the terms that we receive on that deal. And again, we keep our mind open to all sorts of alternatives obviously as you know from our capital management strategy other than protecting the business, investing in the growth and returning a meaningful amount of capital as always been part of our plan. We are sure, we will talk more about the return on capital from the repurchase. But Mike, do you want to give any more color.

No, I think you said that from the credit facility perspective, we were within one year of facility expiring and importantly we moved from the secured facility to an unsecured facility and doubled the capacity, which is more in line with the size of the business and the profile of the business now. We also changed out some of the partners and lenders in the facility. So we are very pleased with that facility and we think it just continues to provide flexibility as we need it.

Got it. And then quick follow-up, if you can just talk a little bit about your net flow outlook maybe on the mutual fund side. What products they are looking at closely at the smaller funds gaining traction and then clearly the deal where rules are big issue right now. So you have ever seen - you see pressure with certain products in the mutual fund line or even issues with shelf space based or something to that effect with your platform partners as they look to consolidate. And then if you can just around that our just touching a little bit about be institutional side and it just seen sort of a pipeline build over there and maybe like demand for new products here versus like previous quarters? Thanks.

Sure. Well certainly in interesting environment that we are all engaged in and particularly difficult for active managers. I think we have always felt, we were competitively in a pretty good position, because of the types of strategies that we offer generally are those that don’t compete head on with more index based types of passive products. So most of our strategy are the hyper quality orientation, a risk mitigation type of an approach where they are highly concentrated alpha type of portfolios. So generally we have always felt good about the offerings or products we have being differentiated enough to be less susceptible to some of those competitive pressures that absolutely we face the same competitive pressures. I think where we have seen some of the flows has really been narrowing a lot of what is going on in the market. Obviously, we did have two quarters where we had elevated outflows in our emerging market fund, but now as indicated in the prepared remarks, those outflows have pretty much gone, broken to even and that fund continues to do very well. So as we sort of pointed out, EM continues to have a good sales, multi-sector short-term bond and low duration on the fix income side, I think in this environment will be great alternatives. If you want to navigate, what could be an interesting set of experiences in each trade markets, we believe the Newfleet products are uniquely positioned to help investors navigate those markets. And we have seen great strength on the Kayne equity products and we mentioned the Duff and Phelps reach strategy which was the large inflow that we had on the institutional side. So it’s sort of feels very well positioned from the competitive standpoint in terms of performance and the types of…

Great. Really appreciate the color. Thank guys. A - George Aylward Thanks Ari. A - Michael Angerthal Thanks Ari.

[Operator Instructions] And our next question comes from Surinder Thind from Jefferies. . Your line is open.

Good morning guts. Just a follow-up on the DOL here, there has been a lot of the industry discussion around may be the difficulties that it might be to sell kind of into the broker space or kind of managing retirement accounts without some sort of change in the industry pricing rules. Any thoughts there or if you are participating with others or collaborating with others on something like that?

In terms of I think all of us on the asset management side are having very constructive dialogs with our distribution partners in terms of working with them to address the issues in the way that works from their prospective. So I think we are all working with our distribution partners to address that and it will manifest itself, probably in different types of share classes and different types of pricing structures. I think a lot of that will evolve over the next few months or few quarters. I thinks it’s something everyone is trying to grapple with. And I also think that people are not just focused on retirement, I think they are looking to be more holistic when they come up with an approach that even though deal well in its relationship retirement. I think our distribution partners are doing the right thing in thinking about all of their clients come out with a solutions.

Fair enough. And I assume that the working assumption at this point is that at some point the SEC will come out with effectively similar rules to the deal. Well is that effectively next year sometime, is that a fair working assumption for everyone?

I have heard many people express that view, obviously we don’t have any knowledge of that, but I have heard that frequently.

Fair enough. And then just from the perspective of your all products your sales. About what percentage are and basically to brokers for in commissionable types of sales at this point?

I mean, for A class. Are you talking about the class, the type of class that we sell or.

Correct. In terms of like whether it’s A, B or C you could share classes in terms of just commissionable sales that you guys have at this point?

Yes, I mean most of our sales now in non-commission classes like the I or A class at any day, I think 11% of our sales. Sorry 7% of our sales are in traditional A class, which is I think what you are focusing on. So it’s relatively small piece of our business at this point.

Fair enough. And then maybe just move to new topics here and maybe focusing a little bit on the ETFs space. It seems like that overall ETFs space is getting much more competitive and we are not only seeing competition amongst products and the kind of race to get more and more products out there, but we are also seeing increased price competition. How are you guys thinking about that or feel that you guys are going to compete in that space, given there is a few large encumbrance and it just seems like the barriers to entry. While the actual ability to launch a product is really low, it remains fairly challenging without a first mover advantage to gain traction in products. And then you also mentioned a little bit about that you guys are refining your distribution approach, so maybe some color around that?

Sure. Well, I mean the ETFs part the business as we mentioned. We do see that as a very important element of long-term growth, the industry is going to increasingly move through an ETF structure for some of the investment needs. So hence we have been very focused on that part of our business and have introduced several new products, we have a few that will be introduced in the near-term. So we are very excited about some of the opportunities we have there. Looking at the ETF market though, I wouldn’t necessarily look at it as one marketing right. So in terms of some of the lower cost purely passive types of products absolutely that is dominated by a lot of players and you really need that level of scale to be that competitive on the fee levels. For some of the other products, the smart data side or actively managed. Really when you think about pricing, you should really think about it relatively to, it’s alternative, right. So if someone is interested in more of an actively managed strategy, which obviously we are a big believers in smart data. They are not going to necessarily always be comparing that prices to passive alternative, but maybe to the other active alternative and say an open-end and fund or another product vehicle. So I think there is continuing to be diligence on what is the right pricing for some of those products. Again, I think where you have the ability to be competitive, it’s not competing on scale or on being the lowest cost provider. Because I think smaller players don’t have that opportunity, it’s really being innovative in terms of what types of products you are offering and then how you are making those available. So I think there are opportunities there, we saw a very small ETF business, but we have been incredibly pleased with the fact that it has been growing in that products that we have introducing, has bound some acceptance. In terms of what I’m referring to, when I say refining our distribution model, there is still work to be done throughout the industry I think. In terms of how do you truly private coordinate you ETF and you open-end mutual fund sales, because there some differences in terms of how it work with insight the distribution partners and also getting whole sellers to have the right motivations and alignments. So I think like a lot of other players, we have a open-end funds as well as ETF’s, we are continuing to work on what is the best way to maximize the right opportunities set. So that’s sort of what we are referring to there. But we see the ETF area as an opportunity for future growth and again we have a very active pipeline in some of the things including additional actively managed strategies as well as, what might be called as smart data.

That’s helpful. That’s it for me, thank you.

Okay. Thank you.

And this concludes our question-and-answer session. I would like to turn the call back over to Mr. Aylward for closing remarks.

I just wanted to thank everyone for joining us today, and obviously we certainly encourage you to call if you have any other further questions. Thank you.

That concludes today’s teleconference. You may now disconnect. Everyone have a great day.