Affiliated Managers Group Inc (AMG) 2002 Q3 法說會逐字稿

Good morning, ladies and gentlemen and welcome to the Affiliated Managers Group third quarter conference call. At this time , all participants are in listen-only mode. Following today's presentation , time will be given for the question and answer session. If anyone needs assistance at any time during the conference , please press the star followed by the zero. As a reminder, this conference is being recorded today, Wednesday , October 23rd of 2002. I'd like to turn the conference over to John McNamara.

Thank you . Thank you for joining the Affiliated Managers Group third quarter conference call. By now, all of you should have received a cop pitch the earnings release. If you need one please call my office at 212-445-8435 and we'll fax you a copy immediately following the call. With us on the line are William Nutt , Chairman and Chief Executive officer, Sean Healey and Darrell Crate, Executive Vice President and Chief Financial Officer. In this conference call, certain matters discussed will constitute forward-looking statements under the federal securities laws. Actual results and the timing of events could differ from that contemplated by the forward-looking statements due to a number of factors, including changes in securities or financial markets or in general economic conditions , competition for acquisitions of interest and investment management firms and the investment and financial performance of the company's existing affiliates and other risks detailed under the caption cautionary staples in the company's form 10-K. In connection with a discussion of AMG's quarterly results and business prospects, the investment performance of certain of AMG's affiliates will be discussed. The benchmarks that such performance is compared against are deemed to be the appropriate benchmarks. Investment management services are provided by the affiliates and not AMG itself. The information provided is not an offer or solicitation for investment , product or service I'd like to turn the call over to Bill Nutt.

Good thank you , John. Good morning and welcome to AMG's conference call discussing our operating and financial results for the third quarter of 2002. I'm Bill Nutt , AMG's chairman and CEO. With me today are Sean Healey, our president and Chief Operating Officer and Darrell Crate , our Chief Financial Officer. I'd like to begin today's call with an overview of our operating results for the quarter and the year to date. Sean will then provide additional details regarding AMG's operating results. Finally, Darryl will take us through the financials. As always, we look forward to your questions at the end of the call.

As you know, since last quarter's conference call , the equity markets have remained difficult with the major indices ending the quarter lower than the levels we saw in late July. These market conditions have been challenging for most investment managers , including many of our affiliates. However , AMG continues to benefit from the breadth and diversity among our affiliates which have approximately 150 different investment products that span a broad range of asset classes and investment styles. Our EBITDA contribution is generated fairly evenly by growth and equity value products and is almost equally divided among high net-worth , mutual fund and institutional distribution channels. This level of diversity provided stability to our earnings in the quarter. Moreover, our affiliates produced strong relative investment performance and, as Sean will discuss in just a moment, saw positive net client cash flows in directly managed assets for the quarter.

Notwithstanding recent market trends, we remain confident in the long-term growth prospects of our affiliates and of AMG itself. We have invested in firms with well-established , distinct investment styles that have performed well over a number of complete market cycles. Affiliates like Tweedy, Browne, Friess (ph)associates , Third Avenue Value, Rorer (ph), to name some of our affiliates have consistently applied their proven investment disciplines across the market cycles. This is one of the things that attracted us to these firms in the first place. In addition, our structure, which provides our affiliate managers with direct equity ownership in their firm is a powerful incentive for affiliate managers to continue to generate strong investment and financial performance during these difficult markets. We believe the consistency of our results to date bears out this strategy. With that, I'll turn to Sean to discuss our operating results in greater detail.

Thanks , Bill, good morning, everyone. The sharp declines in the equity market during the quarter affected nearly all of our affiliates. As a group, they produced strong relative performance for the quarter and the year to date. We believe as market conditions improve, this relative performance bodies well for future growth. We are pleased with $520 million in aggregate client cashflows from directly managed assets from the quarter. As we note, these flows result in essentially no change to our annualized EBITDA, due to the mix of fees and ownerships among affiliates.

Turning to the performance of individual affiliate, our largest affiliate, Tweedy, Browne continues to produce outstanding relative performance. The largest product, its five star rated global value fund ranks in the top quartile. Has over a thousand basis points over the EFFA year to date. I'm not sure what the music. Apologies for the music that we hear in the background. Our largest affiliate -- our second largest affiliate in terms of EBITDA contribution , growth manager, Friess associates is having a particular strong year in terms of relative performance. Their Brandywine fund is ahead of the S&P by approximately 700 basis points for the year. It's Brandywine Blue fund ranks in the top 1% of Morningstar's large cap growth funds and is approximate 1400 basis points ahead of the Russell 1000 for the year.

As a result of their strong relative performance, Friess has received positive recognition from the press and analyst. In August, Morningstar highlighted the Brandywine fund as one of five funds that has proven to produce superior long-term returns after significant market corrections. In addition, the portfolio manager of the Brandywine fund was profiled in this month's 'Money' magazine. Our other largest affiliates also generally performed quite well. Highlights include Laura (ph) asset management, a relative value manager which produced top quartile results this quarter in its major product, large cap value. Systematic Financial Management , another valued manager performed well in the quarter with its largest product, large cap value, producing top quartile results over the last nine months.

Rounding out the group, growth managers, Essex (ph) and Frontier (ph), as you would expect, are having a more difficult time with the markets, but in each case, their relative performance is strong. Finally, First Quadrant, a quantitative manager continues to have a very strong year and once again , produce performance fees during the quarter. Turning to our affiliate development initiatives, in addition to working with our affiliates on the best ways to position their businesses in these difficult times, we are continuing to invest in the distribution initiatives we have previously discussed as well as some early stage investments in other platform initiatives related to distribution and realizing economies of scale and operations in infrastructure more broadly.

Finally, as we mentioned last quarter, while in the near term we expect a reduced level of new investment activity , given the current uncertainty in the market, we continue to develop and strengthen relationships with high quality mid-size firms. And looking ahead, we remain very optimistic about our long-term prospects. We believe there are a large number of high quality midsize firms which have senior principals approaching retirement age and who will be seeking solutions to success and continuity issues. And our competition for these transaction s or transactions with these firms has been much reduced. With that, I turn if over to Darrell for discuss on the financials.

Thank you , Sean. Good morning, everyone. As you saw in the release , we reported cash earnings per share of $1.08 for the third quarter, 3 cents above First Call 's estimate with performance fees contributing about a penny. We reported GAAP earnings for the quarter of 57 cents. EBITDA was 32.7 million for the quarter, quarter-to-quarter, our margin of EBITDA contribution to end of period assets under management decreased from 23.4 basis points in the second quarter of 2002 to 22.2 basis points in the third quarter of 2002. Going forward, we believe a margin of about 21.2 will be appropriate in part due to the addition of Third Avenue.

Holding company expenses were 5.3 million for the quarter down from 6 million in the second quarter, reflecting a reduction in incentive compensation accruals. As you've indicated in the past, incentive compensation accruals are highly variable and are primarily based on the annual growth in our cash earnings per share.

With regard to taxes, we continue to accrue at a rate of 40%. And we expect this rate to be appropriate for the fourth quarter. Looking ahead to 2003, we expect our tax rate to increase slightly to 41% in the second half of the year as a result of an increase in revenues from affiliates subject to New York taxes, including Third Avenue. Our cash tax rate for the quarter was 12%. With the closing of our investment in Third Avenue, our deferred taxes increased to approximately $6 million per quarter. These deferred taxes will increase slightly to $6.2 million in the fourth quarter to reflect a full quarter's ownership of Third Avenue and remain at this level until we make additional investments.

Amortization for the quarter was 3.8 million. Recently we've received questions about intangibles in response to other companies which have taken impairment charges. As you would expect, both we and our accountants, PriceWaterhouseCoopers analyze the intangibles on a quarterly basis. Based on where we stand now, impairment not an issue for us. Depreciation was 1.5 million for the quarter. Our interest expense decreased by approximately 1 million for this quarter, reflecting the fact that we finished amortizing the fee on our LYONs issuance. Stockholders equity was 561 million.

Turning to our capital structure we recently closed a new $235 million revolving credit facility led by a strong group of banks. The facility matures in August of 2005. We have the option to add additional lenders in order to increase the size to 350 million. As of the third quarter, we had 75 million outstanding under our credit facility and 36 million in available cash on our balance sheet at the holding company. During the quarter, we used cash flow from operations as well as some of our available credit to fund the closing of our investment in Third Avenue Management as well as for opportunistic repurchases of our stock. Our total share repurchases in the quarter amounted to a little over 400,000 shares or just under $20 million.

Turning to guidance on future earnings, last quarter, we based guidance based on the assumption that the market would remain float or grow slightly. In fact, markets actually declined from that point until the end of the quarter. We are pleased that we modestly exceeded our estimates. For the fourth quarter, if markets remain flat from this point, we'd expect cash earnings per share to be in the range of $1.09 to $1.11. Looking ahead to next year, given the volatility and the equity markets in recent weeks, we do not think it is appropriate at this point to offer earnings guidance for 2003 but we'll provide guidance during the fourth quarter conference call in January. As Bill said, we believe our affiliates are well positioned to achieve solid growth in the coming year. Now with that , we'll be happy to answer some questions.

Thank you, sir. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press the star followed by the one on our push button phone. If you would like to decline from the polling process , press the star followed by the two. You will hear a three-tone prompt acknowledging your selection. If you are using speaker equipment , lift the hand set before you press the numbers. One moment , please , for the first question. Your first question is from William Katz with Merrill Lynch. Please go ahead with your question.

Good morning , everybody. Quick question on the asset flows, give us more color, details by class or asset distribution channel. If you could separate out what Third Avenue brought with them in the quarter, that would be helpful.

Great. Sean?

Why don't I do it this way, rather than do channel or try to go through every affiliate , I'll characterize the flows of the largest affiliates. And I think you know or I'll tell you what the -- what the primary channels are. Tweedy, Browne, High Net Worth mutual funds slightly positive. Friess, essentially flat, slightly -- very slightly negative. But obviously you heard our view that given their relative performance we expect that to turn. Essex saw continued outflows , but at a much more modest level. We think those have really stabilized. That's, again, no surprise, given their aggressive growth investment style. Those are institutional assets. Rorer , in the broker distributor channel had a reasonable level of outflows. In percentage terms for them, not that significant, but that was a bit disappointing. The trends in that business are quite good given the quality of their performance and on an overall basis, historically, they've proven to be tremendous at generating internal growth. So we're confident in that. But that was the biggest source of outflows.

Third Avenue, from the period that we made -- since we made our investment , not a full quarter, was slightly positive. Frontier (ph), institutional growth manager , strong positive flows. Systematic, broker distributed institutional value manager, strong positive flows. Welch & Forbes , recently acquired interest in the Boston-based High Net Worth firm. Slightly positive. And managers, slightly positive. That gives you a feel. First Quadrant also did a fantastic job in the quarter, not only in performance, but also in flows.

Follow-up. Could you reconcile your commentary that they have good relative performance and performance fees and so forth with the level of outflows I assume , the overlay assets are coming from them. Is there some kind of counter-cyclicality going on in that particular franchise or could there be a point where you could get both positive direct flows as well as positive overlay flows? I under the margin implications, but just from an optical perspective.

You could, Bill. You could have both. Typically, you don't. Typically it's more a pattern as you have seen. You also can have what they have this quarter , that is some conversion of a client who had only outflow -- or who had only overlay assets to actively managed assets at a higher fee, although in smaller amount. We've had all of those. But generally speaking , your assumption is correct, and that is, when you have higher flows into the directly managed portion of First Quadrant 's business , you have outflows in the overlay side.

I guess I would add, the overlays are, as you obviously understand , very small margin. They tend to be -- I would say they tend to be almost pattern-less. I wouldn't infer anything about the recent -- about the outflows this quarter to suggest they're having trouble with a certain kind of product or anything like that. They're doing a terrific job and their flows, in terms of revenue flows, are just terrific along with their performance.

Okay. Same question goes to capital management a little bit. Sounds like liquidity dried up just a hair in the quarter, following the acquisition of Third Avenue or the affiliation with Third Avenue. Reconciling your comments that maybe deals are on hold a little bit and the step down in liquidity at the holding company. How do you view cash flow going forward? Is it going to be predominantly toward share repurchase, debt or both? Just so we get an understanding of where you think the greatest urgency is.

This is Darryl. I think there are two components. You know, Sean will talk about deals , but let me step back and talk about capital structure at the holding company. That is that we regard liquidity as paramount. I think we've done a good job in building up cash and our businesses generate very strong recurring cash flows that we'll use to pay down debt. But also we'll continue to as we were in this last quarter, be opportunistic about repurchasing shares.

We feel confident in the prospects of our affiliates. So that's a fantastic investment. You'll see us continue to do that. But as well, I think when you talk about liquidity at holding company, something I would draw investors' attention to, is that you've seen over the last 12 months, a number of components of our liabilities move from the current liability section to the long-term section. You saw the LYONs move from current to long term, evidencing the increased tenor of that issue. As well as the recent refinancing of our bank facility which now takes what -- you know the $75 million of current liabilities and moves them into long term as we refinanced our facility and it's now not mature until 2005.

So I -- I have never felt better about the liquidity at the holding company and we'll continue to be very opportunistic, as we always have in putting that recurring cash flow to use in a way that is advantageous to generating cash earnings.

One more question for Bill or Sean. Curious, the markets obviously were pretty rough in the third quarter to say the least. Your earnings were up significantly. Year-over-year and relatively stable quarter-to-quarter, despite the market malaise. Are you getting to a point now with any of your affiliate where your first claim on revenue is reaching its limit and any kind of incremental pressure might start to have an impact on your earnings capability?

Sean, why don't you speak to that?

Nobody has come to us and said , you know , we need to -- we need to take some of your cash flow. Obviously, different affiliates are experiencing the downturn in the market s differently. And some clearly feeling it more. But I would say, broadly, I think Bill said, this but I'll reiterate , we've been very pleased with the long-term focus on business management, obtaining key personnel, all of the things you would expect good managers to be doing and the way the affiliates are dealing with these issues. We're working closely with them. But I would say , I don't want to get into a hypothetical exercise about how far down the market would have to go before , you know, we're going to be in effect experiencing the same margin compression that all of the other asset management peers are already experiencing. But -- clearly there's some level. But I think given where we are now , certainly where we are now, that's not a concern.

Bill, I thought your question indicated it, that is our structure, where you have retained equity of let us say, 30% to 40% of the firm in the hands of the broad group of the management team, that allows people to take not only that longer term view , but also to continue to sort of look at their short -term often salary or bonus-related needs with a little better view towards the future , so that retained direct equity in difficult markets is a real benefit to these firms.

One footnote question -- Darrell, for your guidance for the fourth quarter, assuming flat markets , the $1.09 to $1.11 does that include performance fees or is that a core number?

That's a core number. Sort of reiterate , we'll never in our guidance include performance fees. Because you know, we want them outside of the, you know, the general expectations for earnings.

Okay. Thanks very much.

Thanks , Bill.

: Our next question is from Mark Constant with the Lehman Brothers . Please go ahead with your question.

Good morning. I just had a couple quick follow-ups. Sean , you talked about your disappointment and Rorer's disappointment with their flows. You talked about them being top quartile this quarter. I know they've been great numbers over longer term. Was there a period earlier in the year, if you could refresh my memory , where they had underperformed? Is this a result of something like that or is this one of the client flow anomalies?

They were not doing as well as they had been historically earlier. But -- and I guess last year a little bit, but, no, they're year-to-date numbers are also terrific. Not driven just by this quarter. So I would say part of it is just, you know , flows in the channel. The broker's channel. And we're not surprised to see some outflow s in products positioned in that channel. But I think going forward , we're optimistic about their performance and expect to see a resumption of the very strong flows that this firm has always delivered.

Okay. Can you make any general comments, I'm not asking you to go affiliate by affiliate , but general comments about what you're seeing and hearing from people in the early fourth quarter? In terms of flows.

Honestly, it's too early.

It's too early.

It would be anecdotal. As you can tell, it's always difficult when markets are down and we're talking about excellent performance in terms of relative performance to peers and benchmarks , but we certainly think that as the markets have turned and if overall industry flows come back, we think we'll get more than our share of those. I wouldn't want to comment on the quarter just yet.

Okay. Lastly , I apologize if I missed this earlier in your comments, but I know the board sits down each December and sets your sort of internal year-over-year cash earnings growth hurdles for management compensation and the like. Can you give us a general sense of , you know, based on your expectations for $1.09 to the $1.11 for the fourth quarter, what your expectation of the presumed increase in holing company expense would be next year?

I would -- first, we actually do that in January.

Okay.

And I would respectfully suggest that we would rather sort of do it all of a piece in the January call. I don't want to do more than what Darrell has already done.

Okay. Is that in the 1.09 to 1.11, I assume that's something skin the with the third quarter in terms of accrual?

Yes.

Thank you. Our next question is from Michael Freudenstein with JP Morgan. Please go ahead with your question.

Good morning. Darrell , you mentioned in your comment s that you had no goodwill impairment issues this quarter. I was wondering if you could flush out for us sort of how you go about assessing it? Is it on an affiliate by affiliate basis or what your methodology is .

Not to get too detailed and buried in accounting jargon, but they have a process that is essentially similar to every other asset manager. We look at the intangibles, based on the channels. You look at each of the channels and the cash flow that comes to those channels. And then look -- as FAS 142 would prescribe, look at a fair market multiple for each of the channels. When we do that analysis, we're very comfortable with the intangibles on our balance sheet relative to the cash flow generation power of each of those channels. We also, as a second method to looking at intangibles, look at it on an affiliate by affiliate basis as well. Does that answer your question?

Yeah , that does. And then , just a quick question --

Those channels are institutional mutual funds and high network worth. You can see that with some of our peers as well.

Okay. Then I was just wondering, the owners' allocation declined below 50% this quarter. Could you give us some color on that?

That's just a mix issue. That's principally bringing in Third Avenue.

So is this a level we should be sort of assuming is going to be going -- is this sort of the effect of Third Avenue and going forward this is where it's going to be?

Yeah. That seems appropriate.

Great. Thank you.

Sure.

Thank you. Our next question is from Mark Lane with William Blair and company. Please go ahead with your question.

Lane (ph): Good morning, everyone.

Good morning , Mark.

Lane (ph): Just to clarify the guidance, on the second quarter conference call I think you said that your expectation for the year was 4.30 to 4.40 based on zero to 3% market return from the close on July 23rd. And I think even intraday today , the market -- well, as defined by the S&P 500 is up about 10%. So even taking the top end of that range, of that 3% growth for 4.40 for the year, that would imply $1.12 in the fourth quarter . I'm wondering, has the guidance really changed from the last quarter conference call or what's the thought process?

The guidance is essentially is very similar from thinking about the prospects of the business. Now , there's issues along the way. Example , since we gave that guidance to today , the S&P is up you know, actually it's just about 5.5%. The Dow is up 3%. The NASDAQ is essentially flat. And the Russell is down just about 4%. But if you were to look -- that all sounds good, but if you look back to September 30th, you can see that the S&P from the time that we gave guidance was down a little over 3%, the Dow was down 7%, the NASDAQ down 10%, the Russell down almost 5%. So a considerable amount of our revenues are booked based on assets on that day, both assets in arrears that are billed in arrears that are included in the third quarter earnings as well as we have almost a third of our business builds in advance or based on average assets under management that will be included in the fourth quarter.

So when we gave our guidance our simple assumption that the markets were flat on that day, they'd be flat on the 30th and flat on December 31st. They were down. So if anything, I would have expected our guidance to be a little lower. Now, what happened, we repurchased a couple shares that helped a bit. But most importantly, our affiliates outperformed. And in many respects and almost too long a list to go through on the conference call. Many outperformed their benchmarks, which certainly is very favorable, given , you know, our guidances against those benchmarks. And that's got us to where we are, which is between $1.09 and $1.11. That doesn't include performance fees.

Lane (ph): That thought process is helpful. The second question would be, can you provide or at least maybe some broad guidance on what would a pro forma number for the third quarter of last year be just for the adoption of FAS 142? Every company I cover provides a pro forma number for last year , what the contribution would have been in the prior quarter if FAS 142 were adopted.

I would say , without doing the -- I haven't done the pro forma math to figure out what that would be.

Lane (ph): Okay.

But I'd say it's approximately 8 cents or 9 cents is the change in the adoption from the accounting.

Lane (ph): 8 cents or 9 cents. Okay. Okay. Thank you very much.

Sure.

Thank you. Our next question is from Henry McVey with Morgan Stanley. Please go ahead with your question.

Good morning. Can you hear me?

Hi , Henry.

Just a couple things , one, can you give us an update on the Managers Funds? You used to spend more time talking about your initiative there's. You haven't done much. You said flows were slightly positive. Just bring us up to speed.

Yeah. The initiatives are still under way. And we've got a few new affiliate funds that have been rolled out, of course , this is a very difficult environment to be starting new funds. We are excited about the performance, even given how difficult the market is of this new Fidelity platform that we're on where -- platform is probably the wrong word, but status where we are one of a few fund families that can actually go into the Fidelity branches and market directly. And that's gone well. And I think as I mentioned previously, we have actually been able to broaden our -- the definition of the family to include all of our affiliate funds , Tweedy, Browne funds, Brandywine funds, et cetera. If you go to the Schwab conference, you'll see -- I think they're calling it an AMG village of all of the fund families, including Managers Fund together. So lots of exciting cross-marketing .

If you looked at total assets for Managers Fund , through the n end of the third quarter that were captured that versus year end, what's the apples-to-apples?

Half of their flows are from the fidelity. Is that what you're asking.

I'm trying to figure out, one where you're getting growth and two is the total asset base, where it is today versus where it was at the beginning of the year.

Yeah. Look, the performance has been with the markets quite negative year to date. And so the firm has generated a couple hundred million -- this is through 9/30, a couple hundred million of net flows, which, you know, in the mutual fund channel we think is pretty darn good. There are a lot of firms that have outflows, but that has been swamped by , you know, negative performance , which is -- has been four times that .

How many times, four?

Four. Roughly.

Just a couple other things. Darrell , the EBITDA, you had 520 million I think in flows. But it didn't contribute to EBITDA. I'm just trying to walk through exactly what happened there.

That's exactly right. And it's the mix issue, in that the -- while we had positive flow , you know, of course, this is an aggregated number base d upon inflows and outflows. We had outflows from either firms that had higher fees in which we own more and more inflows into firms which had lower fee products or which we own less.

I guess --

So it's some strong -- so the cutting through , stronger institutional flows.

Right.

Relative to High Net Worth or mutual funds.

That would support what you guys were saying about Rorer having weakness?

That's one out of a couple, yeah.

Last quarter I think you told us that performance fees were 8 million. I was trying to get the number for this quarter. Maybe we calculated --

A little bit over a million dollars in revenues.

This quarter that's all it was?

Yes.

Okay. And then I think that was it. I guess the thing I'm struggling with , I know another analyst asked about, the revenues as a percentage of AUMs , it's hard to get a feel on it. You were running 56 basis points you jumped up to 60, the last two quarters it's been up to 67 and this quarter was 65. Given the estimates that you said of $1.09 to $1.11, that would imply around 63 basis points. Is that in the ballpark?

Yeah, that is. I appreciate that it's been a bit difficult , because there's two factors, one , mix is changing as we've done transactions as well as performance fees. Again, the performance fees are almost against no assets, because there's also a management fee that's been incorporated. But I think you're right on with regard to, you know -- that feels like an appropriate level.

Good enough. Thanks, guys.

Thank you.

Thank you. Gentlemen , we do have time for one more question and the next question is from John Hall from Prudential Securities. Please go ahead with your question.

Good morning.

How are you, John?

Not too bad. Thank you. In your commentary when you were talking about acquisitions , you said near term activity is going to be slow. Not to nit-pick , but when you talk about near term , how long is that? And also , as I recall, the Friess deal was done in two -- or was negotiated in sort of two pieces. Are we getting closer to the next round of that acquisition?

Maybe second part first. That is that the additional portion of Friess is towards the end of 2004.

Okay.

And on the first part of your question , I'm not nitpicking , but I can't give you a specific answer, because as you understand , our business , the way we do the new investment strategy and that portion of our business, it is inherently opportunistic. And so our judgment is that fewer of the high quality mid-size firms that we are -- that we have good relationships with are likely to call us in the next , I'd say, couple of quarters.

But not all of the midsize firms are equity managers. Not all of them are necessarily independently owned. There might be a 'strategic owner,' a bank or an insurance company that has decided that asset management is no longer 'strategic' to them. Opportunities could present themselves. I think what we're trying to do is simply offer our judgment that nobody should be surprised in light of the market environment if we go two or three quarters without announcing a deal. Obviously we hope to get one done sooner.

Great. And then , just finally , is there -- are you seeing any put activity from any of the existing affiliates?

You know, we, of course, as we, you know , did transaction s over, you know, almost ten years ago , there are some puts that come due, but it is an immaterial amount recently. I'd say in the million , 2 million, $3 million, probably over a six-month period.

Any reason to expect prospectively it to accelerate?

No, I have no reason to expect that. I mean , every affiliate has its own schedule and process, but as I've said before , we sit down , we have discussions with them. There's nothing that's terribly surprising about the process.

Thank you.

Thanks, John.

At this time , I would like to turn the call back over to management. Please go ahead.

Once again, we appreciate your participation this morning and support during the quarter and into this fourth quarter. We appreciate your questions and hope we've been helpful in our responses. Thank you very much.

Thank you, sir. Ladies and gentlemen, this concludes the Affiliated Managers Group third quarter conference call. If you would like to listen to your replay of today's conference call , dial 303-590-3000 or 800-405-2236 with access number 501618. Once again , if you would like to list ton a replay of today's conference call please dial 303-590-3000 or 800-405-2236. With access number 501618. You may now disconnect and thank you for using AT&T teleconferencing