Ladies and gentlemen, thank you for standing by. And welcome to the SEI Third Quarter 2015 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session with instructions being given at that time. [Operator Instructions] And as a reminder, today's call will be recorded. I would now like to turn the conference over to our host and facilitator, as well as Chairman and CEO, Mr. Al West. Please go ahead, sir.

Thank you, and welcome, everybody. All of our segment leaders on the call with me, as well as Dennis McGonigle, SEI's CFO; and Kathy Heilig, SEI's Controller. I'll start by recapping the third quarter 2015. I will then turn it over to Dennis to cover LSV and the investment in new business segment. After that each of the business segment leaders will comment on the results for their segments. Then finally Kathy Heilig will provide you with some important companywide statistics. As usual, we will field questions at the end of each report. So let me start with the third quarter 2015. Third quarter earnings decreased by 5% over a year ago. Diluted earnings per share for the third quarter of $0.47 represents a 4% decrease from the $0.49 reported for the third quarter of 2014. And earnings for the quarter were negatively impacted by $6 million write-off of some software that was part of the SEI Wealth Platform. We also reported a 4% increase in revenue from three -- from the third quarter 2014 to the third 2015. Also during the third quarter 2015, our non-cash asset balances under management decreased by $18.3 billion. SEI's assets fell by $9 billion and LSV's assets fell by $9.3 billion. Finally, during the third quarter 2015, we repurchased 1.7 million shares of SEI stock at an average price of $50.40 per share. That translates to approximately 86 million of stock repurchases during the quarter. Now turning to sales, our net new revenue sales during the quarter was good. Of the $20.8 million of net new sales events we generated, $19.5 million are recurring revenues. Our each of the segment heads will address their third quarter sales results. Now while our business was -- while new business was a bright spot, all of…

Thanks, Al. Good afternoon, everyone. I will cover the third quarter results for the investments in new business segments, discuss the results of LSV Asset Management and discuss an item of note for the company during the quarter. During the third quarter of 2015, the investments in new business segment continued its focus principally on two areas, the ultrahigh net worth investors segment and the development of web-based investment services advise offering, coupled with the use of mobile technologies. During the quarter the investments in new business segment incur a loss of $3.7 million, which compares to a $3.4 million loss during the third quarter of 2014. There has been no material change in this segment. Regarding LSV, our earnings from LSV represent our approximate 39% ownership interest during the third quarter. LSV contributed $33.6 million in income to SEI during the quarter. This compares to a $38.2 million contribution for the third quarter of 2014. During the quarter asset balances declined by approximately $9.3 billion due to decrease market valuation, cash flows during the quarter were neutral. Revenue for LSV was approximately $102.8 million of which approximately 8% was performance fee related. One other item of note during the quarter was an approximately $6 million charge or $0.02 in earnings per share we took to write-down certain previously capitalized elements of our SWP Platform. This $6 million impacted the Banking segment by $3.6 million and the Advisor segment by $2.4 million. With that, I will take any questions you might have. Operator, any questions?

A question from the line of Robert Lee. Please go ahead.

Yeah. Hi. Good afternoon, Dennis.

Hi, Rob.

A quick question on LSV, can you just maybe update us, where they stand, couple things, number one is, notwithstanding, the recent fell off and decline in asset values but, if any of the key strategies are currently closed to new investors and then I don’t know, possible to any color kind of around there, I know, their pipeline for lack of a better way of putting it?

Sure. I mean, generally speaking the larger cap products are open and as they get their sectors of the market particularly on the lower cap size, smaller cap and some of the smaller, let say country products, those are the ones that wind up getting close, sometimes with when there is market movements like we had in the third, if that were to be attracted, that would open up capacity, but generally speaking it’s really cap-oriented, so larger capital are open kind of when the smaller cap size are generally want to close. In terms of the sales activity, I mean, they do have -- continue to have a good healthy sales activity around the world. There are -- they have clients in most markets and they continue to attract clients from all those market. But what happens as they -- as you get as big as they are a lot of their new client activity, new net cash flow gets offset by either clients rebalancing or just clients moving along. That’s why they had positive cash flow in the quarter which is offset by some negative flows.

Great. Thank you for taking my questions.

You are welcome.

Our next question is from the line of Chris Shutler. Please go ahead.

Hi, Dennis. Good afternoon.

Hi, Chris.

Somewhat unrelated, but I -- last quarter you mentioned, you might accelerate divesting of the trench of equity options in the backhalf of this year and I was just hoping that you could touch on that? I don’t think you did it, but just tell us how should we look at that item going forward?

Yeah. We didn’t do it and there are still possibly that could happen in the fourth quarter. But as you know, our options vest on earnings per share with the add back of option expense and this $6 million write-down that would factor into that. So we’re just kind of see how the fourth quarter plays out.

All right. Thank you.

So it’s possible to get all accelerated into the fourth quarter, if not they all stay on the current amortization schedule.

Okay. Thanks.

Thank you.

Our next question comes from the line Chris Donat. Please go ahead.

Hi. Good afternoon, Dennis.

Hi, Chris.

Hey. Just on one thing we have seen in the past with LSV is that the -- that your color you yield on average assets there, would increase in the third quarter from the second, but didn’t seem to happen this year and I think it’s normally a function of performance fees and what happens in the third quarter? Is something different this year or is it more just like the market having an impact on performance fees?

Yeah. I mean, our performance fees compared to last year are down.

Okay.

Last year’s third quarter was at, call it unusually high relative to any other experience we had with them and while this year’s third quarter I would say was little bit more normal relative to prior third quarter. So part of the math is that last year’s third quarter was just above normal, if you will.

Yeah.

So, I mentioned that, about 8% of the revenues in this quarter were performance fee related and that’s I would say relative to other third quarters in the past look like more normal.

Okay. Got it. Thanks.

Thank you.

[Operator Instructions] And we have a follow-up from the line of Robert Lee. Please go ahead.

Hey, Dennis. Just on LSV and I forgot, may be I miss it, but could you give us kind of revenue numbers or anything?

Yeah. The revenue for the quarter was $102.8 million.

$102.8 million. Great. That’s it. Thank you.

Thank you.

And gentlemen on the panel and ladies if there is any present, there are no questions in the queue at this time.

Thank you, Dennis. Now, I am going to turn it over to Joe Ujobai to discuss our Private Banking segment. Joe?

Hey. Thanks, Al. I will start with an update on the third quarter financials for the Private Banking segment. Quarterly revenue of $160 million was up slightly from the year ago quarter and up 6% compared to Q2 2015. Early in the quarter, we converted two U.S. clients to the SEI Wealth Platform on the same weekend, successfully testing our ability to convert multiple clients at the same time. In the U.K., assets from current clients continue to grow. Net cash flow to SWP during the quarter was $1.5 billion and AUA now totals $35.9 billion. Overall, the quarter was positively impacted by the growth of our SWP business. Quarterly profit of $12 million was up 25% from the year ago quarter and up 14% compared to Q2 2015. Profit was negatively impacted by two things, the $3.6 million of the write-off previously mentioned by Dennis and market volatility. In our asset management distribution business, asset declined by 7.5% to $18.2 billion. During the quarter, we had flat cash flows at some emerging market and other foreign investors pulled out of the market. This was offset by positive cash flow in other geographic regions. As a reminder, AMD is approximately 30% of this segments revenue. Net sales events for the quarter were $1.7 million in loyalty nonrecurring investment processing related professional services fees. To grow the private banking business, we made focus on the following areas. Number one, executing the Wells Fargo conversion plan. This includes the continued buildout of technology and infrastructure to deliver scale on the platform. It also includes the build towards our software-as-a-service delivery model as well client conversion and change management programs. We are in early days but we are making good progress. Number two, progressing sales activity in the U.S. and the UK. As expected, the Wells Fargo announcement had a positive impact on our sales activity with both new names and current clients. We are encouraged by our progress with other important prospects. In summary, market headwinds will impact profitability as some of our revenue is asset based. Also as we implement Wells and sign other large prospects, we will continue to make substantial investments in the platform to meet their needs. Quarter-by-quarter margin will be variable but we are making good progress as we execute our strategy to deliver the SEI Wealth Platform and to grow our business. At this time, I’ll take any questions.

We have a question from the line of Glenn Greene. Please go ahead.

Thanks. Hey Joe. How are you?

Hey Glenn.

So just looking at and normalizing for that one-time charge just to make sure all are on the same page. It looks 13.5% margin sort of normalized which given the market headwinds and what not look like a pretty healthy margin increase Q-to-Q. Am I missing something and how did we sort of deliver that in the context of what you are sort of explaining?

Well, I think whenever we talked, I’m focused on making sure that the money we spend adds value either to build new client -- to sign new clients or to lower our cost. So there is a -- quarter to quarter things bounce around a little bit. So we obviously didn't have a big sales comp expense but we did have the -- we did have the write-off. Unfortunately, we also had some lower expenses because asset management revenues went down and direct costs associated with that went down. I prefer to have that expense. So we’re trying to manage it as best as we can. Clearly, we’re going to need to make some investment as we bring in more clients but I think we’re making progress.

The AMD flows being relatively flat. I mean, I know you sort of talked about this at the analyst day. But just remind us, how did that compare sequentially Q-to-Q, I know there are some challenges, I think, maybe in Asia, Middle East, West?

Yeah. We’ve seen challenges in some of the emerging markets, Asia and Latin America with some of our bigger distribution relationships. So we had about $370 million in net cash flow in Q2 but that was about flat in Q3.

Okay. And then just a little bit more color, maybe on the SWP big prospect pipeline. I know you went into this at lot of the analyst event, but maybe high level what you sort of seen post the Wells announcement is that we color on the pipeline from bigger prospects?

So Wells is, as I’ve mentioned, certainly important to us as part of our rollout strategy platform. And it certainly helped us with sales activity both with clients and with prospects. But these as I -- as we all know a long decision processes. So we continue to work through the pipeline but we feel good about the progress we’re making.

Okay. Thanks Joe.

Thanks.

We have a question from the line of Robert Lee. Please go ahead.

Thank you. Hi, Joe. How are you?

Good. Thanks.

Just kind of curious, I mean, obviously you’ve given the color on spending for Wells and another potential big clients. I’m just curious, I mean, have you actually kind of start to spend the money for Wells. Yeah, there is -- that type of thing kind of -- the incremental cost will bring to prepare for them that kind of starting to ramp up. So it’s ready in the numbers or is that something that all of us being equal, you expect over course of next year. So start kind of creeping in?

I think both. We’re -- we've started to ramp up some. Again, we’re focusing on making sure this platform scales. I’m trying to bring a lot of clients on to this platform, so does Wayne. So we’re investing in scale. We’re also investing in this software-as-a-service delivery, which is sort of more sort of a kin to the ASP solution we offered in the past. So we’ve gotten started but there is still some more ramp up to happen in coming quarters.

Okay. That was actually my only question. Thank you.

Thanks.

And we have a question from the line of Chris Shutler. Please go ahead.

Hey Joe.

Hi Chris.

So just two questions. First on the expense side in the segment. If you exclude the kind of the big sale last quarter and the commissions associated with that. I mean, it seems like the expenses have been really flatten out for six quarters in a row. So should we expect that to essentially continue if you were to exclude future sales events or will it creep up?

As I mentioned, those things we’re investing in, we’re investing in scale, we’re investing in ASP. We helped to pay a lot of sales comp over time. Sometimes expenses associated with conversions. They don’t always fall in the same quarter as the revenue associated. So again we are watching this very carefully but at the same time, we recognize we have a big business opportunity and we’ll invest where we think it makes sense.

Okay. You kind of just touched on those but I was going to ask on the -- like Wells or on any other big prospects. How much of a mismatch should we expect between the implementation/professional services revenue in the expenses on the P&L? Will there be a decent bit of mismatch or not?

Well, we’re trying that. We try to do that as closely sort of tight as possible. But sometimes we spend ahead of the revenue. I think that makes sense given the opportunity we have. And as I had mentioned sort of on the calls for a very long time, every quarter is going to have total anomalies given the amount of work we’re doing and like we said we try to keep it as close as possible. So that makes sense but it’s hard to predict that.

Okay. Thanks.

There are no further questions in queue at this time. End of Q&A:

Thank you, Joe. And next segment is Investment Advisors. And Wayne Withrow will cover this segment.

Thank you, Al. During the third quarter, we continue good cash flow momentum and had solid quarter of new advisor recruiting although market headwinds and increased investments hurt our bottomline. Assets under management were $48.7 billion at September 30th, a 2% decline from the June 30th bounce. During the quarter, we had almost $1.4 billion of positive net cash flow. For the first nine months of this year, we had $3.5 billion in net cash flow, which compares to $3.8 billion for the entire year in 2014. Revenues for the quarter was $76.2 million. This compares to $77.8 million for the second quarter and represents a 2% sequential decline. A decrease in market valuations and a shift to more conservative investment strategies by some of our advisors will achieve drivers of this decline while net cash flow partially offset these negatives. Expense for the quarter increased from last quarter, primarily due to an increase in personnel cost associated with our asset and client growth, increased expenses associated with both the development and implementation of the SEI Wealth Platform and the one-time software write-off mentioned by Dennis. On the new business front, we signed 240 new advisors. This brings that total for the year to 597 and our pipeline of prospects remains very strong. Moving onto the status of SEI Wealth Platform, we are on track for our October 31st conversion event. This will almost double the amount of advisor AUM on the platform and represents the style of the entire advisor business migrating onto the platform. In preparation for this migration, we had increased staffing on our conversion and operations team. The new revenue opportunities enabled by the platform should begin next year and I expect them to begin making an impact in 2017. In summary, net cash flow and new advisory recruiting were very positive for the quarter. Momentum for our existing business model remains strong but market headwinds and increased investment have made it difficult in the short-term to translate this momentum to the bottomline. Nevertheless, I mean optimistic about our prospects and I’m confident in our investments to capitalize on them. I now welcome any questions you may have. Operator?

Yeah. We have a question from the line of Robert Lee. Please go ahead.

Good afternoon, Wayne.

Hi Rob.

Couple of quick question. Just the first thing is that you went through some of the expense side. And so if we exclude the software charge, we’d be thinking that roughly 42 odd million is kind of ongoing expense level at least for the foreseeable future at the starting point?

I don’t know if I say that’s right. I think what we need to do is we need to time our investments and as we see the opportunity, it’s going to be a function of sales opportunities we see, the commissions associated with that and how fast we migrate onto the platform and what resource that requires.

Okay. And if I think of the revenue yield, I mean, maybe this isn’t the right way to look at but just seeing your revenue over kind of average AUM, understanding that clients got more defensive and yet some pickup in the liquidity assets and what not but if I think of it kind of over the past three quarters resulted for last year, it does feel like it’s been running at a somewhat lower level. Is there some kind of underneath the recent more defensive stance? Is there some other something else that’s been kind of impacting the revenue yield on the AUM, turns us -- make just different mix of business or something?

If you go back to the third quarter of last year, if you recall, we mentioned that we had some advisory assets that went into past investment strategies, which resulted in a lower yield and that was in the third quarter last year. We also reduced the expense ratios of a couple of their funds to make them more competitive, so that impacted the yield. Those two happened in the third quarter last year if you go back and you’ve seen that’s likely to be fully reflected in the yields. And you are also right about liquidity. I mean, assets were down 2% sequentially what I would call a more permanent assets or higher revenue assets. Fixed income and equity are down over 6%. So that’s the bad news. The good news is that we kept the assets as we went into low yielding product and I fully expect it, when the markets recover we will get those assets back in our other high yielding products.

Great. Then maybe just one, last question. Maybe it’s just too early in the quarter to think about or talk about but just kind of curious from where you said, clients got more defensive and I guess in Q3, August, maybe in September. But are you sensing or expecting any shift in investor activity or sentiment, or is it kind of still getting more defensive, or kind of -- they reacted, it’s done and they are kind of seating and waiting, any kind of color around that investor behavior?

Rob, I wish I’m smart enough to kind of really know the answer to that question. So, I guess what I would say is we saw a movement and that occurred and people are sort of staying put right now but we are not seeing that movement is continuing it, if that’s what your question was.

Yeah.

What I will do in the latter part of this quarter? I really don’t know.

Sure. Okay. Thanks so much, Wayne.

Next question is from the line of Chris Donat. Please go ahead.

Hey, Wayne. Just wanted to explore a little deeper on what Rob asked with his first question. In terms of what you’ve seen in the past with investors, maybe stepping to the sidelines. Is that why you think they are likely to reengage in equities and therefore, generate higher fees in the future? Is that sort of the pattern you’ve seen in prior cycles?

We see that all the time. I think if you want to stress this to 2008, where we were much more in panic mode, the assets came out of our long-term investment products and completely left that SEI’s. They went into guaranteed products, be it bank sponsored products, annuities, those types of things. We have not seen that. We’ve kept the assets and as I said, I fully expect that they will move back into our high yielding products as soon as people get more confident.

Got it. Okay. Thanks.

Our next question will come from the line of Glenn Greene. Please go ahead.

Thanks. Good afternoon, Wayne.

Hi, Glenn.

First question, so a positive question, all the skittishness we are talking about, the flows $1.4 billion, probably the best number I recall in a long, long time if ever.

Since 2000, but I’m not keeping track.

All right. So help me reconcile that? I mean, how do you have such strong flows given the context of the skittishness and all those kind of commentary?

I don’t think people are absolutely leaving the market. We have a big book of business and we have a really big book of business and people move back in sometime or markets move back in sometime, exaggerates the bottom line results. With our activity with new advisors, we made very, very strong and as Al mentioned, we are increasing the number of sales territories and you see some of that in the expense. We are increasing our footprint because we see more opportunities to get more assets, we will get more coverage.

Okay. The other side of the coin, not a positive question. So if I look at the revenue growth and you called it out, up 2% year-over-year, down 2% q-to-q. But if I look at the profitability and I know part of investments. It fell 10% q-to-q and 10% year-over-year, which is a lot in sort of a one quarter period. That’s excluding the one-time charge. Can you sort of talk about that, or are we sort of a run rate level of profitability? Did you have the full investments in here, there is more to go? And I guess I’m just trying to think about the margin level on a normalized basis relative to what had been high 40% level, not too long ago?

Yeah. I think we are still in a situation where we could grow the profits for this business. One dynamic to keep in mind is when you look at the asset growth, we had the clients in the market reflected in our revenue and we all set that by 1 point, not completely but we help to offset that with $1.4 billion in net new sales. Net new sales has an expense component associated with it where appreciation and depreciation in the market really don’t have much expense tied to them. They kind of fall right through the bottom line. So asset growth for markets is much, much more profitable than asset growth from actual sales if that makes sense.

It does. And what about the incremental investments? Were there incremental investments in the quarter around SWP, or are we just sort of talking about the sales -- it sounds like sales commissions but you had a strong sales quarter?

There were absolutely investments in SWP associated with both development and in the conversion activity as we begin the migration of the book. But there were also investments in the sales force and growing the operational and the structure for the traditional business model or both.

Okay. All right. Thanks, Wayne.

And our last question in the queue at this time comes from the line of Chris Shutler. Please go ahead.

Hey, Wayne. All my questions have been answered.

Thanks, Chris.

There are no further questions in queue at this time. End of Q&A:

Okay. Thank you, Wayne. Our next segment is Institutional Investors. So, I’m going to turn it over to Ed Loughlin to discuss his segment. Ed?

Thanks, Al. Good afternoon, everyone. Today, I’m going to start by framing the investment landscape during the third quarter. The quarter was marked by heightened volatility with high quality fixed income segments faring pretty well, while higher risk segments delivered a range of negative returns. Global equity markets feel significantly, the steep declines ranging from negative 3% for U.S. small cap to negative 17% for emerging market equities. As you know, revenue for the Institutional segment is asset based is calculated by averaging the last four months ending balances. Market depreciation negatively impacts revenues during the quarter and if capital markets are negative during the last month of the quarter, revenue is negatively impacted for two quarters. Ending asset balances compared to the second quarter declined by $4.8 billion to $73 billion. Revenues of $74 million for the third quarter increased 3% compared to the year ago period. However, third quarter revenues declined $1.5 million compared to the second quarter due to capital market performance during the quarter. I would expect fourth quarter revenues to be negatively impacted due to starting the fee calculation with depressed September ending asset balances. Quarterly profits of $37 million were flat year-to-year but declined $2 million compared to the second quarter. Margins of 50% declined slightly compared to the second quarter 2015 and the year ago period. Net new client assets funded during the quarter was negative $144 million due to slower client transitions during the summer. As a result, the backlog of committed but unfunded assets at quarter end was $2.5 billion. New client sales closed during the quarter were $1.7 billion. New client adoption continues to be well diversified by both market segment and geography. So in closing, we continued to be well positioned to successfully compete in the institutional fiduciary management space and enjoy strong pipeline and we remain optimistic about the growth opportunities for this segment. Thank you very much and I’m happy to entertain any questions you may have.

Our first question will come from the line of Chris Shutler. Please go ahead.

Hey, Ed.

Hey, Chris.

So just long question. It looks like the average fee rate has continued to improve modestly this year. I’m guessing that’s a mix issue gravitating, maybe a little bit more towards Al’s but is a little bit surprising given the unbundling trend that you have talked about a number of times. So maybe just touch on that and secondly, what percentage of your assets today are in alternative?

Sure. I guess the trend towards unbundling. That typically is with larger institutional investors. So, we continue to see a fair amount and what we call the core market. They are bundled types of deals. So that’s something that is not across the board, the unbundling and the pressure on the fees from that perspective. Cost continues to grow in popularity. I would say that’s of the $73 billion that we have in assets. We have about $5 billion on alternative programs, so it’s relatively small for the proportion of the assets.

Okay. Thanks a lot.

Sure.

Your next question is from Glenn Greene. Please go ahead.

Thanks. Hey, Ed. How are you?

Do you have easy ones for me or hard?

Yeah. They are really easy.

Okay. All right.

The negative funding from the quarter which was unusual, just clarify that a little bit more and then the backlog of the $2.5 billion. Do you expect that to convert to sort of a normal level during the quarter and like we call it being, sort of generally converts within the quarter or within 90-days kind of thing?

Yeah. I mean, there is kind of good news and bad news. The good news is that we continue to see a lot of sales activity, positive sales activity in closes and the global markets, the U.K. market in particular. And the contract process is slow there. And it’s primarily because the trustees do not work for the company. They are separate from the company. So unlike in the U.S., where if the contract is negotiated, it can just be sent around to the new office mail and signed by other trustees because they are employees of the company, doesn’t happen that way in the U.K. And they don’t call special meetings just to sign our contract. So there really is kind of a delay. We have about 10 clients that are in that backlog. I would suspect that between now and end of the year, the bulk of those, if not all of those would be funded. And then the summer times just maybe a little bit slower for funding just in general.

Okay. Great. Thanks

Sure.

And we have a question from the line of Robert Lee. Please go ahead.

Thank you. Hi, Ed. How are you?

Good, Robert. How are you doing?

Very good. Thanks. Just a quick question on expense levels of -- I mean, just the absolute level of expenses in the quarter. I mean since the fourth quarter of ’13, I think it’s up only about 3.5% and it’s been kind of pretty much in $35 million, $36 million range for almost I guess next quarter would be two years. So I am just kind of curious if there is -- do you think there maybe any kind of pent-up investment need in this segment, whether it’s infrastructure or adding personnel, or do you feel pretty comfortable that you’ve been able to match expenses, build that kind of -- continue to build infrastructure and personnel and marketing and not see -- haven’t expect much ramp up in expense levels?

I think that your observation at the expense levels is pretty much correct. I think that one thing that would change that that those change would be direct costs, so the more successful that we are outside of the U.S., okay, the management costs there we account for was a different, so that’s good news. I have other good news for you, I am not going to develop my own SWP, okay. So I will convert to that when it’s ready. So you don’t have to worry about any rogue project going on in the institutional loan business. So other than that, we can’t just kind of invest through the business. So we buy new modelers, we’ve done that in the UK last year, we did in the US this year and it just gets absorb by the business.

Great. That was it. Thank you.

Sure.

There are no further questions in queue at this time. End of Q&A:

Thank you, Eric. And our final segment today is investment managers. I now turn it over to Steve Meyer to discuss this segment.

Thanks, Al. Good afternoon, everyone. For the third quarter of 2015, revenues for the segment totaled $67.2 million, which is $3.5 million or 5.5% higher than our revenue in the third quarter of 2014 and was slightly lower as compared to our revenue in the second quarter of 2015. This quarter-over-quarter minor decrease in revenue was primarily due to market declines during the quarter as market depreciation more than offset our new client funding. Our quarterly profit for the segment of $23.3 million was approximately $1.9 million or 7.5% lower than the second quarter of 2015. This decrease in profit was primarily driven by our increase in investment and addition of headcount for future new business. Third-party asset balances at the end of the third quarter of 2015 were $376.1 billion, approximately $5.8 billion or 1.5% lower as compared to an asset balances at the end of the second quarter of 2015. Decrease in assets was primarily due to market depreciation of $12.4 billion offset by net client funding of $6.6 billion. Turning to market activity, during the third quarter of 2015, despite market volatility we had a solid sales quarter. Net new business sales events totaled $7.1 million in annualized revenue. These sales included new name sales and expansion of our business with our current clients. In summary, despite volatile markets which dampened the revenue growth in the quarter, we continue to add new business and see growth opportunity in the market. To that end, we will continue to invest in our solutions and workforce as we look towards executing on this growth. That concludes my prepared remarks. And I will now turn it over to any questions you may have.

And we have a question from the line of Robert Lee. Please go ahead.

Great. And hi, Steve, how are you?

Good. How are you doing, Rob?

Good. Thanks. Curious in the past at least the past couple of quarters you had given us the kind of previously one pipeline but that hasn’t converted yet. So I am just kind of curious where that stands at this point?

Yeah, I think you’re referring to backlog and that’s hovering right around $30 million.

So I guess it’s been relatively consistent last couple of quarters?

Yeah, I mean, I think funds roughly as we continue to sell and grow business in the quarter that typically goes on for at least a couple of quarters, and then obviously we’re working to fund what’s on the backlog as quickly as possible.

Okay. And maybe quick question on the competitive environment. Some of your big competitors who are banks, I just kind of curious if you’re seeing any change in their behaviors, in other words pretty impressive competitors? But presumably given their desire to grow their fee-based businesses, are you seeing any kind of any change either coming less rational or I mean just kind of curious if you’re seeing any change?

Well, I think I don’t think there is any change in selling this quarter, but I think what we continue to see this year it’s proven out and it’s not just our bank-based competitors. This is a very competitive market to our fees and competitors that try to compete with fees, which certainly puts pressures. But I think when you stick to the right segment of the market and the values that you entered the market with, we’re really focused on not providing commodity for our clients and new prospects. And I think when you match up with the right folks, while fees are always important, I think people are willing to pay for the right value proposition. So what I say is I think what we see from all of our competitors is a little bit more aggressiveness, but nothing that’s out of the norm behavior-wise otherwise.

Okay. And last question just any more commercials planning on tapping soon?

Thank you, Rob, for bringing that. Yes, you can hear us on Bloomberg every day. Thank you for the plug well.

Our next question is from Chris Donat. Please go ahead.

Hey, Steve, just I am actually flipping through the slide deck from your investor day. And just wanted to get your comments on sensitivity to market moves like we had and how we should think about the mix of the roughly $400 billion of assets under administration, what are the biggest buckets there if we want to think about them and just in broad strokes?

Well, Chris, it’s a great question, but I think it’s a difficult question. And if you look at, we would diverse client base which is great. Obviously a good portion of our business is about 56% is in the alternative side which ranges from hedge fund, some fund to funds private equity. So it’s hard for me to give you a sliver of percentage moves. But I would tell you if you look at most hedge fund investors for Q3, I think the average hedge fund was down around 3.9%. If you look at our asset declines, we’re down about 1.5%. I think if you went back to 2008 and look at the declines there, you would see a similar trend. While we certainly went down, I don’t think we had poised as an aggressive impact as kind of the pure asset classes or even some of our competitors. And I think what has balanced that is we do have a good diverse portfolio of clients. So I would say in general and I am not sure if it’s helped you completely, but we are not immune to the market moves and certainly we saw that, but I do think because of the caliber of our client base and the diverseness and the diversity of them it does buffer up somewhat.

Okay. That helps. And yes, like you said, there is other intellectuals I was look at there that suggests to me that maybe you would be a little worsening but you a little better. And there is partially diversity, it’s hard to see from the outside, but the data shows that. So that helps. Thanks.

Sure.

Question will come from the line of Chris Shutler. Please go ahead.

Hey, Steve.

Hi, Chris, how are you?

I am good. How are you?

Very good.

Good. Two questions. First, the net sales, they were the 7.1, they were up year-over-year but down from the last three quarters. Were there any customer losses that offset maybe gross sales activity?

Yeah, that is a net number and this business is always losses, there was no what I would say significant losses, I would certainly bring them up. We certainly have a significant recontract. I view that as a part of the business data. So the number you would get with net what I would say few is we are right in the range of and I choose my words carefully, but I view it as a solid quarter. I would expect that sales number and our goal is to drive that sales number higher.

All right. Great. And then the pipeline, I mean, I guess you just alluded to it, but if the medium term pipeline I mean that you’ve seen now compared to maybe what you saw the last several quarters, is that on par, better, worse?

Chris, the number I just gave just to be clear, it’s a real tough and say the number I gave previously was backlog. That is deals that we have won that have yet to be funded. I think what you’re asking is pipelines or the deals out there. What I would tell you is, it’s strong. Our pipeline has probably the largest been in two years. However, it is taking longer to get to the pipeline.

All right. Thanks a lot.

Sure.

There are no further questions in queue. End of Q&A:

Thanks, Steve. I would like Kathy Heilig to give you a few company-wide statistics. Kathy?

Thanks, Al. Good afternoon, everyone. I had some additional corporate information about this quarter. Third quarter cash flow from operations was $117.7 million or $0.70 per share, which brings year-to-date cash flow from operations to $274.5 million. Third quarter free cash flow was $91.2 million or $0.54 per share, which brings year-to-date free cash flow to $216 million. Capital expenditures for the third quarter, excluding any capitalized software, were $20 million and we project about another $10 million of expenditures, capital expenditures in the fourth quarter. The tax rate as noted in release was 34.1%. However, we project the overall annual tax rate to be 35%. We also would like to remind you that many of our comments are forward-looking statements and are based upon assumptions that involve risks and that financial information presented in our release and on this call is unaudited. Future revenues and income could differ from expected results. We have no obligation to publicly update or correct any statements herein as a result of future developments. You should refer to our periodic SEC filings for description of various risks and uncertainties that could affect our future financial results. And now please feel free to ask any other questions that you may have.

And we have a question from the line of Glenn Greene.

Hey, Dennis, just back on LSV real quickly, the outperformance fee dynamic. Can you remind us of the fourth quarter last year what the performance fees were and if there are any high level expectations, how we should think about the fourth quarter this year?

Well, it’s hard to predict the next quarter, but future performance fees because of based on performance, so that’s little bit more challenging. The fourth quarter is generally -- last year was in a similar range about 7% of total revenue.

Okay.

So it’s roughly in the same range that we had in…

And 3Q of last year was what?

That was about close to 13%, 14% of revenue.

Okay. Great. That’s it. Thanks.

You are welcome.

And there are no further questions in queue. End of Q&A:

So ladies and gentlemen, despite our headwinds we are optimistic about what we’re doing and the investments we are making. Looking ahead, we intend to keep our focus on long-term growth, revenues and profits, and we remain bullish about our opportunities. So, good afternoon. And thank you for your time and inputs.