Good morning. My name is Karen, and I'll be your conference operator today. I'd 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 the Virtus website. [Operator Instructions] I will now turn the conference to your host, Joe Fazzino.

Thank you, Karen, 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 first quarter of 2013. Before we begin, I direct your attention to the important disclosures on Page 2 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 the statements. 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 and 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, www.virtus.com. 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 results and should be read in conjunction with the 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. This morning, we will begin with remarks from President and Chief Executive Officer, George Aylward, who will review our accomplishments and operating results for the quarter. Mike Angerthal, Executive Vice President and Chief Financial Officer, will then discuss our financial results in further detail and will also review the balance sheet and capital items. We will conclude by opening up the call to your questions. Now I would like to turn the call over to George Aylward. George?

Good morning, everyone, and thank you for joining our call today. Let me start by reviewing the financial results for the quarter, which were exceptionally strong and represent a very good start to the year. We continued to deliver a significant top line and bottom line growth, including record sales, net flows and profitability. As such, we are continuing the trend of the past few years of sustaining a very high level of sales and consistently above average growth, which has translated into increased profitability and operating margin. We had record total sales and net flows for the quarter on the strength of significantly higher mutual fund sales and net flows. We also had contributions from higher institutional and separately managed account sales inflows. Total sales of $6.2 billion represented a 78% increase from the first quarter of last year and a sequential increase of 62% from the fourth quarter. We also have record $3.7 billion of positive net flows that nearly doubled the net flows from the year earlier and $2 billion more than our net flows last quarter. As a result of these substantial net flows and market appreciation from a very constructive market in the quarter, assets under management grew to $51.2 billion. The biggest driver for our growth continues to be mutual fund sales and we had our best quarter ever for fund sales. Sales were $5.7 billion in the quarter or 98% higher than in the first quarter of last year and 68% higher on a sequential basis. The mutual fund sales rate for the quarter was 90% so we continue to be at the top end of the industry for sales through intermediaries. This continue to high level of sales as a result of our product rep, strong investment performance and effective distribution and…

Thanks, George. Good morning, everyone. In the first quarter, we continued to deliver strong financial results across all our key metrics. And this morning, I'm going to review our quarterly results, starting with assets under management, sales and flows. Then I'll review our operating results, including our key income statement line items and provide an overview of our balance sheet and capital position. Starting on Slide 7, Assets Under Management. We ended the quarter with total AUM of $51.2 billion, up 35% from the prior year and 12% over the prior quarter. The sequential and year-over-year increases in AUM are primarily related to the impact of strong net flows, which contributed approximately 2/3 of the growth and asset appreciation from the strong performance of the financial markets. The year-over-year increase also included higher separately managed account assets from the addition of Rampart. As a result of our consistent strong mutual fund flows, mutual fund AUM are up 53% from the prior year and 18% from the prior quarter. In addition, separately managed account assets are up 50% from the prior year and 10% on a sequential basis. Long-term assets increased 14% sequentially to $49.4 billion and also grew by $13.2 billion, representing 37% growth over the prior year. With our consistently strong equity sales and market appreciation, the percentage of equity assets increased 150 basis points to 60.6%, which is the highest percentage over the past 4 years and money market assets declined to less than 4% of our total AUM. These are key factors contributing to the increasing average fee rates and higher investment management fees. In the first quarter, we achieved record levels of total sales and net flows, as well as record results for mutual fund sales inflows. Total sales for the quarter were $6.2 billion, an…

Thanks, Mike. Before we take your questions, I just want to provide some final thoughts. The strong results of the quarter follow a trend of continued and progressive growth in sales and profitability. By successfully leveraging our business model and executing on our strategy, we've distinguished Virtus as a fast-growing company. We believe that we're very well-positioned to continue that growth as we have the critical elements in place including our model, our breadth of product, our strong distribution capabilities and the effective execution of our strategies. With that, we'll take some questions. [Operator Instructions] Karen, can you open up the lines, please?

[Operator Instructions] The first question we have comes from the line of Michael Kim of Sandler O'Neill. Michael S. Kim - Sandler O'Neill + Partners, L.P., Research Division: Just a couple of questions for me. First, George, can you talk a little bit more about sort of the outlook for asset allocation trends or themes coming out of the first quarter across both retail and institutional investors? So would you expect investors to maybe continue to gradually move up the risk curve, assuming the broader markets remain constructive? Or do you think there's some risk here that we kind of returned it to somewhat of a holding pattern?

Great question. I -- earlier, I think in the first quarter, we did see more of an interest in more of the riskier assets. And the big question has been whether that will come at the expense of the fixed income products or whether it would come more from cash on the sidelines. I think from our experience and what we've seen, a lot of that in the first quarter came more so from cash that had not been put to use as opposed to the fixed income. And for us, we continue to see a strength in the fixed income as well as the increase of the riskier per se, equity types of assets. I think as we see going forward as we look through what we've seen in April, we're thinking going forward. I do think there'll be a continued interest in the non-fixed income assets. And I think people will be making investment decisions not only just per se, saying I'm willing to take more risk but I'm willing to put my money to work in other types of strategies as opposed to traditional credit. And we think on the fixed income side that really the change that you'll see is people trying to take opportunities in strategies that they may feel more comfortable with in the environment going forward, will perform better than maybe some of the categories where they were generally putting money. We feel good on the fixed income side with our emerging -- with our senior floating rate, as well as our traditional Multi-Sector Short Term Bond Fund that those will continue to be a great place to put your fixed income allocation going forward. But I think a lot of what we see in the latter part of the year is really going to be driven by what happens in the macro environment as we move through the next few quarters as people are trying to determine what is the economic outlook here in the U.S. as compared to outside of the U.S. But we continue to see people needing to put their money to work, maybe thinking a little differently about how they do their allocation. But they're still touching upon many of the other traditional categories where there's assets. Michael S. Kim - Sandler O'Neill + Partners, L.P., Research Division: Okay. That's helpful. And then can you maybe give us some color on how the mutual fund flows trended through the first quarter? And then maybe how that matches up against the $1 billion of inflows that you mentioned for April? So just curious if you've seen any sort of volatility or any meaningful shifts in kind of flow trends more recently.

Yes, I mean, obviously, the whole industry, we experienced a very positive early part in the first quarter. Again, and it's really just following up onto your point, which was people beginning to have more of a risk appetite. I think for us, we generally saw that sustained and be pretty constant. I mean, for us, we've seen more increase in some of our products that we think should be attractive like the senior floating rate. For us like the dynamic AlphaSector, which is a long short variation of our other successful premium AlphaSector Fund. So we saw that to be a continued strong trend throughout the first quarter and again, as Mike and I both alluded to, we basically saw the similar type of results in the month of April. So again, that's -- again, it's just 4 months of the year and I think there are a lot of things that could influence the behavior in the second half of the year and we'll sort of probably see that as we emerge. But we're pleased with what we saw in the first 4 months. Michael S. Kim - Sandler O'Neill + Partners, L.P., Research Division: Okay. And just one last quick one. Appreciate you taking all of my questions here. And maybe for Mike, just a follow-up on the capital management front, is the priority to still further strengthen the balance sheet? And then in that context, how are you thinking about share repurchases going forward? Maybe being a bit more opportunistic, just given the rally in the stock or sticking with more of a consistent buyback?

Consistently, on our share repurchases, we have generally used the program to offset dilution based on the fact that we're using equity in connection with our annual incentive programs. And that's a trend that we would expect to continue and as what we've been focused on over the past several years. With respect to the strength of the balance sheet, we've talked about our ability to retain the capital that we generate and start to move our averages of the metrics that we look at, which is both cash as a percentage of spend and working capital as a percentage of spend, where we exclude some of the seed capital investments closer to industry averages. So we'll continue to look at that and we'll be selective and opportunistic to deploy capital as well. So I think the trend and how we've demonstrated our capital management is really to provide ultimate flexibility to operate the business, which we'll continue to do.

The next question comes from the line of Steven Schwartz of Raymond James & Associates. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: If I may, I just -- I thought I had it and I got a little bit confused, I'm not quite sure. George, the $1 billion of flows -- net flows that you cited in April, that -- that is the total complex that is not excluding what I would assume would be outflows out of Emerging Markets?

The number I referred to, it is the open-end mutual funds. That's the number that I was really sort of addressing. And that -- that does include the -- any impact from Emerging Markets. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. Great. I wanted to make sure that last point.

Let me just say, Mike, separately gave you the growth rate for April that was consistently at the 30% level excluding EM. Not including, but excluding EM so I can sort of give you a flavor for how much of those flows are EM versus non-EM. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. So the 1 -- that's why I got confused. The $1 billion that you cited includes EM. The growth rate that Mike cited excludes EM? Got it.

That's right. Yes. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. And then just thinking about the effect of EM. I guess the first thing is that obviously, flows remain good in the first month of this quarter. That's good. Your sales guys, your wholesalers, they have basically begun concentrating more on the floating rate product, more on the short-term duration product. Is that fair to say or is there may be something else that's coming up?

Good question. I mean, we generally focus on multiple products at any point in time. So just looking at the fourth quarter where our best selling product was the Emerging Market Fund. But to be honest, you don't need to spend a lot of time talking about one of the best-performing Emerging Market Funds. So in that quarter, we did $1.7 billion of net flows. Then in the first quarter, upon first day of January, announcing that there's going to be a closure on the EM fund. You see a rush of people getting into the funds so that they can continue to have access. But even in the first quarter, if you exclude any benefit from EM, which was huge, the sales of all of the non-EM products were actually greater than the -- and the net flows were actually greater than the fourth quarter. So that is the illustration that the wholesalers, who always focus on multiple products, in some ways had a great opportunity to now start talking about other things as they continue to focus away from the attention that they were paying on the EM side. Our issue, I think, as we tried to illustrate before, is we have too many things to sell as opposed to we have too few things to sell. But we do think the environment as well as our efforts are making things like the senior floating rate, the dynamic AlphaSector continuing to make Multi-Sector Short Term Bond Fund and all still very attractive in this environment. So for us, we really have sort of have to look where the demand is in the market and given a certain cycle and flows and our broad-enough menu, we'll just sort of make sure we have something that matches up to that. So a combination of what we do from a sales execution standpoint but it's really just mirroring up to where is the demand emerging and to Michael's earlier question, sort of where are people on the risk appetite continue on in terms of what they're looking to access. But we have a large number of very attractive, high-performance products on both the defensive side as well as on the higher end of the risk spectrum. And I think that's -- that's one of the reasons why again, we were effectively able to replace the sales of our best-selling fund in the fourth quarter with other flows in the first quarter. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. Just to beat this horse one more time, the effect of this though -- you've got the sales, which is great. The inflows, the effect of this though I would presume without going and looking it up, would be that there would be some headwind on the effective fee rate? As you transfer from the Emerging Markets to these other funds?

I'm sorry. The Emerging Market Rate Fund has higher fee but a lot of the other funds -- the blended average rate of those funds, particularly dynamic AlphaSector, is not going to be that different. So I don't think you would see material difference in the…

Yes, in the shift of sales between equity products and fixed income products. I think it's generally consistent as well. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. And then one quick numbers question for Mike. The $2 billion -- $1.8 million increase in expenses due to the high sales, that was about 63% of sales. Is that a good number to kind of -- if we thought sales were going to go down $1 billion to use -- that would be 0.63% of that?

Yes, I think we typically talked about that as the basis points. The challenge in the total $2.3 billion increase is there are different channels where that $2.3 billion comes from, where some are commissionable sales and some are non-commissionable sales. So I think the basis point average in that instance is about 7 basis points if you just do the math, which is probably lower than some of the impact that we've talked about and experienced previously. So I would think about it on a basis-point impact and this quarter's impact is again about 7 basis points, which is below -- and I would probably think of, we've had experiences in the 12 to 15 basis point range, which might be a better number.

There's no further questions at this time. [Operator Instructions] No, there's no further questions coming through. So this concludes our question-and-answer session. I'd now like to turn the conference back over to Mr. Aylward for any closing remarks.

I just want to thank everyone for joining us this morning and obviously, we encourage you to give us a call if you have any further questions. Thank you.

That concludes today's teleconference. Thank you for participating. You may now disconnect.