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

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

Thank you, Jeanne. Good morning everyone. I will start today by providing an overview of the quarter including the assets, flows, capital, before turning it over to Mike for more detail on financial results. So let's begin with assets under management and flows, we ended the quarter assets under management of 45.2 billion, which represents a sequential quarter decline of 1%, as net outflows offset market appreciation, total sales were 2.4 billion declined from 2.8 billion in the sequential quarter, due to lower sales in mutual funds, that offset higher sales in both institutional and SMAs. Mutual fund sales of 1.4 billion were down from 2.2 billion sequentially, reflecting lower sales of the emerging market opportunities. Excluding the Emerging Markets fund, mutual fund sales were 0.9 billion, compared with 1.0 billion in the first quarter. Mutual fund net outflows improved modestly to 2.4 billion from 2.6 billion in the sequential quarter, reflecting improved net flows in domestic equity and fixed income funds. The Emerging Markets fund excluding model related redemptions, net flows in the quarter tracked with the improvement in the asset class, and our funds flows improved in each month of the quarter. The fund which remains our best selling fund, continues to generate strong relative performance, at June 30 it was in the top quartile on a year-to-date basis, and top decile on a one year basis, and the longer term performance also remained strong, in the top quartile on a three year basis, and top decile on a five and ten year basis. Relative investment performance continued to be very strong across our funds with 19 of our rated funds representing 83% of our rated fund AUM, having four and five stars at June 30th, that is up 14 four and five star funds, representing 73% of…

Thank you, George. Good morning everyone. As you may have noted, we made some changes to our earnings release format, to make it more focused and concise, and it continues to present both GAAP and non-GAAP information. As always, my comments will be primarily focused on the non-GAAP results, as the GAAP results are described in the earnings release. There have not been any changes to our non-GAAP measures, or the earnings presentation that accompanies this call. Starting on slide seven, Assets Under Management, we ended the quarter with assets of $45.2 billion, which represents a decrease of $0.5 billion, or 1% from the prior quarter. The sequential AUM decline is primarily attributable to new outflows of $2.2 billion, that were partially offset by market appreciation of $1.8 billion. The $7.2 billion year over year decrease in AUM is primarily attributable to $7.6 billion of net outflows and $0.5 billion of dividend distributions, which were partially offset by $1.1 billion of market appreciation. Total AUM was diversified with 37% in domestic equity, 21% in international equity, 34% in fixed income, and 8% in alternatives and other. By product open end fund assets were 56% of total AUM, separately managed accounts were 17%, closed end funds were 15%, and institutional was 12%. Turning to slide eight, Asset Flows, total sales decreased sequentially by $0.4 billion, or 16% to $2.4 billion, reflecting $0.8 billion of lower mutual fund sales, that were partially offset by higher institutional sales of $0.4 billion. Additionally, we had higher sales in separately managed accounts. Gross sales and open end mutual funds were $1.4 billion, a decrease of $0.8 billion from the first quarter, primarily attributable to lower sales in emerging markets. Second quarter total net outflows of $2.2 billion were primarily attributable to $1.7 billion of net…

Thanks Mike. That concludes our prepared remarks. Now, we will take your questions. Cat, would you open up the lines, please?

Thank you. [Operator Instructions] Our first question comes from the line of Michael Carrier with Bank of America Merrill Lynch, your line is open.

Thank you this is Adam Beatty in for Mike. First just a question on products. Interested in some of the differences in new product areas, and what your plans might be there? Specifically ETFs, you have had good traction with the ones so far. And alternatives, given the liquidation, are you planning on backfill that with anything, also multistrategy, if you could comment on that? Thank you.

Sure. I'll start with ETFs. And as you indicated, that is an area where we had acquired a majority interest in an ETF platform last year. We've been very focused on adding product capabilities, and giving effect to their business model in that space. We've had several funds that we've been working on, in terms of those opportunities, one or two of them have already been launched, but that's an area we're spending a lot of time on, in terms of what are the right product offerings there. ETFs will absolutely continue to be an important part of the book of business of the financial advisors that we do business with. and looking to see how we can offer either some differentiated actively managed capabilities, either from our current affiliates, or through other subadvisory relationships, as well as are there those smart data types of opportunities, that we also think would be differentiated and work better in ETF, than they would work in an open end mutual fund. Obviously, a lot of people are doing a lot of work in ETFs, and it takes a lot of time to get all of those things through the regulatory filings, et cetera, and appreciative of the volume that people are dealing with. We are still very optimistic about the opportunity set that is in that space, and we do think that we have some compelling differentiators, in terms of the types of things that we can do in that space. So I think that's great. In terms of ALTs, and even though we did liquidate some of the alternative funds that we had, we do still do believe in the space, and whether you want to call it alternatives, or multiasset class, or non-correlated types of strategies, we currently have the Aviva…

Thanks. Appreciate the detail there. And then just in terms of distribution, and you've talked a little bit about allocation models and some of the redemptions, etcetera, partly driven by Vontobel, how are discussions going in that space? Firstly, are you aware of any potentially lumpy pending redemptions, and then looking forward, are folks that you're talking to in the intermediary channel, concerned about affiliate risk management or anything of that nature, and what does the pipeline look like? Thank you.

No. In terms of the EM models which I guess is what you're focusing in on, there was an organizational change in March, early March as we highlighted on the first quarter call, we focus here. There were some of those models that drove some of the elevated redemptions. As we said in the first quarter call, we did not see any type of elevation of redemptions from financial advisors, so non model driven, so those, where a financial advisor did not have concern about, as much concern about the organizational change. And as we've indicated, we saw those outflows in the first quarter. They occurred in the second quarter but they diminished significantly from $1.3 billion to $0.7 billion. So as you're this far away from that organizational change right now, our view would be you should expect to see our EM flows trend in relation to how good is their performance, and how is the asset class doing. In terms of the asset class because even a lot what you've seen in terms of our fund, you sort of have to take a step back and look at what's going on in the categories. So for intermediary sold Emerging Market funds, March was actually a very negative month overall for those funds, and then was flat in April, got positive again in May, was positive again in June, but a little slightly less positive. So, as I indicated in some of my comments, so our flows will always track that type of trend, so an emerging market is out of favor, and it net flows into category, we would generally have similar experience. Models are always lumpy, and we'll have some money in and we'll have some money out. We actually did in July have money in on a model for EM, and we had a little bit of money out on an EM. They actually offset each other effectively. So we'll always have a little bit of lumpiness with flows in terms of the models, but as Mike had pointed out, we're seeing a decrease of the redemptions in the FA driven business, which were never that elevated. They were elevated but not by much, and we're seeing an increase in sales related to that. But really the challenge in our flows for the quarter is really isolated to the EM Fund.

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

Okay, as always, I want to thank everyone for joining us today, and we certainly encourage you to give us a call if you have any other further questions.

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