Welcome to the Westwood Holdings Group Third Quarter 2012 Earnings Conference Call. Today's call will begin with the presentation followed by a Q&A session. Instructions on that feature will be given later in the program. I would now like to turn the call over to your host for today's call, Sylvia Fry, Vice President and Chief Compliance Officer.

Thank you. Good afternoon and welcome to our third quarter conference call. I'd like to begin by reading our forward-looking statements disclaimer. The following discussion will include forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those contemplated by the forward-looking statements. Additional information concerning the factors that could cause such a difference is included in our press release issued earlier today as well as in our annual report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on forward-looking statements. In addition, in accordance with SEC rules concerning non-GAAP financial measures, the reconciliation of our economic earnings, economic earnings per share and economic expenses to the most comparable GAAP measures is included at the end of our press release issued earlier today. On the call today, we have Brian Casey, our President and Chief Executive Officer; and Bill Hardcastle, our Chief Financial Officer. I would like to turn the call over to Brian Casey, our CEO.

Well, thanks Sylvia, and many thanks to all of you for taking the time to listen to our call today. If you've not yet had a chance to review our earnings release or our 10-Q, we were pleased to report our record overall assets under management of $14.1 billion and record assets under management for the Westwood Funds of $1.6 billion. In addition to positive flows into the Westwood Funds, we earned several new clients on the institutional side of our business. We raised our ongoing quarterly dividend and moved the pay date to December 14, to preserve the certainty of current dividend tax rates. Well the markets served ahead in the third quarter and the performance for our domestic equity products was mix, LargeCap underperformed its benchmark, but managed to stay on the top half for the peer group year-to-date. SMidCap and AllCap were ahead of their benchmarks and improved their relative performance standing by placing in the top third and top cortile with their respective peer groups for the quarter, while SmallCap was well ahead of the benchmark and just outside of the top cortile year-to-date. Our income-oriented products also served well, as both the income and MLP products were ahead of their benchmarks. Our MLP beat the benchmark were over 200 basis points, which is a terrific start to our performance fee measurement period which ends June 30, 2013, for one of our performance based clients. Performance on emerging markets, global equity and global dividend are off to a strong start and have been particularly well received by our Westwood Trust clients and the institutional consulting community. All of the specific performance records for Westwood institutional products can be found in the commercially available databases or in Morningstar for our mutual fund products. Marketing activity has picked…

Thanks, Brian. Good afternoon, everyone. As you may have seen, we filed our 10-Q this afternoon, and if you have any questions after reading the 10-Q, feel free to give me a call, the phone number is listed on our website. After I review our financial highlights for the quarter, I will review some slides with you that we have posted on the Investor Relation section of our website, westwoodgroup.com under the Events and Webcast link. As a backdrop and reminder for the discussion of third quarter financials, I would like to point out that our newly launched subsidiary Westwood International Advisors has only recently commenced operations. Therefore, our third quarter financials include minimal revenues and significant costs related to Westwood International's operations. For the third quarter 2012, Westwood's total revenues were $18.9 million compared to $16 million in the third quarter 2011. Comparing third quarter revenue in 2012 versus 2011, advisory fees increased by 9% as a result of increased average assets under management due to market appreciation and asset inflows from new and existing clients, partially offset by the withdrawal of assets by certain clients. Trust fees increased by 7% as a result of increased trust assets under management, primarily due to asset inflows from new clients. GAAP net income for the third quarter 2012 was $2.5 million compared to $3.3 million for the third quarter 2011. GAAP EPS was $0.34 per diluted share versus $0.46 for the third quarter 2011. Economic earnings for the third quarter 2012 were $5.6 million compared to $5.9 million for the third quarter 2011. Economic EPS was $0.76 per diluted share versus $0.81 for the third quarter 2011. Non-GAAP performance measures, including economic earnings and economic expenses are defined, explained, and reconciled with the most comparable GAAP financial measures, and tables included…

Thanks, Bill, great job. If anybody has any questions, please press 1 on your keypad.

Our first question comes from Rebecca Simons [ph].

You've done a very good job of having AUM, and you've seen the revenues benefit from that. But with the increase in cost, could you talk about maybe how we should think of the crossover point of when you start to benefit from these new funds?

I would say that when we did this deal, we really never budgeted any specific number. And we've always tried to add talent opportunistically and we've done that. We have 11 people now. We have $740 million. It's actually a little bit higher than that as of yesterday. But I would say that that the fees associated with the stock of assets are going to be higher than the fees that we have for our current business. And that it would be somewhere north of $1 billion, where the cost would line up with the revenue, and you'd begin to start to achieve some operating leverage from that point forward.

Our next question comes from Mac Sykes.

My first question got answered before this, that's terrific. But can you give us a sense of what might be the pipeline maybe or some color on to your expectations for growth into the end of the year, excluding the market movement?

For the next 2.5 months?

Yes, if you can. Any color on pipeline for that segment, which has been growing rapidly?

I'll give you color on the pipeline. The pipeline is terrific. We have a lot of interest in of course the international assets. But as I said we have 7 SmallCap researches going on. We've been out extolling the virtues of MLPs, having lots of meetings, talking about the benefits of the asset class, educating both plan sponsors and consultants on what we've shown them. And so there is a lot of interest in that area as well. Our income product is seeing flows almost daily and continued institutional interest. So I would say the pipeline is very full. It's difficult for me to say, how much of that will close in the next 2.5 months, but if history is any guide, some of it will close. Our partners at National Bank on the international side are doing a great a job of telling the story on the international products. And we're seeing a daily flows there as well. So I would say the pipeline in general looks better than it has in a quite a while.

And just quantitatively, given the visibility of this international team, do you think that they will be able to boost or you'll be able to leverage other marketing efforts with your funds, as you market the international products. Do you think there will be some kind of leverage there in terms of to the whole platform and your marketing efforts?

I do. In fact, it was really interesting. We have a local, a very large Fortune 100 Company that has been over here twice to talk about emerging markets. But in the context of doing that and meeting Mark Freeman, our CIO, they expressed interest in the income product and learning more about it. So yes, I do think it's a great way to introduce some cross-selling and to introduce folks to some of the other things that we do. I'd also say that on the international side, a lot of the interest is coming from other parts of the world, not just here in the States, and that too is I think a great opportunity for them to learn more about Westwood overall.

And we are currently awaiting our next question.

Great. Well, thanks for joining us today. We appreciate your time. Please contact Bill or myself, if you have any questions or visit our website at westwoodgroup.com. Have a great afternoon.

That concludes today's conference. Thank you for your participation. You may now disconnect.