“Looking ahead to 2012, we will remain vigilant on costs and seek to maintain a prudent approach to capital management. Despite expectations of further outflows from our International Equity strategies in the near-term, we also see opportunities for long-term growth. Our High Grade, High Yield and US Equity strategies are all well-positioned to gather additional assets, which over time should bring greater diversity and stability to our revenues.”

Fourth Quarter of 2011 Comparison with Fourth Quarter of 2010

Assets Under Management and Net Client Cash Flows

Assets under management were $30.4 billion as of December 31, 2011, down $23.0 billion, or 43%, from $53.4 billion as of December 31, 2010, due to net client cash outflows and market depreciation.

Net client cash outflows for the fourth quarter of 2011 were $4.8 billion, driven primarily by net client cash outflows from our International Equity I and II strategies. 8

Revenues and Other Operating Income

Revenues and other operating income for the fourth quarter of 2011 totaled $51.9 million, down 39% from $85.2 million for the fourth quarter of 2010. The decrease was driven primarily by lower investment management fees of $51.6 million for the fourth quarter of 2011, down 39% from $84.7 million for the fourth quarter of 2010, due primarily to lower average assets under management.

Expenses

Employee Compensation and Benefits

For the fourth quarter of 2011, adjusted employee compensation and benefits expenses were $20.6 million, down 5% from $21.7 million for the fourth quarter of 2010. The decrease was due primarily to lower incentive compensation accruals, partly offset by accruals related to the Company’s long-term incentive plan implemented in 2011.

GAAP employee compensation and benefits expenses for the fourth quarter of 2011 were $23.0 million, down 6% from $24.4 million for the fourth quarter of 2010, due primarily to the reasons noted above.

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