The continuing investor appetite for income, our renewed investor focus on tax efficiency with higher investment taxes now pending in the U.S., growing acceptance of alternative as a mainstream asset class and increased appetite for global investment strategies, and finally, increased demand amongst sophisticated investors for low cost engineered alpha-enhanced data strategies, risk and tax management solutions, and portfolio implementation services. In each of these areas we believe we are well-positioned. Looking first to income strategies, Eaton Vance has long been recognized as a market leader in floating rate bank loans, tax advantage municipal bond, high yield, global income and U.S. government income strategies. In total, we managed about $85 billion in income assets representing approximately 42% of our total managed assets.

Our income capabilities were significantly enhanced when Kathleen Gaffney joined us earlier this month as Co-Director of Investment Grade Fixed Income. Kathleen had been with Loomis Sayles for 28 years, where she co-managed the Loomis Sayles bond fund and also managed or co-managed a number of other mutual funds and institutional accounts, including core-plus, multi-sector and high yield mandates. Kathleen is well-known and well-respected in the industry, and we are very excited to have her join our team.

At Eaton Vance, she will be responsible for managing investment portfolios that draw upon the analytical resources of our entire income team. In fact, we recently filed for SEC approval of the new Eaton Vance bond fund to be managed by a team led by Kathleen. Overtime, we believe this and related offerings have the potential to become major additions to the Eaton Vance income strategy line up.

We are very pleased with how our partnership with Hexavest is beginning and the business momentum may continue to exhibit.

During the quarter, we launched four Hexavest advice mutual funds for U.S. distribution and are preparing to launch four Ireland-based Hexavest funds for the international market.

While we suspect it may take some times to gain traction with the new funds, we are seeing lots of interest and good progress in the institutional channel. From the close of the transaction through October 31, Hexavest had over $700 million of net inflows and saw assets under management increased from $11 billion to $12.1 billion.

Our deep pipeline of new opportunities gives us encouragement that Hexavest will see strong business growth in our fiscal 2013 as they begin to benefit from partnering with Eaton Vance’s power house distribution organization.

As of September 30th, Clifton managed $33.4 billion of overlay and funded assets managed on behalf of approximately 180 institutional clients. The acquisition is expected to close on or about December 31st of this year and is subject to certain customary closing conditions.

Clifton has been providing overlay services and risk management solutions to institutional investors for over 25 years, and is a well-recognized brand among large institutions and consultants.

With $87 billion of pro forma assets under management, Parametric is quickly emerging as a power house provider of portfolio of solutions. Today’s challenging markets require investors to work their portfolios harder and smarter to optimize exposures, balance risks, control costs and maximize risk adjusted returns.

It is the mission and focus of Parametric to help clients achieve these objectives. As they expand their capabilities through the Clifton acquisition and continue their internal development, we see great growth opportunities for Parametric for many years to come.

Although Eaton Vance is often thought of as a traditional asset manager, the large and growing position of Parametric inside Eaton Vance certainly blurs that characterization. Different from the rest of Eaton Vance, Parametric’s portfolio managers are not engaged in making predictive judgments about markets or individual securities.

Instead, the rules-based engineered strategies seek to provide diversified market exposures, often coupled with value-added risk management, tax management and volatility capital trading.

Because Parametric strategies are generally offered at lower price points and competing traditional active those managers, the relentless fee pressures seen across our industry affect Parametric differently, sometimes working to their advantage.

The first is our global income team, and the global macro emerging market debt and currency income strategies they manage, which now total over $10 billion in assets. Over the past several years, we have developed a sophisticated global income investment expertise and the critical infrastructure to support income and currency investing around the world.

The second core element of our global investment capability is Parametric’s emerging market equity discipline, a $16 billion franchise. This rules-based engineered strategy has achieved superior long-term performance, using an approach that Parametric is now applying to a number of different asset classes.

We are market leaders in active tax-managed equity and tax advantage municipal income strategies, and Parametric is the market leader in benchmark-based tax-managed equity strategies.

In total, we manage about $81 billion in tax-managed equity and income assets representing more than 40% of our total managed assets. With tax rates on the rise we expect to see a growing focus on tax efficient investing in 2013. No firm is better positioned to benefit from that than Eaton Vance.

,… how things are going to work in terms of the taxation of investments in United States. Until that’s resolved, there is no great opportunity. But I think we and most people think that we’re certainly on the verge of some truly significant changes. Some of those changes may make an element of tax efficient management, less important.

So, for example, if the tax rate on dividends goes up and dividends or tax are the same as interest then the tax advantage dividend part of our business, which is a relatively small part, either is transformed or goes away or something happens to that, that probably adverse. Most of our business in tax-managed product is focusing on either the generation of tax fee income that would be our immunity and tax advantage income strategies or focused on either reducing or deferring capital against taxes or related to that, actively generating capital losses.

We don’t know exactly when that will happen. We don’t know exactly what the final rules will be but we are quite optimistic that that on balance this will be a positive for our tax and tax sufficient investing business.