8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Act of 1934

Date of Report (Date of earliest event reported): July 20, 2006 (July 14, 2006)

FEDERATED INVESTORS, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	001-14818	25-1111467
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Federated Investors Tower

Pittsburgh, Pennsylvania 15222-3779

(Address of principal executive offices, including zip code)

(412) 288-1900

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

On July 14, 2006 Federated Investors, Inc., (Federated) completed the acquisition of MDTA LLC (MDTA) which, through its registered investment advisory division MDT Advisers, oversees approximately $6.7 billion in managed assets. The acquisition was consummated pursuant to the terms of a definitive agreement dated May 11, 2006 with HBSS Acquisition Corporation, MDTA and the equity interest holders of MDTA. In conjunction with the acquisition of MDTA, the MDT Funds’ board of trustees and Federated Mutual Fund Board of Directors/Trustees approved a reorganization of the MDT Funds into the Federated complex. The Federated Fund Board of Directors/Trustees approved the creation of the Federated MDT Funds, a series of equity funds with substantially the same investment objectives and strategies as the existing MDT equity funds. Shareholders of the MDT funds will be asked to approve a reorganization of the MDT funds into comparable Federated Funds to integrate the MDT products into the Federated complex.

Federated acquired approximately 89 percent of the outstanding equity interests of MDTA with a right to acquire the remaining 11 percent by June 30, 2007. The transaction includes initial purchase payments of approximately $110 million, the majority of which was paid at closing, and a series of contingent payments totaling as much as $130 million over the next three years based on growth. Various assets, primarily intangible assets and intellectual property, will be recorded upon completion of the independent appraiser’s valuation. Both Federated and MDT have made customary representations, warranties and covenants in the agreement. Attached herewith as Exhibit 99.1 is a press release issued by Federated with additional details concerning this transaction.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits:

Exhibit 99.1  –  Press release issued by Federated Investors, Inc. dated July 17, 2006

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FEDERATED INVESTORS, INC.
	(REGISTRANT)
Dated: July 20, 2006	By:	/s/ Thomas R. Donahue
		Thomas R. Donahue
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release issued by Federated Investors, Inc. dated July 17, 2006

EX-99.1

Exhibit 99.1

Press Release

Federated Investors, Inc. Acquires $6.7 Billion MDT Advisers, a Leading Quantitative Equity Manager

• Eight Equity Mutual Funds Added to Federated’s Product Offerings

(PITTSBURGH, Pa., July 17, 2006) — Federated Investors, Inc. (NYSE: FII), one of the nation’s largest investment managers, today announced the completion of the acquisition of Cambridge, Mass.-based MDTA LLC, which, through its division MDT Advisers, oversees $6.7 billion in managed assets. MDT Advisers is now a division of Federated MDTA LLC. The announcement was made by Federated President and CEO J. Christopher Donahue.

MDT Advisers becomes Federated’s quantitative center of excellence as it continues to employ the investment professionals responsible for MDT Advisers’ proprietary quantitative investment approach to equity investing. These professionals will continue to manage the eight MDT equity mutual funds and a variety of separately managed accounts by employing the Optimum Q process, which uses a bottom-up portfolio selection process that integrates precision stock selection with trading-cost control and risk control. Federated will roll out the MDT equity funds to its broad network of financial-intermediary clients today.

“The proven investment acumen of the MDT Advisers’ team combined with Federated’s broad distribution capabilities in the broker/dealer, wealth management and institutional markets, make this acquisition a solid business combination for both MDT and Federated,” Donahue said. “Federated will now offer MDT’s fundamentally based, quantitatively driven equity funds as a complement to our strong traditionally managed offerings particularly those in the equity income, small and mid-cap growth areas.”

In conjunction with the acquisition of MDTA, the MDT Funds’ board of trustees and Federated Mutual Fund Board of Directors/Trustees approved a reorganization of the MDT Funds into the Federated complex. The Federated Fund Board of Directors/Trustees approved the creation of the Federated MDT Funds, a series of equity funds with substantially the same investment objectives and strategies as the existing MDT equity funds. Shareholders of the MDT equity funds will be asked to approve a reorganization of the MDT equity funds into the Federated MDT Funds to integrate the MDT products into the Federated complex. In addition, shareholders of the MDT Short-Term Bond Fund will be asked to reorganize into Federated Short-Term Income Fund.

Contacts:
MEDIA	MEDIA	ANALYSTS
Meghan McAndrew	J.T. Tuskan	Ray Hanley
(412) 288-8103	(412) 288-7895	(412) 288-1920
mmcandrew@federatedinv.com	jtuskan@federatedinv.com	rhanley@federatedinv.com

Federated Completes Acquisition of MDT Advisers

July 17, 2006

Page 2 of 2

Federated owns approximately 89 percent of the outstanding equity interests of MDTA LLC with the right to acquire the remaining 11 percent by June 30, 2007.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing approximately $217.5 billion in assets as of March 31, 2006. With 140 mutual funds and various separately managed account options, Federated provides comprehensive investment management to nearly 5,500 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers.

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Certain statements in this press release, such as those related to obtaining of certain approvals, constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Among other risks and uncertainties is the ability of the Company to increase sales as a result of new products it may acquire, the ability to obtain the necessary approvals and the risk factors discussed in the company’s annual and quarterly reports as filed with the Securities and Exchange Commission. Many of these factors may be impacted by the ongoing threat of terrorism. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.

Federated Securities Corp. is distributor of the Federated Funds and the MDT Funds.

Separately managed accounts are made available through Federated Investment Counseling, a registered investment advisor and MDT Advisers, a registered investment advisor.

For more complete information, visit FederatedInvestors.com for a prospectus. You should consider the fund’s investment objectives, risks, charges and expenses carefully before you invest. Information about these and other important subjects is in the fund’s prospectus, which you should read carefully before investing.

This press release does not constitute an offer for sale of any security.

It is anticipated that the Federated Short-Term Income Fund, a portfolio of Federated Income Securities Trust (ICA No. 811-4577 ) and a newly created investment company entitled Federated MDT Funds, will file proxy statements/prospectuses and other relevant documents concerning the planned transactions with the United States Securities and Exchange Commission (the “SEC”). INVESTORS ARE URGED TO READ THE PROXY STATEMENTS/PROSPECTUSES AND OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PLANNED TRANSACTIONS, OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENTS/PROSPECTUSES, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTIONS AND RELATED MATTERS. Investors will be able to obtain documents free of charge at the SEC website, www.sec.gov. In addition, documents filed with the SEC by the Federated Funds, when effective, will be available free of charge at 1-800-341-7400.