Exhibit 99.1

Press Release

Federated Investors, Inc. Reports Second Quarter 2006 Earnings

• Equity assets top $36 billion with MDT Advisers acquisition in July

• Board authorizes new 7.5 million share repurchase program

• Board declares quarterly dividend of $0.18

(PITTSBURGH, Pa., July 27, 2006) — Federated Investors, Inc. (NYSE: FII), one of the nation’s largest investment managers, today reported earnings per diluted share (EPS) of $0.47 for the quarter ended June 30, 2006. These results include net earnings of $3.3 million or $0.03 per share classified as income from discontinued operations, net of tax, related to the sale of the company’s trade-clearing operation. Federated’s EPS from continuing operations was $0.44 for the quarter ended June 30, 2006 compared with $0.35 for the same quarter last year. Federated reported YTD 2006 EPS from continuing operations of $0.86 compared to $0.41 for the same period in 2005. Income from continuing operations was $46.7 million for Q2 2006 compared to $38.0 million for Q2 2005. For the six months ended June 30, 2006, income from continuing operations was $92.7 million compared to $44.8 million for the same period in 2005.

Federated’s total managed assets were $210.5 billion at June 30, 2006, up $5.8 billion or 3 percent from $204.7 billion at June 30, 2005 and down $7.0 billion or 3 percent from the $217.5 billion reported at March 31, 2006. Through its mutual funds and separately managed accounts, Federated managed $52.2 billion in equity and fixed-income assets as of June 30, 2006, a $1.0 billion or 2 percent decrease from $53.2 billion as of June 30, 2005. Average managed assets for Q2 2006 were $213.9 billion, up $20.8 billion or 11 percent from $193.1 billion reported for Q2 2005 and down $3.6 billion or 2 percent from $217.5 billion in average managed assets reported for Q1 2006. On July 14, Federated increased its total assets under management by $6.7 billion through its acquisition of MDT Advisers.

“With the acquisition of MDT Advisers, Federated added fundamentally based, quantitatively driven portfolios to our offerings,” said President and CEO J. Christopher Donahue. “Combined with the strength of our equity products such as the Federated Kaufmann portfolios, the income-oriented Federated Strategic Value Fund, the unique Federated Market Opportunity Fund and others, the company offers a variety of solid equity funds to our intermediary clients.”

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 Reports Q2 Earnings

July 27, 2006

Page 2 of 7

Federated’s board of directors authorized a share repurchase program that allows Federated to buy back as many as 7.5 million additional shares of class B common stock through 2008. During Q2 2006, Federated purchased 2,468,016 shares of class B common stock for $77.9 million. The board of directors declared a quarterly dividend of $0.18 per share. The dividend is payable on Aug. 15, 2006 to shareholders of record as of Aug. 8, 2006.

Federated’s equity assets were $30.5 billion at June 30, 2006, up $1.6 billion or 6 percent from $28.9 billion at June 30, 2005 and down $1.1 billion or 3 percent, due in large part to equity market conditions, from $31.6 billion at March 31, 2006. Federated’s top selling equity mutual funds on a net basis were: Federated Market Opportunity Fund, Federated Kaufmann Small Cap Fund, Federated Kaufmann Fund, Federated Strategic Value Fund and Federated Muni and Stock Advantage Fund. With the addition of $6.7 billion in equity assets from Federated’s acquisition of MDT Advisers in July, overall equity assets increased to a record $36.8 billion as of July 25, 2006.

Federated’s fixed-income assets were $21.7 billion at June 30, 2006, down $2.7 billion or 11 percent from $24.4 billion at June 30, 2005 and down $0.6 billion or 3 percent from $22.3 billion at March 31, 2006. Federated’s top selling fixed-income mutual funds on a net basis were: Federated Total Return Bond Fund, Federated Pennsylvania Municipal Income Fund, Federated International Bond Fund, Federated Mortgage Fund and Federated Municipal High Yield Advantage Fund, Inc.

Money market assets in both funds and separate accounts were $158.3 billion at June 30, 2006, up $6.9 billion or 5 percent from $151.4 billion at June 30, 2005 and down $5.3 billion or 3 percent from $163.6 billion at March 31, 2006. Money market mutual fund assets were $142.0 billion at the end of Q2 2006, up $5.1 billion or 4 percent from $136.9 billion at June 30, 2005 and down $4.0 billion or 3 percent from $146.0 billion at March 31, 2006. Average money market mutual fund assets were $143.8 billion for Q2 2006, up $18.8 billion or 15 percent from $125.0 billion for Q2 2005 and down $2.3 billion or 2 percent from $146.1 billion for Q1 2006.

Financial Summary

For Q2 2006, revenue increased $18.7 million or 9 percent to $236.4 million compared to $217.7 million for the same quarter last year, primarily due to Federated’s acquisition of Alliance Capital Management L.P.’s cash management business, organic money market growth and increased equity assets under management. For Q2 2006, Federated derived 47 percent of its revenue from money market assets, 39 percent from equity assets, 13 percent from fixed-income assets and 1 percent from other products. Revenue for the first half of 2006 increased $55.5 million or 13 percent to $475.2 million compared to $419.7 million for the first half of 2005. For YTD 2006, Federated derived 47 percent of its revenue from money market assets, 38 percent from equity assets, 14 percent from fixed-income assets and 1 percent from other products.

Operating expenses for Q2 2006 increased by $16.8 million or 12 percent to $160.8 million compared to $144.0 million for Q2 2005. For the first half of 2006, operating expenses increased by $8.1 million or 3

Federated Reports Q2 Earnings

July 27, 2006

Page 3 of 7

percent to $325.4 million compared to $317.3 million for the same period last year. Increases in operating expenses were affected by higher marketing and distribution expenses associated with the Alliance acquisition and increased compensation and related expenses.

The discontinued operations line item for Q2 2006 reflects $3.3 million or $0.03 per share of primarily after-tax gain related to the sale of Federated’s trade-clearing operation, which the company substantially divested in Q2 2006. Discontinued operations for YTD 2006 reflects $6.1 million or $0.06 per share related to the after-tax gain on the sale of the trade-clearing operation ($3.2 million), the reversal of a related deferred tax asset valuation allowance ($1.8 million) and after-tax operating income ($1.1 million) from the trade-clearing operation.

Federated will host an earnings conference call at 9 a.m. Eastern on July 28, 2006. Investors are invited to listen to Federated’s Q2 earnings teleconference by calling 888-412-9259 (domestic) or 706-679-0848 (international) prior to the 9 a.m. start time for the teleconference. The call may also be accessed in real time on the Internet via the About Us section of FederatedInvestors.com. A replay will be available after 12:30 p.m. and until August 4, 2006 by calling 800-642-1687 (domestic) or 706-645-9291 (international) and entering code 2751637.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing $210.5 billion in assets as of June 30, 2006. With 143 mutual funds and a variety of 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. Federated ranks in the top two percent of money market fund managers in the industry, the top eight percent of fixed-income fund managers and the top seven percent of equity fund managers¹. For more information, visit FederatedInvestors.com.

###

1 Strategic Insight, May 31, 2006. Based on assets under management in open-end funds.

Certain statements in this press release, such as those related to the share repurchase program, 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 repurchase shares at a desirable price 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 as a result of 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.

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

Federated Reports Q2 Earnings

July 27, 2006

Page 4 of 7

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)

	Quarter Ended June 30,						% Change Q2 2005 to Q2 2006		Quarter Ended March 31, 2006			% Change Q1 2006 to Q2 2006
	2006			2005
Revenue
Investment advisory fees, net	$	146,487		$	138,890		5	%	$	148,055		(1	)%
Administrative service fees, net		36,082			32,726		10			36,098		(0	)
Other service fees, net		52,099			43,935		19			52,877		(1	)
Other, net		1,738			2,181		(20	)		1,751		(1	)
Total Revenue		236,406			217,732		9			238,781		(1	)
Operating Expenses
Compensation and related		44,780			42,857		4			49,576		(10	)
General and administrative
Marketing and distribution		70,313			51,364		37			69,952		1
Professional service fees		8,422			7,487		12			7,587		11
Office and occupancy		4,976			5,300		(6	)		5,526		(10	)
Systems and communications		4,952			5,322		(7	)		4,756		4
Advertising and promotional		3,794			4,337		(13	)		3,952		(4	)
Travel and related		3,346			3,151		6			2,614		28
Settlement expense		0			5,000		(100	)		0		—
Other		3,015			2,723		11			2,912		4
Total general and administrative		98,818			84,684		17			97,299		2
Amortization of deferred sales commissions		13,018			12,940		1			13,508		(4	)
Amortization of intangible assets		4,220			3,525		20			4,227		(0	)
Total Operating Expenses		160,836			144,006		12			164,610		(2	)
Operating Income		75,570			73,726		3			74,171		2
Nonoperating Income (Expenses)
Investment income, net		3,074			1,811		70			3,214		(4	)
Debt expense––recourse		(65	)		(91	)	(29	)		(65	)	0
Debt expense––nonrecourse		(2,019	)		(4,444	)	(55	)		(2,153	)	(6	)
Other, net		(1	)		(8	)	(88	)		(1	)	0
Total Nonoperating Income (Expenses), net		989			(2,732	)	(136	)		995		(1	)
Minority interest		1,333			2,478		(46	)		1,501		(11	)
Income from continuing operations before income taxes		75,226			68,516		10			73,665		2
Income tax provision		28,570			30,516		(6	)		27,580		4
Income from continuing operations		46,656			38,000		23			46,085		1
Discontinued operations, net of tax*		3,265			(239	)	1,466			2,836		15
Net Income	$	49,921		$	37,761		32	%	$	48,921		2	%
Earnings Per Share—Basic
Income from continuing operations	$	0.44		$	0.36		22	%	$	0.44		0	%
Income (loss) from discontinued operations*	$	0.03		$	(0.00	)	—		$	0.03		0	%
Net Income**	$	0.48		$	0.36		33	%	$	0.46		4	%
Earnings Per Share—Diluted
Income from continuing operations	$	0.44		$	0.35		26	%	$	0.43		2	%
Income (loss) from discontinued operations*	$	0.03		$	(0.00	)	—		$	0.03		0	%
Net Income**	$	0.47		$	0.35		34	%	$	0.45		4	%
Weighted-average shares outstanding
Basic		104,923			105,908					105,639
Diluted		107,078			107,857					108,125
Dividends declared per share	$	0.180		$	0.150				$	0.150

* Discontinued operations reflects the after-tax gain on the sale of Federated’s trade-clearing business ($3.2 million) and after-tax operating income ($0.1 million) in Q2 2006, in addition to after-tax operating income ($1.0 million) and the related reversal of a deferred tax asset valuation allowance ($1.8 million) in Q1 2006.

** May not sum due to rounding.

Federated Reports Q2 Earnings

July 27, 2006

Page 5 of 7

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)

	Six Months Ended June 30,						% Change
	2006			2005
Revenue
Investment advisory fees, net	$	294,541		$	273,768		8	%
Administrative service fees, net		72,181			62,781		15
Other service fees, net		104,976			79,160		33
Other, net		3,490			3,968		(12	)
Total Revenue		475,188			419,677		13
Operating Expenses
Compensation and related		94,356			86,071		10
General and administrative
Marketing and distribution		140,265			88,721		58
Professional service fees		16,009			15,260		5
Office and occupancy		10,502			10,663		(2	)
Systems and communications		9,709			9,539		2
Advertising and promotional		7,746			7,510		3
Travel and related		5,960			5,614		6
Settlement expense		0			55,550		(100	)
Other, net		5,927			5,816		2
Total general and administrative		196,118			198,673		(1	)
Amortization of deferred sales commissions		26,526			26,539		(0	)
Amortization of intangible assets		8,446			6,004		41
Total Operating Expenses		325,446			317,287		3
Operating Income		149,742			102,390		46
Nonoperating Income (Expenses)
Investment income, net		6,287			3,404		85
Debt expense––recourse		(130	)		(174	)	(25	)
Debt expense––nonrecourse		(4,171	)		(9,031	)	(54	)
Other, net		(2	)		(52	)	(96	)
Total Nonoperating Income (Expenses), net		1,984			(5,853	)	(134	)
Minority interest		2,834			4,927		(42	)
Income from continuing operations before income taxes		148,892			91,610		63
Income tax provision		56,151			46,819		20
Income from continuing operations		92,741			44,791		107
Discontinued operations, net of tax*		6,101			(2	)	305,150
Net Income	$	98,842		$	44,789		121	%
Earnings Per Share—Basic
Income from continuing operations	$	0.88		$	0.42		110	%
Income (loss) from discontinued operations*	$	0.06		$	(0.00	)	—
Net Income	$	0.94		$	0.42		124	%
Earnings Per Share—Diluted
Income from continuing operations	$	0.86		$	0.41		110	%
Income (loss) from discontinued operations*	$	0.06		$	(0.00	)	—
Net Income	$	0.92		$	0.41		124	%
Weighted-average shares outstanding
Basic		105,279			106,116
Diluted		107,600			108,089
Dividends declared per share	$	0.330		$	0.275

* Discontinued operations for YTD 2006 reflect the after-tax gain on sale ($3.2 million), the reversal of a related deferred tax asset valuation allowance ($1.8 million) and after-tax operating income ($1.1 million) of Federated’s trade-clearing operations.

Federated Reports Q2 Earnings

July 27, 2006

Page 6 of 7

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	June 30, 2006			Dec. 31, 2005
Assets
Cash, restricted cash and other short-term investments	$	191,387		$	284,805
Other current assets		50,975			61,618
Deferred sales commissions, net		133,848			157,562
Intangible assets, net, and goodwill		376,449			370,026
Other long-term assets		23,696			22,610
Total Assets	$	776,355		$	896,621
Liabilities, Minority Interest and Shareholders’ Equity
Current liabilities	$	97,175		$	166,300
Long-term debt—nonrecourse		135,299			159,784
Other long-term liabilities and minority interest		28,997			30,208
Shareholders’ equity excluding treasury stock		1,155,115			1,090,915
Treasury stock		(640,231	)		(550,586	)
Total Liabilities, Minority Interest and Shareholders’ Equity	$	776,355		$	896,621

Changes in Equity and Fixed-Income Fund Managed Assets

(in millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005
Equity Funds
Beginning assets	$	27,567		$	25,279		$	26,031		$	25,951
Sales		1,475			1,309			2,992			2,688
Redemptions		(1,758	)		(1,490	)		(3,680	)		(3,016	)
Net redemptions		(283	)		(181	)		(688	)		(328	)
Net exchanges		(5	)		5			15			28
Acquisition related		0			0			376			0
Other*		(791	)		470			754			(78	)
Ending assets	$	26,488		$	25,573		$	26,488		$	25,573
Fixed-Income Funds
Beginning assets	$	18,579		$	20,596		$	19,037		$	21,137
Sales		1,112			1,387			2,409			2,872
Redemptions		(1,685	)		(2,055	)		(3,422	)		(4,043	)
Net redemptions		(573	)		(668	)		(1,013	)		(1,171	)
Net exchanges		(25	)		(8	)		(52	)		(41	)
Acquisition related		0			50			0			50
Other*		(14	)		267			(5	)		262
Ending assets	$	17,967		$	20,237		$	17,967		$	20,237

* Includes changes in the market value of securities held by the funds, reinvested dividends and distributions and net investment income.

Federated Reports Q2 Earnings

July 27, 2006

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(in millions)

MANAGED ASSETS	June 30, 2006		March 31, 2006		Dec. 31, 2005		Sept. 30, 2005		June 30, 2005
By Asset Class
Equity	$	30,523	$	31,552	$	29,785	$	29,650	$	28,886
Fixed-income		21,675		22,342		23,017		23,800		24,357
Money market		158,319		163,604		160,621		153,985		151,431
Total Managed Assets	$	210,517	$	217,498	$	213,423	$	207,435	$	204,674
By Market*
Wealth Management & Trust	$	100,935	$	107,885	$	105,918	$	101,980	$	104,190
Broker/Dealer		84,316		82,969		82,886		82,171		76,777
Global Institutional		19,507		20,441		18,592		17,300		17,821
Other		5,759		6,203		6,027		5,984		5,886
Total Managed Assets	$	210,517	$	217,498	$	213,423	$	207,435	$	204,674
By Product Type
Mutual Funds:
Equity	$	26,488	$	27,567	$	26,031	$	26,098	$	25,573
Fixed-income		17,967		18,579		19,037		19,744		20,237
Money market		142,023		145,978		145,289		139,621		136,852
Total Fund Assets	$	186,478	$	192,124	$	190,357	$	185,463	$	182,662
Separate Accounts:
Equity	$	4,035	$	3,985	$	3,754	$	3,552	$	3,313
Fixed-income		3,708		3,763		3,980		4,056		4,121
Money market		16,296		17,626		15,332		14,364		14,578
Total Separate Accounts	$	24,039	$	25,374	$	23,066	$	21,972	$	22,012
Total Managed Assets	$	210,517	$	217,498	$	213,423	$	207,435	$	204,674
	Quarter Ended
AVERAGE MANAGED ASSETS	June 30, 2006		March 31, 2006		Dec. 31, 2005		Sept. 30, 2005		June 30, 2005
By Asset Class
Equity	$	30,976	$	30,696	$	29,386	$	29,542	$	28,279
Fixed-income		21,986		22,743		23,248		24,102		24,590
Money market		160,977		164,061		157,433		154,416		140,191
Total Avg. Assets	$	213,939	$	217,500	$	210,067	$	208,060	$	193,060
By Product Type
Mutual Funds:
Equity	$	27,000	$	26,779	$	25,760	$	26,043	$	25,114
Fixed-income		18,244		18,874		19,249		20,007		20,410
Money market		143,794		146,096		143,691		140,060		125,037
Total Avg. Fund Assets	$	189,038	$	191,749	$	188,700	$	186,110	$	170,561
Separate Accounts:
Equity	$	3,976	$	3,917	$	3,626	$	3,499	$	3,165
Fixed-income		3,742		3,869		3,999		4,095		4,180
Money market		17,183		17,965		13,742		14,356		15,154
Total Avg. Separate Accts.	$	24,901	$	25,751	$	21,367	$	21,950	$	22,499
Total Avg. Assets	$	213,939	$	217,500	$	210,067	$	208,060	$	193,060
	Quarter Ended
ADMINISTERED ASSETS	June 30, 2006		March 31, 2006		Dec. 31, 2005		Sept. 30, 2005		June 30, 2005
Period End	$	18,224	$	18,555	$	18,271	$	18,632	$	17,612
Average	$	18,298	$	18,494	$	17,908	$	18,020	$	17,661

* Federated’s market definitions changed as of Jan. 1, 2006. Channels that had been included in the former Institutional market are now included in the Broker/Dealer and the Wealth Management & Trust markets. For further explanations of these changes and historical data, please see the Historical Assets Under New Market Definition chart on the About Us page of FederatedInvestors.com.