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): April 23, 2009

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 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On April 23, 2009, Federated Investors, Inc. issued the earnings press release attached hereto as Exhibit 99.1 to report first quarter 2009 results.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:

Exhibit 99.1 – Earnings press release issued by Federated Investors, Inc. dated April 23, 2009

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: April 23, 2009	By:	/s/ Thomas R. Donahue
		Thomas R. Donahue
		Chief Financial Officer

EX-99.1

Exhibit 99.1

Federated Investors, Inc. Reports First Quarter 2009 Earnings

• Total managed assets reach record $409.2 billion

• Net bond-fund sales top $1 billion for Q1 2009

• Board declares quarterly dividend of $0.24 per share

(PITTSBURGH, Pa., April 23, 2009) — Federated Investors, Inc. (NYSE: FII), one of the nation’s largest investment managers, today reported earnings per diluted share (EPS) of $0.34 for the quarter ended March 31, 2009 compared to $0.54 for the same quarter last year. Net income was $35.1 million for Q1 2009 compared to $55.8 million for Q1 2008. During Q1 2009, Federated recorded non-cash impairment charges of $20.1 million or $0.13 per diluted share mainly related to intangible assets associated with certain acquisitions. Federated also recorded $1.5 million or $0.01 per diluted share in additional non-cash share-based compensation expense.

Federated’s total managed assets reached a record $409.2 billion at March 31, 2009, up $70.7 billion or 21 percent from $338.5 billion at March 31, 2008 and up $1.9 billion from $407.3 billion reported at Dec. 31, 2008. Asset growth for the quarter was driven by strong net sales of fixed-income products and continued flows into money market funds. Average managed assets for Q1 2009 were $411.7 billion, up $89.7 billion or 28 percent from $322.0 billion reported for Q1 2008 and up $41.9 billion or 11 percent from $369.8 billion reported for Q4 2008.

“As investors increasingly sought fixed-income products, Federated’s broad menu of high-quality bond funds experienced substantial growth in the first quarter,” said J. Christopher Donahue, president and chief executive officer. “Federated sold $3.2 billion in fixed-income mutual funds during the quarter, netting $1.1 billion in bond assets, marking Federated’s best quarter for net fixed-income sales in more than five years.”

Federated’s board of directors declared a quarterly dividend of $0.24 per share. The dividend is payable on May 15, 2009 to shareholders of record as of May 8, 2009. During Q1 2009, Federated purchased 69,937 shares of Federated class B common stock for $1.1 million.

Money market assets in both funds and separate accounts were $360.1 billion at March 31, 2009, up $82.6 billion or 30 percent from $277.5 billion at March 31, 2008 and up $4.4 billion or 1 percent from $355.7 billion at Dec. 31, 2008. Money market mutual fund assets were $328.8 billion at March 31, 2009, up $86.5 billion or 36 percent from $242.3 billion at March 31, 2008 and up $1.5 billion from $327.3 billion at Dec. 31, 2008.

Federated’s fixed-income assets were $25.0 billion at March 31, 2009, up $2.7 billion or 12 percent from $22.3 billion at March 31, 2008 and up $1.5 billion or 6 percent from $23.5 billion at Dec. 31, 2008. Federated had strong net inflows of $1.1 billion into its bond funds during Q1 2009.

MEDIA:	MEDIA:	ANALYSTS:
Meghan McAndrew 412-288-8103	J.T. Tuskan 412-288-7895	Ray Hanley 412-288-1920

Federated Reports Q1 2009 Earnings Page 2 of 9

Federated’s equity assets were $23.4 billion at March 31, 2009, down $14.1 billion or 38 percent from $37.5 billion at March 31, 2008 and down $3.3 billion or 12 percent from $26.7 billion at Dec. 31, 2008 primarily due to market conditions and, to a lesser extent, net outflows.

Financial Summary

Q1 2009 vs. Q1 2008

For Q1 2009, revenue increased to $310.6 million compared to $305.7 million for the same quarter last year. Increases in revenue of $59.9 million from higher average money market managed assets and $7.7 million from higher average equity and fixed-income managed assets due to the Q4 2008 Prudent Bear and Clover Capital acquisitions were partially offset by a $49.0 million decrease from lower remaining average equity managed assets and $9.7 million in fee waivers recorded in Q1 2009 on certain money market funds in order to maintain zero to positive net yields. These fee waivers were offset by a related reduction in marketing and distribution expenses of $4.6 million such that the net impact on operating income was a decrease of $5.1 million. There was also a $2.7 million decrease related to the impact of leap year on Q1 2008 as compared to Q1 2009.

Fee waivers to produce positive or zero net yields may increase and such increases could be significant. The specific level of these waivers will be determined by a variety of factors including market yield levels for money market investments, asset levels within money market funds, changes in the mix of money market assets by type of fund, changes in the expense levels of money market funds and the willingness of the fund adviser to sustain these waivers.

For Q1 2009, Federated derived 71 percent of its revenue from money market assets, 19 percent from equity assets, 9 percent from fixed-income assets and 1 percent from other products and services.

Operating expenses for Q1 2009 increased $35.9 million or 17 percent to $250.6 million compared to $214.7 million for Q1 2008. The increase was primarily attributable to a $16.0 million impairment charge related primarily to significant Q1 2009 market declines in the level of managed assets underlying certain customer relationship intangible assets acquired in connection with two acquisitions. Marketing and distribution expenses increased by $14.7 million primarily from higher average money market managed assets partially offset by lower equity assets and the aforementioned reduction associated with maintaining zero to positive net yields. In Q1 2009, there was also a $3.7 million fixed asset impairment charge reflected in the line item other and a $1.5 million adjustment to share-based compensation expense reflected in compensation and related.

Nonoperating expenses for Q1 2009 increased $2.2 million compared to Q1 2008 primarily due to a $1.4 million decrease in investment income due to lower average investment balances and yields, a $1.0 million increase in recourse debt expense and a $0.4 million impairment charge in Q1 2009 on seed investments in new products.

Q1 2009 vs. Q4 2008

Compared to the prior quarter, revenue increased by $8.9 million or 3 percent. Increases in revenue of $24.0 million from higher average money market managed assets and $5.4 million from higher average equity and

Federated Reports Q1 2009 Earnings Page 3 of 9

fixed-income managed assets due to the Q4 2008 Prudent Bear and Clover Capital acquisitions were partially offset by an $8.5 million decrease from lower remaining average equity managed assets. In addition, there was an increase of $6.3 million in fee waivers on certain money market funds in order to maintain zero to positive net yields. The increase in fee waivers was offset by a related increase to the reduction in marketing and distribution expenses of $2.7 million such that the net impact on operating income was a decrease of $3.6 million. There was also a $6.9 million decrease due to two fewer days in Q1 2009 as compared to Q4 2008.

Compared to Q4 2008, operating expenses increased by $34.6 million or 16 percent. The increase in operating expenses was attributable to four significant items: first, a $16.0 million impairment charge related primarily to significant Q1 2009 market declines in the level of managed assets underlying certain customer relationship intangible assets acquired in connection with two acquisitions; second, a $10.0 million increase in compensation and related expenses primarily related to a $5.1 million increase to amounts accrued for incentive compensation plans including those related to the recent Prudent Bear and Clover Capital acquisitions, a $2.3 million increase in payroll tax and employee benefit expenses primarily due to Q1 seasonality and a $2.0 million increase in share-based compensation primarily related to a $1.5 million adjustment recorded in Q1 2009; third, a $6.8 million increase in marketing and distribution expenses primarily from higher average money market managed assets partially offset by the aforementioned increased reduction associated with maintaining zero to positive net yields and the impact of two fewer days in Q1 2009 as compared to Q4 2008; and finally, a $3.7 million fixed asset impairment charge reflected in other.

Nonoperating expenses decreased $1.3 million compared to the prior quarter due mainly to a $0.9 million reduction in investment losses, a component of which was a $0.4 million impairment charge in Q1 2009 on seed investments in new products and a $0.4 million decrease in recourse debt expense.

Federated’s level of business activity and financial results are dependent upon many factors including market conditions, investment performance and investor behavior. These factors and others including asset levels, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers and expenses can impact Federated’s activity levels and financial results significantly. Risk factors and uncertainties that can influence Federated’s financial results are discussed in the company’s annual and quarterly reports as filed with the Securities and Exchange Commission.

Federated will host an earnings conference call at 9 a.m. Eastern on Friday, April 24, 2009. Investors are invited to listen to Federated’s earnings teleconference by calling 877-407-0782 (domestic) or 201-689-8567 (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 May 1, 2009 by calling 877-660-6853 (domestic) or 201-612-7415 (international) and entering codes 286 and 308797.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing $409.2 billion in assets as of March 31, 2009. With 158 funds and a variety of separately managed account options, Federated provides comprehensive investment management to nearly 5,400 institutions and intermediaries including

Federated Reports Q1 2009 Earnings Page 4 of 9

corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top 2 percent of money market fund managers in the industry, the top 6 percent of fixed-income fund managers and the top 7 percent of equity fund managers¹. For more information, visit FederatedInvestors.com.

###

1 Strategic Insight, March 31, 2009. Based on assets under management in open-end funds.

Federated Securities Corp. is distributor of the Federated funds.

Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling and Federated MDTA LLC, each a registered investment advisor.

Certain statements in this press release, such as those related to the level of fee waivers incurred by the company, asset flows, and asset and revenue levels, constitute or may 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, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Other risks and uncertainties include the ability of the company to predict the level of fee waivers in future quarters, which could vary significantly depending on a variety of factors identified above, and include the ability of the company to sustain asset flows, and asset and revenue levels, which could vary significantly depending on market conditions, investment performance and investor behavior. Other risks and uncertainties also include the risk factors discussed in the company’s annual and quarterly reports as filed with the Securities and Exchange Commission. 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 Reports Q1 2009 Earnings Page 5 of 9

Unaudited Condensed Consolidated Statements of Income¹

(in thousands, except per share data)

	Quarter Ended March 31,						% Change Q1 2008 to Q1 2009		Quarter Ended Dec. 31, 2008			% Change Q4 2008 to Q1 2009
	2009			2008
Revenue
Investment advisory fees, net	$	190,469		$	194,995		(2	)%	$	187,684		1	%
Administrative service fees, net		67,646			51,580		31			61,669		10
Other service fees, net		51,332			57,716		(11	)		50,889		1
Other, net		1,196			1,402		(15	)		1,526		(22	)
Total Revenue		310,643			305,693		2			301,768		3
Operating Expenses
Compensation and related		66,227			61,463		8			56,219		18
General and administrative
Marketing and distribution		122,306			107,626		14			115,518		6
Professional service fees		10,007			8,598		16			9,945		1
Office and occupancy		6,666			6,111		9			6,276		6
Systems and communications		6,428			5,933		8			5,721		12
Advertising and promotional		2,650			3,676		(28	)		3,323		(20	)
Travel and related		2,443			2,925		(16	)		3,883		(37	)
Other		8,264			4,311		92			4,958		67
Total general and administrative		158,764			139,180		14			149,624		6
Amortization of deferred sales commissions		4,873			9,361		(48	)		5,453		(11	)
Intangible asset amortization and impairment		20,730			4,745		337			4,715		340
Total Operating Expenses		250,594			214,749		17			216,011		16
Operating Income		60,049			90,944		(34	)		85,757		(30	)
Nonoperating Income (Expenses)
Investment (loss) income, net		(402	)		1,278		(131	)		(1,115	)	(64	)
Debt expense––recourse		(1,112	)		(96	)	1,058			(1,464	)	(24	)
Debt expense––nonrecourse		(432	)		(872	)	(50	)		(518	)	(17	)
Other, net		20			(49	)	(141	)		(100	)	(120	)
Total Nonoperating (Expenses) Income, net		(1,926	)		261		(838	)		(3,197	)	(40	)
Income before income taxes		58,123			91,205		(36	)		82,560		(30	)
Income tax provision		20,654			34,000		(39	)		27,041		(24	)
Net Income		37,469			57,205		(35	)		55,519		(33	)
Less: Net income attributable to the noncontrolling interest in subsidiaries		2,334			1,386		68			1,256		86
Net income attributable to Federated	$	35,135		$	55,819		(37	)%	$	54,263		(35	)%
Earnings Per Share2
Net income attributable to Federated common shareholders – Basic	$	0.34		$	0.55		(38	)%	$	0.53		(36	)%
Net income attributable to Federated common shareholders – Diluted	$	0.34		$	0.54		(37	)%	$	0.53		(36	)%
Weighted-average shares outstanding
Basic		99,927			99,812					99,891
Diluted		100,035			101,137					100,025
Dividends declared per share	$	0.24		$	0.21				$	0.24

1) On Jan. 1, 2009, Federated adopted Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51.” Its provisions require that minority interest be renamed noncontrolling interest and that companies present a consolidated net income that includes the amount attributable to noncontrolling interests for all periods presented.

2) On Jan. 1, 2009, Federated adopted Financial Accounting Standards Board Staff Position Emerging Issues Task Force No. 03-6-1 “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” Under this standard, unvested share-based payment awards that receive non-forfeitable dividend rights are considered participating securities and are now required to be included in the computation of earnings per share under the “two-class method.” As a result current and prior periods have been adjusted to reflect this new standard.

Federated Reports Q1 2009 Earnings Page 6 of 9

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	March 31, 2009			Dec. 31, 2008
Assets
Cash and other short-term investments	$	71,225		$	58,647
Other current assets		54,329			58,185
Deferred sales commissions, net		25,561			30,261
Intangible assets, net and goodwill		643,086			657,321
Other long-term assets		40,157			42,196
Total Assets	$	834,358		$	846,610
Liabilities and Equity
Current liabilities	$	212,789		$	217,838
Long-term debt—recourse		120,750			126,000
Long-term debt—nonrecourse		25,450			30,497
Other long-term liabilities		33,357			47,705
Equity excluding treasury stock1		1,235,406			1,229,051
Treasury stock		(793,394	)		(804,481	)
Total Liabilities and Equity	$	834,358		$	846,610

1) Noncontrolling or minority interest was previously included in other long-term liabilities, but is now included in Equity excluding treasury stock. On Jan. 1, 2009, Federated adopted Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51.” Its provisions require that minority interest be renamed noncontrolling interest and companies present it as a component of equity for all periods presented.

Federated Reports Q1 2009 Earnings Page 7 of 9

Changes in Equity and Fixed-Income Fund Managed Assets

(in millions)

	Quarter Ended
	March 31, 2009			Dec. 31, 2008			March 31, 2008
Equity Funds
Beginning assets	$	17,562		$	21,583		$	29,145
Sales		1,325			1,031			1,602
Redemptions		(1,591	)		(1,752	)		(1,893	)
Net redemptions		(266	)		(721	)		(291	)
Net exchanges		(75	)		(103	)		(77	)
Acquisition related		0			1,149			0
Other1		(1,319	)		(4,346	)		(2,897	)
Ending assets	$	15,902		$	17,562		$	25,880
Fixed-Income Funds
Beginning assets	$	19,321		$	19,136		$	17,943
Sales		3,151			2,172			1,818
Redemptions		(2,010	)		(2,331	)		(1,555	)
Net sales (redemptions)		1,141			(159	)		263
Net exchanges		42			13			53
Acquisition related		0			658			0
Other1		248			(327	)		80
Ending assets	$	20,752		$	19,321		$	18,339

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

Changes in Equity and Fixed-Income Separate Account Assets²

(in millions)

	Quarter Ended
	March 31, 2009			Dec. 31, 2008			March 31, 2008
Equity Separate Accounts
Beginning assets	$	9,099		$	10,068		$	13,017
Net customer flows3		(561	)		(754	)		(404	)
Acquisition related		0			1,537			0
Other3		(1,029	)		(1,752	)		(975	)
Ending assets	$	7,509		$	9,099		$	11,638
Fixed-Income Separate Accounts
Beginning assets	$	4,165		$	3,602		$	3,754
Net customer flows3		7			180			71
Acquisition related		0			444			0
Other3		47			(61	)		162
Ending assets	$	4,219		$	4,165		$	3,987

2) Includes separately managed accounts, institutional accounts and sub-advised funds (both variable annuity and other) and other managed products . Flows for liquidation portfolios have been removed from Changes in Equity and Fixed-Income Separate Account Assets and are detailed on the following page.

3) For certain accounts, Net customer flows are calculated as the remaining difference between beginning and ending assets after the calculation of Other. Other includes the approximate effect of changes in the market value of securities held in the portfolios, reinvested dividends and distributions and net investment income.

Federated Reports Q1 2009 Earnings Page 8 of 9

Changes in Liquidation Portfolios¹

(in millions)

	Quarter Ended
	March 31, 2009			Dec. 31, 2008			March 31, 2008
Liquidation Portfolios
Beginning assets	$	1,505		$	1,777		$	1,127
Net customer flows2		(802	)		(205	)		(11	)
Other2		(3	)		(67	)		(26	)
Ending assets	$	700		$	1,505		$	1,090

1) For Q1 2009, Federated is presenting flows for liquidation portfolios separately. Liquidation portfolios include portfolios of distressed fixed-income securities and liquidating collateralized debt obligation (CDO) products. In the distressed security category, Federated has been retained by a third party to manage these assets through an orderly liquidation process that will generally occur over a multi-year period. In the case of liquidating CDOs, the CDO structure has unwound earlier than expected due to events of default related to certain distressed securities in the portfolio. The new category was established because the assets and related cash flows from these portfolios are significantly different than those of traditional separate account mandates.

2) For certain accounts, Net customer flows are calculated as the remaining difference between beginning and ending assets after the calculation of Other. Other includes the approximate effect of changes in the market value of securities held in the portfolios, reinvested dividends and distributions and net investment income. For Dec. 31, 2008 ($52) million was reclassified from Other to Net customer flows.

Federated Reports Q1 2009 Earnings Page 9 of 9

(in millions)

MANAGED ASSETS	March 31, 2009		Dec. 31, 2008		Sept. 30, 2008		June 30, 2008		March 31, 2008
By Asset Class
Equity	$	23,411	$	26,661	$	31,651	$	37,281	$	37,518
Fixed-income		24,971		23,486		22,738		22,989		22,326
Money market		360,127		355,658		287,836		271,131		277,527
Liquidation portfolios1		700		1,505		1,777		2,083		1,090
Total Managed Assets	$	409,209	$	407,310	$	344,002	$	333,484	$	338,461
By Market*
Wealth Management & Trust	$	235,250	$	233,444	$	173,284	$	162,991	$	162,865
Broker/Dealer		117,476		121,073		120,014		116,840		119,268
Global Institutional		45,247		41,453		37,374		40,408		43,976
Other		11,236		11,340		13,330		13,245		12,352
Total Managed Assets	$	409,209	$	407,310	$	344,002	$	333,484	$	338,461
By Product Type
Mutual Funds:
Equity	$	15,902	$	17,562	$	21,583	$	25,569	$	25,880
Fixed-income		20,752		19,321		19,136		19,065		18,339
Money market		328,780		327,267		259,172		240,646		242,280
Total Fund Assets	$	365,434	$	364,150	$	299,891	$	285,280	$	286,499
Separate Accounts:
Equity	$	7,509	$	9,099	$	10,068	$	11,712	$	11,638
Fixed-income		4,219		4,165		3,602		3,924		3,987
Money market		31,347		28,391		28,664		30,485		35,247
Total Separate Accounts	$	43,075	$	41,655	$	42,334	$	46,121	$	50,872
Total Liquidation Portfolios1	$	700	$	1,505	$	1,777	$	2,083	$	1,090
Total Managed Assets	$	409,209	$	407,310	$	344,002	$	333,484	$	338,461
AVERAGE MANAGED ASSETS	Quarter Ended
	March 31, 2009		Dec. 31, 2008		Sept. 30, 2008		June 30, 2008		March 31, 2008
By Asset Class
Equity	$	24,219	$	24,870	$	35,136	$	38,974	$	38,471
Fixed-income		24,218		22,546		23,143		22,709		22,111
Money market		362,269		320,684		274,840		279,776		260,306
Liquidation portfolios1		975		1,650		1,944		1,816		1,109
Total Avg. Assets	$	411,681	$	369,750	$	335,063	$	343,275	$	321,997
By Product Type
Mutual Funds:
Equity	$	16,240	$	16,904	$	24,180	$	26,762	$	26,696
Fixed-income		20,009		18,674		19,347		18,672		18,186
Money market		330,294		293,428		245,304		246,868		231,719
Total Avg. Fund Assets	$	366,543	$	329,006	$	288,831	$	292,302	$	276,601
Separate Accounts:
Equity	$	7,979	$	7,966	$	10,956	$	12,212	$	11,775
Fixed-income		4,209		3,872		3,796		4,037		3,925
Money market		31,975		27,256		29,536		32,908		28,587
Total Avg. Separate Accts.	$	44,163	$	39,094	$	44,288	$	49,157	$	44,287
Total Avg. Liquidation Portfolios1	$	975	$	1,650	$	1,944	$	1,816	$	1,109
Total Avg. Assets	$	411,681	$	369,750	$	335,063	$	343,275	$	321,997
ADMINISTERED ASSETS	Quarter Ended
	March 31, 2009		Dec. 31, 2008		Sept. 30, 2008		June 30, 2008		March 31, 2008
Period End	$	7,476	$	8,373	$	8,723	$	8,886	$	9,921
Average	$	8,236	$	9,142	$	8,889	$	9,781	$	9,694

1) Federated added liquidation portfolios as an asset category beginning in Q1 2009. Liquidation portfolios include portfolios of distressed fixed-income securities and liquidating collateralized debt obligation (CDO) products. In the distressed security category, Federated has been retained by a third party to manage these assets through an orderly liquidation process that will generally occur over a multi-year period. In the case of liquidating CDOs, the CDO structure has unwound earlier than expected due to events of default related to certain distressed securities in the portfolio. The new category was established because the assets and related cash flows from these portfolios are significantly different than those of traditional separate account mandates.