EXHIBIT 99.1

December 23, 2008

Dear Stockholder of The Phoenix Companies, Inc.:

We are pleased to inform you that on December 12, 2008, the board of directors of The Phoenix Companies, Inc. (“PNX”) approved the spin-off of Virtus Investment Partners, Inc. (the “Company”), a majority-owned subsidiary of PNX, into an independent publicly traded asset management firm. When the spin-off is completed, PNX will be primarily a life and annuity business, and our assets and business will consist largely of those currently reported in our financial statements as our Life and Annuity segment, as well as the assets and business of our wholly owned subsidiary, Goodwin Capital Advisers, Inc.

The spin-off will occur on December 31, 2008 through a pro rata distribution of Company common stock to PNX’s stockholders. This means each PNX stockholder will receive one share of Company common stock for every 20 shares of PNX common stock held at 5 p.m., New York City time, on December 22, 2008, the record date of the spin-off. The distribution will be made in book-entry form. We intend that the Company common stock you receive in the spin-off (including fractional shares for which stockholders receive cash) will be treated as a taxable distribution for U.S. federal income tax purposes. You should consult your own tax advisor regarding the particular consequences of the spin-off to you.

Following the spin-off, you will own shares in both PNX and the Company. PNX common stock will continue to trade on the New York Stock Exchange under the symbol “PNX.” The shares of Company common stock have been approved for listing on the Nasdaq Global Market under the symbol “VRTS.” Stockholder approval of the spin-off is not required, and you do not need to take any action to receive your Company common stock.

The spin-off will create two separate companies. We believe it will enhance value for PNX stockholders by allowing PNX and the Company to each focus on maximizing their own, distinct opportunities.

The enclosed information statement is being mailed to all PNX stockholders. It describes the spin-off in detail and contains important information about the Company, including its financial statements.

I look forward to your continued support as a stockholder and remain committed to working on your behalf to build long-term value.

Sincerely,

Dona D. Young

Chairman, President and

Chief Executive Officer

December 23, 2008

Dear Stockholder of Virtus Investment Partners, Inc.:

It is my pleasure to welcome you as a future stockholder of our new company, Virtus Investment Partners, Inc. (the “Company”). Our strategy as an independent publicly traded company is to maximize value to our stockholders by building on our current strengths and capitalizing on the opportunities we see in the market where we believe we can be competitive and achieve growth.

We will continue to maintain, extend and improve our product offerings by leveraging the investment capabilities of our affiliated managers and subadvisers, as well as attracting new investment management talent and developing new products to meet the evolving needs of our distribution partners and clients. We also believe we can grow by expanding our current relationships with select distributors that have the capacity to sell a larger volume and broader array of our products. Other key elements of our strategy include attracting and retaining talented personnel in both investment management and distribution in order to better serve our key distribution partners and their clients, and enhancing our shared service model to build greater efficiency and economies of scale into our business.

I invite you to learn more about the Company by reviewing the enclosed information statement. We look forward to our future as an independent publicly traded company and to your support as a holder of our common stock.

Sincerely,

George R. Aylward, Jr.

President and Chief Executive Officer

PRELIMINARY INFORMATION STATEMENT

VIRTUS INVESTMENT PARTNERS, INC.

Common Stock

(par value $.01 per share)

This information statement is being furnished in connection with the distribution to holders of common stock, par value $.01 per share, of The Phoenix Companies, Inc. (“PNX”) of all of the outstanding shares of common stock, par value $.01 per share, of Virtus Investment Partners, Inc. (the “Company”).

We are currently a majority-owned subsidiary of PNX. Following the spin-off, we will be an independent publicly traded company, and our assets and business will consist largely of those currently reported in PNX’s financial statements as PNX’s Asset Management segment and operating as the Company, but excluding the assets and business of PNX’s wholly owned subsidiary, Goodwin Capital Advisers, Inc. (“Goodwin”).

Shares of our common stock will be distributed to holders of PNX common stock of record as of the close of business on December 22, 2008 (the “record date”). These stockholders will receive one share of our common stock for every 20 shares of PNX common stock held on the record date. The distribution of the shares of our common stock will be made in book-entry form. The spin-off will be effective at 5:00 p.m., New York City time on December 31, 2008. PNX intends the spin-off to be a taxable transaction for U.S. federal income tax purposes.

No stockholder approval of the spin-off is required or sought. We are not asking you for a proxy and you are requested not to send us a proxy. PNX stockholders will not be required to pay for the shares of our common stock to be received by them in the spin-off or to surrender or exchange shares of PNX common stock in order to receive our common stock or to take any other action in connection with the spin-off.

There is no current trading market for our common stock. However, we expect that a limited market, commonly known as a “when-issued” trading market, for our common stock will develop on or shortly before the record date for the spin-off, and we expect that “regular way” trading of our common stock will begin the first trading day after the spin-off. The shares of our common stock have been approved for listing on the Nasdaq Global Market under the symbol “VRTS.”

In reviewing this information statement, you should carefully consider the matters described under “Risk Factors” for a discussion of certain factors that should be considered by recipients of our common stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is December 23, 2008.

TABLE OF CONTENTS

	Page
Questions and Answers About the Company and the Spin-Off	1
Summary	5
Risk Factors	16
Special Note About Forward-Looking Statements	26
The Spin-Off	27
Dividend Policy	32
Capitalization	33
Selected Consolidated Financial Data	35
Unaudited Pro Forma Consolidated Financial Data	37
Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Business	77
Management	92
Corporate Governance	97
Compensation of Executive Officers	99
Compensation of Directors	126
Security Ownership by Certain Beneficial Owners and Management	127
Our Relationship With PNX After the Spin-Off	130
Description of Our Capital Stock	136
Equity Investment	145
Indemnification and Limitation of Liability of Directors and Officers	150
Description of Indebtedness	151
Independent Registered Public Accounting Firm	151
Where You Can Find More Information	152
Index to Consolidated Financial Statements	F-1

This information statement is being furnished solely to provide information to PNX stockholders who will receive shares of our common stock in the distribution. It is not and is not to be construed as an inducement or encouragement to buy or sell any of our securities or any securities of PNX. This information statement describes our business, our relationship with PNX and how the spin-off affects PNX and its stockholders, and provides other information to assist you in evaluating the benefits and risks of holding or disposing of our common stock that you will receive in the distribution. You should be aware of certain risks relating to the spin-off, our business and ownership of our common stock, which are described under the heading “Risk Factors.”

You should not assume that the information contained in this information statement is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and we undertake no obligation to update the information, except in the normal course of our public disclosure obligations and practices.

QUESTIONS AND ANSWERS ABOUT THE COMPANY AND THE SPIN-OFF

Q: Why am I receiving this document?

A: PNX is delivering this document to you because you were a holder of PNX common stock on the record date for the distribution of shares of our common stock. Accordingly, you are entitled to receive one share of our common stock for every 20 shares of PNX common stock that you held on the record date. No action is required for you to participate in the distribution.

Q: What is the spin-off?

A: The spin-off is the overall transaction of separating the Company from PNX, which will be accomplished through a series of transactions which will result in our stockholders owning the Asset Management business operated by PNX and currently reported in its financial statements as its Asset Management segment, but excluding the assets and business of Goodwin. The final step of the transactions will be the pro rata distribution of our common stock by PNX to holders of PNX common stock (the “distribution”).

Q: What is the Company?

A: We are an existing majority-owned subsidiary of PNX. Following the spin-off, we will be an independent publicly traded company, providing investment management products and services to individuals and institutions.

Q: Why is PNX separating the Company and distributing its stock?

A: PNX and the Company are fundamentally different types of businesses, and the separation of the two businesses will help highlight unique characteristics and values of these businesses for investors and better position each company to access the capital markets. The separation of the Asset Management business from PNX will result in two separate companies that can each focus on maximizing opportunities for its distinct business. We believe this separation will present the opportunity for enhanced performance of each of the two companies.

PNX’s board of directors has determined that separating the Asset Management business from PNX is in the best interests of PNX and its stockholders. The following potential benefits were considered by PNX’s board of directors in making the determination to effect the spin-off:

• allowing each company to separately pursue the business strategies that best suit its long-term interests;

• creating separate companies that have different financial characteristics, which may appeal to different investor bases and allow for clarity on valuation of the respective businesses;

• creating opportunities to more efficiently develop and finance ongoing operations and future acquisitions;

• allowing each company to establish an expense structure appropriate for its business and size; and

• creating effective management incentives tied to each company’s performance.

For a further explanation of the reasons for the spin-off and more information about our business, see “The Spin-Off—Reasons for the Spin-Off” and “Business.”

Q: Why is the separation of the two companies structured as a spin-off?

A: PNX’s board of directors believes that a distribution of shares of our common stock is a cost-effective way to separate the companies.

Q: What is the record date for the distribution?

A: The record date is December 22, 2008, and ownership will be determined as of 5:00 p.m., New York City Time, on that date.

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Q: When will the distribution occur?

A: Shares of our common stock will be distributed on or about December 31, 2008 (the “distribution date”).

Q: Can PNX decide to cancel the distribution of Company common stock even if all the conditions have been met?

A: Yes. The distribution is conditioned upon satisfaction or waiver of certain conditions. See “The Spin-Off—Spin-Off Conditions and Termination.” PNX has the right to terminate the stock distribution, even if all of these conditions are met, if at any time PNX’s board of directors determines, in its sole discretion, that PNX and the Company are better served being a combined company, thereby making the distribution not in the best interest of PNX and its stockholders.

Q: What will happen to the listing of PNX common stock?

A: Nothing. PNX common stock will continue to be traded on the New York Stock Exchange under the symbol “PNX.”

Q: Will the spin-off affect the market price of my shares of PNX common stock?

A: Yes. As a result of the spin-off, we expect the trading price of your shares of PNX common stock immediately following the distribution date to be lower than immediately prior to the distribution date because the trading price will no longer reflect the value of the Company business. In addition, until the market has fully analyzed the operations of PNX without this business, the price of your shares of PNX common stock may fluctuate significantly. Furthermore, the combined trading prices of PNX common stock and our common stock after the distribution date may be less than the trading price of PNX common stock prior to the distribution date.

Q: What will PNX stockholders receive in the spin-off?

A: In the spin-off, PNX stockholders will receive one share of our common stock for every 20 shares of PNX common stock they own as of the record date of the spin-off. No fractional shares will be issued. Those stockholders who would otherwise be entitled to receive fractional shares will receive cash in lieu of fractional shares. For example, a PNX stockholder that holds 210 shares of PNX common stock as of the record date will, after the spin-off, (i) continue to hold 210 shares of PNX common stock and (ii) receive 10 shares of Company common stock and cash in lieu of fractional shares. Immediately after the spin-off, PNX stockholders will still own their shares of PNX common stock and the same stockholders will still own all of PNX’s current businesses, but they will own them as two separate investments rather than as a single investment.

After the spin-off, the certificates and book-entry interests representing the “old” PNX common stock will represent such stockholders’ interests in the PNX businesses following the spin-off, excluding the Company but including Goodwin, and the book-entry interests representing our common stock that such stockholders receive in the spin-off will represent their interest in our Asset Management business only.

Q: What does a PNX stockholder need to do now?

A: PNX stockholders do not need to take any action, although we urge you to read this entire document carefully. The approval of the PNX stockholders is not required or sought to effect the spin-off and PNX stockholders have no appraisal rights in connection with the spin-off. PNX is not seeking a proxy from any stockholders and you are requested not to send us a proxy.

PNX stockholders will not be required to pay anything for the shares of our common stock distributed in the spin-off or to surrender any shares of PNX common stock. PNX stockholders should not send in their PNX share certificates. PNX stockholders will automatically receive their shares of our common stock when the spin-off is effected and will receive cash for any fractional shares.

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Q: Are there risks to owning Company common stock?

A: Yes. Our business is subject to both general and specific risks relating to our operations. In addition, our spin-off from PNX presents risks relating to our becoming an independent publicly traded company as well as risks relating to the nature of the spin-off transaction itself.

Q: What are the U.S. federal income tax consequences of the spin-off to PNX stockholders?

A: It is intended that the spin-off will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a taxable U.S. stockholder receiving shares of our common stock (including fractional shares for which stockholders receive cash) in the spin-off will be treated as if such stockholder had received a taxable distribution in an amount equal to the fair market value of our common stock received (including fractional shares for which stockholders receive cash). Such distribution will be treated as a dividend to the extent of PNX’s current and accumulated earnings and profits, which subject to certain limitations may be taxable to individuals at a reduced rate of 15%. To the extent in excess of our earnings and profits, the receipt of our common stock will generally result in a reduction of a stockholder’s basis in PNX common stock and capital gain to the extent of any excess. Capital gains may be taxable at a reduced rate of 15% for individuals that have held their shares of PNX common stock for more than one year. In addition, a stockholder’s tax basis in our common stock will be equal to its fair market value at the time of the spin-off and the holding period in our common stock will begin the day after the spin-off. Depending on the circumstances, a non-U.S. stockholder may be subject to a withholding tax at a rate of 30% on the fair market value of the common stock received by such stockholder (including fractional shares for which stockholders receive cash), unless such stockholder is entitled to an exemption from or reduction in withholding under the benefit of an applicable income tax treaty or the amount treated as a taxable dividend is effectively connected with such non-U.S. stockholder’s conduct of a trade or business in the United States, and the stockholder provides to us appropriate certification.

See “The Spin-off—Material U.S. Federal Income Tax Consequences of the Spin-off.”

You should consult your own tax advisor as to the particular consequences of the spin-off to you.

Q: What if I want to sell my PNX common stock or my Company common stock?

A: You should consult with your own financial advisors, such as your stockbroker, bank or tax advisor. PNX does not make any recommendations on the purchase, retention or sale of shares of PNX common stock or our common stock to be distributed.

If you do decide to sell any shares, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your PNX common stock or your Company common stock after it is distributed, or both.

Q: Where will I be able to trade shares of my Company common stock?

A: There is not currently a public market for our common stock. The shares of our common stock have been approved for listing on the Nasdaq Global Market under the symbol “VRTS.” We anticipate that trading in shares of our common stock will begin on a “when-issued” basis on or shortly before the record date and before the distribution date, and “regular way” trading will begin on the first trading day following the distribution date. If trading does begin on a “when-issued” basis, you may purchase or sell our common stock after that time, but your transaction will not settle until after the distribution date. On the first trading day following the distribution date, when-issued trading in respect of our common stock will end and regular way trading will begin. We cannot predict the trading prices for our common stock before or after the distribution date.

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Q: Where can PNX stockholders get more information?

A: Before the distribution, if you have any questions relating to the distribution, you should contact:

The Phoenix Companies, Inc.

Investor Relations

One American Row

Hartford, CT 06102

Telephone: (860) 403-7100

After the distribution, if you have any questions relating to our common stock, you should contact:

Virtus Investment Partners, Inc.

Investor Relations

100 Pearl St., 9^th Floor

Hartford, CT 06103

Telephone: (800) 248-7971

Q: Who will be the distribution agent, transfer agent and registrar for Company common stock?

A: The distribution agent for our common stock will be Mellon Investor Services LLC.

After the distribution, the transfer agent and registrar for our common stock will be Mellon Investor Services LLC.

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SUMMARY

This summary highlights information contained elsewhere in this information statement and may not contain all of the information that may be important to you. For a complete understanding of the Asset Management business and the spin-off, you should read this summary together with the more detailed information and the Company financial statements appearing elsewhere in this information statement. You should read this entire information statement carefully, including the “Risk Factors” and “Special Note About Forward-Looking Statements” sections.

References in this information statement to (1) the “Company,” “Phoenix Investment Partners, Ltd.,” “Virtus Investment Partners, Inc.,” “we,” “us” or “our” refer to Virtus Investment Partners, Inc., a Delaware corporation, and its direct and indirect subsidiaries, and (2) “PNX” refer collectively to The Phoenix Companies, Inc., a Delaware corporation, and its direct and indirect subsidiaries, in each case, unless the context otherwise requires. The transaction in which the Company will be separated from PNX and become an independent publicly traded company is referred to in this information statement as the “spin-off.”

Our Company

We are a provider of investment management products and services to individuals and institutions. We operate a multi-manager asset management business, comprising a number of individual affiliated managers, each having its own distinct investment style, autonomous investment process and brand. We believe our customers value this approach, especially institutional customers who appreciate individual managers with distinctive cultures and styles.

Investors have an array of needs driven by factors such as market conditions, risk tolerance and investment goals. A key element of our business is to offer a variety of investment styles and multiple disciplines to meet those needs. To that end, for our mutual funds, we supplement the investment capabilities of our affiliated managers with those of select unaffiliated sub-advisors. We do that by partnering with these managers whose strategies are not typically available to retail mutual fund customers.

We provide our products in a number of forms and through multiple distribution channels. Our retail products include open-end mutual funds, closed-end funds and separately managed accounts. Our fund family of over 50 open-end funds is distributed primarily through intermediaries. Our five closed-end funds trade on the New York Stock Exchange. Retail separately managed accounts are comprised of intermediary programs, sponsored and distributed by unaffiliated brokerage firms, and private client services, originated and maintained by our affiliated managers. We also manage institutional accounts for corporations, multi-employer retirement funds and foundations, endowments, special purpose funds and other types of institutions. Our earnings are primarily driven by asset-based investment management fees charged on these various products. These fees are based on a percentage of assets under management and are calculated using either daily or weekly average assets or assets at the end of the quarter.

Our Strengths

We believe the following business strengths position us to capitalize on the opportunities presented by the market for asset management products and services:

• We offer our clients investment capabilities across a broad range of products. Our roster of affiliated managers and unaffiliated sub-advisors is comprised of investment management teams with expertise across a spectrum of investment capabilities. We have capabilities in traditional categories such as core, value and international equity, fixed income and money market, as well as specialized categories such as REITs and utilities. As of September 30, 2008, 61%, 69% and 63% of our third-party assets under management were in the top third of relative peer groups on a one, three and five year basis, respectively. See “Business—Our Performance” for additional information.

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• We offer products in multiple styles and multiple disciplines. Unlike many competitors of a similar size, our product set is highly diversified by manager, style and discipline. Our products are managed by a number of different managers, both affiliated and unaffiliated. We have multiple offerings by asset category (equity, fixed income, money market and alternative), in all market-caps (large, mid and small), in different styles (growth, blend and value) and with various investment approaches (fundamental, quantitative, thematic). By offering a broad array of products, we believe we can appeal to a greater number of investors and be less exposed to changes in market cycles and investor preferences. This provides the opportunity to participate in growth opportunities across different market cycles.

• We distribute through multiple channels, with particular strength in retail distribution. We operate in both the institutional and retail markets. In retail markets, we have a broad presence in the national, regional and independent broker-dealer firms that are the major distributors of mutual funds and separately managed accounts to retail customers. In many of these firms, we have a number of products that are on the firms’ preferred “recommended” lists and on fee-based advisory programs. In 2007, our gross sales of retail mutual funds were $3.4 billion.

• We provide an attractive environment for investment teams. Our affiliated managers maintain their own identity and participate in the earnings they generate through compensation arrangements. They are supported by shared distribution and administrative services, allowing them to focus their time and attention on managing client assets. We believe we provide an attractive environment for investment management professionals, which allows us to retain talent and attract new high-performing managers, teams and firms.

• We have a strong and active product management and development capability. We have developed an active product management capability to allow for the continuous improvement of our product line. In our retail business, from 2005 through 2007 we completed 57 fund actions, comprised of launching or adopting new funds, changing sub-advisors and merging or liquidating funds. In addition, we have developed a number of new products that leverage our existing capabilities, through product line extensions such as our alternative fund of funds, Diversifier, and a new international REIT offering, or by identifying and acquiring new capabilities, such as our partnership with Vontobel Asset Management, the sub-advisor to our $1.1 billion Foreign Opportunities Fund.

Our Strategy

We believe we can enhance stockholder value by building upon our strengths and effectively executing the following strategies:

• Maintain, extend and improve our offerings of high quality investment management capabilities. Our goal is to provide the highest quality products possible to our clients. In product categories where we do not have the capability from our affiliated managers, we partner with unaffiliated sub-advisors, selecting managers whose strategies are not typically available to retail mutual fund customers. We manage our product offerings in the same fashion that our distribution partners balance and manage their clientele’s portfolios, seeking to maximize returns while minimizing risks via a diversified, balanced suite of offerings with a long-term horizon.

• Leverage our internal capabilities to develop new products. We intend to leverage our affiliated portfolio management capabilities by offering those capabilities in other product forms and extending them into new strategies. For example, our domestic REIT strategy was first developed for a closed-end fund, and was then introduced as an open-end fund, made available as an institutional account and within a variable annuity product. We then extended that domestic strategy into an international REIT offering in October 2007. We intend to seek to take similar steps with other

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investment capabilities. We also intend to continue to develop and introduce new offerings to meet the evolving needs of investors and to identify strong performing additional products that can be added to our line-up.

• Build upon our current distribution access to generate higher levels of sales. We intend to selectively expand our distribution resources, including sales and relationship personnel. In the retail business, our wholesaling force is smaller than those of many of our competitors. We believe we can build upon the growth we have seen in the retail market by expanding these resources. In addition, through our intermediaries, we currently do business with a large number of producers that employ only one or two of our products. Our strategy is to focus on these producers in order to become one of their preferred mutual fund families. We believe this can be accomplished through appropriate incentives, focused activities and targeted marketing efforts. We also intend to expand into specific growth areas where we have a smaller presence, such as the registered investment advisors (“RIA”) channel. This channel is one of the fastest growing components of the advisory industry.

• Develop and attract additional high-caliber investment professionals. We believe we can attract high-caliber investment management professionals based on the relative attractiveness of our business model, which allows each affiliated manager to maintain its identity and participate in the earnings it generates. We intend to employ a variety of approaches to grow in this manner, including the expansion of existing teams and direct hiring of new teams. Similarly, we believe the structure of our business is attractive to sub-advisors looking for distribution and other support.

• Enhance our shared administrative and distribution services and achieve greater economies of scale. We intend to continue to enhance our shared services to allow for even greater efficiencies and economies of scale. The spin-off provides several opportunities to enhance the scope of the shared services we provide to our affiliated managers. Specifically, we will now have control over the costs related to all forms of shared services and the ability to deploy expenditures to best serve a stand-alone asset management business. We believe the spin-off will provide additional savings related to costs shared with PNX, primarily facilities and administrative support.

We believe that we have an opportunity to expand our profit margins by increasing assets under management and associated revenues while applying disciplined expense management. Generally speaking, we believe that in the asset management business an increase in assets under management to certain levels does not result in additional material fixed costs.

Following the spin-off, we will be an independent publicly traded company, and our assets and business will consist largely of those currently reported in PNX’s financial statements as PNX’s Asset Management segment and operating as the Company, but excluding the assets and business of Goodwin.

We describe in this information statement PNX’s Asset Management business that will be owned by us following the spin-off as if it were our sole business for all historical periods described. However, we are currently a majority-owned subsidiary of PNX that also owns other assets and is engaged, indirectly, in other businesses which will not be part of the Company following the spin-off. References in this document to our historical assets, liabilities, products, business, operations or activities generally refer to the historical assets, liabilities, products, business, operations or activities of PNX’s Asset Management business as it was conducted as part of PNX and its subsidiaries, including the Company and its subsidiaries, before the spin-off. Our historical financial results as part of PNX contained in this information statement may not be indicative of our financial results in the future as an independent company or reflect what our financial results would have been had we been an independent company during the periods presented.

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Summary Consolidated Financial Data

The following tables set forth our summary consolidated financial data. The summary results of operations data for each of the three years in the period ended December 31, 2007 are derived from our audited consolidated financial statements included elsewhere in this information statement, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The results of operations data for the nine months ended September 30, 2007 and September 30, 2008 are derived from our unaudited consolidated financial statements included elsewhere in this information statement. The unaudited consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and in our opinion include all adjustments, consisting only of normal recurring adjustments that we consider necessary for a fair statement of our results of operations and financial position for these periods and as of such dates.

The following tables also present our summary unaudited pro forma consolidated financial information, which has been derived from our unaudited pro forma consolidated financial information included elsewhere in this information statement.

	Nine Months Ended September 30,								Years Ended December 31,
	2008			Pro Forma 2008			2007		2007			Pro Forma 2007		2006			2005
($ in millions)
Results of Operations
Total revenues	$	143.4		$	125.7		$	170.0	$	226.2		$	203.3	$	218.6		$	237.4
Total operating expenses		589.6			574.5			166.1		220.9			198.6		262.5			256.5
Operating income (loss)		(446.2	)		(448.8	)		3.9		5.3			4.7		(43.9	)		(19.1	)
Net income (loss)		(349.9	)		(351.5	)		10.2		(14.2	)		2.3		(47.6	)		(33.1	)
Adjusted net income(1)		13.6						13.5		16.5					5.0			4.8
Cash Flow Data
Net cash provided by (used in) operating activities	$	(2.8	)				$	4.8	$	13.0				$	15.9		$	(11.5	)
Capital expenditures		(2.4	)					—		(0.5	)				(1.6	)		(0.8	)
EBITDA(2)		7.8								38.1					26.2			22.1
	As of September 30								As of December 31,
	2008			Pro Forma 2008			2007		2007					2006			2005
Balance Sheet Data
Cash and cash equivalents	$	22.6		$	44.5		$	32.8	$	36.8				$	33.9		$	23.8
Current assets (including cash and cash equivalents)		60.9			81.7			83.0		83.1					82.2			66.3
Total assets		365.0			274.3			760.7		752.2					781.1			825.0
Current liabilities (excluding current maturities of notes payable)		55.4			37.6			56.9		74.3					71.0			54.0
Notes payable to related parties (including current maturities)		33.0			20.0			370.0		42.0					436.3			508.1
Other liabilities		1.7			12.5			29.6		11.0					20.3			35.9
Convertible preferred equity		—			45.0			—		—					—			—
Stockholder’s equity		274.9			159.2			304.2		624.9					253.5			227.0
Assets Under Management
($ in billions)
Total assets(3)	$	41.2					$	59.4	$	55.5				$	58.1		$	50.9
Third-party assets(3)		28.7						46.5		42.5					45.0			37.4
Pro forma assets(3)		27.0						44.4		40.4					43.6			35.7

Notes to Summary Consolidated Financial Data

(1) The supplemental performance measure “adjusted net income” is provided in addition to net income, but is not a substitute for net income determined in accordance with GAAP and may not be comparable to other

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non-GAAP performance measures, including measures of cash earnings or cash income, of other companies. Furthermore, adjusted net income is not a liquidity measure and should not be used in place of cash flow measures determined in accordance with GAAP. We consider adjusted net income, regularly used in the asset management business, to be a meaningful operating measure of our financial performance. We consider this non-GAAP financial measure when evaluating the performance of the Company and believe the presentation of these amounts provides the reader with information to better analyze the Company’s operations for the periods presented. See our definition of adjusted net income, as well as our reconciliation of net income to adjusted net income in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Performance Measures.”

(2) The supplemental measure “EBITDA,” a non-GAAP liquidity measure, defined as earnings before interest expense, income taxes, depreciation and amortization, is provided in addition to, but not as a substitute for, cash flow from operations. EBITDA, as calculated by us, may not be consistent with computations of EBITDA by other companies. As a measure of liquidity we believe that EBITDA is a useful indicator of our ability to service debt, make new investments and meet working capital requirements. We further believe that many investors use this information when analyzing the financial position of companies in the asset management industry.

(3) “Total assets” reflect all related party and unrelated party assets managed by the Company, including PNX’s general account. Historical financial results included in this information statement are presented using total assets as the basis of the Company’s operations. “Third-party assets” are total assets excluding PNX’s general account. Historical financial results of the Asset Management segment of PNX are presented using third-party assets as the basis of the segment’s operations. “Pro forma assets” exclude Goodwin’s portion of PNX’s general account as well as third-party institutional assets managed by Goodwin. Pro forma financial results included in this information statement, as well as the Company’s future results, are presented using pro forma assets as the basis of the Company’s operations.

Our unaudited pro forma consolidated financial statements have been prepared to reflect adjustments to our historical financial information to give effect to the distribution of our common stock to the stockholders of PNX and the following transactions, as if these transactions had been completed at earlier dates:

• Transfer of the Goodwin business to PNX. Goodwin is a registered investment advisor with revenues of $22.9 million and $17.6 million, and operating expenses of $17.6 million and $13.2 million, for 2007 and the first nine months of 2008, respectively.

• Operating costs related to human resources, facilities, corporate communications, compliance, corporate and staff, legal, internal audit and tax service were previously charged to the Company by PNX. Costs for these functions are now directly incurred by the Company. In addition, costs have been adjusted to include board of directors’ expenses, transfer agent fees and stock exchange listing fees. This resulted in net cost adjustments of ($4.7) million and ($1.9) million for 2007 and the first nine months of 2008, respectively.

• A one-time pre-payment of approximately $13.0 million on its $33.0 million intercompany note agreement with Phoenix Life Insurance Company (“Phoenix Life”). The Company will seek to renegotiate and keep approximately $20.0 million of this indebtedness outstanding on a third-party, arm’s-length basis. The pro forma financial presentation assumes a renegotiated interest rate on this indebtedness of LIBOR plus 400 basis points. A 100 basis point increase or decrease in the interest rate would result in additional or reduced annual interest expense of $0.2 million. The Company intends to obtain third-party financing to retire this obligation on or after the distribution date.

• Sale of $45.0 million of convertible preferred stock to Harris Bankcorp, Inc. (“Harris Bankcorp”). On October 30, 2008, the Company signed a definitive agreement with Harris Bankcorp, a U.S. subsidiary of Bank of Montreal, to take a 23% equity position in the Company in connection with the spin-off.

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• Establishment of a $94.0 million valuation allowance against deferred tax assets, which were generated primarily by federal net operating losses, due to the uncertainty of future income that is necessary to realize these assets, as well as due to certain tax rules relating to the treatment of losses in connection with a spin-off that may result in all or a portion of the related net operating loss and capital loss carryovers to not be available to the Company following the spin-off. Elimination of $4.9 million of intercompany taxes payable to PNX under the tax sharing agreement with PNX.

The unaudited pro forma consolidated financial data presented for the year ended December 31, 2007 and for the nine months ended September 30, 2008 is derived from our audited consolidated financial statements for the year ended December 31, 2007 and our unaudited consolidated financial statements for the nine months ended September 30, 2008. The unaudited pro forma consolidated results of operations data for the year ended December 31, 2007 and the nine months ended September 30, 2008 assumes the items listed above occurred as of January 1, 2007. For a more complete explanation see “Unaudited Pro Forma Consolidated Financial Data.”

Our consolidated financial information may not be indicative of our future performance and does not necessarily reflect what our financial condition and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, including many changes that will occur in the operations and capitalization of the Company as a result of our separation from PNX.

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Summary of the Spin-Off

The following is a summary of the terms of the spin-off. See “The Spin-Off” for a more detailed description of the matters described below.

Distributing company The Phoenix Companies, Inc.

Distributed company Virtus Investment Partners, Inc.

Distribution ratio Each holder of PNX common stock will receive a dividend of one share of our common stock for every 20 shares of PNX common stock held on the record date.

Securities to be distributed Shares of our common stock and accompanying share purchase rights, which will constitute all of the outstanding shares of our common stock immediately after the spin-off. The number of shares that PNX will distribute to its stockholders will be reduced to the extent that cash payments are to be made in lieu of the issuance of fractional shares of Company common stock, as described below. See “Description of our Capital Stock—Common Stock” and “Description of our Capital Stock—Anti-Takeover Provisions—Rights Agreement.”

Fractional shares PNX will not distribute any fractional shares of our common stock to its stockholders. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate net cash proceeds of the sales pro rata to each holder of PNX common stock who otherwise would have been entitled to receive a fractional share in the distribution. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares.

Record date The record date is the close of business on December 22, 2008. In order to be entitled to receive shares of our common stock in the spin-off, holders of shares of PNX common stock must be stockholders as of the close of business on the record date.

Distribution date The distribution date will be on or about December 31, 2008.

Relationship between the Company and PNX after the spin-off After the spin-off, neither PNX nor the Company will have any ownership interest in the other, and each of PNX and the Company will be an independent publicly traded company. In connection with the spin-off, we are entering into a number of transitional agreements with PNX that will govern our future relationship with PNX. Under these transitional agreements, we expect PNX will provide us with the following transition services, among others: information technology support, human resources, legal and other limited services consistent with past practices. We will also enter into other agreements with PNX providing for the allocation of tax benefits, employee matters and liabilities arising from periods prior to the spin-off. We may enter

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into other agreements with PNX prior to or concurrently with the distribution that would relate to other aspects of our relationship with PNX following the spin-off. See “Our Relationship With PNX After the Spin-Off.”

Management of the Company Following the spin-off, we will have an initial board of directors (the “Board”) consisting of nine directors. Our certificate of incorporation and our bylaws will provide that our Board is divided into three classes. The term of the first class of directors expires at our 2009 annual meeting of stockholders, the term of the second class of directors expires at our 2010 annual meeting of stockholders and the term of the third class of directors expires at our 2011 annual meeting of stockholders. At each of our annual meetings of stockholders, the successors of the class of directors whose term expires at that meeting of stockholders will be elected for a three year term, one class being elected each year by our stockholders. See “Management—Board of Directors.”

Description of indebtedness We currently intend to obtain new third-party financing, the proceeds of which will be used to pay down certain existing related party payables, the outstanding balance on our notes payable to Phoenix Life, to provide for our working capital requirements, to support letters of credit and for other general corporate requirements, including the financing of acquisitions. See “Description of Indebtedness” and Notes 9 and 15 to our consolidated financial statements in this information statement.

Dividend policy We do not plan on initially paying any cash dividends. However, the owners of our common stock may receive dividends when declared by our Board from funds legally available for the payment of dividends. All decisions regarding the declaration and payment of dividends will be evaluated from time to time in light of our financial condition, earnings, growth prospects, other uses of cash, funding requirements, applicable law and other factors our Board deems relevant. See “Dividend Policy.”

Payment of intercompany indebtedness The Company intends to make a one-time pre-payment of approximately $13.0 million on its $33.0 million intercompany note agreement with Phoenix Life in connection with this spin-off transaction. The Company expects there will be approximately $20.0 million of outstanding indebtedness on this note after the distribution is completed. The Company intends to obtain third-party financing to retire this obligation. See “Description of Indebtedness.”

Anti-takeover provisions In connection with the spin-off, we intend to adopt a stockholders’ rights agreement, which will expire on or before June 19, 2011, which could have the effect of discouraging, delaying or preventing a change of control of the Company not approved by our Board. If the rights become exercisable, the rights will cause substantial dilution to a person or group that attempts to acquire us on terms not approved

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by our Board. Thus, while the rights are intended to encourage persons who may seek to acquire control of us to initiate such an acquisition through negotiations with our Board, their actual effect may be to discourage a third party from making a partial tender offer or otherwise attempting to obtain a substantial equity position in our equity securities or seeking to obtain control of us. See “Description of Our Capital Stock—Anti-Takeover Provisions—Rights Agreement.”

Provisions of the Delaware General Corporation Law (the “DGCL”) may have the effect of discouraging, delaying or preventing a change of control of the Company not approved by our Board. Such provisions may also have the effect of discouraging third parties from making proposals involving an acquisition or change of control of the Company, although such proposals, if made, might be considered desirable by a majority of the stockholders of the Company. Such provisions could further have the effect of making it more difficult for third parties to cause the replacement of our Board.

Risk factors You should carefully consider the matters discussed under the section entitled “Risk Factors.”

Corporate Information and Structure

We are a Delaware corporation and an existing majority-owned subsidiary of PNX. Our principal executive offices are located at 100 Pearl St., 9^th Floor, Hartford, CT 06103, and our telephone number is (800) 248-7971.

Pursuant to the spin-off, we will be separated from PNX and become an independent publicly traded company. The spin-off and our resulting separation from PNX involve the following steps:

• Before the distribution date:

• The PNX board of directors will determine the record date for the dividend of our common stock to PNX stockholders, declare that dividend and determine the distribution ratio.

• Our common stock is expected to begin trading on a “when-issued” basis on or shortly before the record date for the spin-off.

• PNX, as the majority stockholder, will:

i. elect our Board;

ii. approve our adoption of certain benefit plans; and

iii. approve various actions related to the spin-off as described in this information statement.

• Our Board will approve:

i. the adoption of certain benefit plans;

ii. our corporate governance documents and policies; and

iii. various actions related to the spin-off as described in this information statement.

• The Securities and Exchange Commission (the “SEC”) will declare effective under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our Form 10, of which this information statement is a part.

• PNX will mail this information statement to its stockholders.

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• On or before the distribution date:

• We will have entered into numerous agreements with PNX, including a:

i. Separation and Distribution Agreement;

ii. Transition Services Agreement;

iii. Tax Separation Agreement; and

iv. Employee Matters Agreement.

• On the distribution date:

• Phoenix Investment Management Company (“PIM”), our direct parent and a wholly owned subsidiary of PNX, will transfer all of our common stock to PNX.

• We will transfer all of the stock and assets of Goodwin to PNX.

• PNX will distribute 100% of the shares of our common stock (other than shares withheld to satisfy certain withholding obligations) pro rata to all of its stockholders of record as of the record date.

• Following the distribution date:

• We expect that our common stock will begin trading on the Nasdaq Global Market on a “regular way” basis under the symbol “VRTS” on the first trading day following the distribution date. We will operate as an independent publicly traded company.

For a further explanation of the spin-off, see “The Spin-Off.”

The Company is not a registered investment advisor. However, it has seven subsidiaries that are active registered investment advisors.

The following diagram depicts our corporate structure after giving effect to the distribution and the other concurrent transactions described in this information statement:

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Recent Developments

On October 30, 2008, we and our parent companies, PNX and PIM, entered into an Investment and Contribution Agreement with Harris Bankcorp, pursuant to which Harris Bankcorp will acquire $45.0 million in convertible preferred stock of the Company, representing a 23% equity position in us and our direct and wholly owned subsidiary. The agreement calls for a two-step closing process, the first step of which was completed effective October 31, 2008. The second step of the transaction, which is subject to certain regulatory and other customary conditions, is expected to be completed in connection with the spin-off.

For additional information on the agreement with Harris Bankcorp, see “Equity Investment.”

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RISK FACTORS

You should carefully consider the risks described below, together with all of the other information included in this information statement, in evaluating the Company and our common stock. If any of the risks described below actually occurs, our business, financial results, financial condition and stock price could be materially adversely affected.

Recent Risk Factors Related to the Current Market Environment

Recent market and economic developments may materially and adversely affect our business, revenues, earnings, sales, assets under management, financial condition and results of operations.

Recent markets have experienced unprecedented credit and liquidity issues as well as volatility and declines in the equity markets. Lending practices in past years, particularly in the “sub-prime” market, coupled with dramatic declines in home prices, rising mortgage defaults and increasing home foreclosures, have resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks. These write-downs, initially of mortgage-backed securities but spreading to most sectors of the credit markets, and to credit default swaps and other derivative securities, have caused many financial institutions to seek additional capital, to merge with larger and stronger institutions, to be subsidized by the U.S. Government and, in some cases, to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, credit markets have worsened considerably, with many lenders and institutional investors reducing, and in some cases, ceasing to provide funding to borrowers, including other financial institutions. Additionally, concerns over increasing unemployment, fluctuating inflation and energy costs as well as geopolitical issues have contributed to diminished expectations for the economy and the financial markets going forward. These factors, combined with declining business and consumer confidence and increased unemployment, have precipitated an economic slowdown and fears of a prolonged recession. As a result, the financial markets and the U.S. economy are experiencing a period of extreme volatility.

This economic environment has had a direct impact on the actions of both retail and institutional investors. The continued erosion of the equity and fixed income markets has materially and adversely impacted the value of our assets under management, which has resulted in lower fee revenues. Although it is not possible to predict how long this economic downturn will continue, it is expected to have a direct impact on our fourth quarter 2008 results. During the interim period from September 30, 2008 through November 30, 2008 third-party assets under management have declined by $4.6 billion or 16.0% from $28.7 billion at September 30, 2008 to $24.1 billion at November 30, 2008.

The decrease in assets under management was comprised of $3.8 billion of market related depreciation, $1.5 billion of outflows, partially offset by sales of $0.6 billion and positive net change in money market funds assets under management of $0.1 billion.

The decrease in our assets under management is driven in great part due to the equity markets, with the S&P 500 Index down 23.1% for the two-month period from September 30, 2008 through November 30, 2008. We have seen decreased investment inflows and an increase in redemptions of certain products. Revenue for retail funds, which is based on average assets during the quarter, will be negatively impacted for the fourth quarter 2008 as compared to third quarter 2008 and fourth quarter 2007. Fourth quarter 2008 revenue for separately managed accounts and institutional accounts will be based primarily on September 30, 2008 asset under management levels, which were lower than the levels at June 30, 2008. These decreases will have a direct effect on our net income and liquidity. For example, the $4.6 billion decrease in our assets under management has the effect of reducing our annual revenues by approximately $18.0 million to $20.0 million. Reductions in related variable expenses, primarily incentive compensation and distribution costs, would marginally compensate for this loss of revenue but the Company would experience a material reduction in income from operations.

General account assets under management at September 30, 2008 were $12.5 billion. The fees earned on general account assets are not based on a percentage of assets under management, but rather, a reimbursement of

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cost. Therefore, recent market activity has not had a significant effect on revenues or liquidity. In addition, the Company will not be managing the general account assets following the spin-off, and the related revenues and expenses are excluded from the pro forma financial presentation.

It is difficult to predict how long the current economic and market conditions will continue, how the coordinated actions of the U.S. Government and other international economic leaders will affect the current environment, and whether the financial markets will continue to deteriorate and which aspects of our products and/or business will be adversely affected. However, the resulting lack of available credit, lack of confidence in the financial sector, increased volatility in the financial markets and reduced business activity may materially and adversely affect us. Recent market and economic developments have affected, or have the potential to affect, us negatively by:

• reducing the value of the assets we manage, which has resulted in, and may continue to result in, lower fee revenues;

• increasing consumer concerns about the returns and attractiveness of our investment products, which may cause existing clients to withdraw assets and diminish our ability to attract assets from new and existing clients, which would result in lower sales and fee revenues;

• affecting the access to, and reliability of, service levels provided by our intermediary distribution channels and service providers, which could materially affect our sales, redemptions and business operations;

• exacerbating the conditions which caused us to recognize an impairment of the goodwill and intangible assets on our balance sheet and may lead to future impairments;

• increasing competition from stronger rivals in a more consolidated financial services industry, driven by regulatory action or other opportunistic transactions;

• causing regulators to change the laws and regulations that affect us, which may result in greater compliance costs and restrictions on our ability to do business;

• encouraging litigation, arbitration and regulatory action in response to the increased frequency and magnitude of investment losses, which may result in unfavorable judgments, awards and settlements, regulatory fines and an increase in our related legal expenses;

• reducing our ability to obtain financing to support the development of our business on favorable terms, or eliminating our ability to obtain financing at all;

• increasing the difficulty of performing administrative functions such as determining the fair value of assets we manage and changing our investment positions in assets we manage, which may affect our service levels and the ability to retain existing clients or attract new clients;

• damaging our reputation indirectly by association with the industries most seriously affected by market and economic developments, or directly due to a decline in investment performance or service levels, which may affect our ability to retain existing clients or attract new clients;

• damaging our reputation due to the inability of investors to redeem auction rate preferred securities due to the failure, since February 2008, of such remarketing auctions caused by illiquidity in the auction rate preferred market, which previously provided investment liquidity to certain of our closed-end funds; and

• damaging our reputation or creating pressure to contribute capital to certain of our money market funds should these funds become at risk of falling below a $1.00 net asset value, referred to as “breaking the buck,” due to illiquidity in the money markets or credit-related impairments of their holdings.

Any of these negative effects may materially and adversely affect our business, revenues, earnings, sales, assets under management, financial condition and results of operations.

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Risk Factors Relating to the Spin-Off

Our historical and pro forma consolidated financial information is not necessarily representative of the results we would have achieved as a stand-alone company and may not be a reliable indicator of our future results.

Our historical consolidated financial information included in this information statement does not reflect the financial condition, results of operations or cash flows we would have achieved as a stand-alone company during the periods presented or those we will achieve in the future. This is primarily a result of the following factors:

• our historical financial information reflects the assets and business of Goodwin that will not be part of the Company following the distribution;

• our historical financial results reflect allocations of corporate expenses from PNX, which may be different than the comparable expenses we would have actually incurred or will incur in the future as a stand-alone company;

• our cost of debt and our capitalization will be different from that reflected in our historical consolidated financial statements; and

• significant changes may occur in our cost structure, management, financing and business operations as a result of our separation from PNX, including the costs for us to establish our new operating infrastructure.

We have made adjustments based upon available information and assumptions that we believe are reasonable to reflect these factors, among others, in our pro forma financial information. However, our assumptions may prove not to be accurate, and accordingly, our pro forma financial information should not be assumed to be indicative of what our financial condition or results of operations actually would have been as a stand-alone company nor to be a reliable indicator of what our financial condition or results of operations actually may be in the future.

The agreements we are entering into with PNX may involve, or may appear to involve, conflicts of interest.

Because the spin-off involves the separation of PNX’s existing businesses into two independent companies, we are entering into certain agreements with PNX to provide a framework for our initial relationship with PNX following the spin-off. We have negotiated these agreements with PNX while we are still a majority-owned subsidiary of PNX. Accordingly, the persons who are expected to become our officers are currently employees or officers of PNX or its subsidiaries and, as such, have an obligation to serve the interests of PNX and its subsidiaries. As a result, they could be viewed as having a conflict of interest.

As we build our information technology infrastructure and transition our data to our own systems, we could experience temporary business interruptions and incur substantial additional costs.

After the spin-off, we will install and implement information technology infrastructure to support our business functions. We anticipate this will involve significant costs. We may incur temporary interruptions in business operations if we cannot transition effectively from PNX’s existing technology infrastructure, as well as the people and processes that support them. We may not be successful in implementing our new technology infrastructure and transitioning our data, and we may incur substantially higher costs for implementation than currently anticipated. Our failure to avoid operational interruptions as we implement the new infrastructure and transition our data, or our failure to implement the new infrastructure and transition our data successfully, could disrupt our business and have a material adverse effect on our profitability.

Our separation from PNX could increase our U.S. federal income tax costs.

Due to the separation we will not be able to file a consolidated U.S. federal income tax return with PNX. As a result, the Company and PNX will no longer be able to offset one another’s net operating and capital gains with net operating and capital losses to the extent available. It is also possible that, due to certain tax rules relating to the treatment of losses in connection with a spin-off, all or a portion of the Company’s related net operating loss

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and capital loss carryovers may not be available to the Company following the spin-off. Additionally, any other benefits relating to taxes arising from being part of the larger PNX company may be lost. As a result, the aggregate amount of U.S. federal income taxes applicable to our business may increase after the distribution.

Risk Factors Relating to Our Business

Poor performance of the securities markets could adversely affect our revenues, earnings, sales and assets under management.

The securities markets can be volatile and experience both periods of strong growth and of substantial declines. There are several ways in which market declines and volatility have affected, or have the potential to affect, us negatively, including:

• limiting our fee revenues by reducing the value of the assets we manage;

• decreasing sales of our investment products;

• causing existing clients to withdraw assets from our managed investment products, which would result in lower fee revenues; and

• diminishing our ability to attract assets from existing and new clients.

Any of these negative effects may result in lower revenues and earnings.

For example, during the first nine months of 2008, the market value of our assets under management declined $4.3 billion due to declines in the securities markets. Accordingly, our management fees, which are calculated based on a percentage of the market value of assets under management, declined at an annualized rate of $19.1 million. Future periods of poor securities market performance, which will affect our investment management fees, may have an adverse effect on our revenues, earnings, sales, assets under management and the carrying value of our goodwill or intangible assets.

For the first nine months of 2008, we had a loss of $349.9 million as compared to a loss of $10.2 million for the same period in 2007. The primary contributors to the 2008 loss were pre-tax non-cash impairment charges of $432.2 million related to goodwill and intangible assets. Our 2007 loss was primarily driven by interest expense on $325.0 million of intercompany debt, which was extinguished on December 31, 2007.

Poor relative investment performance of some of our asset management strategies may result in outflows of assets under management, lower revenues and lower earnings.

Net flows related to our asset management strategies can be affected by investment performance. Further, our asset management strategies are rated or ranked by independent third parties and individual distribution partners, and many industry periodicals and services provide assessments of the relative performance of our strategies. These assessments often affect the decisions of customers regarding which strategies to invest in. If the relative performance or assessments of our strategies decline materially, the assets under management related to these strategies may decrease as customers select strategies with better performance. Any loss of assets under management would decrease the fees that we earn from such strategies. This could result in lower assets under management, lower revenues and lower earnings.

Our business operations, investment returns and profitability could be adversely impacted by inadequate performance of third-party relationships.

We are dependent on certain third-party relationships to maintain essential business operations. These services include, but are not limited to, information technology infrastructure, application systems support, mutual fund and investment accounting services, transfer agent and cash management services, custodial services, records storage management, backup tape management, security pricing services, payroll, legal and employee benefit programs. In addition, we maintain contractual relationships with certain investment advisory and investment management firms to leverage their expertise. These firms manage select investments or portions of portfolios under sub-advisory agreements.

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We periodically negotiate provisions and renewals of these relationships and there can be no assurance that such terms will remain acceptable to such third parties or us. An interruption in our continuing relationship with certain of these third parties or any material delay or inability to deliver essential services could materially affect our business operations and potentially adversely affect our profitability.

Clients can withdraw assets from our management for a variety of reasons, which could lead to a decrease in our revenues and earnings.

Generally, our clients can terminate their relationships with us or our distribution partners at will or on relatively short notice. They can also reduce the aggregate amount of managed assets or shift their funds to other types of accounts for any number of reasons, including investment performance, changes in investment preferences, changes in reputation in the marketplace, changes in client management or ownership, loss of key investment management personnel and financial market performance. In declining markets, the pace of mutual fund redemptions and withdrawals of assets from other accounts could accelerate. Poor performance relative to other asset management firms may result in decreased purchases of fund shares, increased redemptions of fund shares, and the loss of institutional or individual accounts. A reduction in the assets we manage, and the associated decrease in revenues and earnings, could have a material adverse effect on our business.

Our separation from PNX could adversely affect our business and profitability due to the loss of PNX’s brand, reputation and capital base.

As a majority-owned subsidiary of PNX, we have marketed certain of our products and services using the “Phoenix” brand name and logo. Our separation from PNX and change in name may adversely affect our ability to attract and retain customers and their investments, which could result in outflows or reduced sales from our mutual funds and other investment products. We cannot predict the effect that our separation from PNX will have on our business or customers, sub-advisors, distribution partners and employees.

We might be unable to attract or retain personnel who are key to our business.

The success of our business is dependent to a large extent on our ability to attract and retain key employees. Competition in the job market for professionals such as portfolio managers, securities analysts and sales personnel is generally intense. In general, our employees are not subject to employment contracts or non-compete agreements. Any inability to retain our key employees, or attract and retain additional qualified employees, could have a negative impact on us.

The independent trustees of our mutual funds and closed-end funds, intermediary program sponsors, managed account clients and institutional asset management clients could terminate their contracts with us. This would reduce our revenues and earnings.

Each of the mutual funds and closed-end funds for which we act as investment advisor or sub-advisor is registered under the Investment Company Act of 1940 (the “Investment Company Act”) and is governed by a board of trustees or board of directors. Each fund’s contract is renewed annually by the fund board. Either the board members or, in limited circumstances, the stockholders may terminate an advisory contract with us and move the assets to another investment advisor. The board members also may deem it to be in the best interests of a fund’s stockholders to make other decisions adverse to us, such as reducing the compensation paid to us or imposing restrictions on our management of the fund.

Our asset management agreements with intermediary program sponsors, private clients and institutional clients are generally terminable by these sponsors and clients upon short notice without penalty. As a result, there would be little impediment to these sponsors or clients terminating our agreements if they became dissatisfied with our performance.

The termination of any of the above agreements relating to a material portion of assets under management would adversely affect our investment management fee revenues and earnings and could require us to take a charge to earnings as a result of the impairment of the goodwill or intangible assets associated with our asset managers.

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Goodwill or intangible assets could become impaired requiring a charge to earnings in the event of significant market declines, net outflows of assets or losses of investment management contracts.

The amount of goodwill and intangible assets on our balance sheet is supported by the assets under, management and the related revenues of the business. In the nine months ended September 30, 2008, we have recognized goodwill and intangible asset impairments totaling $432.2 million. These impairment charges were triggered by the significant declines in the equity markets and the decline in valuations of financial companies experienced in 2008, particularly in the third quarter. It might be necessary to recognize additional impairment of these assets should these events worsen or recur or if we experience a drop in assets under management for other reasons such as material outflows, the termination of a material investment management contract or material outflows if clients withdraw their assets following the departure of a key employee.

We face strong competition in our businesses from mutual fund companies, banks and asset management firms. This competition could impair our ability to retain existing customers, attract new customers and maintain our profitability.

We face strong competition in our businesses. We believe that our ability to compete is based on a number of factors, including investment performance, service, distribution capabilities and relative scale. We are also highly dependent on our distribution relationships. Our actual and potential competitors include a large number of mutual fund companies, banks and asset management firms, many of which have advantages over us. Recent industry consolidation has resulted in larger competitors with financial resources, marketing and distribution capabilities and brand identities that are stronger than ours. Larger firms also may be able to offer, due to economies of scale, lower cost products. If we do not compete effectively in this environment, our profitability and financial condition would be materially adversely affected.

Our operations may depend on the availability of additional financing and, after the spin-off, we may not be able to obtain financing.

To support the development of our business, we may require additional financing for liquidity, capital requirements or growth initiatives. After the spin-off, PNX will not provide additional financing to us. Accordingly, we will depend on our ability to generate cash flow from operations and to borrow funds and issue securities in the capital markets to maintain and expand our business. We may need to incur debt on terms and at interest rates that may not be as favorable as those historically available to PNX. Any inability by us to obtain financing in the future could have a negative effect on our results of operations and financial condition.

Potential changes in federal and state regulation may increase our business costs, which could adversely affect our business, consolidated operating results, financial condition or liquidity.

We are subject to regulation by the SEC, the Financial Industry Regulatory Authority (“FINRA”) and other federal and state agencies and self-regulatory organizations. Each advisor (including unaffiliated sub-advisors) is registered with the SEC under the Investment Advisers Act of 1940 (the “Investment Advisers Act”). Each closed-end fund and open-end fund is registered with the SEC under the Investment Company Act. Our broker-dealer is registered with the SEC under the Securities Exchange Act and is a member of FINRA. All of our funds currently available for sale are qualified in all 50 states, Washington, DC, Puerto Rico, and the U.S. Virgin Islands. Most aspects of our investment management business, including the business of the sub-advisors, are subject to various federal and state laws and regulations.

These laws and regulations are primarily intended to benefit the investment product shareholder and generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict us and any sub-advisor from carrying on its investment management business in the event that it fails to comply with such laws and regulations. In such an event, the possible sanctions which may be imposed include the suspension of individual employees, limitations on our engaging in the investment management business for specified periods of time, the revocation of the advisors’ registrations as investment advisors or other censures and fines.

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These laws and regulations are complex and subject to change. Moreover, because they are administered and enforced by a number of different governmental authorities, each of which exercises a degree of interpretive latitude, we are subject to the risk that compliance with any particular regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another regulator’s or enforcement authority’s interpretation of the same issue, particularly when compliance is judged in hindsight. In addition, there is risk that any particular regulator’s or enforcement authority’s interpretation of a legal issue may change over time to our detriment, or that changes in the overall legal environment may, even absent any particular regulator’s or enforcement authority’s interpretation of a legal issue changing, cause us to change our views regarding the actions we need to take from a legal risk management perspective, thus necessitating changes to our practices that may, in some cases, limit our ability to grow and improve the profitability of our business.

Compliance with these laws and regulations is also time consuming and personnel-intensive, and changes in these laws and regulations may increase materially our direct and indirect compliance costs and other expenses of doing business, thus having an adverse effect on our business, consolidated operating results, financial condition and liquidity.

Legal and regulatory actions are inherent in our businesses and could result in financial losses or harm to our businesses.

We are regularly involved in litigation and arbitration, both as a defendant and as a plaintiff. In addition, various regulatory bodies regularly make inquiries of us and, from time to time, conduct examinations or investigations concerning our compliance with, among other things, securities laws and laws governing the activities of broker-dealers. There has been a significant increase in federal and state regulatory activity relating to financial services companies, with regulatory inquiries focusing on late-trading, market timing and valuation issues. Financial services companies have also been the subject of broad industry inquiries by state regulators and attorneys general which do not appear to be company-specific. We have had inquiries relating to market timing and distribution practices in the past, and we continue to cooperate with the applicable regulatory authorities in these matters. While no regulatory authority has ever taken action against us with regard to these inquiries, we may be subject to further related or unrelated inquiries or actions in the future.

It is not feasible to predict or determine the ultimate outcome of all legal or regulatory proceedings or to provide reasonable ranges of potential losses. We believe that the outcomes of our litigation and regulatory matters are not likely, either individually or in the aggregate, to have a material adverse effect on our consolidated financial condition. However, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation and regulatory matters, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our results of operations or cash flows in particular quarterly or annual periods.

Misconduct by our employees, sub-advisors and distribution partners is difficult to detect and deter and could harm our business, results of operations or financial condition.

Misconduct by our employees, sub-advisors and distribution partners could result in violations of law by us, regulatory sanctions and/or serious reputational or financial harm. Misconduct can occur in each of our businesses and could include:

• binding us to transactions that exceed authorized limits;

• hiding unauthorized or unsuccessful activities resulting in unknown and unmanaged risks or losses;

• improperly using or disclosing confidential information;

• recommending transactions that are not suitable;

• engaging in fraudulent or otherwise improper activity;

• engaging in unauthorized or excessive trading to the detriment of customers; or

• otherwise not complying with laws or our control procedures.

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We cannot always deter misconduct by our employees, sub-advisors and distribution partners, and the precautions we take to prevent and detect this activity may not be effective in all cases. Prevention and detection among our sub-advisors and distribution partners, who are not employees of the Company, present additional challenges. Misconduct by our employees, sub-advisors and distribution partners may have a material adverse effect on our business, results of operations or financial condition.

Changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies may adversely affect our financial statements.

Our financial statements are subject to the application of GAAP, which is periodically revised and/or expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards or guidance issued by recognized authoritative bodies, including the Financial Accounting Standards Board. It is possible that future accounting standards we are required to adopt could change the current accounting treatment that we apply to our consolidated financial statements and that such changes could significantly affect our reported financial condition and results of operations.

We may be unsuccessful in our future acquisition endeavors, if any, which may have an adverse effect on our business.

One aspect of our future growth rate depends in part on our selective acquisition of additional businesses. We may be unable to identify suitable targets for acquisition or make acquisitions at favorable prices. If we identify a suitable acquisition candidate, our ability to successfully implement the acquisition would depend on a variety of factors, including our ability to obtain financing and, for larger transactions, requisite government approvals.

Acquisitions involve risks, including those associated with integrating the operations, financial reporting, technologies and personnel of acquired companies; managing geographically dispersed operations; the diversion of management’s attention from other business concerns; the inherent risks in entering markets or lines of business in which we have either limited or no direct experience; unknown risks; and the potential loss of key employees, customers and strategic partners of acquired companies. We may not successfully integrate any businesses or technologies we may acquire in the future and may not achieve pre-acquisition anticipated revenue and cost benefits. Acquisitions may be expensive, time consuming and may strain our resources. Acquisitions may not be accretive to our earnings and may negatively impact our results of operations as a result of, among other things, the incurrence of debt, one-time write-offs of goodwill and amortization expenses of other intangible assets. In addition, future acquisitions that we may pursue could result in dilutive issuances of equity securities.

Risk Factors Relating to Our Common Stock

Because of our size, there may be little institutional interest or trading volume in, or research analyst coverage of, our common stock.

Public companies with relatively small market capitalizations have difficulty generating institutional interest or trading volume, which illiquidity can translate into price discounts as compared to industry peers or to the shares’ inherent value. In addition, the smaller size of our market capitalization after the separation and distribution, compared to the market capitalization of PNX prior to the separation and distribution, may result in the loss of research analyst coverage of us. The absence of research analyst coverage makes it difficult for a company to establish and hold a market following. Accordingly, our size could lead to our shares trading at prices that are significantly lower than our estimate of their inherent value.

Sales of a substantial number of shares of our common stock following the spin-off may adversely affect the market price of our common stock and the issuance of additional shares will dilute all other stockholdings.

Sales or distributions of a substantial number of shares of our common stock in the public market or otherwise following the spin-off, or the perception that such sales could occur, could adversely affect the market price of our common stock. After the spin-off, all of the shares of our common stock will be eligible for

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immediate resale in the public market. Investment criteria of certain investment funds and other holders of our common stock may result in the immediate sale of our common stock after the spin-off to the extent such stock no longer meets these criteria. Substantial selling of our common stock, whether as a result of the spin-off or otherwise, could adversely affect the market price of our common stock.

Our rights plan and applicable laws may discourage takeovers and business combinations that our stockholders might consider in their best interests.

We will be subject to the provisions of Delaware law described below regarding business combinations with interested stockholders.

Section 203 of the DGCL applies to a broad range of business combinations between a Delaware corporation and an interested stockholder. The Delaware law definition of “business combination” includes mergers, sales of assets, issuances of voting stock and certain other transactions. An “interested stockholder” is defined as any person who owns, directly or indirectly, 15% or more of the outstanding voting stock of a corporation.

Section 203 prohibits a corporation from engaging in a business combination with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder, unless:

• the board of directors approved the business combination before the stockholder became an interested stockholder, or the board of directors approved the transaction that resulted in the stockholder becoming an interested stockholder;

• upon completion of the transaction which resulted in the stockholder becoming an interested stockholder, such stockholder owned at least 85% of the voting stock outstanding when the transaction began other than shares held by directors who are also officers and other than shares held by certain employee stock plans; or

• the board of directors approved the business combination after the stockholder became an interested stockholder and the business combination was approved at a meeting by at least two-thirds of the outstanding voting stock not owned by such stockholder.

In addition, we intend to adopt a stockholders’ rights agreement. Under the agreement, if any person or group (other than Bank of Montreal and its controlled affiliates) acquires, or begins a tender or exchange offer that could result in such person acquiring, 15% or more of our common stock, without approval by our Board under specified circumstances, our other stockholders will have the right to purchase shares of our common stock, or shares of the acquiring company, at a substantial discount to the public market price. See “Description of Our Capital Stock—Anti-Takeover Provisions—Rights Agreement.”

We cannot predict the price range or volatility of our common stock after the spin-off.

From time to time, the market price and volume of shares traded of companies in the asset management industry experience periods of significant volatility. Company-specific issues and general developments in the asset management industry or the economy may cause this volatility. The market price of our common stock may fluctuate in response to a number of events and factors, including:

• general economic, market and political conditions;

• quarterly variations in results of operations or results of operations that could be below the expectations of the public market analysts and investors;

• changes in financial estimates and recommendations by securities analysts;

• operating and market price performance of other companies that investors may deem comparable;

• press releases or publicity relating to us or our competitors or relating to trends in our markets; and

• purchases or sales of common stock or other securities by insiders.

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In addition, broad market and industry fluctuations, as well as investor perception and the depth and liquidity of the market for our common stock, may adversely affect the trading price of our common stock, regardless of actual operating performance.

There can be no assurance as to the price at which our common stock will trade after the distribution date. Until an orderly market develops in our common stock, the price at which our common stock trades may fluctuate significantly and may be lower or higher than the price that would be expected for a more seasoned outstanding issue.

There may not be an active trading market for shares of our common stock.

Prior to the spin-off, there has been no public trading market for shares of our common stock. The shares of our common stock have been approved for listing on the Nasdaq Global Market under the symbol “VRTS.” We cannot predict the extent to which investor interest in the Company will lead to the development of an active trading market in our common stock or how liquid such a market might become. It is possible that, after the spin-off, an active trading market will not develop or continue and there can be no assurance as to the price at which our common stock will trade. The initial price of shares of our common stock may not be indicative of prices that will prevail in any future trading market.

In addition, because of the significant changes that will take place as a result of the spin-off, the trading market for each of our common stock and PNX common stock after the spin-off may be significantly different from that for PNX common stock prior to the spin-off. The market may view the Company and PNX as “new” companies after the spin-off and it is possible that neither of us will be the subject of significant research analyst coverage. The absence of significant research analyst coverage of the Company can adversely affect the market value and liquidity of our common stock.

We may not pay dividends on our common stock.

We do not plan on initially paying any cash dividends. However, the owners of our common stock may receive dividends when declared by our Board from funds legally available for the payment of dividends. All decisions regarding the declaration and payment of dividends will be evaluated from time to time in light of our financial condition, earnings, growth prospects, other uses of cash, funding requirements, applicable law and other factors our Board deems relevant. See “Dividend Policy.”

Risk Factors Relating to the Equity Investment

The agreements the Company has entered into in connection with the equity investment contain restrictions and limitations on our ability to obtain additional equity financing.

Following the spin-off, the approval of the holders of our Series B Convertible Preferred Stock will be required to effect certain significant issuances of equity securities of the Company or any of its controlled subsidiaries. Such required approval may restrict our ability to carry out our business objectives, take advantage of opportunities such as acquisitions that could supplement or grow our business and could have a material adverse effect on our ability to service our debt and operate our business.

The voting power of the holders of our convertible preferred stock may discourage third party acquisitions of the Company at a premium.

Holders of our Series B Convertible Preferred Stock will have the right to approve any merger, consolidation, acquisition, business combination, sale of all or substantially all of the assets of the Company or its subsidiaries, or any similar transaction or pledge of assets, in certain circumstances. This may have the effect of discouraging offers to acquire control of the Company and may preclude holders of Company common stock from receiving any premium above market price for their shares that may otherwise be offered in connection with any attempt to acquire control of the Company.

For more information, see “Description of our Capital Stock—Series B Voting Convertible Preferred Stock” and “Equity Investment.”

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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

This information statement and other materials filed or to be filed by the Company and PNX, as well as information in oral statements or other written statements made or to be made by the Company and PNX, contain statements, including in this document under the captions “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “foresees” or the negative version of those words or other comparable words and phrases. Any forward-looking statements contained in this information statement are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved.

We believe that the factors that could cause our actual results to differ materially include but are not limited to the factors we describe in this information statement, including under “Risk Factors,” “The Spin-Off” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

• expected benefits from the spin-off may not be fully realized;

• our revenues and operating costs may be different than expected following the spin-off;

• volatility in the securities markets;

• competition in our industry;

• difficulty in implementing our business strategy; and

• our ability to attract and retain qualified personnel.

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this information statement. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Consequently, actual events and results may vary significantly from those included in or contemplated or implied by our forward-looking statements. The forward-looking statements included in this information statement are made only as of the date of this information statement, and we undertake no obligation to publicly update or review any forward-looking statement made by us or on our behalf, whether as a result of new information, future developments, subsequent events or circumstances or otherwise.

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THE SPIN-OFF

General

PNX currently has two operating businesses: its Asset Management business and its Life and Annuity business. Historically, these two distinct business segments have been operated by PNX in different locations, utilizing separate management teams and pursuing different business strategies. The results of these segments, consistent with past practice, are regularly reviewed by PNX’s chief operating decision makers and the executive team to assess the performance of each segment and to determine resource allocations among the segments. As part of its periodic reviews of the businesses, the PNX board of directors and its management assessed the possibility of separating the Asset Management business and the Life and Annuity business, including through the spin-off of one of these business segments.

On February 7, 2008, PNX announced that its board of directors had decided to pursue the spin-off of the Asset Management business from PNX in order to enhance stockholder value.

On December 12, 2008, the PNX board of directors formally approved the spin-off and declared a dividend payable to each holder of record at the close of business on December 22, 2008 of one share of our common stock for every 20 shares of PNX common stock held by such holder.

The separation of the Asset Management business from the Life and Annuity business, and the distribution of our common stock to holders of PNX common stock, will be accomplished through several steps, which PNX has determined based on a variety of contractual, structural, legal, tax and other reasons. As the final step in the spin-off, PNX will distribute 100% of our common stock to its stockholders (other than shares withheld to satisfy certain withholding obligations) such that a holder of 20 outstanding shares of PNX common stock will be entitled to receive one share of our common stock.

Reasons for the Spin-Off

PNX’s board of directors believes that the spin-off will better position both the Company’s Asset Management business and PNX’s Life and Annuity business to achieve their strategic and financial objectives. The Company’s Asset Management business and PNX’s Life and Annuity business are fundamentally different types of businesses, and the separation of the two businesses will help highlight the unique qualities and values of these businesses for investors, better position each company to access the capital markets and allow each company to separately pursue distinct business strategies.

The board of directors of PNX considered the following potential benefits in making its determination to effect the spin-off:

• allowing each company to separately pursue the business strategies that best suit its long-term interests;

• creating separate companies that have different financial characteristics, which may appeal to different investor bases and allow for clarity on valuation of the respective businesses;

• creating opportunities to more efficiently develop and finance ongoing operations and future acquisitions and investments;

• allowing each company to establish an expense structure appropriate for its business and size; and

• creating effective management incentives tied to each company’s performance.

Neither we nor PNX can assure you that, following the spin-off, any of these benefits will be realized to the extent anticipated or at all.

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PNX’s board of directors also considered a number of other factors in evaluating the spin-off, including:

• the one-time and on-going time expenditures and financial costs of the spin-off to both PNX and the Company;

• the possibility that PNX and the Company may not achieve the expense reductions anticipated in connection with the spin-off;

• the possibility that the spin-off may affect the financial strength or senior debt ratings of PNX or its subsidiaries;

• the potential tax consequences to PNX, PNX stockholders and the Company; and

• the risk that the combined trading prices of our common stock and PNX common stock after the distribution may be lower than the trading price of PNX’s common stock before the distribution.

PNX’s board of directors concluded, however, that the potential benefits of the spin-off outweigh these factors and that spinning off the Asset Management business to PNX stockholders is appropriate and advisable for PNX and its stockholders.

Manner of Effecting the Spin-Off

The general terms and conditions relating to the spin-off are set forth in a separation and distribution agreement between the Company and PNX. The spin-off will be effective at 5:00 p.m., New York City time on the distribution date, which is December 31, 2008. Prior to the distribution, Phoenix Investment Management Company (“PIM”), our direct parent and a wholly owned subsidiary of PNX, will transfer all of our common stock to PNX, and we will transfer all of the stock and assets of Goodwin to PNX. As a result of the spin-off, each PNX stockholder will receive one share of our common stock for every 20 shares of PNX common stock that such stockholder owns. No fractional shares will be issued. Those stockholders who would otherwise be entitled to receive fractional shares will receive cash in lieu of fractional shares. In order to be entitled to receive shares of our common stock in the spin-off, PNX stockholders must be stockholders at the close of business of the New York Stock Exchange on the record date, which is December 22, 2008. The distribution of the shares of our common stock will be made in book-entry form. Each share of our common stock that is distributed will be validly issued, fully paid and nonassessable and free of preemptive rights. See “Description of Our Capital Stock.”

PNX stockholders will not be required to pay for shares of our common stock received in the spin-off or to surrender or exchange shares of PNX common stock in order to receive our common stock or to take any other action in connection with the spin-off. No vote of PNX stockholders is required or sought in connection with the spin-off and PNX stockholders have no appraisal rights in connection with the spin-off.

In addition, at the time of the spin-off, certain outstanding options to purchase PNX common stock and certain outstanding service vested restricted stock units held by our employees on the distribution date will be converted into options to purchase Company common stock and restricted stock units, respectively. The formula used in the conversion will be based on the applicable plans and accounting rules with the intention of keeping the holders in the same financial position immediately following the conversion as existed immediately before the conversion. See “Our Relationship With PNX After the Spin-Off—Employee Matters Agreement—Treatment of PNX Equity Awards Held by Company Employees.”

IN ORDER TO BE ENTITLED TO RECEIVE SHARES OF OUR COMMON STOCK IN THE SPIN-OFF, YOU MUST BE A HOLDER OF PNX COMMON STOCK AT THE CLOSE OF BUSINESS ON THE RECORD DATE.

The distribution agent will not deliver any fractional shares of our common stock in connection with the distribution. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate net cash proceeds of the sales

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pro rata to each holder of PNX common stock that would otherwise be entitled to receive a fractional share in the distribution. Such holders will then receive a cash payment in an amount equal to their pro rata share of the total net proceeds of those sales. Such cash payments will be made to the holders in the same accounts in which the underlying shares are held. If a PNX stockholder physically holds PNX stock certificates, such holder’s check for any cash that he or she may be entitled to receive instead of fractional shares of our common stock will be included together with the account statement in the mailing that the distribution agent expects to send out on the distribution date.

None of PNX, the Company or the distribution agent will guarantee any minimum sale price for the fractional shares of Company common stock. Neither PNX nor the Company will pay any interest on the proceeds from the sale of fractional shares.

Results of the Spin-Off

After the spin-off, we will be an independent publicly traded company. Immediately following the spin-off, we expect to have approximately 26,000 beneficial holders of shares of our common stock, based on the number of beneficial stockholders of PNX common stock on December 17, 2008, and approximately 5,720,826 shares of our common stock outstanding. The actual number of shares to be distributed will be determined on the record date and will reflect any exercise of PNX options between the date the board of directors of PNX declares the dividend for the spin-off and the record date for the spin-off.

The Company and PNX will be parties to a number of agreements that govern the spin-off and the future relationship between our companies. For a more detailed description of these agreements, see “Our Relationship With PNX After the Spin-Off.”

Material U.S. Federal Income Tax Consequences of the Spin-Off

The following is a summary of certain U.S. federal income tax consequences to holders of PNX common stock. This summary does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the U.S. federal income tax laws, such as tax-exempt entities, non-resident alien individuals, foreign entities, foreign trusts and estates and beneficiaries thereof, stockholders who acquire shares as compensation for services, insurance companies and dealers in securities. In addition, this summary does not address any state, local or foreign tax consequences.

All stockholders should consult their own tax advisors concerning the specific tax consequences of the distribution of our common stock to holders of PNX common stock in light of their particular circumstances. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor.

Each taxable U.S. stockholder of PNX receiving shares of our common stock (including fractional shares for which stockholders receive cash) in the spin-off will be treated as if such stockholder had received a taxable distribution in an amount equal to the fair market value of our common stock received (including fractional shares for which stockholders receive cash). Such distribution will be treated as a dividend to the extent of PNX’s current and accumulated earnings and profits, which subject to certain limitations may be taxable to individuals at a reduced rate of 15%. To the extent in excess of our earnings and profits, the receipt of our common stock will generally result in a reduction of a stockholder’s basis in PNX common stock and capital gain to the extent of any excess. Capital gains may be taxable at a reduced rate of 15% for individuals that have held their shares of PNX common stock for more than one year. A stockholder’s tax basis in our common stock will be equal to its fair market value at the time of the spin-off and the holding period in our common stock will begin the day after the spin-off.

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In addition, non-U.S. stockholders may be subject to a withholding tax at a rate of 30% on the fair market value of the common stock received by them (including fractional shares for which stockholders receive cash) to the extent of their share of PNX’s earnings and profits, unless such non-U.S. stockholders provide to us or our distribution agent, as the case may be, a properly executed (i) Internal Revenue Service (“IRS”) Form W-8BEN (or other applicable form) claiming an exemption from or reduction in withholding under the benefit of an applicable income tax treaty or (ii) IRS Form W-8ECI (or other applicable form) stating that the amount treated as a taxable dividend is not subject to withholding tax because it is effectively connected with such non-U.S. stockholder’s conduct of a trade or business in the United States. Effectively connected dividends (and, if an income tax treaty applies, dividends attributable to a permanent establishment), although not subject to withholding tax, are subject to U.S. federal income tax at the same graduated rates applicable to U.S. persons, net of certain deductions and credits. In addition, dividends received by corporate non-U.S. stockholders that are effectively connected with a United States trade or business of the corporate non-U.S. stockholder (and, if an income tax treaty applies, are attributable to a corporate non-U.S. stockholder’s permanent establishment in the United States) may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified in an applicable income tax treaty).

In addition, backup withholding may apply with respect to the amount of the distribution of our shares of common stock paid to a U.S. stockholder if such U.S. stockholder fails to provide a taxpayer identification number or certificate of other exempt status or fails to report in full dividend and interest income. In general, no backup withholding will be required with respect to the amount of the distribution of our shares of common stock paid to a non-U.S. stockholder if such non-U.S. stockholder establishes an exemption, for example, by properly certifying its non-U.S. status on an IRS Form W-8BEN (or other applicable form). Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against a stockholder’s U.S. federal income tax liability provided the required information is furnished to the IRS. In general, information regarding the amount of the distribution of our shares of common stock paid to a stockholder will be reported to the IRS unless an exception applies.

If any withholding (including backup withholding) is required, shares of our common stock may be held back and sold on the market to the extent necessary to remit cash to the IRS and to pay brokerage and other costs.

Listing and Trading of Our Common Stock

There is currently no public market for our common stock. The shares of our common stock have been approved for listing on the Nasdaq Global Market under the symbol “VRTS.” We anticipate that trading of our common stock will commence on a when-issued basis on or shortly before the record date. When-issued trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. On the first trading day following the distribution date, when-issued trading with respect to our common stock will end and regular way trading will begin. Regular way trading refers to trading after a security has been issued and typically involves a transaction that settles on the third full business day following the date of the transaction.

We cannot predict what the trading prices for our common stock will be before or after the distribution date. In addition, we cannot predict any change that may occur in the trading price of PNX common stock as a result of the spin-off. In addition, until our common stock is fully distributed and an orderly market develops in our common stock, the price at which it trades may fluctuate significantly and may be lower or higher than the price that would be expected for a fully distributed issue. See “Risk Factors––Risks Relating to Our Common Stock.”

The shares of our common stock distributed to PNX stockholders will be freely transferable except for shares received by persons who may be deemed to be “affiliates” of the Company under the Securities Act of 1933, as amended (the “Securities Act”). Persons that may be considered affiliates of the Company after the spin-off generally include individuals or entities that control, are controlled by or are under common control with the Company.

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Spin-Off Conditions and Termination

We expect that the spin-off will be effective on the distribution date, December 31, 2008, provided that, among other things:

• the SEC has declared effective our Form 10, of which this information statement is a part, under the Exchange Act, and no stop order relating to our Form 10 is in effect;

• the Company and PNX have received all material licenses, permits, estoppels, consents, approvals, authorizations, qualifications and orders of governmental authorities and third parties as are necessary for consummation of the spin-off; and

• no action, proceeding or investigation shall have been instituted or threatened before any court or administrative body to restrain, enjoin or otherwise prevent the consummation of the spin-off, and no restraining order or injunction issued by any court of competent jurisdiction shall be in effect restraining the consummation of the spin-off.

The fulfillment of the foregoing conditions will not create any obligation on PNX’s part to effect the spin-off, and the board of directors of PNX has reserved the right to amend, modify or abandon the spin-off and the related transactions at any time prior to the distribution date. The board of directors of PNX may also waive any of these conditions.

In addition, PNX has the right not to complete the spin-off and related transactions if, at any time, the PNX board of directors determines, in its sole discretion, that the distribution is not in the best interests of PNX and its stockholders.

Reason for Furnishing this Information Statement

This information statement is being furnished solely to provide information to PNX stockholders who will receive shares of our common stock in the spin-off. It is not and is not to be construed as an inducement or encouragement to buy or sell any securities. We believe that the information contained in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither we nor PNX undertakes any obligation to update the information except in the normal course of our respective public disclosure obligations.

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DIVIDEND POLICY

We do not plan on initially paying any cash dividends. However, the owners of our common stock may receive dividends when declared by our Board from funds legally available for the payment of dividends. All decisions regarding the declaration and payment of dividends will be evaluated from time to time in light of our financial condition, earnings, growth prospects, other uses of cash, funding requirements, applicable law and other factors our Board deems relevant.

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CAPITALIZATION

The following table sets forth the consolidated capitalization of the Company (i) on an actual basis as of September 30, 2008 and 2007 and (ii) on pro forma basis as of September 30, 2008 as adjusted to give effect to:

• Transfer of the Goodwin business to PNX. Goodwin is a registered investment advisor with revenues of $22.9 million and $17.6 million, and operating expenses of $17.6 million and $13.2 million, for 2007 and the first nine months of 2008, respectively.

• A one-time pre-payment of approximately $13.0 million on its $33.0 million intercompany note agreement with Phoenix Life. The Company will seek to renegotiate and keep approximately $20.0 million of this indebtedness outstanding on a third-party, arm’s-length basis. The pro forma financial presentation assumes a renegotiated interest rate on this indebtedness of LIBOR plus 400 basis points. A 100 basis point increase or decrease in the interest rate would result in additional or reduced annual interest expense of $0.2 million. The Company intends to obtain third-party financing to retire this obligation at the time of the distribution date.

• Establishment of a $94.0 million valuation allowance against deferred tax assets, which were primarily generated by federal net operating losses, due to the uncertainty of future income that is necessary to realize these assets, as well as due to certain tax rules relating to the treatment of losses in connection with a spin-off that may result in all or a portion of the related net operating loss and capital loss carryovers to not be available to the Company following the spin-off. Elimination of $4.9 million of intercompany taxes payable to PNX under the tax sharing agreement with PNX.

• On October 30, 2008, we and our parent companies, PNX and PIM, entered into a definitive agreement with Harris Bankcorp, pursuant to which Harris Bankcorp will acquire $45.0 million in convertible preferred stock of the Company representing a 23% equity position expected to be completed in connection with the spin-off.

You should read this table in conjunction with “Selected Consolidated Financial Data,” “Unaudited Pro Forma Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes that are included elsewhere in this information statement.

	As of September 30, 2008						As of September 30, 2007
	Actual			Pro Forma			Actual
($ in millions)
Debt
Current portion of notes payable to related parties	$	12.0		$	10.0		$	12.0
Notes payable to related parties		21.0			10.0			358.0
Total debt		33.0			20.0			370.0
Convertible preferred equity		—			45.0			—
Stockholder’s Equity
Common stock, par value $.01 per share (1,000,000,000 shares of common stock authorized, 5,714,546 shares issued and outstanding, actual and as adjusted)		—			—			—
Additional paid-in capital		962.5			920.5			637.5
Accumulated deficit		(687.4	)		(761.1	)		(333.3	)
Accumulated other comprehensive loss		(0.2	)		(0.2	)		—
Total stockholder’s equity		274.9			159.2			304.2
Total Capitalization (Debt, convertible preferred equity and stockholder’s equity)	$	307.9		$	224.2		$	674.2

33

The number of shares of common stock shown to be outstanding excludes:

• Shares issuable upon exercise of outstanding employee stock options and upon vesting of outstanding service-vested restricted stock units which will be converted from outstanding PNX grants as of the distribution date; and

• 1.8 million additional shares available for future issuance under our stock option and incentive plans as of January 2, 2009, which includes shares issuable pursuant to outstanding PNX equity grants that will be converted as of the distribution date.

See “Management” and “Compensation of Executive Officers” for more information about options and restricted stock units that may be granted.

34

SELECTED CONSOLIDATED FINANCIAL DATA

The historical financial data has been derived from PNX’s consolidated financial statements using the historical results of operations and bases of the assets and liabilities of PNX’s businesses and give effect to allocations of expenses from PNX. The historical consolidated results of operations data set forth below does not reflect changes that will occur in the operations and funding of the Company as a result of our separation from PNX. The historical consolidated balance sheet data set forth below reflects the assets and liabilities that were or are expected to be transferred to us as a result of our separation from PNX.

The selected consolidated financial data should be read in conjunction with, and are qualified by reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical audited and interim unaudited financial statements and the accompanying notes thereto, which for certain periods are included elsewhere in this information statement. The results of operations and the balance sheet data for each of the three years in the period ended December 31, 2007 are derived from the audited consolidated financial statements included elsewhere in this information statement and should be read in conjunction with those consolidated financial statements and the accompanying notes. The results of operations and the balance sheet data set forth below for the nine months ended September 30, 2008 and 2007 are derived from the unaudited consolidated financial statements included elsewhere in this information statement. In management’s opinion, these unaudited consolidated financial statements have been prepared on substantially the same basis as the audited financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial data for the periods presented. The results of operations for the interim period are not necessarily indicative of the operating results for the entire year or any future period.

	Nine Months Ended September 30,						Years Ended December 31,
	2008(1)			2007(1)			2007(2)			2006(2)			2005(2)			2004(1)			2003(3)
($ in millions)
Results of Operations
Revenues	$	143.4		$	170.0		$	226.2		$	218.6		$	237.4		$	273.7		$	258.5
Expenses		589.6			166.1			220.9			262.5			256.5			262.8			265.9
Operating income (loss)		(446.2	)		3.9			5.3			(43.9	)		(19.1	)		10.9			(7.4	)
Net loss		(349.9	)		(10.2	)		(14.2	)		(47.6	)		(33.1	)		(18.7	)		(23.8	)
Adjusted net income(4)		13.6			13.5			16.5			5.0			4.8			9.2			7.2
EBITDA(5)		7.8			29.3			38.1			26.2			22.1			37.0			20.7
	As of September 30,						As of December 31,
	2008(1)			2007(1)			2007(2)			2006(2)			2005(1)			2004(3)			2003(3)
Balance Sheet Data
Cash and cash equivalents	$	22.6		$	32.8		$	36.8		$	33.9		$	23.8		$	50.0		$	38.7
Intangible assets, net		86.1			215.6			208.2			237.7			295.9			308.4			335.1
Goodwill		122.7			454.4			454.4			454.4			454.4			416.9			408.1
Total assets		365.0			760.7			752.2			781.1			825.0			834.0			843.5
Accrued compensation and benefits		25.1			28.0			34.1			35.3			30.1			31.9			39.6
Notes payable to related parties		33.0			370.0			42.0			436.3			508.1			460.0			446.0
Total liabilities		90.1			456.5			127.3			527.6			598.0			607.7			612.5
Total stockholder’s equity		274.9			304.2			624.9			253.5			227.0			226.3			231.0
Assets Under Management
($ in billions)
Total assets(6)	$	41.2		$	59.4		$	55.5		$	58.1		$	50.9		$	56.2		$	59.2
Third-party assets(6)		28.7			46.5			42.5			45.0			37.4			42.9			46.3
Pro forma assets(6)		27.0			44.4			40.4			43.6			35.7			39.9			41.1

35

Notes to Selected Consolidated Financial Data

(1) Derived from unaudited consolidated financial statements.

(2) Derived from audited consolidated financial statements included elsewhere in this information statement.

(3) Derived from audited consolidated financial statements not included elsewhere in this information statement.

(4) The supplemental performance measure “adjusted net income” is provided in addition to net income, but is not a substitute for net income determined in accordance with GAAP and may not be comparable to other non-GAAP performance measures, including measures of cash earnings or cash income, of other companies. Furthermore, adjusted net income is not a liquidity measure and should not be used in place of cash flow measures determined in accordance with GAAP. We consider adjusted net income, regularly used in the asset management business, to be a meaningful operating measure of our financial performance. We consider this non-GAAP financial measure when evaluating the performance of the Company and believe the presentation of these amounts provides the reader with information necessary to better analyze the Company’s operations for the periods presented. See our definition of adjusted net income, as well as our reconciliation of net income to adjusted net income in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Performance Measures.”

(5) The supplemental measure “EBITDA,” a non-GAAP liquidity measure, defined as earnings before interest expense, income taxes, depreciation and amortization, is provided in addition to, but not as a substitute for, cash flow from operations. EBITDA, as calculated by us, may not be consistent with computations of EBITDA by other companies. As a measure of liquidity we believe that EBITDA is a useful indicator of our ability to service debt, make new investments and meet working capital requirements. We further believe that many investors use this information when analyzing the financial position of companies in the asset management industry.

(6) “Total assets” reflect all related party and unrelated party assets managed by the Company, including PNX’s general account. Historical financial results included in this information statement are presented using total assets as the basis of the Company’s operations. “Third-party assets” are total assets excluding PNX’s general account. Historical financial results of the Asset Management segment of PNX are presented using third-party assets as the basis of the segment’s operations. “Pro forma assets” exclude PNX’s general account as well as third-party institutional assets managed by Goodwin. Pro forma financial results included in this information statement, as well as the Company’s future results, are presented using pro forma assets as the basis of the Company’s operations.

36

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The unaudited pro forma consolidated financial information presented below has been derived from our audited consolidated financial statements for the year ended December 31, 2007 and our unaudited consolidated interim financial statements for the nine months ended September 30, 2008. This unaudited pro forma consolidated financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes related to those consolidated financial statements included elsewhere in this information statement.

The unaudited pro forma consolidated statements of operations for the year ended December 31, 2007 and for the nine months ended September 30, 2008 have been prepared as if the distribution had occurred as of January 1, 2007. The unaudited pro forma consolidated balance sheet as of September 30, 2008 has been prepared as if the distribution occurred as of September 30, 2008. The pro forma adjustments are based on the best information available and assumptions that our management believes are reasonable. The unaudited pro forma consolidated financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what our results of operations or financial position would have been had the transactions contemplated by the separation and distribution and related transactions occurred on the dates indicated. The unaudited pro forma consolidated financial information also should not be considered representative of our future results of operations or financial position.

Our unaudited pro forma consolidated financial statements have been prepared to reflect adjustments to our historical financial information to give effect to the distribution of our common stock to the stockholders of PNX and the following transactions, as if these transactions had been completed at earlier dates:

• Transfer of the Goodwin business to PNX. Goodwin is a registered investment advisor with revenues of $22.9 million and $17.6 million, and operating expenses of $17.6 million and $13.2 million, for 2007 and the first nine months of 2008, respectively.

• Operating costs related to human resources, facilities, corporate communications, compliance, corporate and staff, legal, internal audit and tax service were previously charged to the Company by PNX. Costs for these functions are now directly incurred by the Company. In addition, costs have been adjusted to include board of directors’ expenses, transfer agent fees and stock exchange listing fees. This resulted in net cost adjustments of ($4.7) million and ($1.9) million for 2007 and the first nine months of 2008, respectively.

• A one-time pre-payment of approximately $13.0 million on its $33.0 million intercompany note agreement with Phoenix Life. The Company will seek to renegotiate and keep approximately $20.0 million of this indebtedness outstanding on third-party, arm’s-length basis. The pro forma financial presentation assumes a renegotiated interest rate on this indebtedness of LIBOR plus 400 basis points. A 100 basis point increase or decrease in the interest rate would result in additional or reduced annual interest expense of $0.2 million. The Company intends to obtain third-party financing to retire this obligation at the time of the distribution date.

• On October 30, 2008, the Company and its parent companies, PNX and PIM, entered into a definitive agreement with Harris Bankcorp, pursuant to which Harris Bankcorp will acquire $45.0 million in convertible preferred stock of the Company representing a 23% equity position expected to be completed in connection with the spin-off.

• Establishment of a $94.0 million valuation allowance against deferred tax assets, which were primarily generated by federal net operating losses, due to the uncertainty of future income that is necessary to realize these assets, as well as due to certain tax rules relating to the treatment of losses in connection with a spin-off that may result in all or a portion of the related net operating loss and capital loss carryovers to not be available to the Company following the spin-off. Elimination of $4.9 million of intercompany taxes payable to PNX under the tax sharing agreement with PNX.

37

The pro forma income statement adjustments do not give effect to:

• Non-recurring separation costs primarily comprised of services to effect the transaction and establish two independent companies, primarily infrastructure-related.

See the notes to the unaudited pro forma consolidated financial information for a more detailed discussion of these events.

The unaudited pro forma consolidated financial information has been prepared on a consolidated basis from the Company’s consolidated financial statements using the historical results of operations and bases of the assets and liabilities of Company businesses and give effect to allocations of expenses from PNX. The unaudited pro forma consolidated financial information is not indicative of our future performance or what our results of operations and financial position would have been if we had operated as an independent company during the periods presented or if the transactions reflected therein had actually occurred as of January 1, 2007 or September 30, 2008, as the case may be. The unaudited pro forma consolidated statement of operations may not reflect the complete impact of one-time and ongoing incremental costs required to operate as an independent publicly traded company. These pro formas do not reflect the costs of a new equity incentive plan that the Company expects to adopt after the distribution.

38

Virtus Investment Partners, Inc.

Unaudited Pro Forma Consolidated Statements of Operations

For the Year Ended December 31, 2007

				Pro Forma Adjustments
	Historical			Transferred Business(1)			Cost Adjustments(2)			Financing(3)			Pro- Forma
($ in thousands, except per share data)
Revenues
Investment management fees	$	158,998		$	(22,853	)							$	136,145
Distributor and service fees		36,467												36,467
Administration and transfer agent fees		23,354												23,354
Other income and fees		7,398												7,398
Total revenues		226,217			(22,853	)		—			—			203,364
Operating Expenses
Employment expenses		94,849			(10,246	)		(2,847	)					81,756
Distribution and administration expenses		50,089												50,089
Other operating expenses		44,438			(4,645	)		(1,843	)					37,950
Intangible asset impairment		301												301
Depreciation and other amortization		1,095			(23	)								1,072
Amortization of intangible assets		30,097			(2,640	)								27,457
Total operating expenses		220,869			(17,554	)		(4,690	)		—			198,625
Operating Gain (Loss)		5,348			(5,299	)		4,690			—			4,739
Other Income (Expense)
Unrealized depreciation on trading securities		(2,569	)											(2,569	)
Other income		2,227												2,227
Total other income (expense), net		(342	)		—			—			—			(342	)
Interest (Expense) Income
Interest expense		(26,739	)								25,397			(1,342	)
Interest income		1,633												1,633
Total interest income (expense), net		(25,106	)		—			—			25,397			291
Income (Loss) Before Income Taxes		(20,100	)		(5,299	)		4,690			25,397			4,688
Income tax expense (benefit)		(5,950	)		(2,173	)(4)		1,641	(4)		8,889	(4)		2,407
Net Income (Loss)	$	(14,150	)	$	(3,126	)	$	3,049		$	16,508		$	2,281
Preferred shareholder dividends		—			—			—			(3,600	)		(3,600	)
Net Income (Loss) Available to Common Shareholders	$	(14,150	)	$	(3,126	)	$	3,049		$	12,908		$	(1,319	)
Weighted average shares outstanding(5)														5,715
Basic loss per share(5)													$	(0.23	)
Diluted loss per share(5)													$	(0.23	)

See Notes to Unaudited Pro Forma Consolidated Statements of Operations

39

Virtus Investment Partners, Inc.

Unaudited Pro Forma Consolidated Statements of Operations

For the Nine Months ended September 30, 2008

	Historical		Pro Forma Adjustments									Pro Forma
			Transferred Business(1)			Cost Adjustments(2)			Financing(3)
($ in thousands, except per share data)
Revenues
Investment management fees	$	102,211	$	(17,640)								$	84,571
Distribution and service fees		24,345											24,345
Administration and transfer agent fees		15,072											15,072
Other income and fees		1,759											1,759
Total revenues		143,387		(17,640)			—			—			125,747
Operating Expenses
Employment expenses		65,802		(8,081)			(1,219)						56,502
Distribution and administration expenses		33,586											33,586
Other operating expenses		35,087		(3,160)			(708)						31,219
Goodwill impairment		331,706											331,706
Intangible asset impairment		100,492											100,492
Depreciation and other amortization		549		(17)									532
Amortization of intangible assets		22,413		(1,980)									20,433
Total operating expenses		589,635		(13,238)			(1,927)			—			574,470
Operating Gain (Loss)		(446,248)		(4,402)			1,927			—			(448,723)
Other Income (Expense)
Unrealized depreciation on trading securities		(2,350)											(2,350)
Other income		580											580
Total other income (expense), net		(1,770)		—			—			—			(1,770)
Interest (Expense) Income
Interest expense		(2,037)								1,031			(1,006)
Interest income		675											675
Total interest income (expense), net		(1,362)		—			—			1,031			(331)
Income (Loss) Before Income Taxes		(449,380)		(4,402)			1,927			1,031			(450,824)
Income tax expense (benefit)		(99,503)		(894)	(4)		675	(4)		361	(4)		(99,361)
Net Income (Loss)	$	(349,877)	$	(3,508)		$	1,252		$	670		$	(351,463)
Preferred shareholder dividends		—		—			—			(2,700)			(2,700)
Net Income (Loss) Available to Common Shareholders	$	(349,877)	$	(3,508)		$	1,252		$	(2,030)		$	(354,163)
Weighted average shares outstanding(5)													5,715
Basic loss per share(5)												$	(61.97)
Diluted loss per share(5)												$	(61.97)

Notes to Unaudited Pro Forma Consolidated Statements of Operations

(1) Reflects the dividend of Goodwin to PNX. Thus, revenues of $22.9 million and $17.6 million, and expenses of $17.6 million and $13.2 million for 2007 and the first nine months of 2008, respectively, have been excluded from the pro forma consolidated statements of operations.

(2) Reflects the new costs for certain services, previously provided by PNX, which will be replaced or eliminated. The costs for other services provided by PNX that are not expected to change are reflected in the historical financial statements. Costs that will change or be eliminated relate to human resources, facilities,

40

corporate communications, compliance, corporate and staff, legal, internal audit and tax. Costs for these functions will be directly incurred by the Company. In addition, costs have been added to include board of directors’ expenses, transfer agent fees and stock exchange listing fees. The pro forma adjustments exclude the general overhead costs allocated to the Company by PNX that will no longer be incurred. Effective November 1, 2008 the PNX cost allocations were ended and the new cost structure was put in place. Details of the cost adjustments are as follows:

	For the Year Ended December 31, 2007
	Expense Sharing Charge		New Cost			Savings
($ in millions)
Employment expenses:
Human resources—pension costs	$	1.4	$	—	(a)	$	1.4
Other operating expenses:
Rent and occupancy		2.1		0.8	(b)		1.3
Human resources—administration		2.4		0.8	(c)		1.6
Corporate and staff		1.3		0.2	(d)		1.1
Corporate communications		1.8		0.6	(e)		1.2
Public company expenses		—		1.9	(f)		(1.9	)
		7.6		4.3			3.3
Total Cost Adjustments	$	9.0	$	4.3		$	4.7

	For the Nine Months Ended September 30, 2008
	Expense Sharing Charge		New Cost			Savings
($ in millions)
Employment expenses:
Human resources—pension costs	$	1.0	$	—	(a)	$	1.0
Other operating expenses:
Rent and occupancy		1.7		0.6	(b)		1.1
Human resources—administration		1.0		0.6	(c)		0.4
Corporate and staff		0.5		0.2	(d)		0.3
Corporate communications		0.9		0.4	(e)		0.5
Public company expenses		—		1.4	(f)		(1.4	)
		4.1		3.2			0.9
Total Cost Adjustments	$	5.1	$	3.2		$	1.9

(a) —For Human resources—pension costs, the Company eliminated expense sharing charges related to a defined benefit pension plan because it will not have such a plan.

(b) —For Rent and occupancy expenses, the expense sharing charge reflects the cost for the corporate headquarters currently occupied in part by the Company. The pro forma expense, or new cost, reflects the square footage requirements of the Company at market rates. This rate is supported by a new, eight-year lease agreement already executed by the Company.

(c) —For Human resources—administration, the expense sharing charge includes charges for human resource professionals as well as costs for employee programs and systems. The pro forma expense, or new cost, reflects executed contracts for payroll processing, 401(k) administration, stock plan administration, benefits administration as well as employment expenses for the personnel required to support the ongoing business function.

41

(d) —The Corporate and staff expense sharing charges include overhead expenses for PNX’s executive and public company costs. The pro forma expense, or new cost, presentation eliminates these expense sharing charges and separately identifies the Company’s public company expenses.

(e) —For Corporate communications, the expense sharing charges include charges for communication personnel as well as costs associated with internal and external communication programs. The pro forma expense, or new cost, reflects the employment of an individual and the terms of an executed agreement with an external public relations company experienced in supporting public companies of similar size and scale to the Company.

(f) —For Public company expenses, the pro forma expenses, or new cost, reflect the Company’s board of directors fees, exchange listing fees, transfer agent expenses and other incidental costs associated with being an independent public company.

(3) Reflects the following:

• The PNX board of directors deemed it to be in the best interests of PNX and the Company to forgive the remaining intra-company indebtedness associated with these notes in the amount of $325.0 million and to terminate the outstanding credit instruments extended by PNX in favor of the Company effective December 31, 2007.

• Reduction of interest expense as the Company intends to make a one-time pre-payment of approximately $13.0 million on its $33.0 million intercompany note agreement with Phoenix Life in connection with this spin-off transaction. The Company will seek to renegotiate and keep approximately $20.0 million of this indebtedness outstanding on a third-party, arm’s-length basis. The pro forma financial presentation assumes a renegotiated interest rate on this indebtedness of LIBOR plus 400 basis points. The Company intends to obtain third-party financing to retire this obligation on or after the distribution date.

• Reflects an agreement entered into on October 30, 2008 with Harris Bankcorp, pursuant to which Harris Bankcorp will acquire $45.0 million of convertible preferred stock of the Company representing a 23% equity position of the Company on a fully-diluted basis. The agreement calls for a two-step closing process, the first step of which was completed on October 31, 2008 and the second step of which is expected to be completed in connection with the distribution.

(4) Reflects the tax attributes of the above pro forma adjustments at an incremental U.S. federal income tax rate of 35% and at varying state tax rates.

(5) Pro forma basic and diluted loss per share and weighted average shares outstanding for the periods presented are based on The Phoenix Companies, Inc. common shares outstanding as of September 30, 2008, adjusted for the expected distribution ratio of one share of our common stock for every 20 shares of The Phoenix Companies, Inc. common stock.

42

Virtus Investment Partners, Inc.

Unaudited Pro Forma Consolidated Balance Sheet

As of September 30, 2008

				Pro Forma Adjustments
($ in thousands)	Historical			Transferred Business(1)			Intercompany Financing(2)			Preferred Equity Financing(3)			Other(4)			Pro Forma
Assets
Current Assets
Cash and cash equivalents	$	22,610		$	(100	)	$	(13,019	)	$	35,000		$	—		$	44,491
Trading securities, at fair value		10,463			—			—			—			—			10,463
Available-for-sale securities, at fair value		1,517			—			—			—			—			1,517
Accounts receivable		5,903			(590	)		—			—			—			5,313
Receivables from related parties		17,914			(85	)		—			—			—			17,829
Prepaid expenses and other assets		2,453			(410	)		—			—			—			2,043
Total current assets		60,860			(1,185	)		(13,019	)		35,000			—			81,656
Deferred commissions		2,212			—			—			—			—			2,212
Furniture, equipment and leasehold improvements, net		4,054			(11	)		—			—			—			4,043
Intangible assets, net		86,119			(13,022	)		—			—			—			73,097
Goodwill		122,663			(11,900	)		—			—			—			110,763
Deferred taxes, net		86,643			(3,452	)		—			—			(83,191	)		—
Long-term investments and other assets		2,501			—			—			—			—			2,501
Total assets	$	365,052		$	(29,570	)	$	(13,019	)	$	35,000		$	(83,191	)	$	274,272
Liabilities and Stockholder’s Equity
Current liabilities
Accrued compensation and benefits	$	25,121		$	(2,872	)	$	—		$	—		$	770		$	23,019
Accounts payable		2,545			—			—			—			1,800			4,345
Payables to related parties		9,442			—			—			—			(9,442	)		—
Securities sold short, at fair value		698			—			—			—			—			698
Income taxes payable		8,148			(3,291	)		—			—			(4,857	)		—
Other accrued liabilities		3,648			—			—			—			—			3,648
Broker dealer payable		5,837			—			—			—			—			5,837
Current portion of notes payable to related parties		12,000			—			(2,000	)		—			—			10,000
Total current liabilities		67,439			(6,163	)		(2,000	)		—			(11,729	)		47,547
Deferred taxes, net		—			—			—			—			10,809			10,809
Notes payable to related parties		21,019			—			(11,019	)		—			—			10,000
Lease obligations and other long-term liabilities		1,667			—			—			—			—			1,667
Total liabilities		90,125			(6,163	)		(13,019	)		—			(920	)		70,023
Convertible preferred equity		—			—			—			45,000			—			45,000
Stockholder’s Equity
Common stock		—			—			—			—			—			—
Additional paid-in-capital		962,546			(42,392	)		—			(10,000	)		10,329			920,483
Accumulated deficit		(687,450	)		18,985			—			—			(92,600	)		(761,065	)
Accumulated other comprehensive income (loss)		(169	)		—			—			—			—			(169	)
Total stockholder’s equity		274,927			(23,407	)		—			(10,000	)		(82,271	)		159,249
Total liabilities and stockholder’s equity	$	365,052		$	(29,570	)	$	(13,019	)	$	35,000		$	(83,191	)	$	274,272

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Notes to Unaudited Pro Forma Consolidated Balance Sheet

(1) Reflects the transfer of the Goodwin business to PNX.

(2) Reflects a one-time pre-payment of approximately $13.0 million on its $33.0 million intercompany note agreement with Phoenix Life. The Company will seek to renegotiate and keep approximately $20.0 million of this indebtedness outstanding on a third-party, arm’s-length basis. The pro forma financial presentation assumes a renegotiated interest rate on this indebtedness of LIBOR plus 400 basis points. The Company intends to obtain third-party financing to retire this obligation on or after the distribution date.

(3) On October 30, 2008, we and our parent companies, PNX and Phoenix Investment Management Company, entered into a definitive agreement with Harris Bankcorp, pursuant to which Harris Bankcorp will acquire $45.0 million in convertible preferred stock of the Company representing a 23% equity position expected to be completed in connection with the spin-off.

(4) Reflects settlement of intercompany payables in connection with the spin-off as well as a valuation allowance of $94.0 million against deferred tax assets. Intercompany payables are settled by either cash or, in some instances, forgiven. Intercompany payables settled in cash consist of services provided under intercompany shared services agreement. The establishment of the valuation allowance against deferred tax assets, which were generated primarily by federal net operating losses, was due to the uncertainty of future income that is necessary to realize these assets, as well as due to certain tax rules relating to the treatment of losses in connection with a spin-off that may result in all or a portion of the related net operating loss and capital loss carryovers to not be available to the Company following the spin-off. This adjustment was made when considering the Company on a separate return basis, as the Company was previously included in a tax sharing agreement with PNX.

Pro Forma Adjusted Net Income Reconciliation Schedule

	Year Ended December 31, 2007
				Pro Forma Adjustments
	Historical			Transferred Business			Cost Adjustments		Financing		Pro Forma
($ in millions)
Net income (loss)	$	(14.2	)	$	(3.1	)	$	3.1	$	16.5	$	2.3
Add back:
Intangible asset amortization		30.1			(2.6	)		—		—		27.5
Intangible asset impairment		0.3			—			—		—		0.3
Intangible asset related deferred taxes		0.3			0.9			—		—		1.2
Adjusted net income(1)	$	16.5		$	(4.8	)	$	3.1	$	16.5	$	31.3
	Nine Months Ended September 30, 2008
				Pro Forma Adjustments
	Historical			Transferred Business			Cost Adjustments		Financing		Pro Forma
($ in millions)
Net income (loss)	$	(349.9	)	$	(3.5	)	$	1.3	$	0.6	$	(351.5	)
Add back:
Intangible asset amortization		22.4			(2.0	)		—		—		20.4
Intangible asset impairment		100.5			—			—		—		100.5
Goodwill impairment		331.7			—			—		—		331.7
Goodwill and intangible asset related deferred taxes		(91.1	)		0.8			—		—		(90.3	)
Adjusted net income(1)	$	13.6		$	(4.7	)	$	1.3	$	0.6	$	10.8

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Notes to Pro Forma Adjusted Net Income Reconciliation Schedule

(1) As supplemental information, we provide a non-GAAP performance measure that we refer to as adjusted net income. This measure is provided in addition to, but not as a substitute for, net income determined in accordance with GAAP. Adjusted net income is defined as net income (loss) plus amortization and impairments of goodwill and intangible assets and deferred taxes related to those assets. We consider adjusted net income an important measure of our financial performance as we believe it most accurately represents the operating performance of the Company adjusted for non-cash expenses related to acquisitions. We consider this non-GAAP financial measure to be useful to investors because it is an important metric in measuring economic performance of asset management companies, as an indicator of value and because it facilitates comparison of our operating results with the results of other asset management firms that have not engaged in significant acquisitions. Adjusted net income is also used by the Company as one of the inputs for calculating performance-based incentives. Please review our definition of adjusted net income, as well as our reconciliation of adjusted net income to net income, included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Performance Measure.”

45

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes which appear elsewhere in this information statement.

This discussion contains forward-looking statements that involve risks and uncertainties. See “Special Note About Forward-Looking Statements” for more information. Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this information statement, particularly under the heading “Risk Factors.”

On October 30, 2008, we and our parent companies, PNX and PIM, entered into an Investment and Contribution Agreement (the “Agreement”) with Harris Bankcorp, pursuant to which Harris Bankcorp will acquire $45.0 million in convertible preferred stock of the Company, representing a 23% equity position in us and our direct and wholly owned subsidiary. The agreement calls for a two-step closing process, the first step of which was completed effective October 31, 2008. The second step of the transaction, which is subject to certain regulatory and other customary conditions, is expected to be completed in connection with the spin-off. In certain cases, Harris Bankcorp can put the securities to us. See Note 4 to our September 30, 2008 unaudited consolidated financial statements for additional information concerning Harris Bankcorp’s put option.

Overview

We are currently a majority-owned subsidiary of PNX. PNX has determined to spin off the Company by distributing all of our common stock to the stockholders of PNX as a dividend. We will enter into a separation and distribution agreement with PNX (the “Separation Agreement”) containing the key provisions relating to our separation from PNX. The Separation Agreement identifies the assets to be transferred, liabilities to be assumed and contracts to be assigned to us. Our capital structure will be changed significantly at the date of our separation from PNX. See the related discussion in “Capitalization.”

Our Business

We are a provider of investment management products and services to individuals and institutions. We operate a multi-manager asset management business, comprising a number of individual affiliated managers, each having its own distinct investment style, autonomous investment process and brand. We believe our customers value this approach, especially institutional customers who appreciate individual managers with distinctive cultures and styles.

Investors have an array of needs driven by factors such as market conditions, risk tolerance and investment goals. A key element of our business is to offer a variety of investment styles and multiple disciplines to meet those needs. To that end, for our mutual funds, we supplement the investment capabilities of our affiliated managers with those of select unaffiliated sub-advisors. We do that by partnering with these managers whose strategies are not typically available to retail mutual fund customers.

We provide our products in a number of forms and through multiple distribution channels. Our retail products include open-end mutual funds, closed-end funds and separately managed accounts. Our fund family of over 50 open-end funds is distributed primarily through intermediaries. Our five closed-end funds trade on the New York Stock Exchange. Retail separately managed accounts are comprised of intermediary programs sponsored and distributed by unaffiliated brokerage firms, and private client services, originated and maintained by our affiliated managers. We also manage institutional accounts for corporations, multi-employer retirement funds and foundations, endowments, special purpose funds and other types of institutions. Our earnings are primarily driven by asset-based investment management fees charged on these various products. These fees are based on a percentage of assets under management and are calculated using either daily or weekly average assets or assets at the end of the quarter.

46

Our Profitability Drivers

Our profitability is primarily driven by the following factors:

• Investment management fees earned on assets under management. Depending on the product, these fees can be based on average daily market values, beginning-of-quarter market values, or outstanding principal values of the assets being managed. Assets under management are principally driven by the following factors:

^¡ sales less redemptions (net flows); and

^¡ absolute and relative performance.

• Operating expenses, including:

^¡ base compensation;

^¡ variable incentive compensation;

^¡ distribution expenses; and

^¡ administrative expenses.

• Amortization of intangibles, principally related to acquired investment contracts.

Recent Market Developments

Recent markets have experienced unprecedented credit and liquidity issues as well as volatility and declines in the equity markets. Lending practices in past years, particularly in the “sub-prime” market, coupled with dramatic declines in home prices, rising mortgage defaults and increasing home foreclosures, have resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks. These write-downs, initially of mortgage-backed securities but spreading to most sectors of the credit markets, and to credit default swaps and other derivative securities, have caused many financial institutions to seek additional capital, to merge with larger and stronger institutions, to be subsidized by the U.S. Government and, in some cases, to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, credit markets have worsened considerably, with many lenders and institutional investors reducing, and in some cases, ceasing to provide funding to borrowers, including other financial institutions. Additionally, concerns over increasing unemployment, fluctuating inflation and energy costs as well as geopolitical issues have contributed to diminished expectations for the economy and the financial markets going forward. These factors, combined with declining business and consumer confidence and increased unemployment, have precipitated an economic slowdown and fears of a prolonged recession. As a result, the financial markets and the U.S. economy are experiencing a period of extreme volatility.

This economic environment has had a direct impact on the actions of both retail and institutional investors. The continued erosion of the equity and fixed income markets has materially and adversely impacted the value of our assets under management which has resulted in lower fee revenues. Although it is not possible to predict how long this economic downturn will continue, it is expected to have a direct impact on our fourth quarter 2008 results. The following table presents interim third-party assets under management by product for the periods indicated:

($ in billions)	November 30, 2008		September 30, 2008		Change
Mutual Funds	$	15.2	$	17.7	$	(2.5	)
Separately Managed Accounts		3.0		3.8		(0.8	)
Institutional Accounts		4.9		5.9		(1.0	)
Structured Finance Products		1.0		1.3		(0.3	)
Ending Balance	$	24.1	$	28.7	$	(4.6	)

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General account assets under management at September 30, 2008 were $12.5 billion. The fees earned on general account assets are not based on a percentage of assets under management but, rather, a reimbursement of cost. Therefore, recent market activity has not had a significant effect on revenues or liquidity. In addition, the Company will not be managing the general account assets following the spin-off, and the related revenues and expenses are excluded from the pro forma financial presentation.

The following table summarizes interim period asset flows for third-party assets under management for the two-month period from September 30, 2008 through November 30, 2008:

	Two Months Ended November 30, 2008
($ in billions)
September 30, 2008 balance	$	28.7
Sales		0.6
Redemptions		(1.5	)
Net flows		(0.9	)
Market depreciation		(3.8	)
Money market funds—net change in assets under management		0.1
Net change in assets under management		(4.6	)
November 30, 2008 balance	$	24.1

The decrease in our assets under management is driven in great part due to the equity markets, with the S&P 500 Index down 23.1% for the two-month period from September 30, 2008 through November 30, 2008. We have seen decreased investment inflows and an increase in redemptions of certain products. Revenue for retail funds, which is based on average assets during the quarter, will be negatively impacted for the fourth quarter 2008 as compared to third quarter 2008 and fourth quarter 2007. Fourth quarter 2008 revenue for separately managed accounts and institutional accounts will be based primarily on September 30, 2008 asset under management levels, which were lower than levels at June 30, 2008. These decreases will have a direct effect on our net income and liquidity.

In response, the Company is evaluating all elements of its cost structure. Specifically, during the recent equity declines in the markets, management reduced its support staff by approximately 15% and outsourced its transfer agent functions, further reducing its fixed cost base. Variable costs, primarily comprised of incentive compensation and distribution costs, are directly related to revenue levels and will decline accordingly. The Company will continue to review measures to reduce its fixed costs.

The value of the Company’s goodwill and intangibles assets is based on assets under management and the related revenue. As a result, significant and sustained declines in assets under management would impact the valuation of these intangible assets. The Company will be performing its annual impairment test of goodwill in the fourth quarter of 2008 and again in connection with the closing of the spin-off transaction. Given the recent market trends described above, the results of these tests will be reasonably likely to have an adverse impact on the results of operations.

Summary Analysis of Results of Operations

Nine months ended September 30, 2008 compared to nine months ended September 30, 2007. Our results declined to a net loss of $349.9 million in the first nine months of 2008 compared with a net loss of $10.2 million in the first nine months of 2007. This was primarily driven by $432.2 million non-cash goodwill and intangible asset impairment charges. Revenues decreased by $26.6 million primarily due to a decrease in average assets under management as a result of market declines in the second half of 2007 and the first nine months of 2008

48

combined with net outflows of assets since the first six months of 2007. Operating expenses, excluding the impairment charges, decreased $8.5 million due to lower employment and distribution expenses, partially offset by increases in certain other expenses.

Year ended December 31, 2007 compared to year ended December 31, 2006. Our results improved to a net loss of $14.2 million in 2007 from a net loss of $47.6 million in 2006. This was primarily driven by a $32.5 million non-cash impairment charge on intangible assets recorded in 2006 as compared to a $0.3 million impairment charge in 2007. Restructuring and severance charges in 2006 of $13.6 million did not recur in 2007. Revenues increased $7.6 million mainly from higher mutual fund management and administrative fees. Total assets under management at December 31, 2007 were $55.5 billion including $13.0 billion of PNX general account assets, down slightly from the prior year end primarily due to net redemptions in our separately managed accounts and institutional products. Net outflows were $0.6 billion in 2007, a significant improvement over net outflows of $4.0 billion in 2006.

Year ended December 31, 2006 compared to year ended December 31, 2005. Our results declined to a net loss of $47.6 million in 2006 compared with a net loss of $33.1 million in 2005. This was primarily driven by a higher intangible asset non-cash impairment charge of $32.5 million in 2006 as compared to an $11.1 million intangible asset impairment in 2005. In addition, investment management fees were $27.5 million lower in 2006, due to a shift in assets to those generating lower management fees. Partially offsetting these reduced fees were lower employment expenses.

Significant Product Introductions and Developments

The following events are important components in developing our multi-manager, multiple distribution channel business model over the past several years:

Adoption of Mid-Cap Value Fund and Foreign Opportunities Fund

In October 2004, we adopted the Mid-Cap Value Fund with $17 million in assets under management. The fund grew to $1 billion in 2007, before it was partially closed to new investors, and had $546 million in assets under management at September 30, 2008. In June 2005, we adopted the Foreign Opportunities Fund and grew the assets under management from $86 million at the time of adoption to approximately $1.1 billion at September 30, 2008.

Completion of Purchase of Remaining Interest in Two Affiliates

In May 2005, we completed the acquisition of the minority interest in SCM Advisors, LLC, formerly Seneca Capital Management (“SCM”), thereby increasing our ownership to 100%. SCM manages a full spectrum of fixed income investment products, primarily institutional.

In September 2005, we completed the acquisition of the minority interest in Kayne Anderson Rudnick Investment Management, LLC (“KAR”). KAR’s expertise is primarily in separately managed accounts and private client arenas, as well as in mutual funds and institutional accounts.

See Note 3 to our consolidated financial statements in this information statement for more information.

Introduction of Alternative Investment Fund-of-Funds

In November 2005, we introduced the Diversifier fund, an addition to our asset allocation fund-of-funds options. The Diversifier fund offers investors the opportunity to hold interests in a number of our alternative investment options, such as REITs, global utilities and market neutral strategies, as well as several specialized exchange-traded funds (“ETFs”).

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Strategic Alliance with Harris Investment Management, Inc.

In May 2006, we acquired the rights to advise, distribute and administer the Insight Funds (the “Insight Funds”) from Harris Investment Management, Inc. (“Harris”). This adoption added 18 funds to our existing mutual fund product line, including a diverse mix of equity, international, fixed income and money market funds, with an additional $10.2 billion in assets under management, including $7.0 billion of money market funds. See Note 3 to our consolidated financial statements in this information statement for more information.

Assets Under Management

Our total assets under management as of September 30, 2008 were $41.2 billion, which includes the $14.2 billion of fixed income assets managed by Goodwin that will not be managed by us after the distribution date. The revenues earned from the $14.2 billion managed by Goodwin have been removed from our results in the pro forma information included in “Unaudited Pro Forma Consolidated Financial Data.”

Assets Under Management by Product

The following table presents our assets under management by product for the periods indicated:

	As of September 30,				As of December 31,
	2008		2007		2007		2006		2005
($ in billions)
Retail assets
Mutual fund assets
Money market funds	$	4.4	$	7.5	$	6.2	$	5.7	$	0.1
Long-term open-end funds		8.9		11.7		11.0		11.3		7.8
Closed-end funds		4.4		5.1		5.1		4.9		4.2
Total mutual fund assets		17.7		24.3		22.3		21.9		12.1
Separately managed accounts
Intermediary sponsored programs		2.0		3.0		2.7		3.8		6.1
Private client accounts		1.8		3.0		2.7		3.0		3.3
Total managed account assets		3.8		6.0		5.4		6.8		9.4
Total retail assets		21.5		30.3		27.7		28.7		21.5
Institutional assets(1)		5.9		11.3		11.2		12.3		13.4
Structured finance products(2)		1.3		4.9		3.6		4.0		2.5
Third-party assets		28.7		46.5		42.5		45.0		37.4
PNX General Account		12.5		12.9		13.0		13.1		13.5
Total	$	41.2	$	59.4	$	55.5	$	58.1	$	50.9

(1) Includes Goodwin third-party assets of $1.5, $1.8, $1.8, $1.1 and $1.2 as of September 30, 2008, September 30, 2007, December 31, 2007, December 31, 2006 and December 31, 2005, respectively.

(2) Includes Goodwin third-party assets of $0.2, $0.3, $0.3, $0.3 and $0.5 as of September 30, 2008, September 30, 2007, December 31, 2007, December 31, 2006 and December 31, 2005, respectively.

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Asset Flows by Product

The following table summarizes our asset flows by product for the periods indicated:

	Nine Months Ended September 30,						Years Ended December 31,
	2008			2007			2007			2006			2005
($ in billions)
Retail Products
Mutual Funds
Beginning balance	$	22.3		$	21.9		$	21.9		$	12.1		$	12.3
Sales		2.0			3.0			3.6			2.6			2.0
Redemptions		(2.4	)		(2.8	)		(3.9	)		(2.8	)		(2.4	)
Net flows		(0.4	)		0.2			(0.3	)		(0.2	)		(0.4	)
Market appreciation (depreciation)		(2.3	)		0.5			0.3			1.5			0.1
Money market funds net change in assets under management		(1.8	)		1.8			0.5			(1.4	)		—
Acquisitions (dispositions) / Other		(0.1	)		(0.1	)		(0.1	)		9.9			0.1
Change in assets under management		(4.6	)		2.4			0.4			9.8			(0.2	)
Ending balance	$	17.7		$	24.3		$	22.3		$	21.9		$	12.1
Separately Managed Accounts
Beginning balance	$	5.4		$	6.8		$	6.8		$	9.4		$	13.5
Sales		0.7			1.0			1.2			1.1			1.8
Redemptions		(1.7	)		(2.1	)		(2.6	)		(4.3	)		(5.7	)
Net flows		(1.0	)		(1.1	)		(1.4	)		(3.2	)		(3.9	)
Market appreciation (depreciation)		(0.6	)		0.3			0.1			0.6			(0.1	)
Acquisitions (dispositions) / Other		—			—			(0.1	)		—			(0.1	)
Change in assets under management		(1.6	)		(0.8	)		(1.4	)		(2.6	)		(4.1	)
Ending balance	$	3.8		$	6.0		$	5.4		$	6.8		$	9.4
Institutional Products
Beginning balance	$	11.2		$	12.3		$	12.3		$	13.4		$	14.2
Sales		0.5			0.9			1.2			1.6			5.5
Redemptions		(5.5	)		(1.5	)		(2.0	)		(3.5	)		(6.6	)
Net flows		(5.0	)		(0.6	)		(0.8	)		(1.9	)		(1.1	)
Market appreciation (depreciation)		(0.3	)		0.5			0.6			1.1			0.4
Acquisitions (dispositions) / Other		—			(0.9	)		(0.9	)		(0.3	)		(0.1	)
Change in assets under management		(5.3	)		(1.0	)		(1.1	)		(1.1	)		(0.8	)
Ending balance(1)	$	5.9		$	11.3		$	11.2		$	12.3		$	13.4
Structured Finance Products
Beginning balance	$	3.6		$	4.0		$	4.0		$	2.5		$	2.9
Sales		—			2.3			2.3			2.4			1.0
Redemptions		(1.2	)		(0.4	)		(0.4	)		(1.1	)		(1.2	)
Net flows		(1.2	)		1.9			1.9			1.3			(0.2	)
Market appreciation (depreciation)		(1.1	)		(1.0	)		(2.3	)		0.2			(0.2	)
Change in assets under management		(2.3	)		0.9			(0.4	)		1.5			(0.4	)
Ending balance(2)	$	1.3		$	4.9		$	3.6		$	4.0		$	2.5
General Account
Ending balance	$	12.5		$	12.9		$	13.0		$	13.1		$	13.5
Total
Beginning balance	$	55.5		$	58.1		$	58.1		$	50.9		$	56.2
Sales		3.2			7.2			8.3			7.7			10.3
Redemptions		(10.8	)		(6.8	)		(8.9	)		(11.7	)		(15.9	)
Net flows		(7.6	)		0.4			(0.6	)		(4.0	)		(5.6	)
Market appreciation (depreciation)		(4.3	)		0.3			(1.3	)		3.4			0.2
Money market net change		(1.8	)		1.8			0.5			(1.4	)		—
Acquisitions (dispositions) / Other		(0.6	)		(1.2	)		(1.2	)		9.2			0.1
Change in assets under management		(14.3	)		1.3			(2.6	)		7.2			(5.3	)
Ending balance	$	41.2		$	59.4		$	55.5		$	58.1		$	50.9

(1) Includes Goodwin third-party assets of $1.5, $1.8, $1.8, $1.1 and $1.2 as of September 30, 2008, September 30, 2007, December 31, 2007, December 31, 2006 and December 31, 2005, respectively.

(2) Includes Goodwin third-party assets of $0.2, $0.3, $0.3, $0.3 and $0.5 as of September 30, 2008, September 30, 2007, December 31, 2007, December 31, 2006 and December 31, 2005, respectively.

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Assets Under Management by Investment Category

The following table summarizes our assets under management by investment category:

	As of September 30,				As of December 31,
	2008		2007		2007		2006		2005
($ in billions)
Investment Categories
Equity assets	$	12.6	$	18.1	$	16.7	$	19.2	$	18.9
Fixed income assets(1)		11.7		20.9		19.6		20.1		18.3
Money market assets		4.4		7.5		6.2		5.7		0.2
Third-Party Assets		28.7		46.5		42.5		45.0		37.4
PNX General Account		12.5		12.9		13.0		13.1		13.5
Total	$	41.2	$	59.4	$	55.5	$	58.1	$	50.9

(1) Includes Goodwin third-party assets of $1.7, $2.1, $2.1, $1.4 and $1.7 as of September 30, 2008, September 30, 2007, December 31, 2007, December 31, 2006 and December 31, 2005, respectively.

Nine months ended September 30, 2008 compared to nine months ended September 30, 2007. At September 30, 2008, we managed $41.2 billion in total assets, a decrease of $18.2 billion from September 30, 2007. This was primarily driven by net outflows totaling $8.6 billion over the prior four quarters, of which $5.2 billion was in institutional accounts, combined with market depreciation of $5.9 billion and a decrease in money market assets of $3.1 billion over that period. Of the $5.2 billion of institutional net redemptions, $3.7 billion related to a terminated relationship with one institutional client, a general account mandate for a non-affiliated insurance company. The fees earned on these assets were approximately five basis points. Of the $5.9 billion market depreciation, $2.4 billion related to structured finance products while $3.5 billion related to other products. This was the result of the significant downturn in the securities markets.

Both equity assets and fixed income assets were lower driven by market depreciation in the fourth quarter of 2007 and the first nine months of 2008, as well as structured finance market depreciation over the four quarters ending September 30, 2008. Also contributing to the decreases in equity assets were net outflows in separately managed accounts. Fixed income assets declined further due to net outflows in the first quarter of 2008 related to a terminated relationship with one institutional client.

Year ended December 31, 2007 compared to year ended December 31, 2006. At December 31, 2007, we managed $55.5 billion in total assets, a decrease of $2.6 billion from December 31, 2006. This decrease was driven by unfavorable net flows in our institutional and separately managed account products as well as market depreciation in structured finance products. Net outflows in institutional and separately managed accounts were related to underperformance in certain strategies. Market depreciation in structured finance products was driven by the significant deterioration of the fixed income market in the second half of 2007. Partially offsetting these decreases in assets under management was $1.0 billion of market appreciation, excluding structured finance products and positive net flows in structured finance products due to the three new products issued during the year. Each of these issuances occurred in the first two quarters of 2007, before significant declines in value of these securities took hold. Despite a decrease in our long-term open-end mutual fund assets at period end, we had sales of $3.6 billion in 2007 driven in large part by the successful fund adoptions of the Foreign Opportunities Fund and Mid Cap Value Fund. Also contributing to sales was focused wholesaling efforts. However, these increases were offset by higher redemptions in funds affected by sector preferences, such as real estate.

Assets under management by investment category changed slightly as equity assets became less attractive for investors given the market volatility that was seen in the second half of 2007 combined with the underperformance of certain equity strategies within our separately managed account platform, resulting in net outflows of $1.4 billion.

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Year ended December 31, 2006 compared to year ended December 31, 2005. At December 31, 2006, we managed $58.1 billion in total assets, an increase of $7.2 billion from December 31, 2005. This increase was driven by the adoption of the Insight Funds in May 2006, which added $10.2 billion to our assets under management, consisting of $7.0 billion in money market funds and $3.2 billion in long-term equity and fixed income funds. Also contributing to the increase in total assets was market appreciation of $3.4 billion in 2006. We also had positive net flows in structured finance products as a result of three issuances in 2006. Partially offsetting these increases were net outflows in our separately managed accounts and institutional products. The net outflows were driven by underperforming large cap equity strategies that have since largely been redeemed. Net outflows in money market funds were driven by institutional investors who use these funds for cash management purposes.

Assets under management by investment category changed significantly in 2006 due to the adoption of the Insight Funds which included $7.0 billion, $2.3 billion and $0.9 billion of money market, equity and fixed income assets, respectively, at the time of acquisition. Fixed income assets also increased due to the three structured finance product issuances during the period.

Average Fee Earning Assets Under Management and Average Basis Points

The average fee earning assets under management and average fees earned expressed in basis points presented in the table below are intended to provide information in the analysis of our asset based revenue and distribution expenses. Money market and long-term mutual fund fees are calculated based on either average daily net assets or average weekly net assets. Separately managed accounts and institutional fees are generally calculated based on beginning of period, average or end of period asset values. Structured finance product fees are calculated based on a combination of the underlying cash flows and the principal value of the product.

	As of September 30,					As of December 31,
	Average Fees Earned in 2008 Expressed in BPS	2008		2007		2007		2006		2005
($ in billions)
Products
Money market mutual funds	10.7	$	5.9	$	6.0	$	6.2	$	4.3	$	0.1
Long-term mutual funds	61.1		15.2		16.7		17.0		14.2		15.0
Separately managed accounts	46.3		4.8		6.5		6.4		8.1		10.4
Institutional(1)	25.8		7.9		11.9		11.7		12.7		14.1
Structured finance products(2)	19.7		2.8		5.5		5.4		2.7		1.7
Third-Party Assets	40.3		36.6		46.6		46.7		42.0		41.3
PNX General Account	9.6		12.8		13.1		13.1		13.3		13.4
Total	32.3	$	49.4	$	59.7	$	59.8	$	55.3	$	54.7

(1) Includes Goodwin third-party assets of $1.5, $1.8, $1.8, $1.1 and $1.2 as of September 30, 2008, September 30, 2007, December 31, 2007, December 31, 2006 and December 31, 2005, respectively.

(2) Includes Goodwin third-party assets of $0.2, $0.3, $0.3, $0.3 and $0.5 as of September 30, 2008, September 30, 2007, December 31, 2007, December 31, 2006 and December 31, 2005, respectively.

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First Nine Months Results of Operations

Summary Financial Data

	Nine Months Ended September 30,						Increase (Decrease)
	2008			2007			2008 vs. 2007
($ in millions)
Results of Operations
Investment management fees	$	102.2		$	119.5		$	(17.3	)
Other revenue		41.2			50.5			(9.3	)
Total revenues		143.4			170.0			(26.6	)
Operating expenses		135.0			143.5			(8.5	)
Goodwill and intangible asset impairment		432.2			—			432.2
Intangible asset amortization		22.4			22.6			(0.2	)
Total expenses		589.6			166.1			423.5
Operating (loss) income		(446.2	)		3.9			(450.1	)
Other income (expense)		(1.8	)		0.6			(2.4	)
Interest expense, net		(1.4	)		(18.9	)		(17.5	)
Income (loss) before income taxes		(449.4	)		(14.4	)		(435.0	)
Income tax benefit		(99.5	)		(4.2	)		95.3
Net income (loss)	$	(349.9	)	$	(10.2	)	$	(339.7	)

Revenues

The decrease in revenues was primarily a result of a decrease in average assets under management due in large part to the volatility in the securities markets in the second half of 2007 and the first nine months of 2008 and net outflows of assets occurring after the third quarter of 2007. Revenues by source were as follows:

	Nine Months Ended September 30,				Increase (Decrease)
	2008		2007		2008 vs. 2007
($ in millions)
Investment management fees
Mutual funds	$	56.8	$	63.5	$	(6.7	)
Separately managed accounts		16.7		22.7		(6.0	)
Institutional accounts		15.3		18.7		(3.4	)
Structured finance products		4.2		6.0		(1.8	)
Third-party management fees		93.0		110.9		(17.9	)
PNX general account		9.2		8.6		0.6
Total investment management fees		102.2		119.5		(17.3	)
Distribution and service fees		24.3		27.1		(2.8	)
Administration and transfer agent fees		15.1		17.5		(2.4	)
Other income and fees		1.8		5.9		(4.1	)
Total revenues	$	143.4	$	170.0	$	(26.6	)

Investment Management Fees

Investment management fees decreased primarily due to a decrease in average fee earning assets under management. Average fee earning assets under management decreased primarily as a result of all products experiencing net outflows during the four quarters ending September 30, 2008 combined with market depreciation.

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Distribution and Service Fees

Distribution and service fees decreased as these fees are asset based and, therefore, reflect the decrease in our average assets under management in the first nine months of 2008 as compared the same period in the prior year. The decrease in fees was partially offset by a corresponding decrease in trail commissions, which are a component of distribution expenses (“trail commissions”). Trail commissions represent asset-based payments to our distribution partners based on a percentage of our assets under management.

Administration and Transfer Agent Fees

Administration and transfer agent fees decreased as a result of a $1.1 million decrease in fund administration fees and a $1.0 million decrease in transfer agent fees in the first nine months of 2008 as compared to the same period in 2007. Fund administration fees decreased due to the decline in the average assets under management upon which these fees are based. Transfer agent fees decreased due to a decline in the number of accounts and a change in the contract with the service provider which also reduced our cost to provide these services. Additionally, underwriting fees decreased $0.3 million due to a decrease in sales of Class-A mutual fund shares on which underwriting fees were earned.

Other Income and Fees

Other income and fees decreased primarily due to a decline in fees earned for the distribution of non-affiliated products.

Operating Expenses

Operating expenses increased primarily due to non-cash goodwill and intangible asset impairment charges recorded in the third and, to a lesser degree, first quarters of 2008. Partially offsetting this was a decrease in employment expenses resulting from lower sales-based and other incentive compensation combined with lower trail commissions and other distribution costs. Operating expenses by category were as follows:

	Nine Months Ended September 30,				Increase (Decrease)
	2008		2007		2008 vs. 2007
($ in millions)
Operating expenses
Employment expenses	$	65.8	$	72.5	$	(6.7	)
Distribution and administrative expenses		33.6		37.2		(3.6	)
Other operating expenses		35.6		33.8		1.8
Goodwill and intangible asset impairments		432.2		—		432.2
Intangible asset amortization		22.4		22.6		(0.2	)
Total operating expenses	$	589.6	$	166.1	$	423.5

Employment Expenses

Employment expenses decreased primarily due to a $7.4 million decrease in incentive compensation partially offset by a $1.2 million increase in base compensation payments. Sales-based incentive compensation decreased due to reduced mutual fund sales. Other incentive compensation decreased due to lower fee revenues in the first nine months of 2008. Base compensation increased primarily due to severance payments in 2008 partially offset by a reduction in the number of employees.

Distribution and Administrative Expenses

Distribution and administrative expenses decreased primarily due to $2.9 million in decreased asset-based expenses paid to our distribution partners, $0.4 million in reduced fees to our fund administrator, and a 0.3 million decrease in mutual fund commission amortization.

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Other Operating Expenses

Other operating expenses increased primarily as a result of a $1.7 million increase in rent resulting from vacating and/or moving office space at three of our affiliates. Additionally, increased legal, consultant and portfolio management operational costs were offset by reduced PNX chargebacks.

Goodwill and Intangible Asset Impairments

In the first quarter of 2008, a $10.5 million non-cash intangible asset impairment charge was recorded as a result of an interim impairment test of identified intangibles valued at $29.3 million. The test was triggered by our assessment that previous declines in assets and revenue supporting the intangible assets, coupled with a notice of termination from one large account, required such a test. In connection with this impairment, we also performed a test for impairment of goodwill. No such goodwill impairment was required.

In the third quarter of 2008, we recorded a $421.7 million pre-tax impairment charge related to goodwill and other intangible assets. We determined that a triggering event had occurred in the third quarter as a result of the changes in the market environment, specifically the equity market declines, a marked decrease in credit market liquidity and unprecedented government intervention in the financial markets. We performed an impairment analysis using the methodology applied in prior annual and interim testing and, given the current market conditions and the existence of impairment indicators we expanded the fair value estimations used in impairment testing to incorporate other data including third party valuation analyses obtained from our financial advisors, discounted cash flow models and market transactions. This analysis resulted in $331.7 million in goodwill and $90.0 million in intangible asset impairments. The primary drivers of the impairment were the reduction in assets under management, due to markets being at multi-year lows, and valuation multiples for asset managers also being at multi-year lows.

Intangible Asset Amortization

Amortization was down slightly due to certain intangible assets having become fully amortized during 2007.

Other Income and Expenses

Other Income (Expense), Net

Other income (expense), net decreased as the market value of our trading securities decreased in 2008 resulting in realized and unrealized losses totaling $2.4 million as compared to gains of $0.2 million in 2007. These losses were partially offset by an increase in the equity earnings of our unconsolidated holdings.

Interest Expense, Net

Interest expense, net decreased as a result of a reduction in the amount of debt outstanding during the first nine months of each year. Effective December 31, 2007, PNX forgave $325.0 million of debt by making a capital contribution to us. Also contributing, to a lesser degree, was the $12.0 million of debt repayments we made to PNX during the twelve month period ended September 30, 2008.

Income Taxes

Our income tax benefit increased from $4.2 million in the first nine months of 2007 to $99.5 million in the first nine months of 2008 primarily due to an increase in our pretax loss from $14.4 million in the first nine months of 2007 to $449.4 million in the first nine months of 2008. The significant goodwill and intangible asset impairments recorded in 2008 resulted in deferred tax benefits.

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Annual Results of Operations

Summary Financial Data

	Years Ended December 31,									Increase (Decrease)
	2007			2006			2005			2007 vs. 2006			2006 vs. 2005
($ in millions)
Results of Operations
Investment management fees	$	159.0		$	164.0		$	191.5		$	(5.0	)	$	(27.5	)
Other revenue		67.2			54.6			45.9			12.6			8.7
Total revenues		226.2			218.6			237.4			7.6			(18.8	)
Operating expenses		190.5			198.0			212.1			(7.5	)		(14.1	)
Intangible asset impairment		0.3			32.5			11.1			(32.2	)		21.4
Intangible asset amortization		30.1			32.0			33.3			(1.9	)		(1.3	)
Total expenses		220.9			262.5			256.5			(41.6	)		6.0
Operating income		5.3			(43.9	)		(19.1	)		49.2			(24.8	)
Other income (expense)		(0.3	)		1.5			(6.5	)		(1.8	)		8.0
Interest expense, net		(25.1	)		(32.0	)		(27.1	)		6.9			(4.9	)
Income (loss) before income taxes		(20.1	)		(74.4	)		(52.7	)		54.3			(21.7	)
Income tax benefit		(5.9	)		(26.8	)		(19.6	)		(20.9	)		7.2
Net income (loss)	$	(14.2	)	$	(47.6	)	$	(33.1	)	$	33.4		$	(14.5	)

Revenues

The increase in revenues during 2007 as compared to 2006 was primarily a result of an increase in mutual fund investment management, distribution and service fees resulting from higher average mutual fund assets under management. The decrease in revenues in 2006 as compared to 2005 was primarily due to significant redemptions of separately managed accounts and the loss of several institutional clients. This decrease was partially offset by increased distribution and service fees due to higher mutual fund assets under management resulting, in part, from the acquisition of the Insight Funds in May 2006. Revenues by source were as follows:

	Years Ended December 31,						Increase (Decrease)
	2007		2006		2005		2007 vs. 2006			2006 vs. 2005
($ in millions)
Investment management fees
Mutual funds	$	84.9	$	76.3	$	71.1	$	8.6		$	5.2
Separately managed accounts		29.5		35.7		52.4		(6.2	)		(16.7	)
Institutional accounts		24.9		34.1		49.9		(9.2	)		(15.8	)
Structured finance products		8.1		8.0		8.7		0.1			(0.7	)
Third-party management fees		147.4		154.1		182.1		(6.7	)		(28.0	)
PNX general account		11.6		9.9		9.4		1.7			0.5
Total investment management fees		159.0		164.0		191.5		(5.0	)		(27.5	)
Distribution and service fees		36.5		29.8		25.6		6.7			4.2
Administration and transfer agent fees		23.3		19.8		16.2		3.5			3.6
Other income and fees		7.4		5.0		4.1		2.4			0.9
Total revenues	$	226.2	$	218.6	$	237.4	$	7.6		$	(18.8	)

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Investment Management Fees

Year ended December 31, 2007 compared to year ended December 31, 2006. Investment management fees decreased primarily due to a decline in fees earned on separately managed accounts and institutional accounts. These fees decreased due to net outflows of assets resulting from underperforming large cap growth strategies that have since been largely redeemed and also due to a one-time final accelerated $5.2 million fee in 2006 from an early termination of an institutional contract. This decrease was partially offset by an increase in mutual fund investment management fees, as we earned fees from the Insight Funds for the full year in 2007 as compared to only a post-adoption partial year in 2006. Additionally, fees earned from managing closed-end funds increased $2.6 million due to secondary or preferred offerings as well as market appreciation. Fees earned from managing PNX’s general account increased $1.7 million primarily due to a change in the fee structure.

Year ended December 31, 2006 compared to year ended December 31, 2005. Investment management fees decreased, despite an increase in average assets under management, as a majority of the increased assets were in lower fee products. In May 2006, with the adoption of the Insight Funds, money market assets, a lower fee product, increased by $7.0 billion. Along with an increase in other mutual fund assets under management, both open-end and closed-end, mutual funds management fees increased $5.2 million year-over-year. However, for assets under management in other asset classes, particularly in separately managed accounts and in institutional accounts, net flows were negative, more than offsetting market appreciation and resulting in a $27.5 million overall decrease in management fees.

Distribution and Service Fees

Year ended December 31, 2007 compared to year ended December 31, 2006. Distribution and service fees for open-end mutual funds are earned based upon average assets under management. Average mutual fund assets increased by 25% from 2006 to 2007 in large part due to the adoption of the Insight Funds in May 2006.

Year ended December 31, 2006 compared to year ended December 31, 2005. Distribution and service fees increased as a result of a 23% increase in average mutual fund assets under management. The increase was primarily due to the adoption of the Insight Funds in May 2006.

Administration and Transfer Agent Fees

Year ended December 31, 2007 compared to year ended December 31, 2006. Administration and transfer agent fees represent payments made to us for fund administration and transfer agent services provided. Fund administration fees increased by $2.8 million, while transfer agent fees increased by $0.5 million. Due to the increase in average assets under management resulting primarily from the adoption of the Insight Funds, transfer agent fees also increased, as they are earned based on the number of accounts. Underwriting fees increased $0.3 million due to an increase in sales on which these fees are earned.

Year ended December 31, 2006 compared to year ended December 31, 2005. Fund administration fees increased by $3.6 million as a result of the adoption of the Insight Funds. Transfer agent fees increased $0.7 million due to the increase in shareholder accounts related to the partial year impact of the Insight Funds adoption.

Other Income and Fees

Year ended December 31, 2007 compared to year ended December 31, 2006. Other income and fees increased primarily as a result of increased sales of non-affiliated products for which we earned distribution income. In addition, $1.0 million received in 2007 related to the issuance of a structured product.

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Year ended December 31, 2006 compared to year ended December 31, 2005. Other income and fees increased primarily due to the initial sales of non-affiliated products, partially offset by reduced brokerage commissions earned.

Operating Expenses

Operating expenses decreased in 2007 as compared to 2006, primarily as a result of a non-cash intangible asset impairment charge of $32.5 million recorded in 2006 as compared to a $0.3 million impairment in 2007. In addition, certain employment charges, including staff reductions, and lease related charges totaling $13.6 million associated with the restructuring of the business in 2006 did not recur in 2007. In 2006 as compared to 2005, operating expenses increased primarily as a result of a $32.5 million intangible asset impairment recognized in 2006 as compared to a $11.1 million charge in 2005. Both years had restructuring charges: $13.6 million in 2006 and $12.5 million in 2005. Employment expenses decreased $12.7 million in 2006 because of reduced staff levels resulting in part from the 2005 restructuring and also due to reduced variable compensation. Operating expenses by category were as follows:

	Years Ended December 31,						Increase (Decrease)
	2007		2006		2005		2007 vs. 2006			2006 vs. 2005
($ in millions)
Operating expenses
Employment expenses	$	94.9	$	97.7	$	110.4	$	(2.8	)	$	(12.7	)
Distribution and administrative expenses		50.1		41.3		35.8		8.8			5.5
Other operating expenses		45.5		45.4		53.4		0.1			(8.0	)
Restructuring and severance		—		13.6		12.5		(13.6	)		1.1
Intangible asset impairment		0.3		32.5		11.1		(32.2	)		21.4
Intangible asset amortization		30.1		32.0		33.3		(1.9	)		(1.3	)
Total operating expenses	$	220.9	$	262.5	$	256.5	$	(41.6	)	$	6.0

Employment Expenses

Year ended December 31, 2007 compared to year ended December 31, 2006. Employment expenses decreased to $94.9 million from $97.7 million, primarily as a result of a decrease in staffing levels as part of the restructuring that occurred in 2006. Base salaries decreased by $8.8 million, partially offset by increased incentive compensation paid on higher mutual fund sales in 2007. In 2006, $2.6 million of incentive compensation was recorded relating to an accelerated fee from the early termination of an institutional contract which did not recur in 2007. Other employment expenses, including employee related charges such as benefits and payroll taxes, decreased by $1.0 million primarily as a result of the reduced compensation, partially offset by an increase in human resource administration costs.

Year ended December 31, 2006 compared to year ended December 31, 2005. Employment expenses decreased to $97.7 million from $110.4 million primarily due to a decrease in base salaries related to the reduction in the number of employees as part of the restructuring that occurred in both 2005 and 2006. Additionally, a decrease in performance-based compensation was primarily driven by lower investment management fees upon which this compensation was based.

Distribution and administrative expenses

Year ended December 31, 2007 compared to year ended December 31, 2006. Distribution and administrative expenses increased, due primarily to an increase in trail commissions related to an increase in mutual fund assets under management. Other distribution-related costs and costs associated with fund accounting of the mutual funds increased primarily due to the adoption of the Insight Funds, which increased both sales and assets under management.

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Year ended December 31, 2006 compared to year ended December 31, 2005. Distribution and administrative expenses increased, due primarily to an increase in trail payments and fund accounting costs related to the adoption of the Insight Funds.

Other Operating Expenses

Year ended December 31, 2007 compared to year ended December 31, 2006. Other operating expenses consist primarily of computer services, professional fees, investment research fees, travel, training, entertainment, portfolio management operational costs and other office and corporate expenses including items such as rent, insurance, printing and general taxes. The services provided by PNX are detailed in the related party note, Note 15, to our consolidated financial statements in this information statement.

Other operating expenses were basically unchanged from 2006 to 2007 as management focused on controlling costs. Increases in investment research fees, portfolio management operational costs and printing were offset by decreases in outside services, insurance, consultants and professional fees.

Year ended December 31, 2006 compared to year ended December 31, 2005. Operating expenses decreased primarily as a result of the 2006 restructuring. Rent, marketing costs, consulting fees, computer services, clearance costs, insurance and outside services were reduced, more than offsetting increases in communications costs and investment research fees.

Restructuring and Severance

In 2005, we initiated a significant restructuring program. Specifically, the Company: (i) streamlined its operating structure from being a collection of majority-owned and wholly owned affiliated firms into a single business of affiliated managers with common distribution and support operations, (ii) eliminated redundant functions and management layers, (iii) took actions to restructure its product portfolio focusing on mutual fund products, and (iv) repositioned its distribution strategy with an increased focus on retail mutual fund distribution. The Company had not undertaken changes of a similar magnitude at any time prior to or since 2006 and does not expect to do so in the future. These actions resulted in costs totaling $26.1 million, of which $12.5 million were recognized in 2005 and $13.6 million in 2006.

The charges were primarily related to actions taken at several of our affiliated asset managers. Charges at SCM totaled $12.0 million, primarily comprised of $7.8 million of one-time severance payments and $3.5 million of vacated office space. Charges at EAM were comprised of $9.5 million in connection with terminating its large-cap strategy. The primary components of the charges at EAM included $5.0 million of severance payments and $2.6 million of vacated office space. We incurred $2.8 million of charges at KAR, including $1.6 million of severance payments. Another charge of $1.8 million was primarily related to reconfiguring investment strategies of the Duff and Phelps investment teams largely to focus that firm on its core strengths.

Intangible Asset Impairment

Year ended December 31, 2007 compared to year ended December 31, 2006. In 2007 and 2006, we recorded impairment charges of $0.3 million and $32.5 million, respectively. Each of the impairments was the result of the loss during those years of a significant portion of the revenues supporting identifiable intangible assets.

Year ended December 31, 2006 compared to year ended December 31, 2005. In 2006 and 2005 we recorded impairment charges of $32.5 million and $11.1 million, respectively. The impairments in each year were the result of the loss of a significant portion of the revenues supporting identifiable intangible assets.

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Intangible Asset Amortization

Year ended December 31, 2007 compared to year ended December 31, 2006. Intangible asset amortization is recognized on our definite-lived intangible assets on a straight-line basis over the estimated remaining lives of those assets. Amortization decreased primarily as a result of the impairment recorded in 2006.

Year ended December 31, 2006 compared to year ended December 31, 2005. Amortization decreased primarily as a result of the impairment recorded in 2005.

Other Income and Expenses

Other Income (Expense), Net

Year ended December 31, 2007 compared to year ended December 31, 2006. Other income (expense), net decreased. We hold investments in certain affiliated mutual funds and institutional accounts that are classified as trading securities. Changes in the market value of these investments are included in other income (expense). The difference between the cost and the market value of these holdings decreased by $2.6 million as compared to a $0.7 million increase in the prior year, or a net $3.3 million increase in the unrealized loss year over year. Partially offsetting this increase in the unrealized loss was an increase of $1.2 million in realized gains on securities in 2007 as compared to 2006.

Year ended December 31, 2006 compared to year ended December 31, 2005. Other income (expense), net increased. In 2005, the Company acquired the remaining minority interests in certain of its asset management subsidiaries. The minority interest recorded in 2005 until the time of these final acquisitions was $6.7 million. Changes in the market value of its trading securities gained $0.7 million in 2006 as compared to a loss of $1.2 million in 2005, a net $1.9 million increase in 2006 over 2005. Changes in other income and expense items resulted in a $0.7 million decrease.

Interest Expense, Net

Year ended December 31, 2007 compared to year ended December 31, 2006. Interest expense, net is mainly comprised of interest expense on the intercompany debt owed by us to PNX, but also includes interest and dividend income earned. Interest expense in 2007 was lower by $3.4 million as compared to 2006 due to lower interest rates of variable rate notes as well as lower renegotiated fixed interest rates. The $57.2 million remaining portion of a promissory note agreement with a subsidiary’s minority members to finance the remainder of that subsidiary’s acquisition was paid in early 2007 thereby reducing interest expense by $2.8 million in 2007. The $25.0 million outstanding on an unsecured revolving credit facility with outside lenders was repaid in 2006 further reducing interest expense by $0.5 million in 2007. Interest and dividend income increased to $1.6 million in 2007 from $1.5 million in 2006.

Year ended December 31, 2006 compared to year ended December 31, 2005. The increase was primarily the result of an increase in the interest rate on one of the debt agreements with PNX, which increased interest expense by $3.0 million, and the promissory note with a subsidiary’s minority members that was entered into in mid-year 2005, increasing interest expense by $2.0 million in 2006. Interest and dividend income decreased to $1.5 million in 2006 from $1.6 million in 2005.

Income Tax Expense

Year ended December 31, 2007 compared to year ended December 31, 2006. Our income tax benefit decreased from $26.8 million in 2006 to $6.0 million in 2007 primarily due to a decrease in our pretax loss from $74.4 million in 2006 to $20.1 million in 2007. The rate of our income tax benefit decreased from 36% to 30% primarily due to a shift in income between certain affiliates which significantly impacted state taxes as the shift was to affiliates in higher tax jurisdictions. As of December 31, 2007, we had deferred tax assets of $38.8 million and $0.4 million related to net operating and capital losses, respectively, for federal income tax purposes and $9.8 million for state net operating losses. The related federal net operating loss carryovers were $110.9 million,

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and the related federal capital loss carryovers were $1.0 million. However, due to certain tax rules relating to the treatment of losses in connection with a spin-off, all or a portion of the related net operating loss and capital loss carryovers may not be available to the Company following the spin-off. To the extent such losses are generally available to the Company following the spin-off, the related federal net operating loss carryovers of $110.9 million are scheduled to expire between the years 2023 and 2027, and the related federal capital loss carryovers of $1.0 million are scheduled to expire in 2010 and 2012. The state net operating losses of $118.7 million are scheduled to expire as follows: $0.2 million in 2007; $59.6 million in 2008 through 2017 and $58.9 million in 2018 through 2026. We have established a $9.8 million valuation allowance at December 31, 2007, relative to the state deferred tax assets.

Year ended December 31, 2006 compared to year ended December 31, 2005. Our income tax benefit increased from $19.6 million in 2005 to $26.8 million in 2006 primarily due to an increase in our pretax loss from $52.7 million in 2005 to $74.4 million in 2006. Our effective tax rate was relatively unchanged between the two years. As of December 31, 2006, we had deferred tax assets of $31.5 million and $0.3 million related to net operating and capital losses, respectively, for federal income tax purposes and $9.8 million for state net operating losses. We have established a $9.8 million valuation allowance at December 31, 2007, relative to the state deferred tax assets.

Effects of Inflation

For the first nine months of 2008 and the years 2007, 2006 and 2005, inflation did not have a material effect on our consolidated results of operations.

Supplemental Performance Measure

As supplemental information, we provide a non-GAAP performance measure that we refer to as adjusted net income. This measure is provided in addition to, but not as a substitute for, net income determined in accordance with GAAP. Adjusted net income is defined as net income (loss) plus amortization and impairments of intangible assets, impairments of goodwill, and deferred taxes related to those assets. We consider adjusted net income an important measure of our financial performance as we believe it most accurately represents the operating performance of the Company adjusted for non-cash expenses related to acquisitions. We consider this non-GAAP financial measure to be useful to investors because it is an important metric in measuring economic performance of asset management companies, as an indicator of value and because it facilitates comparison of our operating results with the results of other asset management firms that have not engaged in significant acquisitions. Adjusted net income is also used by the Company as one of the inputs for calculating performance-based incentives.

In calculating adjusted net income we added back amortization and impairments attributable to acquisition related intangible assets, such as management contracts, to adjusted net income to reflect the fact that these non-cash expenses make it difficult to compare our operating results with the results of other asset management firms that have not engaged in significant acquisitions. Because goodwill and indefinite-lived assets are not amortized under GAAP, and since they generate deferred tax expenses that typically do not reverse, we added back these non-cash expenses, and their related tax attributes, to net income to measure operating performance. We added back impairments on intangible assets and goodwill to reflect that these non-cash items makes it difficult to compare our operating results with the results of other asset management firms that have not engaged in significant acquisitions.

Adjusted net income is one of the key measures we analyze in managing our business. Additionally, we believe that adjusted net income is a measure that is useful to investors because it identifies the earnings of the ongoing operations of our business. Adjusted net income is not a substitute for net income or measures that are derived in accordance with GAAP and may differ from similarly titled measures of other companies. We encourage investors to review and consider GAAP net income, as well as adjusted net income, in evaluating the results of our operations.

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The following tables provide reconciliations of net income (loss) to adjusted net income:

	Nine Months Ended September 30,						Increase/(Decrease)
	2008			2007			2008 vs 2007
($ in millions)
Net Income (Loss)	$	(349.9	)	$	(10.2	)	$	(339.7	)
Add back:
Amortization of intangible assets		22.4			22.6			(0.2	)
Goodwill and intangible asset impairment		432.2			—			432.2
Goodwill and intangible asset related deferred taxes		(91.1	)		1.1			(92.2	)