Federated Investors' Mutual Fund to Acquire $200 Million in Equity Assets from Mason Street Fund

(Pittsburgh, Pa., 12/14/2005 10:12 AM) — Federated Investors, Inc. (NYSE: FII), one of the nation's largest investment managers, announced today that a definitive agreement was reached among Federated Investors, Inc., Northwestern Mutual and Mason Street Advisors, LLC, a wholly-owned company of Northwestern Mutual. The agreement relates to the proposed acquisition of approximately $200 million in mutual fund assets by Federated Mid-Cap Index Fund from Mason Street Index 400 Stock Fund. The financial terms of the definitive agreement were not disclosed. The announcement was made by J. Christopher Donahue, president and CEO of Federated Investors.

The boards of directors of the Federated funds and the Mason Street funds unanimously approved the planned transaction, which is now subject to the approval of Mason Street fund shareholders. It is anticipated that the Mason Street fund shareholder meeting to approve these transactions will be held in March 2006.

"Federated's Mid-Cap Index Fund is an excellent option for our Index 400 shareholders," said Mark Doll, president of Mason Street Funds. "The Federated Mid-Cap Index Fund has the same investment objective, solid history of investment performance and lower expenses than our Mason Street Index 400 Stock Fund, all of which will be available to our shareholders."

"Acquisitions like this one with Mason Street enable Federated to grow our assets under management and allow Mason Street shareholders to leverage Federated's investment expertise, competitive performance and product breadth," Donahue said.

A proxy related to the transaction will be filed with the U. S. Securities and Exchange Commission on or before Dec. 30, 2005.

The deal represents Federated's fourth acquisition of stock or bond fund assets in the last two years. Additionally, Federated acquired the $19.3 billion cash management business of Alliance Capital Management L.P. during Q1 and Q2 2005.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing more than $207 billion in assets as of Sept. 30, 2005. With 138 mutual funds, various separately managed accounts and closed-end funds, Federated provides comprehensive investment management to nearly 5,600 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top two percent of money market fund managers in the industry and the top six percent of both fixed-income and equity fund managers.1 For more information, visit FederatedInvestors.com.

Mason Street Advisors, LLC, a wholly-owned company of Northwestern Mutual, is a federally registered investment adviser, providing investment management services to corporate, charitable and retirement accounts and mutual funds. Mason Street Advisors manages over $71 billion in assets and provides investment advisory services to Northwestern Mutual, the Northwestern Mutual Series Fund and affiliates. As of Sept. 30, 2005, the Mason Street Funds had $1.9 billion in assets. For more information on the Mason Street Family of Funds, please visit www.masonstreetfunds.com.

Northwestern Mutual, the nation's leading provider of individual life insurance according to the American Council of Life Insurers, has always received the highest possible ratings for financial strength from Standard & Poor's, Moody's, Fitch and A. M. Best. In addition to life insurance, the company, its subsidiaries and affiliates are also providers of annuities, mutual funds, long-term care insurance and disability income insurance. These products and services are distributed through the Northwestern Mutual Financial Network and its financial representatives nationwide. For more information, please visit www.nmfn.com.


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