SEI Investments Company (NASDAQ:SEIC) Q1 2022 Earnings Conference Call April 20, 2022 4:30 PM ET Company Participants Al West - Chairman and Chief Executive Officer Ryan Hicke - Executive Vice President Dennis McGonigle - Chief Financial Officer Al Chiaradonna – Senior Vice President, SEI Wealth Platform Phil McCabe - Head of Investment Manager Services Wayne Withrow - Executive Vice President, Independent Advisor Solutions Paul Klauder - Executive Vice President, Head of the Institutional Group Conference ...

PART I [Item 1. Business.](index=4&type=section&id=Item%201.%20Business.) SEI provides global technology and investment solutions, managing approximately $1.3 trillion in assets across five core business segments - SEI manages, advises, or administers approximately **$1.3 trillion** in assets globally, serving a broad range of client types including top U.S. banks and investment managers worldwide[18](index=18&type=chunk) - Key strategies include focusing on converging market needs, enhancing existing capabilities with a 'One SEI' approach, investing in talent, and expanding global presence[19](index=19&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) - The business model emphasizes turning challenges into opportunities, driving mutual growth, engaging clients and employees, and leveraging financial strength, characterized by scalable businesses, recurring revenues, and strong cash flow[21](index=21&type=chunk)[22](index=22&type=chunk) [Corporate Overview](index=4&type=section&id=Corporate%20Overview) SEI delivers technology and investment solutions, managing $1.3 trillion in assets globally through five business segments - SEI provides technology and investment solutions, encompassing investment processing, operations, and asset management, to a diverse client base[17](index=17&type=chunk) - The company has **five business segments**, with Investments in New Businesses focusing on R&D for new initiatives[18](index=18&type=chunk) - SEI manages, advises, or administers approximately **$1.3 trillion** in assets, with global service centers[18](index=18&type=chunk) [Mission and Strategy](index=4&type=section&id=Mission%20and%20Strategy) SEI's strategy focuses on meeting converging client needs, enhancing capabilities, investing in talent, and expanding its global footprint - SEI's mission is to build brave futures through the power of connection, aiming to meet emerging and converging client needs and increase shareholder value[19](index=19&type=chunk) - Key strategies include addressing converging markets and client needs, enhancing existing capabilities through a 'One SEI' approach for aggregated data and modular solutions, investing in talent, and expanding its global footprint[19](index=19&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) [Business Model](index=5&type=section&id=Business%20Model) SEI's business model is built on four critical elements to drive long-term, sustainable growth with recurring revenues - SEI's growth strategies are anchored in a proven business model with four critical elements: turning challenges into opportunities, driving mutual growth, meaningfully engaging clients and employees, and leveraging financial strength[21](index=21&type=chunk)[22](index=22&type=chunk) - The company focuses on long-term, sustainable revenue and earnings growth, maintaining a strong balance sheet, investing in R&D, and favoring scalable businesses that generate recurring revenues and predictable cash flows[22](index=22&type=chunk) [Other Competitive Advantages](index=5&type=section&id=Other%20Competitive%20Advantages) Competitive advantages stem from integrated solutions, a 'One SEI' approach, a dynamic workforce, and new solution development - SEI is uniquely positioned in the wealth and investment management industry, providing critical capabilities across technology, operations, and asset management, delivered standalone or as comprehensive solutions[22](index=22&type=chunk) - The 'One SEI' approach leverages company assets, especially technology, as modular components across multiple market segments, enhancing operating leverage and driving service quality and product innovation[22](index=22&type=chunk) - Commitment to new solutions includes SEI Sphere for cybersecurity and SEI Ventures for corporate venture capital, aiming for longer-term growth opportunities[23](index=23&type=chunk) [Core Capabilities](index=7&type=section&id=Core%20Capabilities) Core capabilities include technology services, investment operations, and asset management, combined into outsourced solutions - SEI combines technology services, investment operations, and asset management into tailored outsourced solutions[24](index=24&type=chunk) - Technology and operations services include advanced platforms for asset management, wealth advisory, administration, processing, infrastructure, and cybersecurity[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - Asset management solutions provide comprehensive programs for personal and institutional wealth, including investment strategies, customized programs, and SEI-sponsored products[28](index=28&type=chunk)[29](index=29&type=chunk) [Principal Business Platforms and Revenue Recognition](index=7&type=section&id=Principal%20Business%20Platforms%20and%20Revenue%20Recognition) SEI's principal platforms enable modular service delivery, with revenues recognized from SaaS fees and asset-based percentages - SEI's principal business platforms (Investment Processing, Investment Operations, Investment Management) are foundational for its 'One SEI' modularization strategy[30](index=30&type=chunk) - Investment processing revenues are from application software, BPO, professional, and transaction-based services, recognized as information processing and software servicing fees[30](index=30&type=chunk) - Investment operations and management revenues are primarily earned as a percentage of net assets under administration or management, recognized as asset management, administration, and distribution fees[31](index=31&type=chunk)[32](index=32&type=chunk) Assets Under Management (as of December 31, 2021) | Asset Type | Amount (Billions USD) | | :--- | :--- | | Fixed-income and equity funds & SMAs | $201.8 | | Collective trust fund programs | $92.6 | | Liquidity or money market funds | $11.8 | | **Total SEI-managed assets** | **$306.2** | | LSV Asset Management (unconsolidated)| $99.0 | [Human Capital](index=9&type=section&id=Human%20Capital) SEI employed 4,406 people as of January 2022, emphasizing a diverse workforce and professional development - As of January 31, 2022, SEI had **4,371 full-time and 35 part-time employees**, none of whom are unionized[33](index=33&type=chunk) - SEI is committed to creating an inclusive workforce and culture, valuing diversity of thought and talent[34](index=34&type=chunk) - The company provides multiple tools for employee growth and professional development, including new programs, learning content, and a comprehensive learning platform[35](index=35&type=chunk) [Diversity and Inclusion](index=9&type=section&id=Diversity%20and%20Inclusion) SEI is dedicated to fostering an inclusive culture, recognizing diversity as crucial for meeting client needs - SEI is committed to creating and maintaining an inclusive workforce and culture, believing diversity of thought and talent is imperative for addressing market and client needs[34](index=34&type=chunk) - The company values contributions from diverse backgrounds, experiences, and ideas, and is an equal opportunity employer[34](index=34&type=chunk) [Training and Development](index=9&type=section&id=Training%20and%20Development) SEI supports employee growth through various training tools, including a comprehensive online learning platform and specialized programs - SEI provides multiple tools for employee growth and professional development, including new programs and a comprehensive learning platform[35](index=35&type=chunk) - The Design Thinking program fosters creativity and innovation, while the Gallup CliftonStrengths assessment helps employees understand and build upon their unique strengths[36](index=36&type=chunk) [Leadership Development](index=9&type=section&id=Leadership%20Development) Leadership development includes programs for emerging leaders, initiatives for advancing women, and support for recent graduates - The '5-15 Leadership Program' brings together emerging and experienced leaders to learn, grow, and develop a leadership mindset while working on key business topics[37](index=37&type=chunk)[38](index=38&type=chunk) - The 'Get, Grow, Keep' global initiative aims to develop clear paths for women's advancement, improving attraction, development, and retention of female employees[38](index=38&type=chunk) - Associates and Internship programs equip recent graduates with tools and development opportunities for successful careers at SEI[39](index=39&type=chunk) [Employee Affinity Groups](index=10&type=section&id=Employee%20Affinity%20Groups) SEI supports employee-led affinity groups that foster positive change and advocacy within communities - SEI supports employee-led affinity groups that make a meaningful, positive impact on communities and advocate for diversity initiatives[40](index=40&type=chunk) - These groups are self-created, self-run, and self-sustained with a global reach, each following a specified mission[40](index=40&type=chunk) - Examples include the SEI Black Professionals Network, SEI Cares, SEI Diversity, SEI Green Team, SEI Salutes, SEI Women's Network, and Wellness Team[45](index=45&type=chunk) [Workplace Health and Safety](index=10&type=section&id=Workplace%20Health%20and%20Safety) SEI prioritizes workforce health and safety, implementing a multi-phased return-to-office plan in response to COVID-19 - Workplace health and safety is a top priority, with a multi-phased return-to-office plan implemented in response to the COVID-19 pandemic[41](index=41&type=chunk) - Measures include following local and national governmental guidance, restructuring floor plans for physical distancing, and implementing various health and safety protocols[41](index=41&type=chunk)[43](index=43&type=chunk) - Expanded health and wellness benefits were introduced to help employees cope with COVID-19 impacts, including a microsite for information, child care reimbursement, expanded paid time off, and mental health resources[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) [Sustainability](index=11&type=section&id=Sustainability) SEI is formalizing its sustainability efforts by integrating ESG considerations into its investment approach and operations - SEI is formalizing and building upon its sustainability efforts, considering ESG impacts on business risk and future growth[48](index=48&type=chunk) - Sustainable investing capabilities are underpinned by manager research, providing in-depth ESG analysis of managers and developing sustainable investing solutions for clients[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Environmental sustainability efforts include managing greenhouse gas emissions, waste, and benefiting local watersheds, as well as joining Climate Action 100+[52](index=52&type=chunk)[53](index=53&type=chunk) [Business Segments Overview](index=11&type=section&id=Business%20Segments%20Overview) SEI's five business segments are organized by target market, with Investment Managers being the largest revenue contributor in 2021 - SEI's business segments are organized around target markets: Private Banks, Investment Advisors, Institutional Investors, Investment Managers, and Investments in New Businesses[54](index=54&type=chunk) - Each segment offers specialized outsourced investment processing, investment management, and administrative platforms[54](index=54&type=chunk) Percentage of Consolidated Revenues by Business Segment | Segment | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Private Banks | 26 % | 27 % | 28 % | | Investment Advisors | 25 % | 24 % | 24 % | | Institutional Investors | 18 % | 19 % | 20 % | | Investment Managers | 30 % | 29 % | 27 % | | Investments in New Businesses | 1 % | 1 % | 1 % | | **Total** | **100 %**| **100 %**| **100 %**| [Private Banks](index=12&type=section&id=Private%20Banks) This segment offers outsourced investment processing and management solutions to wealth managers globally - The Private Banks segment provides outsourced investment processing and management solutions to institutional and private-client wealth managers globally[56](index=56&type=chunk) - Solutions are enabled by the SEI Wealth Platform (SWP) and TRUST 3000, offering integrated technology, operational outsourcing, and asset management[58](index=58&type=chunk) - Contracts for services generally range from **five to seven years**, with **108 significant client relationships** as of December 31, 2021[59](index=59&type=chunk) [Investment Advisors](index=12&type=section&id=Investment%20Advisors) This segment delivers wealth management technology and investment solutions to independent financial advisors in the U.S - The Investment Advisors segment provides wealth management technology and investment solutions to independent financial advisors in the U.S[63](index=63&type=chunk) - The flexible operating platform offers end-to-end business, technology, and operational solutions, including front, middle, and back-office capabilities[64](index=64&type=chunk) - Revenues are primarily earned as a percentage of average daily assets under management, with approximately **7,500 financial advisor relationships** as of December 31, 2021[64](index=64&type=chunk)[65](index=65&type=chunk) [Institutional Investors](index=13&type=section&id=Institutional%20Investors) This segment offers Outsourced CIO (OCIO) and Enhanced CIO (ECIO) solutions to institutional clients globally - The Institutional Investors segment provides OCIO solutions and ECIO platforms to institutional investors globally[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - Solutions leverage SEI's comprehensive capabilities to help clients make confident decisions, achieve greater control, reduce risk, and improve efficiencies[67](index=67&type=chunk) - In 2021, SEI acquired Atlas Master Trust and Novus Partners to expand its presence and integrate global portfolio intelligence capabilities[70](index=70&type=chunk) [Investment Managers](index=14&type=section&id=Investment%20Managers) This segment provides investment operations outsourcing solutions to fund companies and investment managers worldwide - The Investment Managers segment offers investment operations outsourcing solutions to a global market, including fund companies, banking institutions, and investment managers[73](index=73&type=chunk) - Capabilities include data and information management, investment operations, regulatory and compliance support, fund administration, and multi-asset class accounting via SEI's Archway Platform[75](index=75&type=chunk)[77](index=77&type=chunk) - Contracts for fund administration outsourcing generally range from **three to five years**, with fees primarily earned as a percentage of assets under management and administration[78](index=78&type=chunk) [Investments in New Businesses](index=14&type=section&id=Investments%20in%20New%20Businesses) This segment focuses on developing new ventures and R&D activities to expand SEI's solutions into new markets - This segment focuses on new business ventures and R&D to expand solutions to new or existing markets, including ultra-high-net-worth families[80](index=80&type=chunk) - Initiatives include cybersecurity and IT solutions via SEI Sphere and modularization of larger technology platforms for wealth management and investment processing[81](index=81&type=chunk) - The family wealth management solution offers flexible, personalized family-office type services with a goals-based investment process[82](index=82&type=chunk) [Research and Development](index=15&type=section&id=Research%20and%20Development) SEI dedicates significant resources to R&D, primarily for technology platforms and new investment products - SEI devotes significant resources to R&D for new technology platforms, enhancements to existing ones, and new investment products and services[83](index=83&type=chunk) - The majority of R&D spending is related to adding capabilities to the SEI Wealth Platform (SWP), which serves as the technology infrastructure for Private Banks and Investment Advisors segments[83](index=83&type=chunk) Research and Development Expenditures | Metric | 2021 (in thousands) | 2020 (in thousands) | 2019 (in thousands) | | :--- | :--- | :--- | :--- | | Research and development expenditures | $168,519 | $175,456 | $163,008 | | Capitalization of costs incurred in developing computer software | $26,037 | $24,119 | $34,074 | | R&D expenditures as a percentage of revenues| 8.8 % | 10.4 % | 9.9 % | [Marketing and Sales](index=15&type=section&id=Marketing%20and%20Sales) SEI directly markets its business platforms globally through a dedicated sales force - SEI directly markets its business platforms to potential clients in target markets[85](index=85&type=chunk) - As of January 31, 2022, the company employed approximately **100 sales representatives** globally[85](index=85&type=chunk) [Customers](index=15&type=section&id=Customers) The company maintains a diversified customer base with no single customer accounting for more than 10% of revenues - In 2021, **no single customer accounted for more than 10% of revenues** in any business segment, indicating a diversified customer base[86](index=86&type=chunk) [Regulatory Considerations](index=15&type=section&id=Regulatory%20Considerations) SEI operates through regulated subsidiaries, facing risks from extensive and evolving U.S. and foreign regulations - SEI conducts operations through several regulated wholly-owned subsidiaries, subject to extensive and changing legislation, regulation, and supervision by U.S. and foreign authorities[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - Non-compliance can lead to sanctions, fines, business limitations, and reputational harm, with increased governmental scrutiny in recent years[90](index=90&type=chunk)[91](index=91&type=chunk) - The company must comply with anti-money laundering, economic sanctions, and privacy/data protection laws (e.g., GDPR, CCPA), incurring substantial compliance costs and risks[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [Item 1A. Risk Factors.](index=18&type=section&id=Item%201A.%20Risk%20Factors.) SEI faces risks from capital markets, product development, competition, technology, investment performance, and regulations - Revenues and earnings are highly sensitive to capital market changes and financial instrument values, with decreases in assets under administration/management directly impacting financial results[101](index=101&type=chunk) - Significant risks include product development challenges, reliance on third-party providers, intense pricing pressure from competition and disruptive technology, and the performance of unconsolidated affiliates like LSV[102](index=102&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk)[112](index=112&type=chunk) - Cybersecurity threats, data breaches, system outages, and intellectual property risks pose significant challenges to technology infrastructure and client data security[116](index=116&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - The financial services industry's extensive and evolving regulatory environment, including anti-money laundering, sanctions, and data privacy laws, presents substantial compliance costs and litigation risks[135](index=135&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk)[141](index=141&type=chunk)[147](index=147&type=chunk) - General business risks include the effectiveness of management strategies, challenges in integrating acquisitions, operational failures, and the ability to attract and retain skilled employees, exacerbated by global events like COVID-19 and geopolitical unrest[148](index=148&type=chunk)[151](index=151&type=chunk)[159](index=159&type=chunk)[163](index=163&type=chunk)[181](index=181&type=chunk)[187](index=187&type=chunk) [Risks Related to Our Business Model](index=18&type=section&id=Risks%20Related%20to%20Our%20Business%20Model) Business model risks include capital market fluctuations, product development challenges, pricing pressure, and affiliate performance - A majority of SEI's revenues are based on assets under management or administration, making them **vulnerable to changes in capital markets** and financial instrument values[101](index=101&type=chunk) - Product development risk exists due to the need for continuous innovation, timely delivery, and client acceptance of new products and services, with potential for significant financial losses if unsuccessful[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - Reliance on third parties for products and services (e.g., software development, cloud services) introduces risks of inadequate or untimely service, potentially causing errors or failures[107](index=107&type=chunk)[108](index=108&type=chunk) - The investment management industry is **highly competitive**, leading to pricing pressures from lower-priced products, passive investing, and technological innovations[109](index=109&type=chunk) - SEI's earnings and cash flows are significantly affected by the performance of its minority-owned affiliate, **LSV Asset Management**[112](index=112&type=chunk) [Risks Related to Our Technology](index=21&type=section&id=Risks%20Related%20to%20Our%20Technology) Technology risks include data and cybersecurity threats, system outages, data losses, and intellectual property protection - SEI experiences **millions of daily cyber-attacks** and faces significant data and cybersecurity risks from various sources, including organized crime, hackers, and internal errors[116](index=116&type=chunk) - Successful cyber-attacks or information breaches could lead to operational disruptions, data misappropriation, financial losses, reputational damage, and regulatory scrutiny[117](index=117&type=chunk)[118](index=118&type=chunk) - The company is exposed to risks of outages, data losses, and disruptions of services, which could diminish product quality and lead to contractual liability or reputational harm[124](index=124&type=chunk) - Protecting proprietary technology and defending against infringement claims are crucial, as the industry is characterized by frequent intellectual property litigation[125](index=125&type=chunk) - Dependence on third-party service providers for operations increases the risk of operational failures and potential financial losses or regulatory sanctions[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) [Risks Related to Our Investment Products and Solutions](index=24&type=section&id=Risks%20Related%20to%20Our%20Investment%20Products%20and%20Solutions) Investment product risks include poor performance, contract terminations, and reliance on third-party sub-advisers and services - **Poor investment performance** of SEI's products or client preference for lower-fee products can lead to asset outflows and reduced management fees[130](index=130&type=chunk) - Investment advisory contracts can be terminated or not renewed on favorable terms, potentially reducing fees and assets under management[131](index=131&type=chunk) - Reliance on third-party sub-advisers introduces risks of financial loss, regulatory sanctions, or reputational damage due to their performance, errors, or non-compliance[132](index=132&type=chunk) - Dependence on third-party approvals for distributing investment offerings and third-party pricing services for security valuation can adversely affect marketing and financial accuracy[133](index=133&type=chunk)[134](index=134&type=chunk) [Risks Related to Our Legal, Regulatory and Compliance Environment](index=24&type=section&id=Risks%20Related%20to%20Our%20Legal%2C%20Regulatory%20and%20Compliance%20Environment) SEI operates in a highly regulated industry, exposing it to significant legal, regulatory, and compliance risks - The financial services industry is subject to extensive and evolving regulations, exposing SEI to legal or regulatory sanctions, financial loss, and reputational damage from non-compliance[135](index=135&type=chunk)[137](index=137&type=chunk) - Compliance with anti-money laundering, economic sanctions (OFAC), and anti-corruption laws globally incurs higher costs and compliance risks[139](index=139&type=chunk)[140](index=140&type=chunk) - Privacy and data protection laws (e.g., Gramm-Leach-Bliley Act, GDPR, CCPA) impose mandatory obligations, leading to significant fines, litigation risk, and increased compliance costs[141](index=141&type=chunk)[142](index=142&type=chunk) - Investment management operations are complex and subject to legal liability for client losses due to operational failures, misrepresentation of services, or errors in investment models[145](index=145&type=chunk)[146](index=146&type=chunk) - SEI faces substantial regulatory risks and litigation, with increased oversight and enforcement actions leading to significant direct and indirect costs[147](index=147&type=chunk) [Risks Related to Our Business Generally](index=26&type=section&id=Risks%20Related%20to%20Our%20Business%20Generally) General business risks include strategy execution, acquisition integration, operational failures, and talent retention - Failure of management to develop and execute effective business strategies, or to anticipate changes, could adversely affect growth prospects and earnings[148](index=148&type=chunk)[149](index=149&type=chunk) - Acquisitions, divestitures, joint ventures, and strategic alliances carry risks related to integration, potential conflicts with partners, and exposure to new regulatory requirements or liabilities[151](index=151&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Operational risks, including inadequate processes, system failures, human error, or misconduct, can lead to significant financial loss, regulatory sanctions, or reputational damage[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[166](index=166&type=chunk) - The ability to hire and retain qualified employees is critical, with intense competition and regulatory limitations on compensation impacting talent acquisition and retention[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - External factors such as currency fluctuations, changes in interest rates, and increased geopolitical unrest (including the long-term effects of climate change) could negatively affect revenues and earnings[171](index=171&type=chunk)[172](index=172&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - The **COVID-19 pandemic** has impacted and may continue to impact business operations, employees, customers, and partners, creating substantial uncertainty in global economic conditions[182](index=182&type=chunk)[183](index=183&type=chunk) [Item 1B. Unresolved Staff Comments.](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) The company has no unresolved staff comments from the SEC - There are no unresolved staff comments[187](index=187&type=chunk) [Item 2. Properties.](index=32&type=section&id=Item%202.%20Properties.) SEI's corporate headquarters in Oaks, Pennsylvania, comprises ten buildings on 124 acres - SEI's corporate headquarters in Oaks, PA, includes **628,000 sq ft** of office space and **34,000 sq ft** of data center space across ten buildings on 124 acres[188](index=188&type=chunk) - The company leases an additional **195,000 sq ft** of office space and owns a **3,400 sq ft** condominium in New York[188](index=188&type=chunk) [Item 3. Legal Proceedings.](index=32&type=section&id=Item%203.%20Legal%20Proceedings.) Information on legal proceedings is detailed in Note 10 to the Consolidated Financial Statements - Information on legal proceedings is provided in Note 10 to the Consolidated Financial Statements[189](index=189&type=chunk) - The company is party to other actions and claims in the normal course of business, which are not believed to be material[190](index=190&type=chunk) [Item 4. Mine Safety Disclosures.](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) SEI has no mine safety disclosures to report - There are no mine safety disclosures[192](index=192&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=33&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) SEI's common stock trades on NASDAQ under 'SEIC', with an active stock repurchase program and semi-annual dividend policy - SEI's common stock is traded on The Nasdaq Global Select Market® under the symbol 'SEIC'[193](index=193&type=chunk) - The Board of Directors intends to declare future dividends on a semiannual basis[193](index=193&type=chunk) - The Board of Directors authorized an additional **$200.0 million** for the stock repurchase program on December 10, 2021, with no expiration date[199](index=199&type=chunk) Common Stock Price Range and Dividends Declared (2020-2021) | Year | Quarter | High ($) | Low ($) | Dividends ($) | | :--- | :--- | :--- | :--- | :--- | | 2021 | First | 62.45 | 52.12 | — | | 2021 | Second | 64.78 | 55.05 | 0.37 | | 2021 | Third | 63.50 | 57.06 | — | | 2021 | Fourth | 65.22 | 57.72 | 0.40 | | 2020 | First | 69.61 | 35.41 | — | | 2020 | Second | 61.58 | 43.40 | 0.35 | | 2020 | Third | 58.67 | 48.81 | — | | 2020 | Fourth | 57.62 | 48.70 | 0.37 | Issuer Purchases of Equity Securities (Q4 2021) | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | October 1 – 31, 2021 | 50,000 | 62.96 | | November 1 – 30, 2021| 802,000 | 63.22 | | December 1 – 31, 2021| 677,000 | 61.49 | | **Total** | **1,529,000** | **62.44** | [Price Range of Common Stock and Dividends](index=33&type=section&id=Price%20Range%20of%20Common%20Stock%20and%20Dividends) SEI's common stock is traded on NASDAQ under 'SEIC', with plans to declare semi-annual dividends - SEI's common stock is traded on The Nasdaq Global Select Market® (NASDAQ) under the symbol 'SEIC'[193](index=193&type=chunk) - The Board of Directors intends to declare future dividends on a semiannual basis[193](index=193&type=chunk) Common Stock Price Range and Dividends Declared (2020-2021) | Year | Quarter | High ($) | Low ($) | Dividends ($) | | :--- | :--- | :--- | :--- | :--- | | 2021 | First | 62.45 | 52.12 | — | | 2021 | Second | 64.78 | 55.05 | 0.37 | | 2021 | Third | 63.50 | 57.06 | — | | 2021 | Fourth | 65.22 | 57.72 | 0.40 | | 2020 | First | 69.61 | 35.41 | — | | 2020 | Second | 61.58 | 43.40 | 0.35 | | 2020 | Third | 58.67 | 48.81 | — | | 2020 | Fourth | 57.62 | 48.70 | 0.37 | [Stock Performance Graph](index=34&type=section&id=Stock%20Performance%20Graph) The report includes a graph comparing SEI's stock performance against the NASDAQ Market Index and a blended Industry Index - The report provides a stock performance graph comparing SEI's common stock cumulative total return against the NASDAQ Market Index and Industry Index 2[197](index=197&type=chunk) - The Industry Index 2 is a blend of **81% NASDAQ US Asset Managers and Custodians** and **19% NASDAQ US Software**[197](index=197&type=chunk) - Returns are based on historical performance and are not indicative of future results[197](index=197&type=chunk) [Issuer Purchases of Equity Securities](index=34&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) SEI has an active stock repurchase program, with an additional $200.0 million approved in December 2021 - The Board of Directors has authorized the repurchase of up to **$5.128 billion** worth of common stock, with no expiration date[199](index=199&type=chunk) - On December 10, 2021, the stock repurchase program was increased by an additional **$200.0 million**[199](index=199&type=chunk) Issuer Purchases of Equity Securities (Q4 2021) | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | October 1 – 31, 2021 | 50,000 | 62.96 | | November 1 – 30, 2021| 802,000 | 63.22 | | December 1 – 31, 2021| 677,000 | 61.49 | | **Total** | **1,529,000** | **62.44** | [Item 6. [Reserved]](index=34&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=35&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) SEI's 2021 revenues increased 14% to $1.9 billion, with net income rising 22% to $546.6 million, driven by market appreciation and LSV earnings Consolidated Statements of Operations Summary (2019-2021) | Metric (in thousands) | 2021 | 2020 | Change (2021 vs 2020) | 2019 | Change (2020 vs 2019) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,918,309 | $1,684,058 | 14 % | $1,649,885 | 2 % | | Expenses | $1,364,928 | $1,238,171 | 10 % | $1,189,461 | 4 % | | Income from operations| $553,381 | $445,887 | 24 % | $460,424 | (3)% | | Net income | $546,593 | $447,286 | 22 % | $501,426 | (11)% | | Diluted EPS | $3.81 | $3.00 | 27 % | $3.24 | (7)% | - **2021 revenue growth** was driven by higher asset management, administration, and distribution fees from market appreciation and positive cash flows, as well as increased information processing fees[206](index=206&type=chunk) - **2020 revenue growth** was primarily from higher assets under administration in the Investment Managers segment and market appreciation after the COVID-19 shutdown[207](index=207&type=chunk) - Operating expenses increased in 2021 due to direct costs related to revenue growth and higher personnel costs, while in 2020, they increased due to new business investments and personnel costs in the Investment Managers segment[206](index=206&type=chunk)[207](index=207&type=chunk) - Earnings from LSV **increased 17% in 2021** due to higher assets under management and performance fees, but **decreased 23% in 2020** due to lower assets and underperformance of value equity[206](index=206&type=chunk)[207](index=207&type=chunk) [Overview](index=35&type=section&id=Overview) SEI provides global wealth and investment solutions, managing $1.3 trillion in assets, with strong revenue and net income growth in 2021 - SEI is a leading global provider of technology-driven wealth and investment management solutions, managing, advising, or administering approximately **$1.3 trillion** in assets as of December 31, 2021[204](index=204&type=chunk) - Significant items impacting 2021 results include **increased asset management and processing fees**, higher LSV earnings, and increased operating expenses due to business growth[206](index=206&type=chunk) - Significant items impacting 2020 results include increased assets under administration, market appreciation post-COVID-19, **decreased LSV earnings**, and increased investments in new business opportunities like the One SEI strategy[207](index=207&type=chunk) Consolidated Financial Performance (2019-2021) | Metric (in thousands) | 2021 | 2020 | Change (2021 vs 2020) | 2019 | Change (2020 vs 2019) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,918,309 | $1,684,058 | 14 % | $1,649,885 | 2 % | | Expenses | $1,364,928 | $1,238,171 | 10 % | $1,189,461 | 4 % | | Income from operations| $553,381 | $445,887 | 24 % | $460,424 | (3)% | | Net income | $546,593 | $447,286 | 22 % | $501,426 | (11)% | | Diluted EPS | $3.81 | $3.00 | 27 % | $3.24 | (7)% | [Ending Asset Balances](index=40&type=section&id=Ending%20Asset%20Balances) Total assets reached $1.338 trillion at year-end 2021, a 14% increase driven by growth in the Investment Managers and Investment Advisors segments - Investment Managers segment saw a **19% increase** in client assets under administration to **$907.4 billion** in 2021[221](index=221&type=chunk) - Investment Advisors segment's total Platform assets **increased 16%** to **$100.6 billion** in 2021[221](index=221&type=chunk) Ending Asset Balances (in millions) as of December 31 | Segment / Asset Type | 2021 | 2020 | Percent Change (2021 vs 2020) | | :--- | :--- | :--- | :--- | | **Total assets under management** | **$405,148** | **$368,660** | **10 %** | | Advised assets | $6,267 | $5,362 | 17 % | | Client assets under administration | $911,858 | $786,743 | 16 % | | Platform-only assets | $14,564 | $11,862 | 23 % | | **Total assets** | **$1,337,837**| **$1,172,627**| **14 %** | | LSV: Equity and fixed-income programs | $98,984 | $93,692 | 6 % | [Average Asset Balances](index=42&type=section&id=Average%20Asset%20Balances) Total average assets increased 20% to $1.268 trillion in 2021, driven by strong growth in the Investment Managers and Investment Advisors segments - Investment Managers segment's total average assets **increased 24%** to **$936.6 million** in 2021[225](index=225&type=chunk) - Investment Advisors segment's total Platform average assets **increased 21%** to **$94.5 million** in 2021[225](index=225&type=chunk) Average Asset Balances (in millions) for the Year Ended December 31 | Segment / Asset Type | 2021 | 2020 | Percent Change (2021 vs 2020) | | :--- | :--- | :--- | :--- | | **Total assets under management** | **$393,289** | **$327,672** | **20 %** | | Advised assets | $5,928 | $4,807 | 23 % | | Client assets under administration | $854,961 | $717,650 | 19 % | | Platform-only assets | $13,426 | $9,914 | 35 % | | **Total assets** | **$1,267,604**| **$1,060,043**| **20 %** | | LSV: Equity and fixed-income programs | $99,591 | $85,043 | 17 % | [Business Segments](index=44&type=section&id=Business%20Segments) All business segments saw revenue growth in 2021, with Investment Managers leading at 19% and Private Banks operating profit growing 245% - Private Banks revenue increased due to new SWP client conversions, growth from existing SWP clients, market appreciation, and non-recurring fees[230](index=230&type=chunk) - Investment Advisors revenue increased from positive cash flows into separately managed account programs and market appreciation[233](index=233&type=chunk) - Institutional Investors revenue increased from market appreciation, new OCIO sales, and performance fees, despite defined benefit client losses[234](index=234&type=chunk) - Investment Managers revenue increased due to higher valuations of existing client assets and positive cash flows into various offerings[235](index=235&type=chunk) - Corporate overhead expenses increased in 2021 due to higher personnel costs, stock-based compensation, consulting, and professional fees[236](index=236&type=chunk) Business Segment Performance (in thousands) for the Year Ended December 31 | Segment | 2021 Revenues | 2020 Revenues | % Change (2021 vs 2020) | 2021 Operating Profit (Loss) | 2020 Operating Profit (Loss) | % Change (2021 vs 2020) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Private Banks | $493,570 | $455,393 | 8 % | $30,774 | $8,912 | 245 % | | Investment Advisors | $482,949 | $407,564 | 18 % | $242,615 | $201,651 | 20 % | | Institutional Investors | $343,805 | $317,627 | 8 % | $175,735 | $167,718 | 5 % | | Investment Managers | $581,157 | $489,462 | 19 % | $232,502 | $180,463 | 29 % | | Investments in New Businesses | $16,828 | $14,012 | 20 % | $(36,391) | $(38,859) | NM | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow increased to $633.1 million in 2021, driven by higher net income and LSV repayments - Operating cash flows increased in 2021 due to **higher net income** and increased repayments from LSV[257](index=257&type=chunk) - Investing activities in 2021 included **$80.2 million for acquisitions** (Novus and Finomial) and **$26.0 million** for capitalized software development[259](index=259&type=chunk) - Financing activities included **$411.5 million for common stock repurchases** and **$105.5 million in dividend payments** in 2021[260](index=260&type=chunk) - SEI has a **$325.0 million** five-year senior unsecured revolving credit facility, with **$40.0 million** borrowed in November 2021 for an acquisition[251](index=251&type=chunk)[254](index=254&type=chunk) Consolidated Cash Flows Summary (in thousands) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $633,101 | $488,682 | $545,122 | | Net cash used in investing activities | $(164,883) | $(67,496) | $(78,180) | | Net cash used in financing activities | $(422,319) | $(482,135) | $(386,620) | | Net increase (decrease) in cash and cash equivalents | $44,031 | $(56,820) | $86,508 | | Cash, cash equivalents and restricted cash, end of year | $831,758 | $787,727 | $844,547 | [Cash Requirements](index=52&type=section&id=Cash%20Requirements) Cash requirements are primarily funded by operating cash flow, available borrowing capacity, and existing cash reserves - Cash requirements and liquidity needs are primarily funded through cash flow from operations and available borrowing capacity[261](index=261&type=chunk) - SEI anticipates sufficient funds from operating cash flow, available borrowing capacity, and existing cash to meet operational needs and fund the stock repurchase program for the foreseeable future[262](index=262&type=chunk) [Critical Accounting Policies and Estimates](index=52&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment for software costs, income taxes, stock compensation, and acquisition valuations - Critical accounting policies and estimates include computer software development costs, income taxes, stock-based compensation, and the valuation of long-lived assets (goodwill and intangible assets) acquired in acquisitions[263](index=263&type=chunk) - Capitalization of internal software development costs requires considerable judgment regarding technological and economic feasibility and estimated economic life[264](index=264&type=chunk)[265](index=265&type=chunk) - Income tax accounting involves assumptions, judgments, and estimates for current and deferred taxes, including valuation allowances and potential outcomes of tax audits[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk) - Stock-based compensation expense depends on management's estimate of when financial vesting targets will be achieved, with changes potentially causing volatility in recognition[270](index=270&type=chunk)[271](index=271&type=chunk) - Valuation of acquired assets, goodwill, and intangible assets in business combinations requires significant estimates and assumptions, impacting amortization expense and potential impairment[272](index=272&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk.](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Market risk disclosures are incorporated by reference from Item 1A and Item 7 of this report - Market risk disclosures are referenced from 'Our revenues and earnings are affected by changes in capital markets and significant changes in the value of financial instruments' and 'Changes in interest rates may affect the value of our fixed-income investment securities' in Item 1A, Risk Factors[278](index=278&type=chunk) - Additional market risk information is found under 'Impact of COVID-19' in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations[278](index=278&type=chunk) [Item 8. Financial Statements and Supplementary Data.](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section presents SEI's audited consolidated financial statements and the independent auditor's reports - This item includes the Reports of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements[280](index=280&type=chunk) - KPMG LLP provided an **unqualified opinion** on the consolidated financial statements for the three-year period ended December 31, 2021, and on the effectiveness of internal control over financial reporting as of December 31, 2021[283](index=283&type=chunk)[284](index=284&type=chunk) [Reports of Independent Registered Public Accounting Firm](index=58&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued unqualified opinions on the financial statements and internal controls, noting software capitalization as a critical audit matter - KPMG LLP issued an **unqualified opinion** on SEI's consolidated financial statements for the three-year period ended December 31, 2021[283](index=283&type=chunk) - KPMG LLP also expressed an **unqualified opinion** on the effectiveness of the Company's internal control over financial reporting as of December 31, 2021[284](index=284&type=chunk)[293](index=293&type=chunk) - A critical audit matter was the evaluation of costs eligible for capitalization in connection with enhancements to internal use software, specifically the SEI Wealth Platform, due to the high degree of auditor judgment required[288](index=288&type=chunk) [Consolidated Balance Sheets](index=62&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $2.355 billion in 2021, driven by growth in cash, receivables, and goodwill from acquisitions - Total assets **increased by $187.4 million** from 2020 to 2021, driven by increases in cash, receivables, and goodwill[301](index=301&type=chunk) - Goodwill significantly **increased to $117.2 million** in 2021 from $64.5 million in 2020, reflecting recent acquisitions[301](index=301&type=chunk) Consolidated Balance Sheet Summary (in thousands) | Account (in thousands) | December 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | $831,407 | $784,626 | | Receivables, net | $441,609 | $385,219 | | Capitalized Software, net | $243,446 | $270,977 | | Goodwill | $117,232 | $64,489 | | Total Assets | **$2,354,702** | **$2,167,256** | | **Liabilities:** | | | | Total Current Liabilities | $355,743 | $317,275 | | Borrowings Under Revolving Credit Facility | $40,000 | — | | Total Liabilities | **$493,939** | **$427,349** | | **Equity:** | | | | Total Shareholders' Equity | **$1,860,763** | **$1,739,907** | [Consolidated Statements of Operations](index=64&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenues increased 14% to $1.918 billion in 2021, with net income growing 22% to $546.6 million - Total revenues **increased by $234.3 million (14%)** in 2021 compared to 2020[306](index=306&type=chunk) - Net income **increased by $99.3 million (22%)** in 2021 compared to 2020[306](index=306&type=chunk) Consolidated Statements of Operations (in thousands, except per-share data) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total revenues | $1,918,309 | $1,684,058 | $1,649,885 | | Total expenses | $1,364,928 | $1,238,171 | $1,189,461 | | Income from operations | $553,381 | $445,887 | $460,424 | | Equity in earnings of unconsolidated affiliates | $137,572 | $117,134 | $151,891 | | Net income | $546,593 | $447,286 | $501,426 | | Diluted earnings per common share | $3.81 | $3.00 | $3.24 | | Dividends declared per common share | $0.77 | $0.72 | $0.68 | [Consolidated Statements of Comprehensive Income](index=65&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income was $543.5 million in 2021, slightly below net income due to foreign currency and investment losses - Total other comprehensive loss, net of taxes, was **$3.045 million** in 2021, compared to income of $6.706 million in 2020[308](index=308&type=chunk) - Foreign currency translation adjustments resulted in a loss of **$1.432 million** in 2021, a reversal from gains in prior years[308](index=308&type=chunk) Consolidated Statements of Comprehensive Income (in thousands) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net income | $546,593 | $447,286 | $501,426 | | Foreign currency translation adjustments| $(1,432) | $5,620 | $7,618 | | Unrealized holding (losses) gains on investments, net of tax | $(2,527) | $374 | $1,486 | | Less: reclassification adjustment for losses realized in net income, net of tax | $914 | $712 | $392 | | Total other comprehensive (loss) income, net of taxes | $(3,045) | $6,706 | $9,496 | | Comprehensive income | $543,548 | $453,992 | $510,922 | [Consolidated Statements of Changes in Equity](index=66&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total shareholders' equity increased to $1.861 billion in 2021, driven by net income and offset by stock repurchases - Total Shareholders' Equity **increased by $120.8 million** in 2021[310](index=310&type=chunk) - Net income of **$546.6 million** contributed positively, while common stock repurchases (totaling **$411.5 million**) and dividends declared (**$107.8 million**) reduced equity[310](index=310&type=chunk) Consolidated Statements of Changes in Equity (in thousands) | Metric (in thousands) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Common Stock (shares) | 138,449 | 143,396 | 149,745 | | Common Stock ($) | $1,384 | $1,434 | $1,497 | | Capital In Excess of Par Value | $1,246,608 | $1,190,001 | $1,158,900 | | Retained Earnings | $632,614 | $565,270 | $601,885 | | Accumulated Other Comprehensive Loss | $(19,843) | $(16,798) | $(23,504) | | **Total Equity** | **$1,860,763**| **$1,739,907**| **$1,738,778**| [Consolidated Statements of Cash Flows](index=67&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to $633.1 million in 2021, while investing cash use rose due to acquisitions - Operating cash flows **increased by $144.4 million** in 2021, primarily from increased net income and repayments of advances from LSV[257](index=257&type=chunk)[311](index=311&type=chunk) - Investing activities in 2021 included **$80.2 million for acquisitions** and **$26.0 million for capitalized software**[259](index=259&type=chunk)[313](index=313&type=chunk) - Financing activities in 2021 included **$408.1 million for common stock repurchases** and **$105.5 million for dividend payments**[260](index=260&type=chunk)[313](index=313&type=chunk) Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $633,101 | $488,682 | $545,122 | | Net cash used in investing activities | $(164,883) | $(67,496) | $(78,180) | | Net cash used in financing activities | $(422,319) | $(482,135) | $(386,620) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $44,031 | $(56,820) | $86,508 | | Cash, cash equivalents and restricted cash, end of year | $831,758 | $787,727 | $844,547 | [Notes to Consolidated Financial Statements](index=69&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies, financial captions, and significant transactions - Note 1 details significant accounting policies, including revenue recognition, cash equivalents, property and equipment, marketable securities, fair value measurements, capitalized software, and business combinations[314](index=314&type=chunk)[325](index=325&type=chunk)[330](index=330&type=chunk)[332](index=332&type=chunk)[337](index=337&type=chunk)[341](index=341&type=chunk)[344](index=344&type=chunk) - Note 2 provides information on the investment in unconsolidated affiliate LSV Asset Management, including SEI's ownership interest and proportionate share in earnings[361](index=361&type=chunk)[363](index=363&type=chunk) - Note 6 details the **$325.0 million revolving credit facility**, including terms, covenants, and borrowings for acquisitions[388](index=388&type=chunk)[391](index=391&type=chunk) - Note 7 covers shareholders' equity, including stock-based compensation plans, common stock buybacks, and cash dividends[396](index=396&type=chunk)[404](index=404&type=chunk)[406](index=406&type=chunk) - Note 10 outlines commitments and contingencies, including the Stanford Trust Company and SS&C Advent litigations[410](index=410&type=chunk)[412](index=412&type=chunk)[415](index=415&type=chunk) - Note 14 provides details on business acquisitions in 2021, including Finomial and Novus, and the contingent consideration for Huntington Steele[448](index=448&type=chunk)[451](index=451&type=chunk)[454](index=454&type=chunk) [Schedule II - Valuation and Qualifying Accounts and Reserves](index=101&type=section&id=Schedule%20II%20-%20Valuation%20and%20Qualifying%20Accounts%20and%20Reserves) This schedule details changes in the allowance for doubtful accounts and the deferred income tax valuation allowance Allowance for Doubtful Accounts (in thousands) | Year | Balance at Beginning of Year | Additions Charged to Costs and Expenses | Deductions | Balance at End of Year | | :--- | :--- | :--- | :--- | :--- | | 2021 | $1,100 | $502 | — | $1,602 | | 2020 | $1,201 | — | $(101) | $1,100 | | 2019 | $718 | $483 | — | $1,201 | Deferred Income Tax Valuation Allowance (in thousands) | Year | Balance at Beginning of Year | Additions Charged to Costs and Expenses | Deductions | Balance at End of Year | | :--- | :--- | :--- | :--- | :--- | | 2021 | $68,776 | — | $(4,977) | $63,799 | | 2020 | $70,731 | — | $(1,955) | $68,776 | | 2019 | $72,316 | — | $(1,585) | $70,731 | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.](index=102&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) SEI reports no changes in or disagreements with its accountants - There are no changes in or disagreements with accountants on accounting and financial disclosure[473](index=473&type=chunk) [Item 9A. Controls and Procedures.](index=102&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and internal control over financial reporting were effective as of year-end 2021 - Management concluded that disclosure controls and procedures were **effective** as of December 31, 2021, ensuring timely and accurate reporting[474](index=474&type=chunk) - Management also concluded that internal control over financial reporting was **effective** as of December 31, 2021, based on the COSO framework[475](index=475&type=chunk) - KPMG LLP audited and expressed an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting[476](index=476&type=chunk) - No changes in internal control over financial reporting occurred during Q4 2021 that materially affected or are reasonably likely to materially affect it[477](index=477&type=chunk) [Item 9B. Other Information.](index=102&type=section&id=Item%209B.%20Other%20Information.) This item reports that there is no other information required to be disclosed - There is no other information to report[478](index=478&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](index=102&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections.) SEI has no disclosures regarding foreign jurisdictions that prevent inspections - There are no disclosures regarding foreign jurisdictions that prevent inspections[479](index=479&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance.](index=103&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) Information on directors, officers, and corporate governance is incorporated by reference from the company's proxy statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement[481](index=481&type=chunk)[488](index=488&type=chunk) - Key executive officers include Alfred P. West, Jr. (Chairman & CEO), Kevin P. Barr (Executive Vice President), Kathy C. Heilig (Chief Accounting Officer & Controller), Ryan P. Hicke (Executive Vice President & CIO), Paul F. Klauder (Executive Vice President), Dennis J. McGonigle (CFO & Executive Vice President), Michael N. Peterson (Executive Vice President & General Counsel), and Wayne M. Withrow (Executive Vice President)[482](index=482&type=chunk)[483](index=483&type=chunk)[484](index=484&type=chunk)[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk) - SEI has adopted a Code of Conduct for all employees and a Code of Ethics for Senior Financial Officers, available on its website[489](index=489&type=chunk) [Item 11. Executive Compensation.](index=103&type=section&id=Item%2011.%20Executive%20Compensation.) Information regarding executive compensation is incorporated by reference from SEI's definitive proxy statement - Information on executive compensation is incorporated by reference from the definitive proxy statement[490](index=490&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](index=103&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) This section incorporates security ownership information by reference and details the company's equity compensation plans - Information on security ownership of certain beneficial owners and management is incorporated by reference from the definitive proxy statement[491](index=491&type=chunk) - The 2014 Omnibus Equity Compensation Plan, which replaced the 2007 Plan, provides for grants of stock options, stock units, stock awards, stock appreciation rights, and dividend equivalents[494](index=494&type=chunk)[495](index=495&type=chunk) - The plan is administered by the Compensation Committee, which determines grant terms, vesting criteria, and exercisability[496](index=496&type=chunk)[497](index=497&type=chunk) Equity Compensation Plan Information as of December 31, 2021 | Metric | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted –average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 19,084,064 | $54.35 | 12,977,981 | | Equity compensation plans not approved by security holders | — | — | — | | **Total** | **19,084,064** | **$54.35** | **12,977,981** | [Item 13. Certain Relationships and Related Transactions, and Director Independence.](index=107&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) Information on related transactions and director independence is incorporated by reference from the proxy statement - Information on certain relationships and related transactions, and director independence, is incorporated by reference from the definitive proxy statement[511](index=511&type=chunk) [Item 14. Principal Accounting Fees and Services.](index=107&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services.) Information concerning principal accounting fees and services is incorporated by reference from the proxy statement - Information on principal accounting fees and services is incorporated by reference from the definitive proxy statement[512](index=512&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules.](index=108&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules.) This item lists the financial statements and exhibits filed with the Annual Report on Form 10-K - This item lists the Consolidated Financial Statements and supplementary data filed as part of Item 8[514](index=514&type=chunk) - It includes reports of independent registered public accounting firm, consolidated financial statements (Balance Sheets, Statements of Operations, Comprehensive Income, Changes in Equity, Cash Flows), and Notes to Consolidated Financial Statements[514](index=514&type=chunk) - An index of exhibits incorporated by reference or filed with the Annual Report on Form 10-K is also provided[514](index=514&type=chunk) [Item 16. Form 10-K Summary.](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary.) This item indicates that no Form 10-K Summary is provided - No Form 10-K Summary is provided[515](index=515&type=chunk)

Connecting financial services SEI Investments Company (NASDAQ:SEIC) Investor Presentation, Q4 2021 ©2021 SEI | --- | --- | |--------------|--------------------------------------------------------------------------------------------------------------------------------------------------| | | | | Who we are. | We're part of the financial services industry's backbone, delivering platforms and solutions that help our clients face and embrace change. | ©2021 SEI 2 Who we are. Distinct position. With relationships ...

Financial Data and Key Metrics Changes - Revenues grew by 13% in Q4 2021 compared to Q4 2020, with earnings increasing by 15% and EPS rising to $1.03, a 20% increase from $0.86 in Q4 2020 [5][6] - SEI's asset balances increased by $6.2 billion during the quarter, while LSV's asset balances grew by $1.4 billion [6][15] - The company repurchased 1.5 million shares at a price of $62.44 per share, totaling $95.5 million in stock repurchases [6] Business Line Data and Key Metrics Changes - The Private Banking and Investment Management segments reported net sales events of $31.3 million, with $22.1 million expected to be recurring [7] - The Investment Managers segment saw revenues of $154.5 million, a 19.2% increase from Q4 2020, and profits of $53.5 million, up 28.4% [109] - The total assets under management for the Investment Managers segment ended at $907.4 billion, reflecting a $45.8 billion increase from the previous quarter [110] Market Data and Key Metrics Changes - The global backlog of signed but not installed recurring investment processing revenue stands at approximately $81.7 million [72] - The Investment Managers segment reported a backlog of sold but unfunded new business at $34.4 million [114] Company Strategy and Development Direction - The company is focused on building growth engines beyond its four traditional businesses, exploring opportunities in adjacent markets and services [10] - SEI has made three acquisitions to enhance capabilities in the IMS and Institutional Investor business lines, integrating these companies into SEI [11] - The company aims to continue executing its growth strategy, increasing client acquisition rates, and investing in platform solutions and workforce [114] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's momentum and backlog, indicating a strong sales pipeline and successful repositioning of asset management-related business segments [12][73] - The management acknowledged challenges in the legacy-defined benefit OCIO client base but emphasized a strategy to address fast-growing markets [9] - The company is committed to managing expenses strategically while maintaining a focus on growth and client satisfaction [53] Other Important Information - The effective tax rate for the quarter was 18.3% [17] - The company experienced net negative cash flow of approximately $2.6 billion with market appreciation of approximately $4.1 billion for LSV [15] Q&A Session Summary Question: How does SEI manage compensation expenses amid rising labor costs? - Management discussed adjustments made to compensation for early-stage to mid-level professionals in response to market conditions and competition for talent [21][22] Question: What is the status of employees returning to the office? - Management indicated that U.S. offices were opened on a voluntary basis, with a gradual increase in employees returning, while also emphasizing the importance of flexibility in the work environment [28][32] Question: What is the outlook for LSV in the context of value versus growth performance? - Management noted that LSV had a strong performance in 2021, which positions them well to capture assets as the market shifts towards value [38][39] Question: How does the company prioritize capital allocation between share buybacks and M&A? - Management stated that stock buybacks remain a predominant use of capital, alongside ongoing M&A activities to enhance existing businesses and explore new revenue streams [42][43] Question: What is the current status of the backlog and expected conversions? - Management confirmed that the global backlog is at $81.7 million, with expectations that approximately 50% would be installed over the next 12 months [83] Question: What are the strategic priorities for the company moving forward? - Management highlighted the focus on serving existing clients, building a global pipeline, and managing expenses effectively while ensuring employee well-being [95][98]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ FORM 10-Q ________________________________________ ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________to ________ Commission File Number: 0-10200 _______________________________ ...

SEI Investments Company (NASDAQ:SEIC) Q3 2021 Earnings Conference Call October 20, 2021 4:30 PM ET Company Participants Alfred West - Chairman and CEO Dennis McGonigle - EVP and Chief Financial Officer Steve Meyer - EVP, Head of Global Wealth Management Services Wayne Withrow - EVP, Independent Advisor Solutions Paul Klauder - EVP, Head of the Institutional Group Conference Call Participants Owen Lau - Oppenheimer Robert Lee - KBW Christopher Donat - Piper Sandler Ryan Kenny - Morgan Stanley Ryan Bailey - G ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ FORM 10-Q ________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________to ________ Commission File Number: 0-10200 ____________________________________ ...

Financial Data and Key Metrics Changes - In Q2 2021, revenues grew by 19% year-over-year, while earnings increased by 32% [5] - Earnings per share (EPS) reached $0.93, a 37% increase from $0.68 in Q2 2020 [5] - Asset balances grew by approximately $7 billion during the quarter [5] - The company repurchased 21 million shares at an average price of $61.93, totaling $129 million [6] Business Line Data and Key Metrics Changes - The Investment Management Services (IMS) segment is steadily growing its revenues and profits [7] - The RA segment is executing a new technology-driven strategy, showing positive indicators of recovery [7] - The Institutional Investor segment faced challenges in the legacy OCIO client base but is addressing growth in OCIO and ECIO segments [8] - The Banking segment reported revenues of $123.7 million, a 14.8% increase from Q2 2020, with a profit of $6 million [57][58] - The Investment Manager segment saw revenues of $142.8 million, a 19.7% increase year-over-year, with a profit margin of 40.5% [102][103] Market Data and Key Metrics Changes - Total assets under management in the Banking segment reached $26.3 billion, up 4.7% from Q1 2021 [65] - The Investment Manager segment's third-party asset balances increased by $44.1 billion to $875.9 billion, driven by net client fundings and market appreciation [104] Company Strategy and Development Direction - The company is exploring growth opportunities beyond its four traditional business lines, including Global Regulatory Compliance services and IT services focused on cybersecurity [9] - The One SEI strategy aims to integrate various services and platforms to enhance growth opportunities [66] - The company is adapting to a hybrid work model and is focused on enhancing its digital capabilities and market reach [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about capturing opportunities from significant changes in the market and a strong backlog of sales [12] - The competitive landscape for talent is driving up personnel costs, which is expected to continue [18] - Management anticipates that margins may experience choppiness due to ongoing M&A activities and the competitive environment [69] Other Important Information - The effective tax rate for the quarter was 22.3% [21] - The company is increasing spending on corporate marketing and branding to support the promotion of SEI Services [20] Q&A Session Summary Question: Can you elaborate on expenses and spending? - The company incurred $1.9 million in severance expenses, which are not repeatable, and $5.6 million in expenses tied to revenue growth [25][26] Question: How should we think about headcount growth and compensation pressure? - The company expects to increase headcount to support growth, with competition for talent driving up costs [27][28] Question: Was there a one-time adjustment in sub-advisory expenses? - Yes, there was a one-time adjustment in the institutional business related to sub-advisory expenses [36][38] Question: What is the outlook for LSV and potential for better flows? - LSV experienced negative net flows but saw increased sales activity, indicating improving market conditions [48] Question: How is the company managing real estate and travel expenses? - The company plans to maintain its real estate footprint due to long-term leases and expects a hybrid work model [42] Question: What is the status of the backlog for implementation? - The backlog stands at $72.6 million, with most implementations expected within the next 18 months [77] Question: How is the company addressing demand for crypto transactions? - The company supports crypto funds and is expanding its solutions in this area, indicating potential for revenue growth [125][127]

PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) This section presents SEI Investments Company's unaudited consolidated financial statements for the quarter ended March 31, 2021, encompassing balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2021, total assets were $2.15 billion, total liabilities decreased to $321.8 million, and shareholders' equity increased to $1.83 billion Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,150,901** | **$2,167,256** | | Cash and cash equivalents | $782,582 | $784,626 | | **Total Liabilities** | **$321,793** | **$427,349** | | Accrued liabilities | $199,235 | $299,845 | | **Total Shareholders' Equity** | **$1,829,108** | **$1,739,907** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2021, total revenues increased 10% to $455.7 million, with net income rising 19% to $129.5 million, resulting in diluted EPS of $0.89 Q1 2021 vs. Q1 2020 Performance (in thousands, except per share data) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Total Revenues | $455,686 | $414,762 | | Income from Operations | $132,837 | $110,228 | | Net Income | $129,470 | $109,242 | | Diluted EPS | $0.89 | $0.72 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to $136.6 million in Q1 2021, while investing activities used $30.7 million and financing activities used $109.5 million, leading to a $2.0 million net cash decrease Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $136,573 | $98,972 | | Net cash used in investing activities | ($30,656) | ($17,352) | | Net cash used in financing activities | ($109,512) | ($165,050) | | Net decrease in cash | ($2,044) | ($94,576) | - The company used **$71.2 million** for the purchase and retirement of common stock in Q1 2021, compared to **$130.6 million** in Q1 2020[26](index=26&type=chunk)[167](index=167&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue disaggregation, segment performance, the LSV Asset Management equity investment, litigation updates, and the new credit facility - The company's revenue is primarily derived from asset management, administration, and distribution fees, as well as information processing and software servicing fees[113](index=113&type=chunk) - The company holds a **38.8%** partnership interest in LSV Asset Management, accounted for using the equity method, with SEI's share of LSV's earnings at **$33.4 million** in Q1 2021[44](index=44&type=chunk)[46](index=46&type=chunk) - The company provides updates on two key legal matters: the Stanford Trust Company Litigation and the SS&C Advent Litigation, with management not expecting a material adverse effect[91](index=91&type=chunk)[100](index=100&type=chunk) - On April 23, 2021, the company entered into a new five-year, **$325 million** credit facility, replacing the previous agreement[69](index=69&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Q1 2021 financial performance, highlighting revenue and net income growth driven by market appreciation, segment performance, and LSV affiliate earnings, alongside liquidity and capital resources Q1 2021 Consolidated Performance Summary | Metric | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $455.7M | $414.8M | 10% | | Income from operations | $132.8M | $110.2M | 21% | | Net income | $129.5M | $109.2M | 19% | | Diluted EPS | $0.89 | $0.72 | 24% | - Revenue growth was primarily driven by higher average assets under administration (up **21%** to **$821.6 billion**) and management (up **$43.2 billion** to **$280.4 billion**, excluding LSV), benefiting from market appreciation and positive cash flows[128](index=128&type=chunk) - The company continued its stock repurchase program, buying back **1.2 million** shares for **$66.9 million** in Q1 2021[133](index=133&type=chunk) - The 'One SEI' strategy, a company-wide initiative to integrate and modularize technology platforms, incurred significant costs in 2020, with investments expected to continue through 2021[136](index=136&type=chunk) [Business Segments Analysis](index=35&type=section&id=MD%26A%20Business%20Segments) All business segments reported year-over-year revenue growth, with Investment Managers leading at 17% revenue increase and Private Banks showing a 168% operating profit increase Segment Operating Profit (Loss) (in thousands) | Segment | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Private Banks | $6,884 | $2,568 | 168% | | Investment Advisors | $58,267 | $49,889 | 17% | | Institutional Investors | $45,341 | $40,936 | 11% | | Investment Managers | $53,399 | $42,340 | 26% | | Investments in New Businesses | ($9,538) | ($7,522) | (27)% | - Investment Managers segment revenue grew **17%** due to higher asset valuations and positive cash flows into alternative and traditional offerings[148](index=148&type=chunk) - Private Banks segment operating profit grew **168%** due to higher revenue and decreased promotion, travel, and non-capitalized SWP-related costs[143](index=143&type=chunk)[145](index=145&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=MD%26A%20Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, with $785.7 million in cash, secured a new **$325 million** credit facility, and used cash for stock repurchases and dividends in Q1 2021 - On April 23, 2021, the company replaced its credit facility with a new five-year, **$325 million** agreement with a syndicate of lenders led by Wells Fargo[161](index=161&type=chunk) - Cash flow from operations increased to **$136.6 million** in Q1 2021 from **$99.0 million** in Q1 2020, primarily due to higher net income[160](index=160&type=chunk)[166](index=166&type=chunk) - Key uses of cash in Q1 2021 were stock repurchases (**$71.2 million**), dividend payments (**$53.1 million**), and capital expenditures (**$4.2 million**)[167](index=167&type=chunk)[170](index=170&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) There have been no material changes to the company's market risk disclosures since the 2020 Annual Report on Form 10-K - There have been no material changes to the company's market risk disclosures since the 2020 Annual Report on Form 10-K[181](index=181&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[182](index=182&type=chunk) - No material changes to the internal control over financial reporting were identified during the quarter ended March 31, 2021[183](index=183&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings.) The company is party to various legal proceedings, including Stanford Trust and SS&C Advent litigations, with management believing no material adverse effect is probable - The company states that it does not believe the various legal proceedings it is party to are material and that the probability of a material adverse effect from their outcome is remote[184](index=184&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes in risk factors from those disclosed in the 2020 Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the 2020 Annual Report on Form 10-K[185](index=185&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) In Q1 2021, the company repurchased **1.15 million** common shares for **$66.9 million**, with **$125.9 million** remaining for future repurchases Common Stock Repurchases in Q1 2021 | Period | Total Shares Purchased | Average Price Paid per Share | Approximate Dollar Value Remaining Under Program | | :--- | :--- | :--- | :--- | | January 2021 | — | — | $192,827,000 | | February 2021 | 554,000 | $57.44 | $161,010,000 | | March 2021 | 598,000 | $58.72 | $125,888,000 | | **Total Q1** | **1,152,000** | **$58.11** | **$125,888,000** | [Exhibits](index=45&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including the new Credit Agreement, CEO and CFO certifications, and XBRL interactive data files - Key exhibits filed include a new Credit Agreement, CEO and CFO certifications (Rule 13a-15(e)/15d-15(e) and Section 1350), and XBRL data files[188](index=188&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Commission File Number: 0-10200 ________________________________________ ________________________________________ SEI INVESTMENTS COMPANY (Exact name of Registrant as Specified in Its Charter) Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the tran ...