SEI(US:SEIC)2022-01-27 06:06Financial 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]