SEI(US:SEIC)2023-10-25 23:16Financial Data and Key Metrics Changes - Revenues for Q3 2023 were $477 million, an increase of 1% year-over-year, while net income was $116 million with an EPS of $0.87, reflecting a 13% increase on a comparable basis from the previous year [8][19][24] - Total expenses for the quarter were $368 million, down from $420 million in the previous year [19][24] - Net sales events totaled $14.5 million, with $11.1 million being net recurring [9][20] Business Line Data and Key Metrics Changes - The Investment Managers business showed strong revenue and earnings growth, with net sales for the quarter at $19 million, of which $16.8 million was recurring [22] - Private Banking signed three new deals and re-contracted five clients, contributing over $15 million in recurring revenue [12][21] - The Global Asset Management business experienced net positive cash flows of approximately $612 million, driven by separately managed accounts and open architecture technology [14][23] Market Data and Key Metrics Changes - The Institutional Investors segment faced challenges with corporate defined benefit curtailments and annuitizations, impacting revenue and profitability [17][31] - The company is focusing on enhancing its competitive position in the UK market through an upcoming acquisition of a master trust structure [25] Company Strategy and Development Direction - The company is focused on growing sales in segments where it can achieve repeatable success, particularly in investment managers and private banking [6][7] - There is an emphasis on investing in automation, AI, and alternative assets to drive scale and service excellence [6][7] - The company aims to enhance its market presence through increased client engagement and expanding its reach globally [84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term growth strategy while managing for profitability, despite a challenging market environment [6][7] - The management highlighted the importance of maintaining quality service to clients, which has led to successful client retention and new business opportunities [35][36] - There is an expectation of continued revenue growth driven by strategic initiatives and market opportunities [84] Other Important Information - The company repurchased 1.4 million shares at an average price of $61.43, totaling $86 million [87] - The tax rate for the quarter was 22.5%, with a slight decrease expected in the fourth quarter [95] Q&A Session Summary Question: Can you provide more details on the strength of the Investment Managers segment? - Management highlighted a focus on premium service levels, which has led to growth and client retention, particularly in launching new funds [35][36] Question: What new products are driving revenue growth? - New products are primarily driven by clients launching new offerings, with SEI being involved in the design and support of these products [42][99] Question: Can you elaborate on the client losses in the Investment Advisors and Institutional Investors segments? - Losses were attributed to market pressures, including fee competition and corporate defined benefit plan closures, but management is taking steps to improve retention [60][63] Question: How is the current market volatility impacting client behavior? - Market volatility has led clients to explore risk transfer strategies, creating opportunities for SEI to engage in advisory conversations [65][66] Question: What measures are in place to protect margins in a challenging environment? - Management discussed historical margin performance and emphasized the importance of maintaining long-term strategic growth while managing costs effectively [72][79]