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seic-20210127

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 8-K

________________________________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

January 27, 2021

Date of report (Date of earliest event reported)

________________________________________

SEI INVESTMENTS COMPANY

(Exact name of registrant as specified in charter)

________________________________________

Pennsylvania

0-10200

23-1707341

(State or Other Jurisdiction

of Incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification No.)

1 Freedom Valley Drive

Oaks, Pennsylvania 19456

(Address of Principal Executive Offices and Zip Code)

(610) 676-1000

(Registrants’ Telephone Number, Including Area Code)

________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SEIC

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On Wednesday, January 27, 2021, SEI Investments Company (the "Company") issued a press release announcing its financial and operating results for the fourth quarter ended December 31, 2020. A copy of the press release is furnished as Exhibit 99.1 and incorporated in this Item 2.02 by reference. A recording of the earnings call referenced in the press release furnished as Exhibit 99.1 is available for replay on the Company’s website at seic.com/ir-events.

As provided in General Instruction B.2 to Form 8-K, the information furnished in this Item 2.02 and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing with the Securities and Exchange Commission, except as shall be expressly provided by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.


Exhibit No.						Description

99.1						Press Release dated January 2 7 , 202 1 of SEI Investments Company related to the Company's financial and operating results for the fourth quarter ended December 31, 20 20 .

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		SEI INVESTMENTS COMPANY

Date:	January 28, 2021	By:	/s/ Dennis J. McGonigle
			Dennis J. McGonigle Chief Financial Officer

Document

Exhibit 99.1

Investor Contact: Media Contact:

Lindsey Opsahl Leslie Wojcik

SEI SEI

+1 610-676-4052 +1 610-676-4191

lopsahl@seic.com lwojcik@seic.com

Pages: 8

FOR IMMEDIATE RELEASE

SEI Reports Fourth-Quarter 2020 Financial Results

OAKS, Pa., Jan. 27, 2021 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the fourth-quarter 2020. Diluted earnings per share were $0.86 in fourth-quarter 2020 compared to $0.84 in fourth-quarter 2019.


Consolidated Overview
(In thousands, except earnings per share)	For the Three Months Ended Dec. 31,			For the Twelve Months Ended Dec. 31,
	2020	2019	%	2020	2019	%

Revenues	$443,723	$423,225	5%	$1,684,058	$1,649,885	2%
Net income	125,882	128,737	(2)%	447,286	501,426	(11)%
Diluted earnings per share	$0.86	$0.84	2%	$3.00	$3.24	(7)%

“Our financial results for 2020 reflect steady recovery from the pandemic’s impact on the markets we serve. The health and safety of our workforce continue to be a priority, and I want to thank all of our employees and the firms that support us for helping us stay safe and thrive,” said Alfred P. West, Jr., SEI Chairman and CEO.

“We’re living and operating in extraordinary times, but we are unwavering in our focus on executing our long-term strategy to be the provider of choice in the wealth and investment management markets. We believe we have made significant progress on our One SEI approach, making all of our assets available to all of our markets, delivering new, dynamic solutions and creating new opportunities. Our solutions, backed by our talented workforce, are what uniquely position us to capture growth opportunities that will lead to increased shareholder value. Despite 2020’s challenging environment, our investments and success in adding new clients and building our backlog of new revenue situate us well for the future.”

Summary of Fourth-Quarter Results by Business Segment


(In thousands)	For the Three Months Ended Dec. 31,					For the Twelve Months Ended Dec. 31,
	2020		2019		%	2020		2019		%
Private Banks:
Revenues	$119,654		$118,675		1%	$455,393		$470,276		(3)%
Expenses	115,039		113,596		1%	446,481		443,136		1%
Operating Profit	4,615		5,079		(9)%	8,912		27,140		(67)%
Operating Margin	4	%	4	%		2	%	6	%

Investment Advisors:
Revenues	108,346		105,862		2%	407,564		403,778		1%
Expenses	51,813		53,939		(4)%	205,913		208,508		(1)%
Operating Profit	56,533		51,923		9%	201,651		195,270		3%
Operating Margin	52	%	49	%		49	%	48	%

Institutional Investors:
Revenues	82,318		80,503		2%	317,627		322,062		(1)%
Expenses	36,893		38,554		(4)%	149,909		153,937		(3)%
Operating Profit	45,425		41,949		8%	167,718		168,125		—%
Operating Margin	55	%	52	%		53	%	52	%

Investment Managers:
Revenues	129,647		114,759		13%	489,462		440,796		11%
Expenses	80,204		72,698		10%	308,999		282,024		10%
Operating Profit	49,443		42,061		18%	180,463		158,772		14%
Operating Margin	38	%	37	%		37	%	36	%

Investments in New Businesses:
Revenues	3,758		3,426		10%	14,012		12,973		8%
Expenses	15,180		8,997		69%	52,871		29,660		78%
Operating Loss	(11,422)		(5,571)		NM	(38,859)		(16,687)		NM

Totals:
Revenues	$443,723		$423,225		5%	$1,684,058		$1,649,885		2%
Expenses	299,129		287,784		4%	1,164,173		1,117,265		4%
Corporate Overhead Expenses	20,584		19,351		6%	73,998		72,196		2%
Income from Operations	$124,010		$116,090		7%	$445,887		$460,424		(3)%

Fourth-Quarter Business Highlights:

•Sales events, net of client losses, during fourth-quarter 2020 totaled approximately $8.8 million and are expected to generate net annualized recurring revenues of approximately $4.9 million when contract values are fully realized. For the year ended 2020, sales events, net of client losses, totaled $94.0 million and are expected to generate net annualized recurring revenues of approximately $68.6 million when contract values are fully realized.

•Revenues from Asset management, administration, and distribution fees increased primarily from higher assets under administration in our Investment Managers segment due to sales of new business and market appreciation.

•Our average assets under administration increased $108.2 billion, or 16%, to $779.7 billion in the fourth-quarter 2020, as compared to $671.5 billion during the fourth-quarter 2019 (see attached Average Asset Balances schedules for further details).

•Our average assets under management, excluding LSV, increased $21.2 billion, or 9%, to $260.4 billion in the fourth-quarter 2020, as compared to $239.2 billion during the fourth-quarter 2019 (see attached Average Asset Balances schedules for further details).

•The increase in our operational expenses was primarily due to increased consulting costs related to our continued investments in new business opportunities, such as our One SEI strategy and IT Services offering, as well as increased personnel costs to service new clients in our Investment Managers segment. This increase was partially offset by a decline in travel and promotional-related expenses, as our sales and client relationship personnel adapted to COVID-19 restrictions.

•Our earnings from LSV decreased by $8.5 million, or 22%, to $30.6 million in fourth-quarter 2020 as compared to $39.1 million in fourth-quarter 2019. The decrease in earnings was primarily due to lower assets under management from market depreciation, negative cash flows from existing clients and client losses. LSV's revenues were $102.1 million in the fourth-quarter 2020, as compared to $126.5 million during the fourth-quarter of 2019.

•Stock-based compensation expense in fourth-quarter 2020 decreased $2.5 million as compared to fourth-quarter 2019 primarily due to a change in our estimate of the timing of when stock option vesting targets would be achieved. We expect stock-based compensation expense during 2021 to be approximately $42.7 million as compared to $27.0 million during 2020 as a result of new options granted in fourth-quarter 2020 net of awards granted in the prior year.

•We capitalized $5.5 million of software development costs in fourth-quarter 2020, which includes $5.0 million for continued enhancements to the SEI Wealth PlatformSM (SWP). Amortization expense related to capitalized software was $12.6 million in fourth-quarter 2020.

•Our effective tax rates were 19.6% in fourth-quarter 2020 and 19.5% in fourth-quarter 2019.

•We repurchased 1.8 million shares of our common stock for $99.1 million during the fourth-quarter 2020 at an average price of $54.36 per share. For the year ended 2020, we repurchased 8.0 million shares of our common stock for $424.7 million at an average price of $53.04 per share.

Earnings Conference Call

A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on Jan. 27, 2021. Investors may listen to the call at seic.com/ir-events. Investors may also listen to a replay by telephone at (USA) 866-207-1041; (International) 402-970-0847; Access Code: 5584674.

About SEI

After 50 years in business, SEI (NASDAQ:SEIC) remains a leading global provider of investment processing, investment management, and investment operations solutions designed to help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of Dec. 31, 2020, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers approximately $1 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including approximately $369 billion in assets under management and $787 billion in client assets under administration. For more information, visit seic.com.

This release contains, and the comments we expect to deliver during the earnings call referenced above will contain, forward-looking statements within the meaning or the rules and regulations of the Securities and Exchange Commission. In some cases you can identify forward-looking statements by terminology, such as ‘'may,’' '‘will,’' ‘'expect,’' ‘'believe’' and ‘'continue’' or ‘‘appear.’’ Our forward-looking statements in today’s release include our current expectations as to:

•revenue that we believe will be generated by sales events that occurred during the quarter,

•the rebound of our business,

•our strategic priorities and the degree to which we will execute on them,

•whether our solutions position us to capture growth opportunities or will lead to increased shareholder value, and

•whether our investments and new clients and backlog of new revenue situate us well for the future.

We anticipate that we may deliver forward-looking statements during today’s earnings call that include our current expectations as to:

•our ability to capture the opportunities inherent in significant change,

•the timing and success of client implementations and conversions,

•our ability to expand our relationships and revenue opportunities with new and existing clients,

•our ability to leverage our technologies and scale our businesses,

•the degree to which one-time and transaction-based revenues during the quarter will be repeated,

•revenue that we believe will be generated by sales events that occurred during the quarter or when our unfunded backlog may fund,

•the strategic initiatives and business segments that we will pursue and those in which we will invest,

•the strength of our pipelines,

•how we will manage our expenses,

•the organic and inorganic opportunities that will drive our growth, and

•the success of our strategic investments.

You should not place undue reliance on our forward-looking statements, as they are based on the current beliefs and expectations of our management and subject to significant risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe the assumptions upon which we base our forward-looking statements are reasonable, they could be inaccurate. Some of the risks and important factors that could cause actual results to differ from those described in our forward-looking statements can be found in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended Dec. 31, 2019, filed with the Securities and Exchange Commission.

# # #

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	For the Three Months Ended Dec. 31,		For the Twelve Months Ended Dec. 31,
	2020	2019	2020	2019

Asset management, admin. and distribution fees	$353,610	$337,232	$1,345,649	$1,307,044
Information processing and software servicing fees	90,113	85,993	338,409	342,841

Total revenues	443,723	423,225	1,684,058	1,649,885

Subadvisory, distribution and other asset mgmt. costs	46,973	46,458	181,618	181,418
Software royalties and other information processing costs	7,109	7,274	28,937	29,993
Compensation, benefits and other personnel	135,902	131,004	527,509	517,917
Stock-based compensation	6,556	9,027	27,014	24,582
Consulting, outsourcing and professional fees	59,566	50,235	227,916	194,560
Data processing and computer related	24,681	22,544	96,328	88,058
Facilities, supplies and other costs	17,467	20,307	64,915	72,078
Amortization	13,558	13,012	52,975	51,419
Depreciation	7,901	7,274	30,959	29,436

Total expenses	319,713	307,135	1,238,171	1,189,461

Income from operations	124,010	116,090	445,887	460,424

Net gain (loss) on investments	1,024	1,053	(286)	3,174
Interest and dividend income	986	3,845	6,568	16,582
Interest expense	(153)	(153)	(609)	(630)
Equity in earnings of unconsolidated affiliate	30,646	39,133	117,134	151,891

Income before income taxes	156,513	159,968	568,694	631,441

Income taxes	30,631	31,231	121,408	130,015

Net income	$125,882	$128,737	$447,286	$501,426

Basic earnings per common share	$0.87	$0.86	$3.05	$3.31

Shares used to calculate basic earnings per share	144,077	150,131	146,709	151,540

Diluted earnings per common share	$0.86	$0.84	$3.00	$3.24

Shares used to calculate diluted earnings per share	146,140	153,672	149,003	154,901

Dividends declared per common share	$0.37	$0.35	$0.72	$0.68

SEI INVESTMENTS COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


	Dec. 31,	Dec. 31,
	2020	2019
Assets
Current Assets:
Cash and cash equivalents	$784,626	$841,446
Restricted cash	3,101	3,101
Receivables from investment products	55,271	54,165
Receivables, net of allowance for doubtful accounts of $1,100 and $1,201	385,219	340,358
Securities owned	34,064	33,486
Other current assets	38,696	32,289
Total Current Assets	1,300,977	1,304,845

Property and Equipment, net of accumulated depreciation of $378,639 and $353,453	189,052	160,859
Operating Lease Right-of-Use Assets	38,397	42,789
Capitalized Software, net of accumulated amortization of $491,739 and $442,677	270,977	296,068
Investments Available for Sale	105,419	116,917
Investments in Affiliated Funds, at fair value	6,166	5,988
Investment in Unconsolidated Affiliate	98,433	67,413
Goodwill	64,489	64,489
Intangible Assets, net of accumulated amortization of $12,456 and $8,773	24,304	27,987
Deferred Contract Costs	33,781	30,991
Deferred Income Taxes	2,972	2,822
Other Assets, net	32,289	30,202
Total Assets	$2,167,256	$2,151,370

Liabilities and Equity
Current Liabilities:
Accounts payable	$7,766	$4,423
Accrued liabilities	299,845	272,801
Current portion of long-term operating lease liabilities	8,579	9,156
Deferred revenue	1,085	7,185
Total Current Liabilities	317,275	293,565

Long-term Taxes Payable	803	803
Deferred Income Taxes	55,159	55,722
Long-term Operating Lease Liabilities	34,058	38,450
Other Long-term Liabilities	20,054	24,052
Total Liabilities	427,349	412,592

Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 143,396 and 149,745 shares issued and outstanding	1,434	1,497
Capital in excess of par value	1,190,001	1,158,900
Retained earnings	565,270	601,885
Accumulated other comprehensive loss, net	(16,798)	(23,504)
Total Shareholders' Equity	1,739,907	1,738,778
Total Liabilities and Shareholders' Equity	$2,167,256	$2,151,370

ENDING ASSET BALANCES

(In millions) (Unaudited)


	Dec. 31,		Mar. 31,		Jun. 30,		Sept. 30,		Dec. 31,
	2019		2020		2020		2020		2020
Private Banks:
Equity and fixed-income programs	$23,851		$21,160		$22,974		$23,499		$25,498
Collective trust fund programs	4		5		5		6		6
Liquidity funds	3,405		4,143		4,291		3,718		3,778
Total assets under management	$27,260		$25,308		$27,270		$27,223		$29,282
Client assets under administration	25,801		21,497		23,903		24,174		26,346
Total assets	$53,061		$46,805		$51,173		$51,397		$55,628

Investment Advisors:
Equity and fixed-income programs	$67,895		$54,856		$59,958		$65,581		$71,247
Collective trust fund programs	4		2		3		3		1
Liquidity funds	2,887		5,969		6,648		3,866		3,832
Total assets under management	$70,786		$60,827		$66,609		$69,450		$75,080

Institutional Investors:
Equity and fixed-income programs	$84,291		$72,399		$80,257		$83,846		$90,869
Collective trust fund programs	83		94		103		101		98
Liquidity funds	1,746		3,672		1,924		2,096		2,128
Total assets under management	$86,120		$76,165		$82,284		$86,043		$93,095
Client assets under advisement	3,948		3,406		3,326		3,618		4,063
Total assets	$90,068		$79,571		$85,610		$89,661		$97,158

Investment Managers:
Collective trust fund programs	$	58,070	$	48,226	$	58,178	$	63,277	$	75,214
Liquidity funds	479		392		664		389		424
Total assets under management	$58,549		$48,618		$58,842		$63,666		$75,638
Client assets under administration (A)	657,541		610,794		668,611		730,369		760,397
Total assets	$716,090		$659,412		$727,453		$794,035		$836,035

Investments in New Businesses:
Equity and fixed-income programs	$1,688		$1,484		$1,498		$1,572		$1,711
Liquidity funds	158		152		194		169		162
Total assets under management	$1,846		$1,636		$1,692		$1,741		$1,873
Client assets under advisement	1,343		1,056		1,193		1,179		1,299
Total assets	$3,189		$2,692		$2,885		$2,920		$3,172

LSV Asset Management:
Equity and fixed-income programs (B)	$107,476		$70,851		$81,134		$82,051		$93,692

Total:
Equity and fixed-income programs (C)	$285,201		$220,750		$245,821		$256,549		$283,017
Collective trust fund programs	58,161		48,327		58,289		63,387		75,319
Liquidity funds	8,675		14,328		13,721		10,238		10,324
Total assets under management	$352,037		$283,405		$317,831		$330,174		$368,660
Client assets under advisement	5,291		4,462		4,519		4,797		5,362
Client assets under administration (D)	683,342		632,291		692,514		754,543		786,743
Total assets	$1,040,670		$920,158		$1,014,864		$1,089,514		$1,160,765

(A)Client assets under administration in the Investment Managers segment include $54.3 billion of assets that are at fee levels below our normal full-service assets (as of Dec. 31, 2020).

(B)Equity and fixed-income programs include $2.0 billion of assets managed by LSV in which fees are based on performance only (as of Dec. 31, 2020).

(C)Equity and fixed-income programs include $7.9 billion of assets invested in various asset allocation funds at Dec. 31, 2020.

(D)In addition to the numbers presented, SEI also administers an additional $12.9 billion in Funds of Funds assets (as of

Dec. 31, 2020 on which SEI does not earn an administration fee.

AVERAGE ASSET BALANCES

(In millions) (Unaudited)


	4th Qtr.		1st Qtr.		2nd Qtr.		3rd Qtr.		4th Qtr.
	2019		2020		2020		2020		2020
Private Banks:
Equity and fixed-income programs	$23,106		$24,657		$22,229		$23,740		$24,284
Collective trust fund programs	4		4		5		7		6
Liquidity funds	3,581		3,581		4,366		3,948		3,712
Total assets under management	$26,691		$28,242		$26,600		$27,695		$28,002
Client assets under administration	24,930		24,840		23,819		25,295		25,368
Total assets	$51,621		$53,082		$50,419		$52,990		$53,370

Investment Advisors:
Equity and fixed-income programs	$66,371		$64,933		$57,429		$64,479		$68,396
Collective trust fund programs	4		3		3		3		2
Liquidity funds	2,673		3,284		6,923		4,569		3,788
Total assets under management	$69,048		$68,220		$64,355		$69,051		$72,186

Institutional Investors:
Equity and fixed-income programs	$83,304		$79,926		$77,037		$82,830		$86,277
Collective trust fund programs	82		86		100		102		102
Liquidity funds	2,106		2,342		2,476		2,120		2,271
Total assets under management	$85,492		$82,354		$79,613		$85,052		$88,650
Client assets under advisement	4,106		3,760		3,362		3,565		3,746
Total assets	$89,598		$86,114		$82,975		$88,617		$92,396

Investment Managers:
Collective trust fund programs	$	55,499	$	55,952	$	54,061	$	62,028	$	69,349
Liquidity funds	642		617		482		565		411
Total assets under management	$56,141		$56,569		$54,543		$62,593		$69,760
Client assets under administration (A)	646,592		654,386		649,012		713,528		754,350
Total assets	$702,733		$710,955		$703,555		$776,121		$824,110

Investments in New Businesses:
Equity and fixed-income programs	$1,649		$1,663		$1,468		$1,560		$1,634
Liquidity funds	145		168		182		180		165
Total assets under management	$1,794		$1,831		$1,650		$1,740		$1,799
Client assets under advisement	1,044		1,222		1,148		1,206		1,218
Total assets	$2,838		$3,053		$2,798		$2,946		$3,017

LSV Asset Management:
Equity and fixed-income programs (B)	$104,814		$88,059		$80,395		$83,536		$88,182

Total:
Equity and fixed-income programs (C)	$279,244		$259,238		$238,558		$256,145		$268,773
Collective trust fund programs	55,589		56,045		54,169		62,140		69,459
Liquidity funds	9,147		9,992		14,429		11,382		10,347
Total assets under management	$343,980		$325,275		$307,156		$329,667		$348,579
Client assets under advisement	5,150		4,982		4,510		4,771		4,964
Client assets under administration (D)	671,522		679,226		672,831		738,823		779,718
Total assets	$1,020,652		$1,009,483		$984,497		$1,073,261		$1,133,261

(A) Average client assets under administration in the Investment Managers segment during fourth-quarter 2020 include $53.3 billion that are at fee levels below our normal full-service assets.

(B) Equity and fixed-income programs include $1.8 billion of average assets managed by LSV in which fees are based on performance only during fourth-quarter 2020.

(C) Equity and fixed-income programs include $7.9 billion of average assets invested in various asset allocation funds during fourth-quarter 2020.

(D) In addition to the numbers presented, SEI also administers an additional $12.3 billion of average assets in Funds of Funds assets during fourth-quarter 2020 on which SEI does not earn an administration fee.