seic-20211020
0000350894FALSE00003508942021-10-202021-10-20

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
October 20, 2021
Date of report (Date of earliest event reported)
________________________________________
https://cdn.kscope.io/67323f2469572223ac6243008a88457b-seic-20211020_g1.jpg
________________________________________
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 classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareSEICThe 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, October 20, 2021, SEI Investments Company (the "Company") issued a press release announcing its financial and operating results for the third quarter ended September 30, 2021. 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 will be made 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
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:
October 20, 2021
By:/s/ Dennis J. McGonigle
Dennis J. McGonigle
Chief Financial Officer






Document

Exhibit 99.1

https://cdn.kscope.io/67323f2469572223ac6243008a88457b-download.jpg

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 Third-Quarter 2021 Financial Results
OAKS, Pa., Oct. 20, 2021 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the third-quarter 2021. Diluted earnings per share were $0.97 in third-quarter 2021 compared to $0.75 in third-quarter 2020.
Consolidated Overview
(In thousands, except earnings per share)For the Three Months Ended September 30,For the Nine Months Ended September 30,
20212020%20212020%
Revenues$485,322 $424,927 14%$1,416,659 $1,240,335 14%
Net income 138,045 111,096 24%401,293 321,404 25%
Diluted earnings per share$0.97 $0.75 29%$2.79 $2.14 30%
“Our results reflect positive markets entering the third-quarter, continued sales momentum and delivery across our business segments. As the financial services industry continues to experience unrelenting change, we continue to make strategic investments in our business, our solutions and workforce to drive growth,” said Alfred P. West, Jr., SEI Chairman and CEO.

“Our talented workforce is the key to our ability to serve our clients globally and create opportunities for our future. As we look forward, we will continue to capitalize on market opportunities to deliver long-term value to our shareholders, employees, clients and communities.”




Summary of Third-Quarter Results by Business Segment
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(In thousands)
20212020%20212020%
Private Banks:
Revenues$123,018 $114,792 7%$364,302 $335,739 9%
Expenses116,679 113,066 3%345,057 331,442 4%
Operating Profit6,339 1,726 NM19,245 4,297 348%
Operating Margin%%%%
Investment Advisors:
Revenues124,768 103,189 21%357,458 299,218 19%
Expenses62,107 51,519 21%176,267 154,100 14%
Operating Profit62,661 51,670 21%181,191 145,118 25%
Operating Margin50 %50 %51 %48 %
Institutional Investors:
Revenues85,759 79,583 8%255,957 235,309 9%
Expenses41,643 37,812 10%122,696 113,016 9%
Operating Profit44,116 41,771 6%133,261 122,293 9%
Operating Margin51 %52 %52 %52 %
Investment Managers:
Revenues147,412 123,846 19%426,639 359,815 19%
Expenses89,594 79,838 12%257,609 228,795 13%
Operating Profit57,818 44,008 31%169,030 131,020 29%
Operating Margin39 %36 %40 %36 %
Investments in New Businesses:
Revenues4,365 3,517 24%12,303 10,254 20%
Expenses12,820 13,315 (4)%39,855 37,691 6%
Operating Loss(8,455)(9,798)NM(27,552)(27,437)NM
Totals:
Revenues$485,322 $424,927 14%$1,416,659 $1,240,335 14%
Expenses322,843 295,550 9%941,484 865,044 9%
Corporate Overhead Expenses21,354 18,040 18%65,192 53,414 22%
Income from Operations$141,125 $111,337 27%$409,983 $321,877 27%


2


Third-Quarter Business Highlights:
Revenues from Asset management, administration, and distribution fees increased from higher assets under management and administration due to market appreciation and positive cash flows from new and existing clients.
Average assets under administration increased $116.9 billion, or 16%, to $855.7 billion in the third-quarter 2021, as compared to $738.8 billion during the third-quarter 2020 (see attached Average Asset Balances schedules for further details).
Average assets under management, excluding LSV, increased $53.9 billion, or 22%, to $300.0 billion in the third-quarter 2021, as compared to $246.1 billion during the third-quarter 2020 primarily due to market appreciation (see attached Average Asset Balances schedules for further details).
Net sales events in the Private Banks and Investment Managers segments during third-quarter 2021 were $19.4 million and are expected to generate net annualized recurring revenues of approximately $15.1 million when contract values are completely realized.
Net sales events in asset management-related businesses of the Investment Advisors and Institutional Investors segments and the Asset Management Distribution (AMD) business in the Private Banks segment during third-quarter 2021 were $6.9 million.
The increase in operational expenses was primarily due to increased direct costs related to increased revenues, as well as increased personnel costs due to business growth and competitive labor markets.
Earnings from LSV increased by $6.7 million, or 24%, to $35.0 million in third-quarter 2021, as compared to $28.3 million in third-quarter 2020. The increase in earnings was primarily due to higher assets under management from market appreciation. Negative cash flows from existing clients and client losses partially offset the increase in earnings from LSV.
Stock-based compensation expense in third-quarter 2021 increased $4.9 million as compared to third-quarter 2020 due to equity awards in late 2020 and from a change in estimate of the timing of when stock-option vesting targets would be achieved.
We capitalized $7.2 million of software development costs in third-quarter 2021 for continued enhancements to the SEI Wealth PlatformSM. Amortization expense related to SWP was $12.0 million in third-quarter 2021.
Effective tax rates were 21.7% in third-quarter 2021 and 21.4% in third-quarter 2020.
We repurchased 2.0 million shares of our common stock for $119.9 million during the third-quarter 2021.
Cash flow from operations was $158.9 million, or $1.12 per share, and free cash flow was $144.6 million during the third-quarter 2021.


3


Earnings Conference Call
A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on Oct. 20, 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: 4538998.

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 Sept. 30, 2021, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers approximately $1.3 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including approximately $392 billion in assets under management and $866 billion in client assets under administration. For more information, visit seic.com.

This release contains 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 include our current expectations as to:
revenue that we believe will be generated by sales events that occurred during the quarter and the timing of such realization,
whether we will have sales momentum,
whether we will invest in our business, solutions, or workforce,
our strategic priorities and commitments and the degree to which we will execute on them, and
the degree to which we are able to capitalize on market opportunities and deliver long-term value to our shareholders, employees, clients and communities.
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 migrations, implementations and conversions,
our ability to expand our relationships and revenue opportunities with new and existing clients,
whether we will be able to take advantage of increasing sales demand,
the timing of and our ability to integrate acquisition targets and the benefits we will receive from any of our acquisitions,
the degree to which M&A activity in the industries in which we compete will affect our sales,
the degree to which our technology is being adopted across both our existing client base and new 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, if at all,
the strategic initiatives and business segments that we will pursue and those in which we will invest,
the degree to which our One SEISM strategy will allow us to increase our growth opportunities,
the competition for and cost of talent and the effect of these factors on our business,
the amount of recurring sales we will generate,
the strength of our pipelines and demand for our products and services,
the degree to which the global COVID-19 pandemic is affecting our business,
the momentum we may have with respect to our businesses,
the elements of our long-term success,
the degree to which our business will be successful and what parties will be beneficiaries of any such success,
the headwinds we will face and our strategies for how we may respond to these headwinds,
how we will manage our expenses and the degree to which our forecasted expenses will decline, increase or normalize,
when we integrate purchased assets into the SEI Wealth Platform and the timing of our ability to offer additional services to clients,
the organic and inorganic opportunities that will drive our growth, and
the success and benefits 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, 2020, filed with the Securities and Exchange Commission.
# # #
4


SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2021202020212020
Asset management, admin. and distribution fees$393,296 $339,609 $1,143,451 $992,039 
Information processing and software servicing fees92,026 85,318 273,208 248,296 
Total revenues485,322 424,927 1,416,659 1,240,335 
Subadvisory, distribution and other asset mgmt. costs55,619 45,126 161,610 134,645 
Software royalties and other information processing costs7,348 6,992 20,561 21,828 
Compensation, benefits and other personnel150,188 134,795 429,188 391,607 
Stock-based compensation11,318 6,467 31,173 20,458 
Consulting, outsourcing and professional fees55,868 57,949 165,657 168,350 
Data processing and computer related26,650 24,437 79,746 71,647 
Facilities, supplies and other costs14,124 16,679 49,851 47,448 
Amortization14,674 13,200 43,749 39,417 
Depreciation8,408 7,945 25,141 23,058 
Total expenses344,197 313,590 1,006,676 918,458 
Income from operations141,125 111,337 409,983 321,877 
Net (loss) gain on investments(575)776 134 (1,310)
Interest and dividend income892 1,009 2,715 5,582 
Interest expense(101)(153)(354)(456)
Equity in earnings of unconsolidated affiliate35,005 28,305 103,420 86,488 
Income before income taxes176,346 141,274 515,898 412,181 
Income taxes38,301 30,178 114,605 90,777 
Net income$138,045 $111,096 $401,293 $321,404 
Basic earnings per common share$0.98 $0.76 $2.83 $2.18 
Shares used to calculate basic earnings per share140,507 145,812 141,928 147,586 
Diluted earnings per common share$0.97 $0.75 $2.79 $2.14 
Shares used to calculate diluted earnings per share142,426 147,907 143,981 149,958 
Dividends declared per common share$— $— $0.37 $0.35 

5


SEI INVESTMENTS COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30,December 31,
20212020
Assets
Current Assets:
Cash and cash equivalents$793,883 $784,626 
Restricted cash351 3,101 
Receivables from investment products59,808 55,271 
Receivables, net of allowance for doubtful accounts of $2,669 and $1,100
442,187 385,219 
Securities owned31,770 34,064 
Other current assets42,615 38,696 
Total Current Assets1,370,614 1,300,977 
Property and Equipment, net of accumulated depreciation of $400,679 and $378,639
183,802 189,052 
Operating Lease Right-of-Use Assets35,145 38,397 
Capitalized Software, net of accumulated amortization of $531,923 and $491,739
250,280 270,977 
Available for Sale and Equity Securities140,079 105,419 
Investments in Affiliated Funds, at fair value6,893 6,166 
Investment in Unconsolidated Affiliate39,872 98,433 
Goodwill64,489 64,489 
Intangible Assets, net of accumulated amortization of $15,768 and $12,456
31,992 24,304 
Deferred Contract Costs34,263 33,781 
Deferred Income Taxes2,148 2,972 
Other Assets, net32,224 32,289 
Total Assets$2,191,801 $2,167,256 
Liabilities and Equity
Current Liabilities:
Accounts payable$10,772 $7,766 
Accrued liabilities231,043 299,845 
Current portion of long-term operating lease liabilities10,412 8,579 
Deferred revenue1,235 1,085 
Total Current Liabilities253,462 317,275 
Long-term Income Taxes Payable803 803 
Deferred Income Taxes47,434 55,159 
Long-term Operating Lease Liabilities29,857 34,058 
Other Long-term Liabilities22,157 20,054 
Total Liabilities353,713 427,349 
Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 139,305 and 143,396 shares issued and outstanding
1,393 1,434 
Capital in excess of par value1,228,085 1,190,001 
Retained earnings629,153 565,270 
Accumulated other comprehensive loss, net(20,543)(16,798)
Total Shareholders' Equity1,838,088 1,739,907 
Total Liabilities and Shareholders' Equity$2,191,801 $2,167,256 

6


ENDING ASSET BALANCES
(In millions) (Unaudited)
Sept. 30,Dec. 31Mar. 31,Jun. 30,Sept. 30,
20202020202120212021
Private Banks:
Equity and fixed-income programs
$23,499 $25,498 $25,098 $26,264 $25,618 
Collective trust fund programs
Liquidity funds
3,718 3,778 3,793 3,654 3,988 
Total assets under management
$27,223 $29,282 $28,898 $29,925 $29,612 
Client assets under administration
24,174 26,346 4,379 4,412 4,675 
Total assets
$51,397 $55,628 $33,277 $34,337 $34,287 
Investment Advisors:
Equity and fixed-income programs
$65,581 $71,247 $73,818 $78,052 $78,560 
Collective trust fund programs
— 
Liquidity funds
3,866 3,832 3,584 3,550 3,477 
Total Platform assets under management$69,450 $75,080 $77,403 $81,603 $82,037 
Platform-only assets (E)10,506 11,862 12,538 13,566 13,728 
Total Platform assets (E)$79,956 $86,942 $89,941 $95,169 $95,765 
Institutional Investors:
Equity and fixed-income programs
$83,846 $90,869 $92,040 $93,010 $89,441 
Collective trust fund programs
101 98 95 
Liquidity funds
2,096 2,128 2,909 2,516 2,599 
Total assets under management
$86,043 $93,095 $95,044 $95,531 $92,045 
Client assets under advisement
3,618 4,063 4,333 4,566 4,698 
Total assets
$89,661 $97,158 $99,377 $100,097 $96,743 
Investment Managers:
Collective trust fund programs
63,277 75,214 78,304 87,012 87,488 
Liquidity funds
389 424 449 473 568 
Total assets under management
$63,666 $75,638 $78,753 $87,485 $88,056 
Client assets under administration (A)
730,369 760,397 831,819 875,942 861,605 
Total assets
$794,035 $836,035 $910,572 $963,427 $949,661 
Investments in New Businesses:
Equity and fixed-income programs
$1,572 $1,711 $1,777 $1,924 $1,964 
Liquidity funds
169 162 289 191 202 
Total assets under management
$1,741 $1,873 $2,066 $2,115 $2,166 
Client assets under advisement
1,179 1,299 1,355 1,422 1,378 
Total assets
$2,920 $3,172 $3,421 $3,537 $3,544 
LSV Asset Management:
Equity and fixed-income programs (B)
$82,051 $93,692 $101,565 $102,404 $97,604 
Total:
Equity and fixed-income programs (C)
$256,549 $283,017 $294,298 $301,654 $293,187 
Collective trust fund programs
63,387 75,319 78,407 87,025 87,499 
Liquidity funds
10,238 10,324 11,024 10,384 10,834 
Total assets under management
$330,174 $368,660 $383,729 $399,063 $391,520 
Client assets under advisement
4,797 5,362 5,688 5,988 6,076 
Client assets under administration (D)
754,543 786,743 836,198 880,354 866,280 
Platform-only assets 10,506 11,862 12,538 13,566 13,728 
Total assets
$1,100,020 $1,172,627 $1,238,153 $1,298,971 $1,277,604 
(A)Client assets under administration in the Investment Managers segment include $12.3 billion of assets that are at fee levels below our normal full-service assets (as of September 30, 2021).
(B)Equity and fixed-income programs include $2.3 billion of assets managed by LSV in which fees are based on performance only (as of September 30, 2021).
(C)Equity and fixed-income programs include $7.8 billion of assets invested in various asset allocation funds at September 30, 2021.
(D)In addition to the numbers presented, SEI also administers an additional $13.7 billion in Funds of Funds assets (as of
September 30, 2021) on which SEI does not earn an administration fee.
(E)    Platform assets under management and Platform-only assets combined are total Platform assets in the Investment Advisors segment.
7


AVERAGE ASSET BALANCES
(In millions) (Unaudited)
3rd Qtr.4th Qtr.1st Qtr.2nd Qtr.3rd Qtr.
20202020202120212021
Private Banks:
Equity and fixed-income programs
$23,740 $24,284 $25,139 $26,056 $26,232 
Collective trust fund programs
Liquidity funds
3,948 3,712 3,876 3,833 3,916 
Total assets under management
$27,695 $28,002 $29,021 $29,896 $30,154 
Client assets under administration
25,295 25,368 4,317 4,405 4,476 
Total assets
$52,990 $53,370 $33,338 $34,301 $34,630 
Investment Advisors:
Equity and fixed-income programs
$64,479 $68,396 $73,239 $76,839 $79,602 
Collective trust fund programs
— 
Liquidity funds
4,569 3,788 3,619 3,370 3,403 
Total Platform assets under management$69,051 $72,186 $76,859 $80,210 $83,005 
Platform-only assets (E)10,501 11,214 12,206 13,292 13,863 
Total Platform assets (E)$79,552 $83,400 $89,065 $93,502 $96,868 
Institutional Investors:
Equity and fixed-income programs
$82,830 $86,277 $91,349 $93,458 $91,965 
Collective trust fund programs
102 102 96 68 
Liquidity funds
2,120 2,271 2,621 2,681 2,742 
Total assets under management
$85,052 $88,650 $94,066 $96,207 $94,712 
Client assets under advisement
3,565 3,746 4,146 4,516 4,658 
Total assets
$88,617 $92,396 $98,212 $100,723 $99,370 
Investment Managers:
Collective trust fund programs
62,028 69,349 78,035 84,553 89,441 
Liquidity funds
565 411 490 469 532 
Total assets under management
$62,593 $69,760 $78,525 $85,022 $89,973 
Client assets under administration (A)
713,528 754,350 817,330 853,810 851,183 
Total assets
$776,121 $824,110 $895,855 $938,832 $941,156 
Investments in New Businesses:
Equity and fixed-income programs
$1,560 $1,634 $1,743 $1,870 $1,958 
Liquidity funds
180 165 169 236 205 
Total assets under management
$1,740 $1,799 $1,912 $2,106 $2,163 
Client assets under advisement
1,206 1,218 1,327 1,406 1,423 
Total assets
$2,946 $3,017 $3,239 $3,512 $3,586 
LSV Asset Management:
Equity and fixed-income programs (B)
$83,536 $88,182 $97,476 $103,583 $99,924 
Total:
Equity and fixed-income programs (C)
$256,145 $268,773 $288,946 $301,806 $299,681 
Collective trust fund programs
62,140 69,459 78,138 84,629 89,452 
Liquidity funds
11,382 10,347 10,775 10,589 10,798 
Total assets under management
$329,667 $348,579 $377,859 $397,024 $399,931 
Client assets under advisement
4,771 4,964 5,473 5,922 6,081 
Client assets under administration (D)
738,823 779,718 821,647 858,215 855,659 
Platform-only assets10,501 11,214 12,206 13,292 13,863 
Total assets
$1,083,762 $1,144,475 $1,217,185 $1,274,453 $1,275,534 
(A)    Average client assets under administration in the Investment Managers segment during third-quarter 2021 include $12.5 billion that are at fee levels below our normal full-service assets.
(B)    Equity and fixed-income programs include $2.4 billion of average assets managed by LSV in which fees are based on performance only during third-quarter 2021.
(C)    Equity and fixed-income programs include $7.8 billion of average assets invested in various asset allocation funds during third-quarter 2021.
(D)    In addition to the numbers presented, SEI also administers an additional $13.6 billion of average assets in Funds of Funds assets during third-quarter 2021 on which SEI does not earn an administration fee.
(E)    Platform assets under management and Platform-only assets combined are total Platform assets in the Investment Advisors segment.
8