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SEI Investments Co--Form 8-K

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 22, 2008

Date of report (Date of earliest event reported)

SEI Investments Company

(Exact name of registrant as specified in its charter)

Pennsylvania

0-10200

23-1707341

(State or other jurisdiction

of incorporation)

(Commission File No.)

(I.R.S. Employer

Identification No.)

1 Freedom Valley Drive

Oaks, Pennsylvania 19456

(Address of principal executive offices) (Zip Code)

(610) 676-1000

(Registrants’ telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

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))

Item 2.02.

Results of Operations and Financial Condition.

On Wednesday, October 22, 2008, SEI Investments Company issued a press release announcing its financial and operating results for the third quarter ended September 30, 2008. A copy of the press release is furnished as Exhibit 99.1 and incorporated in this Item 2.02 by reference.

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.

(d)

Exhibits.


99.1		Press Release dated October 22, 2008 of SEI Investments Company related to the Company’s financial and operating results for the third quarter ended September 30, 2008.

SIGNATURES

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


	SEI Investments Company

Date: October 22, 2008	By:	/s/ Dennis J. McGonigle
		Dennis J. McGonigle
		Chief Financial Officer

EXHIBIT INDEX


Exhibit Number		Description
99.1		Press Release dated October 22, 2008 of SEI Investments Company related to the Company’s financial and operating results for the third quarter ended September 30, 2008.

Press Release

Exhibit 99.1

NEWS FROM SEI

For Immediate Release


Contact:	Larry Wexler, Corp Comm	Murray Louis, VP	Dana Grosser, Corp PR
Voice:	610.676.1440	610.676.1932	610.676.2459
E-mail	lwexler@seic.com	mlouis@seic.com	dgrosser@seic.com
Pages:	Nine

SEI Reports Third-Quarter Revenues Down 10%, Net Income Down 53%

Net income negatively affected by $40.8 million in SIV-related charges

OAKS, Pa., October 22, 2008 — SEI Investments Company (NASDAQ:SEIC) today announced financial results for third-quarter 2008, reporting decreases in revenues, net income and earnings per share compared to third-quarter 2007. Net income during the third-quarter 2008 was negatively affected by a $40.8 million pre-tax charge (approximately $.13 per share post-tax) for previously-disclosed structured investment vehicle-related issues involving SEI-sponsored money market funds. The total loss recognized during 2008 is $93.9 million and the total cumulative loss recognized is $119.0 million.


Consolidated Overview (In thousands, except earnings per share)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2008		2007		%		2008		2007		%
Revenues	$	316,086	$	349,636	(10	)%	$	979,517	$	1,015,619	(4	)%
Net Income Before Taxes		54,305		111,727	(51	)%		205,497		324,748	(37	)%
Net Income		34,495		73,299	(53	)%		129,605		206,177	(37	)%
Diluted Earnings Per Share	$	.18	$	.37	(51	)%	$	.66	$	1.02	(35	)%

“The turmoil in the capital markets made the third-quarter a particularly challenging one,” said Alfred P. West, Jr., SEI Chairman and CEO.

“The current market environment presents one of the most challenging ever faced. However, our diverse portfolio of businesses and our strong capital base and balance sheet should enable us to maintain profitability, continue to generate cash and stay the course in the implementation of our new strategies.

“Rest assured, during these times, we will continue to work hard to improve our business and its results. We are firm in our belief that what we are doing will provide our clients with opportunities for success, position us to prosper as times get better.”

Summary of Third-Quarter and Year to Date Results by Business Segment


	For the Three Month Period Ended September 30,								For the Nine Month Period Ended September 30,
(In thousands)	2008			2007			%		2008			2007			%
Private Banks:
Revenues	$	99,882		$	104,280		(4	)%	$	310,538		$	302,108		3	%
Expenses		79,545			82,846		(4	)%		251,079			241,668		4	%

Operating Profit	$	20,337		$	21,434		(5	)%	$	59,459		$	60,440		(2	)%
Operating Margin		20	%		21	%				19	%		20	%

Investment Advisors:
Revenues		58,846			65,715		(10	)%		181,213			192,724		(6	)%
Expenses		30,775			31,257		(2	)%		93,702			91,550		2	%

Operating Profit		28,071			34,458		(19	)%		87,511			101,174		(14	)%
Operating Margin		48	%		52	%				48	%		52	%

Institutional Investors:
Revenues		52,757			51,275		3	%		154,746			146,815		5	%
Expenses		30,525			30,980		(1	)%		89,993			89,334		1	%

Operating Profit		22,232			20,295		10	%		64,753			57,481		13	%
Operating Margin		42	%		40	%				42	%		39	%

Investment Managers:
Revenues		38,202			35,844		7	%		112,002			105,131		7	%
Expenses		26,566			25,445		4	%		77,542			74,649		4	%

Operating Profit		11,636			10,399		12	%		34,460			30,482		13	%
Operating Margin		30	%		29	%				31	%		29	%

Investments in New Businesses:
Revenues		1,811			1,881		(4	)%		5,509			5,347		3	%
Expenses		4,023			5,020		(20	)%		12,822			14,597		(12	)%

Operating Loss		(2,212	)		(3,139	)	30	%		(7,313	)		(9,250	)	21	%
Operating Margin		n/a			n/a					n/a			n/a

LSV:
Revenues		64,588			90,641		(29	)%		215,509			263,494		(18	)%
Expenses (1)		40,754			56,252		(28	)%		133,950			162,411		(18	)%

Operating Profit		23,834			34,389		(31	)%		81,559			101,083		(19	)%
Operating Margin		37	%		38	%				38	%		38	%

Consolidated Segment Totals:
Revenues	$	316,086		$	349,636		(10	)%	$	979,517		$	1,015,619		(4	)%
Expenses		212,188			231,800		(8	)%		659,088			674,209		(2	)%

Operating Profit	$	103,898		$	117,836		(12	)%	$	320,429		$	341,410		(6	)%
Operating Margin		33	%		34	%				33	%		34	%

(1)	Includes $32,741 and $47,671 for the three-month period ended September 30, 2008 and 2007, respectively, and $112,051 and $139,204 for the nine-month period ended September 30, 2008 and 2007, respectively, of minority interest to the other partners of LSV.

A reconciliation of the totals reported for the business segments to the applicable line items in the Consolidated Statements of Income for the three and nine-month periods ended September 30, 2008 and 2007 is as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Total operating profit from business segments	$	103,898		$	117,836		$	320,429		$	341,410

Corporate overhead expenses		(10,420	)		(9,754	)		(30,876	)		(30,459	)
Minority interest reflected in segments		33,291			49,016			114,561			142,641
LSV Employee Group Expenses (1)		(1,820	)		(1,820	)		(5,460	)		(5,460	)

Income from operations	$	124,949		$	155,278		$	398,654		$	448,132

(1)

Includes $1,805 for the three-month period ending September 30, 2008 and 2007, and $5,416 for the nine- month period ended September 30, 2008 and 2007 of amortization expense related to intangible assets owned by LSV Employees Group LLC. The amortization is offset through Minority interest since SEI does not have any ownership in LSV Employee Group LLC.

Third-Quarter Business Commentary:

•

The Institutional Investors and Investment Managers segments generated gains in third-quarter 2008 revenues and operating profits versus third-quarter 2007 due to new client activity.

•

The LSV and Investment Advisors segments were most directly affected by the weakening capital markets resulting in substantial third-quarter 2008 revenue and operating profit declines from third-quarter 2007 levels.

•

The company’s percentage ownership in LSV remained at approximately 43 percent. In the third-quarter 2008, the company recognized $23.8 million as its portion of the earnings from LSV versus $34.4 million in the third-quarter 2007.

•

Assets under management declined by $16.4 billion during third-quarter 2008 to $161.8 billion, primarily due to market depreciation.

•

The third-quarter 2008 results include a $34.2 million non-cash charge related to money market funds support agreements. Additionally, on September 30, 2008, SEI purchased all of the SIVs held by the SDIT Money Market fund for a cash purchase price of $15.3 million. The purchased securities on that date had a fair value of $8.7 million which resulted in a $6.6 million loss recognized in the third quarter. SEI has recognized losses of $93.9 million during 2008 and cumulative losses of $119.0 million associated with SIV- related issues involving SEI-sponsored money market funds. Additional information about the capital support agreements is attached to this release and is also contained in SEI’s 2007 Form 10-K filed February 26, 2008 and SEI’s 2008 second-quarter 10-Q filed July 31, 2008.

•

In the third-quarter 2008, SEI purchased 770,000 shares of its common stock for $16.7 million.

Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 PM ET on October 22, 2008. Investors may listen to the call at www.seic.com (Investor Information section), or listen at www.earnings.com, a service of Thomson Streetevents. The call may also be accessed at numerous financial services web sites including AOL and Yahoo. Investors may also listen to replays at these web sites, or by telephone at (USA) 1-800-475-6701; (International) 320-365-3844, access code 966006.

About SEI

SEI (NASDAQ:SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company’s innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of September 30, 2008, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $431 billion in mutual fund and pooled assets and manages $162 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from more than 20 offices in over a dozen countries. For more information, visit www.seic.com.

Many of the statements in this release may be considered “forward looking statements” and include discussions about future operations, strategies and financial results. Forward-looking statements are based upon estimates and assumptions that involve risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe our assumptions are reasonable, they could be inaccurate. Our actual future revenues and income could differ materially from our expected results. We have no obligation to publicly update or revise any forward-looking statements.

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,
	2008			2007
Asset management, admin. and distribution fees	$	243,162		$	280,287
Information processing and software servicing fees		56,577			58,485
Transaction–based and trade execution fees		16,347			10,864

Total revenues		316,086			349,636
Commissions and fees		42,336			44,184
Compensation, benefits and other personnel		80,932			88,463
Consulting, outsourcing and professional fees		26,213			23,703
Data processing and computer related		11,325			10,410
Facilities, supplies and other costs		18,656			16,607
Depreciation and amortization		11,675			10,991

Total expenses		191,137			194,358
Income from operations		124,949			155,278
Minority interest		(31,078	)		(46,463	)
Net loss on investments (1) (2)		(42,047	)		(202	)
Interest and dividend income		3,384			4,381
Interest expense		(903	)		(1,267	)

Income before taxes		54,305			111,727
Income taxes		19,810			38,428

Net income	$	34,495		$	73,299

Diluted earnings per common share	$	.18		$	.37

Shares used to calculate diluted earnings per common share		194,696			200,321

Basic earnings per common share	$	.18		$	.38

Shares used to calculate basic earnings per common share		191,554			194,930

(1)	Includes $34,205 for the three month period ended September 30, 2008 of a non-cash charge related to money market funds support agreements.

(2)	Includes $6,588 for the three month period ended September 30, 2008 of a loss related to the purchase of structured investment vehicles from a SEI-sponsored money market fund.

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Nine Months Ended September 30,
	2008			2007
Asset management, admin. and distribution fees	$	764,152		$	813,338
Information processing and software servicing fees		173,804			168,131
Transaction–based and trade execution fees		41,561			34,150

Total revenues		979,517			1,015,619
Commissions and fees		130,676			129,857
Compensation, benefits and other personnel		248,353			261,293
Consulting, outsourcing and professional fees		79,581			67,199
Data processing and computer related		33,102			31,404
Facilities, supplies and other costs		54,458			51,867
Depreciation and amortization		34,693			25,867

Total expenses		580,863			567,487
Income from operations		398,654			448,132
Minority interest		(107,837	)		(134,439	)
Net loss on investments (1) (2)		(93,387	)		(1,515	)
Interest and dividend income		10,745			13,314
Interest expense		(2,678	)		(3,696	)
Other		—			2,952

Income before taxes		205,497			324,748
Income taxes		75,892			118,571

Net income	$	129,605		$	206,177

Diluted earnings per common share	$	.66		$	1.02

Shares used to calculate diluted earnings per common share		196,300			202,875

Basic earnings per common share	$	.67		$	1.05

Shares used to calculate basic earnings per common share		192,457			196,720

(1)	Includes $87,301 for the nine month period ended September 30, 2008 of a non-cash charge related to money market funds support agreements.

(2)	Includes $6,588 for the nine month period ended September 30, 2008 of a loss related to the purchase of structured investment vehicles from a SEI-sponsored money market fund.

SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)


	(Unaudited) September 30, 2008		December 31, 2007
Assets
Cash and short-term investments	$	345,790	$	360,921
Restricted cash		34,250		10,250
Receivables		253,776		275,109
Securities owned		12,093		16,777
Other current assets		68,208		31,877

Total current assets		714,117		694,934
Property and equipment, net		150,735		143,516
Marketable securities		86,017		77,169
Capitalized software, net		258,190		231,684
Goodwill		22,842		22,842
Intangible assets		54,434		60,177
Other assets, net		17,039		22,043

Total assets	$	1,303,374	$	1,252,365

Liabilities
Current liabilities (1)	$	267,515	$	230,367
Long-term debt		29,623		43,971
Deferred income taxes		81,978		73,600
Long term liabilities		12,021		11,895
Minority interest		128,858		136,149
Shareholders’ Equity		783,379		756,383

Total liabilities and shareholders’ equity	$	1,303,374	$	1,252,365

(1)	Includes $112,423 and $25,122 for the period ended September 30, 2008 and December 31 2007, respectively, of an accrual related to money market funds support agreements.

SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

(Unaudited)


	Sep. 30, 2007		Dec. 31, 2007		Mar. 31, 2008		Jun. 30, 2008		Sep. 30, 2008
Private Banks:
Equity/Fixed Income prgms.	$	21,816	$	21,160	$	18,904	$	18,163	$	14,436
Collective Trust Fund prgm.		1,056		1,007		1,008		955		1,028
Liquidity funds		8,836		8,886		9,198		8,345		9,253

Total assets under mgmt.	$	31,708	$	31,053	$	29,110	$	27,463	$	24,717
Client assets under admin.		15,655		14,235		13,897		13,242		12,301

Total assets	$	47,363	$	45,288	$	43,007	$	40,705	$	37,018
Investment Advisors:
Equity/Fixed Income prgms.	$	37,751	$	36,378	$	32,736	$	31,938	$	27,817
Collective Trust Fund prgm.		2,325		2,295		2,310		2,259		2,471
Liquidity funds		1,619		2,079		2,461		2,410		2,859

Total assets under mgmt.	$	41,695	$	40,752	$	37,507	$	36,607	$	33,147
Institutional Investors:
Equity/Fixed Income prgms.	$	43,504	$	44,833	$	43,134	$	43,608	$	39,775
Collective Trust Fund prgm.		907		897		924		947		1,001
Liquidity funds		4,342		3,629		4,077		3,950		3,930

Total assets under mgmt.	$	48,753	$	49,359	$	48,135	$	48,505	$	44,706
Investment Managers:
Equity/Fixed Income prgms.	$	24	$	24	$	20	$	19	$	10
Collective Trust Fund prgm.		6,814		6,651		6,571		6,572		6,453
Liquidity funds		360		325		571		438		699

Total assets under mgmt.	$	7,198	$	7,000	$	7,162	$	7,029	$	7,162
Client assets under admin.		205,251		215,124		225,005		228,722		256,553

Total assets	$	212,449	$	222,124	$	232,167	$	235,751	$	263,715
Investments in New Businesses:
Equity/Fixed Income prgms.	$	907	$	929	$	869	$	838	$	704
Liquidity funds		40		74		77		98		115

Total assets under mgmt.	$	947	$	1,003	$	946	$	936	$	819
LSV Asset Management
Equity/Fixed Income prgms.	$	71,349	$	67,599	$	61,765	$	57,692	$	51,296
Consolidated:
Equity/Fixed Income prgms (A)	$	175,351	$	170,923	$	157,428	$	152,258	$	134,038
Collective Trust Fund prgm.		11,102		10,850		10,813		10,733		10,953
Liquidity funds		15,197		14,993		16,384		15,241		16,856

Total assets under mgmt.	$	201,650	$	196,766	$	184,625	$	178,232	$	161,847
Client assets under admin. (B)		220,906		229,359		238,902		241,964		268,854

Total assets	$	422,556	$	426,125	$	423,527	$	420,196	$	430,701

(A)	Equity/Fixed Income programs include $2,697 of assets invested in various asset allocation funds at September 30, 2008.

(B)	In addition to the numbers presented, SEI also administers an additional $6,485 in Funds of Funds assets (as of September 30, 2008) on which SEI does not earn an administration fee.

SEI Investments Company

Impact of Support Provided to Sponsored Money Market Funds

Third-Quarter 2008 and Cumulative as of September 30, 2008

(in thousands)


	Transaction Dates	Par Value of Securities		Support Amount		Third Quarter 2008				Cumulative
	Transaction Dates	Par Value of Securities		Support Amount		Gross Charge		After-Tax Charge		Gross Charge		After-Tax Charge
Securities currently held by funds:
Capital Support Agreement (1)	Nov 2007	$	274,069	$	150,000	$	27,871	$	17,698	$	93,659	$	59,099
Capital Support Agreement (2)	Dec 2007		74,286		20,000		7,289		4,629		18,765		11,841

Total of securities currently held by funds			348,355		170,000		35,160		22,327		112,424		70,940
Securities purchased from funds:
Gryphon (formerly Cheyne)	Sep 2008		15,321		15,321		5,634		3,578		6,588		4,157

Total of all Securities		$	363,676	$	185,321	$	40,794	$	25,905	$	119,012	$	75,097

(1)	Pertains to SEI Daily Income Trust Prime Obligation Fund

(2)	Pertains to SEI Liquid Asset Trust Prime Obligation Fund