SEIC - Earnings call transcript Q1 2018

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Operator

Ladies and gentlemen thank you for standing by. Welcome to the SEI First Quarter 2018 Earnings Call. At this time all participant lines are in a listen-only mode. Later, there will be an opportunity for your questions; instructions will be given at that time.

As a reminder, today's conference call is being recorded. to Al conference West. like Chairman to now CEO, and would turn over the the I Please ahead. go

Al West

Thank you and welcome everyone.

Heilig, SEI's All then on And business the of quarter of that leaders new Kathy Dennis comment on each and XXXX. you of McGonigle, over turn the results investment provide in to the questions important are I’ll Kathy CFO; to call as I’ll And business we by our report. After the with their segments. of well field or as first will segment finally segment recapping the SEI's tell as will Controller. leaders some each cover end will at it and you company-wide usual, start then Dennis segment. LSV statistics.

with So XXXX. first the let quarter me start

First increase XX% quarter ago. represents per share a of the the first Diluted of from a the $X.XX earnings year $X.XX, earnings first for quarter quarter by for XX% from increased XXXX. reported

reported quarter a essentially we first of of the during increase first The non-cash were offset balances flows were XXXX. in drops flat. by market. Also under first quarter positive revenue XXXX asset management to from XXXX, had quarter also the our of We in XX%

per addition the $XX during shares share. repurchased quarter repurchases That of $XX In during to of average of million stock of first translates have approximately SEI’s an X.X the XXXX, we price stock million quarter. at over

X.X of previously $XXX,XXX development investments development. capitalized made IMS $XX SWP fourth amortized approximately of the development amortized in the capitalized quarter Finally, capitalized of million $X.X capitalized and we create to million the first of we million development. growth, IMS in part approximately previously we Also quarter, as of the and

of approximately quarter are million $XX.X and to XXXX’s annualized events totaled losses $XX.X sales net expected of generate recurring approximately client net million. revenues of First

remain disappointed results. we Now sales with our

today and more results. is Each close. take speak Larger of high deals are will longer our sales complex our and significant. pipelines specific very units to activity Our are their to

formal concludes this my Now, remarks.

turn update business the I will in segment. to heads. it over other to to Dennis? Dennis and business our LSV I you new an So over investment segment will then it give turn on

Dennis McGonigle

I'll Thanks, Good asset quarter business in first everyone. and afternoon results LSV the cover discuss results the Al. new for the management. segment of investments

group. the segment continued focus our on During worth in through testing business operational and a ultra-high-net management segment the the the offering development XXXX, first quarter digital web-based investor new investments of device and on wealth private its

of of to this million, incurred loss During the compared the quarter, a which during $X.X fourth a of segment loss $X.X quarter million XXXX.

million LSV, fourth $XX.X interest our during from for quarter. a in LSV quarter. income LSV to This represent the quarter $XX.X compares ownership XX% to earnings approximate XXXX. of contributed million our during first the SEI the Regarding contribution

was grew $XXX.X Assets the $XXX offset approximately cash which the was X% approximately of approximately experienced was million related. for by during flow quarter, appreciation. million Revenue quarter. market performance positive LSV fee which

effect into had law our rate XX.X%. Tax and tax rate. XX, This the was Act. effective the President signed Our December of for tax Cuts On the quarter Jobs the overall lowering

the In option discussed change tax stock expense, rule benefited addition, which year. to accounting rate related last our we from

the $X.X were not have brokerage we revenue financial and record and One in revenue adoption periods. million arrangements not the did revenue treatment a banking net revenue. gross banking prior of did fees recorded was income adopted but on will for relates and we a in in to material accounting provided The segment Finally, or during new for services adjust area reduction recognition. direct Both our in new however expense impact are questions. on for this netted previously impact We to segment first filed private revenue our our research accounting expenses of of how now incurred the expense statements. the not basis, resulted quarter. no more majority of received change in was in both a now note segment. quarter, on This ASU company. SEI's the be of the There I This accounting this did rule this recently to XX-Q take change. XX-K to filed XXXX-XX. information rule and I you any and soon to in

Operator

from [Operator line from go Instructions] ahead. of Chris is William Blair. Shutler First question Please

Chris Shutler

good Dennis, afternoon. Hey,

Dennis McGonigle

Hi, Chris.

Chris Shutler

revenue million of we that $X.X magnitude year? the but should as the the and course forward private we going So in just item think remaining know hitting offsetting model expenses, there's about kind that I banks, of same

Dennis McGonigle

I say so. Yes, would

Chris Shutler

okay. Okay,

Dennis McGonigle

quarter say just first we Really, forward.

Chris Shutler

yes, exactly. for quantify that positive. flows Dennis, they you said then LSV, you Can Yes, the were And it?

Dennis McGonigle

just billion. about positive under They’re $X.X

Chris Shutler

Okay, so really good quarter then.

Dennis McGonigle

it’s quarter. Yeah, good a

Chris Shutler

And then on was mostly clients, okay… new

Dennis McGonigle

Yeah…

Chris Shutler

tax just the remaining here lastly, how should tax quarters. rate, then about And for the rate we think from

Dennis McGonigle

comments, in have option kind activity, really the impact. way it, we go up we for be is a is as bit predict want her that we’re plan there's – exercising it level looking to rates Also at little year. know – some know have of up there, statutory going for have the to the has you a this if accounting if don't We the we you covered don't in really You can't but which rate Kathy set. set

kind use would – I'm modeled. normalized way I still the using that we’ve XX% So of rate ranges are

Kathy Heilig

reasons. expectation the extremely well first couple be for quarter of was our a would that Yeah,

of not forward. going One that and a the in lot that of we expect repeat a course We lot options rate. had would left was level – a stock And had to it statutory exercises. was we of

of just in the know terms is it is on percentage pretax quarter saying worth. one significant it’s income first the You I’m through impact of quarter's because only

Dennis McGonigle

year, it’s adjusted. gets as So work through you the

So I rate in we be certainly higher first a quarter. would what experienced the than modeling

Chris Shutler

you. thank Okay,

Dennis McGonigle

We’re operating at model. statutory our the rate in

Chris Shutler

Thanks, Dennis.

Dennis McGonigle

Yep.

Operator

no are there And other questions.

may You continue.

Al West

segment. going to to it turn Joe? to I'm going Joe Ujobai Dennis. banking now now our I'm to you, And private – over thank discuss

Joe Ujobai

a by on quarter, followed update start activity. first the Al. update with financial Thanks, new on an business I'll

mentioned recent Dennis. revenue by down X%, of quarter changes due First million $XXX manly was accounting to

million operating was quarter, quarter. current prospects. contracting up for management the SWP challenging in new $XX activity and profit from the The clients asset for decision both Sales and remains process For robust and fourth name distribution is $X.XX of elongated.

We’re making progress the and solution gaining market is acceptance.

currently we their quarter, important the long-term migrate BMO in signed announced book Management. agreement XXXX, on Platform XXXX, Wealth an of BMO XXXX. TRUST During and An client the will with SEI since SEI Wealth existing business SWP

we and gather cash to SWP end the was cash for flow flow current another signed SWP also solid to TRUST expected We clients. agreement, convert the Private of continue the from cross-sell XXXX net $X.X Trust to year. In a UK by quarter billion. long-term client, Net first this

two decided business notification received their contract in-house system. to potential not when that their they we’ve quarter SWP homegrown quarter, of will expires run at it XXXX. first renew the the During on of CPS the from end an

During strong SWP the professional and to sales revenue conversions client quarter, we had activity. one-time agendas, services other or related

Regarding during million. for total clients the XXXX three we recontracted quarter, TRUST a of $X.X

recontract activity. no clients losses some did changes quarter, downs competitive through in but two were business models. There and the client However, smaller to the acquisition we during merger lose net due mostly

distributors of flows asset of million distribution cash in first and Our new management The with ended business Europe. flows new Asia positive assets. net of $XXX the are in quarter key representative

we management new year, delivering investor In the Montgomery first conference a our manager platform Scott. discussed announced this February, our last launch asset client platform, During of for research. Janney we

of services negative As losses or of $X.X net an professional which totaled approximately $X.X SWP, TRUST client $X.X AMD revenue. XXXX million tally recurring is and non-recurring and overall for revenue sales event, million is

total not Our installed backlog uninstalled signed eight in $XX encompassing recurring for SWP million new is revenue net clients. but approximately

greater recurring value the SWP, momentum recontacted TRUST of our illustrate our the As $XX than net million. of XXXX total new metric relationships a value revenue including SWP the new revenue to recurring plus the continued with backlog is

is average than the a years, represents substantial these six As so reminder, relationships to SEI. revenue greater contract commitments SWP

I'd Fargo. on backlog, an update Wells the Regarding give to like you

development, to on remain backlog following. the process, I working make unit with but collaboration to and grow Banking our the backlog push reset installing rest continue in we Fargo. the improving the key to by have the the of conversion. segment the progressing Capitalizing we on questions? point focused and SWP this working the at contracting dates the assess our both and the and margins. progress conversion met of expect will Fargo are closely with great milestones historical Any all we sales momentum for to Wells Wells We profitability events conclusion, including In them Today, through return profit to prospects

Operator

the We Donat [Operator ahead. Please Sandler of go with Chris Instructions] O'Neill. go to line

Chris Donat

thanks… Hi,

Joe Ujobai

Chris. Hi,

Chris Donat

taking for my call, Thanks Joe.

because Or just should – back, you revenue Just from that some us… nothing help on that? push XXXX existing any or are getting Wells material does account, impact Fargo to can expect already in in we have they can

Joe Ujobai

nothing we amount in – XXXX... work very XXXX revenue the one-time impact the There revenue, although build Really, conversion actively isn't out to and and the material we of or reasonable we custom. a of still so really continue have much on to

Chris Donat

how answer it. Is Okay. And can I'll you you getting back pushed it asking or or try and say? see you that them

Joe Ujobai

these and working complex are So, closely conversion. really we’re very together

we more a think I both we sides about of day, explain as delays. said I earlier, we the all to As and can key met deliverables get firmer our

Chris Donat

Joe. thanks, Okay,

Operator

Greene ahead. line with we go Glenn Next go to of the Oppenheimer. Please

Glenn Greene

Hey, good afternoon, Joe.

the the this timing on in at up Wells air? you have last do or of when following the is likely too reasonable point convert sense a just Just much up to question,

Joe Ujobai

platform I lot thing as a possible. PayRoll the to want it we because both value They to soon as sides bought believe their they Look business. converted adds think of this get

seems as from think, figure really working you those It timing. as official. get anybody. date, And we're again before So guys things know probably go soon the know you'll I out closely to before best everything we

best So really as But soon we're you possible. them will working out the closely dates. to as tell figure with

Glenn Greene

color for clients two the just little SWP be more why those a the order clients to magnitude dollar going UK in not just to not impact? bit renew, of clear And renewing that the they're are

Joe Ujobai

fairly the competitive their mutual were own. clients I quiet have that account They there decided business. build they that little house. was sorry decided are also not we in has managed that I some they simple to software – a re-contract fund because mentioned did decided situations. mentioned two they to True the end try client built front and And of XXXX Potential there – UK technology businesses in on competitive to weren't and TRUST take of called bend really not they And platform M&A a have ours their bit to

Glenn Greene

the assets for that. misread I client which Thank renewing, one true potential, that. for not you SWP that’s What’s is

Joe Ujobai

what clients. announced the individual for we've I what about. Well today. that assets talked That's announce don't We

Glenn Greene

bills getting over a by then goal little just the it And a bit but color, seeing. color line. frustrated of little But Okay. the enthused be more more you're are bit you in pipeline, with may terms like activity still sound

Joe Ujobai

So substantial global VMO sales called a terrific us. opportunity But win for we terrific for situations. as are book a larger has And clients wins big, of are has, a now VMO there’s ours. big more VSP win management think And a these again us, business wealth of they for of are There complex a lots very that’s and organization. us. very

So is said are we that's have very, day. complex and for the as mentioned, but and a activity helpful. to the contracting as we just is processes these contracts lot to I’ve hard the to helps activity into and us it lot another it’s great decide of that Al VP, firms every getting get. at one The that's move part. very as are strong like That a But sales so

Glenn Greene

Okay. Thanks, luck. good

Joe Ujobai

Thanks.

Operator

go go Please KBW. the of Lee we Robert ahead. with line Next

Robert Lee

good Yes, Joe. hi afternoon

Joe Ujobai

Hi, Rob.

Robert Lee

be the cash update curious I kind I'm activity of But I'm us may UK strong sales pipeline unfortunately you about one net kind Hi. client leaving the and and the of obviously new in just can had just SWP with who's mean talked clients. curious you UK SWP. about flows

Joe Ujobai

the many in we market, disappointed been we've engaged through some agendas agendas process. we've closed sales that got robust last side couple larger are those to But haven't we on the move very years. the in the the that deals Yes of sales actively of UK in

lot other of was regulatory the market change a think going of that industry. with I the of really were bogged on with the MiFID in down II changes some some the and

we’re there for Some so this opportunities I didn't to and we get clients But on actively I'm of growth happy in to progress good [indiscernible] did That’s there spend we're businesses, with agendas and the hard of that. pipeline. there up vendors interesting the continue well. today. week some we time a Others some of expect platform there's delivered their MiFID job the have the opened we And next we'll because But deliver some engaged the working of us. agendas we're II some year. that some have there. organic

organic could new we for think get to add names us. to if some growth, an continues So interesting be to we that opportunity that

Robert Lee

but kind through you reasonable of people time still one as Okay. kind signed kind pipeline, the to of of yet you're you're kind through And most like one time of mean a going who on seeing are and haven't already of amount signed or the going those maybe the others was a process? of revenues. of has are course I’m Wells $X I fees Or process? just million the one just in exploratory revenues million from the, guess of the curious I about those follow-up just related $X onetime are – of client kind on

Joe Ujobai

There's that. bit little a

again that that conversion haven’t are signed but us So signed. of are revenue to already some there contracts, process have that prospects bulk is to what related clients are yet the paying

Robert Lee

Okay. Great, thanks my for taking questions.

Joe Ujobai

Thanks.

Operator

Next we the to go line of William Blair. Shutler ahead. Please with Chris go

Chris Shutler

Hi Joe.

Joe Ujobai

Hi Chris.

Chris Shutler

Regarding confirm is to sales want that true potential correct? I events the net QX the for just the UK, in in

Joe Ujobai

not we had would events… Absolutely, negative have otherwise

Chris Shutler

correct. Yes,

that Okay. including that management the revenue Is asset potential all it will true from component? you the lose

Joe Ujobai

what – it processing average the is we Yes revenue. investing of year, it’s management the from asset it’s investment an average of revenue not sort just last but had

financial it management services said to technology they’ve expect sells But build decided take We and to in to house. revenue something they, there. and firm asset addition in management try as the firm a as continue asset to I

Chris Shutler

is kind revenue revenue or management bigger and Okay a asset the the platform component?

Joe Ujobai

in past. past. fifty-fifty in about about the the It’s It was fifty-fifty

So…

Chris Shutler

I helps. want clear make just And I'm Wells Okay. absolutely on That to on sure this.

saying kind push to basically of revenue you're date, the a right. around change Wells on outlook the go-live So no out just

Joe Ujobai

out there’s change. XXXX And Yes, certainly and I’ll in correct. go-live no yes XXXX that’s date, push the absolutely

Chris Shutler

Wells do to large to other that think to ESP need be you you And sign Okay. go clients? able live

Joe Ujobai

large No with as an other clients global as very actively ASP software-to-service over I we're think our talking our that of would well other large prefer some banks some model.

has I’m for the assuming expectation opportunities would but Wells are our that been so be first, there for us. And other

Chris Shutler

Okay, lot. thanks a

Joe Ujobai

the is Tom Next of Mizuho. with Please go ahead. line McCrohan

Tom McCrohan

done? date halt Hey Joe until is what’s just come or Wells, the to on has a up follow-up to formed a Wells or conversion new being

Joe Ujobai

all. Not at

very the have We the conversion. actively in same are team involved we

of conversion technology that again have specific and software-as-a-service. is in We to develop the ASP have continued the or the continue to to They people a continues. substantial project number

Tom McCrohan

of and Great way… in if and any there's the of talking just delay are we years terms quarters, magnitude about

Joe Ujobai

will point with sense hard talking as It’s we otherwise for that it. to that about sure that it. us be correct to said probably tell information me I is committed isn’t soon find really we hard it. don't as It frankly earlier feel really good want about this you I of a I and it, the we have be talk scanning at in wouldn't I'm delayed we to But about Wells But and it's you better think give a predict that. have it as to will until market of that out openly

Tom McCrohan

thanks Joe. Okay,

Dennis McGonigle

we us good to excited But with be have about platform. Wells in a is Wells. relationship very

to make we're being a this them very with closely are We Wells reality. about client And of working excited ours. very a

Operator

further are continue. questions There you no may

Al West

Thank you Joe.

Advisor Withrow segment. Wayne? and Wayne Our next segment is cover this will

Wayne Withrow

to the the the our strides our Wealth of we in Thank business revenues simultaneously migration XXXX of to and first SEI profits while making Platform. Al. In quarter continue grow big

$XX driven quarter capitalization positive you in quarter than development SEI net by versus $XX personality This Platform our up PV some do growth. by in year’s first the to the the and over with net of contributed also documented expense were part expense flow of offset These first direct totaled appreciation market expenses and tied increased revenues last products. was year. revenues better Expenses increase. quarter quarter first increase cash Wealth to migration million cost last in increased our together were million. First investment

our year’s first as grew revenue and Our from quarter our grew last margins line categories growth. roughly many slightly expense profits with in increased XX.X%

at of $X.X net driven was XXXX. cash billion management March under XX, March for market and by positive The Assets $XX.X was an billion increase increase appreciation. XX flow

flow During This the million. first declining quarter positive by increase our no $XXX end cash was cause cash of year. the partially of flow offset last our was the AUM markets from

advisors. recruited we XXX the During quarter

another posted We roughly Our assets March and onto we over This migration of pipeline XX have On completed now Platfrom. advisors of to billion assets. new SEI the Wealth our on strong. accounts XX% included advisors the remains Wealth in XX,XXX migrated $XX SEI migration of Platform.

Another large end planned March for final September is planned the smaller of migration a XXXX. migration is XX, and for

on XX will SEI be in Wealth all months So accounts advisor Platform. roughly the

complete these will of the our progress straight features migration long-term conversions simultaneously processing of These advisors us be Wealth continued to front welcome reflected financial questions completion solid the of we new items and As growth give of platform, summary, a the have. we first I all SEI any you towards through helping quarter us. In in capabilities. the especially about in the opportunity confidence Platform.

Operator

go We phone ahead. of Lee Mr. you KBW. have to with Lee do muted the your Please [Operator Instructions] go sir? line Robert

Robert Lee

about that. Thanks. Sorry Hi you? how Wayne are

Wayne Withrow

Great.

Robert Lee

the is were happening implemented reductions fees that you a reductions because or the could give over some thing products. more times have And sense saw some or lower those products to year flow us or just know impact it the management there through were on just prior you've talked a if were past that's of few the where kind Where start kind these about of with reductions so. that you a say at on Just year the the of mixed several of seeing – I this maybe of of impacts? kind of new

Wayne Withrow

beginning funds. some early the our Well our mutual funds. year mutual based for last of we middle larger year. U.S. last strategies And ratio of strategies ETF And then we reduced at we year the our very the of of SMA mutual larger at of reduced was expenses then early last funds, portfolio one ratio and the our our That reduced year clients. expense expense in this

in those So all results. the are numbers reflected first basically quarter

Robert Lee

has And see you you different technology target there. And little environment great. of quarter-over-quarter. to competitive been Okay, who I headcount mean good anything? little maybe advisor a platforms. segments. like the you're advisor curious we what of just seeing up advisor firms out the entrance think new bit on update and bit others the about of mean different competitive on in do pretty And I'm the your I any hear new engines us see environment you seem types competitors there's like same can maybe kind about trying coming talk they're and same Can or

Wayne Withrow

I management business would mean a Yes that what look advisor their would And I at to platform look Do some platforms I engines. can assemble asset highest take by wants advisor would run And themselves. would as the – at I to at It that like same way firms. is they who Yourself of they're the level the them I appealing the for technology

management. this So technology pick construct platform, they be it they the the pick feet they performance whether the collection aggregation cusp these could platform, around could can pick of of components portfolios, portfolios, platform,

of fund complete We’re solutions.

that operations, primarily selling new servicing advisor outsource the the existing complete be concentrate on clients. clients or platform, and or to technology, their wants investment, we to appeal once it and we So

I with different advisors that we’ve propositions very go are the different value mindsets. – So and after think

Robert Lee

thank helpful. you. great. all Okay, That’s had, That’s I

Operator

may there no further continue. And questions you are

Al West

you, Thank Wayne.

this report institutional And segment segment. Klauder will investors next is Paul Our segment. Paul? on

Paul Klauder

everyone. for afternoon, to Al. results Thanks, going discuss Good XXXX. first quarter the the I'm financial of

$XX.X of million revenues first to the XX% quarter compared First increased of quarter XXXX.

the translation and of of $XX.X in by profits diversification compared market both specific unfunded Net retro This compared market reflect to approximately currency client is asset $X in $XXX impacted client for was increase fundings private as client were was XX% our the at in losses. operating the in discussed and quarter equity partial quarter Quarter-end continuation a a previously backlog by profit and positively first $XX.X quarter quarter client be of the class flat due to billion asset profits XXXX. second operating This driven first of fundings, revenues fees. revenue impacted which First was base. firms million curtailments DB were client of and performance capital increased new $X.X but increase XXXX, appreciation, positive the losses changes billion operating first client The one-time Approximately balances million nature, to quarter. $XXX and base of will higher million by of client positive million merger. by includes in client fundings. quarter-end quarter

$X.X New Fiduciary for This new UK and in healthcare Management. were endowments diversified across quarter client signings primarily foundations, is the and billion. clients U.S.

Continued sales a investment consumption higher fee penetration alternatively bases. in the higher not-for-profit of asset segments will rate continue to yield

I is markets pipeline on and XXXX. sales have. in that any welcome key continue focus Our And might strong will you to we questions growth

Operator

go We go with of line the Please Instructions] Lee [Operator Robert ahead. KBW. to

Robert Lee

Hi, good afternoon.

Al West

Robert. Hi,

Robert Lee

Hey, Just I a how are quick follow-up. guess you?

the and pipeline ahead current redemptions look keep mentioned losses some anticipating I quarter? sizable as to client that are client by You subsequent quarters, be impacted there we you're guess

Al West

know gross There of probably now quarter somewhere in we the is similar that curtailment the in that’s of a the backlog. magnitude second

Robert Lee

about And pricing for can helpful. can entrants little consultants I and guess past the That's put you Okay. – environment, others, pressure just also maybe talked competitive marketplace, in bit it's the industry about some business of seeing new you also or them in us a competitors the maybe talk the OCIO again know has update some feel impact then on and a I mainly if are - you're kind of priced just value or to you your on kind pipeline, here you you lower do how and – as – you you're your there losing that get fixed see that. are

Al West

Yes.

want not into they resources low find XX quality next buyers, and scope are organization are they endowments manage buyers priced high the that beauty to the have of segue scale our they think endowment foundation foundations, years. and and can their if that for I – odd

in say to right the a to be be the unlike cost a are now, because be low not five for around years, market four client might to was So only they was buyer that going or someone they going really DB they're growing they foundations, competitive cheapest your concern do and to not vis-à-vis but speak. that they're competitive going to are endowments make But so buy provider. a sure just process, are to rates the others going going

The is I our model my certainly consume mentioned other that be some types a the benefit first with other of benefit and saw but that we cliff. benefit of in higher in investment just a it quarter. remarks alternative for that higher and investors competitors revenue that is these will direct much like And is alternatives

Robert Lee

taking was you my question. that Great, it. for Thank

Al West

problem, Robert. No

Operator

And line Chris go Shutler the next Blair. of we to with ahead. Please William go

Chris Shutler

Hey, Paul.

Paul Klauder

Hey, Chris.

Chris Shutler

wanted on around last follow-up just comment I alternatives. the a

kind the increasing with mix pressure alternatives kind it revenue how should business? think of your yield of together part see of the about elsewhere, putting all blended of we just So in

Paul Klauder

years down I we won and ago XX them OCIO DB really XX much management flat, that curtailing fee we We mean, a we're ago account won that had or We little have do a going Chris. fiduciary two steep, fee. had we the – had when years higher Where historical it’s so bit, dimensions. losing. we maybe are fairly

higher and out. have consequently much lower where the alternative kind alternative investments, endowments is the because get the of it foundations, much this DB with from we plans but up OCIO investment now be did net leveled replacing not might that We’re

endowments yield will but don't that the runs keep in and As in the time, goal is we foreseeable with see My the foundations, of feel it increase levelized. it off future the actually over that replace DB we rate and future. I these confident more we foreseeable

very X commitment of and the is investors. had. the to the that’s in years private our clients class with us that we we rate asset XX years a for largest ever It's know. we investors equity in did six as making assets to that over last they're And would had private equity real a benefit tremendous helpful One you put for months

they benefit we've also real for that's commitment us offer. a So a good have them and as to OCIO brought

Chris Shutler

helps. right, All that you. Thank

Paul Klauder

you. Thank

Operator

are you There continue. other may no questions,

Al West

Paul. Thanks,

final Managers. segment is Investment Our today

to turn I'm over So going Steve to Steve? to this Meyer it discuss segment.

Steve Meyer

afternoon, Thanks, Al. everyone. Good

higher the For XXXX. for $XX.X revenue quarter increase totaled in was new XXXX, year-over-year acquisition appreciation to compared first which market and to due XX.X% million million, our client of as was Archway. quarter revenue of the This first fundings, $XX.X or revenues segment the net of

segment Our of profits quarter quarterly an million revenue, increase by profit increase this personnel compared investment as XX.X% XXXX. expenses. primarily $XX.X million was in to first higher offset or are by the for Higher $X.X driven of an in and

in in our the Our investment portion included expense our of the investment front increase amortization acquisition. office of platform and amortization Archway of

quarters. several in amortization for next continue related investment the increase expense expect our and We

to asset quarter end asset XX% new $XXX.X billion, the $XX.X one new of or of of billion metal at process. deals with current an and a several a business outsourcing prominent with a of private a totaling traditional all as mandate in equity included million. comprised business fund clients our event as first higher at compared approximately the quarter two XXXX of existing balances the wins end the first balances outsourcing the market Third-party were competitive across of to first office These net were sales to turning mandate business mandates due of billion. EPS managers. we XXXX. billion and and activity, $X.X $XX.X quarter have This increase market new And of of In strong client the during primarily in net XXXX expansion These quarter assets fundings as appreciation of $X.X is new sales name well with servicing segments. collective

for signed lead we The our questions to continues compliance office now you market platform. continue active new it regulatory and we clients. We concludes growth and market platform, platforms hosting well prepared strong regarding our front positioned several with as office any as our feel over to That feel Additionally, see may our new we've opportunity. including demand my and our turn for global solutions, well stay made for optimistic the family remarks, future I'll have. investments and

Operator

you. Please We line Sandler with to [Operator Donat the O'Neill. Thank Instructions] go go ahead. of Chris

Chris Donat

Hey, Steve.

Steve Meyer

are Hi, Chris. you? How

Chris Donat

fine. you? about How Doing

Steve Meyer

Good.

Chris Donat

on does activity the opportunities away Just you consolidation kind a quarter just or the it we've you? some last your I'm then lot Does competitive industry your of or environment wondering and when past ask noise doesn't Fidessa you sales it if wanted when here this an but wondering in sort year SS process to and CNDSP from affects create away which you, this Just the merger call that to clients? particularly, you. guys business I in for realized new But business, did acquisition in of around create really? of from it have competition for how more seen

Steve Meyer

think have anytime anytime industry. you I opportunities. there's what transaction like would I call like noise this, a that There Well, always are

we’ll we've especially It's especially was larger big something see. to that for a think larger huge the these from tough move deals points their event It I if to happens. people. continue consolidation business they for don't We it, seen, someone inflexion see people get as as become.

for most see course capability. see not, I looking know provide at from business. their change we under we clients pushing with. expand regulation that’s is to see model are the business, the to business or opportunity among from do as They that looking you we how increased acquisitions consolidations and providers scale managers whether certain still think what driving are And their them their and love as complexity they’re However,

Chris Donat

Got it.

you. Okay, thank

Steve Meyer

Sure.

Operator

no other And questions. there are

You may continue.

Al West

you now a company-wide would Kathy like I Steve. statistics. to few Kathy? To give Heilig

Kathy Heilig

quarter. have Thanks, Al, some everyone. information about corporate afternoon and good additional this I

$XXX.X quarter cash operations first was Our share. or flow per million, $X.XX from

excluding quarter the flow capital capitalized first million. quarter First And was expenditures $X.X software free million. $XX.X were cash

expenditures that does be $XX expansion for million the We’re capitalized money about because aside of projecting excluding software for year facility. capital to our include set

As will you're we talked and And of about option first stock was stock net earlier exercises. the aware, the to the of option quarter of tax as as tax of and is it XX.X% result timing rate rate the the fluctuate Tax Act due benefit exercises. combination a the our

that unaudited. assumptions on are remind expected release are We differ information that like and this is risks of also and income forward-looking many the involve and revenues statements comments would financial from Future call and that our in to could upon presented you based our results.

periodic as for obligation update of could correct publicly herein description of future a that risks our affect uncertainties any no future our SEC have and shall result to refer a developments. or results. statements various to We filings We financial

free please feel Now, to may any other that have. you ask questions

Operator

line go Instructions] Please [Operator Chris Blair. Shutler go of ahead. from to We William

Chris Shutler

a quick of Thank didn’t few in you. couple had Steve, I get follow-ups. enough. I a

Steve Meyer

problem. problem, No Chris. No

Chris Shutler

you the the us just So quarter? the gave fundings in Can quarter, one knew number was you give number. a the just for I

Steve Meyer

Fundings the quarter; year-over-year again is this It’s assets. is well, – for Chris. the that quarters,

were it billion, So $XX.X And billion was QX going again net XXXX out of up. fundings of client $XX.X QX new that assets versus XXXX.

you where I QX sequentially, QX, wise you're look at quarter-over-quarter are were which we up think to we about to typically If is trying quarter-over-quarter QX. where go asset X.X%

Chris Shutler

all And that from of versus that fundings? markets how was was or client funding much

Steve Meyer

by offsets billion were fundings client new net $XX.X – about was about XX.X. depreciation of it Actually

Chris Shutler

Okay…

Steve Meyer

So to QX. that’s QX

Chris Shutler

the backlog then And okay. give at the numbers number and you or those least? backlog did it, retention, Got

Steve Meyer

XX.X. the at end of about of is Backlog quarter

Chris Shutler

on general amortization lastly forward? to then going a is XX.X, okay. just the P&L, the XX.X rate QX, the use run question, in that And good

Steve Meyer

capitalized several of mentioned. as that’s probably think remember. consistent our quarters And the the we there’s for line, Man, mentioned amortization that’s to the be I of quarters. expenses that two directionally acquisition, the investment I correct. pretty going next next over and to points already There’s Archway, think in I several amortization

Chris Shutler

you. thank Okay,

Steve Meyer

Sure.

Operator

questions. other no are there And

continue. You may

Al West

you, Thank guests.

encouraged and by are taking gentlemen, am making. So the the I businesses our and they’re ladies progress direction

headwinds, short-term help we're our industry. And our thank call attending appreciate have this and day our you the believe While in making changes the to face benefit I for and taking will a from investments great we concludes us all place we it. that call.

Operator

and for your participation. Ladies does your that you conference gentlemen, for today. conclude Thank

You disconnect. may now

SEI Investments (SEIC) 25 Apr 182018 Q1 Earnings call transcript