SEI Investments (SEIC) 19 Jul 182018 Q2 Earnings call transcript

Company Profile

Participants

Al West	Chairman and Chief Executive Officer
Dennis McGonigle	Executive Vice President, Chief Financial Officer
Joe Ujobai	Executive Vice President, Head-Private Banking
Wayne Withrow	Executive Vice President, Head-SEI Advisor Network
Paul Klauder	Executive Vice President, Head-Institutional Group
Steve Meyer	Executive Vice President, Head-Investment Manager Services
Kathy Heilig	Chief Accounting Officer and Controller
Chris Donat	Sandler O'Neill
Robert Lee	KBW
Andrew Nicholas	William Blair
Glenn Greene	Oppenheimer
Tom McCrohan	Mizuho
Patrick O'Shaughnessy	Raymond James

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the SEI Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer period. Instructions will be given at that time. a conference as recorded. is And Instructions] reminder, call today's being [Operator would the CEO, Chairman turn like Al over I to host, conference now to your West. and go Please ahead.

Al West

everyone, Thank good Anna. Welcome you, afternoon.

will SEI's on our of as Dennis Dennis Heilig, recapping start you in investments the segment to LSV business Controller. are the on XXXX. After CFO; All turn that, of the second it the Kathy of segments. and Heilig leaders important over cover each quarter finally, business segment leaders well statistics. call as I'll their by segment. SEI's new comment McGonigle, results with I'll the Kathy and to company-wide Then will some then provide

each usual, report. field we end As will questions at of the

quarter me with let start second XXXX. So

earnings the XX% earnings of $X.XX represent year ago. increased for second the quarter from second for increase a by $X.XX quarter Diluted the from reported quarter a of share per Second XXXX. XX%

the X% from asset balances during in as to management At decreased I’m We of quarter. noncash the decreased our increase Also – also $X.X billion. assets XXXX, by in second XXXX. of reported billion second XXXX under second depreciation. of well market revenue second a the assets decreases quarter quarter during to quarter the by under increased These under sorry, management $X.X due same LSV time, by management were

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

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

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

sales speak their events fact to of still the take and are are is results. larger longer reflect units sales very large, particularly are close. that we to and will experiencing specific our results pipelines that complex activity sales Each Our high our

remarks, turn this So an concludes then the our segment. turn other business update business over I'll and heads. the to new I'll to Dennis? investment Dennis so give it my in it you on formal segment to LSV over

Dennis McGonigle

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

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

with During the ultra-high-net-worth news second acquired Management quarter, firm Steele million the the SEI investments SEI on segment Huntington bit April to of in of loss $X.X Private a Wealth XXXX. a through the $X.X incurred similar this in a which compared in business of quarter based One space, of new characteristics business loss segment. million, the On X, very Washington. Seattle, during

revenue assets approximately during The overall While $XXX,XXX, in efforts expand and this additional business, this business in of consolidation an in our acquisition to resulted approximately of to the in SEI’s $XXX million not material practice. increase added $XXX,XXX. quarter of in footprint region. a our an made approximately geographic to development research our corresponding expense We've increase business enhance acquisition and to this

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

was XX.X%. was rate depreciation. was performance X% million, with our Corporately was quarter offset quarter. tax by Revenue billion net $X.X approximately approximately Cash LSV shrank approximately during flow cash for LSV approximately positive $X.X billion. effective Assets experienced the of of fee-related. market $XXX.X the quarter which for the flow

on the Before wanted our investments. provide spending mainly business additional and move some focus I on development spending. we at I'll other research on to overall overall to information segments,

This quarter, influenced the a increased spending the XXXX. to total was in During company expenses items. increase by $X.X when couple X% of or mainly quarter first million compared

of operating Steele expenses to the business about First, related earlier. the spoke the addition Huntington I

salary the we tax by to in increase invest in to quarter. This a providing all people. spending fixed a resulted increase most recent salary important during in a below approximately Second, asset, tax did our made of derived employees portion amount. provide decision our the this our globally from the of benefit million cut an $X of a a We

received there were well now this drive items. Other was other I unusual who our workforce can take success you questions. everyday. As any no by our valuable that, imagine, than will

Operator

we O'Neill. a ahead. And with from [Operator have Chris Sandler Donat go Please question Instructions]

Chris Donat

Dennis, Hi doing? you how are

Dennis McGonigle

and yourself? Chris Good

Chris Donat

Doing for me. fine, two questions

accruals First going XXXX? or of quarter think purely compensation that words, something number can going first the is said on the the this I your it’s for higher reflects for that is for In that of just or be employees, forward? million, I $X is there sort you assume other something to quarter

Dennis McGonigle

it just second just going forward, the this was for Yes, number quarter.

Chris Donat

something. be it us business might a Huntington get with conflict geographic Steele why Okay. footprint, but just little And seems I get when to business? there of risk color notable the color sort on can you on it's a then expanding development me some always acquisitive, give also acquisition a your like you channel the you because advisor you not very more the little I gave guys do us are of

Dennis McGonigle

that's And group. ultra-high-net-worth private focus individual on are or family. unique our that really but we we pretty attentive kept in have a type management our certainly something here And Yes. we to, have wealth practice

coincidence. Seattle we in more focus some net actually residents So we've excess individuals been gradually worth as by clients million. in that got And distribution we’ve kind US$XX on that solution. just out build we're we’ve as time. And of books or of our actually of on the that after generally sales were already families kind have growing Particularly had business over in

if market similar business clients, net very of is firm, and average that's service to comes firm principles client our of characteristics focus – Could there worth, experimentation in to book an we client that to where had wanted in another in. that and they find of side see we So the the the and their offer. terms size approach the of solution of the

very in So a half we approach with book a a criteria. converting model so to our met managers, a pretty of implementation, of place is in in here. to similar of they can that business of geography the similar took. the in that us grow approach portfolio here one book That business we or marry of because we from year business business The detailed those can ease have that to similar we've market we book a are probably manager to it see allow way find us in terms a grown up that with and took of firm of research the another that characteristics. the And

kind investing channel, been see say that do And back experimentation in research. I trend, from advisor area research, beginning I'll extension going the of we of around really this of, lot out an built really family. repurposed the And really distribution kind into that's do business individual any it’s So management it's the learning focused and has of of wouldn’t a company this we channel ultra our really on or a it then how business came things asset in we leverage, how our a as of of it goals-based we forward. but

Chris Donat

very That’s Dennis. helpful, Thanks. it. Got

Dennis McGonigle

welcome. You’re

Operator

ahead. Please comes next go Lee Robert from KBW. question with Our

Dennis McGonigle

Robert. Hi,

Robert Lee

details Hey, LSV’s I repeat for and comments, I apologize think revenue? flows your just missed me excuse or one the two I of can you

Dennis McGonigle

Yes, about was $X.X billion, revenues their fees. overall have shrank $X.X positive their flows assets billion, $XXX.X were performance they million; X% of

Robert Lee

kind I of think still could to to at it rules. that know isn't with maybe of of pretty any the reason our us? is close I if kind as tax year – for just And new second good this relatively quick know as I expectations, a given it look is then ahead look and But accounting bounces a was Great. for there rate I around half run the question, we we least

Dennis McGonigle

We’ll way over this I Yes, But the a the is activity. much – pretty we norm get the variability think the this XX%. XX% probably going little bit forward. projecting some that option is we're norm think with more

Robert Lee

That All right, have. was great. all I Thank you.

Dennis McGonigle

You’re welcome.

Operator

Please next Blair. comes Andrew William go Our Nicholas ahead. with question from

Andrew Nicholas

Hey afternoon. good Dennis,

Just two quick up items. clean

First, this acquisition quarter’s results was Steele full we when the Huntington did close? have that in worth numbers quarter? Do of of

Dennis McGonigle

Yes, on X. April we closed

Andrew Nicholas

impact just was currencies And – item FX I any quarter, call are there of a Okay, little the know thank bit? out weakened to exposed to, some you this was guys the you. second

Dennis McGonigle

little a pretty Yes, Certain impact. I the it have mean, was benign. across bit different company segments

to then benign. on And Paul on if will a first period this to, it bit comparing It's you’re year. comment segment. it you're quarter think pretty still his little it of the I comparing depends

to year level comparing more second it rather If a kind And last or a bit year last an it's quarter segment last than level. in more little there’s year, you’re of a of company year and of impact. full

Andrew Nicholas

Thank All you. right, that’s helpful.

Dennis McGonigle

You’re welcome.

Al West

ready. are we Okay,

Operator

[Operator Instructions]

Al West

you. Thank

over Ujobai Banking segment. going I'm Now discuss Joe? to to turn Joe it to Private our

Joe Ujobai

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

was fund due revenue primarily slightly from trading a mutual down quarter million decline revenue. the of quarter, in Second $XXX to first

Platform. the quarter slightly quarter, was of to also the operating Wealth down profit expenses to For first $X.X SEI tied million from the the due

as during new the activity goes, four SWP sales quarter, far signed As agreements. we

We SWP net $X recurring convert million. will expect clients of the all revenue result next end sales year. new of annualized events to by in of these

Three new Northern BBVA SWP Legacy services professional Trust prospects. in million Bank, $X.X Company. Trust related and clients signed also U.S. the to and clients of Compass and SWP We are fees includes the

of continue signed $X.X from UK, Net other flow manager. we solid SWP billion. leading cross-sell flow In UK was signing from the is headquartered the cash net second a to in where for the UK SWP cash U.S. UK, The also new business investment quarter current clients global and the gather we clients.

We Trust to recontracted net down X% rate. six quarter. $XX.X during Regarding for were a losses Trust during client XXXX, the of quarter, total million. experienced XXXX a clients the no There recontract we

And events million net revenue. Our million million, segment XXXX asset $XXX million annual in were mainly incorporating net $X.X approximately banking $X.X is Trust approximately private recontracts for $X sales cash from recurring negative negative flows, distributor. one-time the services professional for management which U.S.-based Overall, experienced cash is of AMD revenue. one flows, and distribution

client we during clients Wealth a Company converted based update April, to At the end As client, the Trust Washington In name the of we new Island. an clients, quarter. converted total SWP. four to Bank, clients SEI currently XX Platform Rhode on conversions, SEI. on three both This including installed to processing Trust First and new the Hawaiian clients a XXXX and we Bank, quarter, Trustmark, Moody the client National in brings

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

As the includes SWP mentioned metric continued recontracted we net on to illustrate approximately of the with the revenue tracking backlog. are call, total the Trust million. our recurring revenue value This momentum of annual a recurring $XX is new our April relationships new and XXXX plus the SWP, value

the momentum than greater these than contract of grow on six matriculate installing $XXX in margins. is represent following remain revenue; average total segment clients profit to on contracted In unit backlog the the more SWP historical our to we to our years, conclusion, the million areas: As SEI. term of focused uninstalled backlog the profitability revenue to return and business; the banking the to improving capitalizing

client new improvements will banking XXXX SEI of continue scale to the to Department convert and profitability we hard work drive we built milestones. we are working the parties think I'd Regarding to is as to you a all are SWP to most are the and first all those profit like update the All first Wealth and SWP, to myself, the of that segment, have conversion notably that is, conversion I'd and Platform. We're I there question because dates, to of of losses, headwinds to ask now. we I clients improve Fargo Fargo Trust Wells for the benefits our meeting continues Interior. reduction the reset the want And the of questions realize announced like of any conversion all Trust with date, positive XXXX activity But any side, segment. question relationships banking the XXXX, Wells working post efficiency the conversion the tailwinds. contribute and to they date? through the On together previously the to In of know to complete finalize to that. eager ask

on conversions announcing identified new sorry point, with have clients continue are dates We meantime, likely at we make take conversion. consume not the capabilities questions. other prospects and the target clients But finalize working will conversations significant other that I dates. the now We any and large Wells to possible Software-as-a-Service new the and be other to active prospects, model. are before In Software-as-a-Service at we this plan. and progress active we'll convert SWP in able would continued clients Fargo point, this At large other our

Operator

please Greene Glenn [Oppenheimer], ahead. go

Glenn Greene

Thanks.

anticipated question, my You Joe.

So thank you.

Joe Ujobai

Okay.

Operator

please go Lee, Robert ahead.

Robert Lee

sorry you? how are Hi, that. Joe, about Hey

Joe Ujobai

Good.

Robert Lee

I'm mean, you're suggesting I that if signed I large you just Software-as-a-Service, curious, guess client. another

able You install Wells. would to possibly be it before

could type Given kind of too currently haven’t even you're date, for down this times historical suggest would three set or? long much large Wells thing you maybe road a but that mean, reading two be really I that the into of lead the this, though clients, to years – I'm thinking you are

Joe Ujobai

market going Well, think that would be thinking the mindset. changed. and had ASP the or really everybody is first, a – to and occurred, was that This Wells be that they first when the the mindset Software-as-a-Service is I Wells push the suggesting client

So no other really reason banks in to that saying business that around that. were model for wait there's are consumers now

changed institutions that from conversations other – time. nature the of sort a viewing has that so point that as the nobody’s has them of and the And prevents conversation ahead going of

are than significant them past. we probably Wells, use them of sort that there – no to of some and So most but smaller a have as have milestone longer that size certainly firms get of that other

Robert Lee

kind little what's if bit. last But you within refresh metric just you embedded about can me did want quarter? I on number? Okay, we us that I’m the new how Could you should fair indulge understanding think – And a of make if maybe enough. to the introduced exactly could I sure

Joe Ujobai

I the our of significant a to mean, the business is and our shifting Wealth point revenue Platform. is amount SEI that

services the cases, sort And XXXX as lift recontracting, the clients on in based are a of based Trust Trust the we as all revenue XXXX on almost with so additional additional if revenue in certainly an revenue the well SWP.

just net currently the just is Trust sales for what doing – calculate sales and XXXX. so revenue historically, events there. client additional But what above is the going events paying And is we're us beyond, actually out whatever

I As or the term between client, and the five mentioned, average are new contracts these somewhere of average years. XX

the XXXX, paying million. about for maybe us pay would us $X sales the on But only signing And $X.X contract we XX $XXX,XXX reality million so are today client may talking Trust a is $X.X they're And years. million we be event. five to

clients time. big we portion a recontracting a periods of are we long So of amount SWP. – revenue into of And are our our moving for large

this to we and how about So SWP up start business. are wanted we talking more growing showing

Robert Lee

almost distant pretty book have it bigger was or flows out I how All had in convert. the still kind one a as either an just right, great. convert – in cash I potentially had clients if UK of past, you And could could we last that? then of on any assets pointed about of you if update question. about mean, the like net an into that, Do contractually maybe maybe SWP talked I were obligated remain that mean, they think UK maybe you the to should unconverted or exist that how kind and different robust.

Joe Ujobai

coming That is from net places. flows, cash mean two I

and growing and that all clients converted they're those this of business. their Some have is really,

so the clients growth organically characteristics represents organic those substantial SWP. it those of enabled growth growing many And we've at So a them if the are you firms. on at look of generally And amount clients. at UK really of and

Robert Lee

you. Thank great. Okay,

Joe Ujobai

Sure, thanks.

Operator

ahead. go Nicholas, Andrew please

Andrew Nicholas

Joe. Hey

transitioning, expecting material Just relates today a to ago? Trust strategy, increase XXXX on or it more approached to flexible like have you from are that you might pretty clients you are transition requiring you front particularly it as Are SWP. about and to still few how versus pricing talk want or that pricing years

Joe Ujobai

to different clients. for our drive are levels There variety of a mean, – there us revenue from more are I current

system, clients. us, the because for revenue SWP So an more straight SWP generally and the is solution Trust through uptick in a there's XXXX for efficient core more where

usually core-to-core. So is premium there a

We include of have that the we management sell tools tools. additional around around around SWP. particularly client things SWP. front-end portfolio we Those that are acquisition, proposal generation, can with built There things services

typical generally have integrated additional So clients. the solutions the we our is been clients. to to other we that the us sell have opportunity typically income trust which can that big heavily just for to are platform beyond go And banks set accounting principal departments for

we've so Hawaiian have been on this business a we quarter, that additional platform. been some converted in were example, recently And that cases, able, there, brokerage past some to for able we run secure First

was a SWP. number we that relationship. historically us for of and net that in And firms hadn't these processed business a there up suspect is been business of so part of new that And that was on lots in

so our future books us, with of additional additional drive of to I we are are In the importantly revenue. SEI opportunities that the levels get us. allow many are for had many book a Wealth one for of But and we number additional And the then Platform. business there to of processed day getting think revenue there over are opportunities for traditional us will time more clients us cases, inside that and

Andrew Nicholas

had thank right, think million And about outflows you. $XXX I All you the then in the business of said AMD quarter.

or one it seems as on you little a two the an alluded weaker one was the would tone given ago? concentrated expected being but it been I than year the whole, outflow, have provide there a hoping just AMD can I opportunity update business have – flows I to think a you like around

Joe Ujobai

of had an Asia. not in sort the second have U.S. we replaced where in in situation quarter. The a U.S. little more the product. market in they of Europe A sensitive our investment was that They large are a are and lot second distributors the quarter distributor a

substantial that harmed that and outflow And so some distributor of one had our we a from flows. net

Andrew Nicholas

That’s all I had.

Joe Ujobai

good are we from some And some distribution of key seeing players. our

Andrew Nicholas

you. Okay, thank

Operator

Glenn Greene, ahead. please go

Glenn Greene

yes. Joe, Hey

off got I think I before. cut

Joe Ujobai

Okay.

Glenn Greene

quarter in questions, upgrades the couple what relative give a four wins of clients was a the on for Trust So proportion? XXXX, from new mix clients you first, the the just relative could SWP, us

Joe Ujobai

we SWP gives clients decided us three pricing. down, to one do private and which for client never that the they're their SEI that, of you for it event us was some I net later, I that took but investment deconverted one are and we exciting about not to four decided due deal, disappointing client to us. said to that minute, one in And a and It's XXXX. we very leave, negotiating business. as they us largely, very client the large saw be about U.S. clients, year know potentially access at And was with It that down was but leave for of and one we those we year. Trust was they U.S. a in actually mentioned are so And and going to one second usually the they all to that us. a had and had them last business took a And will There on And after notifies we was UK in manager an looking the event us, And a clients next through with alternative, we great made interesting II decided in or U.S. that a us when to so mistake. and that convert that sales situation. from so as couple struggled join competitors. that pretty it on that we came – the from some a think And in then of running expect in then XXXX is with of lost an as got their tough quarter because a the current sales vendor back year for as then after them a they net had MiFID was pricing to of years, aggressive they that, our spent some leaving. think so last interesting opportunity on time as a

XXXX and at the a happy and what to what have the to it pricing that's at didn't there had a but look Trust and And strategy the win very got that are good us. we that – as with client case necessarily business the clients, again competitors let was we gotten offer, alone SWP. in Trust not it's competitor many compare new a So for it the with exciting bank we necessarily where and had and in goods only the people, all just win deliver, offer, the happy very to of are – as back to have had particularly saw and used isn't XXXX, all didn't the

us market. So that was the a for great in move

Glenn Greene

the on back. win Congratulations

So you conversions the three had also quarter? mentioned, I right think, that second of end you the at had

Joe Ujobai

Yes.

Glenn Greene

trying check, I meaningful got lift I a what And a guess, could conversions get to at the relatively quarter? second like it was happened given into going XQ, of I'm revenue expect backlog the the but end we looked your is, static.

Joe Ujobai

be some revenues Yes, will yes. lift, there

backlog things converted the So those we things new with then the wins. – and we in some placed the

Glenn Greene

maybe finally, then UK on sales broader and update pipeline the a just And Okay. activity?

Joe Ujobai

win in calls been So wins we that there I to more UK, have that a you haven't in the we're happy know, disappointed talked as the recent been UK. have in

no decisions. and there, been competed cases, there've in have some We

business grow about that we've and excited the very at are We there that installed, a won, to clip. the nice clients have model and we continue

of the this to and market, some hard And investment a a so momentum, the wins we're but focused focused good get on win – mean really year. one win we're opportunities for try us us important – largest it's will certainly managers we there, for and so opportunity and client working some not win of more private more does we – to in there, actively to but, we on are are selling, some the it's

Glenn Greene

Okay. Joe. Thanks,

Joe Ujobai

Thanks.

Operator

go please [Mizuho], ahead. McCrohan Tom

Tom McCrohan

actually and to missed this, Joe. if when client us, convert you Can remind will BMO I – the SWP? Hey, apology

Joe Ujobai

next Yes, it's year, next of year middle around the sometime the year.

Tom McCrohan

there can interesting regions more with or us learnings than have year? the platform on data regarding they share And any Great. probably now a and that half been live a are for points you little

Joe Ujobai

Platform. the and business. the Regions There's BSP of so the institutional the back. of think, trust client, since our I it's a lots ends. incredibly of integrated in I people. of is and Regions interesting running But of they're some think a been someone from solution an of when really nature that they book robust a across front the book, in of a they a entire powerful about SEI Wealth is one or is and private front and consumers they they seven things learning. or – it's the think, of client private but are they've a sort pretty terrific They they're terrific months terrific consumes have nature business organization And – using I of our great team business solution. They're and everything enterprise platform integrated institutional now, a up of to the are client a days, that, and growing and first They're processing so will, consuming obviously the enjoy early the full benefit still probably it's really,

and prospects meeting helpful there. as very us as other we've some been Trust and have that good to a XXXX case scheduled clients, far they've meeting it's got study, with incredibly So for as generous

and process think as we're them make every to – we with have clients I them good continue great month. it's So to

Tom McCrohan

update be that's TIAA-CREF? progress. Excellent. thought And year. I this confirm on that also in just was if going to want any I to

Joe Ujobai

really incredibly working organization large them the them. a fast-growing with we're with we're conversion. working They're Yes, on and closely and hard

Tom McCrohan

Is date? on is a – Okay. a XXXX go-live XXXX or that that

Joe Ujobai

Yes, making I think date them. the – it's at point complex isn't but progress good we're this it's but with and yet, so exact

Tom McCrohan

Okay, you, great. right, Joe. All thank

Joe Ujobai

Thanks.

Operator

Patrick ahead. O'Shaughnessy [Raymond James], please go

Patrick O'Shaughnessy

Hey Joe.

XXXX? are six recontracting those down XXXX Trust on to are Or that clients X% quarter recontraction a Were sticking clients those who clients and some spoke Trust to of rate. you are during So the moving then that's SWP? the

Joe Ujobai

Those all XXXX recontracts. are Trust

XXXX to four going years, for a two, three, more Trust they're So more stay few years. on

so ready or to know do some Some but their clients are eventually that But from current SWP. yet and about our they – and to of that clients aren't standpoint, a to will yet all contracts move be clients ready move aren't but so up timing up. – to

relatively recontract strategies a clients. shorter-term we with of our some So have

that So represents. that's what

Patrick O'Shaughnessy

Innovest you it it. other which looks with then name. a question, awarded Got Trust a for of Innovest, clarifying XXXX that their to is called that. the to replace And Thank often Department more my relevant Or for you up against when the somebody DOI, they solution competing that that's me, like base? you're customer but a Is core unique for RFPs? contract new company coming you're for do that Interior think have something your maybe not

Joe Ujobai

smaller a me process at around because it's We, have them for to firms. it's transparency to And is doesn't – historically, have while. for that of hard seen been ton a think they've it. little I a comment

see at Fargo Wells they to Wealth So regions an them would space. or are say a selected But in wouldn't SWP selling to don't we with it's strategic If going – prospect, a them at see our very them. me why for in hard someone typically, the we we important that area. Management we or be competing aggressively

Patrick O'Shaughnessy

Got helpful. that’s you. it, Thank

Joe Ujobai

questions? other Any

Operator

Robert Lee, go please head.

Robert Lee

asked. question Actually, my Thanks. was

Joe Ujobai

great afternoon. have Everyone a all Okay, right.

Al West

Thank you, Joe.

next will Investment Advisors. this cover segment. segment is Our Wayne Withrow

Wayne Withrow

the Wealth In Platform. strides the revenues and to profits, migration big making continued our SEI simultaneously Al. of grow our second XXXX, while in Thanks to we quarter

by Platform positive up net $XXX driven some cash revenues in offset of expense, by totaled quarter together due than our net of almost the fee flow the last expense million development fee expenses, products. were contributed These migration This and part versus tied capitalization, Second to in increase and growth. better second revenues $X million. personnel the was increased SEI second cost year. to were increased reductions Wealth direct last appreciation, in market Expenses also quarter year, to quarter with our increase. of

unchanged. relatively second from Our profits and quarter remained year's margins X% grew last our

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

During $XXX net was the second cash quarter, our million. flow

this flow robust. activity recent market some than While lower other quarters, cash is remains

the quarter, During we recruited new XXX advisers.

of over work roughly continued pipeline we our At the SEI Wealth the we billion advisers. With in migration the advisers to of migrated assets. end of XX,XXX respect and accounts March, Our on new Platform, to strong. $XX remains

accounts SEI assets to billion expect XXX,XXX and the September. another of We migrate $XX at in end

March XX, migration continues to XXXX. Our be for planned final

and of As new we its continued platform, the helping complete reflected straight-through second solid migration Platform. growth you opportunity features items the progress may in summary, our quarter in give welcome especially the these advisers These adopt migrations, long-term of front I capabilities. confidence questions be our us now of have. we in Wealth all us. SEI simultaneously our the processing the will financial any In to

Operator

comes our Robert go question with KBW. Please [Operator And first ahead. Lee from Instructions]

Robert Lee

Thanks. Hi how Wayne, you? are

Wayne Withrow

Good, Robert.

Robert Lee

Great.

activity, in kind that's – considering you of place? considering in of terms seeing been were behavior, the that of curious, but sense are Just or understanding flows maybe environment, in taking client net little general kind change that, than any that investor cash anything often more like makes risk lighter other running, which they've a underlying

Wayne Withrow

the liquidity rate see I cash only the more in that reflected any is see trend don't one that really than a income point to you tend a given thing – our maybe that balances. small the would but rising see And environment, fixed I little thing they I favor out. was big people product

Robert Lee

the your end getting – mean, then while to you've have at road? road, And as kind maybe starting is to still sign tail the towards migrated are, great. finally of starting it, and larger that books that any right, you service the array I assets revenue maybe advisers platform you trickle a follow-up, business revenue been – for – over incremental of some the conversions All fact, capture advisers that? of for down and that's that more now I down this the SWP there's some starting your – the the of is kind service mean, of of to but platform of is and in a since a from their maybe there – attributes the broader incremental – of you're Or a of segment one the can come this already pieces are of in that

Wayne Withrow

word. a good think trickle's I Yes, probably

think now, XXXX to really have agenda I a but we're for conversations that's us. starting those that

Robert Lee

Okay, was great. it. Thank you. That

Operator

question comes Our Please next go with from Oppenheimer. Glenn Greene ahead.

Glenn Greene

Wayne. Hi afternoon. Good

Wayne Withrow

Hi Glenn.

Glenn Greene

terms Just whatever of – been the in you changed? Or fee If products specific past? any just in if certain that got there's sort called to us of change? maybe update you anything's really out just pressure,

Wayne Withrow

I mean, quarter. was February There fee no fee last reductions our year. in were reduction this this

Glenn Greene

Okay, I that’s had. Thanks. all

Operator

from Chris Sandler our Donat with And go comes next question O'Neill. Please ahead.

Chris Donat

Wayne, how doing? Hi are you

Wayne Withrow

Good, Chris.

Chris Donat

the that on want Rob's of mentioned you have a you other map once change get to kind the in more long types once sort any at on through starting of to look Do signing more Or event. you the XXXX of question, finally just of conversion a you is over? to for sales follow moving or business, process assets Just up of sort more is road pushing process? Are conversion on advisers?

Wayne Withrow

that working up approach especially be different ramping sale right of to terms now, because their them. that think I in change we're for a the sales would it through Yes, force

definitely we I is think point. concrete nothing plans, this in So at have cast but

Chris Donat

Okay.

planning So than it's on stage more stage this? action

Wayne Withrow

taking that. haven't now, on. I right it's the but say we're some want the told focus one thing I action not you think it's mean, – wouldn't – force, absolutely I sales to I I what

part it's now, that but there core out sales right the they're after So opportunistically of strategy. going not

Chris Donat

you. Okay, understood. Thank

Wayne Withrow

of Now I last comment, year, the this reduction my February year. fee not last was think last

Operator

And you. Thank no [Operator questions. are there Instructions]

Al West

Wayne. you, Thank

Our Paul? segment. segment. on Klauder this next Institutional Paul Investors is report segment will the

Paul Klauder

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

million, increased Second is $XX.X revenue quarter compared quarter second X% of to XXXX. the of

new quarter billion currency to second diversification increase increase changes quarter of in quarter of compared asset non-U.S. the capital approximately in fixed-income second Second for markets a of client billion by million, were profits large market $X.X balances for foundations. asset were is a base. The endowments defined unfunded revenues appreciation, higher signings of class and were positive partial by our negative profit the translations. in a portfolio backlog by a This million, $XXX at loss million is $XXX primarily Quarter-end U.S. driven client positively and the positive increased $XXX the operating and $X.X included XXXX. quarter. of benefit client. currency was clients new quarter-end fundings This client X% reflect Net $XX.X billion XXXX. new Both impacted and for compared quarter This operating $XX.X to translation million.

OCIO and competitive The Management continues Management and of for OCIO the growing have we offering Fiduciary focus to marketplace on larger sales Our or new a number as and prospects. Fiduciary wins is is increase. continued firms strong pipeline

However, strong of have. our may to and I'm aggressive we'll value entertain continue you be and questions much, to happy a very new have we proposition, any business. you in Thank pursuits

Operator

[Operator question ahead. with Robert we Lee from have KBW. Instructions] Please And go a

Robert Lee

Hey are how Paul, you?

Paul Klauder

Good, Robert.

Robert Lee

update same you you it, a or mean, environment. and us? maybe characterize at to I of of that, it trying you kind the maybe more in the think a a $XXX-odd mean, those of been transactions color on hinted of to four to of Can just I – pricing ago? the was bit get the end you mean types way change? two, of relative – if little years details have Just but similar quarter? is magnitude – I million think sense may what how or pricing of, think would size of three, there I

Paul Klauder

I the or it is benefit But It's three compared seen in we've ago. years. have to foundations if the – calls, two – investments. seven as I in past in explained of change much it, consumption pricing and the in five endowments years I alternative don't a change of more of U.S. think

might public be of which up their while anywhere us. So going to a markets price XX% be is a consumption XX%, point net bit might the from rate lower, the nice alternatives, for to yield for

book. any bring account years same the in not that's Clearly, erosion further control as and we diversification we're pressure. get margins yield helping bringing if and into seen lose is probably going specifically on old, pricing an our to ago and the XX haven't a business but good the XX new we and account we further us years So that account from

Robert Lee

I a Okay, business. there was that part forget know focus you, strategic on couple for that's a been maybe I ago of magazine, follow-up kind something I DC and I about the weeks was growth And talking of maybe, a what business. it great. the – guess in mean, of P&I OCIO the of

pipeline clients, little So maybe your potential or of your that? think foundation kind of way you feels backlog a much of characterizing hospital… DC-oriented that any of can – DB more maybe of is on if of late, update you been like it it's but versus kind slow or How of us traditional

Paul Klauder

about maybe say XX% is DC. would I the pipeline of Yes,

So marketplace with of define the the article, be. to one people what to that respect specific is in OCIO issues

So define delegation don't same accountability definition, consulting reporting, and we a it full they're fiduciary as that the of assignments full would that reclassifying and use Others that for opinion, lot so my the is in P&I's implementations. growth outsourcing. as

have luxury outsourcing may different than defining proposition consultant of when might seem fundamentally in you that Just you're as as and space, not something like a the outsourcing. business our actually both

down participant good. probably DC, as not knocked change think lineup, slowed bit, pain are a things because little are part with us little markets a balances propose of up, I partial are HR happened consequently, a DC when less there. There's regard much down. are for to to bit going So has discretion, directors in and the all that's reluctant

or make participants. market they to their to a probably to in decision, them reality have really XX,XXX not Now the sales talk does long-term. sponsor participants think DC market only X,XXX But we talk better run the that or that's and changing to platform the to bit. has participants DC little a And it sell that have about X,XXX the is a right opportunity hampered

Robert Lee

Thank great. additional you. color. Okay, the Appreciate

Paul Klauder

problem. No

Operator

Thank no you. questions. there And are further

Al West

Thank you, Paul.

Our Managers. Investment to segment. this is Steve Meyer final today over I'm Steve? it going discuss to turn segment to

Steve Meyer

Thanks Al. afternoon Good everyone.

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

as compared million quarterly this segment of higher the was second XXXX. Our XX.X% or profit quarter to $X.X $XX.X of for million

asset of offset the administration asset of increase due under XXXX at assets billion of $XX.X assets our in to higher billion, of $XX.X $XXX.X $XX.X Third-party the our balances the of of $XX.X fundings billion. note, balances to totals. the from the at This client of XX% were Of acquisition of including we're new client XXXX. as Archway quarter quarter assets compared the was first the asset billion, approximately Archway the market this appreciation by second end second billion, segment for or in end primarily time

to market Turning activity.

revenues. During strong quarter XXXX, of the business events net $XX.X we new quarter in had second sales a with million recurring totaling

business, Importantly, with these expand current entire our include an and business wallet expansion sales new-name are share existing diverse of and both clients.

new market, competitive This in quarter first, included equity in with process. addition of alternative the our won private following: business the sales mandates new a wins

global the Archway name of to outsourcing several global well Second, expansion, middle representing client. several expansion our clients existing adding fourth, relationship clients; growth clients as third, our Solutions; regulatory Archway with our addition unit new office as family office non-U.S. with new by with our our of mandates current with of platform our existing finally, services; a some new in in and growth

We continue remarks, clients, I'll positioned. growth for it current my driven continued to may for new opportunity turn markets well services you by solutions. concludes new wins, any feel prepared Strategically, questions and have. new see That business and now expansion with and over we

Operator

[Operator William from have Instructions] from And Andrew go ahead. question a Please we Nicholas Blair.

Andrew Nicholas

Steve. Hi

the one. quick Could backlog? you one provide updated Just

Steve Meyer

$XX.X the quarter the of was million. at Backlog end Sure.

Andrew Nicholas

That’s all had. I you. Thank

Operator

Please Lee with a And Robert we KBW. ahead. go have question from

Robert Lee

Steve. afternoon Good thanks. Great,

Steve Meyer

How you Rob. afternoon, Good are doing?

Robert Lee

thanks. Great,

change. any get right know you're a it's now, it curious, of always of pricing probably I kind was I if environment, Just balanced mean, but just of of kind how the a kind sense – seeing competitive it but curious of kind update I'm kind on – any it's well. if just tough,

Steve Meyer

needs space, It value-add think I think we number pricing. a think get have I our we've This price. able talked we were to feel at That's a we And truly, bit the know, don't compression premium into a with emerging – focusing support I there helps pressure. before. clients. some but Rob, fee the be conversations understand is that on a clients to us to There have driving kind going say of we a not relatively and of clients, proposition that behavior. I good a premium No, needs competitive. end acquisitions of stick what base is service discussions out is kind of it of we you of more pricing And there's as the will also and up But a little always crowded value blessed deliver. are the supports a offering, day, diverse to think and is the on, premium of pricing we which

Robert Lee

I kind Great. conversion let backlog, And $XX of that? but of question. that kind then given what lumpiness mandates? kind know that, half, of specific don’t follow-up of of on kind of can't in Is – have a frame, that so kind over without kind flow for And – maybe of should color time just the think backlog call time there's if go do of to any one you you I the kind one, of million that's to a a frame two the or year and of as any

Steve Meyer

No, but I'd say this.

it. end had the do events at of $XX.X first quarter the and sales our Over a announced in in we this actually our that So $XX.X if the funded new for which I million. current this million in year, in $X.X quarter then quarters, actually math, of you decent the backlog already quarter – of was last we has quarter – the time of signed a couple million this amount funded

little a say a smaller get longer think it's – $XX.X a I'd go that some it's approach to traditional, but clients fully that period. rest the over takes were and in, XX think and the between we average, larger XX of of sooner, kind mix some I a next between kind little the uptick. a I in of in to mix pace that alternative months on So million, for will, nice was

Robert Lee

Thanks that’s helpful. Steve. Great,

Steve Meyer

Sure.

Operator

queue. there further no And in questions are

Al West

you Thank Heilig company-wide you, few to statistics. a Steve. give like I'd Kathy now

Kathy Heilig

Thanks corporate information Al. quarter. Good this regarding afternoon, everyone. I additional some have

share, $XXX.X cash cash year-to-date operations quarter bringing flow million per million or $X.XX or Second from to operations was flow $X.XX share. per from $XXX.X

Second was free million, flow and quarter cash cash $XXX.X million. flow $XXX.X year-to-date free

Projected million million. capital Second was expenditures, quarter will about have which expenditures capital excluding software, expansion. million. related expenditures, year-to-date and $XX of $XX.X Remaining excluding around remaining million, facility $XX been capitalized to $X.X be estimate software, includes capital capitalized an

is our exercises. due in to The tax the noted As rate in change benefit rate tax a act earnings of stock release, quarter the XX.X%. and option second combination was the the for tax a new of

tax exercises. as effective could result rate Our fluctuate a option stock of the

of that risk involve We based like you remind this is are to assumptions our also are statements the and that and many call information release our in comments would on and forward-looking upon that unaudited. financial presented

believe, herein financial about differ we update as revenues could during income no will developments. of generated that, to discussions obligation or results. include expected quarter. future strategies statements correct result as that and to by occurred the results, operations, our be sales any future from We've revenue the and statements publicly expectations a Future events including forward-looking Our

that and our risks please to now results. financial various refer filings additional you SEC feel may descriptions uncertainties to affect questions future should our could that You And of periodic for free ask have. any

Operator

queue. And there in no are questions [Operator Instructions]

Al West

you. Thank

and businesses our So the ladies gentlemen, by by I of are our making. businesses encouraged and direction am we are progress – the the direction taking

of place for face investments the Have great we Good the in we banking, making call. we a thank our day, including our help us loss believe changes and that from afternoon. are clients all you industry. short-term attending two benefit taking While the will large in headwinds,

Operator

gentlemen, today. your you and does for ladies that And Thank our for participation. conclude conference

now You may disconnect.

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