SEI Investments (SEIC) 21 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Alfred West	Chairman and CEO
Dennis McGonigle	EVP and Chief Financial Officer
Steve Meyer	EVP, Head of Global Wealth Management Services
Wayne Withrow	EVP, Independent Advisor Solutions
Paul Klauder	EVP, Head of the Institutional Group
Owen Lau	Oppenheimer
Robert Lee	KBW
Christopher Donat	Piper Sandler
Ryan Kenny	Morgan Stanley
Ryan Bailey	Goldman Sachs
Rajiv Bhatia	Morningstar

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the SEI Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session and I'll give instructions at that time. [Operator Instructions] And as a reminder, this call is being recorded. I would now like to turn the conference over to our host, Chairman and CEO, Al West. sir. ahead go Please

Alfred West

welcome and everyone. you Thank

business of field and in recapping segment All report. their to of as as SEI's Dennis on we I'll by will call, each to are segments. at as LSV of Controller. will turn Dennis over start Heilig, our well Kathy the comment McGonigle, each the and XXXX. segment. After new leaders SEI’s And it quarter third I'll then cover leader business on questions end the that, investment segment the results usual, CFO;

attention So, let's now the of turn our the XXXX. third to quarter results financial

quarter Third XX% ago. year a revenues grew from

reported earnings EPS quarter XXXX. in and Third by a from third increased of year XX% quarter grew ago $X.XX the quarter $X.XX third XX% the from

balances $X.X LSV's quarter billion, $X.X decreased by Third approximately while billion. by decreased balance asset

X.X SEI translates share. quarter shares million the at During $XXX per into million repurchased $XX.XX price That a we repurchases. of stock of stock of

would you I to provide today. our like Now, situation

One of steadily profits, and revenues IMS. its that’s our growing businesses

Another Advisor segment against strategy. technology-driven the been recently new our executing has business,

experiencing excited are that. indicators We the has about are we the corner and turned strong very business

implementation business, enhancing diligently Another is on of working and banking sales strong pipeline client an private satisfaction. backlog

We're businesses. four the focused Now defined our headwinds segments. in addressing on it OCIO currently beyond the the building engines traditional client fourth while also is segment, Institutional growing other legacy business growth Investor faced strong base, it’s

Here and a we have these shared businesses. innovative of four we adjacent past are the opportunity In main finding in markets engines. our services couple to young

has to service security. network Sphere. throughout SEI service services Sphere's leading the Compliance data Regulatory Global been First, SEI GRC providing financial to and IT organizations world; from what renamed edge is second, services

high Third, the is to private management an worth ultra providing business platform families. net enterprise wealth

both will capabilities lines. In in information. have that provide and Dennis, Steve Paul addition, and for will add two business made IMS more our October we additional acquisitions Institutional

million third the in quarter. Investment be during $XX.X Banking production and were revenue to expected turn Managers Private $XX.X events recurring. Net let’s Next are which to sales of million,

sales results net heads the positive detail their Advisors know businesses asset To in million provide incurred same. new a minutes, unit asset new sales more and These addition, of specific In the $X.X and management-related events we Institutions. events few things units. will of In reflect of and flows prosper with their will on business. updates in be never that grow future, their the

is new adopting One remotely busy and mental reality new distributed such been we've So, the realities. models workforce.

on and force will we We have are today the future beginning the work to how been work in planning act our plans.

sustained the Fortunately, we of half momentum during the XXXX. have positive created first

sales implementations in We strong number late and of the sales have key cycle. backlog a of prospects a in

to significant In we In forward segment. with to it in new repositioning our Dennis the over management-related to addition, in And successful business segments. look our the we inherent I you Dennis? conclusion that, of change. business LSV opportunities investment an have update asset and been and capturing turn give will

Dennis McGonigle

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

different assets in services IT we new and platforms One Group, Management told call you our business consisted on of other opportunity, SEI quarter Al Private our deliver data third know business Sphere, and the of integration During Wealth strategy to activities SEI investments operation the our modularization the investments. the which of segment now of

our is effort. a million, third during quarter third in the One incurred $X.X During expense new quarter compared of of loss SEI the million the million to of the to tied loss of XXXX. Approximately which quarter, a business XXXX segment investments $X.X $X.X during

in income to approximate SEI LSV, for XXXX. compares third third $XX.X the of the to a This income Regarding in for quarter million quarter our $XX million contributed contribution XX.X% XXXX. ownership of

the billion million cash negative approximately of approximately of performance market flow during fees. the during with quarter approximately approximately appreciation $X.X quarter for $X.X quarter the million of was net at Assets with $XXX.X LSV $X.X experienced LSV $X.X billion. contracted billion. Revenue

the we call quarter over As are go. key people our the making last discussed on and to SEI time,

and Our to need operational to recruit, our business growth as all our our teams. areas develop talent in retain including

invest the play We company. have to Regularly the our taken again quarter we as employer recognize competitiveness in their our choice. adjustments as markets compensation. keep SEI make the their which and will and of our and we operational compete During contribution investments recently appropriate in within to role we they steps with talent to a monitor labor to success an

this impact to it do. an right is overall has thing we believe the on While expenses,

Al mentioned, on closed acquisitions. have two As recently we

The in in enhance United have is technology company of the investor assets Investment the areas Services offering the assets purchased States, called Manager These compliance. services and a first regulatory we our Finomial. of

cloud of they our solutions grows financially expertise. This trust the part Master our technical pending Trust. the expanding and they carry Trust addition, in to respective value. Trust to capabilities approval, now strategic are material, SEI Master team Steve In although the with will provide of the the us capabilities giving SEI Paul our acquisition segments. with greater UK Master compete that when and talent commentary Atlas grow. their enhances computing we Neither combine these speak acquisitions regulatory high institutional we additional of space In his will and scale and are the believe

rate was For our tax the effective XX.X%. quarter,

XX-Q information. We in have our questions. now be will more information. release any additional take also Please our to earnings included I refer filed to financial soon for

Operator

Oppenheimer. we go will Lau Please line of with the Owen to go ahead. And Instructions] [Operator

Owen Lau

of your planning you. taking please latest an office you give you Thank question. rest status and could for the working XXXX XXXX? us also for of into the update my people the about going in working Thank remotely Dennis, versus

Dennis McGonigle

Sure.

have in Indianapolis just both and month London offices one So be the call of a this I in open and offices, or anyone have work that we three to and the who of in two to an week here since or voluntarily Oaks end kind days it like back door for whether a employees week. starting would we somewhat or in welcomed our quarter five second come and gradually what Ireland our

We people and being and not do they every with kind the recognizes with if have spontaneity from the force advantage coming conversations, benefits how if geographic take relative in past of worked specific learned improved meetings day. effectively and XX of months. office of to over the to be what keep recognize areas. we effectively you we We and distributed and can people to in that start bang. people back into And do, the a when and but gradual group of build our like issues, will, certainly how opportunities to different run plus on run office the we've in certainly as benefits have running protocols work they you being to people will can team safe the – can versus the we we'll on we've process we things and pros the taking forward We and engagement that big protected covering campuses, our more to Al but business seeing we're a mentioned, said, our continue adjusted well look

around for rest quarter fourth I we we decisions as the of work we this So through make year see go could process our some into that will route how certainly that's XXXX.

Operator

next The go Robert Lee question ahead. with you. Please is Thank KBW.

Robert Lee

you're Dennis, Hi doing Thanks. afternoon. Hope good well.

Dennis McGonigle

Yes, great.

Robert Lee

thanks. Good,

Another earnings season.

Dennis McGonigle

They fast. come up

Robert Lee

kind a guess mention maybe have They reason was of sort commentary you things, missed just it, kind two of like employee apologize to metrics I bit may have and of that little know well I want do. around but your that I of there go may missed? specific I to were compensation expense you back or that I

Dennis McGonigle

actually, so talked seeing of what we the long-term we made But the to growth kind and and anniversary sure and July look quarter our of and some strategy at in quarters didn’t four of we operational quarter I might knew in for then. that back their more and compensation No the would put through did impact employees work we third the operations to employee X force we as planning remember talent, that as areas we the area going is in the of in work just factored made were back have structures date run quarter, because addition it, see for about of particularly for of and force make adjustments do something our certain we July. that particularly our beginning to a we decision the I we many call compensation to in second on were that we

ongoing in some see the costs So quarter decisions. that compensation it and a fourth of those a you'll was set in expectation more growth in result of the kind again as

Robert Lee

just… Okay know you great. And maybe

Dennis McGonigle

letting I conversation force. quarter the at just after company we the what every after back outliner, would it's labor I talking within the our of couple is the that on, call mean because on weeks a have was say became what funny call in ended more much said norm second than that the that a is about,

Robert Lee

as a up next get be back you maybe expenses Yes, this like and we the question we thinking the with the you for know and be about but other as expectations anything about on as or quarter maybe the little starting prior first and the COVID into keeping next bit thinking pick wood just into back to that sorry few think year ahead what hopefully much and next goes marketing, exiting year? on maybe quarters of of you start anything solid, part you office, or we should to knock may to T&E that maybe look theme know not should

Dennis McGonigle

you out. I pinpointed Yes, think

bit all you're in of of people quarter the dinners seeing big bang. the engagement. relationship that allow road. We're an Things what where allow, on but outdoor flag we though we NASCAR maybe going continue I up. year simple without and of staff see like we the will think a saw coming to look or comfortable race. to to or prominent the with have of more do with down, folks drop relative half client process meals and don’t were positive During to approval first clients that as winter are going a it's the have and the activities and the third see It's that did little going we a for one to we elevation inch the we'll to as that more and most die we're being won't client folks kind of sales and

Robert Lee

want that. we be may Although don’t

Dennis McGonigle

there's well, so. games and some of also few a on and thinks going probably that at games Giant Al people as Eagles

Robert Lee

of so off be the the of that into and is kind trail this reasonable expect Okay, should kind guess, in lastly that's part we new somewhat thinking is this so deeper still to that been One that and business get about in that going $X.X investments the I a second of your I SEI place trying of we to appreciate kind year, start patience, off trailing of couple I've next of quarters? expenses million to

Dennis McGonigle

that a as say it it third will a year. second will third then little and it the I'd think down more bit into fourth Yes, step trailed down trail bit we little go and next or more I down

wouldn’t where it sort today more. because will into next of I So year are we carry be

Robert Lee

Okay, my Thanks great. taking questions. for

Dennis McGonigle

Rob. Thanks

Operator

is ahead. next go Donat Sandler. with And Chris Please Piper the

Christopher Donat

for Thanks taking Dennis. Hey question. my

run is one that a know, to understand little moving just facilities, to anything supplies and for other trying sort costs, just Just or if, new out looked on call light, a some what's reason of there? you I'm the there rate small

Dennis McGonigle

So, tax exhaustive did you for nice tax on very program benefit in investments got process of a our if data They were accept on our did that check. and the beneficiaries and third we accounting R&D we frankly and pick applied so application and actually request made our investments rebate item we other in R&D team, for in the we the center we statement and line up will quarter. on our folks IT that state by income after folks

understated. So I is It's bit number more. probably would a say that little

that expense an benefit. did from standpoint far we So get

that way. other the On more were the other one-time side went expenses there some

So in company of terms the other. in the total the fairly costs total expenses things for at were one neutral or moment

Christopher Donat

about think down? end others your but up, items like facilities we probably line as come but some Okay, of the comes

Dennis McGonigle

Yes.

Christopher Donat

me Okay, that's from now. for it

Dennis McGonigle

Thanks.

Operator

more the one in ahead. Stanley. queue, Kenny Morgan go Please have we with Ryan And question

Ryan Kenny

Hey Dennis, you? how are

Dennis McGonigle

and Ryan great, yourself? I'm

Ryan Kenny

Good. more expenses. question One on

beyond into? SEI, given how the been heavily investment about that company at you So we talked year-to-date, and up but the more that how comp type plan work, One the XX% business might lean is that growth other beyond to and much we reinvest should the of of comp return you there to think revenue into initiatives has about any

Dennis McGonigle

Well, I his are initiatives some business GRC clearly activities, Sphere but that outlined we the activities. know in the defined heavily, investing how SEI don’t in new talk, you Al business

As term expense smaller which October and I mentioned did short speak also two the in a Steve have roof. acquisitions to. more little Paul almost we will They to

are R&D in any type investing, we terms are in and still or I are total. speak doing that of underway. kind range that in our we of total of terms the we would that is nothing So operating percentage in we're think XX% of always revenue There surprise I one, that think

funding revenue has You employees. Wealth generating ought Private have it already the now Management self business. Yes, to like a is things business because

Ryan Kenny

you. Thank

Dennis McGonigle

You are welcome.

Operator

we not in any questions have And do more queue.

Dennis McGonigle

presentation like your today's and have notices will so with regarding that We refer and like of statements. the is are I forward-looking our we Please Steve, our Heilig to and to I make to that in some I'd it With uncertainties during we SEC. update remind questions subject risks turn happy our results statements may it Before our get Steve. earnings that today's not you cause that forward-looking to to say that to actual to to it. forward-looking release statements undertake to materially. any in do defer filings and over appear responses turn Kathy new to over would that in

Steve Meyer

segment. with Good everyone usual Thank as Private you, afternoon I'll Dennis. and Banking start

as X% the of to revenues up XXXX XXXX. which quarter from quarter This primarily was or driven $XXX million million was the increase third recurring compared Third of revenues. $X totaled revenues

of expect during CNB signed migrate in of SEI competitive sales to and we profit We This a SEI process new a $X.X Clearfield, growth in XXXX XXXX. to we look future to of Bank with client segment quarter business quarterly competitor primarily quarter an quarter was the XXXX. to the through We initiatives. a first the recurring to million from was turning and activity, SWP in them the profit Third $X.X And in their for million revenues. the to up due Pennsylvania. forward increase supporting to increase based the from agreement won platform welcoming this Bank family CNB half third

investment million primary business new in processing Processing services our sales trusted our of driver of analyzed in for onetime for million closed third the business essentially offset the by revenues. sales was we gross XXXX, of of $X.X event reduction revenue. For quarter was was in total approximately $X a of specific utilized. size sales the several contracts, reduction net in reflecting Investment business client's signed event The reductions this Also dollars the Total flat. a or quarter some the

stronger of on moved update is to quarter, quarter sales result report have in our to quarter fourth I activities when fourth to would the we an It was a results. a While transactions having those safe we some will liked have give say see good wait function events start more to than this effort. we along. signed the net timing

activity expanding the our to relationship year we for Turning First announced that our Horizon are quarter, Bank. with last long-term client, implementation we

been has Horizon running client an which competitor First Horizon July been XXXX. SEI XXXX In merged had since platform. previously with on First a Iberiabank,

of book successfully of announce that We to pleased the we that business the migration completed SEI. during quarter, are to

technology We larger and organization. continue services current to are to providing scope new excited our of the

not was management management $XX.X on down quarter. at the of X.X% recurring ended backlog total assets an our signed period the at revenue XXXX. As the is in second the total end from quarter third approximately our From billion, standpoint, under of $XX million net asset an update which backlog, but installed new

management third cash Our $XX quarter was a negative business sales asset event of side for for This flow negative of quarter. the XXX,XXX XXXX for in a the the million. resulted the

prudently business on As rest momentum, remain the year, executing we our through to in ensure growth. focused sales the the will go and continuing sustainable of on we investing

on has will have. And across That and any SEI unlocking platforms allow our turn now I'll continue the by prepared remain strategy, also growth remarks. my SEI offer you all execute and to may to over One optimistic to to opportunities it company. will our We on our the questions increase which excited assets opportunity. We us growth concludes

Operator

[Operator Stanley. to And Kenny Instructions] Morgan with Please go Ryan we will ahead. go

Ryan Kenny

Hi, Steve, how are you?

Steve Meyer

you, Good. How are Ryan?

Ryan Kenny

Great.

So you've clients could new existing relationships outlined banks. some growth much just to from size that come you is if of us help growth I'm opportunities on expected expanding wondering private how versus scale? the

Steve Meyer

I looking we the But the been have, now, about XX Yes, some platforms we expansion past XX%, other more good we we we're you to at, a of maybe new at little have when we the pipeline say bit some have, those I relationships. give during with actually on what think size. XX% When it's wouldn't opportunity. Ryan, look probably at hard see successful from the including and exact months. and size I'd look yes Archway, right existing the probably IMS, we've And of of platforms technology we opportunities

both we're say both we trying that. I'd equally with So and on are to bullish now move

Ryan Kenny

Got thanks. it,

but it remind your is you us maybe could question protecting top-three clients? yourself bring if risk, do your on But flexibility top-five And in is. that you your how because you of to And Just risk? the about what advisor follow-up, of about revenues some do how think chatter it if up that your as think looking that's around who investor or platform even I'm have or in potential does is concentration there's you on a wealth been that we large a asking been someone we've don't change one concern their hearing know provider. transition And model?

Steve Meyer

clients business clients. of top-five don't in We order. material so or start any Yes, to group have or reverse single I'll the

into go a would certainly we but really about that. talk we if specifics, don't we real had So, client,

risk As far everybody a for in transition business. and that is in out ratio this servicing business, that there as we're outsourcing

client XXs think I managed that our over points that we've retention in the very well very risk rates high the to the being fact years.

to of is have or see feel Typically, what typically think majority risk think, organization private covered and and when from on when silver service an technology you of client wealth execution this we another that segment, the where client. and by back secure they lining you client I while on services, in bank managers bank movement some transition, prospect front also I in we it outside banking all for the power QX, history, of you manager. and we've M&A we larger a or bought comes that's I is look the said, your I've those. not it become think immediate M&A, And down lose when that at we us run if in the the I most as people is comes us, of of have for another bought pretty wealth the by a client ours, will But in again. a had

Ryan Kenny

Thanks.

Steve Meyer

Sure.

Operator

Lau And Owen Oppenheimer. from go the ahead. with comes Please next question

Owen Lau

for taking Hi, question. my Thank you Steve.

you. So that to discipline? it think the to you want expenses, the than this sequentially. tell that will is off? anything mentioned you expenses I will but expense think investments, are they continue for a slightly out you I to that Thank sign and Is make expected, start better declined call

Steve Meyer

in not are, tried due some we and we mentioned Bank. year. management, like expense operations manage folks the Besides we've to a mean what we Dennis that as certainly do our does did to That do and expenses we compensation through took no, in that, to pickup will judiciously them mentioned, and the Private expert have have look through in that good kidding, QX, at continue no

I manage happy best it but and again, with is we'll strength but was was and worth. hard So certainly we manage as the and results very management team the that can, working

Operator

Thank you.

with We ahead. will Robert KBW. now Lee go to go Please

Robert Lee

you're Steve, I Hi, well. Thanks. hope doing

Steve Meyer

you? How am. I are

Robert Lee

quick ones. Good. Thank you. of Couple

it's broadly bank pipeline first of is with kind with really conversations way. way, win does to going just, M&A like if, the willingness that impact as me, too sometimes but, so been there's M&A all its far kind bank all is, and impact in along. that as prospecting feels like would and of rise for, this maybe and terms around kind your stay have down of you it on is down pretty of doesn't activity heated factor sometimes to go more Does and them I path in trying much kind at prospects of on the one the the know the and, a to go that impact, go day-to-day First you of their kind move excuse

Steve Meyer

go say, don't in prospect pretty or out the Other They're business an they impact Yes, we're you'll think start path to already their evident decisions discussions a it's to their ones a to they is I view Rob. ones, unless residence that forward they're conversation. negotiations that and see or we of right if that to I grow now. it's strategic think are typically part much them the a down And I's process. have too like of talking business. their to when just in the day-to-day, we start it reach becomes making

being hurdle process. really prospecting as us we don't So sales a in the big fear see or or

Robert Lee

the part can just two you Wells of of how kind you maybe backlog as follow-up years over us as dropped of the is backlog they the still in backlog, in Okay, the way? that to as of the on currently kind well And fund remind or a great. still Fargo as, have and out then that that, next expect

Steve Meyer

No, I appreciate that. Rob.

months. term be we three delay, expect in we, but a to come more Wells next months looking would short we prospects of a that Fargo have XX And be about right at in of said, probably we're following probably now that remainder certain expect will in the net-off four backlog. delay. it the a $XX it XX seen or that With process, delay the XX% way million the we the backlog, the yes, month where So

so the getting development has some and development of over think our centers take XX clients prospects months, pretty hit certain done pandemic in little hard past to a I longer. As the

change think laid are be it a that I dramatically here there. those couple there or move So, timeframes could don't will out, but

Robert Lee

Thanks Thanks taking questions. so Great. my much. for

Steve Meyer

Sure, no problem.

Operator

next Please Sachs. And Ryan to over go we go Goldman Bailey will ahead. with

Ryan Bailey

it how's Steve, Hey, going?

Steve Meyer

Hey, Ryan.

Ryan Bailey

I'm sorry.

I quick understand, well in question up follow Just first months? the months sort as to backlog a of but if as that completely comment, is, XX Rob's can't of you second the XX or

Steve Meyer

It would be the second. in

Ryan Bailey

Got it.

Okay.

Steve Meyer

And is, have just one. date on the reason because don't we a that

Ryan Bailey

Got it.

Steve, in Okay. think exit some your of of recent accelerating heading And then, be you've will that commentary margin, as said I towards we feel sustainable this like segment and the more a year. sort

nearly kind the feel the over case? Now the right we're next six or that matriculation much call that based of is on And of like does million of $XX through the XX how it months still months the year, that so? like

Steve Meyer

matriculating us fill margin, third main the expenses. the leg the matriculate pieces will and looking we as third that of two that right sales well to piece as continuing to a level. of really goals. sustainable us certain we're accelerating right. more the new as are not And one and backlog of be $XX then that with some We're still size we're can managing to year. the to through I a the there million that sale on stool margin I I We're the feel Yes, yet. through say getting again to We things That's also where navigate sustainable getting closer agreement. the mentioned of point have or

Ryan Bailey

Got it.

developing quick scale in, one just opportunity, a any if on the RIA Okay. more that's advancements one sneak can RIA of or anything larger percolating? sort there or I And with

Steve Meyer

No, there. I think working hard pipeline team the the is building very

yet. We us, the as We down opportunity nothing a for to but report big path. that continue see

Ryan Bailey

Okay, thank you.

Steve Meyer

Sure.

Operator

questions any queue. the And in have we do not more

may You continue.

Steve Meyer

you. Thank

So now I'll segment. turn the Manager Investment to

momentum growth third clients. new both our the with in continued segment, During and quarter, continued the existing in strong

higher XXXX, revenue was for third $XXX.X For million the compared XXXX. segment the in of as higher our $XX.X compared of to segment XX%. third of quarter million Profit as revenues for the quarter from third totaled to XXXX. the XX.X% the of quarter third quarter

A product our the $XX robust. for first to is our existing process, lower billion; asset client add XXXX ETF XXXX. to was clients party currently as the unit land platform. one sales of of offset converting of appreciation of outsourcing negative a asset end thus end Third the The lower our competitors $XX.X third new service decrease by highlight quarter fund strategic time, quarter solutions liquidity at the And strategy an assets net product drop another In their strong these turning fee third our the million trust continues driven This we all private both of and contracted revenue, market clients. new billion a we resulting revenue. selection XXXX, a lines recurring with provider was a approximately the in resonate client in during drop equity and collective in to as unit, was very expansion a continue $XXX.X roster. as quarter events sales of equity land billion a funding market quarter to fund is in large adding of funding existing billion quarter particular net client in balances and events new traditional at manager robust. in be the number business totaling new In SEI than and Highlights had net with we in market and client a continue business business off expand smaller market much $XX.X in of of by alternative million $XX.X a of business and to balances to due and second activity, sales billion. our the our sourcing of that names, private while to $XX.X revenues. large to included we closed in won as the decrease well competitive $XX.X were expand recurring

we our office During client outsourcing during our services office new steady strengthening a in And In Circle complex clients. Archway see demand the in solid clients. mainly the more Advisors XX to Act services the market platform multi quarter segment sales growth continue Europe pioneering we and added three for continued we market Inner for the cross demand had unit expanded with family single family the to in have private multifamily with XX We office segment. relationships fund relationships and than platform. from

the Our business at stands backlog the of of at $XX.X new quarter. million of sold unfunded end third

and to the complements regulatory strategic am Turning business, pleased we to the offering. investor October compliance global solutions Finomial of XX, and side firm and our platforms lifecycle the that announce compliance an acquired our assets of services I fintech cloud on native

While has and expertise not and financially our complimentary this development resources technology material, an cloud to base. employee in transaction

to family. We the team pleased and Meredith are to Finomial SEI Moss welcome the

the during Luxembourg our operating approval license, servicing in start fully also we which us Luxembourg. to received Finally, final allows on quarter,

look turn to jurisdiction. We this to prepared questions important our concludes over and have and hired may an initial it established capabilities That my remarks now our office and any staff have. forward adding I'll servicing you for

Operator

we Owen ahead. [Operator to Instructions] Oppenheimer. with will Lau Please go And go

Owen Lau

build? please criteria very area could Thank Steve, buy you remind of it's what to doing us think you. you do Thank your much. and versus you M&A better

Steve Meyer

Sure.

from a better build, lot to of their through a look versus group at I is and adjacent be came then. there. a where to and some think technology I match switched, out moves expertise. was adding importantly, place so it across great frankly, the of products the has the firepower this in it and really Finomial space; into get future, there's partnership Doing or tough we products our so we the their a just market, have people looked their think business we made it for labor And addition good us. with market And feel build for we're have sense just of solutions So capabilities, serve I and and assets would things we a kind very out quite And market very it as acquisition thought we an we to the open because to thought we a we think can fast. company most if criteria strategic terrific in an add for to just

I we'd product we opportunity us think further, look if that think the to cross as new and a substantially in go solution or and market, new will get us and I I or this that think out that adjacent be market platforms, very see comes the we market, be us an whether company, our an that. completely down interested path build help into help

after market We or focused the will to of gain We're partnership, share. just the acquisition to important strategic actual an gain That's benefits buy not acquisition us. in what assets very to on, thing. things to share, market not just be most comes offset or strategic the interested to

Owen Lau

XXXX? And that then, next even you I of it. in we maybe terms but about mentioned also Got how think make helpful. to That's margin you're and investments. quarter, the Because going going into margin very the down, margin, should think came some your

how margin? So about we should you. think Thank

Steve Meyer

like boy that and the bit growing risk of believe, the our for line to said where Who I Wolf, for it Cried down with the And was XX%, like this I hoping at again, change are that. come the I you is that this is business did reason and right think the sustainable, maybe sale. said more in higher. little XXs, IX we now wolf, not margin Boy I will I've – a we quarters, is feel do expanding the do to to being I come this I've a close two down the and the ask little as obviously mid were see XX% who sounding in up at point, cried can past feel going quarter.

We of with that those past. before the actually the have the supporting we salary are an The will forward. that we're we QX Dennis active and in expense bringing impact than in are revenue very going in sales increases markets combined more actually mentioned, rapidly believe implementing have

normalize So to the historically will into that they we were believe. where back more

Owen Lau

helpful. Got Thanks, it. That's Steve. very

Steve Meyer

Sure.

Operator

we ahead. with will go to Lee And Please Robert go KBW.

Robert Lee

question on, ask Great. feel kind margin nowadays crypto and almost of assets Thanks I guess have about I a question my like taking have almost calls capabilities. already. for got questions these to crypto and all have and to my do But

you capabilities, or need seeing and talk clients So in a it bit safekeeping, that from Wayne it's start some or -- can question But prepared. about, kind little the, a about bit I'm just transaction, you assets? a talk those will you be want later however be for can so a in little the of for curious business. more whether your demand of to providing are your out to you building find crypto

Steve Meyer

Yes. now a did seen have before. already this cover We Rob, so I need, we think there. little we're

our funds from actually capabilities. and client our quite prospects number crypto We have. and our a have demand from some supporting on a do of a we we base few inquiries are see clients we So

think even we smaller. there the do for demand What is though, a burgeoning say, it. have are I'd those we typically funds So is with ones

scale of do some adoption it's we them, While wide not adoption. see

in we're So this think early innings the of still. I

think regulations getting around definitely get these, in and a but wide a how there there's after question on leadings take we still prospecting are capabilities concern lot asked they we're around of I off about crypto. will scale,

cross impact IMF a at and how outsourcing funds. operations services as functional offer, I'm we now, as crypto to the far offer team asked, around right additional have this services have go advisor, and would administration platform's actually we looking but the So we across lease banking, might

Robert Lee

was for that question. it. my taking Great, Thanks

Steve Meyer

Sure.

Operator

Chris Piper go from Donat And question the is ahead. Sandler. Please with

Christopher Donat

Hey, Steve, my taking thanks for question.

Steve Meyer

Sure.

Christopher Donat

do your terms data of want I right heard the how think Or your architecture? of clients Yes, tenant it are heads prefer how was I'm your now, they you world cloud centers And cloud where clients thought just tenant a or or world are about a on-prem? Finomial. about about native. thinking in expressing that the I clients strong terms you multi single to opinion? and wondering say in Just or you're

Steve Meyer

I to very we on people are clients our cloud. some think of I the realize us, be think have

people obviously side. you when managers still concerns, there's more especially banking think who the wealth have of I get some and into

look them. initiatives of institutions, of many large middle most the them the have or you across if of cloud in However,

So of to a part is it's inevitable. taking key us. is We believe We we be all cloud and native, able expertise, to believe platforms, our of tenancy aligned multi believe that be important. very kind this of think with they're our future. we And

well I markets. with aligned strategically, our very we're both So think

Christopher Donat

Thanks. it. Got

Steve Meyer

Sure.

Operator

the I go Please And ahead. Rajiv Morningstar. but I Bhatia apologize name, with it is forget

Rajiv Bhatia

how Great. between is revenue growth rates Can alternative afternoon. you versus mix compare? Good us does the your remind And revenue alternative? traditional what versus traditional

Steve Meyer

The What strong what several So saw QX, is a well. remainder about as traditional had higher. business starting the alternative. our quarter, showing obviously, would the the trend split traditional, business XX% in I has and alternative say, this years specifically side we our past the for of over been

a from around So down I traditional, our XX% management XX%, some see it of passive and they platforms of well for clients say look as traditional middle, well as split very capabilities, our would was remainder maybe to their but expand to close office. as kind are our strong push the middle we alternatives other out excited as services

Rajiv Bhatia

Got it. Thanks.

Steve Meyer

Sure.

Operator

any do queue. we And have not questions more in

You may continue.

Steve Meyer

Thank you.

So to over I'll cover Wayne? segment. it Advisor turn to Wayne now Withrow the

Wayne Withrow

Steve. Thanks,

third our in The quarter strategic the progress reflected continued execution framework. of

in year, some year last quarter to as investments rose this $XX the the was represented Like Overall, net the This billion flow remained have flow, platform. growth, assets management of positive a cash the under clear the Total believe assets. at due Contributing XX only $X.X the platform personnel assets quarter, last included working. that $XX under rates. total asset flow quarter third was to of pressure tied we the were growth rates is Cash the and engaged products. and sub lower primarily reflect our advisor years. on platform intact, totaled platform extent, platform the increased our realized profit quarter increased billion represented from the this total I lesser Of billion. over end quarterly management, approximately new despite second well is for unit quarter. our this strategy revenue to during third increase to million. $XXX technology billion and and in is $XXX AUM and XX% in in costs two revenues compared as onto of of management. quarter, to the Third our quarter asset our our a third to Expenses in assets, during strongest $X.X fee on platform million case picture cash indication assets advisors

advantages have we competitive upon invest. built Oranj remains and our integrate To to of goal continue in are year and this technology this the which on track. we platform continue launch invested Our to capabilities end, the a

well technology, estimated We trading digital automation. mutual as and management enhanced of are also fund, and rollout proposal as continuing fully a account open an model

strategy. much execution remains any I to we have. continue be still questions to make our progress of there accomplished, welcome While in you

Operator

have Kenny Stanley. ahead. we Ryan Morgan Please And go Instructions] [Operator with

Ryan Kenny

Hey, Wayne, how are you?

Wayne Withrow

All right, afternoon, Ryan. good

Ryan Kenny

advantages acquisition the the some and competitive with of work your are heard comments I they So automation doing. on Oranj the

lot So space. on competitive wondering if could we broader update of environment? there the Specifically, new just a get in tamp picture have entrants a the been

I'm with newer So competition of competing you are mark. Or more entrants? from the investment players seeing some wondering asset if today and like you're big the mostly

Wayne Withrow

other on Yes, to I firms mistake honest, be compete space. focus a it just think, would to be that this in

they're the half. where people I with sort of take are the complimentary at platforms affiliated and could think most that our to advisors broker-dealers need are in look building also you of business

much. not a So and also as competitor, that you that's see might

asset well tamp of gain I continue in market. compete an to in really in that think, traction, of platforms, So technology, or really that, as I our people. advantage these as, against But we platform, those we one us investment the the other for our additional and, acceptance proprietary give think market us our strong great which more an space, advantages,

Ryan Kenny

Thanks. That's helpful color.

Operator

Lee go And Robert with Please from our ahead. next is KBW. question

Robert Lee

Thanks.

doing? hope afternoon, So you Okay. good Wayne,

Wayne Withrow

I'm great.

Robert Lee

recently and of net new have is, of the added drivers, the, of baked maybe business, for that my guess obviously advisors to so how to bigger like, kind flows, been around, be be aging just organic tend advisors advisors perspective? on are maybe a by whereas, kind should growth new flows, what your the been has that What while have the, platform their of less books cash into tend them. you know just of mean I Can our an refresh memory that we think you $X.X from always Good. I billion, on on and impression

changes towards are kind case, seeing book advisors? the the skewed it's any overall, still how is newer you the of, kind flowing of kind that businesses is as So, of in of so

Wayne Withrow

that's way. book of right, and going coming I existing and the a and We're successes. growth book and existing not came new They our know, the you're of where, this to still But we reengagement this often the, Yes, customers best always from one on the growth most more quarter, the look kind say, from of seeing platform. new is, last shift the case and is customers. it newer maybe look you I key has that been lot point we're at our mean, our the and to technology existing at seeing the think, that of book been lot this a

So, I traditional a think of there's been little that in view. shift bit

Robert Lee

crypto advisors crypto, maybe the Steve reported getting do then of ask just portfolios on are that you're from the is their And asked they're or, and same I'll who about, some I asked, more hearing of adding the, so which question what capabilities. having others Great. just brokers to

there? adviser have same you kind you build seeing that, money can to that and you spend some, Steve, that your So of, are seeing kind or it obviously base, of you're talked or time whatnot, a that out maybe of curious building talk just about of or more but, from little what just bit kind

Wayne Withrow

Yes, mean, two you think divide into to sort items. of it I I separate need

crypto a refer we that processing custody/trading a agree, lot of and kind with, addressed And of that and capability. how into and to your your Steve capabilities platform capabilities, with of also out which whole is, fit to first need supports The build comments that capability. and a more does Steve's I

allocation for investment we right that that. know the this that you how an to conversation. making that incorporate into think the we're modified are We're process I in have your capabilities you investment is clients? question available on right into still of have your answer you help is portfolio? that, The does advocate along investment wanted asset strategies studying pricing that an And second that crypto strategy now. different isn't I an further is the are portfolio now. into Now, fit for a don't

Robert Lee

taking Thanks it. my questions. was That for Great.

Operator

And Sachs. Please then the ahead. next go question is Ryan Goldman with Bailey

Ryan Bailey

Wayne. Hi,

over was quarter. last just the So very wondering quarter, strongest I reported you're accelerating that the

who from just the your you're there I which anything tailwinds, well. if from specific use in there temps accelerating are there months trends wondering if clearly to willing or more that? to helping was joining as ago, relative changed, see why to call or now, like thumb anything's And as demand I was new hearing we some think are is outsource some generally, or six XX they're SEI, something it pent-up advisors floor or peers of

Wayne Withrow

really Yes, demand. it if know I'd I don't pent-up call

including I'm are which the some is, more we have we as I the and more mentioned I of of people compelling, now textodian look -- that saying change. to when make platform and we willing at entire are technology capabilities it of sort enhance as this think becomes what and that call the and we is [ph], further sort platform more our not investing, a platform business think just whole earlier in technology more I custody, our

me, there. I for out would say going that’s dynamics So the on

Ryan Bailey

Got it.

for that. along passing just the out for also the And you doing Thank early in disclosure. the platform Okay. assets breaking appreciation

Wayne Withrow

welcome. You’re

Operator

more any have queue. questions not in do we And

continue. may You

Wayne Withrow

Okay, that, Paul. to With it on I thank you. pass will

Paul Klauder

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

$XXX asset base. margin were due $XX million quarter slightly were of million. $XXX billion XXXX increase reflect offset compared quarter a $XX.X for to XX%. was $XX.X X% fee positive Third third revenue across $X.X event third increases increase balances by versus X% a client were for of and currency to the of Both end quarter to due the totaled operating an XXXX. This appreciation. quarter increased were profits million. of for XXXX and $XX.X third compression the of XXXX. translation quarter sales Operating compared the market Operating client the appreciation, billion quarter quarter is profits million revenue the XXXX. market sales the to Net of third third positive losses million Quarter Gross

The end client not-for-profit, new sales UK X.X at unfunded quarter Healthcare US Management. U.S. quarter Fiduciary sales Third and was gross billion. included backlog of

acquisition and billion. billion are according Atlas, £X.X Trusts Master UK. the the Al Master is of assets of as deliver Ltd management of to rapidly. marketplace or US$X.X DC fine continue approximately completed capabilities. As Dennis the The Go and scale in regulatory Trust billion, UK the combined positions the greater with growing Trusts the to as under mentioned, Trust more two Presently $XX it the X/XX/XXXX contribution pounds to service is to SEI Subject Master approval, and acquisition we cap best-of-breed Pensions

demonstrates candidates competitive has to and this These gives the presence members. scale, record and their when the SEI clients SEI members. material, additional financial to results our not XXXX. This Trust increases Trust in While our the transaction track to the market, dating and of investment Master criteria UK Master back DC important significantly evaluate commitment Master DC serve long-term schemes Trust a transaction are

continue stabilizing selling addition we focus OCIO In the our distinguishing to to platform news regarding our new Master UK on OCIO Trust, relationships. client and base, our

We the to while that with and platform. large global you much are platform overall our questions advancing very I'm answer Thank to mega enhancements ECIO prospects have. any may making you happy

Operator

Lee Instructions] Please we to go [Operator KBW. go with will ahead. Robert And

Robert Lee

Paul. Hey, you? How hi, are

Paul Klauder

Robert. Good.

Robert Lee

business there there were am were so like misunderstand lose something maybe that it of quarter. kind thought my was going that I I guess, of you quarter? think still out large, you or a to recall the Curious, or $X Is -- I like but I was wrong, in last I notes billion did

Paul Klauder

billion and we billion $X.X is that billion. relative balance. asset which XXX, out And is quarter, to why is losses of of asset we of down as reported sales gross balance No, $X.X reported last majority that XXX of the $X.X the the

Robert Lee

must Okay, you there have there I I was out guess go. thought else something I misunderstood

I be pretty end a may although, but I well, kind quarter. it's last the up out quarter, it and year where the range, know first of you've but of towards You bit But, back back maybe down last getting XXs but talked or is going been, the sticky. had of, about it's margin, from it's losing number, mean, as holding been to obviously the was guess, Then I really guess. I wrong I the

to you where feel that bit is future? to should for comfortable this any down that reason pretty So trend foreseeable be or give it it's the a round the for start take going here or

Paul Klauder

little that be Steve do pressure increasing, percentage, a in like But going is messaged. feel I Yes, fee Boy rebids I margin compressions Wolf or is expect the about margin. there's Cried which Who to which we've Travel the good. on given the bit

hopeful not but which clients and that that think greater new OCIO. at is certainly saw the we pre-pandemic, as to business with increases are We're being prospects, we settings. levels So, out production sales ourselves helpful distinguish seeing around retention both we well and in comp able as

as business, generally would some of probably low macro acquisition be those well being we've things, get holding percentage, able there profit time, as that pounds. the investment in the those, And earnings, Capita, that so then the in in to pressure we accretive back very XX be the market and some an to not to, marketplace we think And nicely relative margin which making including into investment been billion see and of profit XX%. given salespeople over would just just in but investing business compete large in of

to a retaining growth over by profit absolute percentage that but going probably terms increase we see we're some line reasons, those for erosion, itself in returning hope margin will So or on time. ultimately to the top

Robert Lee

taking client foundations, curious kind less last the maybe update Great of how or mix, your any and of you kind kind more we on, of towards if gross evolving? hospital think how time, that's of how know, systems, sales question, one pipeline for endowments, thanks your shifting, and that's busy, then DB just

Paul Klauder

plans look all going plans have about on the some we governmental around that's aren't that's at being to because termination, Not a to hospitals or a for or multi that's that's as longer, over are I other Yes, time. endowments have thinking of new longer mean, a DB, attractive, seen be that's a non-corporate the period employer they that path for benefit we are to and lifecycle DB, when we defined and business. plan, still that and certainly of terminated, switch foundations whether the years DB thing

to evergreen So what clearly, longer diversified would pools. more or the call term asset mix is I

segment and the building of continuum that with pipeline, end ECIO. we where the larger we things have confident of of we're we market is So one OCIO are the really the to like this

or be that and billion So select ability sense model have self with help a investment We whether honestly had model before. for team a where we Foundation, makes them the them whether a of letting makes never dollar into more delegation sense. would efficient them, walking we an

It So to also we're that larger actually may that palatable some that's outsourcing continuum, may they go them. go categories, end pivot decide ECIO. because those to pivot really nice on to them some segment. to But of having not into more which may the of one market that has the forcing been for

Robert Lee

thank you much. Great, so

Paul Klauder

Thanks, Robert.

Operator

And Lau Please Oppenheimer. with go Owen a have ahead. we question from

Owen Lau

me, my you. Thank expense any just and mentioned, investment stage? just question. generating you please about one progress Could in revenue there, started Paul for you or the you taking from one talk it's Thank the quick still ECIO,

Paul Klauder

ago. this year at a for year. we've Owen, a about announced it about We it, been Yes. time

that So do there's line capabilities platform around front the we suspects and prospects. analytics. haven't gotten over active to continue goal enhancing an that And specifically also the There's any the we evaluation yet. end

the done. line. the a to getting the or seen worms turning lot opposed just to we're the that turn over really as again, been we're and choose this continuum decision excited about in harken or to confident marketplace way getting said, the to we gives we're able work hopeful prospects have harder so will just be I'll clients. other, worms to We've has nice the them one pushing But reality about go there. before we're I Suspects And capabilities So goal prospects to them of the the and are that. bullish, comments and us a back to having buyer early

Owen Lau

much. you Thank it. very Got

Paul Klauder

Thanks, Owen.

Operator

have any other queue, you And continue. do in questions we may not

Paul Klauder

call turn the like West. I'd to back Al Great. now over to

Alfred West

Paul. Thanks,

making So on progress ladies and two gentlemen, fronts. we are

level a very healthy first of kept our we workforce are high the one, service pandemic. client delivering On productive, have and to fortunate the throughout

we remain you for On Please throughout and day. are our Have healthy. our great businesses. momentum the a second safe front, call. attending Thank building be

Operator

today. our does you That your AT&T using for conclude and for Event participation for Services. conference Thank

now may disconnect. You

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