Sei Investments Co 10-K for FY2023

Sei Investments Co (SEIC)

10-K 2024-02-20 For: 2023-12-31

Added on April 04, 2026

About this 10-K

Sei Investments Co filed this 10-K on February 20, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.92B; down 3.6% from $1.99B a year earlier
Net income: $462.26M; down 2.8% from net income of $475.47M a year earlier
Diluted EPS: $3.46; unchanged from $3.46 a year earlier

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Pennsylvania						23-1707341
State or Other Jurisdiction of Incorporation or Organization						I.R.S. Employer Identification No.


		Page
PART I
Item 1.	Business.	2
Item 1A.	Risk Factors.	14
Item 1B.	Unresolved Staff Comments.	27
Item 1C.	Cybersecurity.	27
Item 2.	Properties.	28
Item 3.	Legal Proceedings.	28
Item 4.	Mine Safety Disclosures.	28

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	29
Item 6.	[Reserved]	30
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	49
Item 8.	Financial Statements and Supplementary Data.	50
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	91
Item 9A.	Controls and Procedures.	91
Item 9B.	Other Information.	91
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	91

PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	92
Item 11.	Executive Compensation.	92
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	93
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	95
Item 14.	Principal Accounting Fees and Services.	95

PART IV
Item 15.	Exhibit and Financial Statement Schedules.	96
Item 16.	Form 10-K Summary.	96


	2023		2022		2021
Private Banks	26	%	29	%	26	%
Investment Advisors	23	%	23	%	25	%
Institutional Investors	15	%	16	%	18	%
Investment Managers	35	%	31	%	30	%
Investments in New Businesses	1	%	1	%	1	%
	100	%	100	%	100	%


(all dollar amounts in thousands)	2023			2022			2021
Research and development expenditures	$	137,492		$	144,459		$	168,519

Capitalization of costs incurred in developing computer software	$	33,958		$	35,293		$	26,037

Research and development expenditures as a percentage of revenues	7.2		%	7.3		%	8.8		%


2023	High		Low		Dividends
First Quarter	$	64.69	$	53.93	$	—
Second Quarter	59.87		56.10		0.43
Third Quarter	64.43		58.25		—
Fourth Quarter	64.94		52.20		0.46


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Period	Total Number of Shares Purchased	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
October 2023	175,000	$	53.58	175,000	$	91,628,000
November 2023	625,000	56.89		625,000	56,069,000
December 2023	387,000	61.41		387,000	282,079,000
Total	1,187,000	57.88		1,187,000


Year Ended December 31,	2023		2022		Percent Change*		2021		Percent Change
Revenues	$	1,919,793	$	1,991,037	(4)	%	$	1,918,309	4	%
Expenses	1,495,269		1,515,284		(1)	%	1,364,928		11	%
Income from operations	424,524		475,753		(11)	%	553,381		(14)	%
Net gain (loss) from investments	2,757		(3,078)		NM		(366)		NM
Interest income, net of interest expense	40,444		12,559		222	%	3,086		307	%
Other income	—		3,379		NM		—		NM
Equity in earnings of unconsolidated affiliates	126,930		120,667		5	%	137,572		(12)	%
Income before income taxes	594,655		609,280		(2)	%	693,673		(12)	%
Income taxes	132,397		133,813		(1)	%	147,080		(9)	%
Net income	462,258		475,467		(3)	%	546,593		(13)	%
Diluted earnings per common share	$	3.46	$	3.46	—	%	$	3.81	(9)	%


Ending Asset Balances
(In millions)	As of December 31,
					Percent Change				Percent Change
	2023		2022				2021
Private Banks:
Equity and fixed-income programs	$	24,496	$	22,377	9	%	$	26,281	(15)	%
Collective trust fund programs	4		7		(43)	%	6		17	%
Liquidity funds	3,916		3,201		22	%	4,724		(32)	%
Total assets under management	$	28,416	$	25,585	11	%	$	31,011	(17)	%
Client assets under administration	7,267		4,151		75	%	4,481		(7)	%
Total assets	$	35,683	$	29,736	20	%	$	35,492	(16)	%
Investment Advisors:
Equity and fixed-income programs	$	71,634	$	66,240	8	%	$	81,686	(19)	%
Liquidity funds	4,812		5,436		(11)	%	4,317		26	%
Total Platform assets under management	$	76,446	$	71,676	7	%	$	86,003	(17)	%
Platform-only assets	18,324		13,931		32	%	14,564		(4)	%
Platform-only assets-deposit program	843		—		NM		—		NM
Total Platform assets	$	95,613	$	85,607	12	%	$	100,567	(15)	%
Institutional Investors:
Equity and fixed-income programs	$	77,208	$	73,178	6	%	$	91,719	(20)	%
Collective trust fund programs	1		5		(80)	%	5		—	%
Liquidity funds	1,734		1,557		11	%	2,118		(26)	%
Total assets under management	$	78,943	$	74,740	6	%	$	93,842	(20)	%
Advised assets	6,120		4,314		42	%	4,857		(11)	%
Total assets	$	85,063	$	79,054	8	%	$	98,699	(20)	%
Investment Managers:
Collective trust fund programs (A)	$	156,376	$	141,285	11	%	$	92,549	53	%
Liquidity funds	114		199		(43)	%	423		(53)	%
Total assets under management	$	156,490	$	141,484	11	%	$	92,972	52	%
Client assets under administration	935,564		810,491		15	%	907,377		(11)	%
Total assets	$	1,092,054	$	951,975	15	%	$	1,000,349	(5)	%
Investments in New Businesses:
Equity and fixed-income programs	$	2,174	$	1,912	14	%	$	2,096	(9)	%
Liquidity funds	209		215		(3)	%	240		(10)	%
Total assets under management	$	2,383	$	2,127	12	%	$	2,336	(9)	%
Advised assets	1,150		1,077		7	%	1,410		(24)	%
Total assets	$	3,533	$	3,204	10	%	$	3,746	(14)	%
LSV:
Equity and fixed-income programs (B)	$	89,312	$	83,753	7	%	$	98,984	(15)	%


Total:
Equity and fixed-income programs (C)	$	264,824	$	247,460	7	%	$	300,766	(18)	%
Collective trust fund programs	156,381		141,297		11	%	92,560		53	%
Liquidity funds	10,785		10,608		2	%	11,822		(10)	%
Total assets under management	$	431,990	$	399,365	8	%	$	405,148	(1)	%
Advised assets	7,270		5,391		35	%	6,267		(14)	%
Client assets under administration (D)	942,831		814,642		16	%	911,858		(11)	%
Platform-only assets	19,167		$	13,931	38	%	14,564		(4)	%
Total assets	$	1,401,258	$	1,233,329	14	%	$	1,337,837	(8)	%


Average Asset Balances
(In millions)	For the Year Ended December 31,
					Percent Change				Percent Change
	2023		2022				2021
Private Banks:
Equity and fixed-income programs	$	23,638	$	23,326	1	%	$	25,857	(10)	%
Collective trust fund programs	6		7		(14)	%	6		17	%
Liquidity funds	3,537		3,834		(8)	%	4,019		(5)	%
Total assets under management	$	27,181	$	27,167	—	%	$	29,882	(9)	%
Client assets under administration	4,976		4,204		18	%	4,451		(6)	%
Total assets	$	32,157	$	31,371	3	%	$	34,333	(9)	%
Investment Advisors:
Equity and fixed-income programs	$	68,407	$	70,394	(3)	%	$	77,596	(9)	%
Liquidity funds	4,960		5,682		(13)	%	3,509		62	%
Total Platform assets under management	$	73,367	$	76,076	(4)	%	$	81,105	(6)	%
Platform-only assets	16,026		13,574		18	%	13,426		1	%
Platform-only assets-deposit program	70		—		NM		—		NM
Total Platform assets	$	89,463	89,650		—	%	94,531		(5)	%
Institutional Investors:
Equity and fixed-income programs	$	74,546	$	79,415	(6)	%	$	91,832	(14)	%
Collective trust fund programs	4		5		(20)	%	44		(89)	%
Liquidity funds	1,636		1,939		(16)	%	2,609		(26)	%
Total assets under management	$	76,186	$	81,359	(6)	%	$	94,485	(14)	%
Advised assets	4,479		4,330		3	%	4,533		(4)	%
Total assets	$	80,665	$	85,689	(6)	%	$	99,018	(13)	%
Investment Managers:
Collective trust fund programs (A)	148,097		125,595		18	%	85,622		47	%
Liquidity funds	261		311		(16)	%	496		(37)	%
Total assets under management	$	148,358	$	125,906	18	%	$	86,118	46	%
Client assets under administration	875,369		837,647		5	%	850,510		(2)	%
Total assets	$	1,023,727	$	963,553	6	%	$	936,628	3	%
Investments in New Businesses:
Equity and fixed-income programs	$	2,053	$	1,968	4	%	$	1,906	3	%
Liquidity funds	205		247		(17)	%	202		22	%
Total assets under management	$	2,258	$	2,215	2	%	$	2,108	5	%
Advised assets	1,089		1,191		(9)	%	1,395		(15)	%
Total assets	$	3,347	$	3,406	(2)	%	$	3,503	(3)	%
LSV:
Equity and fixed-income programs (B)	$	85,661	$	87,220	(2)	%	$	99,591	(12)	%


Total:
Equity and fixed-income programs (C)	$	254,305	$	262,323	(3)	%	296,782		(12)	%
Collective trust fund programs	148,107		125,607		18	%	85,672		47	%
Liquidity funds	10,599		12,013		(12)	%	10,835		11	%
Total assets under management	$	413,011	$	399,943	3	%	$	393,289	2	%
Advised assets	5,568		5,521		1	%	5,928		(7)	%
Client assets under administration (D)	880,345		841,851		5	%	854,961		(2)	%
Platform-only assets	16,096		13,574		19	%	13,426		1	%
Total assets	$	1,315,020	$	1,260,889	4	%	$	1,267,604	(1)	%


Year	Total Number of Shares Repurchased	Average Price Paid per Share		Total Cost
2023	5,237,000	$	59.34	$	310,769
2022	5,914,000	57.22		338,442
2021	6,747,000	61.00		411,534


Year	Cash Dividends Paid		Cash Dividends Paid per Share
2023	$	114,837	$	0.86
2022	109,830		0.80
2021	105,516		0.74



Common Stock, $.01 par value						131,352,305


Year Ended December 31,	2023			2022			Percent Change		2021			Percent Change
Private Banks:
Revenues	$	503,317		$	575,625		(13)	%	$	493,570		17	%
Expenses	455,820			473,209			(4)	%	462,796			2	%
Operating profit	$	47,497		$	102,416		(54)	%	$	30,774		233	%
Operating margin	9		%	18		%			6		%
Investment Advisors:
Revenues	436,298			447,766			(3)	%	482,949			(7)	%
Expenses	259,142			251,650			3	%	240,334			5	%
Operating profit	$	177,156		$	196,116		(10)	%	$	242,615		(19)	%
Operating margin	41		%	44		%			50		%
Institutional Investors:
Revenues	289,708			323,353			(10)	%	343,805			(6)	%
Expenses	165,455			172,252			(4)	%	168,070			2	%
Operating profit	$	124,253		$	151,101		(18)	%	$	175,735		(14)	%
Operating margin	43		%	47		%			51		%
Investment Managers:
Revenues	670,486			624,918			7	%	581,157			8	%
Expenses	437,174			404,850			8	%	348,655			16	%
Operating profit	$	233,312		$	220,068		6	%	$	232,502		(5)	%
Operating margin	35		%	35		%			40		%
Investments in New Businesses:
Revenues	19,984			19,375			3	%	16,828			15	%
Expenses	45,437			45,159			1	%	53,219			(15)	%
Operating loss	$	(25,453)		$	(25,784)		NM		$	(36,391)		NM


	2023		2022		Percent Change	2021		Percent Change
Capitalized software development costs	$	26,227	$	41,437	(37)%	$	53,568	(23)%
Intangible assets	12,161		12,580		(3)%	5,260		139%
Other	281		263		7%	324		(19)%
Total amortization expense	$	38,669	$	54,280	(29)%	$	59,152	(8)%


Year Ended December 31,	2023		2022		2021
Statutory rate	21.0	%	21.0	%	21.0	%
State taxes, net of federal tax benefit	2.6		2.9		2.6
Foreign tax expense and tax rate differential	(0.3)		(0.2)		(0.1)
Tax benefit from stock option exercises	(0.3)		(0.7)		(1.2)
Research and development tax credit	(1.1)		(1.1)		(1.0)
Foreign-Derived Intangible Income Deduction (FDII)	(0.3)		(0.3)		(0.2)
Other, net	0.7		0.4		0.1
	22.3	%	22.0	%	21.2	%



Index to Financial Statements:			Page

Reports of Independent Registered Public Accounting Firm			51
Auditor Name: KPMG LLP
Audit Firm ID: 185
Auditor Location: Philadelphia, PA
Consolidated Balance Sheets — December 31, 2023 and 2022			55
Consolidated Statements of Operations — For the years ended December 31, 2023, 2022 and 2021			57
Consolidated Statements of Comprehensive Income — For the years ended December 31, 2023, 2022 and 2021			58
Consolidated Statements of Changes in Equity — For the years ended December 31, 2023, 2022 and 2021			59
Consolidated Statements of Cash Flows — For the years ended December 31, 2023, 2022 and 2021			60
Notes to Consolidated Financial Statements			62
Schedule II - Valuation and Qualifying Accounts and Reserves — For the years ended December 31, 2023, 2022 and 2021			90



Consolidated Balance Sheets									SEI Investments Company
(Dollars in thousands, except per share data)									and Subsidiaries


December 31,	2023		2022
Assets
Current Assets:
Cash and cash equivalents	$	834,697	$	853,008
Restricted cash	301		351
Receivables from investment products	55,886		62,014
Receivables, net of allowance for doubtful accounts of $663 and $901	501,434		457,084
Securities owned	31,334		32,148
Other current assets	54,464		48,703
Total Current Assets	1,478,116		1,453,308
Property and Equipment, net of accumulated depreciation of $474,034 and $440,861	171,364		181,029
Operating Lease Right-of-Use Assets	22,477		24,992
Capitalized Software, net of accumulated amortization of $612,971 and $586,744	239,783		237,302
Available For Sale and Equity Securities	155,413		128,201
Investments in Affiliated Funds, at fair value	7,316		6,366
Investment in Unconsolidated Affiliate	110,781		104,673
Goodwill	137,333		115,599
Intangible Assets, net of accumulated amortization of $42,520 and $30,261	82,443		55,532
Deferred Contract Costs	40,221		37,928
Deferred Income Taxes	37,709		4,936
Other Assets, net	37,047		33,687
Total Assets	$	2,520,003	$	2,383,553



Consolidated Balance Sheets									SEI Investments Company
(Dollars in thousands, except per-share data)									and Subsidiaries



Consolidated Statements of Operations						SEI Investments Company
(Dollars in thousands, except per-share data)						and Subsidiaries



Consolidated Statements of Comprehensive Income						SEI Investments Company
(Dollars in thousands)						and Subsidiaries



Consolidated Statements of Cash Flows						SEI Investments Company
(Dollars in thousands)						and Subsidiaries


Notes to Consolidated Financial Statements						SEI Investments Company
(all figures are in thousands except share and per-share data)						and Subsidiaries


Year	Expected Amortization Expense Related to Capitalized Software
2024	$	27,025
2025	27,025
2026	26,018
2027	24,401
2028	22,463


Condensed Statement of Operations Year ended December 31,	2023		2022		2021
Revenues	$	426,270	$	406,895	$	456,259
Net income	$	328,905	$	312,180	$	354,964


Condensed Balance Sheets December 31,	2023		2022
Current assets	$	169,867	$	158,326
Non-current assets	6,568		6,019
Total assets	$	176,435	$	164,345

Current liabilities	$	74,853	$	77,306
Non-current liabilities	2,182		3,050
Partners’ capital	99,400		83,989
Total liabilities and partners’ capital	$	176,435	$	164,345


	2023		2022
Trade receivables	$	115,356	$	110,722
Fees earned, not billed	372,291		320,700
Other receivables	14,450		26,563
	502,097		457,985
Less: Allowance for doubtful accounts	(663)		(901)
Receivables, net	$	501,434	$	457,084


	2023		2022
Buildings	$	216,968	$	210,626
Equipment	193,096		179,318
Land	26,450		26,439
Purchased software	165,348		160,714
Furniture and fixtures	23,025		21,956
Leasehold improvements	19,827		20,879
Construction in progress	684		1,958
	645,398		621,890
Less: Accumulated depreciation	(474,034)		(440,861)
Property and Equipment, net	$	171,364	$	181,029


	2023		2022
Accrued employee compensation	$	107,495	$	100,566
Accrued employee benefits and other personnel	9,797		9,852
Accrued voluntary separation program	21,058		53,821
Accrued consulting, outsourcing and professional fees	32,285		37,009
Accrued sub-advisory, distribution and other asset management fees	49,405		52,916

Accrued dividend payable	61,104		58,051

Other accrued liabilities	37,801		47,148
Accrued liabilities	$	318,945	$	359,363


			Fair Value Measurements at Reporting Date Using
	December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets
Equity securities	$	36,661	$	36,661	$	—
Available-for-sale debt securities	118,752		—		118,752
Fixed-income securities owned	31,334		—		31,334
Investment funds sponsored by LSV (1)	7,316
	$	194,063	$	36,661	$	150,086


			Fair Value Measurements at Reporting Date Using
	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets
Equity securities	$	10,900	$	10,900	$	—
Available-for-sale debt securities	117,301		—		117,301
Fixed-income securities owned	32,148		—		32,148
Investment funds sponsored by LSV (1)	6,366
	$	166,715	$	10,900	$	149,449


	At December 31, 2023
	Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Available for sale debt securities	$	127,681	$	—	$	(8,929)	$	118,752
SEI-sponsored mutual funds	30,427		818		(19)		31,226
Equities and other mutual funds	5,301		134		—		5,435
	$	163,409	$	952	$	(8,948)	$	155,413


	At December 31, 2022
	Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Available for sale debt securities	$	129,372	$	—	$	(12,071)	$	117,301
SEI-sponsored mutual funds	6,207		—		(176)		6,031
Equities and other mutual funds	5,026		—		(157)		4,869
	$	140,605	$	—	$	(12,404)	$	128,201


	Number of Shares	Weighted Average Price
Balance as of December 31, 2020	18,495,000	$	51.15
Granted	3,323,000	60.48
Exercised	(1,719,000)	29.73
Expired or canceled	(1,015,000)	57.92
Balance as of December 31, 2021	19,084,000	$	54.35
Granted	2,215,000	61.74
Exercised	(1,537,000)	35.03
Expired or canceled	(992,000)	59.52
Balance as of December 31, 2022	18,770,000	$	56.52
Granted	1,871,000	62.01
Exercised	(2,148,000)	45.11
Expired or canceled	(1,073,000)	59.79
Balance as of December 31, 2023	17,420,000	$	58.31

Exercisable as of December 31, 2023	6,759,000	$	54.95
Available for future grant as of December 31, 2023	8,509,000


	Number of RSUs	Weighted Average Grant-Date Fair Value
Balance as of December 31, 2021	—	$	—
Granted	467,000	61.27
Vested	—	—
Expired or canceled	—	—
Balance as of December 31, 2022	467,000	$	61.27
Granted	373,000	61.76
Vested	(20,000)	57.39
Expired or canceled	(24,000)	61.85
Balance as of December 31, 2023	796,000	$	61.58