0000350894FALSE00003508942021-07-212021-07-21

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 8-K

________________________________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

July 21, 2021

Date of report (Date of earliest event reported)

________________________________________

________________________________________

SEI INVESTMENTS COMPANY

(Exact name of registrant as specified in charter)

________________________________________

Pennsylvania

0-10200

23-1707341

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

1 Freedom Valley Drive

Oaks, Pennsylvania 19456

(Address of Principal Executive Offices and Zip Code)

(610) 676-1000

(Registrants’ Telephone Number, Including Area Code)

________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SEIC

The NASDAQ Stock Market LLC

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02.    Results of Operations and Financial Condition.

On Wednesday, July 21, 2021, SEI Investments Company (the "Company") issued a press release announcing its financial and operating results for the second quarter ended June 30, 2021. A copy of the press release is furnished as Exhibit 99.1 and incorporated in this Item 2.02 by reference. A recording of the earnings call referenced in the press release furnished as Exhibit 99.1 will be made available for replay on the Company’s website at seic.com/ir-events.

As provided in General Instruction B.2 to Form 8-K, the information furnished in this Item 2.02 and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing with the Securities and Exchange Commission, except as shall be expressly provided by specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.

Exhibit No.						Description
99.1						Press Release dated July 21, 2021 of SEI Investments Company related to the Company's financial and operating results for the second quarter ended June 30, 2021.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

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

						SEI INVESTMENTS COMPANY
Date:			July 21, 2021			By:			/s/ Dennis J. McGonigle
									Dennis J. McGonigle Chief Financial Officer

Exhibit 99.1

Investor Contact:                         Media Contact:

Lindsey Opsahl                        Leslie Wojcik

SEI                                    SEI

+1 610-676-4052                        +1 610-676-4191

[email protected]                        [email protected]

Pages:        8

FOR IMMEDIATE RELEASE

SEI Reports Second-Quarter 2021 Financial Results

OAKS, Pa., July 21, 2021 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the second-quarter 2021. Diluted earnings per share were $0.93 in second-quarter 2021 compared to $0.68 in second-quarter 2020.

Consolidated Overview
(In thousands, except earnings per share)						For the Three Months Ended June 30,																		For the Six Months Ended June 30,
						2021						2020						%						2021						2020						%
Revenues						$475,651						$400,646						19%						$931,337						$815,408						14%
Net income						133,778						101,066						32%						263,248						210,308						25%
Diluted earnings per share						$0.93						$0.68						37%						$1.82						$1.39						31%

“Our second-quarter results reflect positive markets, improving sales momentum and solid capital returns to shareholders. We continue to invest in our technology and investment solutions to deliver best-in-class products and services to our clients,” said Alfred P. West, Jr., SEI Chairman and CEO.

“As the industry evolves coming out of the pandemic, we continue to execute growth strategies across our business and take advantage of increasing demands for integrated technologies, sound operational solutions and a market-responsive investment approach. For more than 50 years, our stability, scale and success have been driven by seizing opportunities powered by our dedicated, talented workforce and tech-driven solutions. We are committed to delivering long-term value to our shareholders, employees, clients and communities.”

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Summary of Second-Quarter Results by Business Segment

						For the Three Months Ended June 30,																		For the Six Months Ended June 30,
(In thousands)
						2021						2020						%						2021						2020						%
Private Banks:
Revenues						$123,676						$107,726						15%						$241,284						$220,947						9%
Expenses						117,654						107,723						9%						228,378						218,376						5%
Operating Profit						6,022						3						NM						12,906						2,571						402%
Operating Margin						5		%				—		%										5		%				1		%
Investment Advisors:
Revenues						119,396						93,708						27%						232,690						196,029						19%
Expenses						59,133						50,149						18%						114,160						102,581						11%
Operating Profit						60,263						43,559						38%						118,530						93,448						27%
Operating Margin						50		%				46		%										51		%				48		%
Institutional Investors:
Revenues						85,699						76,523						12%						170,198						155,726						9%
Expenses						41,895						36,937						13%						81,053						75,204						8%
Operating Profit						43,804						39,586						11%						89,145						80,522						11%
Operating Margin						51		%				52		%										52		%				52		%
Investment Managers:
Revenues						142,808						119,340						20%						279,227						235,969						18%
Expenses						84,995						74,668						14%						168,015						148,957						13%
Operating Profit						57,813						44,672						29%						111,212						87,012						28%
Operating Margin						40		%				37		%										40		%				37		%
Investments in New Businesses:
Revenues						4,072						3,349						22%						7,938						6,737						18%
Expenses						13,631						13,466						1%						27,035						24,376						11%
Operating Loss						(9,559)						(10,117)						NM						(19,097)						(17,639)						NM
Totals:
Revenues						$475,651						$400,646						19%						$931,337						$815,408						14%
Expenses						317,308						282,943						12%						618,641						569,494						9%
Corporate Overhead Expenses						22,322						17,391						28%						43,838						35,374						24%
Income from Operations						$136,021						$100,312						36%						$268,858						$210,540						28%

2

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Second-Quarter Business Highlights:

•Revenues from Asset management, administration, and distribution fees increased primarily from higher assets under administration in our Investment Managers segment due to market appreciation and positive cash flows from new and existing clients.

•Average assets under administration increased $185.4 billion, or 28%, to $858.2 billion in the second-quarter 2021, as compared to $672.8 billion during the second-quarter 2020 (see attached Average Asset Balances schedules for further details).

•Average assets under management, excluding LSV, increased $66.6 billion, or 29%, to $293.4 billion in the second-quarter 2021, as compared to $226.8 billion during the second-quarter 2020 primarily due to market appreciation (see attached Average Asset Balances schedules for further details).

•Net sales events in the Private Banks and Investment Managers segments during second-quarter 2021 were $13.2 million and are expected to generate net annualized recurring revenues of approximately $9.8 million when contract values are completely realized.

•Net sales events in asset management-related businesses of the Investment Advisors and Institutional Investors segments and the Asset Management Distribution (AMD) business in the Private Banks segment during second-quarter 2021 were $2.8 million, reflecting positive asset flows in the Advisor and AMD businesses, offset by net losses in our legacy Institutional client base.

•The increase in operational expenses was primarily due to increased direct costs related to increased revenues, as well as increased personnel costs to service new clients in our Investment Managers segment.

•Earnings from LSV increased by $6.8 million, or 24%, to $35.1 million in second-quarter 2021, as compared to $28.3 million in second-quarter 2020. The increase in earnings was due to higher assets under management from market appreciation. Negative cash flows from existing clients and client losses partially offset the increase in earnings from LSV.

•Stock-based compensation expense in second-quarter 2021 increased $3.0 million as compared to second-quarter 2020 due to equity awards in late 2020 and from a change in estimate of the timing of when stock-option vesting targets would be achieved. We expect to recognize $25.7 million in stock-based compensation expense during the remainder of 2021.

•We capitalized $5.9 million of software development costs in second-quarter 2021 for continued enhancements to the SEI Wealth PlatformSM. Amortization expense related to SWP was $12.0 million in second-quarter 2021.

•Effective tax rates were 22.3% in second-quarter 2021 and 23.3% in second-quarter 2020. The decrease in our effective tax rate was due to increased tax benefits associated with a higher volume of stock option exercises.

•We repurchased 2.1 million shares of our common stock for $129.2 million during the second-quarter 2021.

•Cash flow from operations was $188.4 million, or $1.31 per share, and free cash flow was $171.3 million during the second-quarter 2021.

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Earnings Conference Call

A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on July 21, 2021. Investors may listen to the call at seic.com/ir-events. Investors may also listen to a replay by telephone at (USA) 866-207-1041; (International) 402-970-0847; Access Code: 1520669.

About SEI

After 50 years in business, SEI (NASDAQ:SEIC) remains a leading global provider of investment processing, investment management, and investment operations solutions designed to help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of June 30, 2021, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers approximately $1.3 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including approximately $399 billion in assets under management and $880 billion in client assets under administration. For more information, visit seic.com.

This release contains forward-looking statements within the meaning or the rules and regulations of the Securities and Exchange Commission. In some cases you can identify forward-looking statements by terminology, such as ‘'may,’' '‘will,’' ‘'expect,’' ‘'believe’' and ‘'continue’' or ‘‘appear.’’ Our forward-looking statements include our current expectations as to:

•revenue that we believe will be generated by sales events that occurred during the quarter and the timing of such realization,

•whether we will have sales momentum,

•whether we will be able to take advantage of increasing sales demand,

•whether we will invest in the strength and expansion of our solutions,

•our strategic priorities and commitments and the degree to which we will execute on them,

•the elements of our long-term success, and

•the degree to which our business will be successful and the beneficiaries of any such success.

We anticipate that we may deliver forward-looking statements during today’s earnings call that include our current expectations as to:

•our ability to capture the opportunities inherent in significant change,

•the timing and success of client migrations, implementations and conversions,

•our ability to expand our relationships and revenue opportunities with new and existing clients,

•the timing of and our ability to integrate acquisition targets,

•the degree to which M&A activity in the industries in which we compete will affect our sales,

•the degree to which our technology is being adopted across both our existing client base and new clients,

•our ability to leverage our technologies and scale our businesses,

•the degree to which one-time and transaction-based revenues during the quarter will be repeated,

•revenue that we believe will be generated by sales events that occurred during the quarter or when our unfunded backlog may fund,

•the strategic initiatives and business segments that we will pursue and those in which we will invest,

•the competition for and cost of talent and the effect of these factors on our business,

•the amount of recurring sales we will generate,

•the strength of our pipelines and demand for our products and services,

•the degree to which the global COVID-19 pandemic is affecting our business,

•the momentum we may have with respect to our businesses,

•the headwinds we will face and our strategies for how we may respond to these headwinds,

•how we will manage our expenses and the degree to which our forecasted expenses will decline, increase or normalize,

•when we integrate purchased assets into SWP and the timing of our ability to offer additional services to clients,

•the organic and inorganic opportunities that will drive our growth, and

•the success and benefits of our strategic investments.

You should not place undue reliance on our forward-looking statements, as they are based on the current beliefs and expectations of our management and subject to significant risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe the assumptions upon which we base our forward-looking statements are reasonable, they could be inaccurate. Some of the risks and important factors that could cause actual results to differ from those described in our forward-looking statements can be found in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended Dec. 31, 2020, filed with the Securities and Exchange Commission.

# # #

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SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

						For the Three Months Ended June 30,												For the Six Months Ended June 30,
						2021						2020						2021						2020
Asset management, admin. and distribution fees						$382,509						$320,577						$750,155						$652,430
Information processing and software servicing fees						93,142						80,069						181,182						162,978
Total revenues						475,651						400,646						931,337						815,408
Subadvisory, distribution and other asset mgmt. costs						55,827						44,182						105,991						89,519
Software royalties and other information processing costs						7,471						7,389						13,213						14,836
Compensation, benefits and other personnel						141,779						125,331						279,000						256,812
Stock-based compensation						10,103						7,062						19,855						13,991
Consulting, outsourcing and professional fees						55,449						57,111						109,789						110,401
Data processing and computer related						27,375						24,506						53,096						47,210
Facilities, supplies and other costs						18,479						13,973						35,727						30,769
Amortization						14,723						13,140						29,075						26,217
Depreciation						8,424						7,640						16,733						15,113
Total expenses						339,630						300,334						662,479						604,868
Income from operations						136,021						100,312						268,858						210,540
Net gain (loss) on investments						377						1,903						709						(2,086)
Interest and dividend income						878						1,370						1,823						4,573
Interest expense						(130)						(151)						(253)						(303)
Equity in earnings of unconsolidated affiliate						35,065						28,276						68,415						58,183
Income before income taxes						172,211						131,710						339,552						270,907
Income taxes						38,433						30,644						76,304						60,599
Net income						$133,778						$101,066						$263,248						$210,308
Basic earnings per common share						$0.94						$0.69						$1.85						$1.42
Shares used to calculate basic earnings per share						142,074						147,478						142,638						148,473
Diluted earnings per common share						$0.93						$0.68						$1.82						$1.39
Shares used to calculate diluted earnings per share						144,212						149,598						144,759						150,983
Dividends declared per common share						$0.37						$0.35						$0.37						$0.35

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SEI INVESTMENTS COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

						June 30,						December 31,
						2021						2020
Assets
Current Assets:
Cash and cash equivalents						$780,928						$784,626
Restricted cash						351						3,101
Receivables from investment products						56,177						55,271
Receivables, net of allowance for doubtful accounts of $3,188 and $1,100						409,568						385,219
Securities owned						26,174						34,064
Other current assets						38,158						38,696
Total Current Assets						1,311,356						1,300,977
Property and Equipment, net of accumulated depreciation of $394,743 and $378,639						184,042						189,052
Operating Lease Right-of-Use Assets						36,871						38,397
Capitalized Software, net of accumulated amortization of $518,514 and $491,739						256,473						270,977
Available for Sale and Equity Securities						130,039						105,419
Investments in Affiliated Funds, at fair value						6,932						6,166
Investment in Unconsolidated Affiliate						47,420						98,433
Goodwill						64,489						64,489
Intangible Assets, net of accumulated amortization of $14,573 and $12,456						33,187						24,304
Deferred Contract Costs						33,352						33,781
Deferred Income Taxes						2,447						2,972
Other Assets, net						33,082						32,289
Total Assets						$2,139,690						$2,167,256
Liabilities and Equity
Current Liabilities:
Accounts payable						$9,291						$7,766
Accrued liabilities						211,984						299,845
Current portion of long-term operating lease liabilities						10,344						8,579
Deferred revenue						1,280						1,085
Total Current Liabilities						232,899						317,275
Long-term Income Taxes Payable						803						803
Deferred Income Taxes						47,644						55,159
Long-term Operating Lease Liabilities						31,697						34,058
Other Long-term Liabilities						21,041						20,054
Total Liabilities						334,084						427,349
Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 141,027 and 143,396 shares issued and outstanding						1,410						1,434
Capital in excess of par value						1,219,487						1,190,001
Retained earnings						599,231						565,270
Accumulated other comprehensive loss, net						(14,522)						(16,798)
Total Shareholders' Equity						1,805,606						1,739,907
Total Liabilities and Shareholders' Equity						$2,139,690						$2,167,256

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ENDING ASSET BALANCES

(In millions) (Unaudited)

						Jun. 30,						Sept. 30,						Dec. 31						Mar. 31,						Jun. 30,
						2020						2020						2020						2021						2021
Private Banks:
Equity and fixed-income programs						$22,974						$23,499						$25,498						$25,098						$26,264
Collective trust fund programs						5						6						6						7						7
Liquidity funds						4,291						3,718						3,778						3,793						3,654
Total assets under management						$27,270						$27,223						$29,282						$28,898						$29,925
Client assets under administration						23,903						24,174						26,346						4,379						4,412
Total assets						$51,173						$51,397						$55,628						$33,277						$34,337
Investment Advisors:
Equity and fixed-income programs						$59,958						$65,581						$71,247						$73,818						$78,052
Collective trust fund programs						3						3						1						1						1
Liquidity funds						6,648						3,866						3,832						3,584						3,550
Total assets under management						$66,609						$69,450						$75,080						$77,403						$81,603
Institutional Investors:
Equity and fixed-income programs						$80,257						$83,846						$90,869						$92,040						$93,010
Collective trust fund programs						103						101						98						95						5
Liquidity funds						1,924						2,096						2,128						2,909						2,516
Total assets under management						$82,284						$86,043						$93,095						$95,044						$95,531
Client assets under advisement						3,326						3,618						4,063						4,333						4,566
Total assets						$85,610						$89,661						$97,158						$99,377						$100,097
Investment Managers:
Collective trust fund programs						58,178						63,277						75,214						78,304						87,012
Liquidity funds						664						389						424						449						473
Total assets under management						$58,842						$63,666						$75,638						$78,753						$87,485
Client assets under administration (A)						668,611						730,369						760,397						831,819						875,942
Total assets						$727,453						$794,035						$836,035						$910,572						$963,427
Investments in New Businesses:
Equity and fixed-income programs						$1,498						$1,572						$1,711						$1,777						$1,924
Liquidity funds						194						169						162						289						191
Total assets under management						$1,692						$1,741						$1,873						$2,066						$2,115
Client assets under advisement						1,193						1,179						1,299						1,355						1,422
Total assets						$2,885						$2,920						$3,172						$3,421						$3,537
LSV Asset Management:
Equity and fixed-income programs (B)						$81,134						$82,051						$93,692						$101,565						$102,404
Total:
Equity and fixed-income programs (C)						$245,821						$256,549						$283,017						$294,298						$301,654
Collective trust fund programs						58,289						63,387						75,319						78,407						87,025
Liquidity funds						13,721						10,238						10,324						11,024						10,384
Total assets under management						$317,831						$330,174						$368,660						$383,729						$399,063
Client assets under advisement						4,519						4,797						5,362						5,688						5,988
Client assets under administration (D)						692,514						754,543						786,743						836,198						880,354
Total assets						$1,014,864						$1,089,514						$1,160,765						$1,225,615						$1,285,405

(A)Client assets under administration in the Investment Managers segment include $49.6 billion of assets that are at fee levels below our normal full-service assets (as of June 30, 2021).

(B)Equity and fixed-income programs include $2.4 billion of assets managed by LSV in which fees are based on performance only (as of June 30, 2021).

(C)Equity and fixed-income programs include $8.0 billion of assets invested in various asset allocation funds at June 30, 2021.

(D)In addition to the numbers presented, SEI also administers an additional $13.5 billion in Funds of Funds assets (as of

June 30, 2021) on which SEI does not earn an administration fee.

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AVERAGE ASSET BALANCES

(In millions) (Unaudited)

						2nd Qtr.						3rd Qtr.						4th Qtr.						1st Qtr.						2nd Qtr.
						2020						2020						2020						2021						2021
Private Banks:
Equity and fixed-income programs						$22,229						$23,740						$24,284						$25,139						$26,056
Collective trust fund programs						5						7						6						6						7
Liquidity funds						4,366						3,948						3,712						3,876						3,833
Total assets under management						$26,600						$27,695						$28,002						$29,021						$29,896
Client assets under administration						23,819						25,295						25,368						4,317						4,405
Total assets						$50,419						$52,990						$53,370						$33,338						$34,301
Investment Advisors:
Equity and fixed-income programs						$57,429						$64,479						$68,396						$73,239						$76,839
Collective trust fund programs						3						3						2						1						1
Liquidity funds						6,923						4,569						3,788						3,619						3,370
Total assets under management						$64,355						$69,051						$72,186						$76,859						$80,210
Institutional Investors:
Equity and fixed-income programs						$77,037						$82,830						$86,277						$91,349						$93,458
Collective trust fund programs						100						102						102						96						68
Liquidity funds						2,476						2,120						2,271						2,621						2,681
Total assets under management						$79,613						$85,052						$88,650						$94,066						$96,207
Client assets under advisement						3,362						3,565						3,746						4,146						4,516
Total assets						$82,975						$88,617						$92,396						$98,212						$100,723
Investment Managers:
Collective trust fund programs						54,061						62,028						69,349						78,035						84,553
Liquidity funds						482						565						411						490						469
Total assets under management						$54,543						$62,593						$69,760						$78,525						$85,022
Client assets under administration (A)						649,012						713,528						754,350						817,330						853,810
Total assets						$703,555						$776,121						$824,110						$895,855						$938,832
Investments in New Businesses:
Equity and fixed-income programs						$1,468						$1,560						$1,634						$1,743						$1,870
Liquidity funds						182						180						165						169						236
Total assets under management						$1,650						$1,740						$1,799						$1,912						$2,106
Client assets under advisement						1,148						1,206						1,218						1,327						1,406
Total assets						$2,798						$2,946						$3,017						$3,239						$3,512
LSV Asset Management:
Equity and fixed-income programs (B)						$80,395						$83,536						$88,182						$97,476						$103,583
Total:
Equity and fixed-income programs (C)						$238,558						$256,145						$268,773						$288,946						$301,806
Collective trust fund programs						54,169						62,140						69,459						78,138						84,629
Liquidity funds						14,429						11,382						10,347						10,775						10,589
Total assets under management						$307,156						$329,667						$348,579						$377,859						$397,024
Client assets under advisement						4,510						4,771						4,964						5,473						5,922
Client assets under administration (D)						672,831						738,823						779,718						821,647						858,215
Total assets						$984,497						$1,073,261						$1,133,261						$1,204,979						$1,261,161

(A)    Average client assets under administration in the Investment Managers segment during second-quarter 2021 include $51.6 billion that are at fee levels below our normal full-service assets.

(B)    Equity and fixed-income programs include $2.4 billion of average assets managed by LSV in which fees are based on performance only during second-quarter 2021.

(C)    Equity and fixed-income programs include $8.0 billion of average assets invested in various asset allocation funds during second-quarter 2021.

(D)    In addition to the numbers presented, SEI also administers an additional $13.5 billion of average assets in Funds of Funds assets during second-quarter 2021 on which SEI does not earn an administration fee.

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