0000350894FALSE00003508942021-04-212021-04-21

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

April 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, April 21, 2021, SEI Investments Company (the "Company") issued a press release announcing its financial and operating results for the first quarter ended March 31, 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 April 21, 2021 of SEI Investments Company related to the Company's financial and operating results for the first quarter ended March 31, 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:			April 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 First-Quarter 2021 Financial Results

OAKS, Pa., April 21, 2021 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the first-quarter 2021. Diluted earnings per share were $0.89 in first-quarter 2021 compared to $0.72 in first-quarter 2020.

Consolidated Overview
(In thousands, except earnings per share)						For the Three Months Ended March 31,
						2021						2020						%
Revenues						$455,686						$414,762						10%
Net income						129,470						109,242						19%
Diluted earnings per share						$0.89						$0.72						24%

“Our first-quarter results reflect positive capital market performance. We continue to execute our business strategies across the company and invest in the strength and expansion of the solutions we bring to our target markets,” said Alfred P. West, Jr., SEI Chairman and CEO. “We had solid sales results in processing and operational services, helping us offset the anticipated headwinds our asset management businesses face.”

“Our long-term success is built on a strong foundation of advancing our suite of solutions, leading in our markets, effectively executing strategies, and soundly managing finances—all backed by a talented workforce. We will continue to drive our success forward for the benefit of our clients, employees, communities and shareholders.”

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Summary of First-Quarter Results by Business Segment

						For the Three Months Ended March 31,
(In thousands)
						2021						2020						%
Private Banks:
Revenues						$117,608						$113,221						4%
Expenses						110,724						110,653						—%
Operating Profit						6,884						2,568						168%
Operating Margin						6		%				2		%
Investment Advisors:
Revenues						113,294						102,321						11%
Expenses						55,027						52,432						5%
Operating Profit						58,267						49,889						17%
Operating Margin						51		%				49		%
Institutional Investors:
Revenues						84,499						79,203						7%
Expenses						39,158						38,267						2%
Operating Profit						45,341						40,936						11%
Operating Margin						54		%				52		%
Investment Managers:
Revenues						136,419						116,629						17%
Expenses						83,020						74,289						12%
Operating Profit						53,399						42,340						26%
Operating Margin						39		%				36		%
Investments in New Businesses:
Revenues						3,866						3,388						14%
Expenses						13,404						10,910						23%
Operating Loss						(9,538)						(7,522)						NM
Totals:
Revenues						$455,686						$414,762						10%
Expenses						301,333						286,551						5%
Corporate Overhead Expenses						21,516						17,983						20%
Income from Operations						$132,837						$110,228						21%

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First-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 $142.4 billion, or 21%, to $821.6 billion in the first-quarter 2021, as compared to $679.2 billion during the first-quarter 2020 (see attached Average Asset Balances schedules for further details).

•Average assets under management, excluding LSV, increased $43.2 billion, or 18%, to $280.4 billion in the first-quarter 2021, as compared to $237.2 billion during the first-quarter 2020 (see attached Average Asset Balances schedules for further details).

•Net sales events in the Private Banks and Investment Managers segments during first-quarter 2021 were $17.5 million, and are expected to generate net annualized recurring revenues of approximately $13.0 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 first-quarter 2021 were negative $12.7 million, mainly related to net losses in our legacy Institutional client base of $9.9 million and a single product use client in the AMD business line of the Private Banks segment.

•The increase in operational expenses was primarily due to increased consulting costs related to our continued investments in new business opportunities, such as our One SEISM strategy and IT Services offering, as well as increased personnel costs to service new clients in our Investment Managers segment. This increase was partially offset by a decline in travel and promotional-related expenses.

•Earnings from LSV increased by $3.5 million, or 12%, to $33.4 million in first-quarter 2021, as compared to $29.9 million in first-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 first-quarter 2021 increased $2.8 million as compared to first-quarter 2020 due to equity awards in late 2020.

•We recorded a net gain from investments of approximately $332 thousand during the first-quarter 2021 as compared to a net loss of approximately $4.0 million during the first-quarter 2020.

•We capitalized $6.3 million of software development costs in first-quarter 2021 for continued enhancements to the SEI Wealth PlatformSM (SWP). Amortization expense related to SWP was $11.9 million in first-quarter 2021.

•Effective tax rates were 22.6% in first-quarter 2021 and 21.5% in first-quarter 2020. The increase in our effective tax rate was due to decreased tax benefits associated with a lower volume of stock option exercises.

•We repurchased 1.2 million shares of our common stock for $66.9 million during the first-quarter 2021.

•Cash flow from operations was $136.6 million, or $0.94 per share, and free cash flow was $126.0 million during the first-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 April 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: 1599078.

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 March 31, 2021, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers approximately $1 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including approximately $384 billion in assets under management and $836 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,

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

•our strategic priorities 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 implementations and conversions,

•our ability to expand our relationships and revenue opportunities with new and existing 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 strength of our pipelines,

•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 or increase,

•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 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 March 31,
						2021						2020
Asset management, admin. and distribution fees						$367,646						$331,853
Information processing and software servicing fees						88,040						82,909
Total revenues						455,686						414,762
Subadvisory, distribution and other asset mgmt. costs						50,164						45,337
Software royalties and other information processing costs						5,742						7,447
Compensation, benefits and other personnel						137,221						131,481
Stock-based compensation						9,752						6,929
Consulting, outsourcing and professional fees						54,340						53,290
Data processing and computer related						25,721						22,704
Facilities, supplies and other costs						17,248						16,796
Amortization						14,352						13,077
Depreciation						8,309						7,473
Total expenses						322,849						304,534
Income from operations						132,837						110,228
Net gain (loss) on investments						332						(3,989)
Interest and dividend income						945						3,203
Interest expense						(123)						(152)
Equity in earnings of unconsolidated affiliate						33,350						29,907
Income before income taxes						167,341						139,197
Income taxes						37,871						29,955
Net income						$129,470						$109,242
Basic earnings per common share						$0.90						$0.73
Shares used to calculate basic earnings per share						143,201						149,468
Diluted earnings per common share						$0.89						$0.72
Shares used to calculate diluted earnings per share						145,306						152,368

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SEI INVESTMENTS COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

						March 31,						December 31,
						2021						2020
Assets
Current Assets:
Cash and cash equivalents						$782,582						$784,626
Restricted cash						3,101						3,101
Receivables from investment products						57,291						55,271
Receivables, net of allowance for doubtful accounts of $2,307 and $1,100						406,028						385,219
Securities owned						33,040						34,064
Other current assets						42,809						38,696
Total Current Assets						1,324,851						1,300,977
Property and Equipment, net of accumulated depreciation of $386,319 and $378,639						184,253						189,052
Operating Lease Right-of-Use Assets						37,762						38,397
Capitalized Software, net of accumulated amortization of $505,112 and $491,739						263,964						270,977
Available for Sale and Equity Securities						114,973						105,419
Investments in Affiliated Funds, at fair value						6,623						6,166
Investment in Unconsolidated Affiliate						51,743						98,433
Goodwill						64,489						64,489
Intangible Assets, net of accumulated amortization of $13,377 and $12,456						34,383						24,304
Deferred Contract Costs						33,430						33,781
Deferred Income Taxes						2,706						2,972
Other Assets, net						31,724						32,289
Total Assets						$2,150,901						$2,167,256
Liabilities and Equity
Current Liabilities:
Accounts payable						$5,529						$7,766
Accrued liabilities						199,235						299,845
Current portion of long-term operating lease liabilities						9,813						8,579
Deferred revenue						1,335						1,085
Total Current Liabilities						215,912						317,275
Long-term Income Taxes Payable						803						803
Deferred Income Taxes						50,892						55,159
Long-term Operating Lease Liabilities						33,089						34,058
Other Long-term Liabilities						21,097						20,054
Total Liabilities						321,793						427,349
Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 142,701 and 143,396 shares issued and outstanding						1,427						1,434
Capital in excess of par value						1,208,433						1,190,001
Retained earnings						634,651						565,270
Accumulated other comprehensive loss, net						(15,403)						(16,798)
Total Shareholders' Equity						1,829,108						1,739,907
Total Liabilities and Shareholders' Equity						$2,150,901						$2,167,256

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ENDING ASSET BALANCES

(In millions) (Unaudited)

						Mar. 31,						Jun. 30,						Sept. 30,						Dec. 31						Mar. 31,
						2020						2020						2020						2020						2021
Private Banks:
Equity and fixed-income programs						$21,160						$22,974						$23,499						$25,498						$25,098
Collective trust fund programs						5						5						6						6						7
Liquidity funds						4,143						4,291						3,718						3,778						3,793
Total assets under management						$25,308						$27,270						$27,223						$29,282						$28,898
Client assets under administration						21,497						23,903						24,174						26,346						4,379
Total assets						$46,805						$51,173						$51,397						$55,628						$33,277
Investment Advisors:
Equity and fixed-income programs						$54,856						$59,958						$65,581						$71,247						$73,818
Collective trust fund programs						2						3						3						1						1
Liquidity funds						5,969						6,648						3,866						3,832						3,584
Total assets under management						$60,827						$66,609						$69,450						$75,080						$77,403
Institutional Investors:
Equity and fixed-income programs						$72,399						$80,257						$83,846						$90,869						$92,040
Collective trust fund programs						94						103						101						98						95
Liquidity funds						3,672						1,924						2,096						2,128						2,909
Total assets under management						$76,165						$82,284						$86,043						$93,095						$95,044
Client assets under advisement						3,406						3,326						3,618						4,063						4,333
Total assets						$79,571						$85,610						$89,661						$97,158						$99,377
Investment Managers:
Collective trust fund programs						48,226						58,178						63,277						75,214						78,304
Liquidity funds						392						664						389						424						449
Total assets under management						$48,618						$58,842						$63,666						$75,638						$78,753
Client assets under administration (A)						610,794						668,611						730,369						760,397						831,819
Total assets						$659,412						$727,453						$794,035						$836,035						$910,572
Investments in New Businesses:
Equity and fixed-income programs						$1,484						$1,498						$1,572						$1,711						$1,777
Liquidity funds						152						194						169						162						289
Total assets under management						$1,636						$1,692						$1,741						$1,873						$2,066
Client assets under advisement						1,056						1,193						1,179						1,299						1,355
Total assets						$2,692						$2,885						$2,920						$3,172						$3,421
LSV Asset Management:
Equity and fixed-income programs (B)						$70,851						$81,134						$82,051						$93,692						$101,565
Total:
Equity and fixed-income programs (C)						$220,750						$245,821						$256,549						$283,017						$294,298
Collective trust fund programs						48,327						58,289						63,387						75,319						78,407
Liquidity funds						14,328						13,721						10,238						10,324						11,024
Total assets under management						$283,405						$317,831						$330,174						$368,660						$383,729
Client assets under advisement						4,462						4,519						4,797						5,362						5,688
Client assets under administration (D)						632,291						692,514						754,543						786,743						836,198
Total assets						$920,158						$1,014,864						$1,089,514						$1,160,765						$1,225,615

(A)Client assets under administration in the Investment Managers segment include $54.6 billion of assets that are at fee levels below our normal full-service assets (as of March 31, 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 March 31, 2021).

(C)Equity and fixed-income programs include $7.9 billion of assets invested in various asset allocation funds at March 31, 2021.

(D)In addition to the numbers presented, SEI also administers an additional $13.3 billion in Funds of Funds assets (as of

March 31, 2021) on which SEI does not earn an administration fee.

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AVERAGE ASSET BALANCES

(In millions) (Unaudited)

						1st Qtr.						2nd Qtr.						3rd Qtr.						4th Qtr.						1st Qtr.
						2020						2020						2020						2020						2021
Private Banks:
Equity and fixed-income programs						$24,657						$22,229						$23,740						$24,284						$25,139
Collective trust fund programs						4						5						7						6						6
Liquidity funds						3,581						4,366						3,948						3,712						3,876
Total assets under management						$28,242						$26,600						$27,695						$28,002						$29,021
Client assets under administration						24,840						23,819						25,295						25,368						4,317
Total assets						$53,082						$50,419						$52,990						$53,370						$33,338
Investment Advisors:
Equity and fixed-income programs						$64,933						$57,429						$64,479						$68,396						$73,239
Collective trust fund programs						3						3						3						2						1
Liquidity funds						3,284						6,923						4,569						3,788						3,619
Total assets under management						$68,220						$64,355						$69,051						$72,186						$76,859
Institutional Investors:
Equity and fixed-income programs						$79,926						$77,037						$82,830						$86,277						$91,349
Collective trust fund programs						86						100						102						102						96
Liquidity funds						2,342						2,476						2,120						2,271						2,621
Total assets under management						$82,354						$79,613						$85,052						$88,650						$94,066
Client assets under advisement						3,760						3,362						3,565						3,746						4,146
Total assets						$86,114						$82,975						$88,617						$92,396						$98,212
Investment Managers:
Collective trust fund programs						55,952						54,061						62,028						69,349						78,035
Liquidity funds						617						482						565						411						490
Total assets under management						$56,569						$54,543						$62,593						$69,760						$78,525
Client assets under administration (A)						654,386						649,012						713,528						754,350						817,330
Total assets						$710,955						$703,555						$776,121						$824,110						$895,855
Investments in New Businesses:
Equity and fixed-income programs						$1,663						$1,468						$1,560						$1,634						$1,743
Liquidity funds						168						182						180						165						169
Total assets under management						$1,831						$1,650						$1,740						$1,799						$1,912
Client assets under advisement						1,222						1,148						1,206						1,218						1,327
Total assets						$3,053						$2,798						$2,946						$3,017						$3,239
LSV Asset Management:
Equity and fixed-income programs (B)						$88,059						$80,395						$83,536						$88,182						$97,476
Total:
Equity and fixed-income programs (C)						$259,238						$238,558						$256,145						$268,773						$288,946
Collective trust fund programs						56,045						54,169						62,140						69,459						78,138
Liquidity funds						9,992						14,429						11,382						10,347						10,775
Total assets under management						$325,275						$307,156						$329,667						$348,579						$377,859
Client assets under advisement						4,982						4,510						4,771						4,964						5,473
Client assets under administration (D)						679,226						672,831						738,823						779,718						821,647
Total assets						$1,009,483						$984,497						$1,073,261						$1,133,261						$1,204,979

(A)    Average client assets under administration in the Investment Managers segment during first-quarter 2021 include $53.8 billion that are at fee levels below our normal full-service assets.

(B)    Equity and fixed-income programs include $2.2 billion of average assets managed by LSV in which fees are based on performance only during first-quarter 2021.

(C)    Equity and fixed-income programs include $7.9 billion of average assets invested in various asset allocation funds during first-quarter 2021.

(D)    In addition to the numbers presented, SEI also administers an additional $13.2 billion of average assets in Funds of Funds assets during first-quarter 2021 on which SEI does not earn an administration fee.

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