SEI Investments Company (SEIC): history, ownership, mission, how it works & makes money

A Brief History of SEI Investments Company (SEIC)

SEI Investments Company, incorporated in 1968, has evolved into a significant player in the financial services sector, providing technology and investment solutions. The company operates across various segments, including Private Banks, Investment Advisors, Institutional Investors, Investment Managers, and Investments in New Businesses.

Financial Performance as of 2024

As of September 30, 2024, SEI reported consolidated revenues of $1.57 billion for the first nine months, marking a 9% increase from $1.43 billion in the same period of 2023. For the third quarter alone, revenues rose to $537.4 million, a 13% increase compared to $476.8 million in Q3 2023.

Income and Expenses

Net income for the nine months ended September 30, 2024, stood at $425.4 million, reflecting a 25% increase from $341.5 million in the prior year. The net income for Q3 2024 was $154.9 million, a 34% increase from $115.7 million in Q3 2023.

Asset Management and Administration

Average assets under administration increased by 15% to $998.4 billion in the first nine months of 2024, compared to $866.0 billion in 2023. Average assets under management in equity and fixed income programs rose by 5% to $177.9 billion from $169.1 billion year-over-year.

Capital Expenditures and Investments

During the first nine months of 2024, SEI invested $44.6 million in capital expenditures, with $22.2 million attributed to depreciation expenses. The company also capitalized $18.4 million in software development costs, reflecting ongoing enhancements to its SEI Wealth Platform.

Stock Performance and Shareholder Returns

SEI repurchased 3.7 million shares of its common stock at a total cost of $252.9 million in the first nine months of 2024. The Board declared a cash dividend of $0.46 per share, totaling $60.3 million during this period, up from $57.2 million in the same period of 2023.

Outlook and Future Strategies

SEI continues to focus on expanding its market presence through strategic investments in technology and enhancing client services across its business segments. The company is positioned to leverage its robust asset management capabilities to meet evolving client needs in a competitive financial landscape.

A Who Owns SEI Investments Company (SEIC)

Major Shareholders

As of 2024, SEI Investments Company (SEIC) has a diverse ownership structure, with significant holdings distributed among institutional investors, mutual funds, and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages:

Institutional Ownership Trends

Institutional ownership has been steadily increasing, reflecting confidence in SEI's business model and financial performance. The total institutional ownership as of September 30, 2024, is approximately 72.0%. This indicates a significant interest from large asset managers and investment firms, who are likely attracted by SEI's robust asset management services and technological solutions.

Recent Financial Performance

SEI Investments Company reported a net income of $425.4 million for the nine months ended September 30, 2024, compared to $341.5 million for the same period in 2023. This represents a 25% increase year-over-year. The diluted earnings per share were reported at $3.23, up from $2.54 in the previous year, marking a 27% increase.

Stock Performance

As of the end of Q3 2024, SEI's stock price has seen a 13% increase, reflecting overall market trends and the company's performance. The average assets under administration increased to $998.4 billion, a 15% increase from $866.0 billion in 2023.

Dividend History

SEI has consistently paid dividends, with the most recent dividend declared at $0.46 per share, compared to $0.43 per share in 2023.

Conclusion on Ownership Dynamics

The ownership landscape of SEI Investments Company is characterized by a strong institutional presence, which is indicative of the company's stability and growth potential. The increasing institutional stakes suggest a positive outlook on SEI's financial health and market performance.

SEI Investments Company (SEIC) Mission Statement

Overview of SEI Investments Company

SEI Investments Company (SEIC) is dedicated to delivering technology and investment solutions that connect the financial services industry. The company focuses on providing capabilities across investment processing, operations, and asset management. As of September 30, 2024, SEI manages, advises, or administers approximately $1.6 trillion in various assets, including hedge funds, private equity, mutual funds, and separately managed accounts.

Mission Statement

SEI's mission is to empower clients by providing innovative solutions that enable them to achieve their financial goals. This mission is reflected in their commitment to enhancing operational efficiencies and delivering superior investment performance.

Financial Highlights

Key Performance Indicators

As of September 30, 2024:

• Average assets under administration increased by $132.4 billion, or 15%, to $998.4 billion.
• Average assets under management in equity and fixed income programs increased by $8.8 billion, or 5%, to $177.9 billion.
• SEI Integrated Cash Program fees totaled $10.7 million for Q3 2024 and $30.4 million for the first nine months of 2024.

Research & Development Investments

SEI capitalized software development costs totaling $18.4 million in the first nine months of 2024, focusing on enhancing the SEI Wealth PlatformSM and developing new platforms for the Investment Managers segment.

Regulatory Compliance

SEI is subject to ongoing regulatory reviews, which may result in the identification of compliance issues or necessitate remediation activities. This regulatory environment influences operational and financial performance.

Equity and Stock Performance

As of September 30, 2024, SEI repurchased 3.7 million shares of its common stock for $252.9 million.

Conclusion

SEI Investments Company remains committed to its mission of empowering clients through innovative solutions while maintaining strong financial performance and compliance within a complex regulatory environment.

How SEI Investments Company (SEIC) Works

Business Model

SEI Investments Company (SEIC) operates primarily in the financial services sector, providing technology and investment solutions. The company serves various clients, including corporations, financial institutions, and ultra-high-net-worth families. As of September 30, 2024, SEI managed, advised, or administered approximately $1.6 trillion in assets across various investment products.

Revenue Streams

• Investment processing fees, earned as monthly fees or a percentage of market value of assets processed.
• Investment management, administration, and distribution fees, based on assets under management.
• Information processing and software servicing fees from clients using SEI Wealth PlatformSM.

Financial Performance

For the three months ended September 30, 2024, SEI reported:

For the nine months ended September 30, 2024, SEI reported:

Assets Under Management

As of September 30, 2024, SEI reported the following asset balances:

Operational Segments

SEI categorizes its operations into several segments:

• Private Banks: Focused on investment processing and software servicing fees.
• Investment Advisors: Offers asset management and advisory services.
• Institutional Investors: Provides investment solutions tailored for institutional clients.
• Investment Managers: Manages alternative investment products and funds.
• Investments in New Businesses: Focuses on emerging financial solutions and services.

Stock Performance and Shareholder Returns

In the first nine months of 2024, SEI repurchased approximately 3.7 million shares for $252.9 million. The company declared dividends of $0.46 per share during the same period, compared to $0.43 in 2023.

Cash Flow Analysis

For the nine months ended September 30, 2024, SEI reported the following cash flows:

Investment in Technology

SEI capitalized $18.4 million in software development costs in the first nine months of 2024, primarily for enhancements to the SEI Wealth Platform. The net book value of the platform as of September 30, 2024, was $208.5 million.

Market Position and Regulatory Environment

SEI continues to navigate a complex regulatory landscape, facing scrutiny from various regulatory authorities, including the SEC and FCA. These regulatory challenges necessitate ongoing compliance and adaptation to new laws and regulations that may impact operational costs and business practices.

How SEI Investments Company (SEIC) Makes Money

Revenue Streams

SEI Investments Company generates revenue through several key streams, primarily from asset management, investment processing, and software services.

Assets Under Management and Administration

Revenue from assets under management, administration, and distribution fees significantly contributes to SEI's income. For the nine months ended September 30, 2024, total revenues from these sources reached $1.57 billion, a 9% increase from $1.43 billion in the same period of 2023. This growth was driven by an increase in average assets under administration, which rose by $132.4 billion, or 15%, to $998.4 billion.

Investment Management Fees

Investment management fees, particularly from separately managed accounts and Strategist programs, also saw substantial growth. Total revenues from investment management fees for the three months ended September 30, 2024, were $126.8 million, a 15% increase compared to $110.5 million in the prior year. This included:

• Investment management fees from SEI fund programs: $59.7 million
• Separately managed account fees: $49.9 million
• Other fees: $17.3 million

Overall, these fees reflect a robust demand for SEI’s investment solutions amid market appreciation.

Information Processing and Software Services

SEI also earns revenue from information processing and software servicing fees, which totaled $102.0 million for the three months ended September 30, 2024, marking a 19% increase from $85.9 million in the previous year. This growth can be attributed to new client conversions and increased transaction volumes from existing SEI Wealth Platform clients.

Investment in New Businesses

SEI has invested in new business segments, contributing additional revenue. For instance, revenues from SEI Family Office Services and SEI Private Wealth Management reached $15.6 million for the three months ended September 30, 2024, an increase of 18% year-over-year.

Equity in Earnings from Affiliates

SEI's equity in earnings from its unconsolidated affiliate, LSV Asset Management, amounted to $36.5 million for the three months ended September 30, 2024, reflecting a 22% increase from $29.9 million in the same period of 2023. This uptick is attributed to increased assets under management and higher performance fees.

Financial Performance Overview

The financial performance of SEI Investments Company demonstrates significant growth across its various revenue streams. The company's consolidated statements for the three months ended September 30, 2024, showed:

Overall, SEI's strategic focus on expanding its asset management capabilities and enhancing its technology offerings has positioned it well for continued growth.

Cost Management

SEI has implemented cost containment measures that have positively impacted its operating margins, which increased to 17% in Q3 2024 compared to 7% in Q3 2023. Operating expenses were $393.6 million, a 7% increase from the prior year, reflecting the company’s investment in growth while managing costs effectively.

Market Position and Strategy

As of September 30, 2024, SEI manages, advises, or administers approximately $1.6 trillion in hedge, private equity, mutual fund, and pooled or separately managed assets. The company’s strategic focus on enhancing its technology platforms, such as the SEI Wealth Platform, continues to drive its competitive advantage in the financial services industry.

Article updated on 8 Nov 2024

Resources:

• SEI Investments Company (SEIC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SEI Investments Company (SEIC)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View SEI Investments Company (SEIC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.