seic · U.S. segment leaders (Wells Fargo, Regions Bank) signed Building advanced capabilities U.K....

1 seic.com

2 seic.com

Al West Growth Strategy Update

3

Agenda

› SEI’s Growth Strategy Al West

› Private Banks: Investment Processing Joe Ujobai

› Private Banks: Asset Management Kevin Barr

›  Investment Advisors Wayne Withrow

›  Institutional Investors Paul Klauder

›  Investment Managers Steve Meyer

› Summary Al West

4

SEI: Focus on long range sustainable growth

› Grow by adhering to SEI’s mission, values and proven business model.

› Overcome headwind trends and take advantage of tailwinds.

› Execute core businesses in existing markets with existing platforms.

› Expand business with existing clients by building new platforms. › Enter or increase focus on adjacent financial markets with existing and new

platforms.

› Apply advanced technologies.

5

SEI: Mission

We deliver innovative, comprehensive platforms

to help clients achieve lasting success.

6

What is a Platform?

7

SEI: Values

› We help our clients succeed. Their needs come before our own and drive our business.

› We value collaboration and treat each other with respect. › We behave with integrity; we do what we say, and are transparent in all our

dealings.

› We embrace diversity in our thinking and in our workforce. Diversity is key to our commitment to creativity and innovation.

› SEI is our company. We think and act as owners. › We are committed to the growth and betterment of our people, partners as well

as community.

› We are committed to providing shareholders with sustainable earnings growth. › We have fun.

8

SEI: Grow using proven business model

Grow Organically ›  Focus on emerging client needs ›  Deliver enterprise platforms ›  Selective acquisitions to create organic growth

Engage Clients ›  Forge intimate client relationships ›  Be a thought-leader ›  “Win-win” pricing models

Enhance Financial Strength

›  Focus on sustainable growth in earnings-per-share ›  Generate recurring revenue & predictable cash flows ›  Maintain strong balance sheet ›  Grow dividends and stock buy-backs

Innovate

›  Long-term focus ›  Capital investments are necessary to grow in new ways ›  Foster collaborative, innovative, risk-taking culture ›  Try to fail fast and learn from mistakes ›  Be patient with new potential winners

9

SEI: Headwinds and tailwinds

Tailwinds › Growth in DC plans world-wide ›  Tighter financial and banking regulations world-wide › Growth in family offices world-wide › Widespread need to replace legacy systems and inefficient

operations

Headwinds ›  Corporate DB plans are becoming frozen or closing ›  Rise in popularity of passive investing ›  Price pressure on investment products ›  High speed and magnitude of technological change

10

EXISTING PLATFORMS NEW PLATFORMS

NEW MARKETS

EXISTING MARKETS

Execute core businesses in existing markets with

existing platforms

SEI: Strategy Matrix

11

SEI: Existing markets

Private Banks ›  Global banks & other wealth managers ›  U.S. banks & other wealth managers ›  U.K. banks & other wealth managers ›  U.K. PCIMs

Investment Advisors ›  Affiliated RIAs ›  Broker-dealers

Institutional Investors ›  North American DB corporate sponsors ›  U.K. DB corporate sponsors ›  Hospitals ›  Taft-Hartley plan sponsors ›  Public funds

Investment Managers ›  Traditional investment managers ›  Global investment managers ›  Hedge fund managers ›  Private equity managers ›  Real Estate managers

Investment in New Businesses ›  Ultra-high-net-worth investors

12

SEI: Execute core businesses in existing markets with existing platforms

Private Banks

Investment Advisors

Institutional Investors

Investment Managers

Ultra-high net-worth investors (INB segment)

13


Private Banks

Investment Advisors


Investment Managers


14


Private Banks

Investment Advisors


Investment Managers


15


Private Banks

Investment Advisors


Investment Managers


16


Private Banks

Investment Advisors


Investment Managers


17



NEW MARKETS

EXISTING MARKETS

Expand business with existing clients by building

new platforms.

18

SEI: Expand business with existing markets by building new platforms

Private Banks

Investment Advisors


Investment Managers


19


Private Banks

Investment Advisors


Investment Managers


20


Private Banks

Investment Advisors


Investment Managers


21


Private Banks

Investment Advisors


Investment Managers


22


Private Banks

Investment Advisors


Investment Managers


23


NEW MARKETS

Enter or increase focus on adjacent financial markets with existing and new platforms.

EXISTING MARKETS


24

SEI: Enter or increase focus on adjacent financial markets with existing and new platforms

Independent RIAs

DC plan sponsors

Foundations & endowments

Large global wealth managers

Family offices

NEW MARKETS

25

SEI: Enter or increase focus on adjacent financial markets with existing and new platforms

Independent RIAs

DC fund sponsors

Foundations and endowments

Large global wealth managers

Family Offices

NEW MARKETS EXISTING PLATFORMS NEW PLATFORMS

26

SEI: Plan Summary

27

SEI: Apply advanced technologies

› Robotics

› Data analytics

› Blockchain

› Artificial intelligence

› Front-end technologies

› Infrastructure

28

SEI: Investing in the future

We are committed to make capital investments to drive growth

Target 8-10 percent of revenues for platform development

29

1968 1980 1990 2000

SEI: a history of innovation and market expansion

Regions

Markets

Platforms

Innovations

Investment Processing

Asset Management SEI Wealth Platform

›  Manager of Managers ›  Fee-based advisor

Platform ›  Back-office processing ›  Globalization

›  Invest idle cash balances

›  Asset allocation

›  Goals-based investing ›  OCIO & fiduciary management ›  Total operations outsourcing

›  Trust System

Investment Management

Banks

2010

United States Canada EMEA, Asia Ireland U.K.

Investment Managers

Advisors


IWA’s

2017

30

SEI’s business model and strategy have benefited long-term investors

Source: Google Finance as of November 14, 2017.

SEI’s gross growth in stock price since going public in 1981 34,063%

NASDAQ Composite growth in index over the same period of 1981 to 2017 3,166%

S&P 500 gross growth in index over the same period of 1981 to 2017 1,823%

31 seic.com

Joe Ujobai Private Banks: Investment Processing

32

SEI Banking: Focus on global growth

›  Industry trends are in our favor

›  The SEI Wealth Platform is an unparalleled solution in a growing market

›  We’ve made great progress in the U.S. and U.K.

›  We expect increased adoption of SWP from TRUST 3000 clients

›  Sales and contracting activity is increasing

›  We are focused on revenue growth and profit improvement

33

Banking: Trends that drive our strategy Largely favorable

Tailwinds ›  Regulation - tied to consumer protection ›  Savvy consumer combined with the power of the crowd ›  Digital transformation, advanced technology, access to data and

machine learning driving need to replace legacy systems › Operational inefficiency in current models › Growing acceptance of outsourcing with improved transparency

Headwinds ›  Evolving competitive pressures in the U.S. and U.K. ›  Complex regulatory and compliance environment drives

friction in the contracting process › Magnitude of change related to an enterprise platform

conversion

34

SEI Wealth Platform: Unparalleled commitment to the wealth management industry

ASSETS

State-of-the-art enterprise offering: ›  Fully integrated

application ›  Server based

infrastructure ›  Experienced global

operations ›  Expert workforce ›  Industry-leading

clients

INVESTMENT

Deliberate and patient commitment to build a solution for the long term: ›  Integrated workflow ›  Open architecture ›  Single database ›  Secure and redundant

infrastructure ›  Continuous innovation

JOURNEY

Long journey due to the complex nature of the build and value proposition: ›  Leverage knowledge ›  Built new technology ›  Launch in UK ›  Step into US ›  Lead clients installing ›  41 clients signed

VISION

End-to-end wealth processing platform designed to: ›  Manage evolving

needs ›  Operate seamlessly

in global markets ›  Drive efficiency and

growth ›  Reduce enterprise

risk

35

SEI Wealth Platform: Simplifying self-inflicted infrastructure complexity

36

Infrastructure Services

Back Office Services

Information Management Services

Front Office Services S

Investment Management Middle Office Services

SWP: Integrated enterprise platform

37

2007 – 2012 Core

U.K. launch

Stabilize and scale

SWP Live Clients: 20 Accounts: 133,394

2013 – 2014 Expansion

U.S. step-in launch

U.K. based operational infrastructure


Our Journey: Building market momentum

2015 – 2016 Scalability

U.S. segment leaders (Wells Fargo, Regions Bank) signed

Building advanced capabilities

U.K. client consolidation

Automating service excellence


2017 Evidence

Front office innovation


Future Milestones Growth and Scale

TRUST 3000 conversions

Global implementation

Backlog: $30 M SWP Clients: 41 Accounts: 723,000

38


NEW MARKETS

EXISTING MARKETS

Execute core business in

existing markets with SWP

Private Banking: Strategic focus

39


NEW MARKETS

EXISTING MARKETS

›  New names ›  Trust 3000 conversions ›  New books of business

Private Banking: Strategic focus

40

Client since: 08/09

›  National independent financial advisor

›  Growing organically and through acquisition

›  Converting books to SWP

›  Commitment to SWP for all new assets

Global Bank

Client since: 07/07

›  Leading global private bank

›  First adopter of SWP

›  Early adopter of new services

›  Growth through additional books of business

Client since 05/17

›  Private client investment manager

›  Transforming from traditional stockbroker to fee-based DFM

›  Partner to improve end client value proposition and support growth

›  Migrate existing book and commitment to all new assets

National IFA

PCIM

Strong and growing UK client base: Focus segment examples

41

Client since: 10/17

›  Enterprise platform

›  Front-to-back solution

›  New integrated front office

›  Large scale outsourcing

›  >30,000 accounts

Trust 3000 BSP

Client since: 1991

›  Adopted BSP in 2015

›  Expanding footprint

›  Now owned by RBC

›  Converting to SWP in 2018

›  Additional book of business

Client since: 1975

›  Installing 2H 2019

›  Enterprise platform

›  Integrated to other bank systems- large data transfer capabilities

›  Large scale processing

›  >200,000 accounts

›  Advanced risk management solutions

New Name BPaaS

Trust 3000 ASP

Strong and growing US client base: Focus segment examples

42

Solid Trust 3000 foundation: Accelerate conversion of clients to SWP

›  5 clients converted

›  5 clients in the backlog

›  18% of revenue converted or committed to convert

›  15 clients in active agendas

›  25% of additional Trust 3000 revenue in active agendas

›  20-30% increase in T3K to SWP revenue

›  Protect the client relationship and revenue

›  Maintain strong relationships

•  45% of clients, 20+ years; 80% of clients, 10+ years

›  Execute the SWP migration schedule aligned with client requirements

›  Maximize new revenue opportunity and control costs

43


EXPANDED MARKETS

SWP growth through expanding markets

EXISTING MARKETS

SWP: Expanded opportunity Aligned to our current business

44


PROVEN OPPORTUNITY

IN EXPANDED MARKETS

›  Other wealth managers ›  Global banks ›  Any advisory or fee-

based assets ›  Complex global portfolios

EXISTING MARKETS

SWP: Expanded opportunity

45

›  Contracting process remains long and complex ›  Perceived cost and risk of change is high ›  Some banks are still distracted by environmental issues

›  SWP client base is growing and highly reference-able ›  Platform is robust and maturing ›  Key segment operating models delivered ›  Proven global capabilities ›  Adoption is usually tied to a strategic change agenda ›  Conversion process is growing more efficient

Sales and contracting trends

46

United States United Kingdom

NEW CLIENTS

EXISTING CLIENTS

Market momentum is strong: Sales and contracting activity is increasing

50% of our active agendas ›  Additional 25%+ of the T3K ›  Large regional banks ›  Larger community banks ›  Early discussions with large ASP

clients

50% of our active agendas ›  Larger regional/community banks ›  Other wealth managers ›  New books of business ›  Early discussions with large firms

using proprietary platforms

75% of our active agendas ›  Trending to larger firms ›  Largely PCIMs, IFAs and some

bank activity

25% of our active agendas ›  Support organic growth ›  Support growth by acquisition ›  Secure additional books ›  Cross sell new solutions ›  Geographic expansion

47

Growing SWP conversion capacity

›  Modeling exponential growth in conversion capacity

›  Continued investment in tools and automation

›  Re-aligning some of the workforce

›  Reducing dependencies on weekend/month end conversions

›  Leveraging and certifying external resources

48

Driving revenue growth and profit improvement: Execute the strategy

Execute current growth

Drive scale and efficiency

Leverage SEI innovation

›  Sell and contract new names ›  Convert the Trust 3000 clients ›  Install the backlog to drive revenue growth

•  $30 million in annual recurring revenue •  Total SWP contract value of $795 million

›  Help the clients grow their business

›  Finish core development ›  Install the growing backlog to drive critical mass ›  Focus on automation across the client experience ›  Continue to manage expense

49 seic.com

Kevin Barr Private Banks: Asset Management Distribution (AMD)

50

Asset Management Distribution (AMD)

› Strategic partnerships with leading regional, national and global wealth managers

› Clients in North America, U.K., Europe, Asia

› Deliver customized investment solutions

› Differentiate by supporting and enabling the advice our partners deliver to their clients

› Underlying SEI investment products are primarily actively managed with competitive pricing and performance

7

320+ More than 320 existing partnerships

In seventh year of delivering custom asset management solutions

$1b More than $1 billion in net sales year-to-date

$97.3m Greater than $97 million in revenue year-to-date

51

Total Assets: $5.9 billion Market Strategy: •  Continue to expand relationships with

IFAs and platforms •  Target large banks and distributors

AMD – Today

Asia

North America

United Kingdom & Europe

Total Assets: $8.9 billion Market Strategy: •  Leverage and expand existing

banking relationships •  Target new names and channels

•  Broker dealers/wirehouses •  Wealth managers/platforms •  Insurance companies

Total Assets: $3.4 billion Market Strategy: •  Leverage current

relationship •  Target large banks and

distributors in select countries

*Capgemini Financial Services Analysis , 2017

52

AMD – The Opportunity

The opportunity set is $52 trillion!

Americas: $18 trillion* UK & Europe: $15 trillion*

Asia: $19 trillion*

*Capgemini Financial Services Analysis , 2017

53

Headwinds and tailwinds

Tailwinds ›  Tightening monetary policy › Market volatility › Greater fiduciary responsibility ›  Product rationalization › Move to advice from product

Headwinds ›  Increasing fee sensitivity ›  Regulatory pressure ›  Active vs. passive ›  Shortening investor time horizons ›  Crowded, commoditized industry

54

AMD: Targeting an industry in transition

Industry Response

•  Product proliferation

•  Lower fees •  Chasing

performance

Client Needs

•  Advice •  Value for fees •  Asset allocation •  Goal attainment •  Diversification

SEI’s Response

•  Goals based tools and technology

•  Pricing flexibility •  Partner funds •  Custom asset

allocation advice •  Manager research

55

AMD: Leveraging SEI’s capabilities

Manager Research Custom Asset Allocation Advice

Individual Funds & Turnkey Strategies

Separately Managed Accounts

Discretionary Asset

Management

Investment Philosophy &

Process

Investment Manager

Technology

Bank & Wealth Management Technology

Practice Management

Fund Administration

Regulatory Services

Wealth Management Operations Outsourcing

Goals Based Tools & Technology Partner Funds

Independent Advisor

Technology

56





Discretionary Asset

Management


Process

Investment Manager

Technology


Practice Management

Fund Administration

Regulatory Services



Type of Firm Location(s) Reach / Client Base Branding SEI Platforms Consumed

Private Bank Major cities in US, UK, Europe, Asia

Global HNW, UHNW

Private Label •  Asset Management – custom strategies •  SWP •  Operational outsourcing

Independent Advisor

Technology

57


Broker Dealer U.S. Regional Mass Affluent, HNW

Private Label •  Asset Management •  Custom, lower cost strategies •  Manager research


Network France National Mass Affluent

White Label •  Asset Management – standard strategies •  Goals-based Investing •  GoalPortal® - Goals-based technology





Discretionary Asset

Management


Process

Investment Manager

Technology


Practice Management

Fund Administration

Regulatory Services



Independent Advisor

Technology

58








Discretionary Asset

Management


Process

Investment Manager

Technology


Practice Management

Fund Administration

Regulatory Services



Independent Advisor

Technology

59








Discretionary Asset

Management


Process

Investment Manager

Technology


Practice Management

Fund Administration

Regulatory Services



Independent Advisor

Technology

60

New Platform - Manager Research

Manager Research

Manager Selection

Manager Engagement

Manager Oversight

Manager research is in our DNA !  Part of business for 30 years !  20 analysts 10+ avg yrs experience !  Proprietary alpha source approach !  Deep, high-quality analysis !  Forward-looking, actionable insights !  Balanced risk/reward

Extensive scale & resources !  14 traditional asset classes !  >365 strategies (of 3,400 monitored) !  >100 non-traditional (of 1,800 monitored) !  Differentiated tech & data resources !  >$170b in AUM invested !  Full and custom implementation

Institutional Buying Power & Experience !  Contract and fee negotiation !  Model delivery !  Manufacturing capabilities !  Manager of Manager implementation !  Access to alpha source opportunities

Continuous Multi-Level Monitoring !  Independent Risk Management,

Operational Due Diligence, and Investment Due Diligence Teams

!  Proprietary risk analytics systems !  Daily holdings transparency !  Trade oversight

61

2010 2010

AMD: Innovation-led evolution & growth

2011 – 2012

• SEI Branded Investment Solutions

• Private/White-Labeled Investment Solutions

• U.K. Goals-based Strategies

2013 – 2014

• Formation of global sales teams

• SEI GoalPortal®

• Partner branded funds

• VIT funds (Insurance cos)

• Canada Goals-based Strategies

2015 – Today

• Expansion into Asia/Europe

• DOL Strategies

• Manager research

• Europe Goals-based Strategies

AUM: $10.9B

AUM: $15.8B

AUM: $18.2B

AUM: $7.9B

Continue to evolve our customized investment solutions,

further enabling our partners to

deliver advice to their clients.

62

AMD: The future

•  20+ strategic partners •  Help partners adapt and transform their business •  $18.2 billion AUM

Grow Current Relationships

•  Banks, wealth managers, broker-dealers •  Cross-sell SEI investment management clients •  Strong brands with an advice model •  Selective – looking for preferred placement

Establish New Relationships

•  Manager research •  Goals-based to Europe •  Factor-based •  Technology to support the advice process

Expand Solution Offering

•  Existing – US, Canada, UK, Hong Kong •  New – France, Germany, Singapore, South Korea Extend Geographic Reach

•  Regulatory – MiFID II, PRIIPs, CRM2, DOL •  Product rationalization Adapt to Industry in Transition

63 seic.com

Wayne Withrow Investment Advisors

64

Investment Advisors: Overview

› 7,477 advisors

Leading Turnkey Asset Management Program (TAMP) provider

› $61.8 billion in Assets Under Management

› 432,000 end client accounts

$

65

TAMP DIY

Broker Dealer 62,790

Hybrid 11,208

RIA 33,453

Hybrid 3,378

RIA 7,631

107,451 11,009

Addressable market

FLEXIBLE TAMP

66


NEW MARKETS Independent RIAs

EXISTING MARKETS Affiliated RIAs Broker Dealers

›  TAMP - Trust 3000 ›  Asset Management ›  Practice Management

›  TAMP - Trust 3000 ›  Asset Management ›  Practice Management

›  Independent Advisor Front Office ›  Flexible TAMP - SEI Wealth Platform ›  Investment Services ›  Manager Research ›  Regulatory Compliance

›  Independent Advisor Front Office ›  TAMP - SEI Wealth Platform ›  Asset Management

Investment Advisors: Strategy Matrix

67

Advisor Business Platform

Practice Management

Asset Management

Innovation Opportunities Exist in All TAMP Component Parts

›  Portfolio Structure ›  Investment Product Construction ›  Tax Management

›  Proposal Generation ›  Client Management ›  Model Management &

Trading ›  Reporting ›  Custody

›  Sales & Marketing ›  Business Efficiency ›  Client Management ›  Business Ownership ›  Succession

Current business solution

68

Execute core businesses in existing markets with new platforms

The Wealth Platform is helping to redefine a Turnkey Asset Management Program (TAMP):

›  Traditionally TAMP platforms have been focused on back office, investments and custody functions

›  The new approach incorporates flexible investments and begins in the front office with robust integration to the back office & custody functions

–  Straight through processing from Advisor Desktop Experience including:

•  Model Management

•  Account Open

69







•  Account Open

–  Integrated end client digital experience

SAMPLE SAMPLE SAMPLE

70







•  Account Open

–  Integrated end client digital experience

›  The new approach includes data analytics tools

71

Migration status

2017 2018 2019 2016

Accounts

Assets

Firms

65,960

$8.7B

102

134,504

$19.2B

949

180,000

$22.0B

3260

60,000

$6.0B

1687

Trust 3000 Accounts

SEI Wealth Platform Accounts

Total

292,804

12,079

304,883

2017 2018 2019 2016 2015 2014

340,823

26,446

367,269

316,000

73,000

389,000

232,000

200,000

432,000

60,000

375,000

455,000

All Remaining Advisors

72


Tailwinds ›  The fee-based advisory model continues to grow with a

focus on a fiduciary standard ›  DOL/Fiduciary rule has influenced broker-dealers to

consolidate TAMP partnerships –  LPL –  Cetera

Headwinds ›  Rise in popularity of passive investing (competition) ›  Price pressure on investment products (fee compression)

73

Headwinds and Tailwinds




Headwinds ›  Rise in popularity of passive investing (competition) ›  Price pressure on investment products (fee compression)

74





› Rise in popularity of passive investing (competition)

Headwinds ›  Price pressure on investment products (fee compression)

75

Leverage our Manager Research Platform

Introduced 2014: $4.2 billion in assets

76

Headwinds and tailwinds Tailwinds ›  The fee-based advisory model continues to grow with a



›  Rise in popularity of passive investing (competition) ›  Price pressure on investment products (fee compression)

Headwinds

77

Programs designed for aging Baby Boomers with the need for retirement income

20bp portfolio structure fee, $1.7 billion

Leverage our portfolio structure expertise

78

Enter independent advisor market with new platforms

CRM

Financial Planning

Proposals

Client Reporting

Firm Reporting

Portfolio Management

Tax Management

Aggregation

Rebalancing

Custody


Practice Management

Asset Management

79

CRM

Financial Planning

Proposals

Client Reporting

Firm Reporting


Tax Management

Aggregation

Rebalancing

Custody

Traditional TAMP model

Traditionally TAMP platforms have been focused on back office custody functions.

80

If connected, front office interfaces

are limited, data centric,

and mostly left to the

advisor to manage.

CRM

Financial Planning

Proposals

Client Reporting

Firm Reporting


Tax Management

Aggregation

Rebalancing

Custody

Independent advisor front office

81

A True Integrated Solution › SEI Wealth Platform

Financial Planning NaviPlan

Reporting / Portfolio Management

PortfolioCenter

Analytics/Research Morningstar

Rebalancing RedBlack

Document Management Laserfiche

Custodian 1 Schwab

Custodian 2 Fidelity

CRM Redtail

Advanced Reporting eMoney Advisor

Advanced Portfolio

Management Adhesion

Aggregation By-All-Accounts

Custodian 3 TD Ameritrade

Financial Planning MoneyGuide Pro

Document Management DocuXplorer

Analytics/Research Callan

Advanced Portfolio

Management Envestnet

Advanced Reporting

Black Diamond

CRM Junxure

CRM Sales Force

Rebalancing iRebal

Rebalancing Tamarac

Advanced Portfolio

Management Advent

82

A True Integrated Solution › SEI Wealth Platform


Client Reporting

Rebalancing

Aggregation

Proposals

Firm Reporting

Custody

Tax Management

Financial Planning CRM

Single Point of Accountability

83

Independent Advisor Front Office allows

SEI clients to utilize industry leading third party tools

in a fully integrated

ecosystem.

CRM

Financial Planning

Proposals

Client Reporting

Firm Reporting


Tax Management

Aggregation

Rebalancing

Custody

Independent advisor front office

CRM

Financial Planning

Proposals

Client Reporting

Firm Reporting


Tax Management

Aggregation

Rebalancing

Custody

SEI has created a business process that fully leverages technology.

84

Practice Management – Advice with Execution


Practice Management

Asset Management

85

Practice Management – Infrastructure Support


Practice Management

Asset Management

86

Asset Management – Investment Support


Practice Management

Asset Management

87

Advisor growth summary

› SEI Wealth Platform redefines our TAMP platform to a complete business platform

› SEI Wealth Platform migration is well under way

›  Innovative investment implementations allow us to address passive and fee compression

› Comprehensive technology infrastructure connected through workflows fills a need in the truly independent RIA market

› Combination of multiple new SEI platforms creates a unique solution

88 seic.com

Paul Klauder Institutional Investors

89

Institutional Investors Segment Markets We Serve

Corporations DB & DC

Unions DB & DC

Hospitals All Asset Pools

Foundations & Endowments

Operating Assets

Endowed Assets

Retirement Assets

Serving various types of asset pools:

Netherlands Hong Kong / South Korea South Africa

Governments DB

Middle East Canada UK U.S.

We offer solutions to seven markets:

Offering three solutions centered around:

90

Global Footprint: $93.2 b AUM & 480 Institutional OCIO / Fiduciary Management (FM) Accounts1

United States $75 billion

South Africa $1 billion

Far East $225 million

Canada $4 billion Finland

$0

Middle East $65 million

United Kingdom $10 billion

The Netherlands $3 billion

Developed OCIO / FM Markets

Emerging OCIO / FM Markets

Ireland $0

1 As of September 30, 2017 (all numbers expressed in USD).

91

Growth in OCIO / FM

2 0 1 1

$600 BILLION

$1.4 TRILLION

OCIO assets more than

DOUBLED since 2011

Source: Cerulli Associates. The Cerulli Edge – U.S. Institutional Edition // 4Q 2017. Analyst Commentary, Outsourced Chief Investment Officer. Participants were asked to select the top three reasons why institutions choose to outsource. Estimated assets will be $2.7 trillion as of Q1 2022 according to The Cerulli Report – U.S. Outsourced CIO Function, November 2017.

2 0 1 7 2 0 2 2

$2.7 TRILLION (PROJECTED)

Top Drivers for Outsourcing 58% Lack of internal resources

58% Need to improve a governance process

31% Desire to enhance risk-adjusted investment portfolio returns

28% Seeking stronger advisory relationship

28% Seeking operational and administrative support

92

Institutional Investor Market Size

Type Count Assets Growth / Decline

U.S. Corporate Defined Benefit 3,000+ $4 trillion Decline

U.S. Defined Contribution I/O 6,000+ $6 trillion Growth

Mega Investors 1,000+ $10 trillion Growth

U.S. Healthcare 400+ $600 billion Merging

U.S. Union / Industry Plans 500+ $800 billion Neutral

U.S. Endowments & Foundations 8,000+ $3 trillion Growth

Government 2,000+ $5 trillion Neutral

Insurance Market 600+ $4 trillion Growth

Global Markets 2,000+ $8 trillion Growth

Total ~23,500 ~$41.4 trillion

93

End-to-end OCIO Solution (example: US endowments & foundations)

Strategic Advice - Asset allocation & investment policy

development - Spending studies - Liquidity analysis - Capital markets review - Fiduciary management options - Market & industry research - Committee education & training

Investment Management - Manager research & selection - Manager oversight & replacement - Proactive portfolio engineering - Dynamic asset management - Public & private markets - Exclusive fiduciary - Socially responsible investing - Transition management -  Integration & oversight for existing assets

Risk Management - Market risk management - Alpha risk management - Organization risk management - Stress testing:

- Manager level -  Strategy level

Committee Education - Quarterly client presentations -  Institutional Account Access Website - Thought leadership - Market updates - Conferences and seminars - Fiduciary training

Custody & Administrative Services - Custodial & trust services -  Integrated accounting & performance

reporting - Audit assistance - Rebalancing services - Secure web access

94

Example portfolio for a $500m endowment

GrowthStrategies SEI

USEquity(10Managers) 20.0%

InternationalDeveloped(5Managers) 18.0%

EmergingMarketEquities(5Managers) 4.0%

HighYieldBonds(4Managers) 3.0%

Long-BiasedHedgeFunds(10Managers) 8.0%

PrivateEquity(12-15Investments) 17.0%

TotalGrowthStrategies 70.0%

InflationProtection SEI

LiquidRealAssets(2Managers) 5.0%

PrivateRealEstate(5Managers) 4.0%

TotalInflationProtection 9.0%

RiskReductionStrategies SEI

CoreFixedIncome(4Managers) 16.0%

Non-DirectionalHedgeFunds(12Managers) 5.0%

TotalRiskReduction 21.0%

Total 100.0%

95

Charts for illustrative purposes only.

Compare a portfolio change to your current portfolio or compare two new portfolios

See the impact of different spending policies

View projected value and spending levels based on CMAS or historical returns

1

2

3

Proprietary Modeling Technology (example US endowments & foundations)

96


NEW MARKETS DC Plan sponsors Foundations and Endowments

›  OCIO Platform ›  Asset

Management

›  Investment Manager / OCIO / Manager Research Combined Platform

EXISTING MARKETS

Institutional Investors ›  North American DB corporate sponsors ›  U.K. DB corporate sponsors ›  U.S. Hospitals ›  Taft-Hartley plan sponsors ›  Public funds

Strategy Matrix for Institutional Investors segment

97

Headwinds and tailwinds: North American Markets

Tailwinds ›  Growth in OCIO consumption in foundations and endowments ›  Growth in OCIO / DCIO for DC plans ›  Increased use of alternative investments by clients ›  Recognized as an industry leader − Size (> $90 billion / 480 clients)

− Resources (300 dedicated professionals)

− Tenure (25 years, singularly focused)

Headwinds ›  Corporate & healthcare mergers and acquisitions ›  DB plan curtailments / annuitization ›  Increased OCIO competition ›  Fee compression ›  Investor complacency due to strong market returns

98

Headwinds and tailwinds: EMEA & Asia Markets

Tailwinds ›  Continued acceptance of FM in the U.K. ›  Growth of DC Master Trust in the U.K. ›  CMA review of FM / consulting market ›  Growth of pension assets in emerging markets (e.g. South Korea) ›  Partial investment delegation (e.g. asset class or diversified

portfolio) taking hold in Europe, South Africa and Asia with mega investors

Headwinds ›  Fee compression ›  Increased competition from consultants ›  DB mergers in Netherlands ›  Need to establish SEI brand in emerging countries ›  DB “buy-ins” or “buy-outs” in the U.K.

99

Future Growth Opportunities › Frontier international markets for expansion

–  Examples: Japan, Germany, Sweden, Norway and India

100

›  Integrated platform of Investment Manager, OCIO partial delegation and Manager Research

– Mega DC Plans (> $5 Billion)

– Large Endowment & Foundations (> $2 Billion)

– Governments / Sovereign Wealth Funds (SWF)

Future Growth Opportunities

101

Institutional Investors: Strategic Priorities

•  Repositioned sales force •  Cross-sell existing DB clients with defined contribution •  Enhance client referral and reference program •  Key account strategy / senior management for top 50 clients

Execute on current opportunity into North American markets

•  Direct calling campaign and focus on UK schemes > 500 MM pounds •  Leverage DC Master Trust 10 year results / Senior DC resource •  Established technical sales process / support for partial OCIO •  Key account strategy / senior management for top 20 clients

Execute on current opportunity into EMEA & Asia markets

•  Continue to build out suite and breadth of alternative investments •  Factor based investing •  Smart beta

Innovate investment products and offerings

•  Finalize strategic review of frontier markets / begin execution •  Begin offering combination of integrated platform including Investment Manager, OCIO partial and Manager Research

Grow into Frontier markets; Launch integrated platform offering

102 seic.com

Steve Meyer Investment Managers

103

Investment Managers: Snapshot We provide a comprehensive Front-to-Back Office operating platform to investment managers covering their business and investment vehicles/products such as:

›  Hedge Funds and Funds of Hedge Funds

›  Private Equity Funds and Funds of PE Funds

›  Private Debt

›  Real Estate / Infrastructure

›  Mutual Funds / UCITS

›  Collective Investment Trusts (CITs)

›  Exchange Traded Funds (ETFs)

›  Separately managed accounts

3

5 Global domiciles across 8 nations

Operations centers in Oaks, NYC, Indianapolis, Denver, Dublin, Ireland

Over three decades as an infrastructure and service provider

$845b Nearly $850 billion in Assets Under Administration

100,000 Accounts serviced

8

104

Investment Managers: Our Platform

Alternative Portfolio

Accounting

Traditional Portfolio

Accounting

Open-end Fund

Accounting

Closed-end Fund

Accounting Retail Wrap Accounting

Share Class Equalization

Index Data Corporate Actions Pricing Security Descriptive Data

Enterprise data management

Best-of-breed technologies

Technology & data driven front end

Data Management & Governance

WO

RK

FL

OW

&

D

OC

M

AN

AG

EM

EN

T SEI Trade

Automates private fund transactions

Insight Investor data transparency

Investor Dashboard

Investor reporting

Manager Dashboard

Internal reporting

End Client Reporting

Investor statements

Global Regulatory,

Risk & Compliance Fulfills global requirements

Fund Operations

Fund accounting & administration

Investor servicing

Middle Office

Investment operations

105

1990

1995-2005

•  Started providing proprietary fund administration and distribution services to third party mutual funds

2005-2010

2010-2016

Investment Managers: Evolution driven by innovation

Fund Accounting Fund Administration Full Back Office Middle Office Outsourcing Total Operational

Outsourcing Platform Provider

Traditional Offshore Alternative Multi-Asset Hybrid

•  SEI Investments – Global Fund Services (Ireland) formed

•  SEI Investments Trustee & Custodial Services (Ireland) formed

•  SEI wins first Hedge and Private Equity fund clients

Revenue: $88 mm Net Income: $14 mm

•  Total AuA reaches $400 bn

•  Hedge fund assets over $150 bn

•  Re-opened NYC sales, service and operation office

Revenue: $160 mm +83% Net Income: $57 mm +292%

•  Total AuA over $800 bn

•  Middle Office assets over $100 bn

•  PE / RE committed capital over $240 bn

•  Largest SWF $75+ bn in assets serviced

Revenue: $294 mm +82% Net Income: $103 mm +82%

106

Investment Managers: Current evolution 2017 NEW MARKETS: Archway Technology Partners

› Founded in 2002

› Archway is a technology firm whose software solution supports the accounting, investment management and reporting functions for family offices and service providers to the family office market.

› Archway’s primary objective is to help single and multi-family offices and those who service them with a single, integrated technology offering.

›  200+ clients

›  $230+ bn assets on the platform

› Global clientele

› Headquarters in Indianapolis, Indiana

› Regional offices in New York and Denver

›  125 employees

› Leading provider to the single and multi-family office market

NEW PLATFORM / SOLUTIONS : Regulatory & Compliance

› Component Solutions (Form PF, FATCA, AML)

› DaaS / Data Platform

Front Office Technology › SEI Trade, Insight

› Enabling next wave of growth for our clients

Platform Provider

› PaaS/SaaS

› Data And Analytics

› Fintech Cloud

107

Investment Managers: Addressable market / opportunity

Type # of Funds # of Firms Assets Opportunity

Hedge Funds ~14,000 ~5,000 $3.2 trillion High

Funds of Hedge Funds ~1,500 ~675 $0.6 trillion Neutral

Private Equity & Debt ~6,000 ~5,850 $3.3 trillion High

Real Estate / Infrastructure ~2,000 ~1,850 $1.2 trillion High

UCITS ~31,000 ~4,000 €9.3 trillion Moderate

Alt Inv Funds (“AIFs” - EU) ~28,000 ~5,000 €5.8 trillion Moderate

US Mutual Funds ~8,000 ~850 $16.3 trillion Neutral

ETFs (US) ~1,800 ~100 $3.1 trillion Moderate

CITs ~5,000 ~500 $2.5 trillion High

Family Office N/A ~6,000 $1.7 trillion High

108

›  Explosive growth in investment manager businesses – particularly alternatives, customized portfolios and hybrid products

›  Regulatory and investor demands and costs increasing

›  Growth of DC plans and move to low cost products helps fuel CIT growth

›  New technologies solving industry issues

›  Growth in single and multi-family offices globally

›  Investment Managers business model transforming/evolving rapidly

›  Rise in passive investing causing increase in competition and fewer traditional active manager launches

›  Active manager underperformance

›  Significant fee pressure causing managers’ margin erosion; move to more manager / investor alignment

›  Increase in fintech and non-financial service industry competitors

Investment Managers: Market headwinds and tailwinds Headwinds

Tailwinds

109

›  Explosive growth in investment manager businesses – particularly alternatives, customized portfolios and hybrid products

›  Regulatory and investor demands and costs increasing

›  Growth of DC plans and move to low cost products helps fuel CIT growth

›  New technologies solving industry issues

›  Growth in single and multi-family offices globally

›  Investment Managers business model transforming/evolving rapidly

›  Rise in passive investing causing increase in competition and fewer traditional active manager launches

›  Active manager underperformance

›  Significant fee pressure causing managers’ margin erosion; move to more manager / investor alignment

›  Increase in fintech and non-financial service industry competitors

Investment Managers: Market headwinds and tailwinds Headwinds

Tailwinds OPPORTUNITY!

110

Investment Managers: Strategic growth focus •  Alternative Market: Private Equity, Hedge, Real Estate •  Traditional Market: ETFs, CITs, Mutual Funds •  Global Managers •  Middle Office •  Family Office

Execute current growth

•  Process efficiency and optimization •  Automation •  Enhanced processing technologies: blockchain, robotics, etc.

Drive scale & efficiency

•  Focus on end investor experience •  Ecosystem for end client •  Investor platform •  Prospecting through execution and reporting

Front office expansion

•  Data management •  Investor data and forecasting •  Predictive analytics and attribution •  API platform, SaaS, PaaS •  Hosted infrastructure

Platform, data & analytics

•  Expand components and bundles •  Comprehensive Platform for regulatory and compliance •  Firm wide compliance •  Regulatory data management and analytics

Regulatory & compliance

111 seic.com

Closing Summary

112

SEI: Focus on Growth

› Grow by adhering to SEI’s vision, values and proven business model.

› Overcome headwind trends and take advantage of tailwind trends.

› Execute core businesses in existing markets with existing platforms.

› Expand business with existing clients by building new platforms.

› Enter or increase focus on adjacent financial markets with existing and new platforms.

› Apply advanced technologies.

113

Forward Looking Statements

This presentation may include "forward-looking statements," and discussions about future operations, strategies and financial results. Future revenues and income could differ from expected results. We have no obligation to publicly update or correct any statements herein as a result of future developments. You should refer to our periodic SEC filings for a description of various risks and uncertainties that could affect our future financial results.

114 seic.com

Thank you

Date post:	09-May-2020
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

seic · U.S. segment leaders (Wells Fargo, Regions Bank) signed Building advanced capabilities U.K....

Documents