SEI Investments Company · NASDAQ:SEIC
SEI Investments — Investor Day (June 2010)
82 slides from SEI Investments's investor day presentation, Jun 16, 2010
Slide 1: SEI Investor Conference
SEI Investor Conference June 16, 2010 Oaks, PA 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 an
Slide 2: SEI Agenda
SEI Agenda SEI’s Growth Strategy Al West Private Banks Joe Ujobai Investment Advisors Wayne Withrow Institutional Investors Ed Loughlin Investment Managers Steve Meyer Summary Al West SEI Investor Presentation 16 June 2010 2
Slide 3: SEI: Client Experience
SEI: Client Experience Vision Helping clients succeed through improving their businesses and lives SEI Investor Presentation 16 June 2010 3
Slide 4: SEI Markets & Businesses
SEI Markets & Businesses Serving two related markets Wealth Holders Wealth Services Holders • Individuals • Distributors • Institutions • Manufacturers Through five business units Private Investment Institutional Investment New Banks Advisors Investors Managers Businesses (ultra HNW) Pct of 2009 Rev
Slide 5: SEI Solutions & Services
SEI Solutions & Services Solutions Wealth Management Business Process Outsourcing • Individuals • Distributors • Institutions • Manufacturers Integrated Integrated services services ++ advice advice Investment Investment Investment Management Processing Operations SEI Investor Presentation 16 June 2
Slide 6: SEI: A history of innovation and market expansion
SEI: A history of innovation and market expansion Innovations Trust System Invest idle cash balances Asset Manager of Managers Advice & goal-based investing allocation Fee-based advisor platform Integrated pension & finance Back-office investment processing Total operations outsourcing Globalization
Slide 7: SEI Business Model
SEI Business Model “Our business model has served us well.” • Focus on emerging client needs Organic Growth • Deliver ever-expanding solutions • Not acquisitive • Forge intimate client relationships Client Relationships • Be a thought-leader • Adopt “win-win” pricing models • Focus on long-term grow
Slide 8: SEI: Key to long-term success
SEI: Key to long-term success Growth Culture • Promote innovation and creativity • Promote experimentation and failure • Promote teamwork and collaboration • Promote leverage and fiscal prudence • Promote integrity and transparency SEI Investor Presentation 16 June 2010 8
Slide 9: SEI: The future is now!
SEI: The future is now! Short Term Priorities • Focus on Growth – Retain clients – New services to existing clients – New clients • Keep building for the future • Fiscal prudence SEI Investor Presentation 16 June 2010 9
Slide 10: SEI: Investing in the Future
SEI: Investing in the Future • GWP • TOO • Global Initiatives • Goal-based Investing SEI Investor Presentation 16 June 2010 10
Slide 11: SEI: Investing in the Future
SEI: Investing in the Future GWP Update • 100,000 plus accounts on platform • All clients now on single image of system • Working on US functionality • Expect to convert first US clients to GWP in first half 2011 SEI Investor Presentation 16 June 2010 11
Slide 12: SEI: Moving forward!
SEI: Moving forward! Portfolio of Businesses • Investment Managers • Institutional Investors • Private Banking Institutional Investors • Advisors Investment Managers Banking Advisors SEI Investor Presentation 16 June 2010 12
Slide 13: SEI: Current Situation
SEI: Current Situation Focusing on Growth • New sales as decision freeze is thawing • New strategies and solutions gaining traction • Pipelines enlarging • Backlogs growing • Investments beginning to pay off SEI Investor Presentation 16 June 2010 13
Slide 14: Private Banks
S E | New ways. New answers? Private Banks Joe Ujobai PERIENCED / INNOVATIVE / SOLUTIONS / EMPOWERING / INSIGH IG / INTEGRATIVE / STRATEGIC / ENCOMPASSING / INFORMATIVE DUSTRIOUS / STRUCTURED / ELEVATING / INTERNATIONAL / SU RING / INFORMATIVE / SUPPORTIVE / ENTREPRENEURIAL / INSP TRATEGIC / EFFECTI
Slide 15: SEI Markets & Businesses
SEI Markets & Businesses Serving two related markets Wealth Holders Wealth Services Providers • Individuals • Distributors • Institutions • Manufacturers Through five business units Private Investment Institutional Investment New Banks Advisors Investors Managers Businesses (ultra HNW) Pct of 2009 R
Slide 16: A large and growing HNW opportunity
A large and growing HNW opportunity Assets >$1 million 2010E: $40.1 trillion assets 2011E: 11 million individuals North America Europe $14.2T Assets $11.8T Assets 3.3M Individuals 3M Individuals A-PAC $9.8T Assets 3.6M Individuals ME-A $2.5T Assets Latin America .7M Individuals $1.8T Assets .1M Indi
Slide 17: But an industry in transition
But an industry in transition Core Drivers of Wealth Management Geared for Growth Revenue is Cyclical Highly resilient •Demographic factors •Tied to equity market •Profitable even in difficult •Entrepreneurship times •Concentration of wealth Change Levers Market Environment Regulatory Client Behavio
Slide 18: Our proposition supports the needs of our clients
Our proposition supports the needs of our clients • Institutionalize the client experience Grow Revenue • Understand the total client relationship • Offer a broader set of solutions • Support merger and acquisitions • Optimize and automate fragmented business processes Reduce Cost • Create operation
Slide 19: Global Wealth Services Solution
Global Wealth Services Solution Outsourced Infrastructure • Comprehensive integrated platform • Enterprise database • Models based investing • Relationship architecture • Global and complex transactions • Scalable infrastructure • 24/7 worldwide operations Transformation Client Portfolio Management
Slide 20: Private Banking: Growth Strategy
Private Banking: Growth Strategy Aggressively Grow the US Expand Asset Sell GWS in Market with Management UK GWS/GWP Distribution SEI Investor Presentation 16 June 2010 20
Slide 21: The UK HNW and Affluent Opportunity is significant
The UK HNW and Affluent Opportunity is significant 6,000 # Firms 5,000 988 Not Managed 4,000 38 1,457 International Banks USD Billions (Mixed) 3,000 Domestic PBs, PCIMs, MFOs 2,000 116 2,272 (Manufacturers) 1,000 135 933 IFAs (Distributors) 0 For wealth above Total managed assets Individuals $150,00
Slide 22: We are aggressively selling GWP in the UK
We are aggressively selling GWP in the UK • Focused on distribution oriented Independent Wealth Advisers (IWAs) Sell New IWA • Growing sales efforts with larger books of business and also at Clients manufacturing oriented IWAs • Support acquisition activity Grow Current • Support additional solution
Slide 23: UK Market Challenges | Key Buying Motives
UK Market Challenges | Key Buying Motives • Multiple custodians/platforms • Massive regulatory change • Inconsistent client experience • Limited infrastructure for growth • No consistent business model SEI Investor Presentation 16 June 2010 23
Slide 24: Our UK Clients
Our UK Clients SEI Investor Presentation 16 June 2010 24
Slide 25: Our UK Business and Later Stage Pipeline
Our UK Business and Later Stage Pipeline Wealth Processing Services via GWP • 4 clients on the system • Over 100,000 accounts • Trading on 95 stock exchanges • In 44 countries / 31 currencies • >$20 million revenue in 2011 Later Stage Pipeline Opportunity • Annual Event Revenue: >$40 million • Our S
Slide 26: GWS UK Business Models
GWS UK Business Models Two “Business Models” Infrastructure • Traditional “Day-One” conversion - “all at once” Client • Growth expected primarily through acquisition • Limited SEI Asset Management opportunity • Typical IWA/IFA conversion- “over time” Business • Multiple custodians and platforms Tran
Slide 27: GWS UK Business Models
GWS UK Business Models Win-Win Revenue Model: Revenue Levers • Asset based fees to share in successful growth of our clients • Transaction based fees to compensate for activity and hedge risk i.e. trading • One-time fees to set up/fund/close accounts • Professional service fees to lead projects • SE
Slide 28: "Infrastructure" Revenue Model Example
“Infrastructure” Revenue Model Example Asset Growth Assumptions Annual Revenue $2,590 $3,099 $4,239 Conversion • Initial book: £1.0b • Convert 100% existing book on Day 1 New business • 10% existing book (£100m/year) Professional Services • Account open fees (400 accounts per year); Project fees • A
Slide 29: "Business Transition" Revenue Model Example
“Business Transition” Revenue Model Example Annual Revenue $608 $2,782 $6,535 Asset Growth Assumptions Initial book • £1.0b • Initial conversion • £100m discretionary • Additional conversion • 50% by year 3; 75% by year 5 • New business • 5% existing book (£50m/year) • Professional Services • Accoun
Slide 30: Grow the US market with GWS | GWP
Grow the US market with GWS | GWP • Convert Frost by late 2011 Launch • Introduce GWP into Community Bank sales process GWP • Sell GWP to targeted large bank segments • Re-contract rates improving Re-contracting & • Risk Management and Information Access solutions Cross Sell • Continued momentum in
Slide 31: North America Market Challenges | Key Buying Motives
North America Market Challenges | Key Buying Motives • Margin pressure • Inconsistent technology implementations • Aging workforce • Manual processes lacking scalability • Inconsistent client experience SEI Investor Presentation 16 June 2010 31
Slide 32: Our US Bank Clients
Our US Bank Clients J.M. Forbes & Co. LLP SEI Investor Presentation 16 June 2010 32
Slide 33: Our US Business and Later Stage Pipeline
Our US Business and Later Stage Pipeline Wealth Processing Services via TRUST 3000® • 108 clients on the system • Over 1.3 million accounts • ~429 million transactions annually • $200 million in annual revenue Later Stage Pipeline Opportunity Event Revenue: >$15 million Our Sales Focus: Competitivel
Slide 34: Current Clients and Market Opportunity
Current Clients and Market Opportunity In-House Capabilities or Abilities LOW MEDIUM MED. HIGH HIGH DOMINANT PLAYERS Clients: 16 Complexity of Business SPECIALTY Revenue: $110 million Clients: 19 Prospects: 5 Revenue: $20 million Prospects: 20 GENERALISTS Clients: 8 Revenue: $35 million Prospects: 5
Slide 35: Expand asset management distribution
Expand asset management distribution • Strengthen existing relationships Re-launch • Expand and upgrade key partner solutions led by Goals- Current based investing Relationships • Focus on UK, Middle East and Canada Sell New • Secure exclusive or preferred status Relationships • Utilize GWP capabili
Slide 36: Key Asset Management Distribution Relationships
Key Asset Management Distribution Relationships • $12.5 billion in AUM • Global presence – U.S., Canada, U.K., Middle East and Asia • Over 150 SEI funds available, including 75+ SEI funds in the U.S Later Stage Pipeline Opportunity Annual Event Revenue: $7.5 million* Our Sales Focus: Expand Footprin
Slide 37: Conclusion
Conclusion • Solutions are well positioned • Managing our expenses – On-going margin pressure – Significant invest in our solutions • Strong sales momentum in the UK • Executing our sales plan in the US • Expanding our global asset management distribution footprint Grow our business through Global W
Slide 38: Investment Advisors
Investment Advisors Wayne Withrow
Slide 39: SEI Markets & Businesses
SEI Markets & Businesses Serving two related markets Wealth Holders Wealth Services Holders • Individuals • Distributors • Institutions • Manufacturers Through five business units Private Investment Institutional Investment New Banks Advisors Investors Managers Businesses (ultra HNW) Pct of 2009 Rev
Slide 40: Market Opportunity
Market Opportunity Investors1 Financial Assets Investable Assets Households [Trillions] Middle Market >$100k-$500k 23,440,234 $4.2 Mass Affluent >$500k-$2m 6,733,892 $5.2 High Net Worth >$2m-$20m 1,821,037 $7.3 Ultra High Net Worth >$20m 44,718 $1.8 32,039,881 $18.5 Advisors2 Advisors AUM [Trillions
Slide 41: SEI Advisor Network Solution
SEI Advisor Network Solution To enable the lasting success of independent investment advisors by providing an integrated wealth management platform Investor nt ie Cl 41
Slide 42: Market Opportunity - Ideal SEI Client
Market Opportunity - Ideal SEI Client Do It Yourself Characteristics Advisors Ideal SEI Advisor Business Model Complete Control Outsourcer Revenue Fees & Commissions Fee Based Fee Based Life Cycle Start-up Growth Stage Growth Stage Steady State Stage Wind Down Competition Schwab Genworth Fidelity Br
Slide 43: Market Opportunity | Advisor Needs
Market Opportunity | Advisor Needs Where Advisors Spend Their Time… Source: 2008 Advisor Impact Client Audit / Moss Adams LLP SEI Investor Presentation 16 June 2010 43
Slide 44: Market Opportunity | Success of SEI's Solution
Market Opportunity | Success of SEI’s Solution SEI Advisors vs. B/D Affiliated Advisors1 All B/D Affiliated Median SEI Advisors Advisors Difference AUM $182M $75M 59% Revenue $1,553,450 $659,314 58% Clients 289 221 24% Revenue/Professional $516,332 $402,300 22% Income Per Owner $325,456 $249,000 23%
Slide 45: Growth Dynamic
Growth Dynamic Need for Growth Current Driver Investors return to market Investor confidence thawing Market still fragile Investors need advice Questioning risk profiles Advisors need to consider outsourcing Investment risk Restore lost profitability SEI Investor Presentation 16 June 2010 45
Slide 46: Growth Initiatives
Growth Initiatives Practice Broker-Dealer Management New Advisors Channel for for retention retention & & growth growth SEI Investor Presentation 16 June 2010 46
Slide 47: Business Growth | Why New Advisors?
Business Growth | Why New Advisors? • Better Year One Asset Conversions • Better Year Two Growth Orientation • Better Year Over Year Recession Resistant Assets Conversions Growth Orientation Recession Resistance Time SEI Investor Presentation 16 June 2010 47
Slide 48: Business Growth | Recession Resistant Cash Flow
Business Growth | Recession Resistant Cash Flow $592 million Source: Numbers represent first 12 months with SEI after reaching $1m in AUM SEI Investor Presentation 16 June 2010 48
Slide 49: Business Growth | Pipeline of Qualified Advisors & New Advisors
Business Growth | Pipeline of Qualified Advisors & New Advisors Source: Comparison of quarterly numbers from 2008 through Q1 2010. SEI Investor Presentation 16 June 2010 49
Slide 50: Business Growth | Broker Dealer Value Proposition
Business Growth | Broker Dealer Value Proposition Broker Dealer SEI Advisor Network • Provides Segmented • Helps Gather More Fee- Advisor Lists based Assets • Provides Referrals • Helps Improve Advisor’s Mutual Productivity • Provides Speaking Opportunities Growth • Helps Increase Recruiting • Promo
Slide 51: Strategic Broker-Dealer Relationships
Strategic Broker-Dealer Relationships Broker-Dealers Signed in 2010 • Broker-Dealers engaged in a co-marketing arrangement 7 firms • Number of producing advisors 9,896 • Assets under Management $134.5 billion Existing Advisor Relationships • Advisors with SEI 403 • Assets under Management with SEI $
Slide 52: Practice Management Overview: Knowledge Flow
Practice Management Overview: Knowledge Flow Advisor Business Cycle Advisor Advisor Transition Transition Experience Experience Phase Phase Efficiency Efficiency Phase Phase Industry Industry Experience Experience && Resources Resources Growth Growth Phase Phase SEI Investor Presentation 16 June 201
Slide 53: Current Growth Summary
Current Growth Summary • SEI’s solution meets key advisor needs • Capital market dynamics are fragile • New strategies are gaining traction • Pipeline of new advisors is robust SEI Investor Presentation 16 June 2010 53
Slide 54: Beyond 2010 | A GWP Enabled Business
Beyond 2010 | A GWP Enabled Business Client Open Straight Through Global Enabled Centric Architecture Processing • Household is managed holistically End Clients • Better tax and investment decisions • Higher quality of service (less errors) • Automated middle office • Practice management tracking &
Slide 55: GWP | Summary of First New Segment
GWP | Summary of First New Segment First New Segment Current Segment (TAMP) (Flexible TAMP or “IWA Light”) UMA / UMH SEI Fund & SMA Products SEI Funds & SMA Non-SEI Funds, ETF’s, Stocks/Bonds, Alternatives 90% to 100% 50% to 90% SEI Assets (Investment sale) (Investment and Platform sale) Fee Type AU
Slide 56: GWP | Timeline
GWP | Timeline Small beta conversion First Half 2011 Added functionality – incremental conversion Second Half 2011 Flexible TAMP initial release 2012 SEI Investor Presentation 16 June 2010 56
Slide 57: In Summary
In Summary • SEI strategies and pipeline are favorable for 2010 and 2011 • Beyond 2011 GWP is a game changer SEI Investor Presentation 16 June 2010 57
Slide 58: Institutional Investors
Institutional Investors Ed Loughlin
Slide 59: SEI Markets & Businesses
SEI Markets & Businesses Serving two related markets Wealth Holders Wealth Services Holders • Individuals • Distributors • Institutions • Manufacturers Through five business units Private Investment Institutional Investment New Banks Advisors Investors Managers Businesses (ultra HNW) Pct of 2009 Rev
Slide 60: Institutional Investors Markets
Institutional Investors Markets We We operate operate in in six six markets: markets: US Canada UK Netherlands Hong Kong South Africa Serving Serving five five market market segments: segments: Corporations Hospitals Unions Municipalities Endowments & Foundations Offering Offering three three soluti
Slide 61: Institutional Investors Market Opportunity
Institutional Investors Market Opportunity We We operate operate in in six six large large geographic geographic markets: markets: US Canada UK Netherlands Hong Kong South Africa DB $744 B $96 B $427 B $910 B $4 B $11 B DC $893 B $21 B $102 B $80 B $30 B Healthcare $372 B E&F $453 B $7 B $100 M Muni
Slide 62: Investment Outsourcing Demand Drivers
Investment Outsourcing Demand Drivers • Difficult capital markets • Limited resources among institutional investors • Demand for alternative investments • Pension plans increased focus on liability-driven investment • Traditional consulting model cannot support timely decisions SEI Investor Presenta
Slide 63: Ideal Institutional Client Profile
Ideal Institutional Client Profile • Asset pools of $20 million to $3 billion • Open to outsourcing/delegating • Change agent within the organization • Underfunded defined benefit plans • Large DC plan • Midsize not-for-profit organization SEI Investor Presentation 16 June 2010 63
Slide 64: Institutional Solution
Institutional Solution Defined Benefit Plans, Endowed Assets, and Operating Assets SEI delivers a bundled customized solution integrating advice, investment implementation, and administration to delegation-oriented buyers. SEI Investor Presentation 16 June 2010 64
Slide 65: Institutional Solution
Institutional Solution Defined Contribution Assets Sophisticated Investments Flexible Solution Single Asset Class Enhanced Custom Strategy Mandate Diversification of Implementation Existing Strategies Individual multi- Target date or asset managed investment Incorporate SEI allocation strategies usi
Slide 66: Respected Organizations Have Entrusted SEI With Their Investment Management
Respected Organizations Have Entrusted SEI With Their Investment Management *Representative clients are selected by SEI to illustrate a sampling of SEI’s client base, but may not necessarily endorse all of the services provided by SEI. List as of June 2010. SEI Investor Presentation 16 June 2010 66
Slide 67: Institutional Client Benefits
Institutional Client Benefits • Greater probability of achieving goals • Complete transformational solution • Reduced time commitment required of financial executives • Cost-effective • True delegation of fiduciary responsibilities • Accountable partners • Responsive governance process SEI Investor
Slide 68: Growth Priorities
Growth Priorities Solution Enhancements • Dynamic asset allocation • Portfolio de-risking, based on goal attainment • Risk management oversight • Integrated goals-based reporting Market Expansion • Separate accounts for larger asset pools • Consultant outreach for Defined Contribution segment SEI In
Slide 69: SEI delivers advice to capitalize on short-term market opportunities
SEI delivers advice to capitalize on short-term market opportunities • In April 2009, SEI made recommendations and changes for the client to take advantage of the opportunities in the fixed income markets – through public and private markets • Changes: – Lowered their inflation hedge allocation and
Slide 70: SEI actively manages client's pension plan to achieve business goals
SEI actively manages client’s pension plan to achieve business goals Monthly Pension Assets and Liabilities 17 % Improvement Portfolio De-risking <80-90% Funding 90-110% Funding 110-120% Funding >120% Funding Note: Sample portfolios shown for illustration only and is not meant to represent past perf
Slide 71: Growth Summary
Growth Summary • Recent market environment reinforces outsourcing proposition • Sales activities support a growing pipeline • Clients are benefiting from SEI’s solution • Sales cycles continue to be protracted • Solution enhancements provide continued differentiation SEI Investor Presentation 16 Jun
Slide 72: Investment Managers
Investment Managers Steve Meyer
Slide 73: SEI Markets & Businesses
SEI Markets & Businesses Serving two related markets Wealth Holders Wealth Services Holders • Individuals • Distributors • Institutions • Manufacturers Through five business units Private Investment Institutional Investment New Banks Advisors Investors Managers Businesses (ultra HNW) Pct of 2009 Rev
Slide 74: Investment Managers: An Overview
Investment Managers: An Overview Serving Serving All All Key Key Investment Investment Manager Manager Product Product Segments Segments Hedge Mutual Offshore CITs Institutional ETFs Separately Private Funds Funds Funds Accounts Managed Equity Accounts Business Business Process Process Solution Solu
Slide 75: Investment Managers' Operations Breadth Depth
Investment Managers’ Operations Breadth Depth Portfolio Trade Mgmt Client Execution Service Liquidity Sales & Management Marketing Collateral Investor Processing Management Services Pricing & Valuation Fund Administration Compliance Fund Accounting OTC Processing Bank Debt Risk & Processing Performa
Slide 76: The End Game: Total Operational Outsourcing
The End Game: Total Operational Outsourcing SEI Manager Dashboard Sales Decision Executive Portfolio Client Operations Marketing Support Mgmt Mgmt Service Mgmt Distribution Thought Knowledge Partnership / Compliance Advantage Leadership Data / Data Management and Governance Information Front Office
Slide 77: New Clients - representative list
New Clients - representative list… Latest SMA outsourcing client 30+ yr old independent traditional Also has Institutional Separate Accounts and Mutual money manager Fund products Firm-wide AUM over $12 billion Spun out of university to manage endowment assets Referred by a large instituti
Slide 78: 2010 Growth Priorities
2010 Growth Priorities Middle Office Expansion Front Office Build-Out * Enhance and expand Complex Security * Enhance Dashboard to incorporate front office Processing roles and functionality * Enhance and expand Reporting capabilities (risk, * Enhance End Investor Reporting compliance, performance,
Slide 79: Market Sizing
Market Sizing US US Traditional Alternative EMEA Managers: 3,200 1,500 3,500 Markets Funds: 8,600+ 6,500 40,000 AUM (US$): $12+ t $1.2 – 1.9 t $11+ t Managers: 91 81 28 Clients Funds: 450+ 810+ 250+ AUM (US$): $110 b * $84 b $ 33 b * Client information does not include SEI Funds SEI Investor Present
Slide 80: IMS Opportunities
IMS Opportunities • Lehman/AIG/Market Volatility + Madoff = Investor Pressure Trends • New Products: CITs, ETFs, Institutional • In-sourcers move towards outsourcing • Need Scalable Infrastructure Market Needs • Need Broader and Deeper Capabilities • Middle Office • Focused Expansion (Europe) Global
Slide 81: Summary
S E | New ways. New answers? Summary PERIENCED / INNOVATIVE / SOLUTIONS / EMPOWERING / INSIGH IG / INTEGRATIVE / STRATEGIC / ENCOMPASSING / INFORMATIVE DUSTRIOUS / STRUCTURED / ELEVATING / INTERNATIONAL / SU RING / INFORMATIVE / SUPPORTIVE / ENTREPRENEURIAL / INSP TRATEGIC / EFFECTIVE / INSIGHTFUL /
Slide 82: SEI: Moving forward!
SEI: Moving forward! Portfolio of Businesses • Investment Managers • Institutional Investors • Private Banking Institutional Investors • Advisors Investment Managers Banking Advisors SEI Investor Presentation 16 June 2010 82