SEI Investments at William Blair Conference: Strategic Shift Highlights

On Thursday, 05 June 2025, SEI Investments Company (NASDAQ:SEIC) presented at the 45th Annual William Blair Growth Stock Conference. The conference call, led by CFO Sean Denham, provided an optimistic overview of SEI’s strategic transformation under CEO Ryan Hickey. The discussion highlighted the company’s shift towards a more agile structure, focusing on asset management expansion and operational improvements, while acknowledging past challenges.

Key Takeaways

• SEI Investments has significantly improved sales events, margins, EPS, and share price under CEO Ryan Hickey.
• The company is focusing on expanding its asset management capabilities, particularly in the alternatives space.
• Operational improvements include cost management, automation, and the establishment of an offshore facility in India.
• SEI’s capital allocation strategy emphasizes stock buybacks and strategic M&A opportunities.
• Private banking has seen margin improvements and a robust pipeline under new leadership.

Financial Results

• Sales events increased by 25%, margins improved by 300 basis points, and EPS rose by 55%.
• The share price has climbed 46% since Ryan Hickey’s appointment as CEO.
• The company aggressively bought back $450 million of stock in the last two quarters.

Operational Updates

• SEI is expanding its asset management division, targeting larger RIAs and the retail alternatives market.
• The company has opened a shared services center in India to enhance operational efficiency.
• Initiatives in private banking have led to a margin improvement from near zero to 18%, with a path to historical margins of 25-30%.

Future Outlook

• SEI aims to capitalize on opportunities in the financial services landscape by maintaining a strong balance sheet and exploring strategic M&A.
• The company is open to taking on debt for acquisitions but remains committed to a disciplined capital allocation approach.
• SEI is positioned well in the alternatives space, leveraging its Access platform to compete with industry leaders like iCapital and Case.

Q&A Highlights

• SEI will continue aggressive stock buybacks, balancing cash management and future growth needs.
• The company is considering inorganic growth opportunities in the RIA space in the U.S. and European fund administration.

In conclusion, SEI Investments showcased a proactive approach to adapting to market dynamics at the conference. Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Jeff Schmidt, Analyst, William Blair: Good morning, everyone. So why don’t we go ahead and get started? My name is Jeff Schmidt. I cover wealth tech stocks here at William Blair. And I’d like to introduce SEI Investments.

They provide outsourced technology and investment solutions to banks, financial institutions, asset managers. They they manage and service 1,600,000,000,000.0 of client assets now. We have with us today Sean Denham. He’s the CFO. Thanks for joining us, Sean.

He’ll discuss the business. But before we begin, I’d like to point you to our website, williamblair.com, just for a list of research disclosures and any potential conflicts of interest. So with that, I will turn it over to Sean.

Sean Denham, CFO & COO, SEI Investments: Thanks, Jeff. So nice to be with everyone today. We had some early meetings today. We’re only here kind of on-site today, And so we had a few investor meetings, but really really great to be with all of you today. Jeff actually did a really nice job of the overview.

Are there any questions? No. I’m I’m joking. So we we actually have a really unique presentation for you today. We’re going to actually go through a history of SEI, but the reason why we’re going to do that is I think it really paints a really nice context of where we are today, and I think you’re going to get actually a lot out of this.

Brad, you got the clicker? Okay, great. So, the most common question that my parents ask me a lot is, what does SEI do? And we get that from investors and analysts all the time, especially for folks that don’t cover us. We can be confusing.

I’ve had some analysts that were starting to think about covering us and have had read our 10 ks. One individual said, Hey, Sean, I’ve read your 10 ks six times. Can you help me understand in a nutshell kind of what you do? And so we can be somewhat complex, because we’re really the only company in the world that really plays across all these spaces up there. So we have really two core offerings.

The first is our technology and operations group, and you’ll see that in the blue up there. These are usually paired together, and I would say in a very, very high level, they’re always paired together. There are times we may sell our our our tech platform on a standalone basis, but in general, they’re always paired together. The second is our asset management piece right there. And then we live right currently, we live in four divisions.

We live in our IMS space. 70% of our revenue from IMS, our investment manager space, is in the alternative managers group, and essentially the core of that is our fund administration. Number two is private banking. So, banking is where SCI was founded. I’m going to go into that in a little more detail here in a bit.

But essentially, what our private banking does is investment processing tech, our SWP platform, which we’ll unpack here in a bit, And plus we have asset management where we see a really large opportunity, we’re not selling as much there as I think we can. The third is our institutional investors business, essentially that’s outsourced CIO. So think DB plan, so we were one of the originals back in the nineties where we stood up an OCIO practice really when no one else was doing that. We claim we claim to be as before my time, I was graduating college in ’94, but we claim to be the first organization that started OCIO. So now we’re actually doing a lot more on the co CIO and the OCIO business.

So that’s primarily and historically been corporate DB plans, but we’re expanding that group as well. And then the last but not least is our investment advisor space. So we do a full suite of solutions there from tech to custody, and then building model portfolios and products. Historically, we’ve played in the smaller advisor space there, but we’re now targeting larger RIAs. I was neglect to introduce two of my colleagues here today.

So, Brad Burke is with us. Brad leads our IR department, and Michael Lane is with us as well. Michael leads asset management, and Michael recently came over from BlackRock. Michael’s been with us for about nine months. Okay, so the fun part.

I am going to go through in about ten minutes the history of SEI, and again, when people think about a history, people want to yawn, but I really think you’re going to get a lot out of these next ten minutes. So we were actually founded in 1968 by a gentleman by the name of Al West. Al was a luminary in this space. So our first client was Wells Fargo. So we started as a private banking, kind of in the private banking space.

So in 1974, we brought on our our largest premier client, Wells Fargo. They are still a client today. SEI went public in ’81, and through the first twenty years, we actually had some really great success. If you invested $100 at the IPO, that grew to $16,000 by $2,000 so a really nice return on that investment. Some of the early success drivers of the business, so again, we started really in the private banking space.

We were a leading provider of accounting and reporting for bank trust departments. That’s where we where Al cut his teeth. As the eighties progressed, there was a need. So, as these banks were creating liquidity, they had come to us. We became really a trusted provider of these banks, and they said, Hey, could you help us with that liquidity?

And we started creating liquidity funds for those banking clients. It was incredibly well received. As the 80s kind of progressed, we said, Well, you know, we’ve been doing this fairly successful. Can we move into some other markets? And we did that throughout the 80s, but really primarily in the banking space.

Things really started getting exciting in the nineties. And so in the nineties, you’ll see there we started, we weren’t just in The US, we moved into Canada, we actually moved into into Europe, and we organically created three new offerings, and those three offerings are really kind of the hallmark of who we are today. About 90% of our revenue or so comes from institutional investors. Again, that’s really our OCIO business. We created our investment advisors group and then investment managers, and we’ll unpack those a little more.

And then also what we did in the 90s, and we may argue this was the greatest investment in The United States Of America. So, in 1994, we made a $1,000,000 investment to seed a company called LSV. It’s probably not the greatest investment in the history of The US. So, that investment has been an incredible return for the organization. So, a million dollar investment, we earn, to the bottom line, about $2,000,000 a week from that investment in 1994.

So it really was a home run, and we own about 38%, thirty nine % of that JV with LSV. Okay, so it’s not all good news. So in the 2000s, we were really debating, you know, are we a tech company? Are we a financial company? And if you remember in the in the in the 2000s, in the early 2000s, dot com bubble burst, and as a technology company we were affected, and you’ll see the drop there.

Well, on top of that, later in the nineties, we had the financial crisis. For being a tech company and a financial company in the February, early ’2 thousand’s, ’2 thousand’s, ’20 ten’s, it wasn’t great. And however, the good news there is, you know, a hundred dollar investment in 2001 resulted in a hundred and $15 investment at the end of the early 2000s. So not great, but not terrible when you’re thinking about the dot com bubble and also the financial crisis. So, kind of as we move out of the early 2000s into the 2010 through 2020, we kind of refer that as the hangover period.

So we’ve had really great success at this point. We’ve launched three great new businesses. We had really great returns early as we launched those business in the nineties. We talked about what happened in the early two thousands. As we moved into kind of the mid mid two thousand twenty fifteen time frame, To be honest, SEI got a little bit back on their heels, and competition grew.

I think we’re a little bit slow to adapt. Things were occurring. We were, you know, in our asset management business, we were really heavily indexed to to active, and there was a huge shift from active to passive. As we know, we’re still experiencing that. And really, we did not adapt.

We also spent a lot of time internally at SEI talking about why we weren’t winning, and we would put a period at the end of that conversation. We would put a period at the end of the conversation explaining why we were losing, as opposed to having a comma and saying, Yes, we were losing, but why what were we doing about that? We spent a lot of time not on greenfield or new logos and trying to win, we spent a lot of time with our sales team focused on retention. So not great. What else was happening at SEI?

So our legacy banking platform is something to this day, part of the business, it was something called Trust 3,000. Well, Trust 3,000 was built on the back of COBOL. Anyone know COBOL? Anyone know that? So, very few people know COBOL today, and not a lot of development is being done on COBOL.

I think that was built like in the 50s and 60s. So we made a shift and decided to build our own custody platform, which is our custody platform today, SCI Wealth Platform, which is known by SWP. That was built off of C plus plus and in during this time frame, we had we had a budget, we had a time frame to build this, and it took a lot more money, a lot more money than ever expected, and it took a lot more time than it was ever expected to build. So that build versus buy model, you know, SEI historically has been a builder of technology, not a buyer of technology, and SWP was really the hallmark for that. So the good news there well, the one thing I’d add there, on top of kind of being on our heels, we really became risk averse.

I think Al West, who truly was an entrepreneur at his heart, if you have ever been to campus, our campus is very, very, very unique. No offices, everything open concept. It was kind if you know Al, he was that entrepreneur. As we’re in this period, this hangover period, we really became risk adverse. So Al’s creating three new businesses because he saw an opportunity in the marketplace in the 90s, really became a little more risk adverse, incredibly siloed, very vertically led, pure vertically led organization, and again, focused on retention.

So there are there is some good news here. So as we started graduating, Al started the business in ’68, went public in ’81. Al decided that he was about to turn the reins over to someone new, so having the second CEO in the history of SEI after founder led. So in 2022, SEI announced the appointment of Ryan Hickey as CEO. Actually, this past Monday was Ryan’s three year anniversary as CEO.

Al remained the board chair, and he’s still the board chair today, just was reelected by proxy last week or two weeks ago. So when there’s a transition from there’s a transition from founder led organizations to kind of that second level of leadership or new leadership, generally what happens, especially as a relatively young four a CEO, forty four year old CEO, there’s two things that happened. A question arises whether that CEO, that founder is really going to step down, or are they really going to be pulling the strings from behind? And will that new 44 year old CEO play it safe? That’s usually sometimes how it goes.

The good news is SEI did neither of those, and Ryan did not play it safe. Ryan has taken a very bold approach over the last three years, and and that’s really been evidenced, I I think, over over the last twelve months, but even broader than that. So what what you’re seeing over here is kind of the the growth trajectory of SEI share price since Ryan’s taken over. We were really flat. We were kind of in that $50.60 dollars range for probably fifteen years after really healthy growth, again from 81 to kind of 2,000.

SEI has 5,200 employees about, we have another 2,000 consultants. Ryan takes over and made some really bold moves. But it’s really difficult, as you all know, to move a large oil tanker very, very quickly. So it has taken a little bit of time. So what Ryan did, and what I give Ryan a tremendous amount of credit for, Ryan started as an intern at SEI and became CEO at 44 years old.

Really challenging, really challenging. I wonder myself if I would have had the ability to do this. But Ryan knew he needed some a kind of new leadership team. He kind of recognized the stagnation of SCI over the last fifteen years or so. By the way, when when we moved into Europe in the in the nineties, you saw that up on the one of the previous slides.

Actually, Ryan, at as 25, 20 six years old, went over and ran Europe for about twelve years or so. But Ryan knew he needed an outside in lens, and what you’re seeing up here is really a complete change of the leadership team. You’ll see Phil McCabe up there. He’s been he’s been in his role for seven years. He’s been kind of a lifer.

But outside of that, for the most part, the leadership team has completely changed over. Sanjay the first thing Ryan did on day one as CEO was named Sanjay Sharma, who was our Chief Technology Officer to take over private banking. And if you knew anything if you know anything about the company where private banking was on that date in 2022, private banking was really, really struggling. We were flat to negative margins. We had negative sales events.

All the questions from the analysts and investors were how are you going to get private banking back on its feet? And Sanjay did that. And we we can talk about maybe that in some of the Q and A. What he also did, really genius move, he found this new CFO to come in place and replace Dennis McGonigal, I’m joking. So I I came in about fifteen months ago, came took over CFO.

A few months ago also took over the Chief Operating Officer role. We had mentioned SEI’s slow move from active to passive in our asset management space, So we went into the market and found Michael Lane. Michael Lane’s here from and Michael’s background is BlackRock. And so when we talk about the move from SEI from active to passive, what did you run-in the wealth department? So iShares.

So Michael Michael spent a decade leading the iShares practice over at BlackRock. So you’ll see some of the changes. Sandy Ewing’s been here a long time. She took over our family office services business. We bought that for $80,000,000.

We sold it recently for $120,000,000, a really kind of stagnating business for the most part. Sandy really helped to turn that around. We brought in Sneha Shah. Sneha Sneha is kind of a visionary and and helps us see where where financial services are moving, not today, but from five to ten years from now. So she leads our new business ventures.

She helps us think about things around automation and AI and the like. So how are we doing? So here here are the numbers. So I I think the good news is we’ve done pretty well under Ryan’s leadership. Sales events are up a 25% over the last few years, margins are up 300 basis points, our earnings per share is up 55% and the share price is up 46%.

So things have gone fairly well under Ryan’s leadership. You know, in that twenty fifteen to twenty twenty timeframe, kind of stagnating, Ryan comes on. We’ve had we’ve made a lot of advancements. We’ve moved or what I think Ryan has done better than anything, we’ve now put a comma at the end of all of our sentences. So, you know, if there is anything going on in the organization we need to shift, we’re making those shifts, we’re making those bold moves.

He also has company really, really in front of the market right now. So, you know, even thinking about my move to COO, that wasn’t for me, that was for Ryan. So Ryan is in front of all of our clients, he’s in front of the market, he’s in front of our people, and I think that alone is kind of a testament. Know that’s hard to feel, but it really has been a mind check mindset shift. And we can talk about probably five or six things on the next slide of where we’re where our our attention is focused.

So these are the really the drivers of where we believe the company is going. Number one, the expansion of asset management and the focus there. So we’ve historically played in the smaller advisor the smaller advisor space there, the independent broker dealers. With Michael coming on board, dissimilar, not dissimilar what Sanjay has done over the last three years, I liken them very similarly. So when Sanjay took over the private banking, again, very kind of the hallmark in what SEI was built upon, What Sanjay did in those early days is he took a look at the overall business.

He took a look at the business, saw we were overspending, our retention rates were low, we had a very large kind of the largest of the large banks, and Sanjay looked at the total addressable market and said, I think we need to shift. And we’ve done that very, very successfully, but he ran the business. He ran the business differently, you’ve seen incredible margin improvement from really zero margins, we’re up to about 18%, and we see a path in private banks to get to historical 25%, thirty % margins again. Michael’s doing really the same thing. Michael’s been in the seat for the last nine months, ten months now, and he’s been taking an overall look at the business, and he’s actually moving his upmarket.

Where Sanjay decided to go downmarket into the community and regional bank space, Michael is moving his upmarket to the large RIA market, and there’s many other things. Michael here sitting in the front row, and we can have some Q and A with him if interested. Even in that asset management space, we recently had a really nice win, and some people have asked us why we made a press release on Summit Wealth. So Summit Wealth, we announced over the last month or so. Summit Wealth is a breakout RIA away from Commonwealth.

Commonwealth was recently acquired by LPL, but that win came prior to the LPL acquisition of Commonwealth, and there was a reason why we won that. So what we do really well, and actually we’re very unique in the marketplace, we play across the entire lifecycle of asset management. If you want to unpack that, I’m just being careful of time here, we can do that. So what we’re doing there, we’re expanding our products, our distribution, our talent. Michael is looking at very similar to what Ryan did.

What is the talent we need to continue to move that business forward? And then we’re capitalizing on the Alt’s momentum. So 70% of our business in our business is focused on alts, specifically in private credit. Whether we’re lucky or good, we’re at a really smart time right now. We’re really well positioned in the alt space.

If you know our business at all, the IMS business is what some analysts and investors would call the golden child right now of SEI. And the alts area for our IMS business really positions us well. And then on top of that, as we think about asset management and the move to retail alts, Michael is positioning the business there around asset management. So as we move into the larger RIAs, those larger RIAs have much more sophisticated investors and they’re demanding alts, and so we are playing a role there. Also in our Access platform.

So our Access platform competes with iCapital and Case. So when you think about the overall ecosystem of asset management, there’s really not a firm that looks like us. Number three, operational excellence. We’ve done a really great job of maintaining costs. And so as we’ve moved, which is kind of on number four there, the enterprise mindset, we have made a full 90 degree shift from a vertical strategy to a horizontal strategy.

That may be okay, a lot of companies do that, but it’s actually really changing the way we go to market and the way we think. But from an operational excellence, hard look, hard hard look at where we’re spending our money, how we think about cost management, wasn’t that discipline was not necessarily there. It was not there. So living inside verticals, really those leaders could almost do whatever they want, whenever they wanted, kind of under before Ryan took over, now much more disciplined around automation, how we’re thinking about automation, AI, and offshoring. Still really early stages there.

In a nine inning baseball game, we’re probably in the second or third inning when we think about AI automation. We just opened up an offshore facility in India. One of the most shocking things I think that I’ve experienced when I came to SEI was that we didn’t have an offshore presence. So, had consultants offshore, but we didn’t actually have our own employee base anywhere from a talent standpoint, from a cost or salary arbitrage. So, in April or in May, we opened up a shared services center in India.

So that’s on operational excellence. So enterprise mind shift, I had mentioned the shift from vertical to a horizontal strategy. So again, that sounds pretty basic, and not that vertical or horizontal is one is better than other, but where we are in our life cycle, the enterprise mindset shift has been incredibly impactful. In the mid mid, you know, in that 2015 to 2020 timeframe, living in the verticals, those were almost autonomous businesses. And if you think about how we play across the financial services spectrum, incredibly important that we’re working together.

So as an example, recently in December, we won a very large client in Europe. It’s called Trinity, but it was close brothers. Historically, we would have gone with an offering of selling our SWP or custody platform. That enterprise mind shift of how we bring asset management, professional services, cybersecurity was a true testament of a very large win, and that’s why we won. We brought the entire organization to bear.

We were not doing that. We were not doing that in those 2015 to 2022 timeframe. So that’s been a huge shift in the organizational philosophy. And then one that is really near and dear to my heart is capital allocation. So we have an unbelievably strong balance sheet.

We have no debt. I think historically SEI has worn no debt as a badge of honor. I think analysts and investors would say it’s probably not the best strategy. So we have a negative one leverage model today. I think analysts and investors would say, think you take on a little more risk than that.

And so, you know, you’ll see up there how we have historically kind of redeployed or provided capital back to our shareholders. So we provide a dividend. We do a significant amount of stock buyback, which we will continue to do. But as we think about, you know, inorganic growth, we’ve talked I’ve talked publicly, Ryan’s talked publicly about where we believe we should be from an inorganic growth standpoint. We’ve talked about potentially doing something on the advice side with an RIA here in The US.

We’ve also talked about how maybe we expand our IMS business in Europe through maybe an acquisition or something along those lines in Europe. So European fund admin, maybe somewhere in the RIA space here in The U. S. Is how we’re thinking about capital and capital deployment, but it’s not just here for shareholders, it’s actually how we’re deploying capital internally. So again, historically, I wouldn’t say we were super disciplined in the way we were even deploying our capital from an R and D standpoint, So we’ve put rigors in place, how we think about really every capital deployment and allocation is a focus on how do we maximize return to shareholders in that enterprise value.

So we have an EVA committee now where any new investment that comes through, we’re talking as a leadership team and really looking at what that return is. And that, for the most part, we have a few minutes left and wanted to keep a few minutes for Q and A. So I won’t say the hole well, I wouldn’t say we have holes to fill. What I would say is where the opportunities lie. And where Ryan and I are most excited is asset is actually asset management.

And you know having Michael come on board, that’s really where the opportunity lies for us. IMS is going to continue to grow at a very, very healthy rate. We’re again really well positioned with private credit in that alt space. We are, I would argue, we are number one in the world in that space. Private banking is back on track.

We have an incredibly robust pipeline in private banking, really in the community regional bank space. We have an opportunity there in asset management. But what really excites us when we turn on the third engine of asset management, that that is when we’re going to have something very, very special. So that’s where the opportunity lies, and that’s where bringing Michael Lane in from BlackRock, reimagining the asset management space, that’s the opportunity. I wouldn’t say we have holes, but we have opportunity there.

Yes. We are. We are open to, yes. I don’t think we’re going to fundamentally change the balance sheet, but having a negative one leverage but we’re going to do it. We’re not going to do it, you know, for leverage sake.

We’re not going to move from negative. But, you know, we’re not afraid of taking on debt where historically, again, we’ve kind of had that badge of honor with no debt. So we’re open to it. We’re not afraid of it. Yes?

In terms of say more? So, I mean, in the last two quarters, last two quarters I think in the last two quarters. I mean, we bought back $450,000,000 of stock just in the last two quarters, where I think historically maybe for the year we were around 300,000,000. I think that’s a really great use of capital of just kind of with with, you know, dollars 708 hundred million of cash sitting on the balance sheet earning four to 5%. We will continue to be very, very aggressive.

I can’t give you I’m not sure what that number would be. I get that question a lot. Will we stay with the same velocity of buyback over the last two quarters that we have? It’s really about cash management. So obviously, I’m looking at cash with my treasure on a monthly basis on future cash needs, inorganic growth strategy, you know, all of that just comes into mix.

But you you can expect us to continue to be aggressive with buyback.

Jeff Schmidt, Analyst, William Blair: All right. We’re coming up on time. So the the breakouts are in Ginny A, and thank you, Sean.

Sean Denham, CFO & COO, SEI Investments: Sure. Thank you. Thank you all. This presentation has now finished. Please check back shortly for the archive.

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