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Al West Growth Strategy Update
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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
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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.
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SEI: Mission
We deliver innovative, comprehensive platforms
to help clients achieve lasting success.
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What is a Platform?
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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.
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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
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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
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EXISTING PLATFORMS NEW PLATFORMS
NEW MARKETS
EXISTING MARKETS
Execute core businesses in existing markets with
existing platforms
SEI: Strategy Matrix
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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
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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)
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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)
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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)
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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)
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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)
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SEI: Strategy Matrix
EXISTING PLATFORMS NEW PLATFORMS
NEW MARKETS
EXISTING MARKETS
Expand business with existing clients by building
new platforms.
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SEI: Expand business with existing markets by building new platforms
Private Banks
Investment Advisors
Institutional Investors
Investment Managers
Ultra-high net-worth investors (INB segment)
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SEI: Expand business with existing markets by building new platforms
Private Banks
Investment Advisors
Institutional Investors
Investment Managers
Ultra-high net-worth investors (INB segment)
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SEI: Expand business with existing markets by building new platforms
Private Banks
Investment Advisors
Institutional Investors
Investment Managers
Ultra-high net-worth investors (INB segment)
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SEI: Expand business with existing markets by building new platforms
Private Banks
Investment Advisors
Institutional Investors
Investment Managers
Ultra-high net-worth investors (INB segment)
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SEI: Expand business with existing markets by building new platforms
Private Banks
Investment Advisors
Institutional Investors
Investment Managers
Ultra-high net-worth investors (INB segment)
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EXISTING PLATFORMS NEW PLATFORMS
NEW MARKETS
Enter or increase focus on adjacent financial markets with existing and new platforms.
EXISTING MARKETS
SEI: Strategy Matrix
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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
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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
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SEI: Plan Summary
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SEI: Apply advanced technologies
› Robotics
› Data analytics
› Blockchain
› Artificial intelligence
› Front-end technologies
› Infrastructure
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SEI: Investing in the future
We are committed to make capital investments to drive growth
Target 8-10 percent of revenues for platform development
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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
Institutional Investors
IWA’s
2017
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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%
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Joe Ujobai Private Banks: Investment Processing
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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
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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
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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
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SEI Wealth Platform: Simplifying self-inflicted infrastructure complexity
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Infrastructure Services
Back Office Services
Information Management Services
Front Office Services S
Investment Management Middle Office Services
SWP: Integrated enterprise platform
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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
SWP Live Clients: 30 Accounts: 228,534
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
SWP Live Clients: 26 Accounts: 349,805
2017 Evidence
Front office innovation
SWP Live Clients: 34 Accounts: 483,198
Future Milestones Growth and Scale
TRUST 3000 conversions
Global implementation
Backlog: $30 M SWP Clients: 41 Accounts: 723,000
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EXISTING PLATFORMS NEW PLATFORMS
NEW MARKETS
EXISTING MARKETS
Execute core business in
existing markets with SWP
Private Banking: Strategic focus
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EXISTING PLATFORMS NEW PLATFORMS
NEW MARKETS
EXISTING MARKETS
› New names › Trust 3000 conversions › New books of business
Private Banking: Strategic focus
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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
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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
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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
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EXISTING PLATFORMS NEW PLATFORMS
EXPANDED MARKETS
SWP growth through expanding markets
EXISTING MARKETS
SWP: Expanded opportunity Aligned to our current business
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EXISTING PLATFORMS NEW PLATFORMS
PROVEN OPPORTUNITY
IN EXPANDED MARKETS
› Other wealth managers › Global banks › Any advisory or fee-
based assets › Complex global portfolios
EXISTING MARKETS
SWP: Expanded opportunity
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› 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
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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
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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
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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
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Kevin Barr Private Banks: Asset Management Distribution (AMD)
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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
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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
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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
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AMD – The Opportunity
The opportunity set is $52 trillion!
Americas: $18 trillion* UK & Europe: $15 trillion*
Asia: $19 trillion*
*Capgemini Financial Services Analysis , 2017
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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
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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
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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
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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
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
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Type of Firm Location(s) Reach / Client Base Branding SEI Platforms Consumed
Broker Dealer U.S. Regional Mass Affluent, HNW
Private Label • Asset Management • Custom, lower cost strategies • Manager research
Type of Firm Location(s) Reach / Client Base Branding SEI Platforms Consumed
Network France National Mass Affluent
White Label • Asset Management – standard strategies • Goals-based Investing • GoalPortal® - Goals-based technology
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
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Type of Firm Location(s) Reach / Client Base Branding SEI Platforms Consumed
Broker Dealer U.S. Regional Mass Affluent, HNW
Private Label • Asset Management • Custom, lower cost strategies • Manager research
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
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Type of Firm Location(s) Reach / Client Base Branding SEI Platforms Consumed
Broker Dealer U.S. Regional Mass Affluent, HNW
Private Label • Asset Management • Custom, lower cost strategies • Manager research
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
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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
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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.
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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
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Wayne Withrow Investment Advisors
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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
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EXISTING PLATFORMS NEW PLATFORMS
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
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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
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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
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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
– Integrated end client digital experience
SAMPLE SAMPLE SAMPLE
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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
– Integrated end client digital experience
› The new approach includes data analytics tools
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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
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Headwinds and tailwinds
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
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)
74
Headwinds and tailwinds
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
› Rise in popularity of passive investing (competition)
Headwinds › Price pressure on investment products (fee compression)
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Leverage our Manager Research Platform
Introduced 2014: $4.2 billion in assets
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Headwinds and tailwinds 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
› Rise in popularity of passive investing (competition) › Price pressure on investment products (fee compression)
Headwinds
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Programs designed for aging Baby Boomers with the need for retirement income
20bp portfolio structure fee, $1.7 billion
Leverage our portfolio structure expertise
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Enter independent advisor market with new platforms
CRM
Financial Planning
Proposals
Client Reporting
Firm Reporting
Portfolio Management
Tax Management
Aggregation
Rebalancing
Custody
Advisor Business Platform
Practice Management
Asset Management
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CRM
Financial Planning
Proposals
Client Reporting
Firm Reporting
Portfolio Management
Tax Management
Aggregation
Rebalancing
Custody
Traditional TAMP model
Traditionally TAMP platforms have been focused on back office custody functions.
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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
Portfolio Management
Tax Management
Aggregation
Rebalancing
Custody
Independent advisor front office
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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
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A True Integrated Solution › SEI Wealth Platform
Portfolio Management
Client Reporting
Rebalancing
Aggregation
Proposals
Firm Reporting
Custody
Tax Management
Financial Planning CRM
Single Point of Accountability
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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
Portfolio Management
Tax Management
Aggregation
Rebalancing
Custody
Independent advisor front office
CRM
Financial Planning
Proposals
Client Reporting
Firm Reporting
Portfolio Management
Tax Management
Aggregation
Rebalancing
Custody
SEI has created a business process that fully leverages technology.
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Practice Management – Advice with Execution
Advisor Business Platform
Practice Management
Asset Management
85
Practice Management – Infrastructure Support
Advisor Business Platform
Practice Management
Asset Management
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Asset Management – Investment Support
Advisor Business Platform
Practice Management
Asset Management
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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
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Paul Klauder Institutional Investors
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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:
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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).
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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
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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
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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
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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%
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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)
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EXISTING PLATFORMS NEW PLATFORMS
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
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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
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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.
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Future Growth Opportunities › Frontier international markets for expansion
– Examples: Japan, Germany, Sweden, Norway and India
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› 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
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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
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Steve Meyer Investment Managers
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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
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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
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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%
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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
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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
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› 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
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› 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!
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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
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Closing Summary
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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.
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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.
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Thank you