Al West. Growth Strategy Update. seic.com 2

Transcription

1 seic.com 1

2 Al West Growth Strategy Update seic.com 2

3 Agenda SEI s Growth Strategy Al West Private Banks: Investment Processing Joe Ujobai Private Banks: Asset Management Kevin Barr Investment Advisors Wayne Withrow Institutional Investors Paul Klauder Investment Managers Steve Meyer Summary Al West 3

4 SEI: Focus on long range sustainable growth Grow by adhering to SEI s mission, values and proven business model. Overcome headwind trends and take advantage of tailwinds. Execute core businesses in existing markets with existing platforms. Expand business with existing clients by building new platforms. Enter or increase focus on adjacent financial markets with existing and new platforms. Apply advanced technologies. 4

5 SEI: Mission We deliver innovative, comprehensive platforms to help clients achieve lasting success. 5

6 What is a Platform? 6

7 SEI: Values We help our clients succeed. Their needs come before our own and drive our business. We value collaboration and treat each other with respect. We behave with integrity; we do what we say, and are transparent in all our dealings. We embrace diversity in our thinking and in our workforce. Diversity is key to our commitment to creativity and innovation. SEI is our company. We think and act as owners. We are committed to the growth and betterment of our people, partners as well as community. We are committed to providing shareholders with sustainable earnings growth. We have fun. 7

8 SEI: Grow using proven business model Grow Organically Focus on emerging client needs Deliver enterprise platforms Selective acquisitions to create organic growth Engage Clients Forge intimate client relationships Be a thought-leader Win-win pricing models Enhance Financial Strength Innovate Focus on sustainable growth in earnings-per-share Generate recurring revenue & predictable cash flows Maintain strong balance sheet Grow dividends and stock buy-backs 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 8

9 SEI: Headwinds and tailwinds 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 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 9

10 SEI: Strategy Matrix EXISTING PLATFORMS NEW PLATFORMS NEW MARKETS EXISTING MARKETS Execute core businesses in existing markets with existing platforms 10

11 SEI: Existing markets Private Banks Global banks & other wealth managers U.S. banks & other wealth managers U.K. banks & other wealth managers U.K. PCIMs Investment Advisors Affiliated RIAs Broker-dealers 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 Institutional Investors North American DB corporate sponsors U.K. DB corporate sponsors Hospitals Taft-Hartley plan sponsors Public funds 11

12 SEI: Execute core businesses in existing markets with existing platforms Private Banks Investment Advisors Institutional Investors Investment Managers Ultra-high net-worth investors (INB segment) 12

13 SEI: Execute core businesses in existing markets with existing platforms Private Banks Investment Advisors Institutional Investors Investment Managers Ultra-high net-worth investors (INB segment) 13

14 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) 14

15 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) 15

16 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) 16

17 SEI: Strategy Matrix EXISTING PLATFORMS NEW PLATFORMS NEW MARKETS EXISTING MARKETS Expand business with existing clients by building new platforms. 17

18 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) 18

19 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) 19

20 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) 20

21 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) 21

22 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) 22

23 SEI: Strategy Matrix EXISTING PLATFORMS NEW PLATFORMS NEW MARKETS Enter or increase focus on adjacent financial markets with existing and new platforms. EXISTING MARKETS 23

24 SEI: Enter or increase focus on adjacent financial markets with existing and new platforms NEW MARKETS Independent RIAs DC plan sponsors Foundations & endowments Large global wealth managers Family offices 24

25 SEI: Enter or increase focus on adjacent financial markets with existing and new platforms NEW MARKETS EXISTING PLATFORMS NEW PLATFORMS Independent RIAs DC fund sponsors Foundations and endowments Large global wealth managers Family Offices 25

26 SEI: Plan Summary 26

27 SEI: Apply advanced technologies Robotics Data analytics Blockchain Artificial intelligence Front-end technologies Infrastructure 27

28 SEI: Investing in the future We are committed to make capital investments to drive growth Target 8-10 percent of revenues for platform development 28

29 SEI: a history of innovation and market expansion Innovations Trust System Invest idle cash balances Asset allocation Manager of Managers Fee-based advisor Platform Back-office processing Globalization Goals-based investing OCIO & fiduciary management Total operations outsourcing Platforms Investment Processing Asset Management Investment Management SEI Wealth Platform Markets Banks Investment Managers Advisors IWA s Institutional Investors Regions United States Canada Ireland U.K. EMEA, Asia

30 SEI s business model and strategy have benefited long-term investors SEI s gross growth in stock price since going public in ,063% NASDAQ Composite growth in index over the same period of 1981 to ,166% S&P 500 gross growth in index over the same period of 1981 to ,823% Source: Google Finance as of November 14,

31 Joe Ujobai Private Banks: Investment Processing seic.com 31

32 SEI Banking: Focus on global growth Industry trends are in our favor The SEI Wealth Platform is an unparalleled solution in a growing market We ve made great progress in the U.S. and U.K. We expect increased adoption of SWP from TRUST 3000 clients Sales and contracting activity is increasing We are focused on revenue growth and profit improvement 32

33 Banking: Trends that drive our strategy Largely favorable 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 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 33

34 SEI Wealth Platform: Unparalleled commitment to the wealth management industry VISION ASSETS INVESTMENT JOURNEY End-to-end wealth processing platform designed to: Manage evolving needs Operate seamlessly in global markets Drive efficiency and growth Reduce enterprise risk State-of-the-art enterprise offering: Fully integrated application Server based infrastructure Experienced global operations Expert workforce Industry-leading clients Deliberate and patient commitment to build a solution for the long term: Integrated workflow Open architecture Single database Secure and redundant infrastructure Continuous innovation 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 34

35 SEI Wealth Platform: Simplifying self-inflicted infrastructure complexity 35

36 SWP: Integrated enterprise platform S Front Office Services Investment Management Middle Office Services Information Management Services Back Office Services Infrastructure Services 36

37 Our Journey: Building market momentum Core U.K. launch Expansion U.S. step-in launch U.K. based operational infrastructure Scalability U.S. segment leaders (Wells Fargo, Regions Bank) signed Building advanced capabilities U.K. client consolidation Automating service excellence 2017 Evidence Front office innovation 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 Stabilize and scale SWP Live Clients: 26 Accounts: 349,805 SWP Live Clients: 20 Accounts: 133,394 SWP Live Clients: 30 Accounts: 228,534 37

38 Private Banking: Strategic focus EXISTING PLATFORMS NEW PLATFORMS NEW MARKETS EXISTING MARKETS Execute core business in existing markets with SWP 38

39 Private Banking: Strategic focus EXISTING PLATFORMS NEW PLATFORMS NEW MARKETS EXISTING MARKETS New names Trust 3000 conversions New books of business 39

40 Strong and growing UK client base: Focus segment examples National IFA PCIM Global Bank Client since: 08/09 National independent financial advisor Growing organically and through acquisition Converting books to SWP Commitment to SWP for all new assets 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 Client since: 07/07 Leading global private bank First adopter of SWP Early adopter of new services Growth through additional books of business 40

41 Strong and growing US client base: Focus segment examples Trust 3000 BSP New Name BPaaS Trust 3000 ASP Client since: 1991 Adopted BSP in 2015 Expanding footprint Now owned by RBC Converting to SWP in 2018 Additional book of business Client since: 10/17 Enterprise platform Front-to-back solution New integrated front office Large scale outsourcing >30,000 accounts 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 41

42 Solid Trust 3000 foundation: Accelerate conversion of clients to SWP 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 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 42

43 SWP: Expanded opportunity Aligned to our current business EXISTING PLATFORMS NEW PLATFORMS EXPANDED MARKETS SWP growth through expanding markets EXISTING MARKETS 43

44 SWP: Expanded opportunity EXISTING PLATFORMS NEW PLATFORMS PROVEN OPPORTUNITY IN EXPANDED MARKETS Other wealth managers Global banks Any advisory or feebased assets Complex global portfolios EXISTING MARKETS 44

45 Sales and contracting trends 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 Contracting process remains long and complex Perceived cost and risk of change is high Some banks are still distracted by environmental issues 45

46 Market momentum is strong: Sales and contracting activity is increasing NEW CLIENTS United States 50% of our active agendas Larger regional/community banks Other wealth managers New books of business Early discussions with large firms using proprietary platforms United Kingdom 75% of our active agendas Trending to larger firms Largely PCIMs, IFAs and some bank activity EXISTING CLIENTS 50% of our active agendas Additional 25%+ of the T3K Large regional banks Larger community banks Early discussions with large ASP clients 25% of our active agendas Support organic growth Support growth by acquisition Secure additional books Cross sell new solutions Geographic expansion 46

47 Growing SWP conversion capacity Modeling exponential growth in conversion capacity Continued investment in tools and automation Re-aligning some of the workforce Reducing dependencies on weekend/month end conversions Leveraging and certifying external resources 47

48 Driving revenue growth and profit improvement: Execute the strategy Execute current growth 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 Drive scale and efficiency Finish core development Install the growing backlog to drive critical mass Focus on automation across the client experience Continue to manage expense Leverage SEI innovation 48

49 Kevin Barr Private Banks: Asset Management Distribution (AMD) seic.com 49

50 Asset Management Distribution (AMD) Strategic partnerships with leading regional, national and global wealth managers 7 In seventh year of delivering custom asset management solutions 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 $1b More than $1 billion in net sales year-to-date $97.3m Greater than $97 million in revenue year-to-date Underlying SEI investment products are primarily actively managed with competitive pricing and performance 320+ More than 320 existing partnerships 50

51 AMD Today United Kingdom & Europe Total Assets: $5.9 billion Market Strategy: Continue to expand relationships with IFAs and platforms Target large banks and distributors North America 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 Asia Total Assets: $3.4 billion Market Strategy: Leverage current relationship Target large banks and distributors in select countries *Capgemini Financial Services Analysis,

52 AMD The Opportunity The opportunity set is $52 trillion! Americas: $18 trillion* UK & Europe: $15 trillion* Asia: $19 trillion* *Capgemini Financial Services Analysis,

53 Headwinds and tailwinds Headwinds Increasing fee sensitivity Regulatory pressure Active vs. passive Shortening investor time horizons Crowded, commoditized industry Tailwinds Tightening monetary policy Market volatility Greater fiduciary responsibility Product rationalization Move to advice from product 53

54 AMD: Targeting an industry in transition Industry Response Product proliferation Lower fees Chasing performance Client Needs Advice Value for fees Asset allocation Goal attainment Diversification SEI s Response Goals based tools and technology Pricing flexibility Partner funds Custom asset allocation advice Manager research 54

55 AMD: Leveraging SEI s capabilities Manager Research Custom Asset Allocation Advice Partner Funds Individual Funds & Turnkey Strategies Separately Managed Accounts Goals Based Tools & Technology Bank & Wealth Management Technology Independent Advisor Technology Wealth Management Operations Outsourcing Investment Philosophy & Process Discretionary Asset Management Practice Management Fund Administration Regulatory Services Investment Manager Technology 55

56 AMD: Leveraging SEI s capabilities Manager Research Custom Asset Allocation Advice Partner Funds Individual Funds & Turnkey Strategies Separately Managed Accounts Goals Based Tools & Technology Bank & Wealth Management Technology Independent Advisor Technology Wealth Management Operations Outsourcing Investment Philosophy & Process Discretionary Asset Management Practice Management Fund Administration Regulatory Services Investment Manager Technology 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 56

57 AMD: Leveraging SEI s capabilities Manager Research Custom Asset Allocation Advice Partner Funds Individual Funds & Turnkey Strategies Separately Managed Accounts Goals Based Tools & Technology Bank & Wealth Management Technology Independent Advisor Technology Wealth Management Operations Outsourcing Investment Philosophy & Process Discretionary Asset Management Practice Management Fund Administration Regulatory Services Investment Manager Technology Type of Firm Location(s) Reach / Client Base Branding SEI Platforms Consumed Broker Network Dealer France U.S. Regional National Mass Mass Affluent, HNW Private White Label Asset Management standard strategies Goals-based Custom, Investing lower cost strategies GoalPortal Manager - Goals-based research technology 57

58 AMD: Leveraging SEI s capabilities Manager Research Custom Asset Allocation Advice Partner Funds Individual Funds & Turnkey Strategies Separately Managed Accounts Goals Based Tools & Technology Bank & Wealth Management Technology Independent Advisor Technology Wealth Management Operations Outsourcing Investment Philosophy & Process Discretionary Asset Management Practice Management Fund Administration Regulatory Services Investment Manager Technology 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 58

59 AMD: Leveraging SEI s capabilities Manager Research Custom Asset Allocation Advice Partner Funds Individual Funds & Turnkey Strategies Separately Managed Accounts Goals Based Tools & Technology Bank & Wealth Management Technology Independent Advisor Technology Wealth Management Operations Outsourcing Investment Philosophy & Process Discretionary Asset Management Practice Management Fund Administration Regulatory Services Investment Manager Technology 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 59

60 New Platform - Manager Research 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 Manager Research Manager Selection 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 Manager Engagement Manager Oversight Continuous Multi-Level Monitoring! Independent Risk Management, Operational Due Diligence, and Investment Due Diligence Teams! Proprietary risk analytics systems! Daily holdings transparency! Trade oversight 60

61 AMD: Innovation-led evolution & growth 2015 Today AUM: $7.9B SEI Branded Investment Solutions Private/White-Labeled Investment Solutions U.K. Goals-based Strategies AUM: $10.9B Formation of global sales teams SEI GoalPortal Partner branded funds VIT funds (Insurance cos) Canada Goals-based Strategies AUM: $15.8B Expansion into Asia/Europe DOL Strategies Manager research Europe Goals-based Strategies AUM: $18.2B Continue to evolve our customized investment solutions, further enabling our partners to deliver advice to their clients. 61

62 AMD: The future Grow Current Relationships 20+ strategic partners Help partners adapt and transform their business $18.2 billion AUM Establish New Relationships Expand Solution Offering Banks, wealth managers, broker-dealers Cross-sell SEI investment management clients Strong brands with an advice model Selective looking for preferred placement Manager research Goals-based to Europe Factor-based Technology to support the advice process Extend Geographic Reach Existing US, Canada, UK, Hong Kong New France, Germany, Singapore, South Korea Adapt to Industry in Transition Regulatory MiFID II, PRIIPs, CRM2, DOL Product rationalization 62

63 Wayne Withrow Investment Advisors seic.com 63

64 Investment Advisors: Overview $ 7,477 advisors $61.8 billion in Assets Under Management 432,000 end client accounts Leading Turnkey Asset Management Program (TAMP) provider 64

65 Addressable market TAMP FLEXIBLE TAMP DIY Broker Dealer 62,790 Hybrid 11,208 RIA 33,453 Hybrid 3,378 RIA 7, ,451 11,009 65

66 Investment Advisors: Strategy Matrix 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 66

67 Current business solution Asset Management Portfolio Structure Investment Product Construction Tax Management Sales & Marketing Business Efficiency Client Management Business Ownership Succession Practice Management Advisor Business Platform Proposal Generation Client Management Model Management & Trading Reporting Custody Innovation Opportunities Exist in All TAMP Component Parts 67

68 Execute core businesses in existing markets with new platforms The Wealth Platform is helping to redefine a Turnkey Asset Management Program (TAMP): Traditionally TAMP platforms have been focused on back office, investments and custody functions The new approach incorporates flexible investments and begins in the front office with robust integration to the back office & custody functions Straight through processing from Advisor Desktop Experience including: Model Management Account Open 68

69 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 SAMPLE SAMPLE SAMPLE Account Open Integrated end client digital experience 69

70 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 70

71 Migration status Accounts 65, , ,000 60,000 Assets $8.7B $19.2B $22.0B $6.0B Firms Trust 3000 Accounts SEI Wealth Platform Accounts Total 292,804 12, , ,823 26, , ,000 73, , , , ,000 60, , ,000 All Remaining Advisors 71

72 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) 72

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) 73

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) 74

75 Leverage our Manager Research Platform Introduced 2014: $4.2 billion in assets 75

76 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 76

77 Leverage our portfolio structure expertise Programs designed for aging Baby Boomers with the need for retirement income 20bp portfolio structure fee, $1.7 billion 77

78 Enter independent advisor market with new platforms Asset Management Rebalancing CRM Aggregation Financial Planning Tax Management Custody Proposals Practice Management Advisor Business Platform Portfolio Client Reporting Management Firm Reporting 78

79 Traditional TAMP model Traditionally TAMP platforms have been focused on back office custody functions. Rebalancing CRM Aggregation Financial Planning Tax Management Custody Proposals Portfolio Management Firm Reporting Client Reporting 79

80 Independent advisor front office Aggregation Rebalancing CRM Financial Planning If connected, front office interfaces are limited, data centric, and mostly left to the advisor to manage. Tax Management Custody Proposals Portfolio Management Firm Reporting Client Reporting 80

81 A True Integrated Solution SEI Wealth Platform CRM Sales Force CRM Junxure Aggregation By-All-Accounts Custodian 2 Fidelity Custodian 3 TD Ameritrade Rebalancing irebal CRM Redtail Custodian 1 Schwab Analytics/Research Callan Financial Planning MoneyGuide Pro Analytics/Research Morningstar Financial Planning NaviPlan Rebalancing Tamarac Advanced Reporting Black Diamond Advanced Portfolio Management Envestnet Advanced Portfolio Management Advent Reporting / Portfolio Management PortfolioCenter Rebalancing RedBlack Advanced Reporting emoney Advisor Advanced Portfolio Management Adhesion Document Management DocuXplorer Document Management Laserfiche 81

82 A True Integrated Solution SEI Wealth Platform Financial Planning CRM Proposals Portfolio Management Tax Management Rebalancing Custody Aggregation Client Reporting Firm Reporting Single Point of Accountability 82

83 Independent advisor front office SEI has created a business process that fully leverages technology. Aggregation Rebalancing CRM Financial Planning Independent Advisor Front Office allows SEI clients to utilize industry leading third party tools in a fully integrated ecosystem. Tax Management Custody Proposals Portfolio Management Firm Reporting Client Reporting 83

84 Practice Management Advice with Execution Asset Management Practice Management Advisor Business Platform 84

85 Practice Management Infrastructure Support Asset Management Practice Management Advisor Business Platform 85

86 Asset Management Investment Support Asset Management Practice Management Advisor Business Platform 86

87 Advisor growth summary SEI Wealth Platform redefines our TAMP platform to a complete business platform SEI Wealth Platform migration is well under way Innovative investment implementations allow us to address passive and fee compression Comprehensive technology infrastructure connected through workflows fills a need in the truly independent RIA market Combination of multiple new SEI platforms creates a unique solution 87

88 Paul Klauder Institutional Investors seic.com 88

89 Institutional Investors Segment Markets We Serve We offer solutions to seven markets: U.S. UK Canada Hong Kong / South Korea South Africa Netherlands Middle East Serving various types of asset pools: Corporations DB & DC Unions DB & DC Governments DB Hospitals All Asset Pools Foundations & Endowments Offering three solutions centered around: Retirement Assets Endowed Assets Operating Assets 89

90 Global Footprint: $93.2 b AUM & 480 Institutional OCIO / Fiduciary Management (FM) Accounts 1 United Kingdom $10 billion The Netherlands Canada $3 billion $4 billion Ireland Finland $0 $0 Developed OCIO / FM Markets Emerging OCIO / FM Markets United States $75 billion Far East $225 million Middle East $65 million South Africa $1 billion 1 As of September 30, 2017 (all numbers expressed in USD). 90

91 Growth in OCIO / FM $2.7 TRILLION (PROJECTED) Top Drivers for Outsourcing 58% Lack of internal resources 58% Need to improve a governance process OCIO assets more than DOUBLED since 2011 $600 BILLION $1.4 TRILLION 31% 28% 28% Desire to enhance riskadjusted investment portfolio returns Seeking stronger advisory relationship Seeking operational and administrative support Source: Cerulli Associates. The Cerulli Edge U.S. Institutional Edition // 4Q 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 Q according to The Cerulli Report U.S. Outsourced CIO Function, November

92 Institutional Investor Market Size Type Count Assets Growth / Decline U.S. Corporate Defined Benefit 3,000+ $4 trillion Decline U.S. Defined Contribution I/O 6,000+ $6 trillion Growth Mega Investors 1,000+ $10 trillion Growth U.S. Healthcare 400+ $600 billion Merging U.S. Union / Industry Plans 500+ $800 billion Neutral U.S. Endowments & Foundations 8,000+ $3 trillion Growth Government 2,000+ $5 trillion Neutral Insurance Market 600+ $4 trillion Growth Global Markets 2,000+ $8 trillion Growth Total ~23,500 ~$41.4 trillion 92

93 End-to-end OCIO Solution (example: US endowments & foundations) Strategic Advice - Asset allocation & investment policy development - Spending studies - Liquidity analysis - Capital markets review - Fiduciary management options - Market & industry research - Committee education & training Investment Management - Manager research & selection - Manager oversight & replacement - Proactive portfolio engineering - Dynamic asset management - Public & private markets - Exclusive fiduciary - Socially responsible investing - Transition management - Integration & oversight for existing assets Risk Management - Market risk management - Alpha risk management - Organization risk management - Stress testing: - Manager level - Strategy level Committee Education - Quarterly client presentations - Institutional Account Access Website - Thought leadership - Market updates - Conferences and seminars - Fiduciary training Custody & Administrative Services - Custodial & trust services - Integrated accounting & performance reporting - Audit assistance - Rebalancing services - Secure web access 93

94 Example portfolio for a $500m endowment Growth Strategies SEI US Equity (10 Managers) 20.0% International Developed (5 Managers) 18.0% Emerging Market Equities (5 Managers) 4.0% High Yield Bonds (4 Managers) 3.0% Long-Biased Hedge Funds (10 Managers) 8.0% Private Equity (12-15 Investments) 17.0% Total Growth Strategies 70.0% Inflation Protection SEI Liquid Real Assets (2 Managers) 5.0% Private Real Estate (5 Managers) 4.0% Total Inflation Protection 9.0% Risk Reduction Strategies SEI Core Fixed Income (4 Managers) 16.0% Non-Directional Hedge Funds (12 Managers) 5.0% Total Risk Reduction 21.0% Total 100.0% 94

95 Proprietary Modeling Technology (example US endowments & foundations) 1 Compare a portfolio change to your current portfolio or compare two new portfolios 2 See the impact of different spending policies 3 View projected value and spending levels based on CMAS or historical returns Charts for illustrative purposes only. 95

96 Strategy Matrix for Institutional Investors segment EXISTING PLATFORMS NEW PLATFORMS NEW MARKETS DC Plan sponsors Foundations and Endowments EXISTING MARKETS Institutional Investors North American DB corporate sponsors U.K. DB corporate sponsors U.S. Hospitals Taft-Hartley plan sponsors Public funds OCIO Platform Asset Management Investment Manager / OCIO / Manager Research Combined Platform 96

97 Headwinds and tailwinds: North American Markets Headwinds Corporate & healthcare mergers and acquisitions DB plan curtailments / annuitization Increased OCIO competition Fee compression Investor complacency due to strong market returns 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) 97

98 Headwinds and tailwinds: EMEA & Asia Markets 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. 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 98

99 Future Growth Opportunities Frontier international markets for expansion Examples: Japan, Germany, Sweden, Norway and India 99

100 Future Growth Opportunities 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) 100

101 Institutional Investors: Strategic Priorities Execute on current opportunity into North American markets 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 EMEA & Asia 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 Innovate investment products and offerings Continue to build out suite and breadth of alternative investments Factor based investing Smart beta Grow into Frontier markets; Launch integrated platform offering Finalize strategic review of frontier markets / begin execution Begin offering combination of integrated platform including Investment Manager, OCIO partial and Manager Research 101

102 Steve Meyer Investment Managers seic.com 102

103 Investment Managers: Snapshot We provide a comprehensive Front-to-Back Office operating platform to investment managers covering their business and investment vehicles/products such as: 3 Over three decades as an infrastructure and service provider Hedge Funds and Funds of Hedge Funds Private Equity Funds and Funds of PE Funds Private Debt Real Estate / Infrastructure Mutual Funds / UCITS $845b Nearly $850 billion in Assets Under Administration 100,000 Accounts serviced Collective Investment Trusts (CITs) Exchange Traded Funds (ETFs) Separately managed accounts 5 8 Operations centers in Oaks, NYC, Indianapolis, Denver, Dublin, Ireland Global domiciles across 8 nations 103

104 Investment Managers: Our Platform Technology & data driven front end Best-of-breed technologies Enterprise data management SEI Trade Automates private fund transactions Insight Investor data transparency Alternative Portfolio Accounting Traditional Portfolio Accounting Pricing Investor Dashboard Investor reporting Manager Dashboard Internal reporting Data Management & Governance Open-end Fund Accounting Security Descriptive Data End Client Reporting Investor statements Closed-end Fund Accounting Corporate Actions Global Regulatory, Risk & Compliance Fulfills global requirements Retail Wrap Accounting Index Data Fund Operations Fund accounting & administration Investor servicing Share Class Equalization Middle Office Investment operations WORKFLOW & DOC MANAGEMENT 104

105 Investment Managers: Evolution driven by innovation Total AuA over $800 bn 1990 Started providing proprietary fund administration and distribution services to third party mutual funds 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% 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% Fund Accounting Fund Administration Full Back Office Middle Office Outsourcing Total Operational Outsourcing Platform Provider Traditional Offshore Alternative Multi-Asset Hybrid 105

106 Investment Managers: Current evolution 2017 NEW MARKETS: Archway Technology Partners Founded in 2002 Archway is a technology firm whose software solution supports the accounting, investment management and reporting functions for family offices and service providers to the family office market. Archway s primary objective is to help single and multi-family offices and those who service them with a single, integrated technology offering clients $230+ bn assets on the platform Global clientele Headquarters in Indianapolis, Indiana 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 Regional offices in New York and Denver 125 employees Leading provider to the single and multi-family office market 106

107 Investment Managers: Addressable market / opportunity Type # of Funds # of Firms Assets Opportunity Hedge Funds ~14,000 ~5,000 $3.2 trillion High Funds of Hedge Funds ~1,500 ~675 $0.6 trillion Neutral Private Equity & Debt ~6,000 ~5,850 $3.3 trillion High Real Estate / Infrastructure ~2,000 ~1,850 $1.2 trillion High UCITS ~31,000 ~4, trillion Moderate Alt Inv Funds ( AIFs - EU) ~28,000 ~5, 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 107

108 Investment Managers: Market headwinds and tailwinds Headwinds 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 Tailwinds 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 108

109 Investment Managers: Market headwinds and tailwinds Headwinds Rise in passive investing causing increase in competition and fewer traditional active manager launches Increase in fintech and non-financial service industry competitors OPPORTUNITY! Explosive growth in investment manager businesses particularly alternatives, customized portfolios and hybrid products Tailwinds Active manager underperformance Significant fee pressure causing managers margin erosion; move to more manager / investor alignment 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 109

110 Investment Managers: Strategic growth focus Execute current growth Alternative Market: Private Equity, Hedge, Real Estate Traditional Market: ETFs, CITs, Mutual Funds Global Managers Middle Office Family Office Drive scale & efficiency Process efficiency and optimization Automation Enhanced processing technologies: blockchain, robotics, etc. Front office expansion Platform, data & analytics Regulatory & compliance Focus on end investor experience Ecosystem for end client Investor platform Prospecting through execution and reporting Data management Investor data and forecasting Predictive analytics and attribution API platform, SaaS, PaaS Hosted infrastructure Expand components and bundles Comprehensive Platform for regulatory and compliance Firm wide compliance Regulatory data management and analytics 110

111 Closing Summary seic.com 111

112 SEI: Focus on Growth Grow by adhering to SEI s vision, values and proven business model. Overcome headwind trends and take advantage of tailwind trends. Execute core businesses in existing markets with existing platforms. Expand business with existing clients by building new platforms. Enter or increase focus on adjacent financial markets with existing and new platforms. Apply advanced technologies. 112

113 Forward Looking Statements This presentation may include "forward-looking statements," and discussions about future operations, strategies and financial results. Future revenues and income could differ from expected results. We have no obligation to publicly update or correct any statements herein as a result of future developments. You should refer to our periodic SEC filings for a description of various risks and uncertainties that could affect our future financial results. 113

114 Thank you seic.com 114