SEI INVESTMENTS CO

SEI Investments Company is a leading global provider of financial technology, operations, and asset management solutions that connect the financial services ecosystem across advice, asset management, and administration. The company serves leading institutions globally, including 8 of the top 20 U.S. banks and 43 of the top 100 investment managers worldwide, and manages, advises or administers approximately $1.9 trillion in assets. The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation, and is being reshaped by consolidation and technological disruption, including changes in technology development and the delivery of services related to automation, artificial intelligence and machine learning.

SEI differentiates through an integrated ecosystem across advice, asset management, and administration, operating a unified platform that combines technology, custody, operations, and investment management. The company is a recognized leader in private credit and alternative investment administration, serving many of the world's largest alternative managers. SEI's trust-based custody model, integrated with the SEI Wealth Platform, provides an end-to-end, single-infrastructure experience. Primary competitors named include SS&C Technologies, State Street, BNY Mellon, Northern Trust, and Citco for Investment Managers; Fidelity National Information Services (FIS), Fi-Tek, SS&C Innovest, FNZ UK Ltd., and Avaloq for Private Banks; Envestnet, Orion, Charles Schwab & Co., Inc., and Fidelity Investments for Investment Advisors; and Mercer, Aon Hewitt, Willis Towers Watson, BlackRock, and Goldman Sachs for Institutional Investors.

SEI generates revenue through a mix of technology and operations outsourcing, asset management fees, and professional services and other ancillary services. In 2025, approximately 57% of revenue came from technology and operations outsourcing and 38% from asset management fees, with the remainder attributable to professional services and other ancillary services. The company delivers modular or end-to-end solutions through a single, modern infrastructure that integrates platform technology, custody, operations, and investment expertise. Revenue is earned primarily as a percentage of assets under management and administration, with contracts typically ranging from three to seven years depending on the segment.

The Investment Managers segment provides a comprehensive, outsourced investment management operating platform to alternative and traditional asset managers, fund companies, and sovereign wealth funds. Capabilities span the front, middle, and back office, including fund administration, depositary services, investment accounting, investor servicing, and middle-office services. This segment had $1.5 trillion in assets under management or administration as of December 31, 2025, with $1.0 trillion in alternative assets and $0.5 trillion in public assets. Contracts generally have terms ranging from three to five years, and 16% of the revenues for this segment is earned as account servicing fees. The Private Banks segment provides technology, operations, and asset management solutions primarily to wealth management businesses embedded within banks and trust companies. As of December 31, 2025, SEI has approximately $8.1 trillion in assets on SEI's wealth management platforms, with $1.9 trillion in assets on the SEI Wealth Platform and $1.2 trillion in assets custodied with SEI Private Trust Company. Contracts generally range from five to seven years. The Investment Advisors segment provides wealth management technology, operations, and asset management solutions for independent financial advisors across the RIA, bank, and independent broker-dealer market segments. Fees are typically bundled and embedded in asset management or custody fees. The Institutional Investors segment is one of the first and largest providers of outsourced investment management services, primarily serving retirement plan sponsors, healthcare systems, higher education, not-for-profit organizations, and other institutional asset owners. Fees are primarily earned as a percentage of average assets under management calculated using the average of the four-month ending balances preceding the billing date. The Investments in New Businesses segment represents other business ventures or research and development activities intended to expand solutions to new or existing markets, including ultra-high-net-worth families who reside in the United States.

In December 2025, SEI completed the first stage of its strategic investment in Stratos Wealth Holdings (Stratos), a network of affiliated companies focused on supporting the success of financial advisors, for approximately $544.0 million ¹. SEI owns 57.5% ² of the holding company that holds the equity of Stratos Wealth Securities, LLC and several SEC registered investment advisors. Stratos operates an extensive network of over 350 ³ financial advisors and has an affiliate in Mexico that SEI has the opportunity to acquire and expects to close in 2026, subject to satisfactory due diligence and regulatory approval. In May 2025, SEI launched a Global Capability Center (GCC) in Hyderabad, India to expand talent access and support follow-the-sun operations. In August 2025, SEI entered into a new $500.0 million ⁴ five-year senior unsecured revolving credit facility, which replaced the prior $325.0 million ⁵ facility, extended the maturity to 2030, and relaxed the leverage ratio covenant to 3.0x EBITDA ⁶, with a temporary allowance up to 3.5x ⁷ under certain conditions. SEI also began investing a portion of its corporate capital in various investment strategies rather than holding excess cash during the year.

For the fiscal year ended December 31, 2025, SEI reported total revenues of $2,297,381 thousand ⁸, compared to $2,099,135 thousand ⁹ in 2024. Net income was $506,930 thousand ¹⁰ in 2025, compared to $487,636 thousand ¹¹ in 2024. Diluted earnings per share were $4.06 ¹² in 2025, compared to $3.73 ¹³ in 2024. The company's operating margin was 30.4% ¹⁴ in 2025, compared to 30.9% ¹⁵ in 2024. Cash provided by operating activities was $637,606 thousand ¹⁶ in 2025, compared to $619,575 thousand ¹⁷ in 2024.

A major growth vector is the strategic investment in Stratos Wealth Holdings, which repositions SEI in the private wealth and advisor ecosystem by giving the company a scaled, high-growth, fee-based advisory platform with proven recruiting, acquisition, and advisor-enablement capabilities. Stratos' nationwide advisor network broadens SEI's distribution reach, creating natural entry points for SEI's outsourced chief investment officer, Private Wealth, SEI Access, alternatives, and asset management solutions, while its M&A engine strengthens SEI's ability to meet growing advisor succession-planning needs. SEI also expects to acquire Stratos' affiliate in Mexico in 2026, subject to satisfactory due diligence and regulatory approval.

Another growth vector is the expansion of SEI's asset management business through product and platform innovation. SEI is actively converting mutual fund assets to ETF structures to meet client demand, with recent launches and conversions such as the SEI DBi Multi-Strategy Alternative ETF (QALT). The company is investing in technology platforms such as SEI Access, which is being developed into a marketplace for alternative investments, positioning SEI as a key provider for broker-dealers and advisors seeking access to alternatives. SEI is also integrating its LifeYield acquisition to deliver industry-leading tax management, tax-transition, and tax-alpha capabilities by incorporating LifeYield's tax-smart technology into the SEI Wealth Platform. Additionally, SEI is expanding wallet share with large, multi-strategy managers by providing complex, cross-jurisdiction solutions and retail-accessible alternative investment operations and Collective Investment Trust administration for retirement plans.

The filing discusses margin trajectory in the context of the Private Banks segment, noting that SEI has meaningfully improved delivery and margins in recent years through stronger client engagement, standardized implementations, and the build-out of SEI Professional Services. The company is also leveraging its Global Capability Center in India to scale while maintaining client service, which is expected to support margin improvement.SEI launched a Global Capability Center (GCC) in Hyderabad, India in May 2025 to expand talent access and support follow-the-sun operations while maintaining excellent client service. The company is investing in technology infrastructure, including embedding artificial intelligence, robotic process automation, digital workflows, and the SEI Data Cloud into core platforms to reduce manual processes and enhance analytics and reporting. SEI is also investing in SEI enterprise professional services delivery capabilities to lead complex client change initiatives and streamline platform implementations. At December 31, 2025, SEI had 4,997 full-time and 32 part-time employees.

The filing does not provide specific R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy figures for the upcoming period. However, the company's new $500.0 million ¹⁸ five-year senior unsecured revolving credit facility provides additional borrowing capacity and flexibility for capital allocation.

A significant headwind is the ongoing regulatory matter with the Financial Conduct Authority (FCA) in the United Kingdom. SEI's subsidiary, SEI Investments (Europe) Limited (SIEL), is working with the FCA to determine the nature and scope of remedial actions in which SIEL will engage in order to meet the FCA's expectations and to enable SIEL to continue to grow and execute on its development and offering of new products and solutions. This regulatory scrutiny could result in increased expenses, limitations on business activities, or other consequences.

Market-driven risks represent a structural headwind, as a significant portion of SEI's revenues is earned as fees based on the market value of client assets. Declines in asset values due to overall market downturns or poor performance of specific investment products directly reduce assets under management or administration and thereby revenue and earnings. The company also faces persistent pricing pressure across the industry from investor demand for low-cost solutions, the rise of passive strategies, and competition from fintech and technology-driven firms. Additionally, consolidation among financial institutions may reduce the number of potential clients or lead to rationalization of services SEI provides.

SEI faces material market-driven risk as a significant portion of revenues is earned as fees based on the market value of client assets, meaning declines in asset values directly reduce revenue and earnings. The company also faces fee compression and competitive pricing pressure from investor demand for low-cost solutions, the rise of passive strategies, and competition from fintech and technology-driven firms. The strategic investment in Stratos Wealth Holdings for approximately $544.0 million ¹⁹ introduces significant integration risks, including consolidating financial statements, aligning technology platforms and compliance processes, and managing cultural differences. SEI's subsidiary in the United Kingdom, SIEL, is working with the FCA to determine the nature and scope of remedial actions, which could result in increased expenses or limitations on business activities. Additionally, the company's new $500.0 million ²⁰ credit facility includes a leverage ratio covenant of 3.0x EBITDA ²¹, and failure to maintain compliance could restrict access to credit and materially affect liquidity.

Management's message emphasizes the company's strategic repositioning through the investment in Stratos Wealth Holdings, which reinforces SEI's footprint in the advice segment and complements its administration and asset management platforms. The key strategic priorities emphasized are: expanding wallet share with existing clients through an enterprise approach, particularly in the Private Banks segment; accelerating product and platform innovation including ETF conversions, the SEI Access marketplace for alternatives, and integration of LifeYield's tax-smart technology; and leveraging the Global Capability Center in India to scale operations efficiently. Management also highlights the company's commitment to security, data, and AI, with investments in the SEI Data Cloud, digital workflows, and embedded AI/automation tools to drive operational efficiency and support scalable growth for clients.