SEI Investments Co (SEIC) 2022 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the SEI Fourth Quarter 2022 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Ms. Lindsey Opsahl. Please go ahead.

女士們，先生們，謝謝你們的支持。歡迎來到 SEI 2022 年第四季度財報電話會議。 （操作員說明）提醒一下，正在錄製此會議。我現在想把會議轉交給我們的主持人 Lindsey Opsahl 女士。請繼續。

Welcome, everyone. Thank you for joining us on today's fourth quarter 2022 earnings call. Joining me on today's call are Ryan Hicke, SEI's Chief Executive Officer; Dennis McGonigle, Chief Financial Officer; and the leaders of our business segment, Paul Klauder, Phil McCabe, Sanjay Sharma and Wayne Withrow, Kathy Heilig, SEI's Controller, is also with us.

歡迎大家。感謝您參加今天的 2022 年第四季度財報電話會議。 SEI 的首席執行官 Ryan Hicke 和我一起參加今天的電話會議； Dennis McGonigle，首席財務官；我們業務部門的負責人 Paul Klauder、Phil McCabe、Sanjay Sharma 和 Wayne Withrow、SEI 的財務總監 Kathy Heilig 也與我們同在。

Before we begin, I'd like to point out that our earnings press release can be found under the Investor Relations section of our website at seic.com. This call is being webcast live, and a replay will be available on the Events and Webcast page of our website. We would like to remind you that during today's presentation and in our responses to your questions, we have and will make certain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements that appear in today's earnings press release and in our filings with the Securities and Exchange Commission. We do not undertake to update any of our forward-looking statements.

在我們開始之前，我想指出我們的收益新聞稿可以在我們網站 seic.com 的投資者關係部分找到。此電話會議正在進行網絡直播，重播將在我們網站的“活動和網絡廣播”頁面上提供。我們想提醒您，在今天的演講和我們對您問題的回答中，我們已經並將做出某些前瞻性陳述，這些陳述受風險和不確定因素的影響，可能導致實際結果出現重大差異。請參閱我們在今天的收益新聞稿和我們提交給美國證券交易委員會的文件中出現的有關前瞻性陳述的通知。我們不承諾更新我們的任何前瞻性陳述。

With that, I'll turn the call to CEO, Ryan Hicke. Ryan?

有了這個，我將把電話轉給首席執行官 Ryan Hicke。賴安？

Thanks, Lindsey. Good afternoon, everyone. I hope you'll all enjoy the holidays and are off to a great start in 2023. Before the holiday season, we had the pleasure of hosting many of you in Oaks for our investor conference in November. I really hope everyone enjoyed that experience. Personally, I was engaged and energized by the entire engagement of the investment community, and I was really excited to share our vision and strategic focus for the future.

謝謝，林賽。大家下午好。我希望你們都享受假期，並在 2023 年有一個良好的開端。在假期之前，我們有幸在奧克斯接待了你們中的許多人參加 11 月份的投資者會議。我真的希望每個人都喜歡這種體驗。就個人而言，投資界的整個參與讓我很投入並充滿活力，我很高興能分享我們對未來的願景和戰略重點。

We are going to continue to apply our proven business model by turning challenges into opportunities, helping clients and prospects more effectively deploy their capital for growth and leveraging our financial strength. During the quarter, markets continue to feel the impact of economic factors, including inflationary pressures, geopolitical tensions, fiscal policy and more.

我們將繼續應用我們成熟的商業模式，將挑戰轉化為機遇，幫助客戶和潛在客戶更有效地部署資本以實現增長，並利用我們的財務實力。本季度，市場繼續感受到經濟因素的影響，包括通脹壓力、地緣政治緊張局勢、財政政策等。

Fourth quarter revenues declined 9% from a year ago. Our fourth quarter earnings were down 23% from a year ago. Fourth quarter EPS of $0.83 decreased 19% from the $1.03 reported in the fourth quarter 2021. In the quarter, we repurchased 1.3 million shares of SEI stock at an average price of $59.36 per share. That translates into $79.6 million of stock purchases.

第四季度收入同比下降 9%。我們第四季度的收入比一年前下降了 23%。第四季度每股收益為 0.83 美元，較 2021 年第四季度的 1.03 美元下降了 19%。本季度，我們以每股 59.36 美元的平均價格回購了 130 萬股 SEI 股票。這相當於 7960 萬美元的股票購買。

We also declared an annual dividend of $0.43 per share. We continued to build off the third quarter's positive sales momentum, but we're still absorbing some losses that offset our wins. I feel very confident that we are turning the tide in a positive direction here, and we've spent a lot of time at key prospects and clients this year already.

我們還宣布派發每股 0.43 美元的年度股息。我們繼續建立第三季度的積極銷售勢頭，但我們仍在吸收一些抵消我們勝利的損失。我非常有信心我們正在朝著積極的方向扭轉局勢，今年我們已經在關鍵的潛在客戶和客戶身上花費了大量時間。

Net sales events totaled approximately $20.8 million, $10.9 million of which were net recurrent. During the quarter, we also had a successful execution of a recontracting strategy, resulting in more than $108 million of annual recurring revenue extended across our processing businesses. We expect to also remain surgical and vigilant in our expense management.

淨銷售事件總計約 2080 萬美元，其中 1090 萬美元為經常性淨額。在本季度，我們還成功執行了再承包戰略，使我們的加工業務產生了超過 1.08 億美元的年度經常性收入。我們希望在我們的費用管理中也保持外科手術和警惕。

I'm sure you all saw that one of the major themes coming out of (inaudible) as companies say they are giving priority to profitability and efficiency amid concerns about macroeconomic conditions, whether that's to reach their strategic goals, slim down their workforces or streamline operations. The market, especially the tech and financial services industries are clearly making adjustments to spending and we are going to manage SEI well through this time, but lean into those investments where we have high conviction to our ability to drive growth.

我相信你們都看到了（聽不清）出現的主要主題之一，因為公司表示他們在對宏觀經濟狀況的擔憂中優先考慮盈利能力和效率，無論是為了實現他們的戰略目標、精簡員工隊伍還是精簡流程操作。市場，尤其是科技和金融服務行業顯然正在調整支出，我們將在這段時間內很好地管理 SEI，但傾向於那些我們堅信自己有能力推動增長的投資。

We also see this time of catalysts and opportunities for SEI to more actively partner with existing and new clients to help them become more successful. Dennis will go into further details later on our financial results.

我們還看到了 SEI 更積極地與現有和新客戶合作以幫助他們取得更大成功的催化劑和機會。丹尼斯稍後將詳細介紹我們的財務業績。

Turning to our lines of business. In the Investment Managers segment, our alternative business continues to see our largest clients opportunistically launching new products. One of our large multi-strategy clients expanded in the private credit business, and a flagship investor platform client at a private equity business as well.

轉向我們的業務範圍。在投資經理部分，我們的另類業務繼續看到我們最大的客戶機會主義地推出新產品。我們的一個大型多策略客戶擴展了私人信貸業務，同時也是私募股權業務的旗艦投資者平台客戶。

In the traditional business, we continue to add new business in all product lines with both new and existing clients. In particular, our CIT business continues to thrive and expand. At a global level, we continue to grow our ETF, private equity and private debt business, primarily through cross sales with existing clients and successful new client wins.

在傳統業務中，我們繼續在所有產品線中為新老客戶增加新業務。特別是，我們的 CIT 業務繼續蓬勃發展和擴展。在全球範圍內，我們繼續發展我們的 ETF、私募股權和私人債務業務，主要是通過與現有客戶的交叉銷售和成功贏得新客戶。

Turning to our Investment Advisors business. We began immediately leveraging the synergies between our U.S. asset -- U.S. advisory business and our asset management distribution businesses globally. We are only a few months into this effort, but we are starting to make progress. We've integrated these business segments to better leverage competencies, aligning our talent and go-to-market strategies across segments.

轉向我們的投資顧問業務。我們立即開始利用我們的美國資產——美國諮詢業務和我們在全球的資產管理分銷業務之間的協同效應。我們只進行了幾個月的努力，但我們開始取得進展。我們整合了這些業務部門，以更好地利用能力，調整我們的人才和跨部門的上市戰略。

Although it is early in the organizational alignment, when we look at the market landscape from institutional clients to be the affiliated advisers to the growth of pure RIAs, we are excited about the future here and feel strong about our positioning. A key component of our strategy is the continued unbundling of our investment options paired with the conviction and oversight of our investment management unit, providing clients both flexibility and choice.

儘管現在處於組織調整的早期階段，但當我們審視從機構客戶到成為純 RIA 增長的附屬顧問的市場格局時，我們對這裡的未來感到興奮，並對我們的定位感到堅定。我們戰略的一個關鍵組成部分是繼續將我們的投資選擇與我們投資管理部門的信念和監督相結合，為客戶提供靈活性和選擇。

Our ETF product line, the SEI systematic core strategies strategic partnerships with Capital Group and Dimensional were not only top net cash flow contributors, but they're increasingly resonating with existing and new advisers and solving their client needs. Across this suite of solutions, we saw over $400 million in net cash flow for the quarter.

我們的 ETF 產品線、SEI 系統核心戰略與 Capital Group 和 Dimensional 的戰略合作夥伴關係不僅是最大的淨現金流貢獻者，而且它們越來越引起現有和新顧問的共鳴，並解決他們的客戶需求。通過這套解決方案，我們在本季度看到了超過 4 億美元的淨現金流。

The Institutional Investors segment experienced new client wins, which included SEI Novus, but revenue and profit during the quarter were directly impacted by capital markets and client losses. Capital market activity was related to a decline in equities, long-duration fixed income balances and alternative investments. But despite the volatile marketplace last year, OCIO sales in 2022 produced strong results. Asset values will be a headwind as we move into 2023, but we will remain focused on where we believe there are growth opportunities, including selling and installing OCIO new business in growth markets, retaining current OCIO clients, further integrating SEI Novus and advancing the ECIO platform, integrating and leveraging SEI Private Wealth Management in our institutional business.

機構投資者部門贏得了新客戶，其中包括 SEI Novus，但本季度的收入和利潤直接受到資本市場和客戶流失的影響。資本市場活動與股票、長期固定收益餘額和另類投資的下跌有關。但是，儘管去年市場動盪不安，但 OCIO 在 2022 年的銷售業績依然強勁。隨著我們進入 2023 年，資產價值將成為不利因素，但我們將繼續專注於我們認為存在增長機會的領域，包括在增長市場銷售和安裝 OCIO 新業務、保留現有 OCIO 客戶、進一步整合 SEI Novus 和推進 ECIO平台，在我們的機構業務中整合和利用 SEI 私人財富管理。

In the Private Bank business, we had a very active quarter. We recontracted 8 clients, including 3 in the U.S., 4 clients in the U.K. and 1 TRUST 3000 client. 4 of these 8 clients were in competitive situations. Our contracts with Wells Fargo was resized as previously announced, and our relationship has been extended until December of 2028.

在私人銀行業務中，我們有一個非常活躍的季度。我們重新簽約了8個客戶，其中美國3個，英國4個，TRUST 3000客戶1個。這 8 個客戶中有 4 個處於競爭狀態。我們與 Wells Fargo 的合同如前所述進行了調整，我們的關係已延長至 2028 年 12 月。

We signed 3 new names in the quarter, including Hilltop Bank and First Financial in the U.S. And we also implemented 2 clients that were in our backlog. We will continue to rightsize expenses in this segment and look to accelerate sales activity, including cross-sell opportunities across our markets.

我們在本季度簽署了 3 個新名稱，包括美國的 Hilltop Bank 和 First Financial。我們還實施了 2 個積壓的客戶。我們將繼續縮減該領域的開支，並尋求加速銷售活動，包括跨市場的交叉銷售機會。

I'm acutely aware of the attention that has been paid to this segment in the past. The leadership changes we made last year, the aggressive increase in client engagement and expense management combined with a renewed focus on sales and what we believe are attractive segments for SEI make me optimistic that we have solidified the foundation for this business now for future growth.

我敏銳地意識到過去對這一部分的關注。我們去年進行的領導層變動、客戶參與度和費用管理的積極增加以及對銷售的重新關注以及我們認為對 SEI 有吸引力的部分讓我樂觀地認為我們現在已經為未來的增長鞏固了這項業務的基礎。

Highlighting some more positive traction in growth areas in our investments in new business segment, SEI Sphere continues to be a focus area with an aggressive growth plan for 2023. This includes increasing the size of the sales force, investments in marketing, accelerated activity with existing SEI clients and new prospects and increased traction in the cyber and cloud services offering.

SEI Sphere 突出了我們對新業務部門投資的增長領域的一些更積極的牽引力，它繼續成為一個重點領域，並製定了 2023 年的積極增長計劃。這包括增加銷售隊伍的規模、營銷投資、加速現有活動SEI 客戶和新的前景以及網絡和雲服務產品的吸引力增加。

During the quarter, we also began building a corporate development team. They will be focused on the development and execution of our strategic transactions plan to drive growth. Finally, our partnership with LSV remains very strong. Dennis will report on their financial results for the quarter.

在本季度，我們還開始組建企業開發團隊。他們將專注於製定和執行我們的戰略交易計劃以推動增長。最後，我們與 LSV 的合作關係仍然非常牢固。丹尼斯將報告他們本季度的財務業績。

As I've mentioned in these calls, we're also focused on initiatives and programs that support the development of our talent and enrich our culture particularly in diversity, equity and inclusion. We continue to invest in these areas as competitive advantages for SEI in the future.

正如我在這些電話中提到的那樣，我們還專注於支持我們人才發展和豐富我們文化的舉措和計劃，尤其是在多元化、公平和包容方面。我們將繼續在這些領域進行投資，作為 SEI 未來的競爭優勢。

To echo my comments at the investor conference in November, SEI is going on offense in 2023. We'll focus on seizing opportunities that we believe will meaningfully drive growth and we'll continue to make the changes necessary to keep us on the path that we've laid out. 2022 was a year of organizational transition for SEI, coinciding with the volatile market environment. We remain steadfast in our belief that we are well positioned to not only help our clients succeed but continue driving our own success in the year ahead and beyond. This concludes my prepared remarks. I will now turn it over to Dennis to discuss our financial results for the quarter. Dennis?

為了回應我在 11 月的投資者會議上的評論，SEI 將在 2023 年進攻。我們將專注於抓住我們認為將有意義地推動增長的機會，我們將繼續做出必要的改變，使我們走上我們已經佈置好了。 2022 年是 SEI 組織轉型的一年，恰逢市場環境動盪。我們始終堅信，我們有能力不僅幫助我們的客戶取得成功，而且在未來一年及以後繼續推動我們自己的成功。我準備好的發言到此結束。我現在將把它交給丹尼斯來討論我們本季度的財務業績。丹尼斯？

Thanks, Ryan. I'll cover information related to the quarter for the company end units. As Ryan mentioned, EPS for the quarter was $0.83. This compares to $1.03 during fourth quarter 2021 and $0.45 for the third quarter of 2022. Revenue for the quarter was $457 million compared to $502 million in 2021 and $471 million in the third quarter.

謝謝，瑞安。我將介紹與公司終端部門的季度相關的信息。正如 Ryan 所提到的，本季度每股收益為 0.83 美元。相比之下，2021 年第四季度為 1.03 美元，2022 年第三季度為 0.45 美元。本季度收入為 4.57 億美元，而 2021 年為 5.02 億美元，第三季度為 4.71 億美元。

Total expenses for the quarter were $363 million, which compares to $358 million last year and $420 million in the third quarter. Excluding items related to the voluntary separation program and other severance, expenses for the third quarter were approximately $358 million. Expenses in the fourth quarter included $2.7 million of severance and $3.5 million in incentive compensation true-ups for the year. Revenues from asset management and administration were impacted by lower average assets during the quarter due to how we entered the quarter, capital market performance during the quarter and cash flows.

本季度總支出為 3.63 億美元，去年同期為 3.58 億美元，第三季度為 4.2 億美元。不包括與自願離職計劃和其他遣散費相關的項目，第三季度的支出約為 3.58 億美元。第四季度的費用包括 270 萬美元的遣散費和 350 萬美元的當年激勵補償調整。由於我們進入本季度的方式、本季度的資本市場表現和現金流，資產管理和行政收入受到本季度平均資產下降的影響。

Processing revenues were impacted by a onetime $6 million reduction in revenue related to Wells Fargo, which was discussed on last quarter's call. On the sales front in our processing businesses of Private Banking and IMS, net sales events totaled $25 million and are expected to generate $15.1 million in recurring revenue.

處理收入受到與 Wells Fargo 相關的收入一度減少 600 萬美元的影響，這在上一季度的電話會議上進行了討論。在我們的私人銀行和 IMS 處理業務的銷售方面，淨銷售事件總計 2500 萬美元，預計將產生 1510 萬美元的經常性收入。

In our asset management-related businesses, net sales were approximately a negative $4.7 million. Private Banking processing sales were $10.2 million, of which $3.3 million is recurring. This reflects 3 new SWP sales; 2 in the U.S. and 1 in the U.K. We recontracted 8 clients during the quarter, representing $53 million in annual recurring revenue at an average extension of 4-plus years. One of these recontracts was Wells Fargo resulting in the recorded revenue reduction.

在我們的資產管理相關業務中，淨銷售額約為負 470 萬美元。私人銀行業務處理銷售額為 1020 萬美元，其中 330 萬美元為經常性銷售額。這反映了 3 個新的 SWP 銷售；美國 2 家，英國 1 家。我們在本季度重新簽約了 8 家客戶，年經常性收入為 5300 萬美元，平均延長 4 年以上。這些重新合同之一是富國銀行，導致記錄的收入減少。

One other recontract was with a large U.K. client that extended our relationship for 5-plus years. While successful in retaining this client, it will result in a current reduction in run rate revenue of approximately $7 million in 2023. We view this as an investment in a key relationship in the U.K. due to their long-term growth prospects and opportunities for us to grow this relationship over time. This recontracting item is separate from and not included in our sales results.

另一份續約合同是與一家英國大客戶簽訂的，該客戶將我們的關係延長了 5 年多。雖然成功留住了該客戶，但到 2023 年，目前的運行率收入將減少約 700 萬美元。我們認為這是對英國重要關係的投資，因為他們的長期增長前景和我們的機會隨著時間的推移發展這種關係。此重新合同項目獨立於我們的銷售結果，不包括在我們的銷售結果中。

At year-end, we successfully installed 2 clients on SWP. The current backlog of sold, but expected to be installed revenue in the next 18 months is $40.1 million. Asset management revenues in private banking were up slightly during the quarter as a result of positive flows of approximately $500 million. Expenses in the quarter were down from the third quarter of 2022. This reflects our focus on expense management, as Sanjay and his team reset the business for growth.

年底，我們在 SWP 上成功安裝了 2 個客戶端。目前已售出但預計在未來 18 個月內安裝的積壓收入為 4010 萬美元。由於約 5 億美元的正流量，本季度私人銀行業務的資產管理收入略有上升。本季度的費用低於 2022 年第三季度。這反映了我們對費用管理的關注，因為 Sanjay 和他的團隊重新調整了業務以實現增長。

On the IMS front, net sales for the quarter were $14.8 million, $11.7 million is recurring. The quarter sales activity remained active, reinforcing our belief that the trend of outsourcing is continuing to grow. During the quarter, we recontracted 15 clients totaling $55.2 million in annual recurring revenue with an average length of over 3-plus years.

在 IMS 方面，本季度淨銷售額為 1480 萬美元，經常性銷售額為 1170 萬美元。本季度的銷售活動依然活躍，強化了我們對外包趨勢持續增長的信念。本季度，我們與 15 家客戶重新簽約，年度經常性收入總計 5520 萬美元，平均期限超過 3 年。

Revenue for the quarter was flat to third quarter reflecting the impact of capital markets offset by client installs. We continue to see growth within many of our top clients. Expenses were up slightly from the third quarter, reflecting continued inflation pressures, growth in our talent and a true-up on incentive compensation for 2022. Our backlog of sold, but expected to install in the next 18 months recurring revenue is $32.9 million.

本季度收入與第三季度持平，反映了資本市場的影響被客戶安裝所抵消。我們繼續看到許多頂級客戶的增長。費用較第三季度略有上升，反映出持續的通貨膨脹壓力、我們人才的增長以及 2022 年激勵薪酬的調整。我們積壓的已售出但預計將在未來 18 個月內安裝的經常性收入為 3290 萬美元。

For Investment Advisors, net cash flow was approximately negative $675 million. This number reflects increased momentum and strategic initiatives we have launched over the past 2 years offset by negative flows in mutual fund products. Activity included custody assets on the platform increased $473 million. Our dedicated RIA team produced $66 million in net positive cash flow and cash flows in the portfolio is built on our ETF strategies and our dimensional offering was approximately $350 million.

對於投資顧問，淨現金流約為負 6.75 億美元。這一數字反映了我們在過去 2 年推出的增長勢頭和戰略舉措被共同基金產品的負流量所抵消。平台上的活動包括託管資產增加了 4.73 億美元。我們專門的 RIA 團隊產生了 6600 萬美元的淨正現金流，投資組合中的現金流建立在我們的 ETF 策略之上，我們的規模產品約為 3.5 億美元。

Our new offerings are helping us move the business forward and to offset the negative flows we see out of mutual funds. Revenues for the quarter were down from third quarter as a result of asset levels entering the quarter, capital market performance during the quarter and net flow activity. Expenses were up slightly due to inflation and year-end activity. We recruited 34 new advisers during the quarter, 15 of which were in the newer RIA channel and reengaged 13 existing advisory firms.

我們的新產品正在幫助我們推動業務向前發展，並抵消我們從共同基金中看到的負面流量。由於進入本季度的資產水平、本季度的資本市場表現和淨流量活動，本季度的收入低於第三季度。由於通貨膨脹和年底活動，費用略有增加。我們在本季度招聘了 34 名新顧問，其中 15 名在較新的 RIA 渠道中，並重新聘用了 13 家現有諮詢公司。

Adviser activity remains strong, but we continue to see a slowdown in market activity on the part of both advisers and their clients. In the Institutional Investors segment, OCIO net sales events for the fourth quarter were essentially flat. The unfunded client backlog of gross sales at quarter end was $2.5 billion. Revenues for the quarter were down from third quarter due to capital market activity, offset partially by net positive client fundings.

顧問活動依然強勁，但我們繼續看到顧問及其客戶的市場活動放緩。在機構投資者部分，第四季度 OCIO 淨銷售事件基本持平。季度末沒有資金的客戶積壓總銷售額為 25 億美元。由於資本市場活動，本季度收入較第三季度有所下降，部分被淨正客戶資金抵消。

We continue to see pricing pressure across all institutional markets and continued headwinds in the corporate DB segment globally. Expenses were also down reflecting reduced direct costs as well as general expense management. In the Investments in New Business segment, revenues and expenses were flat to third quarter. We had net recurring sales of $500,000 in the quarter. We expect expenses in this segment while shifting to and supporting new initiatives to remain in this range. LSV produced $31.7 million of profit during the quarter. This compares to $26.7 million during the third quarter. Revenues for LSV were $107 million compared to $91.6 million in the third quarter. LSV recorded performance fees of $13.4 million during the quarter, reflecting strong positive relative performance.

我們繼續看到所有機構市場的定價壓力以及全球企業數據庫領域的持續逆風。費用也有所下降，反映了直接成本和一般費用管理的減少。在新業務投資領域，收入和支出與第三季度持平。本季度我們的經常性淨銷售額為 500,000 美元。我們預計，在轉向和支持新舉措的同時，這一領域的支出將保持在這一範圍內。 LSV 在本季度產生了 3170 萬美元的利潤。相比之下，第三季度為 2670 萬美元。 LSV 的收入為 1.07 億美元，而第三季度為 9160 萬美元。 LSV 在本季度錄得 1,340 萬美元的績效費用，反映出強勁的積極相對錶現。

The growth in revenues is a result of investment performance and capital growth in assets offset by net negative client flows.

收入增長是投資業績和資產資本增長被淨負客戶流量抵消的結果。

Net sales were down slightly, while net flows from existing clients due to derisking and reallocation were negative $2.3 billion. Market appreciation was approximately $12.8 billion. LSV continues to have active sales activity and continued positive performance will help that. Our tax rate for the quarter was 18.1%.

淨銷售額略有下降，而由於去風險化和重新分配，現有客戶的淨流量為負 23 億美元。市場增值約為 128 億美元。 LSV 繼續保持積極的銷售活動，持續的積極表現將對此有所幫助。我們本季度的稅率為 18.1%。

That concludes my remarks. As a reminder, all of our unit heads are on the call. We'll now be happy to entertain any questions. Thank you.

我的發言到此結束。提醒一下，我們所有的單位負責人都在通話中。我們現在很樂意回答任何問題。謝謝。

(Operator Instructions)

（操作員說明）

And our first question comes from the line of Ryan Kenny with Morgan Stanley.

我們的第一個問題來自摩根士丹利的 Ryan Kenny。

Just a couple of efficiency-related questions. So first on the quarter, it looked like it came in a little bit lighter than usual on margins. So just wondering if you could give us some color on how we should interpret the trajectory for pretax margin? And if there's not a rebound in markets this year, are there any expense items that you could flex lower?

只是幾個與效率相關的問題。因此，在本季度的第一個季度，它的利潤率看起來比平時要低一些。所以只是想知道你是否可以給我們一些關於我們應該如何解釋稅前利潤軌蹟的顏色？如果今年市場沒有反彈，您是否可以降低任何費用項目？

Sure. I mean margins given the nature of our -- the predominant nature of our revenue streams being asset based, when we have these down markets, and we're -- most of our revenues are average asset base. So the market might be up kind of point to point. But in between, there's a lot of activity, which results in kind of lower average assets. That's revenue that really comes right off the bottom line. So margin compression is somewhat a function of that.

當然。我的意思是考慮到我們的性質——我們的收入流的主要性質是基於資產的，當我們有這些低迷的市場時，我們的利潤率——我們的大部分收入是平均資產基礎。因此，市場可能會點對點上漲。但在這兩者之間，有很多活動，導致平均資產較低。這是真正來自底線的收入。所以保證金壓縮在某種程度上是它的一個功能。

I'd say in the quarter, though, we did have good expense management overall and did that in the context of maintaining the investments and the things we know are important and feel really critical to our future growth prospects. If we have downward pressure -- continued downward pressure on markets, we do have some variable costs that we'll adjust based on assets, that's kind of the first expense item on our P&L.

不過，我要說的是，在本季度，我們總體上確實有良好的費用管理，並且是在維持投資和我們知道很重要的事情的背景下做到的，並且對我們未來的增長前景感到非常關鍵。如果我們有下行壓力——市場持續下行壓力，我們確實有一些可變成本，我們將根據資產進行調整，這是我們損益表中的第一個費用項目。

Beyond that, a big chunk of our compensation is variable. So we certainly have the ability if we felt necessary to adjust that based on company -- overall company financial performance as the year goes on, we've done that, say, under -- other periods under extreme market pressure, we've made those adjustments. We do have some variable spending, if you will, things that we could hold off on if we chose to. I'd say that our general rule of thumb, though is difficult markets do end. And when we come out of them, we want to be in a position of strength to take advantage of markets reopening and clients and prospects moving back to making business decisions on our side. So we wouldn't give up -- certainly we would never give up the future and the opportunities that future presents in tougher market cycles. (inaudible) before everybody around this table has been (inaudible) before. So we'll work our way through it.

除此之外，我們的很大一部分薪酬是可變的。因此，如果我們認為有必要根據公司進行調整，我們當然有能力調整這一點——隨著時間的推移，公司的整體財務業績，我們已經做到了——比如說，在極端市場壓力下的其他時期，我們已經做到了那些調整。如果你願意的話，我們確實有一些可變支出，如果我們選擇的話，我們可以推遲的事情。我會說我們的一般經驗法則，儘管困難的市場確實會結束。當我們走出困境時，我們希望處於有利地位，可以利用市場重新開放以及客戶和潛在客戶重新做出我們這邊的業務決策。所以我們不會放棄 - 當然我們永遠不會放棄未來以及未來在更艱難的市場週期中帶來的機會。 （聽不清）在這張桌子周圍的每個人之前（聽不清）。所以我們會努力解決它。

That's clear. And then just 1 follow-up. The press release called out greater investments in compliance infrastructure. Can you just help us understand what that is? And is that a onetime build? Or is that a multiyear build, that would be helpful?

這很清楚。然後只有 1 個跟進。新聞稿呼籲加大對合規基礎設施的投資。你能幫我們理解那是什麼嗎？那是一次性的嗎？或者是多年構建，這會有幫助嗎？

I'd say it's really just a continuation of what businesses like ours have been facing over the past 5, 10 years, but certainly accelerated over the past 5 years. And that's really our ability to meet the compliance requirements of the regulatory frameworks within which we have to operate in all the jurisdictions we have to operate and also making sure that our knowledge of those compliance requirements makes their way into the products and services we are delivering to clients because they are also dealing with those same regulatory compliance pressure.

我想說這真的只是像我們這樣的企業在過去 5 年、10 年中所面臨的問題的延續，但在過去 5 年中肯定會加速。這確實是我們滿足監管框架合規要求的能力，我們必須在這些框架內開展業務，我們必須在我們必須運營的所有司法管轄區內開展業務，並確保我們對這些合規要求的了解能夠應用到我們提供的產品和服務中對客戶來說，因為他們也在處理同樣的監管合規壓力。

So it's almost -- first, we have to digest the meal and then we can share the meal with the clients after we digest it. And if you look around the globe, whether it's the U.K., Ireland, Europe, U.S., Canada, the regulatory pressure requirements just continue to build. So that's really what that referencing. And also, I'd say that there's been continued shift of in many jurisdictions where they want the regulatory work to be locally done rather than centralized outside of their domain. So that's adding a little bit to the -- or has added over time, a little bit of the cost pressure.

所以這幾乎是 - 首先，我們必須消化這頓飯，然後我們才能在消化後與客戶分享這頓飯。如果你環顧全球，無論是英國、愛爾蘭、歐洲、美國、加拿大，監管壓力要求都在不斷增加。這就是真正的參考。而且，我要說的是，在許多司法管轄區中，他們希望監管工作在本地完成而不是集中在他們的領域之外。所以這增加了一點——或者隨著時間的推移增加了一點成本壓力。

Next, we'll go to the line of Owen Lau with Oppenheimer.

接下來，我們就去歐文·劉和奧本海默的台詞。

Ryan, during the Investor Day, you have identified some area for growth such as outsourcing and partnership opportunities, cybersecurity and RIA. Could you please talk about if there's any particular growth area that you would focus on in 2023?

Ryan，在投資者日期間，您已經確定了一些增長領域，例如外包和合作機會、網絡安全和 RIA。您能否談談您在 2023 年是否會關注任何特定的增長領域？

Sure. Good to hear from you. Happy new year. I kind of take those in stages. So if you look at our focus on -- i'll come back to the outsourcing 1 in a second. If you look at something like cyber, that's the SEI Sphere business that I mentioned in the call. We've actually increased our sales force there, added a little bit more in terms of our capabilities in the cyber and cloud offering and actually really started to get more aggressive taking that service out to existing clients.

當然。很高興聽到你的消息。新年快樂。我有點分階段進行。因此，如果您看一下我們的重點——我馬上會回到外包 1。如果你看一下網絡之類的東西，那就是我在電話中提到的 SEI Sphere 業務。我們實際上已經增加了那裡的銷售人員，在網絡和雲產品方面的能力增加了一點，並且實際上開始更加積極地向現有客戶提供該服務。

In the RIA space, Dennis talked about in Wayne on the call, we have a dedicated team there we put in place last year. We're really starting to see some positive traction and momentum in flows from that segment. When you look at the total addressable market and the size and breadth of that segment, it is definitely an area where we really feel that we compete well that our value proposition aligns and that we actually are a little differentiated because of our ability to kind of unbundle the technology, the administration and the manufacturing with our open source solutions and our own manufactured solutions. We feel very good there.

在 RIA 領域，丹尼斯在韋恩的電話會議上談到，我們有一個專門的團隊，我們去年就在那裡成立了。我們真的開始看到來自該細分市場的流量有一些積極的牽引力和勢頭。當您查看整個可尋址市場以及該細分市場的規模和廣度時，這絕對是一個我們真正認為我們競爭激烈的領域，我們的價值主張是一致的，而且我們實際上有點與眾不同，因為我們有能力將技術、管理和製造與我們的開源解決方案和我們自己製造的解決方案分開。我們在那裡感覺很好。

And it's interesting on your kind of outsourcing point in the first box from November, I was thinking about this the other day that right in the outset from April through, I'd say, July, without seeing a lot of our clients, and I would call that a little bit more of a listening tour. Now we're on kind of a round 2 of those. Phil and I were just on the road last week and it's a little bit more of a growth tour. And that -- those conversations with 2 of our larger clients last week or more about how can we be doing more together with them? Where could SEI add value? Where do they want to deploy their capital? And those conversations, I think, are actually starting to happen in a more widespread way across all SEI client bases. So that's something that I get excited about because our engagement with our top clients has been really strong. We have a lot of clients coming on campus in the next 30 to 60 days. But I think that transition is key there.

從 11 月開始，您在第一個框中的外包點很有趣，前幾天我在考慮這個問題，從 4 月開始到 7 月，我沒有看到很多客戶，我這更像是一次聆聽之旅。現在我們正在進行其中的第 2 輪。 Phil 和我上周剛剛在路上，這更像是一次成長之旅。那 - 上週或更多關於我們如何才能與他們一起做更多事情的與我們的兩個大客戶的對話？ SEI 可以在哪裡增加價值？他們想在哪裡部署他們的資金？我認為，這些對話實際上開始以更廣泛的方式在所有 SEI 客戶群中發生。所以這讓我感到興奮，因為我們與頂級客戶的合作非常緊密。在接下來的 30 到 60 天內，我們會有很多客戶來到校園。但我認為過渡是關鍵。

And then the fourth area, Owen, that we talked about in November was alternatives, and we will continue to lean in that space, not just through bills, business and IMS, but in terms of how SEI creates more opportunity from a manufacturing perspective around alternatives and where we believe we can facilitate more capabilities with our position with technology between the manufacturing space and the distribution space, especially in the U.S.

然後我們在 11 月談到的第四個領域，Owen 是替代品，我們將繼續在這個領域傾斜，不僅僅是通過賬單、業務和 IMS，而是在 SEI 如何從製造的角度創造更多機會方面替代方案以及我們相信我們可以利用我們在製造空間和分銷空間之間的技術地位促進更多能力的地方，特別是在美國

So long-winded answer to your simple question. We are really focused in those 4 areas to varying degrees of traction, but it feels good. The client engagement is very high right now.

如此冗長的回答你的簡單問題。我們確實專注於這 4 個領域，並獲得了不同程度的牽引力，但感覺很好。現在客戶參與度非常高。

Got it. That's super helpful. And then maybe, Dennis, just a housekeeping question about the interest and dividend income. I saw there was a $6.6 million interest and dividend income. How should we think about this line item going forward?

知道了。這非常有幫助。然後，丹尼斯，也許只是一個關於利息和股息收入的內務管理問題。我看到有 660 萬美元的利息和股息收入。我們應該如何考慮這個項目的未來發展？

Well, it's really -- I mean, it's pretty simple, as interest rates go up, we're earning more on our cash. Now we're not -- certainly don't view interest income is how we're going to drive growth. But as long as if interest rates stay where they are or continue to creep up and our balance sheet kind of stays under its current construct and interest income will improve. So...

好吧，這真的——我的意思是，這很簡單，隨著利率上升，我們的現金收入增加了。現在我們不是——當然不認為利息收入是我們推動增長的方式。但只要利率保持不變或繼續攀升，並且我們的資產負債表保持在目前的結構下，利息收入就會改善。所以...

Let's say any -- like the base of the, I guess, the interest income asset that you can disclose?

讓我們說任何 - 我猜，你可以披露的利息收入資產的基礎？

I'm sorry. The interest income we earn on our balance sheet is really comes from the cash we have on deposit were invested in money market funds or other cash instruments. That's where -- that's all that is. Yes, we don't -- I would just -- we don't generate spread income, that's what you're getting at.

對不起。我們在資產負債表上賺取的利息收入實際上來自我們存入貨幣市場基金或其他現金工具的現金。那就是——就是這樣。是的，我們不——我只是——我們不產生利差收入，這就是你想要的。

Next, we'll go to the line of Mike Brown with KBW.

接下來，我們將與 KBW 一起去 Mike Brown 的台詞。

I guess, first, I wanted to just follow up on the margin question. How are you guys thinking about the longer-term operating margin for the business? And then maybe more near term for 2023. I guess came in closer to 20% this quarter, but it was closer to high 20s, more so historically. Is that where it should trend back to eventually?

我想，首先，我只想跟進保證金問題。你們如何看待企業的長期營業利潤率？然後可能更接近 2023 年。我猜本季度接近 20%，但更接近 20 多歲的高點，從歷史上看更是如此。那是它最終應該回到的地方嗎？

Yes. I guess my -- I'll answer first and then Ryan will tell me whether I got this right or not. My expectation is the margins will trend more to where they have been historically. We have different businesses operating. We certainly have an expectation that the private banking margins will improve over time. That's really what Sanjay has been working and his team are working on kind of resetting the business, bedding down the kind of revenue picture on the client side and making some progress on the spending side.

是的。我想我的——我會先回答，然後 Ryan 會告訴我我是否正確。我的預期是利潤率將更多地趨向於歷史水平。我們經營不同的業務。我們當然期望私人銀行業務的利潤率會隨著時間的推移而提高。這確實是 Sanjay 一直在做的事情，他的團隊正在努力重置業務，在客戶端降低收入狀況，並在支出方面取得一些進展。

So there's certainly expectations for us that, that business will -- has been reset in the late stages of being reset. And as we grow it, we'll capture more margin. The IMS business, I think you'll see everybody is on the call, they can comment as well after I'm done. That business is kind of a mid-30s 34% to 36% margin business. Typically, when it's creeped up to the high 30s, that's more of an anomaly than kind of how we see the business operating. And we expect the margins to kind of be in that 34%, 35% range over time.

因此，我們當然期望，業務將在重置的後期階段進行重置。隨著我們的成長，我們將獲得更多利潤。 IMS 業務，我想你會看到每個人都在通話中，他們也可以在我完成後發表評論。該業務是一種 30 年代中期的 34% 至 36% 的利潤率業務。通常，當它攀升至 30 多歲時，這更像是一種反常現象，而不是我們對業務運營方式的看法。我們預計隨著時間的推移，利潤率將在 34%、35% 的範圍內。

And these are all market neutral comments. So Investment Advisors, I think, is 1 area where we're going to be consolidating the AMD, the asset manager distribution, components of revenue and profits with the adviser channel, that will have a dampening effect on the margins just because of margins in the asset management distribution business and the types of clients we serve there in the global nature and how we report revenue and expense in that business because the sub-adviser cost for the non-U.S. assets are an expense item on the P&L. That runs at a lower margin business than adviser business has run historically. So that will have a little bit of a dampening impact just on the math -- corporate margins, it should have an impact.

這些都是市場中立的評論。因此，我認為，投資顧問是我們將整合 AMD、資產經理分佈、收入和利潤的組成部分與顧問佢道的第一個領域，這將對利潤率產生抑製作用，因為利潤率在資產管理分銷業務和我們在全球範圍內服務的客戶類型，以及我們如何報告該業務的收入和費用，因為非美國資產的次級顧問成本是損益表中的費用項目。這比顧問業務的歷史運行利潤率更低。因此，這只會對數學產生一點抑制影響——企業利潤率，它應該會產生影響。

But there, given the mix of business over time, as Wayne talk about selling new types of products and capabilities of strategic asset offer versus mutual funds as a straight-up product, the margins on those products as well as selling custody-only assets onto the platform with a lower price point. We always expected the margins in that business to contract slightly, but with an expectation that will be a much bigger business. So kind of higher dollar profit, slightly lower margins.

但是，隨著時間的推移，考慮到業務的組合，當 Wayne 談到銷售新型產品和戰略資產提供能力與共同基金作為直接產品時，這些產品的利潤率以及將僅託管資產出售給價格較低的平台。我們一直預計該業務的利潤率會略有下降，但預計這將是一個更大的業務。所以美元利潤更高，利潤率略低。

And then couple that with the institutional business, which has always been a high-margin business. But with the compression of revenue, and as I mentioned, and Paul has mentioned many times, the pricing competitiveness in the market, while that's been kind of a 50%, high 40s percent margin business, their margins will probably track a little bit over time, but with market success, again, dollar profits should improve.

然後將其與一直是高利潤業務的機構業務結合起來。但隨著收入的壓縮，正如我提到的，保羅多次提到，市場上的定價競爭力，雖然這是一個 50%、40% 的高利潤率業務，但他們的利潤率可能會略微超過時間，但隨著市場的成功，美元利潤應該會再次提高。

So overall margins, I would expect them to be kind of in historical ranges, but for different reasons than maybe they have been in the past.

所以總體利潤率，我預計它們會處於歷史範圍內，但出於與過去不同的原因。

Mike, I don't have anything to add to that. I think Dennis captured it all. And I think kind of echoing an earlier point, we have a good understanding and a good track record of how to operate the business in kind of difficult times. We're going to continue to operate with courage and conviction in the areas that we believe we want to invest for the future. But I also think, as Dennis mentioned, with Sanjay and the team have done the last 9 months to really stabilize private banking, and we can grow off that point will also help to offset some of the areas where we might see some compression. But that compression will be driven by growth of new solutions, which would be a good thing.

邁克，我沒有什麼要補充的。我認為丹尼斯抓住了一切。而且我認為有點呼應早先的觀點，我們對如何在困難時期經營業務有很好的理解和良好的記錄。我們將繼續以勇氣和信念在我們認為我們希望為未來投資的領域開展業務。但我也認為，正如丹尼斯提到的那樣，Sanjay 和團隊在過去 9 個月裡所做的工作真正穩定了私人銀行業務，我們可以在這一點上取得進展，這也將有助於抵消一些我們可能會看到一些壓縮的領域。但這種壓縮將由新解決方案的增長推動，這將是一件好事。

Okay. To switch gears to the recontracting actions. I'm good to hear that you've been able to extend those relationships and thanks for quantifying some of the impacts there. How do you -- how should we think about what's the opportunity with some of those specific clients to cross-sell and will deepen the relationship there? Is there opportunities to mitigate some of those recontracted headwinds here? If you can give some specific examples that would be helpful.

好的。切換到收縮動作。我很高興聽到您能夠擴展這些關係，並感謝您量化其中的一些影響。你如何 - 我們應該如何考慮與某些特定客戶進行交叉銷售並加深那裡的關係的機會是什麼？是否有機會在這裡減輕一些重新簽約的逆風？如果你能舉出一些具體的例子會有幫助。

Yes. I think we'll let Phil and Sanjay answer that. Phil, do you want to go first?

是的。我想我們會讓 Phil 和 Sanjay 回答這個問題。菲爾，你要先走嗎？

Sure. Okay. Thank you. What I would say on a recontract side is actually we did really well. It was 15 different clients. It was about $55 million in revenue, for the most part, a little bit more than 3 years on average and fees stayed pretty much the same. In some cases, we sold some new products and services.

當然。好的。謝謝。在續約方面我要說的是實際上我們做得很好。這是 15 個不同的客戶。它的收入約為 5500 萬美元，大部分時間平均超過 3 年，費用幾乎保持不變。在某些情況下，我們出售了一些新產品和服務。

So for us, it was really good. I think if you look at IMS for the quarter, our sales were about $14.8 million, and that was pretty much 50-50 between cross-sells and new business. So the pipeline is strong. The clients are doing really well. I mean I think we're in a really good place right now. Sanjay?

所以對我們來說，這真的很好。我想如果你看看本季度的 IMS，我們的銷售額約為 1480 萬美元，交叉銷售和新業務之間的比例幾乎是 50-50。所以流水線很強。客戶做得很好。我的意思是我認為我們現在處在一個非常好的地方。桑傑？

Yes. Thanks, Phil. I would echo Phil on the similar lines. When I took over private banking responsibility back in kind of Q2 of last year or so, one of the key up was to retain clients, engage our clients and grow with the client's growth. So based on that, we came with the startup of how we ensure that we fix the leaky bucket, but because that happening in the earlier phases. So we came with the strategy, engaging with the clients and that was the result of those initiatives that in the fourth quarter, we could recontract 8 clients.

是的。謝謝，菲爾。我會以類似的方式回應 Phil。當我在去年第二季度左右接管私人銀行業務時，其中一個關鍵是留住客戶，吸引我們的客戶並隨著客戶的增長而增長。因此，基於此，我們啟動瞭如何確保我們修復漏桶的問題，但因為這發生在早期階段。所以我們制定了戰略，與客戶接觸，這是第四季度這些舉措的結果，我們可以重新簽約 8 個客戶。

And if I quantify those recontracts except 1 client, we are pretty much neutral. So except 1 client where we made -- again, it was a part of our strategy that how we can grow with that client that specific was looking at consolidating their vendor partner footprint and looking at the growth opportunities. And I'm very pleased to say that, yes, we were selected as one of the strategic partner there. And now we are working actively with that client to come with a road map in terms of how we can grow together. So as I would bring it back that the recontracting is a part of our growth strategy. so that we can cross sell and private banking especially in that segment, it can open up the rest of SEI capabilities as well.

如果我量化除 1 個客戶之外的那些重新合同，我們幾乎是中立的。因此，除了我們取得的 1 個客戶——再次，這是我們戰略的一部分，即我們如何與該客戶一起成長，具體是考慮鞏固他們的供應商合作夥伴足跡並尋找增長機會。我很高興地說，是的，我們被選為那裡的戰略合作夥伴之一。現在我們正在與該客戶積極合作，就我們如何共同成長制定路線圖。因此，正如我要重申的那樣，重新簽約是我們增長戰略的一部分。這樣我們就可以交叉銷售和私人銀行業務，尤其是在該領域，它也可以開放其餘的 SEI 功能。

And Mike, the other thing I would add to what Sanjay and Phil said is that this is kind of more of a kind of change internally is as I mentioned earlier, we have 3 or 4 organizations coming in the last week in February alone with their executive team for an Oaks visit. They're going to be meeting with a lot of people around this table as opposed to just the unit head, who has the client relationship.

邁克，我要補充的另一件事是桑杰和菲爾所說的，這更像是一種內部變化，正如我之前提到的，僅在 2 月的最後一周，我們就有 3 到 4 個組織來了，他們的奧克斯訪問的執行團隊。他們將與這張桌子周圍的很多人會面，而不僅僅是擁有客戶關係的部門負責人。

So I think that whole posture and positioning has changed for us so that when clients are on site or we're out seeing clients, there's a little bit of a broader representation of SEI leadership and engagement there so that we're positioning the company and not just a unit. And I could tell you, I mean, activity doesn't necessarily always equate to results, but we have the right activities right now, and we're getting the right level of engagement. I think the clients have actually been super receptive to a broader conversation around the capabilities that SEI can bring to bear to help them succeed.

所以我認為我們的整體姿態和定位已經改變，所以當客戶在現場或我們外出會見客戶時，SEI 領導和參與的代表有一點更廣泛，因此我們正在定位公司和不只是一個單位。我可以告訴你，我的意思是，活動不一定總是等同於結果，但我們現在有正確的活動，並且我們正在獲得正確的參與度。我認為客戶實際上非常願意圍繞 SEI 可以帶來的幫助他們成功的能力進行更廣泛的對話。

(Operator Instructions)

（操作員說明）

And see no further questions. I will turn it back to CEO, Ryan Hicke. Please go ahead.

並且沒有進一步的問題。我會把它轉回給首席執行官 Ryan Hicke。請繼續。

Thank you. Appreciate your participation on the call today. I'm personally energized by the opportunities that lie ahead for SEI. We will continue to focus on leveraging our reach, driving sales and profit growth, capitalizing on market trends but also helping clients maximize their opportunity right now and delivering what the market values. I appreciate everyone attending our call today. Thanks.

謝謝。感謝您參與今天的電話會議。我個人對 SEI 面臨的機遇充滿活力。我們將繼續專注於利用我們的影響力，推動銷售和利潤增長，利用市場趨勢，同時幫助客戶最大化他們現在的機會並提供市場價值。我感謝今天參加我們電話會議的每一個人。謝謝。

That does conclude our conference for today. Thank you for your participation and for using AT&T conferencing service. You may now disconnect.

我們今天的會議到此結束。感謝您的參與和使用 AT&T 會議服務。您現在可以斷開連接。