SEI Investments Company

Ladies and gentlemen, thank you for standing by, and welcome to the SCI first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. We will have a question-and-answer session. Instructions will be given at that time. If you should require assistance during today's call, please press star then zero. As a reminder, today's call is being recorded. I mention the comments of our host, Chairman and CEO Al West. Please go ahead.

Thank you, and welcome, everyone. All of our segment leaders are on the call. as well as Dennis McGonigal, SAI's CFO, and Kathy Heilig, SAI's controller. I'll start by recapping first quarter 2021. I'll then turn it over to Dennis to cover LSB and the investment in new business segment. After that, each business segment leader will comment on the results of their segments. Now, as usual, we will field questions at the end of each report. So, let's turn our attention to the financial results of the first quarter of 2021. First quarter revenue grew 10 percent from a year ago, and first quarter earnings increased by 19 percent from a year ago. In addition, first quarter EPS of 89 cents grew 24 percent from the 72 cents reported in first quarter 2020. Finally, first quarter, asset balances grew by $3.4 billion, while LSV's balances grew by $7.9 billion. During the quarter, we repurchased 1.2 million shares of SEI stock at a price of $58.11 per share. That translates into $66.9 million of stock repurchased. Also this quarter, we continued our investment into growth-generating initiatives. The newest effort is One SEI, which is a large part of our growth strategy. As you will recall, One SEI leverages existing and new SEI platforms by making them accessible to all types of clients, all adjacent markets, and all other platforms. Turning to revenue production, Net sales events in private banks and investment managers were $17.5 million, of which $13 million are expected to be recurring. On the other hand, net sales events of a negative $12.7 million incurred in the asset management-related units of investment advisors, institutional investors, and bankings, AMD. In a few minutes, unit heads will provide more detail on their specific sales results and their new business opportunities. To grow and prosper in the future, we know that things will never be the same. So we have been busy adopting new mental models and realities. One such new reality is a remotely distributed workforce. We have been planning how we work in the future interacting on these plans. Fortunately, we have a lot of positive momentum moving into 2021. Currently, we have a strong backlog of sales and conversions and a number of key prospects late in the sales process. We have also made progress in strategically repositioning our asset management related business segments. We are poised and ready to capture the opportunities inherent in significant change. Now, this concludes my formal remarks, so I'll turn it over to Dennis to give you an update on LSV and the investment in new business segment. After that, our segment heads will update the results in their segments. Dennis?

Thanks, Al. Good afternoon, everyone. I'll cover the first quarter results for the Investments in New Business segment and discuss the results of LSB asset management. During the first quarter of 2021, the Investments in New Business segment activities consisted of the operation of our private wealth management group, our IT services business opportunity, the modularization of larger technology platforms to deliver on our One SEI strategy, and other investments. During the quarter, the Investments in New Business segment occurred a loss of $9.5 million, which compared to a loss of $11.4 million during the fourth quarter of 2020. Approximately $7.5 million is tied to our one SEI effort. Regarding LSV, our approximate 39% ownership contributed $33.4 million in income to SEI for the first quarter. This compares to a contribution of $30.6 million in income for the fourth quarter of 2020. Assets during the quarter grew approximately $7.9 billion. LSB experienced net negative cash flow during the quarter of approximately $4.8 billion, offsetting market appreciation of approximately $12.7 billion. Revenue was approximately $110.8 million for the quarter with nominal performance fees. Finally, our effective tax rate for the quarter was 22.6%. We have also included in our earnings release additional financial information. And if you have any questions on any statistics, Kathy will be available to answer them. With that, I'll take any questions.