SEI Investments (NASDAQ:SEIC) CFO Sean Denham outlined the company’s strategy and growth priorities at a UBS conference, emphasizing the firm’s positioning across “three A’s” of financial services: administration, asset management, and advice. Denham said SEI aims to act as “the connective tissue” of the industry by providing administration and asset management platforms, and recently expanded into advice through its Stratos acquisition.
Investment Managers Services: alternatives mix shift and outsourcing momentum
Denham characterized SEI’s Investment Managers Services (IMS) segment as a global fund administration platform serving large asset managers across traditional and alternative strategies. He said the business has shifted significantly toward alternatives over the past several years, moving from a roughly 70% traditional/30% alternatives mix to an inverse mix in the past year or so. Denham added that SEI is also seeing “convergence of private and public markets,” with alternative managers moving into traditional products and traditional managers expanding into alternatives.
Margins and near-term investment considerations
Denham said SEI has flagged possible near-term margin pressure in IMS as the company prepares for new implementations and continues to invest in capacity and technology, though he noted that margin pressure “has not always come to fruition” in recent quarters. He said SEI typically sees some margin compression in the first quarter due to annual raises, and that severance costs and headcount reductions from a fourth-quarter reduction in force may offset some of those increases.
He also cited ongoing hiring to support new mandates, technology investments to scale platforms, and incremental amortization related to IMS platform upgrades as factors that could affect first-quarter profitability. Denham emphasized that any pressure should be measured and said SEI is not expecting a steep decline from the segment’s recent margin levels. He also highlighted investments intended to reduce clients’ need for “shadow accounting,” including work around NAV visualization.
Private banking: professional services growth and pipeline strength
In SEI’s private banking business, Denham said leadership changes under CEO Ryan Hicke—including moving then-CTO Sanjay Sharma into the role overseeing private banking—helped drive a turnaround from flat to negative margins in some periods to margins “around 18%-ish” currently, compared with historical margins that were “probably around 25%.”
A major theme was the growth in professional services revenue, which SEI has historically described as “non-recurring services.” Denham said the company is reconsidering that terminology after investor feedback, arguing that the services can be repeatable even if individual statements of work differ over time. He said that in the most recent quarter, private banking had roughly $23 million in sales events tied strictly to professional services, with about 25%–30% of that coming from implementation fees and the remainder from advisory and other services that SEI “really wasn’t selling two years ago.” He added that professional services margins can be “more in that 40% range,” making them accretive to segment profitability.
Denham also addressed private banking’s net sales events and retention, noting one significant client loss that was disclosed as part of SEI’s policy after notification was received, and describing the long timelines typical for conversions. He said the private banking pipeline is as strong as it has ever been, and added that while SEI serves large institutions—he cited approximately 12 of the largest 20 U.S. institutions on SEI’s platform—recent gains have also come from regional and community banks, where decisions can be made more quickly.
Asset management: leadership changes, ETFs, and early flow improvements
Denham called asset management SEI’s “hugest opportunity” and said the company has brought in new leadership led by Michael Lane, formerly of BlackRock, as part of what SEI described at its September investor day as a “reimagination of asset management.” He cited early progress, including a quarter with approximately $200 million of positive inflows following a prior year with $5 billion of negative flows.
He said SEI is launching new ETFs, indicating a plan for “around 7 or 8” new ETFs in 2026, and noted an opportunity to incorporate SEI ETFs into its model portfolio business, where he said the majority of underlying products are not SEI-managed. Denham also said SEI recorded $1.4 billion in total ETF flows in 2025, and that the company won two of its largest asset management engagements in 2025—opportunities he said SEI would not have pursued in prior years as it shifts “up market.”
Stratos acquisition, AI, and capital allocation priorities
Discussing the Stratos acquisition, Denham said SEI pursued the transaction to increase its exposure to the advice channel, which he argued has faced less pricing pressure than other areas such as asset management, ETFs, and custody. He said cultural fit and Stratos’ leadership, including CEO Jeff Concepcion, were key factors. Denham said SEI is not forcing Stratos advisors onto SEI platforms, instead aiming to “earn that business,” and described early interest from advisors in SEI’s broader capabilities. He characterized potential deal benefits as revenue synergies rather than cost takeouts.
On AI and automation, Denham said SEI’s business remains labor-intensive and sees AI as an opportunity both to improve efficiency and potentially reduce technology costs paid to third-party vendors. He referenced SEI’s ventures activity, including investments in TIFIN and Axyon AI, and said SEI is working with a “well-known global third party” on an automation effort that could support margin improvement.
Finally, Denham discussed capital allocation and leverage. He said SEI has historically been conservative with leverage, but at investor day discussed moving from roughly negative 1x net leverage toward 0x and potentially 1x over time. He reiterated SEI’s stated intention to return 90%–100% of free cash flow to shareholders and said debt could be used to support future investments, with near-term M&A focused more on supporting Stratos rather than broader acquisitions.
About SEI Investments (NASDAQ:SEIC)
SEI Investments Company is a global provider of asset management, investment processing, and investment operations solutions. The firm offers a range of services designed to help financial institutions, private banks, wealth managers and family offices streamline back-office functions and enhance front-office capabilities. SEI’s technology platforms support various stages of the investment lifecycle, including trade execution, performance reporting, risk analytics and client communications.
The company’s core offerings include outsourced fund administration, custody and trust services, managed account solutions, and wealth management technology.
