SEI: Customized Operating Capabilities For Investment Managers

Mar 2 2016 | 11:13pm ET

Editor’s Note: The rapid advance of technology has revolutionized the way alternative investment managers handle their increasingly complex back office, middle office and reporting affairs, and these functions are unsurprisingly at the forefront of many institutional fintech offerings. But not every fintech company builds and manages completely customized operating platforms for their clients, which is what the Investment Manager Services division of SEI provides.

Company name:  SEI – Investment Manager Services

Locations: SEI’s 100-acre corporate headquarters is in Oaks, PA, a suburb of Philadelphia. We also have key operational centers in New York, NY, London, UK and Dublin, Ireland.

Website: www.seic.com/ims 

Fintech Sector(s):  Fund administration and Investment operations; trustee and custodial services

Elevator Pitch: SEI supplies the advanced operating infrastructure and outsourced investment operations needed for investment management firms to compete more effectively globally.

Year Formed: 1968

No. of Employees: Approximately 2,900

Stage:  Profitable:  $1.3 billion in 2015 revenues, $332 million in net income

Notable investors: Public (NASDAQ - SEIC)

Tell us a bit about your company and what it does?

SEI is a leading global provider of outsourced investment operations, investment technology and asset management solutions. We help investment managers, institutional investors, professional wealth managers and high net worth individuals create and manage wealth – and enable their long-term success – by providing solutions that are both innovative and comprehensive. 

The Investment Manager Services division, one of SEI’s five business segments, provides comprehensive operational outsourcing services to alternative investment managers including those offering hedge, private equity, private debt and real estate solutions, as well as traditional managers globally.

As of year-end 2015, SEI provided outsourced investment processing solutions to nearly 300 investment management organizations, servicing over $850 billion in investment assets.

How are you different than other companies in the same space? 

There are multiple answers to this question. SEI has been in the outsourcing business since inception, when our chairman created a computerized simulation tool from his university dorm room. Since that first bank loan solution, we’ve developed a comprehensive operational outsourcing solution for large, complex, multi-asset financial organizations. 

SEI today, as was the case in 1968 when it was founded, has innovation, technology and vision at its very core. One could even say that we were perhaps the world’s very first fintech start up. 

  • We are very technology-focused, and believe that technology drives operational efficiency, accuracy and distribution success. Our approach transcends our physical boundaries and defines our strategic partnerships with clients. We understand that not all technology is created equally, and what works best for single manager hedge funds is not the same as for FoHFs or committed capital products. Additionally, clients have nuances unique to their business models requiring customization. 
  • We also believe in partnering with clients to provide the best solution possible. Our servicing model creates a unique opportunity to form deep, long-term and successful strategic relationships. When we benchmark satisfaction among our clients, a highly rated “partnership approach” is one of the most critical outcomes we strive to achieve.  
  • Outsourcing is our business. Fund accounting, administration, regulatory compliance and investor servicing are collectively some of SEI’s core outsourcing functions. Likewise, middle-office outsourcing is a key capability that SEI provides to sophisticated investment management firms. 
  • We operate in a culture of compliance and risk containment. Globally, SEI manages risk in all aspects of our business. Primarily servicing the critical administrative functions of our investment manager clients, risk avoidance, regulatory compliance and thoughtful risk management are ingrained into our culture and are part of our daily lives. 
  • We are truly an independent third party administrator. Unlike most of our competitors, SEI’s service model is not dependent on cross-selling custody, FX or brokerage services. Fund administration and operational outsourcing solutions are our core business, not an ancillary service to generate other revenue opportunities.

What is your revenue model? How does the company make money?

Fees are primarily earned as a percentage of average assets under management and administration. A portion of our revenues is earned as account servicing fees.  

Who is your target market?

We target alternative and traditional asset managers globally.  

Why are you and your team capable of succeeding?

Selecting and operating the best industry technology is one thing, integrating them together with knowledgeable staff to provide consolidated holistic views of a manager’s business is another. We are able to integrate proprietary systems/services as well as those from third-party partners into one seamless and cohesive processing platform that can handle the demands of our clients throughout their lifecycles.   

Our global operating platform provides asset managers with customized and integrated capabilities across multiple investment vehicles, strategies, and jurisdictions supporting internal business decisions while also delivering insightful reports to investors and regulators alike. 

What is your company’s next target/milestone? 

Our next major milestone will be to service $1 trillion of assets across all asset classes and investment structures.  

Can you tell us one unusual fact about your company?

SEI’s offices are unique in that the physical boundaries that traditionally separated employees are gone – this means no private offices, cubes, executive break rooms, or even personal assistants. All furniture is on wheels so employees can rearrange their workspace according to changing projects, teams and client requirements. Additionally, works of emerging art from the renowned West Collection are hung throughout each office to encourage new thinking and innovation.


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