The firm took a one-off charge from its programme aimed at long-tenured employees, and it cost $57 million.
SEI Investments Company, the US investments and tech solutions business, last week reported a 55 per cent slump in net income to $61.7 million in the three months to end-September, while revenues slipped by 3 per cent year-on-year to $471.3 million.
For the first nine months until 30 September, net income fell 9 per cent and revenues rose 8 per cent, the firm said in a statement.
Earnings were hit by one-time costs of the voluntary separation programme of $57.0 million, SEI said. (More details below.)
Within SEI’s private banking business arm (the segment that works with PBs), operating profit narrowed on the third quarter of 2021 to $5.9 million; revenue was flat at $122.6 million.
Average assets under management in equity and fixed income programmes, excluding LSV, fell by 17 per cent year-on-year to $166.4 billion. Average assets under administration fell 8 per cent to $786.6 billion.
“Our third-quarter financial results reflect strong sales activity from market adoption of our solutions. Revenue and profits were impacted by lower capital market performance, one-time costs associated with our voluntary separation programme, and continued inflationary pressures on costs. All of our markets are facing a changing landscape, and while this change is challenging, we believe it reinforces growth opportunity for SEI,” CEO Ryan Hicke said.
“We will continue to take the important and necessary steps to invest in our talent and capabilities, while aligning our company for organic and inorganic growth. This is an exciting time for SEI, and we will capitalise on our unmatched position at the intersection of asset management and technology.”
SEI finalised the Voluntary Separation Programme (VSP) offered to long-tenured employees in July 2022; the cost of the VSP was recognised in Q3 at $57.0 million. It also incurred severance costs unrelated to the VSP of $5.2 million included in corporate overhead expenses during the third-quarter 2022.