Q4 2021 SEI Investments Co Earnings Call

Ladies and gentlemen, thank you for standing by welcome to the Sci fourth quarter 2021 earnings call. At this time all participants are in a listen only mode. Later, we will have a question and answer session and instructions for queuing up will be provided for you at that time.

Should you require operator assistance during the call Press Star Zero on your phone's keypad and as a reminder, this conference call is being recorded.

I'd now like to turn the call over to our host Chairman and CEO . Mr. Al West. Please go ahead.

Welcome everyone.

On our call today, we have some new participants due to a change in leadership in our banking and investment managers segment.

I'll tell you Don I will speak to that.

Banking and film cable speak freely.

Investment management segment.

They will be joined by the segment leaders on the call as well as Dennis Mcgonigle Sei's CFO .

Yes.

CFO and Kathy Ireland.

<unk> controller.

First let's turn our attention to the financial results fourth quarter 2021.

Revenues grew 13% during the quarter compared to fourth quarter last year.

At the same time earnings increased 15%.

Plus the fourth quarter EPS of one $1 three.

Grew 20% from the 86.

Reported in north.

Fourth quarter 2020.

During the quarter asset.

Asset balances increased by $6 2 billion.

Well as these asset balances grew by one 4 billion.

During the quarter.

We repurchased one 5 million shares of Sei's stock at a price of $62 44 per share.

That translates in the $95 5 million.

Stock repurchases.

Next let's turn to.

Revenue production during the fourth quarter.

Net sales events and private banks.

Investment managers were $31 3 million of which $22 $1 million or expect to be recurring.

In addition, net sales events of $4 5 billion.

Dollars incurred in the asset management related units. These events reflect positive asset flows advisors and institutions.

In a few minutes unit heads will provide more detail on their specific sales results and our new business opportunities.

Work to build on these results.

'twenty two and beyond.

Now I'd like to provide you an outline of our situation today.

Is that I remember as I mentioned earlier, we have experienced.

Leadership changes.

The private bank and investment manager segments.

This leadership involves four individuals.

<unk>.

Sandy everyone.

Brett Williams and Phil Mccabe.

Together they have deep expertise gained declared collective collectively over 88 years working for Sci.

They are an example of our strong and talented leadership.

One of our businesses steadily grows.

Revenues and profits.

IMS.

Another business. The advisory segment has recently been executing a technology driven strategy. We have strong indicators that the business is returning to pre eminence were very excited about that.

Another business private banking is diligently working on a large implementation backlog a strong sales pipeline and enhanced client satisfaction.

Our last large business is the institutional investor segment, while it faces headwinds in those legacy defined benefit or CIO client base their strategy is to aggressively address fast growing markets.

We are also focused on building growth engines beyond our core traditional businesses here, we're finding opportunity in markets and services adjacent to our four main engines.

In the past we have shared a couple of these innovative young.

Businesses.

For example.

Spear, leading edge servers networks and data security is gaining traction.

And the private wealth management businesses provide an enterprise platform to alter high net worth families.

Just completed a positive year of growth.

Finally, we have made three acquisitions toward the end of the year.

And that will add additional capabilities for both alright.

MFS and institutional investment business lines they.

Hello.

Atlas.

No meal and milk no nor was nobles alright.

Alright.

We are well on our way integrating these companies into Sci and are already in market with the expanded capabilities they give us.

We have built positive momentum during 2021, we.

We have a strong backlog of sales and implementations and a number of key prospects late in the sales cycle. In addition, we have been successful in repositioning our asset management related business segments.

And with that I'll turn it over to Dennis to give you an update of the OSP and the investment in new business segment.

Thanks Al Good afternoon, everyone I'll cover fourth quarter results for the investments in new business segment and discuss the results of <unk> asset management.

During the fourth quarter 2021, and the investments in new business segment activities consisted of the operation of our private wealth management group.

Ci sphere.

Modular <unk> of assets and data integration of different platforms to deliver on our one Sci strategy and other investments.

During the quarter the investments in new business segment incurred a loss of $8 8 million, which compares to a loss of $11 4 million during the fourth quarter of 2020.

Approximately $5 6 million of expense.

During the fourth quarter of 2021 is tied to our <unk> effort.

Regarding <unk>, our approximately 38, 7% ownership contributed $34 2 million and income to Sci for the fourth quarter of 2021.

This compares to a contribution of $30 6 million and income for the fourth quarter of 2020.

Assets during the quarter grew approximately $1 4 billion.

<unk> experienced net negative cash flow during the quarter of approximately $2 $6 billion with market appreciation of approximately $4 1 billion.

Revenue was approximately $113 3 million for the quarter with $3 $2 million of performance fees.

As Al mentioned in addition to the two acquisitions, we discussed on the third quarter call for <unk> and Atlas, we closed on an additional acquisition of a company called notice.

No. This is a global portfolio intelligence platform company designed to expand sci's capabilities for both the institutional investor and investment management markets.

Paul will provide additional commentary on novus.

Our fourth quarter results reflect the assimilation of their respective operational revenue and expense as well as the cost of acquisition.

Our effective tax rate for the quarter was 18, 3%. We are also included in our earnings release additional financial information.

Please refer to our soon to be filed 10-K for more information.

I will now take any questions.

Ladies and gentlemen, if you'd like to ask a question. Please press one zero on your phone's Keybank will hear a tone.

The messaging that you're in Q and you can remove yourself from the queue by pressing one zero again.

You're on a speakerphone with USC. Please pickup your handset before pressing the numbers once again for questions Press, one zero and well go to our first question from Owen Lau with Oppenheimer. Please go ahead.

Good afternoon, and thank you for taking my question, Dennis So labor and salary and labor costs.

A topic that many people pay attention to I think it's not just nci's sci specific but across different industries and I saw the Sci expect the stock based comp to be approximately $46 3 million. This year compared to 41 5 million during 2021.

Which represents a 12% increase could you. Please talk about how sci manage com expands and tackle the rising labor costs. This year. Thank you.

Sure.

He was a topic of conversation for most of 2021, particularly the second half.

And if you remember.

On the third quarter call, we talked about how not only how do we addressed.

Particularly with our kind of early stage professionals tend to mid level professionals.

<unk>.

Compensation adjustments, we've made in the summer and then an additional compensation adjustment we made at the end of the third quarter and we did that not only to certainly reward our employees for the great work they do.

But also reflective of market conditions competition for talent in.

And the need for us to remain competitive.

On that front and all of that cost in terms of cash compensation. If you will is baked into our fourth quarter results.

Stock option expense, that's a little bit different story, we had no stock options are generally issued to employees that we feel and our board sales are going to be significant contributors to the future success of Sci.

Option expense carries its own <unk>.

Unique calculation so how much.

Expenses attributed to each option issued.

That has multiple.

Multiple factors that go into that calculation.

I look back to 2020, we had a fairly significant grant of options in 2020.

We have are generally we issued options in December of each year. So it is safe to say we had an additional grant that was made in 2021.

The expense you saw in 'twenty 2021 was reflective of a the additional options that were granted in 2020 coupled with.

The shortened timeframe for vesting that we estimated we will be in play for some options that we had greater than previously so we accelerated some.

Some expenses into 2021.

And pull it forward if you will from really 2022, and maybe a little bit from 2023.

So you had a little bit of.

Increased option expense in 2021 that we would have incurred eventually we just pulled it forward given our vesting process.

The other.

Saying that did occur in the fourth quarter Youll hear there's an filming kay's commentary.

We did have some retirement of unvested options in the fourth quarter. So we got a little bit of everything we can to get an expense benefit against option expense in the quarter, so that offset some of that some of that increase.

Yeah.

Got it that's helpful and then on the SG&A side could you. Please give us an update of your latest latest status about people going back to the office versus working with mountain in 2022.

Speaking, how do you think about SG&A expense this year compared with 2021. Thank you sure. Thanks.

Now, where we are with bringing people back to our.

Campuses, our offices around the globe.

Yes.

In terms of U S offices other than New York, New York kind of has its own unique is you can probably appreciate.

Attributes to it given how the city is.

And what's going on in the city, particularly.

In October we opened all of our offices up for any employee to come back on a volunteer basis. So we certainly don't want to force anybody back if they were still not quite comfortable.

We are functioning very well as a firm and our current work environment. So we didn't want to.

Really forced the issue, but we did open up our offices to anybody who wanted to come back who come back whether it's one day a week.

Two days of week five days a week.

That being said at that time, we had probably.

Six 700 people that were coming in the office every day.

And during the week so we.

We started to see some pickup of people returning.

Good to see.

We see real benefits in people being at our offices, particularly around team oriented.

Activity is project oriented work across <unk>.

Players.

Of our groups across the company. So we want to continue to foster that.

But then as we got into December , particularly the mid December .

We're all too familiar with.

The letter of the Greek.

Alphabet, we pronounce omicron.

So for those of US who didn't study ancient history learning the Greek alphabet. This year has been I guess, one of the silver linings of October .

So we saw so we got a little bit of a setback, but actually as we've gone into January we have seen actually more people coming back and the numbers.

Are ticking up we are currently working on plans that are I would almost say.

Covid neutral if you will they are really about the long term.

Work environment, how do we want to proceed as a company strategically long term relative to.

How our folks work both in an office outside an office, we certainly have embraced flexibility.

In the work environment, but we also know there are.

Real benefits to.

People being together working together the spot 90 that comes with that.

The cross pollination that comes with that so we're.

Working on those plans now and we expect and I certainly expect that over the course of the first half of this year, yes, we will.

See additional folks coming back to the office again with.

But we will.

Support and continue to sustain us at a certain level of this flexible work environment.

Outside the U S. So that was definitely the U K and was having really good success, bringing people back and then.

The U K government prior to the holidays, because Obama kron shut things down and really push people back into a work from home environment.

As we know just recently they reversed that.

And have now gone just done on 180 degree.

<unk> shipped to getting people back to offices. So I think the UK office will get back to you.

On a more regular presence of most of our workforce again with certainly the element of flexibility baked in Ireland as our other larger office. Similarly, the Irish government announced just this past weekend also a reversal similar to the U K of bringing people back to the office.

We're months there were more consistently remote I would say.

So we'll see how our Dublin office responsive.

In response to that but we will work to get people back and maybe Phil can comment on that one.

I guess, just turn it to Mike here.

So all in all it's going to play out I believe the first half of this year.

Look we don't know the next letter in the Greek alphabet.

<unk>.

We can get get back to the kind of new world of flexible.

But together kind of a work environment.

Got it that's very helpful. Thank you Dennis.

Thanks Al.

Our next question comes from Michael Young with <unk> Securities. Please go ahead.

Hey, Thanks for taking the question I wanted to just ask about LSP I appreciate the update for the fourth quarter, but obviously since then in the first month of this year, we've seen significant outperformance by value versus growth and just curious if you could provide any sort of update on may.

Kind of where things stand now visa the outperformance of value versus kind of just the secular trends in that business.

Sure I.

I mean, 2021, and I would suspect that will continue and that has continued into this year, but.

The firm numbers yet.

Yes, it was a really good relative performance year for LSC.

And that certainly will help them in the market as particularly as firms start to wait more towards value to the extent that occurs <unk> will be on the sure the shortlist of.

Sort of.

Searches for that for assets.

They still struggle a little bit with the three year or five year performance number or did in 2021, so having a strong 2021 will also helped our longer term performance numbers.

And that.

As much as if not more so the one year number should be beneficial so I know there.

Yes, certainly optimistic given the.

Return to value or the again, the shift that seems to be occurring to value and they are certainly feel good about our performance last year.

I feel like they are in a good position to capture assets as the market moves.

And that value direction.

I tried to emphasize on prior calls.

One thing about <unk>.

They know what they are they know what they're really good at they know what the brand stands for.

They have despite the.

Kind of tough environment over the past.

Five plus years really.

They have stuck to their knitting and stuck to their brand and that will serve them well if we get this value shift.

Okay, Great and just as my follow up kind of on just capital allocation more generally you guys have been a little more active in the M&A arena in the fourth quarter, but the stock is also down a little bit kind of what the market.

Seven 8% year, so how should we think about sort of capital allocation priorities vis vis share share buyback versus M&A and kind of what are you seeing in that pipeline.

Yes.

Well first of all.

We definitely make the point that the two are not.

We don't trade one after the other per se.

We are very much in the market relative to M&A and good opportunities that we think are good fits for sci either enhancing one of our existing businesses, adding to our capabilities that can help us in multiple parts of the company like some of the recent transactions we've done.

Now certainly interested in new business lines potentially.

And to further diversify Sci and give us new revenue streams and profit opportunity.

New geographies that we have.

Kind of what our landscapes strategically, but an acquisition might give us a little bit quicker market entry.

Opportunity.

So that's something that we'll continue to press on this year.

Into the future.

It's hard to predict whether anything attractive will come along but.

Won't be for lack of us.

Looking in an entertaining ideas relative to stock repurchase.

Words.

Priorities really haven't changed so reinvest in the business, which includes M&A.

And return capital to shareholders.

Now Thats a stock buyback.

Predominant use of capital, but as you also saw in late December we our board did declare another dividend.

Which just that was higher than last year's dividend.

Just continues the progression of year over year consistent growth.

And our dividend Prost.

Process.

I don't know if were in the I know, we're only these gold lists of dividend paying companies.

I don't see that changing either.

Okay. Thanks.

Rob.

Our next question comes from Robert Lee with K B W. Please go ahead.

Great. Thanks, Good morning, good morning.

Good afternoon, everyone hope everyone's doing well.

Completely confused here.

So anyway good evening.

Rob.

Yeah.

One week already.

So I guess my question, you know I guess, it really much higher level, and frankly, probably a little uncomfortable to ask but.

Something I think is on investors' minds so.

And I think rightly or wrongly with Steve leaving.

Firm I do think there were investors who viewed him as.

Again, rightly or wrongly as a future potential and a leader of the company.

So I think as sudden departure was somewhat jarring for <unk>.

Investors will be some that I've had conversations with so I guess along those lines is there any plan to kind of update us or maybe start to make more transparent.

To the outside with some of the you know.

A potential succession or leadership.

You ship could evolve over time, no going forward, because I think it's something investors would.

It would really value so thank you.

So.

Yes, I think.

Net.

We're back on track with.

The.

The.

Creating the creating.

And.

In an environment, where we're looking for.

A strong CEO .

Will.

We will share that.

As we as we go through.

Okay.

I appreciate that.

And then maybe Dennis will there.

I know you had few transactions.

Kind of touched on some transaction expense were there any kind of notable or sizable.

<unk>.

Transaction or one time related expenses that may flow through in the quarter that we should think about.

Going away going forward I mean, maybe the flip side of the one time.

Termination fee that I guess will be in the private bank segment.

Kind of offsetting that.

Yes, so on the.

The earnings release, you saw that the termination fee that helped revenue and private banking.

<unk> had some offset so.

The net of that I think you'll hear from I know youll hear from <unk>.

None of that was about $4 million benefit to.

Bank profit really think revenue and profit so.

While we had the one transaction we had some other things that went the other way that will not repeat.

In terms of the acquisitions.

The two smaller acquisitions Atlas and so.

So no meal.

Really had less impact to P&L, if you will in.

In the quarter.

Novus. So it was a larger transaction so the.

And there was only a stub period that we had in the quarter wasn't a full quarter and Youll hear from Paul kind of what the impact was there and what do you expect it to be.

For 2022, but yes.

So that had some negative negative impact.

Yes, things that impacted the quarter I would say negatively but they are in our run rate. So our salary salary changes our compensation changes that I talked about when Ellen asked.

Asked this question Thats baked into the P&L.

Paul quarter will tell you about.

One $3 million profit benefit.

Net benefit from a performance fee that we earned in his business.

We won't repeat so that was beneficial to.

Earnings.

There's always things that go in both directions.

As I mentioned with option expense.

The quarter, we did get the benefit of the retirement of some unvested options.

That won't repeat.

As we move into 2022.

But all in all the quarter.

Yes. It was really strong I mean revenue top line was really strong.

Profitability was strong.

Continue to manage expenses, but we're doing it smartly and with their strategic through a strategic lens.

Uh huh.

Which is the best way to do it from our perspective.

Yeah.

So it was.

We have more moving parts I would say in the fourth quarter than we normally do but.

Net net.

You probably would have brought the earnings down a little bit but not <unk>.

Very strong quarter.

Okay, Great I appreciate you taking my questions. Thanks, Oklahoma.

Our next question comes from Chris Donat with Piper Sandler. Please go ahead.

Hey, Dennis.

Just wanted to follow up on Rob's question on the <unk>.

The acquisitions I know you just said that the impact looking backwards from Atlas Inferno meal.

Was.

Less impactful, but do you expect.

Full impact of revenue and expenses from those businesses in 2022.

I understand will have to wait for Paul's comments on Novus, but just for Atlas in canola meal for 2022 any thoughts.

Yes, I'd say phenomenal.

Probably a little bit more.

<unk> expense for the year will have a full.

<unk> expenses, a little bit more there it's not us.

Material I'd say, given the size and scope.

Atlas It comes with revenue.

<unk> expense, so I'll, let Paul speak to that.

As well as notice but.

Yes.

This is really a purchase of a fund with a couple of people.

So it's more of a revenue.

Revenue play than anything else.

Okay.

I'll wait for Paul then yes.

Paul will tell you is.

Impact.

We bake it into 2022 four nervous now thats aside from any growth we get out of it any improvement we get.

Based on.

The stub period in the fourth quarter is about $7 million. So that includes all the amortization of.

Tied to the acquisition itself versus operating.

Operating income.

As you know, we're a GAAP reporting firm, we don't do non-GAAP . So.

Good backhaul that amortization stuff out that apparently doesn't count sometimes but.

<unk>.

Right.

Got it Chris.

Turning for us on getting.

Okay.

Thanks Dennis.

Welcome. Thank you.

For additional questions on this topic. Please press one zero on your phone we go now to Ryan Kenny with Morgan Stanley . Please go ahead.

Hey, John how are you.

Great Ryan about yourself.

Just a follow up to some of the questions on expenses that we've had so far are trying to put everything together.

So your margins have been around 28, 29% for the last few quarters in a row now that's higher than you've been running at historically, so as we look forward to 2022, when we factor in the comp adjustments and the acquisitions and some of the investments you're making do you expect that number to move either up or down at all.

I think the general generally given we do have a lot of moving parts going both directions.

<unk>.

I would expect it to be relatively stable.

It's hard to predict growth is hard to predict the markets. If we get neutral better markets, maybe it will that will help us because it's much more scalable.

Revenue and profit.

But I think.

That's running at that margin level with a growing top line.

It's certainly easy to calculate.

Dollar profits.

And which is something we always look to do sustain a fairly healthy reinvestment rate.

New opportunities.

Whether we would spend that.

All of that.

New money, if you will on new things is really dependent upon our optimism and bullish.

Bullishness on the new things, but it's.

We don't target a margin rate to run at what I would say I would guess it would be in that same range.

Thank you.

Youre welcome.

And we have no additional questions in queue at this time.

Thank you.

Before I turn it over to the other al 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 on today's earnings release.

And in other filings with the SEC, we do not undertake to update any of our forward looking statements now.

Now here's the other al.

Alright, Thanks Dennis.

Good afternoon, everyone fourth quarter 2021 revenues totaled $129 3 million.

Which was up $9 6 million or 8% as compared to the revenues from fourth quarter 2020.

Fourth quarter 2021 quarterly profit of $11 5 million for the segment was up $6 9 million from fourth quarter of 2020.

Q4, 2021 profits include approximately 4 million of net positive impact from onetime items.

And turning to sales activity during the quarter, we closed approximately $18 million of net investment processing event 12 million related to recurring revenues and $6 million related to one time.

The $12 million recurring revenues 6 million is related to at WP <unk> three K. Our trust 3006 million is related to cross sells.

Overall, we signed three new clients of note.

In the U S. We signed one swg agreement with Fiduciary Trust International a wholly owned subsidiary of Franklin Templeton under the New agreement Fiduciary Trust International, which acquired Pennsylvania truck company and existing at WP client.

We will adopt yet.

<unk> wealth platform for the combined entity.

During the quarter in the U K, we signed two contracted nodes.

One new contract with wafer can investment management, a leading U K wealth management brand expanding our success in the <unk> segment.

Another contract with note in the UK is HSBC a client that currently has business on our platform and business in our current backlog while signing this represents an expansion of our relationship to include alternative fund processing services.

We are working with this client to address their changing needs with respect to the business contracted in 2020 that is currently part of our backlog.

This demonstrates our ability to help our most complex and large clients respond to ever changing market environment, the changing environment for our most complex clients creates opportunity and adjustments in our relationships as we try to help them respond to these changes.

We're excited to work with all of these firms.

Now turning to implementation activity in the fourth quarter, we successfully converted to climb from competitive platforms to at WP Carey.

Cambridge Trust headquartered in new England migrate to at WP.

In addition to converting their wealth management business. They also outsource their back office staff.

Previously, Cambridge manage their operations in house.

Headquartered in Kansas City also migrated their private wealth management book of business to the <unk> platform.

We believe the momentum is strong in a number of agreements have been signed and new client implemented throughout the quarter. We feel this is a good indication that while the pandemic continues its not ultimately deterred new frac firms from partnering with Sci.

As an update on our backlog, our total signed but not installed that global backlog is approximately $81 7 million in net new recurring investment processing revenue <unk>.

Including the signs I just mentioned.

We continue to work with our clients with longer tailed timeline as their business needs change and new opportunities present themselves.

From an asset management standpoint, total assets under management ended the period at $26 3 billion.

Which was up 3% from the fourth quarter of 2020.

Our cash flow for the fourth quarter of 2021 was essentially flat.

As we go into 'twenty to 2022, we remain committed to our strategy of building a global pipeline and associated backlog matriculating that backlog gradually improving our operating profit and prudently investing in the business to create sustainable growth.

We have a talented team across Sci that is focused on these goals. We remain excited and optimistic that concludes my prepared remarks, and I'll turn it over to any questions you may have.

Once again for questions plus one zero on your phones, keeping kind of wondering Q from Brian Kenney with Morgan Stanley . Your line is open. Please go ahead.

Hey, just wondering if you have any update on the pace and the path of pretax margin expansion in the private banking segment.

I'm, sorry ask that again.

Yeah.

Is there any update on the pace of the pre tax margin expansion and the private bank segment.

Yes, Thanks, Brian I appreciate it.

As we think about continued margin improved operating margin improvement as you can imagine we don't foreshadow with going forward, but we feel comfortable with what we've achieved but we're.

Waiting and monitoring the impact where the capital markets will be in 2022, as well as well as where M&A will be an opportunity.

Risk for us.

But overall, we continue to do.

Management plans, we've laid out over the last several quarters and Theyre having continue.

Continued success and progress.

Thanks, and just one follow up as Wells Fargo still in backlog and is there any update on if it's still in the backlog when thats expected to come through.

Ryan Good question, Yes Wells Fargo is still in our backlog and as you know we don't.

<unk> deliberately about the live implementation dates of the backlog, but as I mentioned before we're constantly in discussions with our clients about how their business is changing divestitures. They make investments they make and then lining those up to our <unk>.

Limitation timelines.

Thank you.

For additional questions on this topic. Please press one zero.

And we have Robert Lee from K BW. Please go ahead.

Great. Thanks.

Good evening, Alex good afternoon.

I had two questions first could you update us on the size of the backlog given that you had some new business wins, some things funded so just kind of where it stands in aggregate right now.

My first question.

Yes, Robert no problem and good evening deal as well.

Yes, as I mentioned in my prepared comments backlog. The global backlog is at 81 7 million as you know from previous quarters, and then biopsy today, we continue to make progress matriculating that revenue and installing clients and I would anticipate over the next 12 months that.

Approximately 50% of the $81 7 million would be installed.

Great and then maybe as a follow up.

Clearly from a margin perspective.

Hard to.

No one can predict.

What markets do they stay here go back up go down further, but just trying to kind of level set it.

Heading into the year, given what you see with.

New business conversions whatever expense plans you have would you have expected.

Margins can you give us a sense of in.

In a kind of flat.

<unk> acid return environment lets call it that heading into this year, where you. How you would have expected margins to progress or maybe kind of finished the year given where.

Kind of where you started.

Yes, I think again.

Yes, Robert I think we're obviously happy with how we progress throughout the year I think even given capital market neutrality or moderation I still would point to the fact that there is a lot of ins and outs in our margins as especially as it relates to one time and that I can't predict but from where I sit today.

Yes, we made around expense management and how we're looking at our investment stream has helped our margin improvement and I would imagine that would continue as we progress into 2022.

Okay and as you convert the expect about half of the backlog to come on this year are there.

Any kind of incremental I mean, I know, there's usually some incremental costs may be rent escalation certainly around sales, but is there anything you know.

Noteworthy we should be thinking about that as that converts we should expect to see some I don't know.

Some lumpy one time costs as you know is big conversions happen just trying to you know.

It's kind of.

Got my arms around it.

Yes, no it's great Robert Thanks for the call.

As we talk about our implementations and whats lying ahead the cost is relatively baked in inside of our P&L.

I would not expect us to see.

Exceptional costs related to what we implement in our backlog obviously, we have personnel that will ebb and flow as we installed clients, but it wouldn't be material to our expense line items.

Okay, great. Thanks for taking my questions.

Sure.

Yes.

Our next question comes from Ryan Bailey with Goldman Sachs. Please go ahead.

Nice to speak to you.

Yeah.

Nice to meet you as well right.

I was just wondering if you can help us think about.

I know this is challenging but maybe if you can just help us think about the number of potential funds that you're watching in terms of some of those M&A comments and that being a potential headwinds.

And if there's any way you can help us think about what sort of size risk that would be I think can be very helpful.

Yes, Ryan as I'm sure you can imagine it's impossible for me to really size the reservoir the opportunity of M&A, because we don't control that painting. All we know is that the trend that pace is moving up that moving down so as a business we pay attention to that now what I will say Ryan is we're actively engaged with our clients.

We're intimate with them and we're going to respond to their needs as it relates to our capabilities like conversion experience et cetera, we view that as an asset but at the end of the day on an M&A deal.

As you know the M&A as the organization's top priority and platform decisions become second tier to that to that decision. We're involved in it but we don't determinant that final outcome. So it's really hard for me to predict or monetize that for you.

Okay, Alright, thank you I appreciate that.

And I'm, sorry, I tried getting into the initial lineup Q&A, but clearly had some technical difficulties.

If you come back to the other Alan Dennis a quick question I am sorry, if youre doing it during the segment discussions but.

Hey, Rob.

Rob's first question and I'm, sorry, if I misheard I misheard, you or other out did you say that you are in the process of looking for a future C. R.

Yes.

We are started.

Look.

Got it okay. Thank you.

That's all my questions. Thank you.

Our next question comes from Michael Young with through a Securities go ahead. Please.

Hey, Al just wanted to ask kind of high level strategically what your priorities are maybe if you could kind of stack rank those for the businesses and intentionally leaving a little bit open ended, especially for a professor and strategic management so have at it.

Yes.

That's fine.

Yeah, Yeah, I don't want to be sure. If I was going to use a lot of humor to date, but now that you opened up that can maybe call. It two to three hours long.

Michael Great question, I think as it relates to the strategy, we're going to remain relatively consistent.

So our strategy that we talked about over the last several quarters and probably year and a half and if I were to summarize that I think our main focus is serving the clients. We have we haven't really deep relationships with those clients we value those relationships and we think there could be additional potential in those relationships as we see their businesses change.

And about after serving existing clients, we're focused on really building out our pipeline and I would say a global pipeline. So we've made some moves in personnel.

Take some people in the U S that have some experience with.

Global selling helping them help our UK office, so I would expect us to get our pipeline is stronger in the UK and then continue to build the momentum in that pipeline that we have in the U S and then.

Laser focused on the matriculation of that revenue, which we would consider the implementations of those clients.

Deep experience.

Experienced with the clients so I've been around for a while here, but almost all clients that have been installed at WP I've been involved with so I know what it takes to matriculate, though so I keep my eye on that and then as we've talked about it in a number of questions. Before this were going to be continued to be focused on expense management and I say that with respect towards new client.

And whatever investments are needed to extend relationships or install but I would say those four from overall business prior.

Priority will be my strategy priorities and I think it goes without saying, Michael but I'd be remiss not to mention it is and we're going to work really hard on making sure our employees feel like they have the health and safety necessary to operate in the environment, we find ourselves in today and that's a huge part of <unk> culture.

Okay, great and just with the existing wins.

Lee or kind of as you move into this year ahead post pandemic I'm, just kind of curious about the value proposition and kind of the sales.

Process is it really a function of just getting trial kind of with the newer platform with clients, especially internationally or what is kind of a key that you feel like is driving success on the sales side.

Yeah, Great question, Michael I mean, one thing I will just say about the sales process just to starts.

I'm sure you know that.

One of the things that's interesting in our business as the sales process can't be time because of the decisions are multifamily you may have a CTO about the CFO involve the head of risk involved so one of the difficult things about our sales pipeline is predicting when things will actually close because the process of selling is as complicated, but once you get out there.

The process of selling in our market unit I think I will go to exactly where you pointed I would start with our value proposition and I feel really good about our value proposition I think the overall macroeconomic trend towards outsourcing.

Advent of resiliency is an important strategic priority given COVID-19 eight point in favor of a place like Sci and when I think about our value proposition and how we position it in the sales cycle, we position ourselves as a differentiated provider and rightly. So we have the most.

Outdated infrastructure inside our space, we lean into that we are one of the only homegrown fully captive outsourcers and we lean into that as a point of differentiation and then we lean into and this is hard it's a little more intangible we lean into the professionals, we have here with deep domain expertise and our relationships and.

Services architecture to show our clients what it means to be a partner of STI. When I think about how that translates to our momentum I think youre seeing that over the year and the deals. We're closing the type of clients we are winning.

<unk>.

I think we'll continue to see that momentum my goal in 2022 is to.

Make sure that that transcend both U S and the UK as we continue to pursue active engagement in the market.

Okay.

Okay. Thank you for all that color I appreciate it.

My pleasure. Thank you.

One left in queue once again for additional questions on this topic. Please press one zero. We go now to Owen Lau with Oppenheimer. Please go ahead.

Thank you very much sorry, I may have missed this one but I wanted to go back to that $6 $8 million early termination fees from an existing investment in processing client why did this client terminate and how much revenue impact we should expect in our quarters can also it's Dan.

Any offset thank you.

Yes. Thanks.

Thank you Miss it so good question.

The.

The termination fee, you're referring to is related to.

M&A activity it was in SWT client for us the buyer of that client was a non sci client and they decided to move.

Sure.

This business onto their platform, which for competitive point, just so you have this appreciation.

Purchaser has a proprietary system. So it wasn't as if we lost this business to another competitor, we actually are losing it because they are on a consolidated onto that proprietary platform.

And then.

I think this is.

I. Appreciate this we don't get into the details on a client by client basis of our of the revenue impact.

Okay. Thank you very much.

We have no additional questions in queue at this time.

Sure.

Alright so.

I'm going to send it over to my esteemed colleague Dr. Kate Thanks Al good.

Good afternoon, everyone 2021 marked another strong year of growth and continued momentum for the investment managers segment across all of our business lines. Our focus on executing our growth strategy led to positive results driven by new sales growth continued expansion with existing clients and group operational efficiency.

<unk>.

These results were made possible through the significant efforts of our entire IMS team and our seasoned leadership around the world.

For the fourth quarter of 2021 revenue totaled $154 5 million.

Which was 19, 2% higher as compared to our revenue in the fourth quarter of 2020.

Profit for the fourth quarter of $63 5 million.

The 28, 4% higher as compared to the fourth quarter of 2020.

Profit grew as a result of our revenue growth and also benefited by a one time $3 million reversal of stock option expense related to the retirement of Unvested options.

Third party asset balances at the end of the fourth quarter of 2021, or $907 4 billion approximately $45 $8 billion higher than the asset balances at the end of the third quarter of 2021.

This increase is primarily due to net client fundings of $37 4 billion and.

And market appreciation of $8 4 billion.

And returning to market activity during the fourth quarter of 2021, we had another strong sales quarter with net new business events totaling $13 million, which are expected to generate net annualized recurring revenues of $10 1 million.

In addition, we re contracted $37 $8 million in recurring revenue.

Highlights of these events included in our alternative market unit, we closed a number of strategic new names ranging from startups to large global managers and our cross sales strategy continues to resonate and robust sales of existing clients.

We won the business of a private equity fund.

S sales process marketing debt of $60 billion of our initial entry into outsourcing in fund administration.

<unk> was also selected to provide funding administration for a multibillion dollar startup private equity firm as well as in other real estate takeaway from a competitor.

In our traditional market unit, we added business in all product lines with new clients and expanded wallet share with existing clients and in particular, our business expansion in both our collective trusts and ETF solutions remains strong.

Also pleased to announce the conversion of a $10 billion multi fund complex or advisers inner circle platform.

In Europe , we added several new UCITS funds and continue to expand our ETF private equity and private debt business.

At the end of the fourth quarter, our backlog of sold but unfunded new business stands at $34 4 million.

As we exited a successful 2021, we plan to build on our momentum and strong position in the market and then as we progress into 2022 will focus on the following.

Executing our growth strategy, increasing our client acquisition rate expanding our wallet share with existing clients.

And investing in our platform solutions and workforce.

We are very optimistic and excited about our strong growth prospect and our path forward that concludes my prepared remarks, and now I'll turn it over for any questions you may have.

I once again for your questions. Please press one then zero on your phone such bad.

And again, we're going to go back to Mr. Robert Lee with K B W.

Great. Thanks, Thanks for taking my questions.

Just curious on the re contracting I think you've mentioned is about call. It $38 million roughly I'm just kind of curious of what your experience has been on re contracting if youre able to kind of.

You have to price.

Give concessions you're able to get kind of any price increases.

I'm sure that's somewhat unique to each one but kind of in general what's the.

The.

The pattern, you're seeing when contracts come up for <unk>.

Sure IRA.

Actually in the quarter, we had about a number of different re contract they're almost evenly split between alternatives and traditional are all multiyear extensions four plus years on average one of them with our second largest.

Alternatives client.

And they extended for five years and in general we're re.

C C.

These statements and we can probably add a few additional services here and there, but we're not seeing any net down at all in any of these re contract.

Great. Thank you and just as a follow up can you notwithstanding the $3 million reversal I think in prior calls.

As mentioned that margins had been running.

It up higher than I guess normalized pace in that there was an expectation that they may be would trend.

Trend back down towards that kind of high <unk> range is that still the expectation is that something we should expect to play out as.

2022 progresses again kind of against the backdrop of let's just call it kind of flat market whenever that could be.

Yeah, Rob I think youre kind of spot on so the Q.

Q4 margins at 41, 1%, we're running a little bit higher than we've seen in the past are actually probably the highest we've ever seen.

Didn't have that one time cost benefit and.

If you back that out we would be in the higher 30, right in that range or so but as you know over the last few quarters, our implementations and clients are converting faster then our operational expense of hiring and catching up so we're.

Still in a position where revenue is particularly faster than the actual expense of hiring.

That being said in 2022.

We are going to trend back down towards the.

The Missouri that we've been talking about for a long time, probably in the 36% range or so as those expenses hiring expenses and a catch up with the revenue.

We focused as you know on managing the business not managing to a particular number but we're also very focused on operational expenses and growing our margins that were we're walking a fine line, but we're trying to get advice converted quickly as possible.

Same time.

Nice job on the business.

And maybe as a follow up to that this is I guess really asked earlier and.

Most of it seems like most of corporate America is facing this but now as you try to kind of ramp up hiring staffing.

As you mentioned and kind of catch up with <unk>.

Which is good.

Are you finding that even with the kind of the wage inflation that's out there that.

That's even running above what you would've thought.

When you did your budgeting and sometime back in December or the fourth quarter or is it or is it kind of meeting your expectations, but you have to.

Well you have to spend to get the people you want onboard.

Yes, and Rob I think.

We're facing the same challenges you know as everyone else's in the industry.

In the last call I know Dennis spoke a lot about.

Investing in our workforce and.

<unk>.

The additional money that we gave all of our operational and fleet and that actually has been helping us out a lot. So anything that's out there is baked into our run rate in P&L, but we don't anticipate.

A lot of incremental operating expense from on that part of the lecture. So I think we're doing what we can to keep people in the door and keep them happy it's one of our top three initiatives for 2022.

We're just going to stay at it.

Great I appreciate you taking my questions. Thank you.

For additional questions on this topic plus one zero please.

Prompt gentlemen, there are no additional questions in queue.

We track that we do have Mr. Owen Lau is back with Oppenheimer. Please go ahead Mr. <unk>.

Thank you for taking my question just a quick one I think last quarter you got the approval on the Luxembourg surfacing license could you. Please talk about your recent traction in Europe . Overall are there any other countries that you may.

I wanted to get into an expense program. Thank you.

Okay.

As you probably know.

<unk> is the second largest jurisdiction for any alternative fine and we hit the ground running on November one and we converted a ton of existing funds and business and investors that we had already had on our European partner <unk>, we move that business into our unlocked office.

And.

The team is really doing a great job over there. So I think we have a lot of traction.

Even a lot of the funds are being launched by all of our partner alternative clients in that space as well and.

I think the office is doing a great job as far as expansion, we do have some client.

That are.

Working with us to try to figure out how to get more of a.

Far eastern presence and we're just looking at.

As we speak.

Got it thank you very much.

Thank you.

And again, there are no more questions in queue.

Alright, Thank you and with that being said I'm going to transition to Wayne Withrow will run at the advisors segment.

Thanks Bill.

For the fourth quarter and all of 2021. The headline is that the advisor unit is solidly entrenched in the ongoing implementation of our new strategy.

Its ambition to help advisors be better.

So they can deliver great futures for their clients.

And that mission is fully supported by the pillars of our strategy.

With the execution of that strategy that drove the financial results for the segment.

Highlighted by what we believe is a key milestone in our growth.

Achieving over $100 billion.

In total platform assets.

Numerical comparisons of our financial results for last year are included in the press release.

Color explaining some of those comparisons include.

Fourth quarter revenue rose due to positive capital market and continued momentum and positive net cash flow.

For the year, we eclipsed $3 $2 billion in Madden asset net cash flow.

And nearly $800 million.

Non managed platform asset cash flow.

Expenses were up.

Attributing towards decline in op margin.

Direct cost.

<unk> sub adviser fees are reflected in the increase.

Investments in our technology platform.

<unk> the integration of borrowings.

And investments in our personnel.

Due both to growth.

The tight labor market.

Other significant items.

During the quarter, we had $1 $1 billion.

Positive net cash flow.

Of this total.

$1 billion into our managed asset programs.

As I mentioned before total platform assets exceeded $100 billion at December 31.

In Q4, we recruit 58 new advisors.

And Reengage 43 existing advisory firms.

Over the last few years have essentially stopped doing new business with us.

For the year.

We recruited 257, new advisor and Reengage 126 existing advisory firm.

Our pipeline of new.

And we engaged advisers remains active.

I began my comments by noting we arent the ongoing execution of our new strategy.

The three core principles of the strategy.

Are as follows.

With a technology first value proposition.

On the unparalleled capabilities of the <unk> platform.

Including integrated cloud based front and Middle office there.

Thank you.

Offer our technology platform Standalone.

Bundled with our asset management platform.

And third.

We construct the components of our asset management platform.

<unk>, both bundled fee and unbundled fee options.

And opening our platform to cure rate at third party providers.

While we are still early in the execution phase of our new strategy.

We are making good progress.

I now welcome any questions you may have.

Ladies and gentlemen for questions. Please first one zero at this time.

Our first question is from Mr. Robert Lee with <unk>. Please go ahead.

Great Good morning way keep doing it.

Okay.

Hey, guys.

Thanks.

So with that in mind.

Real simple question can you just give us the breakdown between.

Whats in <unk> versus total assets on the platform and no.

Understanding your comments around.

Some of the expense growth than what Youre seeing in gist.

As we think ahead, obviously, it's going to bounce around quarter to quarter, but.

Is there anything.

Maybe kind of one time ish in the quarter that maybe goes away or should we kind of feel I think that this is a pretty good kind of run rate expense base and revenues will do what they do and theirs.

With markets and there's obviously some linkage there, but this is kind of a good kind of.

Level to kind of think about going forward for building on going forward.

Oh, I don't know where to start.

I wouldn't want to say how much.

Revenues, just do what revenues do.

Right.

Yes.

About 15% of the assets are.

Among the assets in our marriage.

If that was sort of you if that was your question.

And there is nothing.

Unusual in the quarter.

Okay, Great and then maybe as a follow up the $1 billion of manage cash flows.

Can you maybe just give us a you know.

David sense of you know.

The products the types of products, that's flowing into I know you have your.

Your ETF.

Kind of.

Model portfolios a portfolio thats.

<unk> been pretty very successful, but can you maybe give us a little dig a little deeper is it that or what are the things you're seeing in.

Where demand is has shifted our shifting.

Yes.

If I say, if I've taken at a high level I would say this too.

Adam.

Number one.

There appears to be a preference for an unbundled fee.

Bundled fee.

And I think that gives advisers more flexibility pricing with their clients would be my assessment.

So that's definitely going on and secondly.

Definitely there's definitely a preference for passive and the passive side.

Etfs right.

Alright.

Yes.

Great Okay.

Okay. Thank you for taking my question.

Pokemon bundle that path both trucks right.

Alright, thank you.

Our next question comes from Owen Lau with Oppenheimer go ahead. Please.

Thank you for taking my question wing.

Quick one could you please give us an update on the direct indexing product I think there's also an ESG overlay with that I think you launched this product in February last year.

And what have you learned from this rollout thank you.

Yes.

<unk>.

We launched last year, and we continue to gain some traction of that.

No that was what I would say the initial phase of that.

While we're getting a lot of positive results from that I don't think we pulled our full stride in either one of those areas yet.

And we have enhanced releases on both of those fronts, both direct indexing in ESG overlay.

This year with very good momentum in those product lines.

Got it alright, thank you very much ring.

Our next question is Ryan Bailey with Goldman Sachs. Please go ahead.

Hiring.

Hey, Ryan.

How's it going.

I was hoping you could give us a little bit more color on some of these re engaged advisory firms.

When you say Reengage does that you're starting to win incremental new business with them or was it that they had converted away and have now come back to the platform.

And maybe this is probably the most important part like what was it that caused them to decide to re engage with you.

Yes.

A multifaceted question and I think the way I would come at it.

We changed our strategy over the last.

Year, or so and we've also.

Completed the rollout of the wealth platform.

At <unk>.

Deep into the.

It really robust enhancement of that platform.

So that technology strategy. In addition to how we've changed the way we bundle unbundle investments some of the things I talked about.

We've been in this business almost 30 years and there's a lot of providers, maybe you've been now came on I really don't know what's anymore.

You've been network, maybe we don't know who we are and what we do now so.

So we had a concerted effort.

We connect with those people and maybe they haven't opened a new account in a while.

And maybe we're not really getting worse, maybe they opened one account over some time, let's re engage them and see if we can get.

Steady flow of new business out of it and that's how we're defining.

So these are people that maybe have access on the platform weren't sending us new asset.

We said hey.

We won't talk to you about what we're doing now.

And we're excited about that.

I don't want new Sci, they're excited about what we're doing and I don't want to get.

I would've thought doing new business again.

We define to be gauged advisers, we have specific metrics that I'm not going to talk to you.

Prepared to talk about now, but I would say that these are people that weren't open in the accounts that are now opening you might get the single account, but multiple accounts with us.

Got it okay, it's really interesting.

No.

Maybe you can speak about it.

Qualitatively rather than quantitatively, but 126.

Reengage with existing advisory funds during the year.

The vast majority of funds you are reconnected with them Greengage that previously were part of the platform or are we still early in the process.

Contacting theres potential re engaged firms there any color you can give us around that.

There's probably 2000 targeted firms that fit that category.

Wow, Okay, Alright, that's very interesting thank you for that color.

Our next question is Michael Young with <unk> Securities Go ahead. Please.

With student loans.

Okay.

We have no additional questions in queue at this time.

Thank you.

Okay.

Thank you very much.

With that I will turn it over to Paul.

Thanks, Dwayne good afternoon, slash almost evening everyone.

I am going to discuss the financial results for the fourth quarter of 2021 as well as the entire year.

Fourth quarter revenue of $87 $8 million increased 7% compared to the prior year full.

Full year revenue of $343 $8 million increased 8% compared to 2020.

Operating profit for the fourth quarter were $42 5 million, 6% lower than the prior year two.

<unk> 2021 full year profits were $175 7 million and were 5% higher than 2020.

Higher capital markets were positive for revenue and operating profit and we earned a onetime performance fee in Q4.

Large clients and higher employee and sales compensation expenses impacted full year profit.

Novus partners and acquired business in Q4 operating loss and one time deal cost directly impacted Q Q4 profit by $1 6 million.

Operating margin for the quarter was 48, 48% and for the full year 2021 was 51% in quarter end asset balances were $98 7 billion.

Net <unk> acid events for the fourth quarter was a positive $300 million.

<unk> sales were $1 4 billion in client losses totaled $1 1 billion.

Total new client signings for 2021 were a healthy $5 7 billion, which represents $13 5 million in revenue.

Fourth quarter, new sales, we're diversified diversified across U S and dominant foundations healthcare North American DB in UK fiduciary management.

Client losses continue to be due to DB terminations mergers where competitive rebids.

The unfunded <unk> sales backlog at year end was $2 8 billion with most of that funding in Q1 of 2022.

In the quarter, we completed two strategic acquisitions that we feel strengthen our capabilities and two very large and growing markets.

As previously announced we believe the Atlas Master Trust acquisition bolsters, our competitiveness and capabilities in the large and fast growing Master trust market in the U K.

The acquisition of Novus partners significantly enhances our <unk> platform and our overall capabilities to large sophisticated global institutional investors.

The acquisition brings us institutional investor clients investment manager clients and family office clients for which we can leverage the one sci mindset in the company.

While we believe both acquisitions will enhance our strategic position in these markets and we are optimistic on long term growth potential the acquisitions bring headwinds to profit and profit margin percentage in 2022.

Thank you very much and I'm happy to answer any questions that you may have.

For questions Press, one zero please.

We have Robert Lee from <unk>. Please go ahead.

Hey, good afternoon, I got it right. So good one Robert.

I can do that.

Just real quickly Paul I'm, just kind of curious.

<unk> gross sales versus redemptions.

Wave kind of characterizing maybe on a.

If I think of the $300 million of net flows.

On a revenue basis would have been <unk>.

Positive negative just given kind of the changing mix or.

Relatively.

Kind of a relatively even so to speak.

When we look at the net $300 million. It is definitely positive probably a little bit over $1 million.

And then we did have the incentive fee that I talked about that we recognized in the fourth quarter as well. So that certainly was accretive that number just for your benefit was $2 $6 million of revenue.

$1 3 million in expense, because we pay the sub advisor.

Civic product and $1 $3 million of profit, it's a 50 50 split.

Right.

Okay, great and.

So I guess the comments around kind of.

Some of the headwinds from some of the acquisitions or at least you know.

Incremental expense pressures. So if we think about I know it's in the release.

It was $800 million 800000 or so.

Is that kind of.

The incremental pressure, we should thinking about going forward or was that part of that just kind of deal expenses and it's going to be somewhat less than that.

Yes, let me unpack that for you. So I said $1 6 million, which is the 850000 thats in the release or even 68.

That's the run rate loss and then there was $750000 of deal costs. That's how we get to the $1 6 million impact for Q4, obviously the deal costs go away.

The largest component of the Novus transaction is the amortization.

So the business is actually on <unk>.

non-GAAP basis, a cash flow basis is just around kind of breakeven.

But some of the amortization will probably be in the tune of about $7 million impact in both 2022 from organic perspective, 2022, and 2023 and then it will kind of clip off over time as the schedule kind of diminishes over time.

Yes.

Great and just kind of curious I mean as you acquire some of these.

These platforms to add capabilities.

Are you do you expect that once you.

In addition to whatever their capabilities are that they require or at least for some period of time, some step up in investment to maybe bring them to scale or.

To enhance their capabilities too.

It fit into your network.

Mean post acquisition, yes, absolutely.

More selling adobe side on the Atlas side.

But thats, all kind of baked into our projections, but equally in the projections is sizeable increases in revenue.

Because of the capabilities, we bring them not the least of which is in addition to their technology, which is state of the art Awesome technology is the back office and Middle office capabilities that we bring to the table, so really sizing up their clients and being able to upgrade their clients and revenue possibilities because of the additional capabilities that Sci brings.

The table, which is why it is such an awesome fit of the two organizations. So I think that message before this market. We think is about 25 trillion and about 4000 global suspects that were not suspects widows CIO. They are do it yourself offers they're ones that wanted to have an investment team which is <unk>.

And now we have a capability that we can squarely go into them and as part of the acquisition, we get instant credibility because we're bringing over 140 clients that already have.

I am quite bullish about the opportunity there might be some financial impact that we're going to deal with in 2022, maybe a little bit residual in 2023, but the growth potential is fairly profound for the business.

Great. That's helpful. I appreciate it thanks, so much no problem.

We have no additional callers in queue at this time.

Okay with that I'd like to turn the call back over to al.

Ladies and gentlemen, we are building momentum throughout our businesses, we look with optimism to the future and capturing the opportunities inherent with constantly changing markets.

Our new brand reflects our company's strengths, our optimism and our belief that we will help our clients build great futures.

Please be safe and remain healthy thank you for attending our call.

Ladies and gentlemen that does conclude your conference call for today.

Thank you for your participation.

AT&T event conferencing, you may now disconnect.

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by welcome to the Sci fourth quarter 2021 earnings call. At this time all participants are in a listen only mode. Later, we will have a question and answer session and instructions for queuing up will be provided for you at that time.

Should you require operator assistance during the call Press Star Zero on your phone's keypad and as a reminder, this conference call is being recorded I would now like to turn the call over to our host chairman and CEO . Mr. Al West. Please go ahead.

Welcome everyone.

On our call today, we have some new participants due to a change in leadership in our banking and investment managers segment.

Our chair Donna will speak for private banking and Phil Mccabe will speak for the investment management sector.

They will be joined by the segment leaders on the call as well as Dennis Mcgonigle Sei's.

Okay.

CFO , Kathy Ireland Sci's controller.

First let's turn our attention to the financial results fourth quarter <unk>.

'twenty one.

Revenues grew 13% during the quarter compared to fourth quarter last year.

At the same time earnings increased 15%.

Yes.

Fourth quarter EPS of one $1 three SaaS.

20% from the 86.

Reported in north.

Fourth quarter 2020.

During the quarter asset.

Asset balances increased by $6 2 billion.

Well L. S vs asset balances grew by $1 $4 billion.

During the quarter.

We repurchased one 5 million shares of Sei's stock at a price of $62 44 SaaS for sure.

That translates in the $95 5 million.

Stock repurchases.

Next let's turn to <unk>.

Revenue production during the fourth quarter.

Net sales events and private banks.

Investment managers were $31 3 million of which $22 $1 million or expect to be recurring.

In addition, net sales events for <unk>.

$5 billion.

Dollars incurred in the asset management related units. These events reflect positive asset flows advisors and institutions.

In a few minutes unit has will provide more detail on their specific sales results and our new business opportunities.

We will work to build on these results and $1.

'twenty two and beyond.

Now I'd like to provide you an outline of our situation today.

Remember as I mentioned earlier, we have experienced.

Leadership changes and the private bank.

And investment manager segments.

This leadership involves four individuals.

Alex here.

Sandy.

With Williams and Phil Mccabe.

They have deep expertise.

<unk> declared a collective collectively over 88 years working for Sci.

They are an example of our strong and talented leadership.

One of our businesses steadily grows.

Revenues and profits.

Yes.

Another business.

Wiser segment as recently been executing a technology driven strategies, we have strong indicators that the business is returning to pre eminence were very excited about that.

Another business private banking is diligently working on a large.

Mentation backlog, a strong sales pipeline and enhanced client satisfaction.

Our last large business is the institutional Investor segment also faces headwinds.

Legacy defined benefit <unk> client base their strategy is to aggressively address fast growing markets.

We are also focused on building growth engine beyond our core traditional businesses.

Here, we are finding opportunity in markets and services adjacent to our four main engines.

In the past we have shared a couple of these innovative.

Businesses for.

For example.

Spear, leading edge servers networks and data security is gaining traction.

And the private wealth management business is providing the enterprise platform to alter high net worth families.

<unk> completed a positive year of growth.

Finally, we have made three acquisitions toward the end of the year that.

And that will add additional capabilities for both alright.

MFS and institutional business lines.

Yep.

Atlas.

But no meal and milk no Norwich.

Alright.

We are well on our way integrating these companies into Sci and are already in market with the expanded capabilities they give us.

We have built positive momentum during 2021.

We have a strong backlog of sales and implementations and a number of key prospects late in the sales cycle. In addition, we have been successful in repositioning our asset management related business segments.

And with that I'll turn it over to Dennis to give you an update of the LSE and the investment in new business segment.

Thanks Al Good afternoon, everyone I'll cover our fourth quarter results for the investments in new business segment.

The results of <unk> asset management.

During the fourth quarter of 2021, the investments in new business segment activities consisted of the operation of our private wealth management group.

Ci sphere.

<unk> of assets and data integration of different platforms to deliver on our one Sci strategy and other investments.

During the quarter the investments in new business segment incurred a loss of $8 8 million.

Which compared to a loss of $11 4 million during the fourth quarter of 2020.

Approximately $5 6 million of expense during the fourth quarter of 2021 was tied to a one sci effort.

Regarding <unk>, our approximately 38, 7% ownership contributed $34 2 million and income to Sci for the fourth quarter of 2021.

This compares to a contribution of $30 6 billion in income for the fourth quarter of 2020.

Assets during the quarter grew approximately $1 4 billion.

<unk> experienced net negative cash flow during the quarter of approximately $2 $6 billion with market appreciation of approximately $4 1 billion.

Revenue was approximately $113 3 million for the quarter with $3 $2 million of performance fees.

As Al mentioned in addition to the two acquisitions, we discussed on the third quarter call. So no meal and Atlas we closed on an additional acquisition of a company called notice.

No. This is a global portfolio of intelligence platform company designed to expand sci's capabilities for both the institutional investor and investment management markets.

I will provide additional commentary on novus.

Our fourth quarter results reflect the assimilation of their respective operational revenue and expense.

As well as the cost of acquisition.

Our effective tax rate for the quarter was 18, 3%. We are also included in our earnings release additional financial information.

Please refer to our soon to be filed 10-K for more information.

I will now take any questions.

Ladies and gentlemen, if you'd like to ask a question. Please press one zero on your phone's keypad, you will hear a tone acknowledging that you're in Q and you can remove yourself from the queue by pressing one zero again, if you're on a speakerphone with UFC. Please pickup your handset before pressing the numbers once again for questions press, one zero and well go to our first.

Question from Owen Lau with Oppenheimer. Please go ahead.

Good afternoon, and thank you for taking my question, Dennis So labor and salary and labor costs.

Topic that many people pay attention to I think it's not just Sci Sci.

Specific but across different industries, and I saw the Sci expect the stock based comp to be approximately $46 3 million this year compared to $41 5 million during 2021, which represents a 12% increase could you. Please talk about how sci manage com.

Fans and tackle the rising labor costs. This year. Thank you.

Sure. It was a topic of conversation for most of 2021, particularly the second half.

And if you remember.

On the third quarter call, we talked about how not only had we addressed.

Particularly with our kind of early stage professionals kind of to mid level professionals.

<unk>.

Compensation adjustments, we made in the summer and then an additional compensation adjustment we made at the end of the third quarter.

Did that not only to certainly reward our employees for the great work they do.

But also reflective of market conditions competition for talent and the need for us to remain competitive.

On that front and all of that cost.

In terms of cash compensation, if you will is baked into our fourth quarter results.

On stock option expense.

Little bit different story, we had no stock options are generally issued to employees that we feel and our board feels are going to be significant contributors to the future success of Sci.

Option expense carries its own unique calculation so how much.

Expenses attributed to each option issued.

That has.

Multiple factors that go into that calculation.

If you look back to 2020, we had a fairly significant grant of options in 2020.

Yes.

Generally we issued options in December of each year. So it's safe to say we had an additional grant that was made in 2021 and the expense you saw in 'twenty 2021 was reflective of.

The additional options that were granted in 2020, coupled with the.

The shortened timeframe for vesting that we estimated that we will be in play for some options that we had greater previously so we accelerated some.

Some expensing into 2021.

And pull it forward if you will from really 2022, and maybe a little bit from 2023.

So you had a little bit of.

Increased option expense in 2021 that we would have incurred eventually we just pulled it forward given our vesting Prost.

Process.

The other.

Saying that did occur in the fourth quarter, and Youll hear theirs and filming Kay's commentary.

We did have some retirement of unvested options in the fourth quarter. So we got a little bit of a day would you get an expense benefit against option expense in the quarter, so that offset some of that some of that increase.

Okay.

Got it that's helpful and then on the SG&A side could you. Please give us an update of your later latest status about people going back to the office versus working with mountain in 2022 broadly speaking how do you think about SG&A expense this year compared with 2021.

Sure. Thanks.

Now, where we are with bringing people back to work.

Campuses, our offices around the globe.

Yes.

<unk>.

In terms of U S offices other than New York, New York kind of has its own unique.

As you can probably appreciate.

Attributes to it given how the city is.

And what's going on in the city, particularly.

In October we opened all of our offices up for any employee to come back on a volunteer basis. So we certain certainly don't want to force anybody back if there were still not quite comfortable.

We are functioning very well as a firm and our current work environment. So we didn't want to.

Really forced the issue, but we did open up our offices to anybody who wanted to come back who come back whether it's one day a week.

Yes, two days of week five days a week.

Now that being said at that time, we had probably.

Six 700 people that were coming in the office every day.

During the week so.

We started to see some pickup of people returning.

Good to see.

We see real benefits in people being at our offices, particularly around team oriented.

Activities project oriented work.

Different players with different groups across the company. So we want to continue to foster that.

But as we got into December was particularly mid December .

We're all too familiar with.

<unk>.

The letter of the Creek.

Alphabet, we pronounce armour crime.

So for those of us that didn't study ancient history learning the Greek alphabet. This year has been.

One of the silver linings of Covid.

So we saw so we got a little bit of a setback, but actually as we've gone into January we've seen actually more people coming back and the numbers are.

We're ticking up we're currently working on plans that are I would almost say.

Covid neutral if you will they are really about the long term.

Work environment, how do we want to proceed as a company strategically long term relative to.

How our folks work both in an office outside an office, we certainly have embraced flexibility.

In the work environment, but we also know there are real benefits to.

People being together working together the spontaneity that comes with that.

The cross pollination that comes with that so we're.

Working on those plans now and we expect and I certainly expect that over the course of the first half of this year, yes, we will see additional folks coming back to the office again with.

But we will see.

Support and continue to sustain us at a certain level of this flexible work environment.

Outside the U S. That's a little bit different the U K.

Having really good success, bringing people back and then.

The UK government prior to the holidays, because Obama kron shut things down and really push people back into a work from home environment.

As we know just recently they reversed that.

And have now gone just done on 180 degree.

<unk> shipped to getting people back to offices. So I think the U K office will get back to.

Yeah more regular presence of most of our workforce again with certainly the element of flexibility baked in Ireland as our other larger office somewhere early the Irish government announced just this past weekend also a reversal similar to the U K of bringing people back to the office they were much.

We're more consistently remote I would say yes.

So we'll see how our Dublin office.

I'll respond to that but we will work to get people back and maybe Phil can comment on that one.

Yes, just turn it to Mike here.

So all in all it's going to play out I believe the first half of this year.

So we don't know the next letter in the Greek alphabet.

We can get get back to the kind of new world of flexible.

But together kind of a work environment.

Got it that's very helpful. Thank you Dennis.

Thanks Al.

Our next question comes from Michael Young with <unk> Securities. Please go ahead.

Hey, Thanks for taking the question wanted to just ask about LSD I appreciate the update for the fourth quarter, but obviously since then in the first month of this year, we've seen significant outperformance by value versus growth and just curious if you could provide any sort of update on it.

Maybe kind of where things stand now visa the outperformance of value versus kind of just the secular trends in that business.

Sure.

2021, and I would suspect that will continue and that has continued into this year, but.

The firm numbers yet.

Yes, it was it really.

Good relative performance year for LSC.

And that certainly will help them in the market as particularly as firms start to wait more towards value to the extent that occurs <unk> will be on the sure the shortlist.

And a lot of <unk>.

Searches for that for assets.

They still struggle a little bit with the three year or five year performance number or did in 2021, so having a strong 2021 will also helped our longer term performance numbers.

And that.

As much as if not more so the one year number should be beneficial so I know there.

Yes, certainly optimistic given the.

Return to value or the again, the shift that seems to be occurring to value and they are certainly feel good about our performance last year.

Affiliates are in a good position to capture assets, if the market moves and that value direction.

Yes, I tried to emphasize on prior calls as well.

One thing about <unk>.

They know what they are they know what they're really good at it now.

But their brand stands for.

And they have despite the.

Kind of tough environment over the past five.

Plus years really.

And they have stuck to their knitting and stuck to their brand.

That will serve them well, if we get this value shift.

Okay, Great and just.

As my follow up kind of on just capital allocation more generally you guys have been a little more.

Active in the M&A arena in the fourth quarter, but the stock is also down a little bit kind of what the market 678% year. So how should we think about sort of capital allocation priorities vis vis share buyback versus M&A and kind of what are you seeing in that pipeline.

Yes.

Firstly I would definitely make the point that the two are not.

We don't trade one after the other per se.

We are very much in the market relative to M&A and good opportunities that we think are good fits for sci either enhancing one of our existing businesses, adding to our capabilities.

Can help us in multiple parts of the company like some of the recent transactions. We've done certainly interested in new business lines potentially that could.

Further diversify Sci and give us new revenue streams and profit opportunity.

New geographies that we're we have.

Kind of what our landscapes strategically, but an acquisition might give us a little bit quicker market entry opportunity.

So that's something that we'll continue to press on this year.

Into the future.

It's hard to predict whether anything attractive will come along but.

Won't be for lack of us.

Looking in an entertaining ideas relative.

Relative to stock repurchase the boards.

Priorities really haven't changed so reinvest in the business, which includes M&A.

And return capital to shareholders.

Stock buyback is the predominant use of capital, but as you also saw in late December we our board did declare another dividend.

Whats that.

Higher than last year's dividend.

Just continues the progression of year over year consistent growth.

And in our dividend.

Process.

I don't know if were in the <unk>.

We are on these gold lists of dividend paying companies.

I don't see that changing either.

Okay. Thanks, Rob.

Well.

Our next question comes from Robert Lee with K B W. Please go ahead.

Great. Thanks, Good morning, good morning.

Good afternoon, everyone hope everyone's doing well.

Completely confused here.

So anyway, good evening good evening Rob.

Yeah.

And a long week already.

So I guess my question, you know I guess, it really much higher level, and frankly, probably a little uncomfortable to ask but it's something I think is on investors' minds. So I.

And I think rightly or wrongly you know with Steve leaving.

I do think there were investors who viewed him as.

Began rightly or wrongly as a future potential leader of the company.

So I think as sudden departure was somewhat jarring for <unk>.

Investors will be some that I've had conversations with so I guess along those lines is there any plan to kind of update us or maybe start to make more transparent.

To the outside with some of the you know.

A potential succession or leadership.

You ship could evolve over time going forward, because I think it's something investors would.

It would really value so thank you.

No.

Yes, I think.

Yes.

We're back on track with.

Okay.

The.

Okay.

<unk>.

Creating.

Yes.

And.

In an environment, where we're looking for.

A strong CEO .

We will.

We will.

We will share that.

As we as we go through.

Okay.

I appreciate that.

And then maybe Dennis we're there.

I know you've had a few transactions.

You've kind of touched on some.

<unk> expense were there any.

Notable or sizable.

Transaction or one time related expenses that may have flowed through in the quarter that we should think about.

Going away going forward I mean, maybe the flip side of the one time.

Termination fee that I guess will be in the private bank segment.

Kind of offsetting that.

Yes, so on the.

The earnings release, you saw that the termination fee that helped revenue and private banking.

<unk> had some offset so.

The net of that I think you'll hear from I know youll hear from <unk> net of that was about $4 million benefit to.

Bank profit really think revenue and profit so.

While we had the one transaction we had some other things that went the other way that wont repeat.

In terms of the acquisitions.

The two smaller acquisitions Atlas and.

So no meal.

Really had less impact to P&L, if you will in.

In the quarter.

Novus. So it was a larger transaction so the.

And there was only a stub period that we had in the quarter wasn't a full quarter and Youll hear from Paul kind of what the impact was there and what do you expect it to be.

For 2022, but yes.

So that had some negative negative impact.

Yes. Thanks.

Each quarter, I would say negatively but they're in our run rate. So our salary salary changes our compensation changes that I talked about when Ellen asked.

Asked this question Thats baked into the P&L.

Paul quarter will tell you about.

$1 $3 million profit benefit.

Net benefit from a performance fee that we earned in his business.

I won't repeat so that was beneficial to.

Earnings.

Yes, there is always things that go in both directions.

Okay.

As I mentioned with option expense.

This quarter, we did get the benefit of the retirement of some unvested options.

That won't repeat.

As we move into 2022.

But all in all the quarter.

Yes, it was really strong I mean revenue topline was really strong.

Profitability was strong.

We continue to manage expenses, but we're doing it smartly and with their strategic through a strategic lens.

Which is the best way to do it from our perspective.

Yeah.

So yes it was.

We have more moving parts I would say in the fourth quarter than we normally do but.

Net net.

Probably would have brought the earnings down a little bit, but not there's still a very strong quarter.

Okay, Great I appreciate you taking my questions no problem.

Our next question comes from Chris Donat with Piper Sandler. Please go ahead.

Hey, Dennis.

Just wanted to follow up on Rob's question on the <unk>.

The acquisitions I know you just said that the impact looking backwards from Atlas Inferno meal.

Was.

Less impactful, but do you expect a meaningful impact to revenue and expenses from those businesses in 2022.

I understand will have to wait for Paul's comments on Novus, but just for Atlas in canola meal for 2022 any thoughts.

Yes, I'd say phenomenal.

Probably a little bit more the full expense for the year will have a full year of expenses a little bit more there it's not us.

Material I'd say, given the size and scope.

Atlas.

With revenue and.

<unk> expense, so I'll, let Paul speak to that.

As well as notice but.

Yes.

Atlas is really a purchase of a fund with a couple of people.

So it's more of a revenue.

Revenue play than anything else.

Okay.

Our wafer Paul then yes.

Yes, Paul I would tell you is.

Impact.

We bake it into 2022 four nervous now thats aside from any growth we get out of it any improvement we get.

Based on.

The stub period in the fourth quarters of about $7 million. So that includes all the amortization of.

Tied to the acquisition itself versus operating.

Operating income.

As you know, we're a GAAP reporting firm, we don't do non-GAAP . So.

I pulled back all that amortization stuff out apparently doesn't count sometimes but.

Okay.

Right.

Got it Chris.

Okay. Thank you Chris I'm kidding.

Okay.

Thanks Dennis.

Well thank you.

For additional questions on this topic. Please press one zero on your phone we go now to Ryan Kenny with Morgan Stanley . Please go ahead.

Hey, gentlemen, how are you.

Great Ryan have it yourself.

Just a follow up to some of the questions on expenses that we've had so far trying to put everything together.

Margins have been around 28, 29% for the last few quarters in a row now that's.

That's higher than you've been running at historically, so as we look forward to 2022, when we factor in the comp adjustments and the acquisitions and some of the investments you are making do you expect that number to move either up or down at all.

I think the general generally given we do have a lot of moving parts going both directions.

I would expect it to be relatively stable.

It's hard to predict growth, it's hard to predict the markets. If we get neutral better markets, maybe it'll that'll help us because it's much more scalable revenue and profit.

But I think.

Running at that margin level with a growing <unk>.

Top line.

No, it's certainly easy to calculate higher.

Dollar profits.

And which is something we always look to do to sustain a fairly healthy reinvestment rate and new opportunities.

Whether we would spend that all of that.

New money, if you will on new things is really dependent upon our optimism.

Bullishness on the new things, but it's.

We don't target a margin rate to run at but I would say I would guess it would be in that same range.

Thank you.

Youre welcome.

Okay.

And we have no additional questions in queue at this time.

Thank you.

Before I turn it over to the other al we would like to remind you that during today's presentation and in our responses to your questions. We have and we will make certain forward looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please.

Please refer to our notices regarding forward looking statements that appear on today's earnings release.

And in other filings with the SEC, we do not undertake to update any of our forward looking statements now here's the other al.

Alright, Thanks Dennis.

Good afternoon, everyone fourth quarter 2021 revenues totaled $129 3 million.

Which was up $9 6 million or 8% as compared to the revenues from fourth quarter 2020.

Fourth quarter 2021 quarterly profit of $11 $5 million for the segment was up $6 9 million from fourth quarter of 2020.

Q4, 2021 profits include approximately $4 million of net positive impact from onetime items.

And turning to sales activity during the quarter, we closed approximately $18 million of net investment processing event 12 million related to recurring revenues and $6 million related to one time.

Of the $12 million recurring revenues 6 million is related to at WP <unk> K, Our trust 3000, and $6 million is related to cross sells.

Overall, we signed three new clients of note in the U S. We signed one at WP agreement with Fiduciary Trust International a wholly owned subsidiary of Franklin Templeton under the New agreement Fiduciary Trust International, which acquired Pennsylvania Trust company and existing at WP client wallets.

We will adopt yet.

Yes, well the platform for the combined entity.

During the quarter in the UK, we signed two contracts of note.

One new contract with waiver can investment management, a leading UK wealth management brand expanding our success in the <unk> segment.

Another contract with note in the UK as HSBC a client that currently has business on our platform and business in our current backlog while signing this represents an expansion of our relationship to include alternative fund processing services.

We are working with this client to address their changing needs with respect to the business contracted in 2020 that is currently part of our backlog.

This demonstrates our ability to help our most complex and large clients respond to ever changing market environment.

The changing environment for our most complex clients create opportunity and adjustments in our relationships as we try to help them respond to these changes.

We're excited to work with all of these firms.

Now turning to implementation activity in the fourth quarter, we successfully converted to climb from competitive platforms to at WP.

Cambridge Trust headquartered in new England migrate to at W. P.

In addition to converting their wealth management business. They also outsource their back office status yet.

Previously, Cambridge manage their operations in house USB.

Quartered in Kansas City also migrated their private wealth management book of business to the <unk> platform.

We believe the momentum is strong in a number of agreements have been signed and new client implemented throughout the quarter. We feel that is a good indication that while the pandemic continues it is not ultimately deterred new frac firms from partnering with Sci.

As an update on our backlog, our total signed but not installed back global backlog is approximately $81 7 million.

In net new recurring investment processing revenue <unk>.

Including the signings I just mentioned.

We continue to work with our clients with longer tailed timeline as their business needs change and new opportunities present themselves.

From an asset management standpoint, total assets under management ended the period at $26 3 billion.

Which was up 3% from the fourth quarter of 2020.

Our cash flow for the fourth quarter of 2021 was essentially flat.

As we go into 'twenty to 2022, we remain committed to our strategy of building a global pipeline and associated backlog matriculating that backlog gradually improving our operating profit and prudently investing in the business to create sustainable growth.

We have a talented team across API that is focused on these goals. We remain excited and optimistic that concludes my prepared remarks, and I'll turn it over to any questions you may have.

Once again for questions, perhaps one zero on your phone's keypad.

Wondering Q from Ryan <unk> with Morgan Stanley . Your line is open. Please go ahead.

Hey, just wondering if you have any update on the pace and the path of pretax margin expansion in the private banking segment.

I'm, sorry ask that again.

Is there any update on the pace of the pre tax margin expansion and the private bank segment.

Yes, Thanks, Brian I appreciate it as.

As we think about continued margin improvement operating margin improvement as you can imagine we don't foreshadow with going forward, but we feel comfortable.

Comparable with what we've achieved but we're.

Waiting and monitoring the impact.

Where the capital markets will be in 2022, as well as well as where M&A will be an opportunity.

<unk> for us.

But overall, we continue to do the <unk>.

Management plans, we've laid out over the last several quarters and Theyre having.

Continued success and progress.

Thanks, and just one follow up as Wells Fargo still in backlog and is there any update on if it's still in the backlog when that's expected to come through.

Ryan Good question, Yes Wells Fargo is still in our backlog and as you know we don't.

Talk deliberately about the live implementation dates of the backlog, but as I mentioned before we're constantly in discussions with our clients about how their business is changing divestitures. They make investments they make and then lining those up to our implementation timelines.

Thank you.

For additional questions on this topic. Please press one zero.

Yes.

Yes.

And we have Robert Lee from K BW. Please go ahead.

Great. Thanks.

Good evening, Alex good afternoon.

I had two questions first could you update us on the size of the backlog given that you had some new business wins, some things funded so just kind of where it stands in aggregate right now.

My first question.

Yes, Robert no problem and good evening deal as well.

Yes, as I mentioned in my prepared comments backlog. The global backlog is at 81 7 million as you know from previous quarters, and then biopsy today, we continue to make progress matriculating that revenue and installing clients and I would anticipate over the next 12 months that.

Approximately 50% of the $81 7 million would be installed.

Great and then maybe as a follow up.

Clearly from a margin perspective.

Hard to yeah, no one can predict.

What markets do they stay here go back up go down further, but just trying to kind of level set it.

Heading into the year, given what you see with <unk>.

No new business conversions whatever expense plans you have would you have expected.

Margins can you give us a sense of in a kind of flat.

Asset return environment lets call it that heading into this year, where you. How you would have expected margins to progress or maybe kind of finished the year given where.

Kind of where you started.

Yes, I think yes.

Yes, Robert I think we're obviously happy with how we progress throughout the year I think even given capital market neutrality or moderation I still would point to the fact that there is a lot of ins and outs in our margins, especially as it relates to one time and that I can't predict but from where I sit today.

Yes, we made around expense management and how we're looking at our investment stream has helped our margin improvement and I would imagine that would continue as we progress into 2022.

Okay and as you convert the expected to have the backlog to come on this year are there.

Any kind of incremental I mean, I know, there's usually some incremental costs may be rent escalation certainly around sales, but is there anything you know.

Noteworthy we should be thinking about that as that converts we should expect to see some I don't know.

Some lumpy one time costs as you know is big conversions happen just trying to you know.

It's kind of.

Got my arms around it.

Yes, no it's great Robert.

As we talk about our implementations and whats lying ahead the cost is relatively baked in inside of our P&L.

I would not expect us to see.

Exceptional costs related to what we implemented our backlog obviously, we have personnel that will ebb and flow as we installed clients, but it wouldn't be material to our expense line items.

Okay, great. Thanks for taking my questions.

Sure.

Yes.

Our next question comes from Ryan Bailey with Goldman Sachs. Please go ahead.

Nice to speak to you.

Yeah.

Nice to meet you as well right.

I was just wondering if you can help us think about.

I know this is challenging but maybe if you can just help us think about the number of potential funds that you're watching in terms of some of those M&A comments and that being a potential headwinds.

And if there's any way you can help us think about what sort of size risk that would be I think can be very helpful.

Yes, Ryan as I'm sure you can imagine it's impossible for me to really size the reservoir the opportunity of M&A, because we don't control that pace. All we know is that the trend that pace is not.

Moving down so as a business we pay attention to that now what I will say Ryan is we're actively engaged with our clients, we're intimate with that and we're going to respond to their needs and as it relates to our capabilities like conversion experience et cetera, we view that as an asset but at the end of the day on an M&A deal.

As you know the M&A as the organization's top priority and platform decisions become second tier to that to that decision. We're involved in it but we don't determine its out final outcome. So it's really hard for me to predict or monetize that for you.

Okay, Alright, thank you I appreciate that.

And I'm, sorry, I tried getting into the initial lineup Q&A, but clearly had some technical difficulties.

Come back to the other Alan Dennis a quick question I am sorry, its been doing it during the segment discussions but.

Im Robert first question and I'm, sorry, if I misheard.

I misheard your other al.

Did you say that you are in the process of looking for a future senior.

We are started.

Look.

Got it okay. Thank you.

That's all my questions. Thank you.

Our next question comes from Michael Young with <unk> Securities Go ahead. Please.

Hey, Al just wanted to ask kind of high level strategically, what's your priorities or maybe if you could kind of stack rank those for the businesses and intentionally leaving a little bit open ended, especially for a professor and strategic management so have at it.

Michael Thats fine.

Yes, I don't want to be sure. If I was going to use a lot of humor every day, but now that you opened up that can maybe just call. It two to three hours.

Michael Great question, I think as it relates to the strategy, we're going to remain relatively consistent to our strategy that we talked about over the last.

Several quarters, and probably year and a half and if I were to summarize that I think our main focus is serving the clients. We have we haven't really deep relationships with those clients we value those relationships and we think there could be additional potential in those relationships as we see their businesses change and evolve after serving existing clients.

We're focused on really building out our pipeline and I would say a global pipeline. So we've made some moves in personnel to.

Take some people in the U S that has some experience with.

Global selling helping that help our UK office, so I would expect us to get our pipeline stronger in the U K and then continue to build the momentum in that pipeline that we have in the U S and then.

Laser focused on the matriculation of that revenue, which we would consider the implementations of those clients and deep.

<unk> with the clients so I've been around for a while here, but almost all clients that have been installed and <unk> been involved but so I know what it takes to matriculate, though so I keep my eye on that and then as we've talked about it in a number of questions. Before this were going to be continued to be focused on expense management and I say that with respect towards new clients.

And whatever investments are needed to extend relationships or install but I would say those four from overall business priority would be my strategy priorities and I think it goes without saying, Michael but I'd be remiss not to mention it is and we're going to work really hard on making sure our employees feel like they have the health and safety naphtha.

Sorry to operate in the environment, we find ourselves in today and that's a huge part of <unk> culture.

Okay, great and just with the maybe existing wins recent.

Recently or kind of as you move into this year ahead post pandemic I'm, just kind of curious about the value proposition and kind of the sales.

Process is it really a function of just getting trial kind of with the newer platform with clients, especially internationally or what is kind of a key.

Like is driving success on the sales side.

Great question Michael.

One thing I'll, just say about the sales process just to start with it.

I am sure you know that.

One of the things that's interesting in our business as the sales process can't be time.

Cause the decisions are multifamily you may have a CPL, Bob the CFL above the head of risk and Bob So one of the difficult things about our sales pipeline is predicting when things will actually close because the process of selling is as complicated but once you get underneath the process of selling in our market unit I think I will go to exactly where you pointed at.

I would start with our value proposition and I feel really good about our value proposition I think the overall macroeconomic trend towards outsourcing.

<unk>.

The advent of resiliency is an important strategic priority given COVID-19 eight point in favor of a place like Sci and when I think about our value proposition and how we position it in the sales cycle, we position ourselves as a differentiated provider and rightly. So we have the most updated infrastructure.

Inside our space, we lean into that we are one of the only homegrown fully captive outsourcers and we lean into that as a point of differentiation and then we lean into and this is hard it's a little more intangible we lean into the professionals, we have here with deep domain expertise and our relationships and services architecture.

To show our clients what it means to be a partner of Sci when I think about how that translates to our momentum I think youre seeing that over the year and the deals. We're closing the type of clients, we are winning and.

I think we'll continue to see that momentum my goal in 2022 is too.

Make sure that that transcends both U S and the UK as we continue to pursue active engagement in the market.

Okay.

Okay. Thank you for all that color I appreciate it.

Thank you.

One left in queue once again for additional questions on this topic. Please press one zero go now to Owen Lau with Oppenheimer. Please go ahead.

Thank you very much sorry, I may have missed this one but I wanted to go back to that $6 $8 million.

Termination fees from an existing investment in processing client why did this client terminate and how much revenue impact we should expect in our quarters can also extend any offset thank you.

Yes. Thanks.

I don't think you missed it so good question.

The.

The termination fee you are referring to is related to.

M&A activity it was in SWT client for us the buyer of that client was a non sci client and they decided to move.

This business onto their platform, which for competitive point just so you have this appreciation the purchaser has a proprietary system. So it wasn't as if we lost this business to another competitor, we actually are losing it because they are on a consolidated onto that proprietary platform.

And then.

I think this is.

I. Appreciate this we don't get into the details on a client by client basis of our of the revenue impact.

Okay. Thank you very much.

We have no additional questions in queue at this time.

Alright so.

I'm going to send it over to my esteemed colleague Velma Kate. Thanks Al. Good afternoon, everyone 2021 marked another strong year of growth and continued momentum for the investment managers segment across all of our business lines are focused on executing our growth strategy led to positive results driven by new store.

<unk> growth in unit expansion with existing clients and improve operational efficiency. These.

These results were made possible through the significant efforts of our entire IMS team and our seasoned leadership around the world.

For the fourth quarter of 2021 revenues totaled $154 5 million.

Which was a 19, 2% higher as compared to our revenue in the fourth quarter of 2020.

Profit for the fourth quarter of $63 5 million.

The 28, 4% higher as compared to the fourth quarter of 2020.

Profit grew as a result of our revenue growth and also benefited by a one time $3 million reversal of stock option expense related to the retirement of Unvested options.

Third party asset balances at the end of the fourth quarter of 2021 or $907 4 billion approximately.

Currently $45 8 billion higher than the asset balances at the end of the third quarter of 2021.

This increase is primarily due to net client fundings of $37 4 billion and market appreciation of $8 4 billion.

And returning to market activity during the fourth quarter of 2021, we had another strong sales quarter with net new business events totaling $13 million, which are expected to generate net annualized recurring revenues of $10 1 million.

In addition, we re contracted $37 $8 million in recurring revenue.

Highlights of these events included in our alternative market unit, we closed a number of strategic new names ranging from startups to large global managers and our cross sales strategy continues to resonate and robust sales of existing clients.

We won the business of a private equity fund sales.

Sales process, marking the $50 billion, our initial entry into outsourcing in fund administration.

<unk> was also selected to provide funding administration for a multibillion startup private equity firm as well as in other real estate takeaway from a competitor.

In our traditional market unit, we added business in all product lines with new clients.

Handed wallet share with existing clients and in particular, our business expansion in both our collective trusts and EES solutions remains strong.

Also pleased to announce the conversion of a $10 billion multi fund complex. So our advisors inner circle platform.

In Europe , we added several new UCITS funds and continue to expand our ETF private equity and private debt.

Yes.

At the end of the fourth quarter, our backlog of sold but unfunded new business stands at $34 4 million.

As we exited a successful 2021, we plan to build on our momentum and strong position in the market and then as we progress into 2020 will focus on the following <unk>.

Executing our growth strategy, increasing our client acquisition rate expanding our wallet share with existing clients and investing in our platform solutions and workforce. We are very optimistic and excited about our strong growth prospects and our path forward that concludes my prepared remarks and I'll now.

I'll turn it over for any questions you may have.

Yes.

I once again for your questions. Please press one then zero on your phone Susquehanna.

And we're going to go back to Mr. Robert Lee with K B W. Two go ahead.

Great. Thanks, Thanks for taking my questions.

I'm just curious on the re contracting I think you've mentioned is about call. It $38 million roughly just kind of curious of what your experience has been on re contracting if you're able to kind of.

You have to price.

Give concessions you're able to get kind of any price increases.

I'm sure that's somewhat unique to each one but kind of in general what's the.

The.

Pattern, you're seeing when contracts come up for.

Come up sure.

Sure IRA.

Actually in the quarter, we had about a number of different re contract there almost evenly split between alternatives and traditional they're all seeing Europe engines, four plus years on average one of them with our second largest.

Alternatives client.

And for five years and in general we're really seeing.

Stay safe and we probably had a few additional services here and there, but we're not seeing any net down at all with any of these re contract.

Great. Thank you and just as a follow up can you notwithstanding the $3 million reversal I think in prior calls.

As mentioned that margins had been running.

It up higher than I guess normalized pace in that there was an expectation that they may be would trend.

Trend back down towards that kind of high <unk> range is that still the expectation is that something we should expect to play out as.

2022 progressed as again kind of against the backdrop with let's just call it kind of flat market whenever that could be.

Yes, Rob I think.

So Q4 margins at 41, 1%, we're running a little bit higher than we've seen in the past are actually probably the highest we've ever seen.

We did have that one time cost that Ed.

If you back that out we would be at the higher 30, right in that range or so but as you know over the last few quarters, our implementations and clients are very faster then our operational expense of hiring and catching up so we're.

We're still in a position where revenue is matriculating faster than the actual expense of hiring.

With that being said in 2022.

We're going to trend back down.

<unk> been talking about for a long time, probably in the area.

Is that range or so.

Spence and hiring expenses and catch up with the revenue.

We focused as you know on managing the business not managing to a particular number but we're also very focused on operational expenses and growing our margins that were we're all kind of fine line, but we're trying to get advice convert quickly as possible.

Hi.

Nice job on the business.

And maybe as a follow up to that this is I guess really asked earlier and.

Most of it seems like most of corporate America is facing this but now as you try to kind of ramp up hiring staffing.

As you mentioned and kind of catch up with <unk>.

Which is good.

Are you finding that even with the kind of the wage inflation that's out there that.

It's even running above what you would've thought.

When you did your budgeting and sometime back in December or the fourth quarter or is it or is it kind of meeting your expectations, what you have to.

Well you have to spend to get the people you want onboard.

Yes, and Rob I think.

We're facing the same challenge as you know as everyone else's in the industry.

In the last call I know Dennis spoke a lot about.

Investing in our workforce and.

<unk>.

The additional money that we gave all of our operational and fleet and that actually has been helping us out a lot. So anything thats out there is baked into our run rate in P&L. So we don't anticipate.

A lot of incremental operating expense from on that part of the.

The ledger. So I think we're doing what we can get people in the door and keep them happy.

One of our top three initiatives for 2022.

We're just going to stay at.

Great I appreciate taking my questions. Thank you.

For additional questions on this topic plus one zero please.

Okay.

And would that prompt gentlemen, there are no additional questions in queue.

That we do have Mr. Owen Lau is back with Oppenheimer. Please go ahead Mr. <unk>.

Thank you for taking my question just a quick one I think last quarter you got the approval on the Luxembourg surfacing license could you. Please talk about your.

<unk> traction in Europe overall are there any other countries that you may want.

I want to get into and expand Florida. Thank you.

Okay.

As you probably know.

<unk> is the second largest jurisdiction for any alternative fine.

And we hit the ground.

Running on November one and we converted it kind of existing funds and business and investors that we had already had.

Our European partner <unk>.

Move that business into our own laptop and.

The EBIT is really doing a great job over there. So I think we have a lot of traction.

Even a lot of the funds are being launched by all of our alternative.

Alternative clients in that space as well and.

I think the office is doing a great job as far as expansion, we do have some clients.

That are.

<unk>.

Working with us to try to figure out how to get more of a.

Far eastern presence and we're just looking at it.

As we speak.

Got it thank you very much.

Thank you.

Yes.

And again, there are no more questions in queue.

Alright, Thank you and with that being said I'm going to transition to Wayne withrow around the advisors segment.

Thanks Bill.

For the fourth quarter and all of 2021. The headline is that the advisor unit is solidly entrenched in the ongoing implementation of our new strategy.

Its ambition to help advisors be better.

So they can deliver great futures for their clients.

And that mission is fully supported by the pillars of our strategy.

With the execution of that strategy that drove the financial results for the segment.

Highlighted by what we believe is a key milestone in our growth.

Achieving over $100 billion.

In total platform assets.

Yeah.

Numerical comparisons of our financial results for last year are included in the press release.

Color explaining some of those comparisons include.

Fourth quarter revenue rose due to positive capital market and continued momentum and positive net cash flow.

For the year, we eclipsed $3 $2 billion in Madden asset net cash flow.

And nearly $800 million.

Non managed platform asset cash flow.

Expenses were up.

Attributing towards decline in our margin.

Direct cost.

<unk> sub adviser fees are reflected in the increase.

Investments in our technology platform, including the integration of Orange.

And investments in our personnel.

Do both to grow and the tight labor market.

The significant items.

During the quarter, we had $1 1 billion in positive net cash flow.

August total $1 billion into our managed asset programs.

As I mentioned before total platform assets exceeded $100 billion at December 31.

In Q4.

We recruited 58 new advisors.

And Reengage 43 existing advisory firms.

Who over the last few years have essentially stopped doing new business with us.

For the year.

Recruited 257, new advisor and Reengage 126 existing advisory firm.

Our pipeline of new and re engaged advisers remains active.

I began my comments by noting we are in the ongoing execution of our new strategy.

The three core principles of this strategy are as follows.

We.

With a technology first value proposition.

Built on an unparalleled capabilities of the <unk> platform.

Including integrated cloud based front and Middle office there.

Thank you.

For our technology platform Standalone.

Were bundled with our asset management platform.

And third.

We construct the components of our asset management platform.

Offering both bundled fee and unbundled fee options.

And opening our platform to cure rate at third party providers.

While we are still early in the execution phase of our new strategy.

I feel we are making good progress.

I now welcome any questions you may have.

Ladies and gentlemen for questions. Please first one zero at this time.

Yes.

Our first question is from Mr. Robert Lee with <unk>. Please go ahead.

Great Good morning Wayne.

Doing this afternoon.

Okay.

Yeah.

Yes.

Okay.

So with that in mind.

Simple question can you just give us the breakdown between.

Whats in <unk> versus total assets on the platform and no.

Understanding your comments around it.

Some of the expense growth than what Youre seeing in gist.

As we think ahead, obviously, it's going to bounce around quarter to quarter, but.

Is there anything.

Maybe kind of one time ish in this quarter that maybe goes away or should we kind of feel I think that this is a pretty good kind of run rate expense base and revenues will do what they do and theirs.

With markets and there's obviously some linkage there, but this is kind of a good kind of.

Level to kind of think about going forward for building on going forward.

I don't know where to start.

Yes, I wouldn't want to say Alex.

Revenues, just do what revenues do.

Right.

Yes.

About 50% of the assets are.

Tobacco mommy assets in automatics.

If that was sort of you if that was your question.

And there is nothing.

Unusual in the quarter.

Okay, Great and then maybe as a follow up the $1 billion of manage cash flows.

Can you maybe just give us.

An updated sense of you know.

The products types of product that's flowing into I know you have your.

Your ETF.

Kind of.

Model portfolios or portfolio that's.

Been pretty very successful, but can you maybe give us a little dig a little deeper or is it that or what are the things you're seeing in.

Where demand has shifted our shifting.

Yes.

If I could if I take it at a high level I would say this too.

So number one.

There appears to be a preference for an unbundled fee as opposed.

But we'll see.

And I think that gives advisers more flexibility pricing with their clients would be my assessment.

So that's definitely going on and secondly.

Definitely there's definitely a preference for passive on the passive side.

ETF.

Alright.

Great Okay.

Okay. Thank you for taking my question.

Pokemon bundle that path both trends right.

Alright, thank you.

Our next question comes from Owen Lau with Oppenheimer go ahead. Please.

Thank you for taking my question wing.

Quick one could you please give us an update on the direct indexing product I think days also in ESG overlay with that I think you launched this product in February last year.

And what have you learned from this rollout thank you.

Yeah.

<unk>.

We launched last year, and we continue to gain some traction of that.

No that was what I would say the initial phase of that and while we're getting a lot of positive results from that I don't think we could have full stride in either one of those areas yet.

And we have enhanced releases on both of those fronts, both directly indexing in ESG overlay.

This year with very good momentum in those product lines.

Got it alright, thank you very much ring.

Our next question is Ryan Bailey with Goldman Sachs. Please go ahead.

Alright.

Alright.

How's it going.

I was hoping you could give us a little bit more color on some of these re engaged advisory firms.

So when you say reengage does that you're starting to win incremental new business with them or was it that they had converted away and have now come back to the platform.

And maybe this is this is probably the most important part.

That caused them to decide to re engage with you.

Yes.

It's a multifaceted question and I think the way I would come at it.

We changed that strategy over the last.

You're so and we've also.

Completed the rollout of the wealth platform.

We're at.

Deep into the.

It really robust enhancement of that platform.

So that technology strategy. In addition to how we've changed the way we bundle unbundle investments some of the things I talked about.

We've been in this business almost 30 years and there's a lot of providers, maybe you've been now came on I really don't know what's anymore, where they.

You've been network, maybe we don't know who we are and what we do now so we had a concerted effort, but you know what let's reconnect with those people and maybe they haven't opened a new account in a while.

And maybe we're not really getting or maybe they opened one account over sometime next re engage them and see if we can get.

Steady flow of new business out of it and that's how we're defining it.

Regain that so these are people that maybe had assets on the platform weren't sending us new asset.

We said hey.

We won't talk to you about what we're doing now.

And we're excited about that.

I don't want to.

We're excited about what we're doing and then I'm going to get out.

I would do a new business again.

We define <unk> gains device, we have specific metrics that I'm not going to talk to you.

Prepared to talk about now, but I would say that these are people that weren't opening the accounts. We are now opening and not just the single account, but multiple accounts with us.

Got it okay, it's really interesting.

No.

Maybe you can speak about it.

Qualitatively rather than quantitatively, but 126.

Reengage with existing advisory funds during the year is this the vast majority of funds you are reconnected with and re engage that previously were part of the platform or are we still early in the process.

Contacting theres potential re engage firms there any color you can give us around that.

There's probably 2000 targeted firms that fit that category.

Okay Alright.

Very interesting thank you for that color.

Our next question is Michael Young with <unk> Securities Go ahead. Please.

Okay.

The student loans openness.

Okay.

Okay.

We have no additional questions in queue at this time.

Thank you.

Okay.

Yes.

Thank you very much.

With that I will turn it over to Paul.

Thanks, Dwayne good afternoon, slash almost evening everyone.

I am going to discuss the financial results for the fourth quarter of 2021 as well as the entire year fourth quarter revenue of $87 8 million increased 7% compared to the prior year.

Full year revenue of $343 $8 million increased 8% compared to 2020.

Operating profit for the fourth quarter were $42 5 million, 6% lower than the prior year two.

2021 full year profits were $175 7 million and were 5% higher than 2020.

Higher capital markets were positive for revenue and operating profit and we earned a onetime performance fee in Q4.

Large clients and higher employee and sales compensation expenses impacted full year profit.

No there's partners and acquired business in Q4 operating loss and one time deal cost directly impacted Q Q4 profit by $1 6 million.

Operating margin for the quarter was <unk> 48, 48% and for the full year 2021 was 51% in quarter end asset balances were $98 7 billion.

Net OCI asset events for the fourth quarter was a positive $300 million.

Sales were $1 4 billion in client losses totaled $1 1 billion.

Total new client signings for 2021 were a healthy $5 7 billion, which represents $13 5 million in revenue.

Fourth quarter, new sales, we're diversified diversified across U S and dominant foundations healthcare North American DB in UK fiduciary management.

Client losses continue to be due to DB terminations mergers where competitive rebids.

The unfunded OCI, our sales backlog at year end was $2 8 billion with most of that funding in Q1 of 2022.

In the quarter, we completed two strategic acquisitions that we feel strengthen our capabilities and two very large and growing markets.

As previously announced we believe the Atlas Master Trust acquisition bolsters, our competitiveness and capabilities in the large and fast growing Master trust market in the U K.

The acquisition of Novus partners significantly enhances our <unk> platform and our overall capabilities to large sophisticated global institutional investors.

The acquisition brings us institutional investor client investment manager clients and family office clients for which we can leverage one sci mindset in the company.

While we believe both acquisitions will enhance our strategic position in these markets and we are optimistic on long term growth potential the acquisitions bring headwinds to profit and profit margin percentage in 2022.

Thank you very much and I'm happy to answer any questions that you may have.

For questions Press, one zero please.

We have Robert Lee from <unk>. Please go ahead.

Hey, good afternoon, I got it right so good Werent Robert.

Even I can do that.

Just real quickly Paul I'm, just kind of curious.

The ins and outs the gross sales versus redemptions.

Any way to kind of characterizing maybe on a.

If I think of the $300 million of net flows.

On a revenue basis would have been positive negative just given kind of the changing mix or.

Relatively.

Kind of relatively even so to speak.

When we look at the net $300 million it is definitely positive.

Rally a little bit over $1 million.

And then we did have the incentive fee that I talked about that we recognized in the fourth quarter as well so thats certainly was accretive.

That number just for your benefit was $2 6 million in revenue.

$1 3 million in expense, because we pay the sub advisor of that specific product and $1 $3 million of profit. It's a 50 50 split.

Right.

Okay great.

Yeah.

So I guess the comments around kind of.

Some of the headwinds from some of the acquisitions.

<unk>.

Incremental expense pressures so.

If we think about I know it's in the release.

It was the $800 million 800000 or so.

Is that kind of.

The incremental pressure, we should thinking about going forward or was that part of that just kind of deal expenses and it's going to be somewhat less than that.

Yes, let me unpack that for you. So I said $1 6 million, which is the 850000 thats in the release or even to the eight.

That's the run rate loss and then there was $750000 of deal costs. That's how we get to the $1 6 million impact for Q4, obviously the deal costs go away.

The largest component of the Novus transaction is the amortization.

So the business is actually on.

non-GAAP basis, a cash flow basis is just around kind of breakeven.

But some of the amortization will probably be in the tune of about $7 million impact in both 2022 from organic perspective, 2022, and 2023, and then it'll kind of clip off over time as the schedule kind of diminishes over time.

Yeah.

Great and just kind of curious I mean as you acquire some of these.

These platforms to add capabilities.

Are you do you expect that once you.

In addition to whatever their capabilities are that they require or at least for some period of time, some step up in investment to maybe bring them to scale or.

To enhance their capabilities too.

It fit into your network.

Mean post acquisition, yes, absolutely.

More so in the Dover side on the Atlas side.

But that's all kind of baked into our projections, but equally in the projections is sizeable increases in revenue.

Because of the capabilities, we bring them not the least of which is in addition to their technology, which is state of the art Awesome technology is the back office and Middle office capabilities that we bring to the table, so really sizing up their clients to meet able to upgrade their clients and revenue possibilities because of the additional capabilities that Sci brings.

The table, which is why it is such an awesome fit of the two organizations. So I think that message before this market. We think is about 25 trillion and about 4000 global suspects that we're not back to those CIO. They are do it yourself offers they're ones that wanted to have an investment team which is <unk>.

And now we have a capability that we can squarely go into them and as part of the acquisition, we get instant credibility because we're bringing over 140 clients that had already.

I am quite bullish about the opportunity there might be some financial impact that we're going to deal with in 2022, maybe a little bit residual in 2023, but the growth potential is fairly profound for the business.

Great. That's helpful. I appreciate it thanks, so much no problem.

We have no additional callers in queue at this time.

Okay with that I'd like to turn the call back over to al.

Ladies and gentlemen, we are building momentum throughout our businesses, we look with optimism to the future and to capturing the opportunities in there.

With constantly changing markets.

Our new brand reflects our company's strengths, our optimism and our belief that we will help our clients build great futures.

Please be safe and remain healthy.

And our goal.

Yeah.

Ladies and gentlemen that does conclude your conference call for today, we do thank you for your participation for using AT&T event conferencing you may now disconnect.