Ladies and gentlemen, thank you for standing by, and welcome to the SEI first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. We will have a question- and- answer session. Instructions will be given at that time. If you should require assistance during today's call, please press star then zero. As a reminder, today's call is being recorded. I'd like to introduce the host, Chairman and CEO, Al West. Please go ahead. Thank you, and welcome everyone. All of our segment leaders are on the call, as well as Dennis McGonigle, SEI CFO, and Kathy Heilig, SEI's Controller. I'll start by recapping first quarter 2021. I'll turn it over to Dennis to cover LSV and the Investments in New Business segment. After that, each business segment leader will comment on the results of their segments. As usual, we will field questions at the end of each report. Let's turn our attention to the financial results of the first quarter 2021. First-quarter revenue grew 10% from a year ago, and first-quarter earnings increased by 19% from a year ago. In addition, first-quarter EPS of $0.89 grew 24% from the $0.72 reported in first quarter of 2020. Finally, first-quarter asset balances grew by $3.4 billion, while LSV's balances grew by $7.9 billion. During the quarter, we repurchased 1.2 million shares of SEI stock at a price of $58.11 per share. That translates into $66.9 million of stock repurchases. Also in this quarter, we continued our investment into growth generating initiatives. The newest effort is One SEI, which is a large part of our growth strategy. As you will recall, One SEI leverages existing and new SEI platforms by making them accessible to all types of clients, all adjacent markets, and all other platforms. Turning to revenue production, net sales events in private banks and investment managers were $17.5 million, of which $13 million are expected to be recurring. On the other hand, net sales events of a - $12.7 million incurred in the asset management related units of investment advisors, institutional investors, and banking's AMD. In a few minutes, unit heads will provide more detail on their specific sales results and their new business opportunities. To grow and prosper in the future, we know that things will never be the same. We have been busy adopting new mental models and realities. One such new reality is a remotely distributed workforce. We have been planning how we work in the future and are acting on these plans. Fortunately, we have a lot of positive momentum moving into 2021. Currently, we have a strong backlog of sales and conversions and a number of key prospects late in the sales process. We have also made progress in strategically repositioning our asset management related business segments. We are poised and ready to capture the opportunities inherent in significant change. This concludes my formal remarks, so I'll turn it over to Dennis to give you an update on LSV and the Investments in New Business segment. After that, our segments' heads will update results in their segments. Dennis? Thanks, Al. Good afternoon, everyone. I'll cover the first quarter results for the Investments in New Business segment and discuss the results of LSV Asset Management. During the first quarter of 2021, the Investments in New Business segment activities consisted of the operation of our Private Wealth Management group, our IT services business opportunity, the modularization of larger technology platforms to deliver on our One SEI strategy, and other investments. During the quarter, the Investments in New Business segment incurred a loss of $9.5 million, which compared to a loss of $11.4 million during the fourth quarter of 2020. Approximately $7.5 million is tied to our One SEI effort. Regarding LSV, our approximate 39% ownership contributed $33.4 million in income to SEI for the first quarter. This compares to a contribution of $30.6 million in income for the fourth quarter of 2020. Assets during the quarter grew approximately $7.9 billion. LSV experienced net negative cash flow during the quarter of approximately $4.8 billion, offsetting market appreciation of approximately $12.7 billion. Revenue was approximately $110.8 million for the quarter with nominal performance fees. Our effective tax rate for the quarter was 22.6%. We have also included in our earnings release additional financial information, and if you have any questions on any statistics, Kathy will be available to answer them. With that, I'll take any questions. Thank you. Ladies and gentlemen, if you do have a question, please press one and zero on your touch-tone phone. You'll hear acknowledgement that you've placed in queue. You may remove yourself from the queue anytime by pressing one and zero again. Thank you. Thank you for taking my questions. Dennis, with the vaccine, could you please give us an update on your operating model in 2021? How does the vaccine change your view about the T&E spend, healthcare costs, and other G&A spend for the rest of this year? Thank you. Sure. Where we sit today, travel is still very, very limited. In fact, we can count on one hand not only the number of trips people have made, but the number of trips people are requesting to make. It's a very limited amount of travel activity. We certainly anticipate, as we move through the year, and I would say particularly the second half of the year after the summer, we might see a slight uptick in travel activity because we are starting to get some requests for folks to travel. That being said, I would say that if it has any impact on expenses, it's really going to be modest overall. In terms of healthcare spending, there's really no trend change over 2020 per se, other than we have a slightly higher or larger workforce, which in and of itself would drive benefit costs up. I think if you're asking really based on the kind of anomaly we had in the third quarter of last year, I believe it was, that was really, I'd say, case specific with certain health issues with employees. Got it. That's very helpful. Then you touched on LSV. I got some numbers from the LSV as well. Could you please give us a bit more color on this? I think in the first quarter, the reflation trade was quite strong. The growth-to-value trade was quite strong. Could you please talk about your view about how sustainable that is, and also how would LSV capitalize this trend? Thank you. Yes. Their outperformance, relative performance, was strong both exiting the year and in the first quarter. The good news is the value trade has certainly helped them. In addition, their position in the value segment of the market has helped them even further. Now, time will tell whether that value trade is going to persist in this market this year and beyond. They certainly are going to stick to their knitting as a value firm. If it does persist and their outperformance were to continue, that would only bode well for their ability to compete and win assets. Also, if clients start to rebalance back towards value within their overall portfolios, that should help them as well. Thank you. That's it for me. Thanks, Owen. Our next question, we're going to go to the line of Ryan Kenny from Morgan Stanley. Please go ahead. Hey, Dennis. How are you? Great, Ryan. How about yourself? Good. Just a follow-up on LSV. On the $4.8 billion of outflows, just want to get a sense of, was that more of a rebalancing issue or a lost client issue? How should we think about organic growth in LSV going forward? Yeah, it was about 50/50. About 50% was rebalancing, and 50% was lost clients, mainly in a managed volatility product they have. In terms of the future, they had positive gross sales during the quarter. Again, back to the answer I gave to Owen, I think that if the value trade persists and their outperformance adds to that, I think that bodes well for their ability to capture not only assets flowing back to them via rebalancing, but also winning searches when firms who aren't clients look to find value managers to hire. Thanks. Just a question on One SEI. I was wondering if you could give an update on the trajectory for that going forward? Sure. As we kind of look out the rest of the year, second quarter is going to look pretty close to first quarter. That's kind of how we had it even forecasted out last year. Then we saw a drop-down from fourth to first. Second quarter probably will be in the same range. It could be a little bit higher than first, but not materially so. Then the second half of the year, third quarter, fourth quarter, we'll see additional step-downs as we finish the work. Some of the One SEI work in terms of modularization is targeted at a client implementation later this year, and we have to finish that work arguably in the second quarter to get those software releases in production so they're well tested and vetted for the client. We're on track, and I think things are trending the way we had expected them to. Thank you. You're welcome. Next we'll go to the line of Chris Donat from Piper Sandler. Please go ahead. Good afternoon, Dennis. Thanks for taking my question. Hey, Chris. Yeah. Thanks. Just quickly wanted to combine the two prior questions in thinking about your total expenses on a consolidated basis for the quarter. Given there should be a positive impact from One SEI decreasing over time, but probably higher expenses further out from some rebounded travel. Is it fair to think about the first quarter expenses as a reasonable run rate for the full year? The 1% uptick from fourth to first, I think there'll be a little more pressure on expenses than that, over the next few quarters. We have, as you'll hear from the unit, from Steve in particular, we have a pretty big backlog of clients to install. That'll have some impact on hiring. I don't know that travel will really move the needle and kind of offset the tick down in One SEI spend. I don't think travel will be that significant. We did get a little bit of benefit in the first quarter on option expense. We had a couple people leave and allow us to reverse some option expense. That being said, I think expenses, I shouldn't say definitely. We expect them to tick up as we progress through the year. Again, our job to continue to try to execute as best we can is to keep our spending targeted at the right things, being as productive as possible, but without giving up some of the investments we think are critical to our future. That'll continue. Okay. Thanks very much. Yeah. We're going to go to the line of Robert Lee from KBW. Please go ahead. Great. Thanks. Good afternoon, Dennis. How you doing? Great, Rob. How about yourself? Pretty good, thanks. All things considered. Just a question. Just kind of curious at a high level, as you think about notwithstanding some spending, and I think we all hope spending comes back on travel or something similar in the second half of the year, in a way. More broadly, as you think about changing the business model a bit, more of a distributed workforce. Maybe it's too early, but you have any kind of initial thoughts on how you think that plays out into over long-term expenses? Is it, Gee, there's an opportunity here to diminish our real estate footprint, or the cost of kind of having supported dispersed sales force kind of pretty much offset any potential benefit? Just kind of curious your initial thoughts on that. Yeah, the pandemic hit at kind of the wrong time relative to our own real estate planning because we were about 75% done building a brand-new building here, and a new campus, arguably. We call it the North Campus. We finished that building and it's ready to be occupied. The reason we built that building was to eliminate a couple leased facilities that we had in the Oaks area, and we were able to do that. We got rid of those leased facilities. All those people went home instead of to Oaks. Right. It's safe to say that we have plenty of capacity. I hope in Dennis McGonigle's future, there is no longer the need to build another parking garage. We do expect the bulk of our workforce, though, over time, to return to our offices around the globe. Let's focus on Oaks at a minimum in roles that are more hybrid, a few days a week type roles. We will optimize our capacity as we manage our workforce back to offices, providing them with a lot more employees with more flexibility in terms of a home work environment versus just an office work environment. I don't see the cost changing much. Our lease space in our bigger offices, Ireland, U.K., Indianapolis, those leases have some time to run. To the extent we get to the end of those lease terms and we don't need the amount of space we have, certainly we would have the option to shrink. Right now we're under lease. It's not really facilities that lend themselves to subletting, if that's even possible. Okay, great. That was my question. Thanks so much. All right. Thanks, Rob. At this time, I have no further questions in queue. Please go ahead. Great. Thanks. Before I turn it over to Steve, we would like to remind everyone 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 in today's earnings release and in our filings with the Securities and Exchange Commission. We do not undertake to update any of our forward-looking statements. With that, I'll turn it over to Steve. Thanks, Dennis. Good afternoon, everyone. I'm going to talk about banking first, and then as usual, I'll turn it over to our investment managers. Let's focus on banking. During the first quarter, we continued our momentum in the market while also executing on our One SEI strategy, and we were able to continue to prudently manage expenses, which aided in the profit for the quarter. First quarter 2021 revenues totaled $117.6 million, which was up approximately 4% from the first quarter of 2020 due to higher recurring revenues. First quarter 2021 quarterly profit of $6.9 million for the segment was up approximately $4.3 million, or 168% from the first quarter of 2020 and up 49% from the fourth quarter of 2020. This is primarily due to expense management. Turning to sales activity, for the quarter, we closed $8.7 million of gross recurring sales events, which resulted in $3.6 million of net recurring events for our investment processing business, offset by a negative $2.5 million in asset management events. This offset from asset management brought our total net recurring events for the quarter to approximately $1.1 million for the segment. Also in the quarter, we closed $2.9 million in one-time revenue. While we were encouraged by the $8.7 million in gross sales events for the quarter and the momentum with new business that continues, we had to digest the headwind of an uptick in M&A activity in the industry, which negatively affected our sales total for the quarter. This is a headwind we'll have to deal with this year as there are several other clients of ours who have been acquired. However, we remain very bullish on the new sales activity we continue to experience. As previously announced on our fourth quarter 2020 call, we closed three SWP agreements in the first quarter, two of them new clients to SEI and one an existing client from TRUST 3000. I outlined the details of these events on the previous call, but to summarize, these new sales included Bangor Savings Bank, a TRUST 3000 client since 2011, who will convert to SWP in 2022, a West Coast large community bank who will migrate to SWP from a competitor platform in the first half of 2022 and who's also a candidate for our One SEI strategy. We believe this firm has an opportunity to leverage additional SEI platforms and solutions and is currently evaluating SEI's asset management distribution products. Finally, our third signing was with another new client, UMB, United Missouri Bank, who will migrate their private wealth management book of business to the SEI Wealth Platform late this year. We are proud to welcome UMB to the SEI family. Additionally, for new sales in the quarter, keeping our One SEI approach in the forefront, we were able to cross-sell our Archway Platform to one of our long-term trust clients as well as cross-sell additional services to several other clients, including an upsell of components to a client who is migrating to SWP. During the quarter, we also had six client recontracts securing another approximately $9 million in recurring revenue. As an update on our backlog, our total signed but not installed backlog is approximately $77.3 million in net new recurring revenue at the end of the first quarter. From an asset management standpoint, total assets under management ended the period at $25.1 billion, which was down 1.6% from the fourth quarter of 2020. Our cash flow for the first quarter of 2021 was a negative $885 million. The majority of this outflow is due to a single asset management client who had purchased one of our asset management products and decided to sell out of that product completely. As we continue through 2021, our focus continues to be on maintaining our strong momentum in the market, continue expanding our business with clients, and expanding into new markets to increase our opportunities. Key to this will be our One SEI strategy and being able to increase our growth opportunities by unlocking all the assets and platforms SEI has to offer across the company. We will also focus on driving scale in our business as we push towards providing a sustainable and accelerating margin growth in the future. We remain excited and optimistic on our growth opportunity. That concludes my prepared remarks, and I'll now turn it over for any questions you have. Thank you. Once again, ladies and gentlemen. Our first question will come from the line of Ryan Kenny from Morgan Stanley. Please go ahead. Hey, Steve. How are you? Good. How are you, Ryan? Good. Couple of questions. First one on the $22 billion drop in AUA for Private Banks. Just wondering if we could get more color on that. Is that all from M&A? How did that impact the forward look on revenues? Yeah. That was a client, it was a fund family who looked more like an asset manager client. We moved that fund complex to IMS. It was really just an internal move. It's a lower fee product, so there wasn't a great deal of revenue associated with it. From a servicing and kind of lining up segment opportunity, it was better to go to IMS. Got it. Thanks. Just as a follow-up, wondering if you could give an update on the competitive environment you're seeing with some of the other wealth management platforms out there. Where are you seeing the most pressure, and where are you seeing the most success? Yeah, I would say the competition is there's no notable change except our competition likes competing with fee, which is nothing new to us. For the wealth managers out there that are looking for a new platform and much more capability, we certainly hit that in all strides. I do see some smaller boutique providers coming in and providing bespoke offerings or going after a piece of the puzzle. Again, I think we've designed our platforms and our solution to really address the whole puzzle for wealth management. With our One SEI strategy, we'll be able to lean into that now and do it in a more staggered fashion to make it more digestible. For us, we feel very well-positioned both here and overseas with our capabilities and our platform and technology. Got it. Thanks. Sure. Next we're going to go to the line of Robert Lee from KBW. Please go ahead. Great. Thanks. Good afternoon, Steve. How you doing? I'm great, Rob. How are you doing? Good, thank you. Couple of questions. The first thing is on your comments on industry M&A, maybe there's some headwind there. I guess in the past, because it's an industry that's been consolidating for years, I guess. I've always kind of felt there's as much in the consolidation opportunity as there is risk. I don't want to read too much into your comments, but it kind of suggests that maybe right now what you see in front of you're kind of expecting there's more likely to lose some of the relationships due to M&A, or is that just trying to be extra cautious? How should I kind of think about that? I'd say, Rob, it's a little bit of both. Listen, a number of our clients, and I think we've talked about these in the past, it's been in the press, they've been acquired. One was acquired by a competitor from overseas that's kind of lining up to come into the U.S. I don't feel very confident that we're going to keep that business. The other ones, I just think where we see it trending, I think out of caution, I would say we're lining up thinking that most likely because of other priorities at the acquiring organization, it most likely will not stay with us. When you started off the commentary, M&A, we've dealt with this in the past. It can be a benefit to us, or it can be a headwind. Over the past couple of years, we've had some M&A that's been very positive for us. Unfortunately, I think we're going to have a couple that are going to be negative for us this year. That's going to be a headwind, but I view it as a temporary headwind. That does not take away or distract from the momentum we have. I think, quite frankly, my view of it is even if we do not retain a client because of acquisitions, that gives us another prospect to go after in a larger way. Okay, great. Maybe as a follow-up, and maybe this goes to the pipeline. Do you have any sense, interest rates go up, bank earnings should go up, credit costs seem to be well controlled? Yes, bank earnings generally seem in better shape versus kind of a year ago, potentially. Do you see that translating at all into your pipeline that banks, that they're engaging more, they seem more willing to start spending some of the money, or at least they feel more willing to kind of engage and think about change and change their technologies? Yeah, it's a great question, Rob, but the way I put it is this. We see a number of forces coming to bear, that I believe is causing managers, not just banks, but wealth managers across the board to relook at their business model, and I think it bodes well for us. I think you've heard us say time and time again before, disruption in this business usually works out for us and presents opportunity. This pandemic has been a big disruption. I think this is causing a lot of people to reconsider outsourcing and strengthen the outsourcing position. You certainly have interest rates and the capital position of banks being in a better position. The other piece is many of these large wealth managers and banks know that they need to make a decision and need to upgrade their technology to drive scale and to execute on their strategic plan. Many of them have pushed that decision, and I think we're getting to an inflection point now where that pushing of the decision cannot be pushed anymore. I think this is why we leaned in with this One SEI strategy. One of the benefits of that is we can make our very powerful transformative solutions more digestible and able to do this in steps. I think that will play well as these forces come together. Okay, great. If I could just follow, there's two little numbers. I think I just missed them. The asset manager contribution in the quarter, and then the one-time revenues. Were those both negative and then positive $2.9 million, or did I not write them down? Well, I think the asset management, the assets I said were down. We were down cash-flow-wise $885 million. What was your other one, Rob? The one-time revenues for. One-time revenues was $2.9 million. Also, if you're asking for asset management as far as sales, was that what you were asking? Yes. Yeah. The sales were around, I think it was - $2.5 million. It was -$2.5 million that went against our gross of $8.7 million. Okay. Got it. Great. Thank you so much. Sure. Next, we're going to go to the line of Ryan Bailey from Goldman Sachs. Please go ahead. Hi, Steve. How's it going? Good. How are you, Ryan? Not too bad, thanks. I just had a quick question on some of the implementation outlook for the backlog. It looks pretty healthy, the growth in the backlog quarter-over-quarter. As we look through the course of the year, how are you thinking about that getting implemented and how that could contribute to revenues? I'm thinking about it, doing it on time. Right now we have people scheduled, and we're in line. Things progress. We didn't have any final implementation schedule for Q1, but we do have others scheduled throughout the year. If you look at the backlog now, and I've been giving this kind of 18-month kind of barometer. Right now about 61%, and the last time we talked that was around 50%, about 61% is probably due in the next 18 months. The remainder after 18 months, probably more in the 24 to 26- month period. We're looking to keep that on track. Could some of it push? Yeah, I don't think materially we're working with clients that might have more troubles or slow down on their side, getting implementation, downstream implementations on their side. For the most part, I think we're intact and on time. Got it. Okay. All right, that makes sense. Maybe just a separate one, to the degree you can talk about a specific client, I'll give it a shot. I was just wondering, one of the drivers you've been talking about for the business has been asset management and wealth management sort of coming closer together and SEI being at a competitive advantage with that. I was just wondering, with Wells' majority sale of their Asset Management business, how that impacts your relationship with them. What sort of an impact could have going forward? Yeah. I don't think it changed our relationship with them. Obviously Wells is going through their own rationalization and working on their business. We have a very close relationship and close contact with Wells. We knew about that they were going to be divesting of that business. We service some of that business, but it's not a majority of the business, and we don't think it will have a material impact on our revenue. We're still focused and, ironically, we think this is good for us because Wells is normalizing and right-sizing their business for the future. I think once they do that and they're getting to a good spot, we'll be able to engage them on how SEI can continue to support them and increase our support and business with them. Awesome. Can I sneak one more in? Sure. I was just wondering about the, I think you said that you upsold a client, who was converting from TRUST 3000 to SWP. I was just wondering if you could give us a little bit more detail there on maybe what components that was, how much of an increase in the revenue. Sorry, are you talking about the cross-sales, Ryan? Yeah, I think so. Yep. Yeah. Obviously I'm not going to get into the client, but what I'd say is, and I think this is an important fact, because before, you heard us talk a lot about new business, but we didn't spend much time on cross-sales. As I've told you, part of our strategy, and we over-use it here with land and expand, but one of the key points of our One SEI strategy was to unbundle parts of our platform so people could digest and move quicker. During that process, as we got the client in, if there was opportunity to upsell them or add other functionality. For example, in this case, to add front office capabilities, because they were just focused either on the back or middle office, that would be an opportunity, and that's what happened in this case. We do think as we lean in more, there'll be more opportunity for us on this, on clients that are converting, as well as new sales that we have. We view that as a very positive move forward for us. It gives us another lever to pull with, as we expand and grow the business. Great. Thanks, Steve. Sure. At this time, we have no further questions in queue. Okay. With no questions, I'll turn it over to Investment Managers s egment. Turning to the Investment Managers s egment, during the first quarter, we continued our momentum in this segment and saw strong growth from both new clients and expansion with existing clients. For the first quarter of 2021, revenues for the segment totaled $136.4 million, which was 17% higher as compared to our revenue in the first quarter of 2020. Profit for the first quarter for this segment of $53.4 million was 26.1% higher as compared to the first quarter of 2020. Third-party asset balances at the end of the first quarter of 2021 were $831.8 billion, approximately $71.4 billion higher than the asset balances at the end of the fourth quarter of 2020. This increase was due to net client fundings of $38.6 billion, as well as market appreciation of $32.8 billion. In turning to market activity, during the first quarter of 2021, we had a strong sales quarter with net new business events totaling $9.3 million in recurring revenue, as well as recontracts with $8.7 million in recurring revenues. These events this quarter were diverse and spanned our entire business. They were reflective of the current market dynamic, which is highlighted by a larger amount of what we would call singles and doubles versus larger scale mandates. Highlights of these events included, in our alternatives market unit, we closed a number of strategic new names while sales to existing clients continued to be robust. SEI was selected to provide fund administration for several new hedge funds. SEI was also selected after an extensive RFP process by a $25 billion fund- to-f und to utilize the SEI Trade platform. Momentum also continues in the private equity and private debt space, and we continue to launch funds with both new and existing clients. In our traditional market unit, we continue to add new business in all product lines with both new and existing clients consistent with our land and expand strategy. Two new clients selected us to take advantage of our middle office services platform. A multi-fund complex joined our pioneering Advisors' Inner Circle Fund '40 Act platform, and we also added a new ETF client to our turnkey Advisors' Inner Circle Fund trust platform. In Europe, we continue to have solid cross-sales. And finally, in our family office services unit, we signed multiple new named single family office clients to the Archway Platform and continue to see strong demand from this industry vertical. Our backlog of sold but unfunded new business stands at $35.6 million at the end of the first quarter. As we progress into 2021, we will continue to focus on our growth strategies and look to continue our strong momentum in the market. We have a strong pipeline across all segments, great momentum, and a leading platform combined with exceptionally talented and experienced people. This, combined with our continued execution of our strategy, bodes well for the future. That concludes my prepared remarks, and I'll now turn it over for any questions you may have. Thank you. Once again, ladies and gentlemen, as a reminder, if you wish to ask a question, please press one zero at this time. We're going to go to the line of Ryan Kenny from Morgan Stanley. Please go ahead. Hey, Steve. Just want to get an update on how you're thinking about margins from here and how sustainable the 39% is? Thanks, Ryan. Margins, my view has not changed from before, and I know I sound like a broken record. I feel comfortable with the margins in the mid-30s. As I said, I think it was last quarter, I can see that up-ticking to the 36% range. This quarter, we had a number of things which I think impacted the margin positively. One, we implemented a lot of new business, and the labor market is a little tighter here. We implemented a lot of the revenue ahead of us bringing in some of the resources for it. Our personnel expense was a little low compared to the revenue, and obviously, that will switch as we go through and switch certainly by Q2. Secondly, we had some kind of one-time expense adjustments that helped us, some around compensation, as Dennis mentioned, that won't repeat. I think if I took those out and looked at the margin, we'd probably be more in the 36% range, which is again, where I feel comfortable that this business is at, especially as we continue to invest and continue to build out our platform and solutions for sustainable revenue. Got it. Then just a question on digital assets. We've seen some announcements from a few investment servicers over the last few months outlining plans to offer servicing, accounting, and custody of digital assets. Just want to get a sense of how that could potentially fit into your space, and if you're seeing any demand from your customers to offer something similar. Yeah. We've actually, Ryan, we're already providing services for a handful of crypto funds, and it is something strategically we believe, and we've already had discussion with numerous of our clients, that they have plans to set up funds around this. It is something that strategically we are on. Obviously, we don't provide custody, but we obviously link and integrate into custodians. It is something we do think that we're going to have a larger servicing footprint on in the future. Great. Thanks. Sure. Next we're going to go to the line of Robert Lee from KBW. Please go ahead. Great. Thanks. Hi again, Steve. Since you already gave us the backlog, I guess I'll just ask one other quick question. Just kind of curious, there's obviously been plenty of M&A in the asset management industry, too, more so in the traditional versus alternative space, but certainly some there. Just is there anything we should be thinking about as that kind of plays out, that there's any kind of impact on the momentum in this business? Doesn't seem like it's been any, but I'm just kind of curious to know your thoughts on that. No. I think, Rob, and I missed a little bit there, it kind of cut out, but listen, the alternative side has been a driver for us as well as the industry for a number of years. What I'd say, and I think we saw this towards the end of last year, our traditional business is resurging again, and I think it's resurging for a number of reasons. The managers in that space are under pressure as active management comes under pressure, and they're rethinking their business model and how to drive scale. Outsourcing and the capabilities we have in the platform resonate very well when they're looking at that. If you look in this quarter's sales, a good bit of it was our traditional business. We're very happy with the progress. We see a huge need for our middle office services platform. We also see a need across our CITs and our ETF platforms. That's an area that I expect good growth from this year, and I think as managers kind of rethink their business model, we stand in a good position to service them and give them an offering that will help them with that. Okay, great. Thanks. That takes my question. Sure. At this time, we have no further questions in queue. Please go ahead. Great. Thank you. I'll now turn it over to Wayne Withrow to cover the Advisor segment. Wayne? Thanks, Steve. During the first quarter of 2021, we continued execution of our strategy, including improvements in our sales and marketing process to fit a virtual environment, the offering of bundled fee and our newer unbundled fee investment products, and continued enhancement and delivery of a completely integrated front to back office technology platform, including custody. First quarter revenues totaled $113 million. This 11% increase from the first quarter of last year reflects the impact of AUM growth, as well as lower fee rates on some of our products. Expenses were up compared to the first quarter of last year, primarily due to an increase in direct costs, and to a lesser extent, expenses associated with our purchase of the Oranj technology platform. Same factors influenced the expense increase from the fourth quarter of last year, as well as inclusion in the fourth quarter expenses of some non-recurring savings. Overall, the profit picture for the unit remained relatively intact, slight pressure on our asset management revenue rates. Assets under management rose to $77.4 billion at the end of the first quarter, and total platform assets stand at $90 billion. Market appreciation drove this increase. We did achieve strong cash flow growth in our newer unbundled fee products, but this was mostly offset by net redemptions in our older embedded fee products, primarily in our actively managed mutual fund wrap program. Total net cash flow for the quarter was $306 million. Of this total, $125 million was in assets under management, and $181 million was in assets under administration. We recruited 52 new advisors during the quarter. During the quarter, we purchased the assets of Oranj technology. This acquisition was in furtherance of our front to back office technology strategy. While the financial size of the transaction was modest, we feel the end investor collaboration platform we acquired is compelling and will unlock new opportunities for tech forward client engagement. We intend to fully integrate this platform into SWP and begin the rollout to our advisors in the second half of this year. In addition to this platform asset, the acquisition included a team of skilled cloud technology professionals. During the balance of this year, we expect to incur a $5 million expense increase as we integrate and roll out this platform. While there still remains much to be accomplished, I feel we are making progress in our three focus areas: evolving our sales and marketing process to fit today's digital world, designing and offering investment products responsive to today's investor, and delivering a compelling front to back office technology platform incorporating custody. It is my opinion that achieving success in these areas favors companies with our skill sets and assets. I'll now welcome any questions you have. Thank you. Once again, ladies and gentlemen, if you do have a question, please press one and zero at this time. We're going to the line of Ryan Kenny from Morgan Stanley. Please go ahead. Hey, Wayne. How are you? I'm great, Ryan. How about you? Good. Just a question on the Oranj acquisition. Wanted to get a sense of how it fits into your tech strategy in terms of what specifically it enables you to do that you weren't able to do before. From here, are there any other gaps in tech or capabilities that you're looking to fill in? Well, at the highest level, Oranj was an end investor collaboration tool. We did not have a strong presence in the end investor collaboration tool. If you look at it in terms of specific functionality, things like account aggregation, a digital document vault, secure messaging and collaboration with trust and advisors and advisors and end clients, it's functions such as that. It is also a completely cloud native technology platform and will be in the forefront of us moving all of our end investor technologies into the cloud. Are there any other gaps or capabilities that you're looking to fill in from here? Yeah. I think when you look at it, we'll always enhance our end customer reporting, and we expect it to be able to do that. If you look at the collaboration on the financial planning side, how you can sort of review and modify financial plans in real time is something we have on our roadmap. It's items such as that, without telling the world what our tech strategy is. Got it. Okay, thanks. Next we're going to go to the line of Ryan Bailey from Goldman Sachs. Please go ahead. Hi, Wayne. How's it going? Hi, Ryan. Wayne, I'm sorry, I missed the number. Did you say for the AUM side you had inflows? Right. Total new assets on the platform were $306 million in net cash flow. Of that total, $125 million was assets under management and $181 million was assets under administration. Got it. Okay. I guess, just a question as you think about the bundled versus unbundled approach. It seems like you've had several quarters now of really good momentum on the unbundled or AUA approach. I was just wondering if you can help us think about why it might be that advisors are choosing the AUA approach over the AUM for you guys. Is it just an investment selection decision? Is there a pricing component to it at all? Or it may be something else that I'm not thinking about. Yeah. I think you hit all the high points. As you get down into the weeds, a little more complex with that. Some of the products, at least you have one that's more expensive than existing products. If you had to generalize, I would say the unbundled products are a little bit cheaper when you add all the components together. Some people prefer having the bundled price, even if it is a little more expensive, because it just seems cheaper because it's not a whole different set of line items. The major difference, I think, of the unbundled and bundled is it allows you to deconstruct the whole investment management process, so that if you want to charge separately, for example, for tax management, take that as an example. You can do that in an unbundled structure, where if everything's bundled, you have to offer all the components of asset management together, whether an investor values it or not. Take tax management would be the easy example. If you have qualified money in tax management in the pricing of the bundled product, you pay for it even though you really don't need it. This allows us to customize the pricing and the delivery of the product to what the investor really needs, and I think that's what's resonating. Got it. That makes sense. I know I asked this question last quarter, but if I can ask it again. If you could do rough justice on the split of the AUA flows between new advisors versus existing advisors converting existing books of business from AUM to AUA. Yeah, I think right now, the majority of the growth is in the new advisors at this point. Got it. Okay. Perfect. All right. Thanks, Wayne. At this time, I have no further questions. Thank you. All right, great. With that, I will turn it over to Paul to talk about Institutional Investors. Thanks, Wayne. Good afternoon, everyone. I'm going to discuss the financial results for the first quarter of 2021. First quarter 2021 revenue of $84.5 million increased 7% compared to the first quarter of 2020. Operating profits for the first quarter 2021 were $45.3 million and increased 11% compared to the first quarter of 2020. Both revenue and operating profit increases were due to market appreciation, positive currency translation, offset slightly by negative client fundings. Operating margin for the quarter was 54%. Quarter-end asset balances of $99.4 billion reflect a $19.8 billion increase versus first quarter 2020. This was due to market appreciation. Net sales event for the first quarter were a - $2.7 billion. Gross sales were $1.2 billion, and client losses totaled $3.9 billion. First quarter new sales were diversified across U.S. endowment and foundations, governmental, and healthcare. The client losses for the quarter were predominantly due to unsuccessful client rebids and DB curtailments. The OCIO market is highly intermediated, and numerous OCIO search consultants are active in getting asset owners to evaluate their incumbent OCIO firm. We were impacted by this in the first quarter, and it is likely this trend continues given our tenured client base, particularly in the corporate defined benefit market. The unfunded client backlog of gross sales at quarter end was $865 million. We continue to focus on stabilizing our client base, distinguishing our OCIO solution, selling new OCIO relationships, and advancing our ECIO proposition. Thank you very much, and I'm happy to answer any questions that you may have. Thank you. We're going to go to our first question from Robert Lee from KBW. Please go ahead. Hi. Good afternoon, Paul. Hi, Robert. Just curious. Given the commentary around the heavily intermediated channel, I guess to some degree that's always been the case, but what's changed maybe more recently that feels like maybe there's some acceleration in the pace of activity? Is it just coming out of the first half of last year, there was maybe pent-up demand? How should we think of that? Good question. The OCIO search consultants have exploded over the last three or four years, and certainly the velocity has increased even more in the last 12 months. What we witnessed last year in the first couple quarters, in the second and third quarter of last year, is most of our clients were just entrenched in focusing in their own business and focusing on the risk management with respect to their asset pool, rightly so. What also, with Zoom and video and efficiencies unveiled, was more time they had to maybe think about their incumbent provider and perhaps test the market. At the same time. Many of the search consultants were prodding into clients, our clients, and other tenured clients, suggesting that proper due diligence and proper governance after some interval, say it's five years, seven years, whatever, that they should go out and test the market. It's been a little bit of a confluence of events in the sense that the clients have more time on their hand and maybe more efficiencies in their quarterly meetings, and the search consultants have gotten more aggressive in their target. We're not anti-search consultants. We have a whole team focused in both the U.S. and the U.K. around the search consultants. We also believe that you have to give an OCIO firm an ample amount of time to prove value and prove worth. Just to go through due diligence for the sake of due diligence may save a couple of hours from a cost perspective, but might not bring the right value proposition. We are in flight reminding all of our clients of that. The Zoom impact, we've lost a little bit of the human element. While we haven't traveled as much, we do see that some of our clients are requesting travel. We're excited to be back in person because some of the human part of the client relationship, we think, is important in addition to just the substance and the quantitative components that we deliver. That makes sense. Maybe as a follow-up to that, if there's a way to characterize, even with the search intermediaries having their own agenda, more or less, is there a way of characterizing when you do lose a mandate? Is it price, performance, a mix of the two? Any way for us to get a sense of, if you do lose something, what tends to be the tipping point? Yeah. When we see rebids, price is always a factor. Whatever we made in the past, we know intuitively we probably won't make the same in the future. We address that in our rebid for the client's sake. We adjust price when we're actively trying to retain the client. That said, I think I've mentioned this in the past, there are some OCIOs that are very predatory with respect to price, where they're even bidding very low single-digit basis points. We spend a lot of time making sure the search consultant and the asset owner understands all costs, not just the OCIO fee, but all the costs of the implementation. Which the bigger component is what the cost of the managers are. Just having a simpler model or a low-cost model doesn't mean it's a better model. Cost is a factor, back to your original question. Sometimes it might be the shiny new car. You go through a rebid and they have eight or nine firms that are presenting, and they maybe click with a new team, or there's a different relationship, or there's other dynamics. One of the beauties of the business is being able to get assets over quickly. One of the negatives of the business is the business does not have long-term contracts. Our contracts are 30 days, and most OCIOs are 30 days' notice. Clients could move easily if they want to. Not that it's not painless to move, but it's not like you're migrating technology or doing a whole large-scale migration and moving from one OCIO firm to another OCIO firm. All those factors are at play. With all that said, which is clearly a headwind from a existing client perspective, that's also a tailwind from a new business standpoint. Our new business trends have increased. Our pipelines are increasing, and our ability of attracting larger investors are increasing. While we don't want to lose any client, we do think there's going to be trends continuing on that front. We also feel the velocity of selling new clients is still going to be there as well. Okay, great. If I could just ask one more question, and I apologize. Sure. I'm taking up so much time. One of your long-time competitors was Russell, is working with a neighbor of yours, Hamilton Lane, to be their one of their sole providers for private investing, private assets. They decided to outsource that. Do you feel comfortable? Do you think that that's something that if you look at the universe and your own capabilities, that is something you guys have thought about or think about that maybe that part of your offering, there's someone else you could team up with? Do you feel comfortable that you've got what you need in-house? Yeah, we have a very robust alternative offering. We've been a pioneer for a number of years. Now that we have endowment and foundations at a larger clip, they're consuming alternatives. We're very comfortable with our alternative capabilities. We would always like to add more resources and more people that have expertise, and we're looking at that, and Kevin Barr has taken that responsibility within the investment management unit. Quite simply, what Russell did is they're an outsourcer that just outsourced a major asset class to another firm. It befuddles me a little bit that if you're picking a firm that can't do a core component of the asset classes that are maybe the most important component, then why are you picking that firm to be the outsourcer? Looking through the realities of some other things that are occurring with their business, and I won't comment on that. It may be because they don't want to invest in the people, and they'd rather just have a relationship or partnership. Okay, great. Appreciate it. Thanks, Paul. Thank you, Rob. Appreciate it. Next, we'll go to the line of Chris Donat from Piper Sandler. Please go ahead. Hey, Paul. How are you doing? Good, Chris. How are you? Doing fine. One quick question on the revenue yield as we calculate it on average assets. It looked like it's ticked down about two basis points over the last year. I don't know if I'm looking at it. It's not a dramatic move, but I'm just wondering if you got any commentary on either your mix shifting or pricing pressure or a lower mix of alts after the volatility or any dynamic going on that's affecting your revenue yield per average asset? Yeah, Chris, not necessarily a lower reduction of alternatives. Like anything, there's rebalancing that we occur. I think that occurs at each kind of quarter to take it back in line with the investment policy statement. There might be a little bit of that. The participation in alts continues to be consistent and in fact, is probably actually increasing as we bring on more endowments and foundations. I would say the biggest thing on the revenue that we yield is the reality of either lost clients or rebid clients. Clients that we rebid that we don't keep at the same rate that we had before. Got it. Okay. Thanks, Paul. Thanks, Chris. All right. Our next question is going to come from the line of Ryan Bailey from Goldman Sachs. Please go ahead. Hi, Paul. I wanted to come back to some of the lost clients, the lost rebids dynamic. You kind of brought up that shining your car analogy. Do you find that call it 12 or 24 months after a client leaves, are you able to sort of reengage with them, and sort of win them back? Is that sort of like a blueprint that you could think about? I wouldn't say 12 or 24 months. That would be awesome if it was that quick. That would probably be unlikely that they would pick somebody else and then move again in 12 or 24 months unless they made a really bad decision. That said, your question is a great question. We keep an incubation program alive with our lost clients. In fact, there's two or three prospects right now that were clients that were lost more than five or seven years ago that their program maybe is not working out as great as they had hoped, that we're reengaging with. I would say, most asset owners that would pick an OCIO firm, unless something really went bad, it would be very odd, less than three years. It would be more normal somewhere between five and seven years. Yes, we do reengage and try to keep connected with the lost clients. Of course, as you know, some of our lost clients are things that are actually just lost entities in the sense that the DB plan is going away. The assets go, the plan or the organization still exists, but there's not a DB plan any longer. Those can't be reengaged, of course. Got it. That makes sense. On the ECIO opportunity, do you have a rough timeline for when you think you'll be out in the market and starting to generate some revenues? Yeah, we're in the market. We're active. We have a number of prospects. We're optimistic that we can get some closes this year, hopefully sooner in the quarters than the later quarters. We're also realistic to understand that any new initiative, while we have passion and energy about getting things over the goal line, the institutional asset owners don't move as swiftly as we would like, and that's just common. I started in what was called the Manager of Managers Group back in 1995. I remember the early years, it took a while. It took us 18 months to get our first one over the goal line when we were selling Manager-Managers. Now, clearly, the environment's different now than it was then. That said, even new initiatives take some time. There are some things that we're trying to offer as sweeteners with respect to pricing, in trying to get a longer-term contract, that I can talk about when we do get one over the goal line. There's also some things that we're going to continue to invest in, which we've already budgeted for in our P&L around front-end technology to make the user experience customizable and as efficient for these asset owners as possible. Got it. Makes sense. Thank you. Thank you. Next we're going to go to our line, Robert Lee with KBW. Please go ahead. Hi again. Thanks for taking my follow-up. No problem. I guess probably just as kind of the quarterly margin question? Margins continue to maintain at a pretty healthy level, kind of maybe not at historic highs. I guess that was last quarter, but kind of certainly up there. Given some of the pricing challenges, the new business challenges, clearly there's been some asset tailwinds which have helped, but how should we be thinking of kind of marginal progression from here, just given some of the headwinds you face and if we just simplistically assume markets kind of, I don't know, I'll use the word normalize, whatever you want to define that? How should we think of kind of progression from here? Is this 53%+ sustainable, or should we think it drifts back like a 51% kind of handle? Rob, I think I've messaged in the past, without question, we've been aided by tremendous capital markets. I don't think 53%, 54%, 55% for the business and the headwinds is sustainable. It's probably more realistic that it's closer to 50% and maybe toggles between, say, 49%, 50%, 51%, somewhere in that area. As a business practice, we don't manage to a specific margin. The realities of the client rebids and the lost clients and what goes out the door is far larger than what comes in the door. That said, more and more of the new clients are consuming alternatives, which is at a better clip. I think a more longer-term run rate profit margin percentage that's closer to 50% and might spike down a little bit from there is more realistic. The other component that Dennis commented on that I think you'll see our group return quicker is travel. We want to be in front of these clients. We want the human element, and there are some of our clients, because they have these formal quarterly meetings, that require us or are asking us to come travel soon rather than later. That doesn't mean that we have to send multiple people in, but we want to be in front of them because we want to remind them of the value of the relationship. You might see my group pick up the travel a little bit quicker than perhaps some of the other groups. Okay, great. Thanks for the refresher. Appreciate it. Thank you. At this time, I have no further questions. Great, I'd like to turn the call back over to Al West. Ladies and gentlemen, we are making progress on two fronts. On the first front, we are very fortunate to have kept our workforce healthy and productive, delivering a high level of client service throughout the pandemic. On the second front, despite short-term headwinds, momentum is building throughout our business. Please be safe and remain healthy. Have a great day. Thank you for attending our call. Thank you. Ladies and gentlemen, that will conclude our conference for today. Thank you for participation and for using AT&T Event Services. You may now disconnect.