Will SEI’s (SEIC) Alternatives Push Redefine Its Competitive Edge in a Crowded Asset Management Market?

• SEI Investments recently launched the SEI DBi Multi-Strategy Alternative ETF, transitioning their SIMT Liquid Alternative Fund into an ETF structure with quantitative strategies managed with Dynamic Beta Investments, and also announced Nephila Capital has selected SEI to support its operational infrastructure in North America and the UK.
• These announcements underscore SEI's ongoing commitment to product innovation in alternatives and expanded relationships with prominent asset managers in growing specialist markets such as insurance-linked securities.
• We'll explore how SEI's ETF innovation and operational partnership with Nephila Capital could influence its broader investment narrative.

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SEI Investments Investment Narrative Recap

To be a shareholder in SEI Investments, you have to trust in the company's commitment to innovation in technology and alternative investments, and their ability to win and retain major clients in a competitive industry. SEI’s recent ETF launch and new operational partnership with Nephila Capital showcase its efforts to drive growth in alternatives, but these announcements are not likely to materially change the most important near-term catalyst, which remains converting a strong sales pipeline into realized revenue, or the most pressing risk of ongoing margin pressure from heavy investment in talent and technology.

Of the latest developments, SEI’s selection by Nephila Capital to support back- and middle-office operations across North America and the UK most clearly illustrates SEI’s push into specialist markets. These types of large client wins are key to offsetting margin concerns and can help support earnings, though they also heighten SEI's exposure to the risk of lumpy, concentrated revenues should such relationships not scale as expected.

However, investors should be aware that despite SEI’s progress, future earnings may still lag revenue growth if anticipated client conversions are delayed or...

Read the full narrative on SEI Investments (it's free!)

SEI Investments' narrative projects $2.5 billion revenue and $733.0 million earnings by 2028. This requires 4.8% yearly revenue growth and a $43.7 million earnings increase from $689.3 million today.

Uncover how SEI Investments' forecasts yield a $99.33 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Three Simply Wall St Community fair value estimates for SEI range from US$75.00 to US$99.33 per share. While many see growth drivers in technology and alternatives, the risk that increased investment in talent and platforms could pressure profitability remains, which may affect how SEI is viewed by market participants with different priorities.

Explore 3 other fair value estimates on SEI Investments - why the stock might be worth 14% less than the current price!

Build Your Own SEI Investments Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your SEI Investments research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free SEI Investments research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SEI Investments' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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