SEI Investments Co
NASDAQ:SEIC
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
62.21
86.58
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
SEI Investments Co
You don't have any saved screeners yet
Ladies and gentlemen thank you for standing by and welcome to the SEI 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, instructions for queuing up will be provided for you at that time. [Operator Instructions] 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 Manager segments. Al Chiaradonna will speak for Private Banking and Phil McCabe will speak for the Investment Management segment. They will be joined by the segment leaders on the call as well as Dennis McGonigle, SEI's CFO and Kathy Heilig, SEI's Controller.
First, let's turn our attention to the financial results of fourth quarter of 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 $1.03 grew 20% from the 0.86 reported in north - in the fourth quarter of 2020.
During the quarter, SEI's asset balances increased by $6.2 billion while LSV's asset balances grew by $1.4 billion. During the quarter we repurchased 1.5 million shares of SEI stock at a price of $62.44 per share that translates into $95.5 million of stock repurchases.
Next, let's turn to revenue production during the fourth quarter. Net sales events in private banks and investment managers were $31.3 million of which $22.1 million are expected to be recurring. In addition, net sales events were $4.5 billion - million incurred in the asset management-related units. These events reflect positive asset flows of advisors and institutions.
In a few minutes unit heads will provide more detail on their specific sales results and their new business opportunities. We will work to build on these results in 2022 and beyond. Now I'd like to provide you an outline of our situation today. As I remember, as I mentioned earlier, we have experienced leadership changes in the Private Bank and Investment Manager segments. This leadership involves four individuals Al Chiaradonna, Sandy Ewing, Brett Williams, and Phil McCabe. Together they have deep expertise, gained collective - collectively over 88 years working for SEI. They are an example of our strong and talented leadership.
One of our businesses steadily grows its revenues and profits, that's IMS. Another business, the Advisor segment has recently been executing the technology-driven strategy. We have strong indicators that the business is returning to pre-eminence. We are 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 Investors segment. While it faces headwinds in the legacy-defined benefit OCIO client base, their strategy is to aggressively address fast-growing markets.
We are also focused on building growth engines beyond our four 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 young businesses. For example, SEI's leading-edge service of networks and data security is gaining traction and the private wealth management business is providing an enterprise platform to alter high net worth families and just completed a positive year of growth.
Finally, we have made three acquisitions toward the end of the year that will add additional capabilities for both our IMS and Institutional Investor business lines. They are Atlas, Finomial, and Melbourne Novus - Novus, sorry. We are well on our way integrating these companies into SEI 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 LSV and the investments in our new business segment. Dennis?
Thanks, Al. Good afternoon, everyone.
I'll cover fourth quarter results for the investments in the new business segment and discuss the results of LSV 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, SEI Sphere, the modularization of assets and data integration of different platforms to deliver on our One SEI 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 2021is tied to our One SEI effort.
Regarding LSV our approximate 38.7% ownership contributed $34.2 million in income to SEI for the fourth quarter of 2021. This compares to a contribution of $30.6 million in income for the fourth quarter of 2020. Assets during the quarter grew by approximately $1.4 billion. LSV 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 Finomial and Atlas, we closed on an additional acquisition of a company called Novus. Novus is a global portfolio intelligence platform company designed to expand SEI's capabilities for both the institutional investor and investment management markets. Al 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 have 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.
[Operator Instructions] And we've 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 is a topic that many people pay attention to. I think it's not just SEI specific but across different industries and I saw that SEI expects 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 SEI manages comp expense and tackle the rising labor cost this year? Thank you.
Sure. This is a topic of conversation for most of 2021 particularly the second half and if you remember in the - on the third quarter call we talked about how not only had we addressed particularly with our kind of early stage professionals come to mid-level professionals between compensation adjustments we made in the summer and then an additional compensation adjustment we made at the end of the third quarter.
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 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, it's a little bit different story, we had. 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 SEI. Option expense carries its own unique calculation. So how much expenses are 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.
We have our - generally we issue options in December of each year, so let's say, to say, we had an additional grant that was made in 2021 and the expense you saw in 2021 is reflective of a, the additional options that were granted in 2020 coupled with the shortened timeframe for vesting that we estimated will be in play for some options that we had granted previously. So we accelerated some expensing into 2021 and pulled 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 thing that did occur in the fourth quarter, and you'll hear in Phil McCabe's commentary is we did a retirement of unvested options in the fourth quarter. So we got a little bit of - if you do get an expense benefit against option expense in the quarter. So that offset some of that - some of that increase.
Got it. That's helpful. And then on the SG&A side, could you please give us an update of your latter - latest status about people going back to the office versus working remotely in 2022 partly speaking, how do you think about SG&A expense this year compared to 2021. Thank you.
Sure, thanks. Now where we are with bringing people back to our campuses or offices around the globe. 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 in our current work environment. So we didn't want to really force the issue, but we did open up our offices to anybody who wanted to come back to come back whether it's one day week, two days a week, five days a week.
Now that being said at that time we had probably 600, 700 people that were coming in the office every day during the week. So we started to see some pickup of people returning and it was good to see. We see real benefits of people being in our offices particularly around team-oriented activities, project-oriented work across different players, different groups across the company.
So we want to continue to foster that but then as we got into December particularly mid-December we're all too familiar with the - the letter of the Greek alphabet that we pronounce, Omnicron, so for those of us who didn't study ancient history learning the Greek alphabet this year has been, I guess 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 ticking up. We're currently working on plans that are I would almost say COVID neutral if you will. They're really about the long-term work environment and 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 we'll 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., it's a little bit different, In the U.K., I was having really good success bringing people back and then the U.K. government prior to the holidays because of Omnicron shut things down and really pushed people back into a work from home environment. As we know just recently they reversed that and have now gone, just done a 180-degree shift to getting people back to offices. So I think the U.K. office will get back to a more regular presence of most of our workforce. Again with certainly the element of flexibility baked in. Ireland is our another 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, they were much, they were more consistently remote, I would say. So we'll see how our Dublin office responds to that, but we will work to get people back and maybe Phil can comment on that one. I guess, let's turn the mic here. So all in all, it's going to play out I believe the first half of this year. Let's hope we don't know the next letter in the Greek alphabet and we can get back to the kind of new world of flexible, but together kind of work environment.
Our next question comes from Michael Young with Truist Securities. Please go ahead.
Dennis, thanks for taking the question. I wanted to just ask about LSV. I appreciate the update for the fourth quarter, but obviously since then In the first kind of 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 maybe kind of where things stand now vis-a-vis outperformance of value versus kind of the secular trends in that business.
Sure, I mean 2021, I would suspect will continue and has continued into this year, but I don't have firm numbers yet. It was a really good relative performance year for LSV and that certainly will help them in the market as - particularly as firms start to weigh more towards value to the extent that occurs LSV will be on the shortlist of a lot of searches for that for assets. They still struggle a little bit with the three-year and five-year performance number they did in 2021.
So having a strong 2021 will also help their longer-term performance numbers, and that as much as, if not more so the one-year number should be beneficial. So, I know they are certainly optimistic given the return to value or the, again the shift that seems to be occurring to value. They certainly feel good about our performance last year, feel like they are in a good position to capture assets if the market moves in that value direction.
I tried to emphasize on prior calls is one thing about LSV is they know what they are, they know what they are really good at, they know what their brand stands for and 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 with the market 6%, 7%, 8% a year. So how should we think about sort of capital allocation priorities vis-a-vis share buyback versus M&A, kind of, what are you seeing in that pipeline?
Yes, well, first, we definitely make the point to two or 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 SEI, other 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 certainly interested in new business lines potentially that could further diversify SEI and give us new revenue streams and profit opportunity, new geographies that we have kind of on our landscape 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 and into the future. It's hard to predict whether anything attractive will come along, but it won't be for lack of us looking and entertaining ideas. Relative to stock repurchase, the Board's 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 which just that was higher than last year's dividend and just continues the progression of year-over-year consistent growth in our dividend process. I don't know if we're in the - I know we're on this gold list of dividend paying companies, but I don't see that changing either.
Our next question comes from Robert Lee with KBW. 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.
Good evening. It's been a long week already. So I guess my question, I guess really a much higher level, and frankly, I'm probably a little uncomfortable to ask, but it's something I think is on investors' minds. So, I think rightly or wrongly with Steve leaving the firm, I do think there were investors who viewed him as again rightly or wrongly as a future potential leader of the company. So I think his sudden departure was somewhat jarring for investors, at least 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 what some of the potential succession or leadership, how leadership could evolve over time going forward because I think it's something investors would really value. So, thank you.
So yes, I think that we're back on track with the - creating - creating an environment where we're looking for a strong CEO and we will share that as we - as we go through it.
Okay. Appreciate that. And then maybe Dennis whether I know you had a few transactions. I think you kind of touched on some transaction expenses. Where there any kind of 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, I mean in the earnings release, you saw the termination fee that helped revenue and private banking that had some offset, so there and the net of that I think you'll hear from - I know you'll hear from outside. The net of that was about 4 million benefit to bank profit really bank revenue and profit.
So while we had the one transaction. We had some other things that help one or the other way that won't repeat. In terms of the acquisitions, the two smaller acquisitions Atlas and Finomial really had less impact to P&L, if you will in the quarter. Novus was a larger transaction. So - and there was only a stub period that we had in the quarter, it wasn't a full quarter and you'll hear from Paul kind of what the impact was there and what do you expect it to be for 2022 but so that had some negative - negative impact.
Things that impacted the quarter I would say negatively but they're in a run rate and so our salary comp - salary changes or compensation changes that I talked about when Owen asked this question that's baked into the P&L. Paul Klauder will tell you about $1.3 million profit benefit net benefit from a performance fee that we earned in his business that won't repeat.
So that was beneficial to earnings. Now there's always things that go in both directions as I mentioned with option expense. In 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 it was really strong, I mean revenue top line was really strong, profitability was strong. We continue to manage expenses, but we're doing it smartly and with a strategic - through a strategic lens which is the best way to do it from our perspective. So it was, we have more moving parts, I'd say in the fourth quarter than we normally do, but net, net it probably would have brought the earnings down a little bit but not, there is still a very strong quarter.
Our next question comes from Chris Donat with Piper Sandler. Please go ahead.
Dennis, just wanted to follow up on Rob's question on the acquisitions, I know you just said that the impact looking backwards from Atlas and Finomial was less impactful, but do you expect a meaningful impact to revenue and expenses from those businesses in 2022 and I'm - I understand, I will have to wait for Paul's comments on Novus, but just for Atlas and Finomial for 2022, any thoughts.
Yes, I'd say Finomial had a little more, the full expense for the year. Well, the full year of expenses was a little bit more there. It's not as material I'd say given the size and scope. Atlas it comes with revenue and expense, I'll let Paul speak to that as well as Novus, but as you know, 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. I'll wait for Paul then.
Yes, maybe Paul will tell you its impact. You're fully baked it into 2022 for Novus, now that's aside from any growth we got out of it, any improvement we get is just 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 I could back all that amortization stuff out, but it apparently doesn't count, sometimes we don't.
Right.
Got it. Chris, I'm kidding, I'm kidding.
Thanks, Dennis.
No, you're welcome, thank you.
[Operator Instructions] We go now to Ryan Kenny with Morgan Stanley. Please go ahead.
Good. Just a follow-up to some of the questions on expenses that we've had so far, trying to put everything together. So your margins have been around 28%, 29% for the last few quarters they are in now, that's higher than you've been running at historically. So as we look forward to 2022 when we factor 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 on in both directions. I would expect it to be relatively stable. It's hard to predict, really it's hard to predict the markets. If we get neutral better markets, maybe that will help us because it's much more scalable revenue and profit but I think running at that margin level with a growing top line is certainly easy to calculate higher dollar profits and which is something we always look to do sustain a fairly healthy reinvestment rate in 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 bullishness on the new things, but it's we don't target a margin rate to run at, but I'd say I would guess it would be in that same range.
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 in 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 is the other Al. Al?
All right. 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 of 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 one-time items.
And turning to sales activity during the quarter we closed approximately 18 million of net investment processing events, 12 million related to recurring revenues and 6 million related to one times. Of the 12 million recurring revenues, 6 million is related to SWP, T3K, or 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 SWP agreement with Fiduciary Trust International, a wholly-owned subsidiary of Franklin Templeton. Under the new agreement Fiduciary Trust International which acquired Pennsylvania Trust Company, an existing SWP client will adopt the SEI's wealth platform for the combined entity. During the quarter in the U.K., we signed two contract notes. One new contract was with Waverton Investment Management, a leading U.K. wealth management brand expanding our success in the PCIM segment. Another contract of note in the U.K. is HSBC, a client that currently has business on our platforms 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 client 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 two clients from competitor platforms to SWP. Cambridge Trust headquartered in New England migrated to SWP. In addition to converting their wealth management business, they also outsourced their back office staff. Previously, Cambridge managed their operations in-house. UMB headquartered in Kansas City also migrated to private wealth management for their business to the SEI wealth platform. We believe the momentum is strong and a number of agreements have been signed and new clients implemented throughout the quarter. We feel that is a good indication that while the pandemic continues, it's not ultimately determining new private firms from partnering with SEI.
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 including the signs I just mentioned. We continue to work with our clients with longer-tail timelines 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 '22 - 2022 we remain committed to our strategy of building a global pipeline and associated backlog, matriculating that backlog, gradually improving our operating profits and prudently investing in the business to create sustainable growth. We have a talented team across SEI 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.
[Operator Instructions] You have one in queue from Ryan Kenny with Morgan Stanley. Your line is open. Please go ahead.
I'm just wondering if you have any update on the pace and the path of pre-tax margin expansion in the Private Bank segment.
What was the question? I'm sorry. Can you say that again?
Is there any update on the pace of the pre-tax margin expansion in the Private Bank segment?
Yes. Thanks, Ryan. I appreciate it. As we think about continued margin improved - operating margin improvement, as you can imagine we don't foreshadow going forward, but we feel comfortable with what we've achieved, but we're waiting and monitoring the impact of where the capital markets will be in 2022 as well as where M&A will be an opportunity and a risk for us, but overall, we continue to do the expense management plans we've laid out over the last several quarters and they're having continued success and progress.
Thanks. And just one follow-up is Wells Fargo still in the backlog and is there any update on if it's still 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 timeline.
[Operator Instructions] And we have Robert Lee from KBW. Please go ahead.
Great, thanks. And good evening, Al. Good afternoon. I have two questions. First, could you update us on the size of the backlog given that you had some new business wins and things funded, so just kind of where it stands in aggregate right now? It's my first question.
Yes, Robert. No problem, and good evening to you as well. Yes, as I mentioned in my prepared comments, the backlog - the global backlog is at $81.7 million. As you know from previous quarters and then myopic, 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, I mean 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 a kind of flat asset return environment, let's call it that, heading into this year, where you - how you would have expected margins to progress or maybe kind of finish the year given kind of where you started or where you ended?
Yes, I think - yes, Robert, I think we're obviously happy with how we progressed 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, the progress we made around expense management and how we're looking at our investment stream has helped our margin improvement, and I would imagine that will continue as we progress into 2022.
Okay. And as you convert the - that you expect about half the backlog to come on this year, are there any kind of increment? I mean, I know there's usually some incremental cost may be ran installation certainly around sales, but is there anything nowhere that 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 big conversions happen just trying to kind of get my arms around it?
Yes. No, it's great, Robert. Thank. The cost - as we talk about our implementations and what's lying ahead, the cost is relatively baked in inside our P&L. I would not expect us to see exceptional costs related to what we implemented in our backlog. Obviously, we have personnel that will ebb and flow as we install clients, but it wouldn't be material to our expense line items.
Our next question comes from Ryan Bailey with Goldman Sachs. Please go ahead.
I was just wondering if you can help us think about - and 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? If there is 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 risk or the opportunity of M&A because we don't control that pacing. All we know is that the trend of pace is moving up, not moving down. So as the 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. 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 is the organization's top priority and platform decisions become second tier to that decision. And we're involved in it, but we don't determine that final outcome. So it's really hard for me to predict or monetize that for you.
Okay. All right. Thank you. I appreciate that. And I'm sorry, I tried getting into the initial line of Q&A, but clearly had some technical difficulties. I wanted to maybe come back to the other, Al and Dennis, with a quick question. I am sorry for doing it during the segment discussions. But on Rob's first question, and I'm sorry if I misheard you other Al, did you say that you are in the process of looking for a future CEO?
We started the look.
Got it. Okay. Thank you. That's all my questions. Thank you.
Our next question comes from Michael Young with Truist Securities. Go ahead please.
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 that a little bit open-ended, especially for professor and strategic management? So how about it?
Michael, that's funny. Yes, I wasn't sure about I'm going to use a lot of humor today. But now that you opened up that can maybe just call be two to three hours last. 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 have 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 a 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 and then help our U.K. office. So I would expect that 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 I'm laser-focused on the matriculation of that revenue, which we would consider the implementations of those clients, and deep experience with the clients. So I've been around for a while here, but almost all clients have been installed on SWP 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 in a number of questions before this, we're going to be - continue to be focused on expense management. And I say that with respect towards new clients and whatever investments are needed to expand relationships or install what I would say, those four from overall business priority will be my strategy priorities, and I think it goes without saying, Michael, I'd be remiss not to mention it 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 an environment we find ourselves in today and that's a huge part of SEI's culture.
Okay, great. And just with the maybe existing wins 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 that you feel like is driving success on the sales side?
Yes, great question, Michael. I mean, one thing I'll just say about the sales process just to start with it. I'm sure you know that - one of the things that's interesting in our business is the sales process can't be timed because the decisions are multifaceted. You may have a CTO involved, the CFO involved, 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 complicated.
But once you get underneath 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 the advent of resiliency as an important strategic priority given COVID, they point in favor of a place like SEI. 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 in our relationships and services architecture to show our clients what it means to be a partner of SEI. When I think about how that translates to our momentum, I think you've seen that over the year and the deals we're closing, the types of clients we're winning and I think we'll continue to see that momentum. My goal in 2022 is to make sure that transcends both the U.S. and the U.K. as we continue to pursue active engagement in the market.
[Operator Instructions] We go now to Owen Lau with Oppenheimer. Please go ahead.
Thank you very much. I'm sorry, I may have missed this one, but I want to go back to that $6.8 million early termination fees from an existing investment processing client. Why did this client terminate and how much revenue impact we should expect in out quarters and also is there any offset. Thank you.
Yes. Owen, thanks. I don't think you missed it. So, good question. The termination fee you're referring to is related to M&A activity. It was an SWP client for us, the buyer of that client was a non-SEI client and they decided to move this business onto their platform, which for competitive point and 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're going to consolidate on to that proprietary platform. And then I think this is - we appreciate this, we don't get into the details on a client by client basis of our, of the revenue impact.
We have no additional questions in queue at this time.
All right. So I'm going to send it over to my esteemed colleague, Phil McCabe.
Thanks, Al. Good afternoon, everyone. 2021 marks another strong year of growth and continued momentum for the Investment Managers segment from all of our business lines. Our focus on executing our growth strategy led the positive results driven by new sales growth, continued expansion with existing clients and group operational efficiency. 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 19.2% higher as compared to our revenue in the fourth quarter of 2020. Profit for the fourth quarter was $53.5 million or 28.4% higher as compared to the fourth quarter of 2020. Profit growth was 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 were $907.4 billion, approximately $45.8 billion higher in 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.
In 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-sell strategy continues to resonate with robust sales with existing clients.
We won the business of a private equity fund and a competitive sales process marking the $60 billion of initial entry into the outsourcing in fund administration. SEI was also selected to provide fund administration for a multibillion-dollar startup private equity firm as well as another 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 many existing clients. In particular, our business expansion in both our collective trust and ETF solutions remains strong. We're also pleased to announce the conversion of a $10 billion multi-fund complex Advisors Inner Circle platform. In Europe, we added several new ETF funds and continue to expand our EPS, private equity and private sector.
At the end of the fourth quarter, our backlog of sold but unfunded new business stands at $34.4 million. As we exit a successful 2021, we plan to build on our momentum with strong position in the market and then as we progress into 2022 we 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 solution and workforce. We're very optimistic and excited about our strong growth prospects and our plan forward.
That concludes my prepared remarks and I will turn it over for any questions you may have.
[Operator Instructions] And again we're going to go back to Mr. Robert Lee with KBW. Please so ahead.
Great, thanks. Thanks for taking my questions. I'm just curious on the re-contracting. I think you've mentioned 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 the price, give concessions, you're able to get kind of any price increases. I mean I'm sure that's somewhat unique to each one but kind of in general, what's the pattern you're seeing when new contracts come up for - come up.
Sure. Hi, Rob. Actually, in this quarter, we had about a number of different re-contracts that are almost evenly split between alternative and traditional. They are all multi-year extensions, four plus years on average. One of them was our second largest alternative client and they signed for five years and in general, we're really seeing same - same thing with probably a few additional services here and there, but we're not seeing any net downs at all in re-contract.
Great, thank you. And just as a follow-up, I mean, notwithstanding the $3 million reversal. I think in prior calls, it was mentioned that margins have been running at higher than I guess in a normalized pace and that there was an expectation that they may be would trend back down towards that kind of high 30s 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, of the kind of flat market whenever that could be?
Yes, we're not. I think we're kind of bottom-lined. So the Q4 margins at 41.1%, we're running a little bit higher than we see in the past or actually probably the highest we've ever seen. We didn't have that one-time cost benefit, and if you back that out, we would be in the higher 30, so right in that range or so, but as you know, over the last few quarters our implementations and clients are converting faster than our operational expense of hiring is catching up.
So we're still in a position where revenue is matriculating faster than the actual spend of hiring. But with that being said in 2022 we are certainly going to trend back down towards the mid-30 that we've been talking about for a long time, probably, the 38% range ourselves as those expenses, hiring expenses kind of catch-up with the revenue.
We focus as you know on managing the business, not managing to a particular number, but we're also very focused on operational expense and growing our margins. So we're, we're walking on a fine line, but we're trying to get the clients convert as quickly as possible and at the same time, it was a nice job over the business.
And maybe as a follow-up to that, this is I guess really asked earlier. And I mean most, it seems like most of corporate America is facing this, but as you try to kind of ramp up the hiring, staffing as you mentioned kind of catch up with business, which is good. Are you finding that even with the kind of the wage inflation that's out there, that you're - it's even running above what you would have thought when you did your budgeting in sometime back in December or the fourth quarter. Is it - or is it kind of meeting your expectations, what 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 is in the industry. In the last call, I know Dennis spoke a lot of about investing in our workforce and the additional money that we gave to all of our operational employees and that actually has been helping us out a lot. So anything that's down there is baked into our current run rate. So we don't anticipate a lot of incremental operating expense from that part of the ledger. So I think we're doing what we can to keep get people in the door and keep them happy. It's one of our top three initiatives for 2022 and we're just going to stay at it.
[Operator Instructions] And with that prompt, gentlemen there are no additional questions in queue. I retract that. We do have Mr. Owen Lau, who is back with Oppenheimer. Please go ahead.
Thank you for taking my question. Just a quick one. I think last quarter you got the approval on the Luxembourg servicing license. Could you please talk about your recent traction in Europe overall? Are there any other countries that you may want to get into and expand further? Thank you.
Okay. So, Owen, as you probably know, Luxembourg is the second largest jurisdiction for any alternative client and we hit the ground running on November 1 and we converted a ton of existing funds and business and investors that we had already had on our European partner EFA. So we moved that business into our own Lux office and where Steve 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 clients in the states as well. And I think the office is doing a great job. As far as expansion, we do have some clients 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 those things as we speak.
And again there are no additional questions in queue.
All right, thank you. And with that being said, I'm going to transition to Wayne Withrow who runs the Advisor segment.
Thanks, Phil. For the fourth quarter and all of 2021, the headline is that the Advisor unit is solidly in trend for the ongoing implementation of our new strategy. Its ambition to help advisors be better, so they can deliver bright 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 of the segment, highlighted by what we believe the key milestone in our growth, achieving over $100 billion in total platform assets. Numerical comparisons of our financial results of the last years are included in the press release.
Color explaining some of those comparisons include fourth quarter revenues rose due to positive capital market and continued momentum in positive net cash flow. For the year, we eclipsed $3.2 billion in managed asset net cash flow and nearly $800 million in non-managed platform asset cash flow.
Expenses were up contributing to a decline in our margin. Direct costs including sub-advisor fees are reflected in this increase. Investments in our technology platform, including the integration of Orange and investments in our personnel due both to growth and the tight labor market or other significant items.
During the quarter, we had $1.1 billion in positive net cash flow. Of this total, $1 billion was into our managed asset progress. As I mentioned before, total platform assets exceeded $100 million at December 31. In Q4, we recruited 58 new advisors and reengaged 43 existing advisory firms, who over the last few years had essentially stopped doing new business with us. For the year, we recruited 257 new advisors, and reengaged 126 existing advisory firm. Our pipeline of new and reengaged advisors remains active.
I began my comments by noting we are thrilled of the ongoing execution of our new strategy. The three core principles of the strategy are as follows. With a technology first value proposition built on the unparalleled capabilities of the SEI Wealth Platform, including integrated cloud-based front and middle office service. Second, offer our technology platform standalone or 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 curated 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.
[Operator Instructions] Our first question is from Mr. Robert Lee with KBW. Please go ahead.
With that in mind, real simple question, can you just give us the breakdown between what's in AUA versus total assets on the platform? And understanding your comments around some of the expense growth and what you're seeing, just 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 there is - with markets, and there is obviously some linkage there, but this is kind of a good kind of level to kind of think about going forward or building on going forward?
I don't know where to start. I wouldn't want to say solid, revenues just do what revenues do. But you know about 15% of the assets are platform-only assets and non-managed. If that was sort of your - if that was your question, and there is nothing unusual in the quarter.
Okay, great. And then maybe the follow-up, a billion of managed cash flows, can you maybe just give us an updated sense of you know the products, the types of products that's falling into, I know you have your ETF kind of model portfolios or portfolio that's been pretty - very successful, but can you maybe give us a look - dig a little deeper, is it that, or what are the things you're seeing, and where demand has shifted or shifting?
Yes, I mean if I take it at a high level, I would say there's two items that are [indiscernible], number one, there appears to be preference for a unbundled fee as to - as opposed to a bundled fee. And I think that gives advisors more flexibility in pricing with their clients would be my assessment. So that's definitely going on. And secondly, there is definitely a preference for on the passive side ETFs.
All right. Great. Okay, thank you for taking that questions.
Have to be both unbundle that path [indiscernible].
Right. Great, thank you.
Our next question comes from Owen Lau with Oppenheimer. Go ahead please.
Thank you for taking my question, Wayne. I just have a quick one. Could you please give us an update on the direct indexing product. I think there is 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, I think we launched it at the end of last year and we continue to sort of gain some traction in that. No, that was what I would say is the initial phase of that and while we're getting a lot of positive results in that, I don't think we could our full stride in either one of those areas yet and we have enhanced releases on both of those fronts both direct indexing and the ESG overlay coming this year with further momentum in those product lines.
Our next question is Ryan Bailey with Goldman Sachs. Please go ahead.
I was hoping you could give us a little bit more color in some of these re-engaged advisory firms. So when you say re-engaged, is that you're starting to win incremental new business with them, or is 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 reengage with you?
Yes, I mean it's a multifaceted question and I think the way I would format it is, we've changed our strategy over the last year or so and we've also completed the rollout of the wealth platform and we are deep into the really robust enhancement of that platform. So that technology strategy in addition to how we've changed the way we bundle, unbundle investments with some of the things I talked about, I think we've been in this business almost 30 years and there's a lot of advisors that maybe used to know us, came to us, really don't know us anymore, maybe they used to know us and they really don't know who we are and what we do now.
So we had a concerted effort, and you know what, let's reconnect with those people and maybe they have opened a new account as well and maybe we're not really getting or maybe they open one account over some time, let's reengage them and see if we can get some, maybe some new business out of them and that's how we're defining reengage.
So these are people that maybe had assets on the platform. We're sending us do assets. We said, hey, we want to talk to you about what we're doing now and they are excited about - I don't want to say a new SEI, they are excited about what we're doing and say I want to get - I would expect to do new business again. So that's how we define reengage. We have specific metrics, but I'm not engaged to talk, prepared to talk about now, but I would say that these are people that weren't opening new accounts, they are now opening not just a single account but multiple accounts.
Got it, okay. It's really interesting. I wonder, maybe you can speak about it sort of qualitatively rather than quantitatively but 126 reengage existing advisory firms during the year. Is this the vast majority of firms you reconnected with and reengage that previously were part of the platform or are we still early in the process of contacting those potential re-engaged firms? So any color you can give us around that?
There's probably 2000 targeted firms that fit that category.
Well, okay, all right, that's very interesting. Thank you for that color.
Our next question is Michael Young with Truist Securities. Go ahead, please. Your line is not open, sir. We have no additional questions in queue at this time.
Okay. Thank you very much. With that, I will turn it over to Paul.
Thanks, Wayne. Good afternoon/good evening, everyone. I'm 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 to 8% compared to 2020.
Operating profit for the fourth quarter was $42.5 million, 6% lower than the prior year. 2021 full year profits were $175.7 million and were 5% higher than 2020. Higher capital markets were positive for revenue and operating profits and we earned a one-time performance fee in Q4. Lost clients and higher employee and sales compensation expenses impacted full year profits. Novus Partners, an acquired business in Q4 operating loss and one-time deal costs directly impacted Q4 profit by $1.6 million.
Operating margin for the quarter was 48% and for the full year of 2021 was 51% and quarter-end asset balances were $98.7 billion. Net OCIO asset events for the fourth quarter were a positive $300 million. Gross sales were $1.4 billion and client losses totaled $1.1 billion. Total new client signings for 2021 were a healthy $5.7 billion, which represents $13.5 million of revenue.
Fourth quarter new sales were diversified across U.S. endowments, foundations, healthcare, North American DB and U.K. Fiduciary Management. Client losses continue to be due to DB terminations, mergers or competitive rebids. The unfunded OCIO sales backlog at year-end was $2.8 billion with most of it funding in Q1 of 2022.
In the quarter, we completed two strategic acquisitions that we feel strengthened our capabilities in 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 ECIO 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 SEI 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.
[Operator Instructions] We have Robert Lee from KBW. Please go ahead.
Even I can do that. Just real quickly, Paul, just kind of curious the ins and outs, the gross sales versus redemptions. Is there any way to kind of characterizing maybe on a, if I think of the $300 million of net flows unlike a revenue basis would have been positive, negative, just, I mean, 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, 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 of expense because we pay the sub-advisor of that specific product and $1.3 million of profit. It's a 50-50 split.
All right. Okay, great. And so I guess the comments around kind of some of the headwinds from some of the acquisitions, or at least incremental expense pressures. So if we think about I know it's in the release, the, I guess was $800 million or so - $800,000 or so, is that kind of the incremental pressure we should think 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 impact that for you. So, I said $1.6 million, which is the $850,000 that's in the release or $868, that's the run rate loss.
Okay.
And then it was $750,000 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 a non-GAAP basis, the 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.
Great. And just kind of curious, I mean as you acquire some of these - these platforms add capabilities. Are you, do you expect that once you addition to whatever their capabilities are that you, they require at least for some period of time some step-up in investment to maybe bring them to scale or to enhance their capabilities to fit into your network, I mean, post-acquisition.
Yes, absolutely. More selling on the Novus side than the Atlas side, but that's all kind of baked into our projections, but equally in the projections is sizable 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 SEI brings to the table, which is why it is such an awesome fit of the two organizations. So I think I message before this market, we think is about $25 trillion and about 4,000 global suspects that were not suspects of OCIO, they are do-it-yourselfers, they are ones that want to have an investment team, which is great 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 are already asked, I'm 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 on 2023, but the growth potential is fairly profound for the business.
We have no additional callers in queue at this time.
Okay. With that, I'd like to turn the call back over to Al West.
So, ladies and gentlemen, we are building momentum throughout our businesses. We look with optimism to the future and to capturing the opportunities inherent. We are 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 this conference call for today. We do thank you for your participation and for using AT&T Event Conferencing. You may now disconnect.