8-K: SEI Investments to Sell Family Office Services Business to Aquiline Capital Partners for $120 Million

SEI Investments Company has reached a definitive agreement to sell its Family Office Services business to Aquiline Capital Partners for $120 million in cash.

Summary

• SEI Investments Company will sell its Family Office Services business to Aquiline Capital Partners for $120 million.
• The transaction is expected to close in late second quarter 2025, pending regulatory approval and customary closing conditions.
• As part of the deal, Family Office Services employees in Indianapolis, Denver, and Oaks, including the core leadership team, will transition to Aquiline.
• Following the close, the business will operate as Archway, leveraging the existing Archway Platform brand.
• As of December 31, 2024, SEI's Family Office Services business had $723 billion in assets on the Archway Platform.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The sale provides SEI with capital and allows it to focus on core areas, while Aquiline gains a valuable business. However, there are inherent risks associated with the transaction and integration.

Positives

• SEI will receive $120 million in cash from the sale.
• The sale allows SEI to focus on other areas of its business where it believes it can drive growth.
• Aquiline's investment may accelerate the growth and adoption of the Archway Platform.
• The Family Office Services employees will transition with the business, ensuring continuity.

Negatives

• SEI will lose the revenue and potential growth associated with the Family Office Services business.
• The press release mentions risks and uncertainties related to the acquisition, including potential delays or non-consummation of the deal.

Risks

• The closing of the acquisition is subject to regulatory approval and other customary closing conditions, which may not be met.
• There is a risk that the acquisition could be delayed or not completed due to unforeseen events or circumstances.
• The forward-looking statements in the release are subject to risks and uncertainties that could cause actual results to differ from expectations.
• The integration of the Family Office Services business into Aquiline may present challenges.

Future Outlook

SEI expects the transaction to close in late second quarter 2025 and anticipates a continued strategic focus after the sale. Aquiline expects to further invest and extend the Archway Platform.

Management Comments

• Vincenzo La Ruffa, Managing Partner at Aquiline, stated that the Archway Platform is the premier provider of accounting and reporting software solutions to family offices.
• Sandy Ewing, Head of SEI's Family Office Services business, expressed pride in the team's contributions and believes Aquiline can accelerate growth and adoption of the Archway Platform.

Industry Context

This announcement reflects a trend of private equity firms investing in specialized financial services businesses. Aquiline's focus on financial services and technology aligns with the growing demand for sophisticated solutions in the family office market. The acquisition allows Aquiline to expand its presence in this sector, while enabling SEI to streamline its operations and focus on core growth areas.

Comparison to Industry Standards

• SEI's Archway Platform, with $723 billion in assets, is a significant player in the family office technology space, competing with solutions from companies like Addepar, Black Diamond (SS&C Advent), and AltaReturn.
• Aquiline's $11.3 billion AUM places it among mid-sized private equity firms specializing in financial services, similar in scale to firms like Lovell Minnick Partners and FTV Capital.
• The $120 million purchase price is within the typical range for acquisitions of specialized financial technology businesses, although the valuation multiple would depend on the specific revenue and profitability of SEI's Family Office Services business.

Stakeholder Impact

• Shareholders: SEI shareholders may benefit from the increased focus and capital allocation resulting from the sale.
• Employees: Family Office Services employees will transition to Aquiline, potentially impacting their roles and career paths.
• Customers: Family office clients of SEI will now be served by Aquiline under the Archway brand.
• Suppliers: The change in ownership may affect relationships with suppliers to the Family Office Services business.

Next Steps

• Obtain regulatory approval for the transaction.
• Satisfy other customary closing conditions.
• Complete the transition of Family Office Services employees to Aquiline.
• Integrate the Family Office Services business into Aquiline's operations.
• Rebrand the business as Archway.

Key Dates