SEIC -- Any opinions? Message Board

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Non-Tech : SEIC -- Any opinions?

SEIC 82.03

-1.4%

Dec 31 3:59 PM EST

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To: andrew peterson who wrote ()	1/9/1997 2:58:00 PM
From: Marc Slovak	of 19

I'll be right up front and tell you that I work for a competitor so take whatever I say for what it is in that light. However, I did work for SEI throughout the 70's and was instrumental in the development of their Trust Accounting product. From an investment standpoint what you have is a reasonably stable company whose stock price has not changed much in the last 4 or 5 years. I think the last big move for the stock was in 91 and since that time the stock has been in the 19-25 range only briefly touching the extremes of this range. My personal view is that there is nothing on the horizon that should materially change this. Most banks involved in Trust Accounting know what the market has to offer and are very aware of the relatively few companies offering solutions. Additionally, the market for products like these is very fixed (i.e., there are not alot of new potential customers) meaning that the companies providing solutions are gaining new customers at the expense of each other. Also consider, that the decision to change vendors is a very large and complicated process. The sales cycle may typically take a year or more and the ultimate decision is many times made at the board level. Bottom line... its a tough marketplace that is shrinking due to bank consolidations. Since the product is big and complicated its difficult and expensive to service. From a product standpoint, the SEI product does not do a good job (if it does it at all) of handling multicurrency issues, limiting their market further to domestic banks not playing in the world arena. Another interesting issue has to do with the fact that SEI's bread and butter is the fees they collect from the funds management side of their business. This is where all of their margins are (You can investigate their balance sheet but I would be surprised if they are turning a profit on their Trust product). Any erosion of Trust product business will most likely have an impact here since clients are likely to move their investments from the SEI funds if they switch to another vendor. While I don't see any big negatives on the horizon I also don't see any big positives. This is actually a very sleepy situation and if that's your investment objective then this may be a good investment for you. If you're someone who does alot of investigation before they invest then I encourage you to investigate the state of the Trust processing industry before committing your buckeroos.

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