(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See ~~the~~ definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~ x ~~Accelerated filer~~ ¨ ~~Non-accelerated filer~~ ¨ ~~Smaller reporting company~~ ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of ~~November 6, 2008: 190,589,562~~April 29, 2009: 190,892,479 shares of common stock, par value $.01 per share.

The accompanying notes are an integral part of these consolidated financial statements.


	September 30, 2008			December 31, 2007		March 31, 2009			December 31, 2008
Liabilities and Shareholders’ Equity
Liabilities and Equity
Current Liabilities:
Current portion of long-term debt	$	7,200		$	8,000	$	6,400		$	7,200
Accounts payable		12,047			8,690		9,054			12,308
Payable to regulated investment companies		762			601		42			97
Accrued liabilities (Note 4)		134,462			186,902		94,866			134,776
Capital Support Agreements (Note 7)		112,423			25,122
Capital Support Agreements (Notes 5 and 7)							57,945			173,983
Deferred revenue		621			1,052		1,370			1,530

Total Current Liabilities		267,515			230,367		169,677			329,894

Long-term Debt		29,623			43,971		216,286			24,332

Deferred Income Taxes		81,978			73,600		106,244			104,548

Minority Interest		128,858			136,149

Other Long-term Liabilities (Note 11)		12,021			11,895		4,752			4,067

Commitments and Contingencies
Shareholders’ Equity:
Common stock, $.01 par value, 750,000 shares authorized; 191,286 and 194,375 shares issued and outstanding		1,913			1,944
Equity:
SEI Investments Company shareholders’ equity:
Common stock, $.01 par value, 750,000 shares authorized; 190,824 and 191,195 shares issued and outstanding							1,908			1,912
Capital in excess of par value		474,615			445,474		489,698			485,721
Retained earnings		309,645			298,975		319,135			289,682
Accumulated other comprehensive (loss) income, net		(2,794	)		9,990
Accumulated other comprehensive loss, net							(9,563	)		(8,163	)

Total Shareholders’ Equity		783,379			756,383
Total SEI Investments Company shareholders’ equity							801,178			769,152

Total Liabilities and Shareholders’ Equity	$	1,303,374		$	1,252,365
Noncontrolling interest							98,260			109,722
Total Equity							899,438			878,874

Total Liabilities and Equity						$	1,396,397		$	1,341,715

The accompanying notes are an integral part of these consolidated financial statements.


			Three Months Ended September 30,							Three Months Ended March 31,
			2008				2007			2009			2008
Revenues:
Asset management, administration and distribution fees			$	243,162			$	280,287		$	169,364		$	260,059
Information processing and software servicing fees				56,577				58,485			62,217			60,139
Transaction-based and trade execution fees				16,347				10,864			17,030			13,710

Total revenues				316,086				349,636			248,611			333,908
Expenses:
Commissions and fees				42,336				44,184			37,553			45,295
Compensation, benefits and other personnel				80,932				88,463			76,868			83,892
Consulting, outsourcing and professional fees				26,213				23,703			21,150			26,757
Data processing and computer related				11,325				10,410			11,515			10,548
Facilities, supplies and other costs				18,656				16,607			15,433			17,385
Depreciation and amortization				11,675				10,991			12,562			11,520

Total expenses				191,137				194,358			175,081			195,397
Income from operations				124,949				155,278			73,530			138,511
Net loss from investments				(42,047	)			(202	)		(14,450	)		(24,046	)
Interest and dividend income				3,384				4,381			1,711			4,138
Interest expense				(903	)			(1,267	)		(799	)		(967	)
Minority interest				(31,078	)			(46,463	)

Net income before income taxes				54,305				111,727			59,992			117,636
Income taxes				19,810				38,428			8,929			29,175

Net income				34,495				73,299			51,063			88,461
Less: Net income attributable to the noncontrolling interest											(16,863	)		(39,515	)

Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments				(7,641	)			1,581
Unrealized holding (loss) gain on investments:
Unrealized holding (losses) gains during the period net of income tax benefit (expense) of $755 and $(11)	(1,263	)				84
Less: reclassification adjustment for losses realized in net income, net of income tax benefit of $469 and $36	783			(480	)	62		146

Other comprehensive (loss) income				(8,121	)			1,727

Comprehensive income			$	26,374			$	75,026
Net income attributable to SEI Investments Company										$	34,200		$	48,946

Basic earnings per common share			$	.18			$	.38		$	.18		$	.25

Diluted earnings per common share			$	.18			$	.37		$	.18		$	.25

The accompanying notes are an integral part of these consolidated financial statements.


							Three Months Ended March 31,
	Nine Months Ended September 30,						2009			2008
	2008			2007
Cash flows from operating activities:
Net income	$	129,605		$	206,177
Net income attributable to SEI Investments Company							$	34,200		$	48,946
Adjustments to reconcile net income to net cash provided by operating activities		80,675			59,725			15,352			19,319

Net cash provided by operating activities		210,280			265,902			49,552			68,265

Cash flows from investing activities:
Additions to restricted cash		(24,000	)		—			(2,400	)		(12,515	)
Additions to property and equipment		(23,726	)		(22,360	)		(2,967	)		(5,545	)
Additions to capitalized software		(39,470	)		(50,126	)		(13,638	)		(12,178	)
Purchase of marketable securities		(55,207	)		(31,776	)		(194,913	)		—
Prepayments and maturities of marketable securities								4,154			486
Sale of marketable securities		29,629			26,747			—			926
Maturities of marketable securities		17,000			—
Cash received from sale of joint venture		—			3,116
Other		—			(231	)

Net cash used in investing activities		(95,774	)		(74,630	)		(209,764	)		(28,826	)

Cash flows from financing activities:
Payments on long-term debt		(15,148	)		(22,695	)		(3,846	)		(5,187	)
Proceeds from borrowings on long-term debt								195,000			—
Purchase and retirement of common stock		(111,169	)		(183,856	)		(5,900	)		(50,916	)
Proceeds from issuance of common stock		20,341			35,170			1,600			4,182
Tax benefit on stock options exercised		5,285			16,038			96			1,547
Payment of dividends		(28,946	)		(25,683	)		(15,297	)		(13,607	)

Net cash used in financing activities		(129,637	)		(181,026	)
Net cash provided by (used in) financing activities								171,653			(63,981	)

Net (decrease) increase in cash and cash equivalents		(15,131	)		10,246
Net increase (decrease) in cash and cash equivalents								11,441			(24,542	)
Cash and cash equivalents, beginning of period		360,921			286,948			416,643			360,921

Cash and cash equivalents, end of period	$	345,790		$	297,194		$	428,084		$	336,379

The accompanying notes are an integral part of these consolidated financial statements.

SEI Investments Company (the Company), a Pennsylvania corporation, provides investment processing, fund processing, and investment management business outsourcing solutions to corporations, financial institutions, financial advisors, and ~~affluent~~ultra-high-net-worth families in the United States, Canada, the United Kingdom, continental Europe, and other various locations throughout the world. Investment processing solutions utilize the Company’s proprietary software system to track investment activities in multiple types of investment accounts, including personal trust, corporate trust, institutional trust, and non-trust investment accounts, thereby allowing banks and trust companies to outsource trust and investment related activities. Revenues from investment processing solutions are recognized in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations, except for fees earned associated with trade execution services.

The fund processing solution offers a full range of administration and distribution support services to mutual funds, collective trust funds, single-manager hedge funds, ~~fund~~funds of hedge funds, private equity funds and other types of investment funds. Administrative services include fund accounting, trustee and custodial support, legal support, transfer agency and shareholder servicing. Distribution support services range from market and industry insight and analysis to identifying distribution opportunities. Revenues from fund processing solutions are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Investment management programs consist of mutual funds, alternative investments and separate accounts. These include a series of money market, equity, fixed-income and alternative investment portfolios, primarily in the form of registered investment companies. The Company serves as the administrator and investment advisor for many of these products. Revenues from investment management programs are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, consistent in all material respects with those applied in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2007.~~2008. Certain financial information and accompanying note disclosure normally included in the Company’s Annual Report on Form 10-K has been condensed or omitted. The interim financial information is unaudited but reflects all adjustments (consisting of only normal recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position of the Company as of ~~September 30, 2008,~~March 31, 2009, the results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ and cash flows for the ~~nine~~three month periods ended ~~September 30, 2008~~March 31, 2009 and ~~2007.~~2008. These interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2007.~~2008.

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 160 (SFAS 160), “Noncontrolling Interest in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51” in January 2009. SFAS 160 established accounting and reporting standards that require the ownership interests in subsidiaries not held by the parent to be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity. This statement also required the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of income.

Except as disclosed herein, there have been no significant changes in significant accounting policies during the ~~nine~~three months ended ~~September 30, 2008~~March 31, 2009 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2007.~~2008.

The Company has involvement with various variable interest entities (VIE or VIEs). These VIEs consist of LSV Employee Group, two SEI-sponsored money market funds, and other investment products in the form of Cayman Island investment companies (Cayman companies) and collective investment trusts.

The Company provided an unsecured guaranty with the lenders of LSV Employee Group in order to facilitate the acquisition of partnership interest in LSV. It was determined that LSV Employee Group is a VIE because the partners of LSV Employee Group do not have any equity at risk because the Company guaranteed the loan. The Company determined it was the primary beneficiary through its guaranty of the debt (See Note 2).

The Company entered into Capital Support Agreements with some of its money market funds to protect the money market fund shareholders from absorbing the credit losses associated with senior notes issued by structured investment vehicles (SIV or SIVs). At the time the Company provided the Capital Support Agreements, the funds became VIEs; however, management concluded the Company was not the primary beneficiary. Management compared the credit risk absorbed through the Capital Support Agreements due to the SIV securities and the interest rate and credit risk associated with the non-SIVs absorbed by the money market funds shareholders to determine if the Company’s risk represented the majority. This analysis determined that the interest rate and credit risk absorbed by the money market fund shareholders was more variable than the credit risk absorbed by the Company. Therefore, the Company is not bearing more than 50 percent of the expected losses on the money market funds and the Company is not the primary beneficiary (See Note 7).

Other variable interest entities are in the form of Cayman companies and collective investment trusts established for the purpose of offering alternative investment products to clients. Clients of the Company are the equity holders in all of these VIEs. The Company governs all decision making authority of the Cayman companies and the collective investment trusts. The Company has no equity investment in the Cayman companies or the collective investment trusts. As a result, the Company has no variable interest in these entities and, therefore, is not the primary beneficiary.

Cash and cash equivalents includes ~~$191,056~~$304,585 and ~~$185,536~~$282,155 at ~~September 30, 2008~~March 31, 2009 and December 31, ~~2007,~~2008, respectively, primarily invested in SEI-sponsored open-ended money market mutual funds. Cash includes $44,425 and ~~cash equivalents also includes $74,402 and $82,374~~$60,515 at ~~September 30, 2008~~March 31, 2009 and December 31, ~~2007,~~2008, respectively, from ~~LSV, of which the Company has a 43 percent partnership interest (See Note 2).~~LSV.

Restricted cash includes $16,400 and $14,000 at ~~September 30, 2008~~March 31, 2009 and December 31, ~~2007 includes $11,000 and $10,000,~~2008, respectively, segregated in special reserve accounts for the benefit of customers of the Company’s broker-dealer subsidiary, SEI Investments Distribution Co. (SIDCO), in accordance with certain rules established by the Securities and Exchange Commission for broker-dealers and $250 segregated for regulatory purposes related to trade-execution services conducted by our subsidiary located in the United Kingdom. Restricted cash at September 30, 2008 also includes $23,000 segregated for the benefit of certain SEI-sponsored money market mutual funds according to the provisions of the Capital Support Agreements (See Note 7).broker-dealers.

The Company capitalized ~~$39,470~~$13,638 and ~~$50,126~~$12,178 of software development costs during the ~~nine~~three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ respectively. As of ~~September 30, 2008,~~March 31, 2009, capitalized software placed into service included on the accompanying Consolidated Balance Sheet had a weighted average remaining life of approximately ~~13.6~~13.1 years. Amortization expense related to capitalized software was ~~$12,704~~$4,876 and ~~$5,497~~$4,200 during the ~~nine~~three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ respectively.

The Company placed the initial version of the Global Wealth Platform into service in July ~~2007. Enhancements~~2007 and has subsequently implemented enhancements and upgrades to ~~expand the functionality of~~ the platform ~~were implemented in October 2007 and April 2008.~~through a series of releases. The total amount of capitalized software development costs related to the platform placed into service and being amortized as of ~~September 30, 2008~~March 31, 2009 was ~~$219,775.~~$279,503, which includes $55,160 related to a release placed into service in January 2009. The Global Wealth Platform has an estimated useful life of 15 years. Amortization expense related to the platform was $4,432 and $3,636 during the ~~nine~~three months ended ~~September 30,~~March 31, 2009 and 2008, ~~was $10,979.~~respectively.

In ~~February 2007,~~September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 159 (SFAS 159), “The Fair Value Option for Financial Assets and Financial Liabilities.” SFAS 159 permits companies to choose to measure certain financial instruments and certain other items at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings. SFAS 159 was effective for the Company on January 1, 2008. The Company elected not to apply the fair value option to any of its financial instruments on the date the standard became effective and, therefore, SFAS 159 had no impact on its consolidated financial position, results of operations or cash flows. The Company may elect to apply the fair value option to any financial instruments acquired after the effective date of SFAS 159.

~~In September 2006, the FASB~~ issued SFAS No. 157 (SFAS 157), “Fair Value Measurements,” which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. The Company adopted the provisions of SFAS 157 ~~does not require any new fair value measurements but rather eliminates inconsistencies~~ in ~~guidance found in various prior accounting pronouncements. SFAS 157 was effective for the Company on~~ January 1, 2008. However, in February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-2 which delayed the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). ~~In October 2008,~~The Company adopted the ~~FASB issued FSP FAS 157-3 which clarifies the application~~provisions of SFAS 157 ~~in a market that is not active and provides an example~~as they relate to ~~illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. SFAS 157 becomes effective for all~~ nonfinancial assets and liabilities ~~for periods beginning after November 15, 2008, which will be the Company’s first quarter of fiscal~~in January 2009. The ~~Company has adopted SFAS 157 for financial assets and liabilities recognized at fair value on a recurring basis. The partial~~ adoption of SFAS 157 for ~~financial~~nonfinancial assets and liabilities did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. See Note 5 for information on related disclosures regarding fair value measurements.

The calculations of basic and diluted earnings per share for the three months ended ~~September 30,~~March 31, 2009 and 2008 ~~and 2007~~ are:

Employee stock options to purchase ~~9,226,000~~26,078,000 and ~~3,468,000~~6,017,000 shares of common stock, with an average exercise price of ~~$27.57~~$20.51 and ~~$29.62,~~$30.83, were outstanding during the three month periods ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ respectively, but not included in the computation of diluted earnings per common share because the effect on diluted earnings per common share would have been anti-dilutive.

~~The calculations of basic and diluted earnings per share for the nine months ended September 30, 2008 and 2007 are:~~

Employee stock options to purchase 9,226,000 and 3,456,000 shares of common stock, with an average exercise price of $27.57 and $29.64, were outstanding during the nine month periods ended September 30, 2008 and 2007, respectively, but not included in the computation of diluted earnings per common share because the exercise price of the options was greater than the average market price of the Company’s common stock, and the effect on diluted earnings per common share would have been anti-dilutive.

Accumulated other comprehensive ~~income (loss) consist~~loss, net of tax, consists of:

Noncontrolling interest on the accompanying Consolidated Balance Sheet as of December 31, 2008 includes a cumulative reclass adjustment of $3,148 as a result of the Company’s adoption of SFAS 160. This reclass adjustment relates to foreign currency translation adjustments.

For purposes of the Consolidated Statements of Cash Flows, the Company considers investment instruments purchased with an original maturity of three months or less to be cash equivalents.

The following table provides the details of the adjustments to reconcile net income to net cash provided by operating activities for the ~~nine~~three months ended ~~September 30:~~March 31:

~~In December 2007,~~On April 9, 2009, the FASB issued ~~SFAS~~FASB Staff Position (FSP) FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4), and FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (FSP 107-1). FSP 157-4 provides additional guidance for estimating fair value in accordance with FAS 157, “Fair Value Measurements,” when the volume and level of activity for the asset or liability has significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 107-1 amends FAS 107, “Disclosures about Fair Value of Financial instruments,” to require disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. FSP 107-1 also amends Accounting Principles Board (APB) Opinion No. ~~141 (revised 2007) (SFAS 141R), “Business Combinations”~~28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim reporting periods. FSP 157-4 and ~~SFAS No. 160 (SFAS 160), “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51.” SFAS 141R will change how business acquisitions~~FSP 107-1 are accounted for and will impact financial statements both on the acquisition date and in subsequent periods. SFAS 160 will change the accounting and reporting for minority interests, which will be re-characterized as noncontrolling interests and classified as a component of equity. SFAS 141R and SFAS 160 will become effective for the Company beginning in the second quarter 2009 and earlier application is permitted beginning with the first quarter ~~of fiscal~~ 2009. ~~Early adoption~~FSP 157-4 and FSP 107-1 must be applied prospectively and retrospective application is not permitted. The Company will apply FSP 157-4 and FSP 107-1 effective with its second quarter 2009. The Company is currently evaluating the impact ~~that SFAS 141R~~FSP 157-4 and ~~SFAS 160~~FSP 107-1 will have on its consolidated financial ~~statements.~~statements, but does not believe it will have a significant impact upon adoption.

~~In March 2008,~~On April 9, 2009, the FASB issued ~~FASB Statement No. 161 (SFAS 161), “Disclosures about Derivative Instruments~~FSP 115-2 and ~~Hedging Activities.~~FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments (FSP 115-2).” ~~SFAS 161 requires companies with derivative instruments~~FSP 115-2 establishes a new method of recognizing and reporting other-than-temporary impairments of debt securities. FSP 115-2 also contains additional disclosure requirements related to ~~disclose information that should enable financial-statement users to understand how~~debt and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 “Accounting for Derivative Instruments and Hedging Activities” and how derivative instruments and related hedged items affect a company’s financial position, financial performance and cash flows. SFAS 161equity securities. FSP 115-2 is effective for ~~financial statements issued for fiscal years~~the Company beginning in the second quarter 2009 and ~~interim periods~~earlier application is permitted beginning ~~after November 15, 2008.~~with the first quarter 2009. The Company will apply FSP 115-2 effective with its second quarter 2009. The Company is currently evaluating the impact ~~if any, that SFAS 161~~FSP 115-2 will have on its consolidated financial ~~statements.~~

In April 2008, the FASB issued FSP 142-3 (FSP 142-3), “Determination of the Useful Life of Intangible Assets.” FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142 (SFAS 142), “Goodwill and Other Intangible Assets.” The intent of this new guidance is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under other accounting pronouncements. FSP 142-3 is effective for financial statements, ~~issued for fiscal years and interim periods beginning after December 15, 2008. The Company is currently evaluating the impact, if any, that FSP 142-3~~but does not believe it will have ~~on its consolidated financial statements.~~a significant impact upon adoption.

~~In September 2008, the FASB issued FSP No. FAS 133-1 and FIN 45-4 (FSP 133-1 and FIN 45-4), “Disclosures about Credit Derivatives and~~

Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161” that introduces new disclosure requirements for credit derivatives and guarantees and clarifies the effective date of SFAS 161. The new disclosure requirements are designedprior year amounts have been reclassified to ~~result in similar disclosures for financial instruments with similar risks and rewards relating~~conform to credit risk, regardless of their legal form. The provisions of FSP 133-1 and FIN 45-4 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact, if any, that FSP 133-1 and FIN 45-4 will have on its consolidated financial statements.current year presentation.

The Company has an investment in the general partnership LSV Asset Management (LSV), a registered investment advisor that provides investment advisory services to institutions, including pension plans and investment companies. LSV is currently an investment sub-advisor for a number of SEI-sponsored mutual funds. The Company’s total partnership interest in LSV was approximately 43 percent during ~~2007~~2008 and ~~2008.~~the three months ended March 31, 2009. LSV Employee Group is owned by several current employees of LSV and was formed for the sole purpose of owning a partnership interest in LSV. The Company does not own any interest in LSV Employee Group.

~~In January 2006, two~~Two partners of LSV, excluding the Company, sold in the aggregate an eight percent interest in LSV to LSV Employee Group. The Company entered into a Guaranty Agreement with LSV Employee Group, Bank of America, N.A. (formerly LaSalle Bank National Association) as administrative agent (the Agent), and certain other lenders in order to facilitate the acquisition of certain partnership interests of LSV by LSV Employee Group. LSV Employee Group obtained financing from the Agent and certain other lenders in the form of a term loan pursuant to the terms of a Credit Agreement (See LSV Employee Group Term Loan below).

Pursuant to the terms and conditions of the Guaranty Agreement, the Company ~~provided~~has agreed to provide an unsecured guaranty to the lenders of all obligations of LSV Employee Group under the Credit Agreement. In the event of default by LSV Employee Group, the lenders have the right to seek payment from the Company of all obligations of LSV Employee Group under the Credit Agreement. As recourse for such payment, the Company will be subrogated to the rights of the lenders under the Credit Agreement and the Guaranty Agreement, including the security interest in the pledged interests transferred to LSV Employee Group.

Under FIN 46, LSV Employee Group meets the definition of a variable interest entity and the Company is the primary beneficiary. As a result of this transaction, the Company has a controlling financial interest in LSV through its direct ownership of LSV and guaranty of LSV Employee Group’s debt. The Company, therefore, consolidates the assets, liabilities and operations of LSV and LSV Employee Group in its Consolidated Financial Statements. The Company’s percentage of direct ownership in LSV was unchanged (approximately 43 percent) as a result of this transaction. The amount of ownership of the other existing partners (approximately 57 percent) of LSV is included in ~~Minority~~Noncontrolling interest. Assuming no other changes in the Company’s relationship with LSV and LSV Employee Group, the Company would no longer be required to consolidate the assets, liabilities and operations of LSV and LSV Employee Group after the LSV Employee Group Term Loan is paid in full. Additionally, the Company may not be required to consolidate LSV and LSV Employee Group if the Company’s percentage of direct ownership in LSV decreases to certain levels.

The Company determined that $72,220 of the $92,000 purchase price related to identifiable intangible assets and the remaining $19,780 was goodwill. The identifiable intangible assets have an estimated life of ten years and are amortized on a straight-line basis. The Company recognized ~~$5,416~~$1,805 in amortization expense ~~during~~in the ~~nine months~~three month periods ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ which is reflected in Depreciation and amortization expense on the accompanying Consolidated ~~Statements~~Statement of Operations. Amortization expense recognized in the Consolidated ~~Statements~~Statement of Operations associated with the assets of LSV Employee Group was eliminated through ~~Minority~~Noncontrolling interest and had no impact on net income.

In March 2009, certain partners (the Contributing partners) of LSV, including the Company, have agreed to designate a portion of their partnership interest for the purpose of providing an interest in the partnership to a select group of key employees. Until such time an interest in the partnership is issued to a key employee, all profits, losses, distributions and other rights and obligations relating to such unissued interests remains with the Contributing partners. Each issuance must be authorized by unanimous vote of all Contributing partners. As of March 31, 2009, the Contributing partners did not issue any interest in LSV.

In April 2009, the Contributing partners agreed to provide certain key employees an interest in LSV, thereby reducing the Company’s interest in LSV to just under 42 percent. The Company expects to deconsolidate the assets, liabilities, revenues and expenses of LSV and account for its interest in LSV under the equity method of accounting effective April 1, 2009. The Company’s indirect eight percent ownership interest in LSV due to the unsecured loan guaranty provided to LSV Employee Group remained unchanged. The Company will continue to consolidate the accounts of LSV Employee Group until such time as the term loan is paid in full. The Company is currently evaluating the impact of this transaction on its consolidated financial statements, in particular, as it pertains to SFAS 160 and SFAS No. 141 (revised 2007), “Business Combinations.”

In order to finance a portion of the purchase price, LSV Employee Group obtained financing from Bank of America, N.A. (formerly LaSalle Bank National Association) and certain other lenders in the form of a term loan pursuant to the terms of a Credit Agreement. The principal amount of the term loan ~~was~~is $82,800. The principal amount and interest of the term loan are paid in quarterly installments. The total outstanding principal balance of the term loan must be paid in full by January 2011. LSV Employee Group may prepay the term loan in whole or in part at any time without penalty. As of ~~September 30, 2008,~~March 31, 2009, the remaining unpaid principal balance of the term loan was ~~$36,823~~$27,686, of which ~~$7,200~~$6,400 is classified as current and included in Current portion of long-term debt and the remaining ~~$29,623~~$21,286 is included in Long-term debt on the accompanying Consolidated Balance Sheets. LSV Employee Group made principal payments of ~~$15,148~~$3,846 and ~~$13,695~~$5,176 during the ~~nine~~three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ respectively. Interest expense for the ~~nine~~three months ended ~~September 30,~~March 31, 2009 and 2008 ~~and 2007~~ on the Consolidated Statements of Operations includes ~~$1,930~~$416 and ~~$2,962,~~$731, respectively, in interest costs associated with the borrowings of LSV Employee Group which was eliminated through ~~Minority~~Noncontrolling interest and had no impact on net income.

LSV Employee Group made a principal payment of ~~$5,274~~$2,998 in ~~October 2008.~~April 2009. The remaining unpaid principal balance of the term loan at ~~October 31, 2008~~April 29, 2009 was ~~$31,549.~~$24,688. The Company, in its capacity as guarantor, currently has no obligation of payment relating to the term loan of LSV Employee Group.

The ~~fair~~book value of LSV Employee Group’s long-term debt is ~~approximately $2,853 in excess~~considered to be representative of ~~the carrying amount~~its fair value based upon an estimation using borrowing rates currently available for bank loans with similar terms and maturities.

LSV Employee Group entered into two interest rate swap agreements to convert its floating rate long-term debt to fixed rate debt. ~~These swaps have~~One of these swap agreements terminated on March 31, 2009. The remaining swap agreement has a ~~total~~ notional value of ~~$33,392.~~$27,440. Payments are made every 90 days and the termination ~~dates~~date of the ~~swaps are March 2009 and~~remaining swap agreement is January 2011. The net effect from the interest rate swaps on the Company’s earnings during the three months ended March 31, 2009 and 2008 was minimal.

In June 2003, the Company purchased an additional percentage ownership in LSV. The total purchase price was allocated to LSV’s net tangible and intangible assets based upon their estimated fair values at the date of purchase. The excess purchase price over the value of the net tangible and identifiable intangible assets was recorded as goodwill. The total amount of goodwill from this transaction amounted to $3,062 and is included on the accompanying Consolidated Balance Sheets.

The Company identified an intangible asset related to customer contracts that met the contractual-legal criterion for recognition apart from goodwill. The fair value of the intangible ~~asset~~ was determined to be $3,821 with a definite life of eight and a half years. The identified intangible asset is amortized on a straight-line basis. The Company recognized ~~$327~~$109 of amortization expense ~~during~~in the ~~nine months ended September 30,~~first quarter of 2008 and ~~2007,~~2009, which is reflected in Depreciation and amortization expense on the accompanying Consolidated Statements of Operations.

Fees earned, not billed represents receivables earned but unbilled and results from timing differences between services provided and contractual billing schedules. These billing schedules generally provide for fees to be billed on a quarterly basis.

Receivables from regulated investment companies on the accompanying Consolidated Balance Sheets primarily represent fees receivable for distribution, investment advisory, and administration services to various regulated investment companies sponsored by SEI.

Property and Equipment on the accompanying Consolidated Balance Sheets consists of:

The Company recognized ~~$16,100~~$5,509 and ~~$14,418~~$5,361 in depreciation and amortization expense related to property and equipment for the ~~nine~~three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ respectively.

~~Accrued sub-advisor and investment officer fees relates to services provided by fund advisors to SEI-sponsored mutual funds and other investment programs.~~

SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used by the Company to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities without adjustment. The Company’s Level 1 assets primarily include investments in ~~SEI-sponsored~~ mutual funds sponsored by SEI and LSV that are quoted daily.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s Level 2 assets primarily include ~~U.S. Treasury~~ securities ~~and U.S. government agency mortgage-backed debt securities~~issued by the Government National Mortgage Association with quoted prices that are traded less frequently than exchange-traded instruments. The value of these assets is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment by management. The Company’s Level 3 financial assets include SIV securities ~~issued by structured investment vehicles (SIVs)~~ (See Notes 6 and 7). The Company elected the fair value option under SFAS 159 to ~~value~~account for these securities. The Company’s Level 3 financial liabilities include the Capital Support Agreements which are considered derivative financial instruments (See Note 7).

The fair value of an asset or liability may include inputs from more than one level in the fair value hierarchy. The lowest level of significant inputs used to value the asset or liability determines which level the asset or liability is classified in its entirety.

The ~~fair value~~underlying collateral of the SIV securities ~~issued by SIVs has been greatly affected by recent~~is mainly comprised of asset-backed securities and collateralized debt obligations. Recent liquidity issues surrounding collateralized debt obligations and asset ~~backed~~backed-securities has greatly affected the fair value of SIV securities. ~~Market price quotes may not be readily available for some positions. The~~Given the lack of any reliable market data on the SIV securities owned by the Company ~~values~~or held by SEI-sponsored money market funds, the fair value of these SIV securities ~~issued by SIVs~~is determined using a net asset value approach which considers the value of the underlying ~~assets.~~collateral. The ~~underlying assets are valued using~~Company utilizes external pricing services that incorporate market ~~information,~~data, where available, or through the use of matrix pricing or other acceptable measures. ~~Securities which~~The valuation methodology used by these service providers considers various characteristics of the underlying collateral including, but not limited to, the issuer, collateral attributes, prepayment speeds, and credit ratings. The underlying collateral that lack any market ~~information~~data are grouped by sector

and valued ~~by utilizing~~using the most recent quoted price, ~~of the underlying asset~~which may be longer than one year, and adjusting that price by the percentage change in the respective sector using ~~indices or~~relative benchmarks. Prices for the SIV securities as well as the underlying collateral are subject to internal reviews that consider broker quotes, current market observations and other ~~relative benchmarks.~~

~~The~~analyses to verify the fair value. In the event a market transaction does exist, management evaluates the circumstances surrounding the transaction in order to assess if the price used represents the fair value according to the guidance in SFAS 157. In management’s opinion, the price of certain SIV securities used in recent transactions were from distressed sales and did not represent the implied fair value of the Capital Support Agreements is determined through the use of an option pricing model designed for credit default swaps. The value is primarily affected by assumptions pertaining to the underlying assets, mainly default percentages and recovery rates specific to each security coveredSIV securities held by the ~~Capital Support Agreement.~~Company or by the SEI-sponsored money market funds.

The fair value of certain financial assets and liabilities of the Company was determined using the following inputs at ~~September 30, 2008:~~March 31, 2009:

The table below presents a reconciliation for all assets and liabilities of the Company measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period from January 1, ~~2008~~2009 to ~~September 30, 2008:~~March 31, 2009:

The ~~$6,588 loss recognized~~$116,038 included in earnings for the Company’s Capital Support Agreements primarily relates to the ~~unrealized losses of securities issued by SIVs during~~reduction in the ~~nine months ended September 30, 2008 and is reflected in Net loss from investments on the accompanying Consolidated Statements of Operations (See Notes 6 and 7).~~

~~The $87,301 loss recognized in earnings relates~~Company’s obligation related to ~~the change in fair value of~~ the Capital Support Agreements as a result of the Company’s purchase of SIV securities from SEI-sponsored money market funds during the ~~nine~~three months ended ~~September 30, 2008 and is reflected in Net loss from investments on the accompanying Consolidated Statements of Operations~~March 31, 2009 (See Note 7).

~~Available~~Investments available for sale ~~securities~~ of the Company’s non-broker-dealer subsidiaries classified as non-current assets consist of:

~~The net~~Net unrealized holding losses at ~~September 30, 2008~~March 31, 2009 were ~~$1,343~~$1,640 (net of income tax benefit of ~~$789)~~$702). ~~The net~~Net unrealized holding ~~gains~~losses at December 31, ~~2007~~2008 were ~~$816~~$1,524 (net of income tax expense of ~~$481)~~$933). These net unrealized ~~gains and~~ losses are reported as a separate component of Accumulated other comprehensive ~~gains~~loss on the accompanying Consolidated Balance Sheets.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2009 and 2008, the Company recognized gross realized gains from available-for-sale securities of ~~$701~~$38 and ~~$1,775,~~$1,066, respectively. ~~Gross realized gains from available-for-sale securities during the three and nine months ended September 30, 2007 were minimal.~~ These gains are reflected in Net loss from investments on the accompanying Consolidated Statements of Operations. There were no realized losses recognized during the ~~nine~~three months ended ~~September 30, 2008~~March 31, 2009 and ~~2007.~~2008.

The Company has investments in two SEI-sponsored mutual funds which primarily invest in fixed-income securities, including debt securities issued by municipalities and mortgage-backed securities. ~~These~~The market value of these investments ~~have been~~has steadily decreased since the initial purchase in ~~an unrealized loss position for an extended period of time. Management believes~~2007. In August 2008, management concluded that the earnings potential and near term prospects of some of the issuers of the underlying securities held in the funds are uncertain and ~~has determined~~ that it iswas unlikely the investments will fully recover from a loss position in the foreseeable future. Due to these factors, the Company recorded an impairment charge of $1,961 during the three months ended September 30, 2008 and classified this charge as an Other-than-temporary decline in market value. ~~At September 30,~~Subsequently, the market value of these securities declined an additional $3,496 by March 31, 2009. Management did not record an other-than-temporary impairment charge at March 31, 2009 due to its assessment of several factors including the volatility in the capital markets, the duration of time since the impairment charge recorded in August 2008 and the ~~new~~Company’s ability and intent to hold onto these securities for a sufficient period to allow for a recovery. The Company re-evaluates its assessment of this investment on an ongoing basis.

The Company has investments included in Other mutual funds that have been in an unrealized loss position for a period of less than one year. These mutual funds primarily invest in a diversified mix of equity and fixed-income securities. The cost basis of these investments ~~inclusive of the impairment charge,~~ was ~~$15,967~~$3,172 with a fair value of ~~$14,550~~$2,540 and a gross unrealized loss of ~~$1,417.~~$632. Management did not record an other-than-temporary impairment charge at March 31, 2009 due to its assessment regarding the correlation of the decline in market value of these investments to the recent events in the capital markets and the Company’s ability and intent to hold onto these securities for a sufficient duration to allow for a recovery. The Company re-evaluates its assessment of this investment on an ongoing basis.

During the three months ended March 31, 2008, the Company ~~were~~held derivatives in the form of equity contracts for the purpose of hedging market risk of certain available for sale ~~securities and~~securities. These derivatives were held ~~only~~ for the purpose of hedging such risk and not for speculation. On March 31, 2008, ~~the Company’s~~these derivative equity contracts reached their contractual maturity date. ~~The Company received gross proceeds of $733 from the maturity of the derivative investments in April 2008.~~ The Company no longer owns any derivative financial instruments to hedge market risk of available for sale securities.

~~There were no~~ Net loss from investments on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2008 includes net gains ~~or losses recognized by the Company~~of $676 from changes in the fair value of derivative ~~instruments during~~instruments.

The Company’s debt securities are issued by the ~~three months ended September 30, 2008.~~ Government National Mortgage Association and are backed by the full faith and credit of the U.S. government. These securities were purchased to satisfy applicable regulatory requirements of SEI Private Trust Company (SPTC) and have maturity dates which range from 2033 to 2037.

The Company has elected the fair value option under SFAS 159 for all of its trading securities and the amount on the accompanying Consolidated Balance Sheet represents the fair value of all trading securities. Unrealized gains and losses from the change in fair value of these securities are recognized in Net loss from investments on the accompanying Consolidated Statements of Operations.

During the three months ended ~~September 30, 2007,~~March 31, 2009, the Company recognized ~~net~~unrealized losses from trading securities of ~~$267~~$130,537 primarily due to the purchase of the Gryphon notes in March 2009 (See Note 7). The purchase of the Gryphon notes reduced the Company’s required capital contribution according to the Amended Capital Support Agreements by approximately $116,038. The unrealized losses from ~~changes~~the trading securities and the subsequent reduction in the fair value of derivative instruments. In the nine months ended September 30, 2008 and 2007, the Company recognized net gains (losses) of $676 and ($1,371), respectively, from derivative instruments. These gains and lossesCompany’s required capital contribution are reflected in Net loss from investments on the accompanying Consolidated Statements of Operations. The Company did not own any trading securities during the three months ended March 31, 2008.

The ~~Company’s debt~~Company has an investment related to the startup of a mutual fund sponsored by LSV. This is a U.S. dollar denominated fund that invests primarily in securities ~~are investments in U.S. government agency~~of Canadian and Australian companies as well as various other global securities. The underlying securities ~~purchased to satisfy applicable regulatory requirements of SEI Private Trust Company (SPTC). The securities have maturity dates which range from 2033 to 2037.~~

~~On September 30, 2008, the Company purchased the securities issued by SIVs~~ held by the ~~SEI Daily Income Trust Money Market Fund.~~fund are translated into U.S. dollars within the fund. The ~~cash purchase~~Company has purchased equity and currency futures contracts as part of an economic hedging strategy to minimize its exposure to price and currency risk

inherent with this investment. The equity futures contracts had a notional value of $3,969 and are expected to hedge the ~~amortized cost~~price risk associated with movements of ~~these~~certain Canadian, Australian and global indices. The Company also purchased currency futures contracts with a notional value of $2,661 that are expected to hedge the currency risk associated with movements of the U.S. dollar against the Canadian and Australian dollars since the underlying securities ~~and their~~of the fund are predominately denominated in those currencies. The fair value ~~at this date was $8,733. The Company elected~~of the futures contracts are netted against the fair value ~~option under SFAS 159 whereby the unrealized gains and losses~~ of the ~~securities are~~investment in the LSV-sponsored fund. During the three months ended March 31, 2009, the Company recognized ~~in current earnings. The~~ unrealized losses of ~~the securities of $6,588 is reflected in Net loss from investments on the accompanying Consolidated Statements of Operations (See Note 7).~~

At December 31, 2007, the Company’s broker-dealer subsidiary, SIDCO, had investments in U.S. Treasury securities reflected as Securities owned on the accompanying Consolidated Balance Sheet. During the nine months ended September 30, 2008, the Company received proceeds of $17,000$329 from the ~~maturity~~LSV-sponsored mutual fund and unrealized gains of ~~these investments~~$384 from the equity and purchased $11,965 of zero-coupon U.S. Treasury securities scheduled to mature in December 2008. These securities had a fair value of $12,093 at September 30, 2008. Due to specialized accounting practices applicable to investments by broker-dealers, the securities held by SIDCO at December 31, 2007 and September 30, 2008 are reported at fair value and changes in fair value are recorded in current period earnings.currency futures contracts.

~~During the three months ended December 31,~~In 2007, the Company entered into Capital Support Agreements with ~~three mutual funds (each a Fund or, together, the Funds),~~ the SEI Daily Income Trust Prime Obligation Fund (the SDIT PO Fund), the SEI Daily Income Trust Money Market Fund (the SDIT MM Fund), and the SEI Liquid Asset Trust Prime Obligation Fund ~~(the SLAT~~(SLAT PO Fund) (each a Fund or, together, the Funds). The Company is the advisor to the Funds. The sub-advisor to the Funds is Columbia Management, which is the primary investment management division of Bank of America Corporation. ~~Various clients of~~Among other money market instruments, the Company are investors in the Funds. SDIT PO Fund is rated AAA and Aaa by Standards & Poor’s Corporation (S&P) and Moody’s Investor Services Inc. (Moody’s), respectively, and the SDIT MM Fund is rated Aaa by Moody’s.

~~The~~ Funds ~~among other securities,~~ hold senior notes issued by SIVs. The senior notes are collateralized by residential mortgage-backed securities, commercial mortgage-backed securities, corporate collateralized debt obligations and collateralized debt obligations of asset-backed securities. AllSome of the SIVs ceased making payments on their outstanding notes on the scheduled maturity dates.

In October 2007, S&P advised the Company that it would place any mutual fund that had an AAA rating and owned certain SIVs on credit watch with negative implications unless the fund was provided credit support having an A-1 short-term rating by S&P. Although the Company was not obligated to provide the credit support required by S&P, in order to avoid a credit watch by S&P on the SDIT PO Fund, and to address the needs of customers who require an S&P AAA rating of the SDIT PO Fund, the The Company entered into the Capital Support ~~Agreement~~Agreements to ~~satisfy S&P’s requirement. The~~provide the necessary credit support related to the SIVs in default held by the Funds.

In March 2009, the Company ~~entered into similar agreements with the SDIT MM and SLAT PO Funds.~~

~~As of December 31, 2007, the aggregate limit~~purchased all of the Company’s capital support commitments to the Funds according to the Capital Support Agreements was $130,500. During the nine months ended September 30, 2008, certain SIVs within the Funds suffered either a technical default or substantial price devaluation, triggering ratings downgradesGryphon notes from the principal rating agencies. As a result, the carrying value of these securities in the Funds was reduced as well. In addition, S&P required an increase in the capital support commitment for the SDIT PO Fund to maintain the Fund’s credit rating. As a result of these events, the Company amended the Capital Support Agreements with the SDIT PO Fund and the SLAT PO ~~Fund to provide additional support.~~

On July 17, 2008, a significant SIV holding in Cheyne Finance LLC (Cheyne or Cheyne Notes) with an aggregate par value across the three Funds of $230,053 and market value on the books of the Funds of $151,835, or 66 percent of par value, was restructured. An opportunity was provided through the restructuring to liquidate the holdings for cash of approximately $117,327, or 51 percent of par value, including distributable cash. The Funds decided not to liquidate the holdings due to an assessment that the liquidation value understated the ultimate value of the underlying collateral. Instead, the Funds exchanged the Cheyne Notes for pass-through notes (Gryphon Notes) issued by a new entity, Gryphon Funding Limited, which holds the same collateral that was held in the Cheyne SIV.

~~On September 30, 2008, the Company purchased the Gryphon Notes held by the SDIT MM~~ Fund. The cash purchase price of ~~$15,321~~$194,913 paid to the Funds was equal to the amortized cost of these ~~securities and their fair value at this date was $8,733. The~~securities. In order to finance the purchases of the Gryphon notes, the Company ~~recorded a loss of $6,588 as~~borrowed $195,000 through the Credit Facility during March 2009 (See Note 8). As a result of this ~~transaction. As~~purchase, the Company recorded losses of ~~this date,~~$129,932 and its required capital contribution according to the Amended Capital Support Agreement was reduced by approximately $116,038 during the three months ended March 31, 2009. In addition, the Company recognized losses of $548 from the change in fair value of the Gryphon notes purchased from the SDIT MM Fund ~~no longer held any SIV securities and~~

in 2008. In total, the ~~Capital Support Agreement with~~charges recognized by the ~~SDIT MM Fund lapsed.~~

Company from SIV-related issues for the three months ended March 31, 2009 amounted to $14,442. As of ~~September 30, 2008,~~March 31, 2009, the Company is committed to provide capital to the Funds, subject to the aggregate limit of $150,000 in the case of the SDIT PO Fund and $20,000 in the case of the SLAT PO Fund, if the Fund realizes payments or sales proceeds from specified SIV securities held by the Fund which are less than the amortized cost of the SIV securities. As of September 30, 2008, upon the ultimate sale or other disposition of a SIV security, the amount of capital that the Company is required to contribute to a Fund would be the least of the following amounts: (i) the amount, if any, by which the amortized cost of the SIV security exceeds the amount realized from the sale or other disposition of the SIV security; (ii) the amount, if any, necessary to restore the net asset value per share of the Fund to $0.9950 (or in the case of the SDIT PO Fund, so long as the SDIT PO Fund is rated AAA by S&P, $0.9975), or (iii) the remaining amount of the aggregate limit of the Capital Support Agreement applicable to the Fund, taking into account all prior contributions.

The Company secured $147,000 of the obligations under the Capital Support Agreements for the SDIT PO and SLAT PO Funds through letters of credit of a third party bank rated A-1 by S&P. The Company had secured $3,000 of the previous obligations under the lapsed Capital Support Agreement with the SDIT MM Fund through a letter of credit. The letters of credit were issued under the Company’s existing credit facility (See Note 8). The remaining $23,000 of the obligations is secured through segregated bank accounts. The Capital Support Agreements and the letters of credit have a term of one year and are scheduled to expire in November and December 2008.

~~In the event that the Company is required under the Capital Support Agreements to commit capital to any Fund, the Company will be required to pay the~~ required capital contribution to the ~~Fund~~Funds was $57,945 and ~~will not receive any consideration from~~ the Fund, in the form of shares of the Fund or any other form, for the contributed capital. If the mark-to-market value of a SIV security is less than its amortized cost and if the aggregate net asset value of the Fund is less than $0.9950 (or in the case of the SDIT PO Fund, so long as the SDIT PO Fund is rated AAArequired collateral to be maintained by ~~S&P, $0.9975), then, even though the loss has not been realized through the sale or other disposition of the SIV security,~~ the Company will be obligated to commit the required amount of capital so that the Funds net asset value is at least $0.9950 (or in the case of the SDIT PO Fund, $0.9975). However, in this case, the Company is not required to pay the capital contributionwas $65,619 according to the ~~Funds.~~Amended Capital Support Agreements.

~~In connection with~~The letters of credit posted to collateralize the Company’s obligations under the Amended Capital Support Agreements was reduced from an aggregate $195,000 to $69,000 (See Note 8). The Company’s borrowings of $195,000 to finance the ~~Company recorded an expense~~purchases of the Gryphon notes and outstanding letters of credit directly reduced the amount available for ~~$87,301 for~~future borrowings under the ~~nine months ended September 30, 2008, which is reflected in Net loss from investments on the accompanying Consolidated Statements of Operations.~~Credit Facility. As of ~~September 30, 2008,~~April 29, 2009, letters of credit of $69,000 remained outstanding and the Company’s total borrowings through the credit facility remained at $195,000. Therefore, the remaining $36,000 of the Credit Facility is unrestricted and may be used for general purposes.

At March 31, 2009, the aggregate obligation that the Company has recorded in connection with the Capital Support Agreements is $112,423, but the Company has not been required to pay such amount because the Funds have not realized any material losses from the ultimate sale or disposition of the SIV securities. Cash payments made under the Capital Support Agreements as of September 30, 2008 were minimal. At September 30, 2008, the aggregate par value and market value of the SIVs covered by the Amended Capital Support Agreements on the books of the ~~SDIT PO Fund and SLAT PO Fund was $348,355. At September 30, 2008, the aggregate market value of the SIVs covered by the Capital Support Agreements on the books of the two~~ Funds was ~~$223,320.~~

~~On November 5, 2008, the Company entered into an Amended~~$123,894 and Restated Capital Support Agreement with the SDIT PO Fund (the SDIT PO Amended Agreement) which extended the termination date under the original Capital Support Agreement with the SDIT PO Fund to November 6, 2009. In addition, the SDIT PO Amended Agreement requires the Company to provide additional support to the SDIT PO Fund in order to maintain the Aaa rating of the Fund by Moody’s.$58,645, respectively. The SDIT PO Amended Agreement provides that if the SDIT PO Fund realizes payments or sales proceeds from the ultimate disposition of any of the specified SIV securities which are less than its amortized cost, the Company will be required to provide capital to the Fund equal to the amount by which the amortized cost of the specified SIV security exceeds the amount realized from the sale or other disposition of such security. The specified SIV securities in the SDIT PO Fund had an aggregate par value of ~~$272,512 on November 5, 2008. Under~~ the SDIT PO Amended Agreement, the Company must maintain collateral in the form of a letter of credit and/or a segregated cash account equal to the difference between the amortized cost value and the market value of the specified SIV securities plus an amount equal to ten percent of the market value of the specified SIV securities. At current market values, the Company is not required to post any additional collateral pursuant to the SDIT PO Amended Agreement because the amount of collateral already maintained under the Capital Support Agreement prior to the execution of the SDIT PO Amended Agreement is sufficient to satisfy the Company’s collateral obligations. If the market values of the specified SIV securities decline further, however, the Company may be required to post additional collateral. As a result of entering into the SDIT PO Amended Agreement on November 5, 2008, and assuming market values on that date hold, an additional non-cash expense of $13,926 would be recorded in the three months ended December 31, 2008.

At this time, the termination date under the SLAT PO Fund Capital Support Agreement has not been extended and is currently scheduled to expire in December 2008. The Company may determine to seek an extension of the termination date under the SLAT PO Fund Capital Support Agreement.

As of November 6, 2008, the amount which would be accrued for the Company’s contribution obligations under the Capital Support Agreements, including the SDIT PO Amended Agreement, based on that day’s market value of the portfolio assets ofGryphon notes purchased from the Funds ~~including the SIVs covered by the Capital Support Agreements,~~on our books was $132,797. Based upon this valuation and assuming no other changes in the portfolio assets through December 31, 2008, an additional non-cash expense of $20,373 would be recorded in the three months ended December 31, 2008.

In accordance with Financial Accounting Standards Board Interpretation No. 46, “Consolidation of Variable Interest Entities” (Revised) (FIN 46(R)), the Company has a significant variable interest in the Funds as a result of the Capital Support Agreements but determined it was not the primary beneficiary and would not be required to consolidate the Funds in its Consolidated Financial Statements. The support provided by the Company would not absorb a majority of the variability created by the assets of the Funds.$208,657.

The ~~Company has determined that the~~Amended Capital Support Agreements are considered derivative ~~contracts. The fair value~~contracts in accordance with applicable accounting guidance and are categorized as Level 3 liabilities as specified by SFAS 157 (see Note 5). These Level 3 liabilities comprise 34 percent of the ~~contracts was determined using a valuation model for credit default swaps.~~Company’s total current liabilities at March 31, 2009. The fair value of the derivative contracts approximates the value of the Company’s actual obligation at ~~September 30, 2008.~~March 31, 2009. The ~~Company will adjust the~~ value of the Amended Capital Support Agreements will be determined at least quarterly. In the event ~~the Company is~~payments are not required to ~~make any payments~~be paid to the Funds, ~~or values increase,~~ such expense may be reversed in a subsequent period.

As of April 29, 2009, the amount which would be accrued for the Company’s contribution obligations under the Amended Capital Support Agreements was $57,798. Based upon this valuation and assuming no other changes in the portfolio assets through June 30, 2009, no additional non-cash expense would be recorded in the three months ended June 30, 2009.

The Company’s future obligation under the Amended Capital Support Agreements is affected by ~~changes~~a number of factors including, but not limited to, prevailing conditions in the credit markets as they impact the value of the SIV securities ~~and~~owned by the Funds, the creditworthiness of the SIV ~~securities. The value of the SIV~~ securities is derived from current market prices or, in the event no market price exists, management determines the fair value using various factors, including the Funds’ fair valuation procedures. The Company’s future obligation under the current SLAT PO Fund Capital Support Agreement is also affected byand the overall asset ~~levels~~level of the SLAT PO Fund. ~~Changes~~A change in the net asset value of the SLAT PO Fund ~~are~~is dependent upon net investments or redemptions in the Fund and the net asset value of the portfolio assets of the ~~Fund.~~Funds. Changes in these amounts, including changes in portfolio assets resulting from mark-to-market adjustments, will affect the per share net asset value of the ~~Fund.~~

Funds. The ~~Company believes changes in the~~fair market value of the ~~specified~~ SIV securities is ~~the primary factor affecting its obligation and required collateral pertaining to the SDIT PO Amended Agreement. Changes~~derived from current market prices or, in the ~~value of the specified SIV securities can cause the Company’s obligation to fluctuate on a daily basis.~~event no market price exists, from external valuation sources (See Note 5).

~~On July 25, 2007 (the Closing Date), the~~The Company ~~entered into~~has a five-year ~~$200,000~~$300,000 Credit Agreement (the Credit Facility) ~~with certain lenders. The Credit Facility became available on the Closing Date and terminates~~which expires in July 2012. On March 19, 2008, the Company and the lenders amended the Credit Facility to increase the aggregate principal amount by $100,000 to $300,000. The aggregate amount of the Credit Facility may be increased by an additional $100,000 under certain conditions set forth in the agreement. At termination,2012, at which time any aggregate principal amount of loans outstanding ~~under the Credit Facility~~ becomes payable in full. Any borrowings made under the Credit Facility will accrue interest at ~~0.45~~0.75 percent above the London Interbank Offer Rate (“LIBOR”). There is also a commitment fee equal to ~~0.09~~0.15 percent per annum on the daily unused portion of the facility. The aggregate amount of the Credit Facility may be increased by an additional $100,000 to $400,000 under certain conditions set forth in the agreement. The Credit Facility, as amended, contains various covenants, none of which negatively affect the Company’s liquidity or capital resources. Both the interest rate and commitment fee prices may increase if the Company’s leverage ratio reaches certain levels.

During March 2009, the Company purchased all of the Gryphon notes from the SDIT PO Fund and the SLAT PO Fund (See Note 7). In order to finance the purchases of the Gryphon notes, the Company borrowed $195,000 through the Credit Facility. The letters of credit posted to collateralize the Company’s obligations under the Amended Capital Support Agreements was reduced from an aggregate $195,000 to $69,000. The Company was in compliance with all covenants of the Credit Facility at March 31, 2009.

As of March 31, 2009, the Company’s ability to borrow from the Credit Facility is not limited by any covenant of the agreement. In management’s opinion, the leverage ratio is the most restrictive of all of the covenants contained in the Credit Facility. The leverage ratio is calculated as consolidated indebtedness divided by earnings before interest, taxes, depreciation, amortization and other items as defined by the covenant during the last four quarters (EBITDA). The amount of consolidated indebtedness according to the terms of the covenant includes the capital commitment under the Amended Capital Support Agreements and the outstanding debt of LSV Employee Group. The Company must maintain at all times prior to and including September 30, ~~2008,~~2009, a ratio of consolidated indebtedness of not more than 2.25 times the amount of EBITDA, at all times from October 1, 2009 through and including December 31, 2009, not more than 2.00 times EBITDA, and at all times thereafter, not more than 1.75 times EBITDA. As of March 31, 2009, the Company’s leverage ratio is 1.24 times EBITDA.

Through the Credit Facility, the Company issued letters of credit of a third party bank to secure ~~$150,000 of~~the existing obligations of the Company under the Amended Capital Support ~~Agreements were issued under~~Agreements. As of March 31, 2008, the ~~Credit Facility~~Company had a total of $69,000 in ~~order to satisfy a major rating agency’s requirement that the Funds have credit support having an A-1 short-term rating (See Note 7).~~outstanding letters of credit. The letters of credit have a term of one year and contain a fronting fee of 0.125 percent per annum on the face amount of each letter of credit which is payable quarterly in arrears. In addition, a participation fee ofranging from 0.45 percent to 1.25 percent, depending upon the Company’s leverage ratio, is payable quarterly in arrears on the face amount of each letter of credit. The participation fee may increase if the Company’s leverage ratio reaches certain levels. As the letters of credit remain outstanding, the amount available under the Credit Facility will be reduced by the face amount of the letters of credit. ~~Therefore, $150,000~~The letters of credit are due to expire in November and early December 2009.

As of April 29, 2009, letters of credit of $69,000 to secure the existing obligations of the Company under the Amended Capital Support Agreements remained outstanding. The amount of the Credit Facility ~~is committed and only the remaining $150,000~~that is unrestricted and ~~may be used~~available for other purposes as determined by the ~~Company. Certain provisions and terms~~Company is $36,000.

The Company considers the book value of long-term debt related to the borrowings through the Credit Facility ~~were amended that provide for a waiver~~to be representative of any breach to various covenants. The Company had no borrowings under the Credit Facility and was in compliance with all covenants at September 30, 2008. In November 2008, the Company and the lenders under the Credit Facility amended theits fair value.

terms of the Credit Facility to increase the maximum amount of contingent obligations that may be incurred by the Company to $297,550, the maximum amount that is required under the Capital Support Agreements, including the SDIT PO Amended Agreement. Also in November 2008, the Company obtained a letter of credit of a third party bank for $6,000 with a term of one year. As of November 6, 2008, $156,000 of the Credit Facility is committed and only the remaining $144,000 is unrestricted and may be used for other purposes as determined by the Company.

The Company’s Canadian subsidiary has a credit facility agreement (the Canadian Credit Facility) for the purpose of facilitating the settlement of mutual fund transactions. The Canadian Credit Facility has no stated expiration date. The amount of the facility is generally limited to $2,000 Canadian dollars or the equivalent amount in U.S. dollars. The Canadian Credit Facility does not contain any covenants which restrict the liquidity or capital resources of the Company. The Company had no borrowings under the Canadian Credit Facility and was in compliance with all covenants during the ~~nine~~three months ended ~~September 30, 2008.~~March 31, 2009.

The Company currently has one active equity compensation plan, the 2007 Equity Compensation Plan (the 2007 Plan), which provides for the grant of incentive stock options, non-qualified stock options and stock appreciation rights with respect to up to 20 million shares of common stock of the Company, subject to adjustment for stock splits, reclassifications, mergers and other events. Permitted grantees under the 2007 Plan include employees, non-employee directors and consultants who perform services for the Company. The plan is administered by the Compensation Committee of the Board of Directors of the Company. There were no grants of incentive stock options or stock appreciation rights made under the plan in ~~2008~~2009 or ~~2007.~~2008.

The Company discontinued any further grants under the Company’s 1998 Equity Compensation Plan (the 1998 Plan) as a result of the approval of the 2007 Plan. No options are available for grant from this plan. Grants made from the 1998 Plan continue in effect under the terms of the grant.

All outstanding stock options have performance based vesting ~~conditions based on~~provisions that tie the ~~attainment~~vesting of ~~certain~~stock options to the Company’s financial performance. The Company’s stock options vest at a rate of 50 percent when a specified diluted earning per share target is achieved, and the remaining 50 percent when a second, higher specified diluted earnings per share ~~targets established at~~target is achieved. Stock options granted prior to 2006 fully vest after seven years from the date of grant. Beginning in 2006, the seven year vesting trigger was eliminated and, as a result, options do not vest due to the passage of time but solely as a result of achievement of the financial vesting targets. Earnings per share targets are calculated exclusive of stock-based compensation expense, net of tax. The ~~first performance condition determines vesting~~diluted earnings per share targets are established at time of ~~50 percent of the options,~~grant and ~~a second performance condition determines the vesting of the remaining 50 percent of the options. The performance conditions~~ are measured annually on December 31. ~~Options granted prior~~The amount of stock-based compensation expense is based upon management’s estimate of when the earnings per share targets may be achieved. If management’s estimate of the attainment of the earnings per share targets proves to ~~2006 also~~be inaccurate, the remaining amount of stock-based compensation expense could ~~vest~~be accelerated, spread out over a longer period, or reversed. This may cause volatility in ~~their entirety seven years from~~ the ~~date~~recognition of ~~grant. All options outstanding have a ten year life. The Company believes that awarding stock options with performance-based vesting schedules better aligns~~stock-based compensation expense in future periods and could materially affect the ~~interests of stockholders~~Company’s net income and ~~employees.~~net income per share.

The Company recognized stock-based compensation expense in its Consolidated Financial Statements in the three month periods ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ respectively, as follows:

Management does not expect that certain option grants, which do not vest due to the passage of time, will attain their pre-determined vesting targets; therefore, the Company has discontinued the amortization of the unrecognized stock-based compensation cost associated with these grants. These option grants have an unrecognized compensation cost of $21,299.

~~The Company recognized stock-based compensation expense in its Consolidated Financial Statements in the nine month periods ended September 30, 2008 and 2007, respectively, as follows:~~

As of ~~September 30, 2008,~~March 31, 2009, there was approximately ~~$53,679~~$48,499 of unrecognized compensation cost remaining, adjusted for estimated forfeitures, related to unvested employee stock ~~options.~~options that management expects will vest and is being amortized. The Company estimates that compensation cost will be recognized according to the following schedule:

During the ~~nine~~three months ended ~~September 30, 2008,~~March 31, 2009, the Company revised its previous estimate made as of December 31, 2008 of when certain vesting targets are expected to be achieved. This change in management’s estimate resulted in a decrease of ~~$2,413~~$1,794 in stock-based compensation expense in the ~~nine~~three months ended ~~September 30, 2008.~~

During the nine month period ended September 30, 2007, the Company accelerated the recognition of $1,160 in stock-based compensation expense due to a change in management’s estimate of when certain vesting targets are expected to be achieved.March 31, 2009.

The Company issues new common shares associated with the exercise of stock options. The total intrinsic value of options exercised during the ~~nine~~three months ended ~~September 30,~~March 31, 2008 was $4,051. The total options exercisable as of March 31, 2009 had no intrinsic value due to the fact that the weighted average exercise price exceeded the market value of the Company’s common stock. The total intrinsic value for options exercisable is calculated as the difference between the market value of the Company’s common stock as of March 31, 2009 and ~~2007~~the exercise price of the shares. The market value of the Company’s common stock as of March 31, 2009 was ~~$17,885 and $45,391, respectively.~~$12.21 as reported by the Nasdaq Stock Market, LLC. The weighted average exercise price of the options exercisable as of March 31, 2009 was $18.47. The total options outstanding as of ~~September 30,~~March 31, 2009 and 2008 was 27,799,000 and ~~2007 was 25,563,000 and 26,104,000,~~27,077,000, respectively.

The Company’s Board of Directors has authorized the repurchase of the Company’s common stock on the open market or through private transactions of up to an aggregate of $1,528,365. Through ~~September 30, 2008,~~March 31, 2009, a total of ~~253,692,000~~255,328,000 shares at an aggregate cost of ~~$1,429,263~~$1,451,729 have been purchased and retired. The Company purchased ~~4,668,000~~527,000 shares at a total cost of ~~$113,068~~$5,901 during the ~~nine~~three months ended ~~September 30, 2008.~~March 31, 2009.

The Company immediately retires its common stock when purchased. Upon retirement, the Company reduces Capital in excess of par value for the average capital per share outstanding and the remainder is charged against Retained earnings. If the Company reduces its Retained earnings to zero, any subsequent purchases of common stock will be charged entirely to Capital in excess of par value.

~~On May 20, 2008, the Board of Directors declared a cash dividend of $.08 per share on the Company’s common stock, which was paid on June 20, 2008, to shareholders of record on June 17, 2008.~~

~~Cash dividends declared during the nine month periods ended September 30, 2008 and 2007 were $15,339 and $13,806, respectively.~~

Private Banks -– provides investment processing and investment management programs to banks and trust institutions ~~worldwide;~~worldwide and independent wealth advisers located in the United Kingdom;

Investment Advisors -– provides investment management programs to affluent investors through a network of independent registered investment advisors, financial planners and other investment professionals in the United States;

Institutional Investors -– provides investment management programs and administrative outsourcing solutions to retirement plan sponsors and not-for-profit organizations worldwide;

Investment Managers -– provides investment processing, fund processing and operational outsourcing solutions to investment managers, fund companies and banking institutions located in the United States and to investment managers worldwide of alternative asset classes such as single-manager hedge funds, ~~fund~~funds of hedge funds, private equity funds and ~~private equity~~registered hedge funds;

Investments in New Businesses -– provides investment management programs to ~~affluent~~ultra-high-net-worth families residing in the United States ~~and Europe~~ through the SEI Wealth Network^®; and

LSV Asset Management – is a registered investment advisor that provides investment advisory services to institutions, including pension plans and investment companies.

The information in the following tables is derived from the Company’s internal financial reporting used for corporate management purposes. There are no inter-segment revenues for the three ~~and nine~~ months ended ~~September 30, 2008~~March 31, 2009 and ~~2007.~~2008. Management evaluates Company assets on a consolidated basis during interim periods. The accounting policies of the reportable business segments are the same as those described in Note 1.

The following tables highlight certain unaudited financial information about each of the Company’s business segments for the three months ended ~~September 30, 2008~~March 31, 2009 and ~~2007.~~2008.

A reconciliation of the total reported for the business segments to income from operations in the Consolidated Statements of Operations for the quarters ended ~~September 30,~~March 31, 2009 and 2008 ~~and 2007~~ is as follows:

The following tables provide additional information for the three months ended ~~September 30,~~March 31, 2009 and 2008 ~~and 2007~~ as required by SFAS 131 pertaining to our business segments:

~~The following tables highlight certain unaudited financial information about each of the Company’s business segments for the nine months ended September 30, 2008 and 2007.~~

A reconciliation of the total reported for the business segments to income from operations in the Consolidated Statements of Operations for the nine month periods ended September 30, 2008 and 2007 is as follows:

~~The following tables provide additional information for the nine months ended September 30, 2008 and 2007 as required by SFAS 131 pertaining to our business segments:~~

The gross liability for unrecognized tax benefits at ~~September 30, 2008~~March 31, 2009 and December 31, ~~2007~~2008 was ~~$13,609~~$4,742 and ~~$13,329,~~$13,453, respectively, exclusive of interest and penalties, of which ~~$12,894~~$4,065 and ~~$12,719~~$13,071 would affect the effective tax rate if the Company were to recognize the tax benefit. ~~The~~As a result of the resolution of federal and state income tax audits, the Company ~~has~~ recognized ~~$1,129~~a reduction of $7,525 of its tax liability for unrecognized tax benefits during the ~~nine~~three months ended ~~September 30, 2008 relating to the expiration~~March 31, 2009.

The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. As of ~~September 30, 2008~~March 31, 2009 and December 31, ~~2007,~~2008, the combined amount of accrued interest and penalties related to tax positions taken on tax returns was ~~$2,211~~$685 and ~~$1,865,~~$2,337, respectively.

The Company files income tax returns in the United States on a consolidated basis and in many U.S. state and foreign jurisdictions. The Company is subject to examination of income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. An examination of the Company’s Canadian subsidiary 2005 and 2006 tax ~~return~~returns is currently being conducted by the ~~IRS.~~Canadian tax authority. The ~~2005 and 2006~~Company is no longer subject to U.S. federal income tax ~~returns of one of the Company’s subsidiaries are under~~ examination for years before 2008 and is no longer subject to state, local or foreign income tax examinations by ~~a foreign tax authority. In addition, some of the prior year tax returns of the Company’s subsidiaries are being examined by certain state tax authorities.~~authorities for years before 2000.

The Company estimates it will recognize ~~$192~~$506 of unrecognized tax benefits within the next twelve months due to the expiration of the statute of ~~limitations.~~limitations and resolution of income tax audits. These unrecognized tax benefits are related to tax positions taken on certain federal and state tax returns. However, the timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. While it is reasonably possible that some issues ~~in the IRS and other examinations~~under examination could be resolved in the next twelve months, based upon the current facts and circumstances, the Company cannot reasonably estimate the timing of such resolution or total range of potential changes as it relates to the current unrecognized tax benefits that are recorded as part of the Company’s financial statements.

The Company estimates that future estimated tax payments in 2009 may be partially or fully offset by the recognition of losses related to the Amended Capital Support Agreements (See Note 7). The expected tax benefit from these losses and the projected tax overpayment for 2008 amounts to $37,418 and is included in Other current assets on the accompanying Consolidated Balance Sheet.

This discussion reviews and analyzes the consolidated financial condition at ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ the consolidated results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2009 and 2008 ~~and 2007~~ and other key factors that may affect future performance. This discussion should be read in conjunction with the Consolidated Financial Statements and the Notes to the Consolidated Financial Statements.

We are a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors, and ~~affluent~~ultra-high-net-worth families create and manage wealth. Investment processing fees are earned as monthly fees for contracted services including computer processing services, software licenses, and trust operations services, as well as transaction-based fees for providing securities valuation and trade-execution. Fund processing and investment management fees are earned as a percentage of average assets under management or administration. As of ~~September 30, 2008,~~March 31, 2009, through our subsidiaries and partnerships in which we have a significant interest, we administer ~~$430.7~~$354.4 billion in mutual fund and pooled assets, manage ~~$161.8~~$122.7 billion in assets, and operate from ~~more than 20 offices in over a dozen countries.~~numerous countries worldwide.

Private Banks – provides investment processing and investment management programs to banks and trust institutions ~~worldwide;~~worldwide and independent wealth advisers located in the United Kingdom;

Institutional Investors -– provides investment management programs and administrative outsourcing solutions to retirement plan sponsors and not-for-profit organizations worldwide;

Investments in New Businesses – provides investment management programs to ~~affluent~~ultra-high-net-worth families residing in the United States ~~and Europe~~ through the SEI Wealth Network^®; and

LSV Asset Management – is a registered investment advisor that provides investment advisory services to institutions, including pension plans and investment companies.

Revenues, Expenses and Income from Operations by business segment for the three ~~and nine~~ months ended ~~September 30, 2008~~March 31, 2009 compared to the three ~~and nine~~ months ended ~~September 30, 2007~~March 31, 2008 were as follows:


	Three Months Ended September 30,								Nine Months Ended September 30,								For the Three Month Period Ended March 31,
	2008			2007			Percent Change		2008			2007			Percent Change		2009			2008			Percent Change
Revenues:
Private Banks	$	99,882		$	104,280		(4	%)	$	310,538		$	302,108		3	%	$	96,948		$	107,054		(9	%)
Investment Advisors		58,846			65,715		(10	%)		181,213			192,724		(6	%)		37,508			60,519		(38	%)
Institutional Investors		52,757			51,275		3	%		154,746			146,815		5	%		39,379			50,689		(22	%)
Investment Managers		38,202			35,844		7	%		112,002			105,131		7	%		33,332			36,493		(9	%)
Investments in New Businesses		1,811			1,881		(4	%)		5,509			5,347		3	%		1,254			1,834		(32	%)
LSV		64,588			90,641		(29	%)		215,509			263,494		(18	%)		40,190			77,319		(48	%)

Total revenues	$	316,086		$	349,636		(10	%)	$	979,517		$	1,015,619		(4	%)	$	248,611		$	333,908		(26	%)
Expenses:
Private Banks		79,545			82,846		(4	%)		251,079			241,668		4	%	$	78,798		$	86,167		(9	%)
Investment Advisors		30,775			31,257		(2	%)		93,702			91,550		2	%		27,109			31,376		(14	%)
Institutional Investors		30,525			30,980		(1	%)		89,993			89,334		1	%		24,170			30,140		(20	%)
Investment Managers		26,566			25,445		4	%		77,542			74,649		4	%		22,867			25,964		(12	%)
Investments in New Businesses		4,023			5,020		(20	%)		12,822			14,597		(12	%)		3,293			4,652		(29	%)
LSV		40,754			56,252		(28	%)		133,950			162,411		(18	%)		26,446			47,356		(44	%)

Total expenses	$	212,188		$	231,800		(8	%)	$	659,088		$	674,209		(2	%)	$	182,683		$	225,655		(19	%)
Income from business segments:
Private Banks		20,337			21,434		(5	%)		59,459			60,440		(2	%)	$	18,150		$	20,887		(13	%)
Investment Advisors		28,071			34,458		(19	%)		87,511			101,174		(14	%)		10,399			29,143		(64	%)
Institutional Investors		22,232			20,295		10	%		64,753			57,481		13	%		15,209			20,549		(26	%)
Investment Managers		11,636			10,399		12	%		34,460			30,482		13	%		10,465			10,529		(1	%)
Investments in New Businesses		(2,212	)		(3,139	)	30	%		(7,313	)		(9,250	)	21	%		(2,039	)		(2,818	)	28	%
LSV		23,834			34,389		(31	%)		81,559			101,083		(19	%)		13,744			29,963		(54	%)

Total income from business segments	$	103,898		$	117,836		(12	%)	$	320,429		$	341,410		(6	%)	$	65,928		$	108,253		(39	%)
Corporate overhead		(10,420	)		(9,754	)	7	%		(30,876	)		(30,459	)	1	%		(9,641	)		(10,109	)	(5	%)
LSV Employee Group (1)		(1,820	)		(1,820	)	—			(5,460	)		(5,460	)	—			(1,820	)		(1,821	)	—
Minority interest reflected in segments (2)		33,291			49,016		(32	%)		114,561			142,641		(20	%)
Noncontrolling interest reflected in segments (2)																		19,063			42,188		(55	%)

Income from operations	$	124,949		$	155,278		(20	%)	$	398,654		$	448,132		(11	%)	$	73,530		$	138,511		(47	%)

This table presents assets of our clients, or of our clients’ customers, for which we provide management or administrative services. These assets are not included in our balance sheets because we do not own them.

Assets under management are total assets of our clients or their customers invested in our equity and fixed-income investment programs, collective trust fund programs, and liquidity funds for which we provide asset management services. Assets under management and administration are total assets of our clients or their customers for which we provide administrative services, including client proprietary fund balances for which we provide administration and/or distribution services.

Consolidated revenues declined ~~$33.6~~$85.3 million, or ~~ten~~26 percent to $316.1 million for the three months ended September 30, 2008 compared to the three months ended September 30, 2007. For the nine month period, revenues declined $36.1 million, or four percent, to $979.5 million compared to the prior year period. Net income decreased $38.8 million, or 53 percent, to $34.5 million forin the three month period ~~and $76.6~~ended March 31, 2009 compared to the same period a year ago. Net income decreased $14.7 million, or ~~37 percent, to $129.6 million for the nine month period. Consolidated operating margins of the business segments declined to 33 percent from 34~~30 percent in the three ~~and nine~~ month ~~periods.~~period ended March 31, 2009 compared to the corresponding period a year ago. Diluted earnings per share ~~for~~were $.18 in the three month period ~~were $.18 per share as~~ended March 31, 2009 compared to ~~$.37 per share a year ago, a decrease of 51 percent. In~~$.25 in the ~~nine~~three month period ~~diluted earnings per share decreased to $.66 per share as compared to $1.02 per share a year ago, a decrease of 35 percent.~~ended March 31, 2008.

In our opinion, the following items had a significant impact on our financial results for the three ~~and nine~~ month periods ended ~~September 30,~~March 31, 2009 and 2008:

The severe downturn in the capital markets during 2008 and ~~2007:~~continued volatility during the first quarter 2009 caused our Asset management, administration and distribution fees to decrease $90.7 million, or 35 percent, as compared to the first quarter of 2008. Our assets under management decreased $61.9 billion during the past 12 months, of which $29.5 billion pertained to assets managed by LSV.

New business activity in our Institutional Investors and Investment Managers segments partially mitigated the negative impact from the capital market depreciation on our revenues. New client asset funding, as well as asset funding from existing clients, for our retirement and not-for-profit solutions in our Institutional Investors segment and for our hedge fund and separately managed accounts solutions in our Investment Managers segment positively impacted revenues in the first quarter of 2009.

Revenues ~~from asset-based~~in our Private Banks segment include $7.0 million in non-recurring fees ~~across all our business segments were negatively affected~~received by ~~declining capital markets, particularly~~us in the ~~LSV, Investment Advisors~~first quarter of 2009 from the buyouts of existing contracts by a large bank client and ~~Institutional Investors segments. Widespread weakness in capital market conditions decreased the value~~a community bank client. These buyouts were a direct result of ~~assets we manage or administer for our existing clients, resulting in decreased base revenues in the segments.~~merger and acquisition activity.

~~The unfavorable capital markets had a significant negative impact on~~Our earnings during the ~~revenue and profits~~first quarter of ~~LSV. Revenues earned~~2009 were adversely affected by further losses totaling $14.4 million associated with SIV-related issues involving SEI-sponsored money market funds. Cumulative losses from SIV-related issues as of March 31, 2009 total $197.7 million (See “Money Market Fund Support” later in this discussion).

Our percentage ownership of LSV ~~were $215.5 million in the nine months ended September 30, 2008 compared to $263.5 million in the prior year comparable period, a decrease of $48.0 million or 18~~remained at approximately 43 percent. Our proportionate share in the earnings of LSV in the ~~nine month period of 2008~~first quarter 2009 was ~~$81.6~~$13.7 million, ~~compared to $101.1 million for the same period in 2007,~~ a decrease of ~~$19.5~~$16.2 million, or 1954 percent, from the comparable period in 2008. Revenues decreased 48 percent primarily because of significant market depreciation in the value of the assets managed. LSV’s assets under management were $32.3 billion at March 31, 2009, as compared to $61.8 billion at March 31, 2008, a decrease of 48 percent.

~~We recorded~~In March 2009, certain partners of LSV, including SEI, have agreed to designate a ~~non-cash charge~~portion of ~~$34.2 million (or $.11 diluted earnings per share) and $87.3 million (or $.28 diluted earnings per share)~~their partnership interest for the purpose of providing an interest in the ~~three~~partnership to a select group of key LSV employees. In April 2009, these contributing partners agreed to provide certain key LSV employees an interest in LSV thereby reducing our interest in LSV to approximately 42 percent. Effective April 1, 2009, we expect to deconsolidate the assets, liabilities, revenues and ~~nine months ended September 30, 2008, respectively, related to agreements that provide capital support to money market funds holding investments that are exposed to liquidity~~expenses of LSV and ~~credit risk (See Note 7 to the Consolidated Financial Statements). On September 30, 2008, we purchased investments from one of~~account for our ~~money market funds included~~interest in these agreements. The cash purchase price of $15.3 million was equal to the amortized cost of these investments and we immediately recorded a loss of $6.6 million (or $.02 diluted earnings per share) from the transaction. The support agreement applicable to those securities lapsed. These support agreements are described in greater detailLSV under the ~~caption “Money Market Fund Support” later~~equity method of accounting. We are currently evaluating the impact of this transaction on our consolidated financial statements, in ~~this discussion.~~particular, as it pertains to SFAS 160 and SFAS 141R.

We ~~recognized an additional $7.1 million~~continued to invest in ~~amortization expense during the nine months ended September 30, 2008 due to the initial release of~~ the Global Wealth Platform ~~which was placed into service in July 2007. The amortization expense was primarily recognized in~~and its operational infrastructure. During the ~~Private Banks~~first quarter of 2009, we capitalized $13.6 million for significant enhancements and ~~Investment Advisors business segments. We capitalized $39.5~~new functionality for the platform, as compared to $12.2 million in the ~~nine months ended September 30, 2008 as compared to $50.1 million in the comparable period~~first quarter of 2007 as a larger portion of our costs were incurred for maintenance and support for the operation of the platform. Capitalized costs in 2008 were for enhancements and upgrades to expand the functionality of the Global Wealth Platform.2008. We will continue to incur significant development costs for these enhancements and upgrades. Our intention is to implement enhancements and upgrades into the platform through a series of releases. ~~The~~In January 2009, we implemented a new release of the Global Wealth Platform. Previously capitalized software development costs of approximately $55.2 million related to this latest release were placed into service. Additional quarterly amortization expense from this latest release is expected to be approximately $1.0 million per quarter.

Our operating expenses during the first quarter of 2009 decreased across all of our business segments. A portion of these declines were due to lower direct costs as a result of reduced revenues. In addition, a significant portion of these declines resulted from our efforts to reduce discretionary expenses across the company. Included in these actions are the elimination of non-strategic activities, process improvements and a reduction in our global workforce, which was undertaken in February 2009. We incurred one-time termination costs associated with ~~these releases~~the workforce reduction of approximately $6.3 million during the first quarter of 2009, which is included in Compensation, benefits and other personnel expense on the accompanying Consolidated Statements of Operations.

Our effective tax rate for the first quarter of 2009 declined to 20.5 percent as compared to 37.1 percent in the first quarter of 2008. Our tax rate in 2009 was favorably impacted by the recognition of certain tax benefits related to the conclusion of federal and state income tax audits. We expect the effective tax rate will be ~~amortized over~~higher for the remaining ~~useful life~~quarters of ~~the platform.~~

During the nine months ended September 30, 2008 and 2007, we recognized approximately $13.0 million and $20.5 million, respectively, in stock-based compensation expense. This decrease was primarily due to stock options vesting in December 2007 and changes in our estimates in 2008 of when outstanding stock options would vest. Our expenses recognized from stock options are described in greater detail under the caption “Stock-Based Compensation” later in this discussion.

The prevailing economic conditions and issues surrounding the credit markets have extended our sales cycles and slowed the sales of new business, particularly in the Private Banks and Investment Advisors segments. This resulted in a decrease in the amount of sales compensation expense which has provided some support for our operating margins in these business segments.2009.

We did not experience any significant collectibility issues regarding our receivables during the first quarter 2009 and have not received any indications that we should anticipate such issues in the near term.

We continued our stock repurchase program during 2009 and purchased approximately ~~4,668,000~~527,000 shares at an average price of approximately ~~$24~~$11 per share in the ~~nine month period.~~first quarter of 2009.

In 2007, we entered into Capital Support Agreements with the SEI Daily Income Trust Prime Obligation Fund (the SDIT PO Fund), the SEI Daily Income Trust Money Market Fund (the SDIT MM Fund), and the SEI Liquid Asset Trust Prime Obligation Fund (the SLAT PO Fund) (each a Fund or, together, the Funds). The terms, conditions and ~~conditions~~subsequent amendments of the Capital Support Agreements are described in our latest Annual Report on Form 10-K in Part I,II, Item 2.7 under the caption titled “Money Market Fund Support”.

AsIn March 2009, we purchased all of ~~December 31, 2007,~~ the aggregate limit of our required capital contributions to the Funds according to the Capital Support Agreements was $130.5 million. During the nine months ended September 30, 2008, certain structured investment vehicles (SIV or SIVs) within the Funds suffered either a technical default or substantial price devaluation, triggering ratings downgradesGryphon notes from the principal rating agencies. As a result, the carrying value of these securities in the Funds was reduced as well. In addition, Standard & Poor’s required the posting of additional capital support for the SDIT PO Fund and the SLAT PO Fund. The cash purchase price of $194.9 million paid to ~~maintain~~ the ~~Fund’s~~Funds was equal to the amortized cost of these securities. In order to finance the purchases of the Gryphon notes, we borrowed $195.0 million through our credit ~~rating.~~ facility during March 2009. We recorded losses of approximately $130.5 million as of March 31, 2009 due to this purchase and the earlier purchase of the Gryphon notes from the SDIT MM Fund in September 2008.

As a result of ~~these events, we amended~~ the ~~Capital Support Agreements with~~purchases of the Gryphon Notes from the SDIT PO Fund and the SLAT PO Fund, ~~to provide additional~~our required capital ~~support. We also amended our credit facility to increase the aggregate amount available for borrowings by $100.0 million to $300.0 million (See Note 8~~contribution according to the ~~Consolidated Financial Statements~~Amended Capital Support Agreements was reduced by approximately $116.1 million during the first quarter of 2009. This reduction in our required contributions partially offset the investment losses incurred from the purchases of the Gryphon notes so that our net charge from SIV-related issues for ~~more information related~~the first quarter totaled $14.4 million. As of March 31, 2009, our required capital contribution to the Funds according to the Amended Capital Support Agreements was $57.9 million.

Also as a result of these purchases, the letters of credit ~~and credit facility).~~

~~On July 17, 2008,~~posted to collateralize our obligations under the ~~SIV holding in Cheyne Finance LLC (Cheyne) had~~Amended Capital Support Agreements was reduced from an aggregate ~~par value across~~$195.0 million to $69.0 million (See Liquidity and Capital Resources section later in this discussion). Our borrowings of $195.0 million to finance the ~~three Funds of $230.1 million and market value on the books~~purchases of the ~~Funds~~Gryphon notes and outstanding letters of ~~$151.8 million, or 66 percent of par value. On this date,~~credit directly reduce the ~~SIV holding in Cheyne was restructured and an opportunity was provided to liquidate~~amount available for future borrowings under the holdings for cash of approximately $117.3 million, or 51 percent of par value, including distributable cash. The Funds decided not to liquidate the holdings due to an assessment that the liquidation value understated the ultimate value of the underlying collateral. Instead, the Funds exchanged the Cheyne notes for pass-through notes (Gryphon Notes) issued by a new entity, Gryphon Funding Limited, which holds the same collateral that was held in the Cheyne SIV.

On September 30, 2008, we purchased the Gryphon Notes held by the SDIT MM Fund. The cash purchase price of $15.3 million was equal to the amortized cost of these securities and their fair value at this date was $8.7 million. The Company recognized a loss of $6.6 million as a result of this transaction.credit facility. As of ~~this date, the SDIT MM Fund no longer held any SIV securities and the Capital Support Agreement with the SDIT MM Fund lapsed.~~

As of September 30, 2008, we are committed to provide capital support to the Funds subject to an aggregate limit of $150.0 million for the SDIT PO Fund and $20.0 million for the SLAT PO Fund for a total aggregate limit of $170.0 million. Of the new aggregate limit, we secured $147.0 million by our credit facility throughApril 29, 2009, letters of credit of ~~a third party bank~~$69.0 million remained outstanding and ~~secured~~our total borrowings through the credit facility remained at $195.0 million. Therefore, only the remaining ~~$23.0 million through segregated bank accounts. We had secured $3.0~~$36.0 million of the ~~previous obligations under the lapsed Capital Support Agreement with the SDIT MM Fund through a letter of credit which is due to expire in November 2008. As of September 30, 2008, the amount of our~~ credit facility ~~that~~ is unrestricted and may be used for general ~~purposes was $150.0 million. The Capital Support Agreements for the SDIT PO Fund and the SLAT PO Fund and the related letters of credit have scheduled expiration dates in November and December 2008.~~purposes.

In connection with the Capital Support Agreements, we recorded an expense for $87.3 million for the nine months ended September 30, 2008, which is reflected in Net loss from investments on the Consolidated Statements of Operations of the accompanying Consolidated Financial Statements. As of September 30, 2008, the aggregate amount of our obligation recorded in connection with the Capital Support Agreements was $112.4 million, but this amount was not required to be paid since the Funds have not realized any material losses from the ultimate sale or disposition of the SIV securities. Cash payments made under the Capital Support Agreements as of September 30, 2008 were minimal. At ~~September 30, 2008,~~March 31, 2009, the aggregate par value and market value of the SIVs covered by the Amended Capital Support Agreements on the books of the ~~two~~ Funds was ~~$348.4~~$123.9 million and ~~$223.3~~$58.6 million, respectively. Included in these amounts is a significant SIV holding in Gryphon with an aggregate par value across the two Funds of $201.7 million and a market value on the books of the Funds of $115.0 million, or 57 percent of par value.

The ~~following table presents the aggregate impact from our support provided to the two Funds covered by the Capital Support Agreements during the third quarter and cumulative as of September 30, 2008:~~

On November 5, 2008, we entered into an Amended and Restated Capital Support Agreement with the SDIT PO Fund (the SDIT PO Amended Agreement) which extended the termination date under the original Capital Support Agreement with the SDIT PO Fund to November 6, 2009. In addition, the SDIT PO Amended Agreement requires us to provide additional support to the SDIT PO Fund in order to maintain the Aaa rating of the Fund by Moody’s. The SDIT PO Amended Agreement provides that if the SDIT PO Fund realizes payments or sales proceeds from the ultimate disposition of any of the specified SIV securities which are less than its amortized cost, we will be required to provide capital to the Fund equal to the amount by which the amortized cost of the specified SIV security exceeds the amount realized from the sale or other disposition of such security. The specified SIV securities in the SDIT PO Fund had an aggregate par value of ~~$272.5 million~~the Gryphon notes purchased from the Funds on November 5, 2008. Under the SDIT PO Amended Agreement, we must maintain collateral in the form of a letter of credit and/or a segregated cash account equal to the difference between the amortized cost value and the market value of the specifiedour books was $208.7 million.

All SIV securities plus an amount equal to ten percent of the market value of the specified SIV securities. At current market values, we are not required to post any additional collateral pursuant to the SDIT PO Amended Agreement because the amount of collateral already maintained under the Capital Support Agreement prior to the execution of the SDIT PO Amended Agreement is sufficient to satisfy our collateral obligations. If the market values of the specified SIV securities decline further, however, we may be required to post additional collateral. As a result of entering into the SDIT PO Amended Agreement on November 5, 2008, and assuming market values on that date hold, an additional non-cash expense of $13.9 million would be recorded in the fourth quarter 2008. In November 2008, we amended the terms of the Credit Facility with the lenders to increase the maximum amount of contingent obligations that we may incur to $297.5 million, the maximum amount that is required under the Capital Support Agreements, including the SDIT PO Amended Agreement. We also obtained a letter of credit from a third party bank for $6.0 million. This letter of credit is scheduled to expire in November 2009. As of November 6, 2008, the amount of our credit facility that is unrestricted and may be used for general purposes was $144.0 million.

At this time, the termination date under the SLAT PO Fund Capital Support Agreement has not been extended and is currently scheduled to expire in December 2008. We may determine to seek an extension of the termination date under the SLAT PO Fund Capital Support Agreement.

~~All SIVs~~ that remain on the books of the two Funds covered by the Amended Capital Support Agreements ~~at November 6, 2008~~ are in technical default. ~~Three~~The Funds currently hold four SIV securities. No other SEI-sponsored fund holds any SIV securities. It is our intention to purchase the remaining SIV securities from the SDIT PO Fund and SLAT PO Fund over the next several months. We expect to have purchased all of the ~~five remaining SIVs have restructured. We believe that~~SIV securities covered by the Amended Capital Support Agreements prior to the expiration dates of the agreements in November 2009.

Our required capital contribution according to the Amended Capital Support Agreement with the SLAT PO Fund is based upon the amount necessary to restore the net asset value per share of the Fund to $0.9950. If we decide to purchase the remaining ~~defaulted~~ SIV securities ~~will~~from the SLAT PO Fund, our required purchase price would be ~~restructured, although we cannot predict~~equal to 100 percent of the ~~timing or net impact the restructuring will ultimately have on the realized~~amortized cost value of these securities. Therefore, we would expect to incur further losses of approximately $7.0 million from our intended purchase of the remaining SIV ~~securities.~~ securities from the SLAT PO Fund based on actual values of the securities as of April 29, 2009.

As of ~~November 6, 2008,~~April 29, 2009, the amount which would be accrued for our contribution obligations under the Amended Capital Support Agreements was ~~$132.8~~$57.8 million. At the close of business on November 6, 2008, the aggregate par value and market value of the SIVs covered by the Capital Support Agreements on the books of the two Funds was $345.1 million and $205.1 million, respectively. Based upon this valuation and assuming no other changes in the portfolio assets through ~~December 31, 2008, an~~June 30, 2009, no additional non-cash expense ~~of $20.4 million~~ would be recorded in the ~~fourth quarter 2008. For further information regarding~~three months ended June 30, 2009.

Our total risk of loss from SIV securities is limited to the ~~portfolio assets of~~aggregate remaining par value held by the Funds ~~the month-end holdings~~and on our balance sheet. As of ~~each of the Funds can be viewed after the 15~~^th ~~day of the following month at http://www.seic.com/holdings_home.asp.~~

~~The following table presents~~April 29, 2009, the aggregate ~~impact from our support provided~~par value of these securities totaled $122.2 million. We do not engage in any lending activities or any other activity that exposes us to a risk of loss associated with the ~~two Funds covered by~~illiquidity issues in the credit markets.

When we entered into the Capital Support Agreements, ~~during~~ the ~~fourth quarter~~Funds became variable interest entities and we were considered to ~~date November 6, 2008 and cumulative as of November 6, 2008:~~

In November 2008, the amount of support provided to the SDIT PO Fund was increased to $272.5 million pursuant to the SDIT PO Amended Agreement and the amount of support provided to the SLAT PO Fund was increased to $25.0 million.

We have a significant variable interest in the ~~Funds as a result of~~Funds. Therefore, we needed to determine if we were the primary beneficiary according to the provisions established in FIN 46(R). Our analysis concluded that we were not the primary beneficiary because the support we provide under the Capital Support Agreements according to the provisions of FIN 46(R); however, we have determined that we are not the primary beneficiary and would not be required to consolidate the Funds in our Consolidated Financial Statements. The support we provided would not absorb a majority of the variability created by the assets of the Funds. As a result, we were not required to consolidate the accounts of the Funds into our Consolidated Financial Statements.

The Amended Capital Support Agreements are considered derivative contracts in accordance with applicable accounting guidance and are categorized as Level 3 liabilities as specified by SFAS No. 157 (SFAS 157), “Fair Value Measurements” (See ~~Notes 1 and 5 to the Consolidated Financial Statements for more information related to SFAS 157)~~Fair Value Measurements section later in this discussion). These Level 3 liabilities comprise ~~approximately 42~~34 percent of our total current ~~liabilities. The fair value of the contracts was determined using a valuation model for credit default swaps.~~liabilities at March 31, 2009. The fair value of the derivative contracts approximates the value of our actual obligation at ~~September 30, 2008.~~March 31, 2009. The value of the Capital Support Agreements will be determined at least quarterly. In the event payments are not required to be paid to the Funds, such expense may be reversed in a subsequent period.

~~We believe changes~~Our future obligation under the Amended Capital Support Agreements is affected by a number of factors including, but not limited to, prevailing conditions in the credit markets as they impact the value of the ~~specified~~SIV securities owned by the Funds, the creditworthiness of the SIV securities and the overall asset level of the SLAT PO Fund. A change in the net asset value of the SLAT PO Fund is dependent upon net investments or redemptions in the Fund and the net asset value of the portfolio assets of the Funds. Changes in these amounts, including changes in portfolio assets resulting from mark-to-market adjustments, will affect the per share net asset value of the Funds. The fair market value of the SIV securities is ~~the primary factor that affects our obligation and required collateral pertaining to the SDIT PO Amended Agreement. Changes~~derived from current market prices or, in the event no market price exists, from external valuation sources (See Fair Value Measurements section later in this discussion).

The market value of the ~~specified~~ SIV securities ~~can cause~~has the most significant impact on the amount of our obligation tounder the Capital Support Agreements. Our obligation can fluctuate on a daily basis. ~~Based~~The following table, based on actual values as of ~~November 6, 2008,~~April 29, 2009, is included to give an indication of the impact of a ~~change of~~ one percent movement in the value of ~~these~~ securities ~~would cause~~issued by SIVs held by the Funds on our obligation ~~with respect to~~under the ~~SDIT PO Amended Agreement to change by approximately $2.7 million and our required collateral would change by approximately $2.4 million.~~Capital Support Agreements:

~~Our~~All outstanding stock options have performance based vesting ~~conditions based on~~provisions that tie the ~~attainment~~vesting of ~~certain earnings per share targets established~~stock options to our financial performance. Our stock options vest at ~~the date of grant. The first performance condition determines vesting~~a rate of 50 percent ~~of the options,~~when a specified diluted earning per share target is achieved, and ~~a second performance condition determines the vesting of~~ the remaining 50 percent ~~of the options. The performance conditions are measured annually on December 31. Options~~when a second, higher specified diluted earnings per share target is achieved. Stock options granted prior to 2006 ~~also could~~fully vest ~~in their entirety~~after seven years from the date of grant. Beginning in 2006, the seven year vesting trigger was eliminated and, as a result, options do not vest due to the passage of time but solely as a result of achievement of the financial vesting targets. Earnings per share targets are calculated exclusive of stock-based compensation expense, net of tax. The diluted earnings per share targets are

established at time of grant and are measured annually on December 31. The amount of stock-based compensation expense is based upon our estimates of when we believe the earnings per share targets may be achieved. If our estimate of the attainment of the earnings per share targets proves to be inaccurate, the remaining amount of stock-based compensation expense could be accelerated, spread out over a longer period, or reversed. This may cause volatility in the recognition of stock-based compensation expense in future periods and could materially affect our net income and net income per share.

~~Page 32~~ During the three months ended March 31, 2009, we revised our estimate made as of 43December 31, 2008 of when certain vesting targets are expected to be achieved. This change in management’s estimate resulted in a decrease of $1.8 million in stock-based compensation expense in the three months ended March 31, 2009.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007,~~ we recognized approximately ~~$13.0~~$3.4 million and ~~$20.5~~$4.7 million, respectively, in stock-based compensation expense, a decrease of ~~$7.5~~$1.3 million. This decrease consisted of the following components:

We do not expect that certain option grants, which do not vest due to the passage of time, will attain their pre-determined vesting targets and; therefore, we discontinued the amortization of the unrecognized stock-based compensation cost associated with these grants. These option grants have an unrecognized compensation cost of $21.3 million.

Based upon our current view of ~~the number of~~how many options ~~that~~ will vest and when they will vest, we estimate that stock-based compensation expense will be recognized according to the following schedule:

Revenues decreased ~~$4.4~~$10.1 million, or ~~four~~nine percent, ~~in the three month period ended September 30, 2008~~ compared to the prior year corresponding period and were primarily affected by:

~~A decrease in~~Decreased investment management fees from existing international clients due to lower assets under management caused by declining capital ~~markets.~~markets and negative cash flows; partially offset by

~~Page 33~~Non-recurring fees of 43

~~Revenues increased $8.4~~$7.0 million ~~or three~~received by us from the buyout of existing contracts relating to bank mergers and acquisition activity; and

Increased trade execution fees due to significant volatility in the capital markets during the first quarter of 2009.

Operating margins decreased to 19 percent compared to 20 percent in the ~~nine month~~same period ~~ended September 30, 2008~~a year ago. Operating income decreased by $2.7 million, or 13 percent, compared to the prior year corresponding ~~period and were primarily affected by:~~

~~An increase in revenues from our GWS solution from cross sales of other services to existing clients; and~~

~~An increase in revenue from our GWTS solution relating to client acquisitions and mergers with existing clients and cross sales of other services to existing clients; partially offset by~~

~~A decrease in investment management fees from existing international clients due to lower assets under management caused by declining capital markets.~~

~~Operating margins declined to 20 percent, as compared to 21 percent in the three month period. Operating income decreased $1.1 million, or five percent, in the three month~~ period and was primarily affected by:

A decrease in revenues;

Increased one-time termination costs associated with the workforce reduction; and

Increased ~~non-capitalized spending for technology, infrastructure buildout, and personnel~~direct expenses associated with the ~~Global Wealth Platform;~~increased trade execution fees; partially offset by

Decreased direct expenses associated with the lower ~~levels of assets from existing global~~ investment management ~~clients;~~fees;

Decreased ~~stock-based~~salary, incentive-based compensation ~~expenses; and~~

~~Decreased sales compensation expenses due to the reduced amount of sales of new business.~~

~~Operating margins declined to 19 percent, as compared to 20 percent in the nine month period. Operating income decreased $1.0 million, or two percent, in the nine month period~~ and ~~was primarily affected by:~~

~~Increased non-capitalized spending for technology, infrastructure buildout, and~~other personnel ~~associated with the Global Wealth Platform; and~~

~~Amortization expense related to the Global Wealth Platform; partially offset by~~

~~An increase in revenues;~~

~~Decreased stock-based and incentive-based compensation~~ expenses; and

Decreased sales compensation expenses due to the reduced amount of sales of new business.

Revenues decreased ~~$6.9~~$23.0 million, or ~~ten~~38 percent, incompared to the ~~three month~~prior year corresponding period ~~and $11.5 million, or six percent, in the nine month period ended September 30, 2008~~ and were primarily affected by:

~~A decrease in~~Decreased investment management fees from existing clients due to lower assets under management caused by declining capital markets; ~~and~~

~~A decrease in~~Decreased investment management fees from negative net cash flows and client-directed shifts from our equity and ~~fixed income~~fixed-income programs to our liquidity products; and

A decrease in the average basis points earned on assets due to client-directed shifts to liquidity products.

Operating margins decreased to 4828 percent as compared to 5248 percent in the ~~three and nine month periods.~~same period a year ago. Operating income decreased by ~~$6.4~~$18.7 million, or 1964 percent, incompared to the ~~three month period, and $13.7 million, or 14 percent, in the nine month~~prior year corresponding period and was primarily affected by:

A decrease in revenues;

Increased ~~non-capitalized technology spending related to~~one-time personnel costs associated with the ~~Global Wealth Platform;~~

~~Amortization expense related to the Global Wealth Platform;~~workforce reduction; partially offset by

Decreased ~~personnel~~direct expenses ~~in our~~associated with the lower investment management ~~operations;~~fees;

Decreased ~~stock-based~~salary, incentive-based compensation and ~~incentive-based compensation~~other personnel expenses; and

Decreased ~~sales compensation~~discretionary marketing and promotion expenses ~~due to the reduced amount of sales of new business.~~associated with cost containment measures.

Revenues ~~increased $1.5~~decreased $11.3 million, or ~~three~~22 percent, incompared to the ~~three month~~prior year corresponding period ~~and $7.9 million, or five percent, in the nine month period ended September 30, 2008~~ and were primarily affected by:

Decreased investment management fees from existing clients due to lower assets under management caused by declining capital markets and client losses as well as unfavorable foreign currency fluctuations in revenues from our international clients; partially offset by

Asset funding from new sales of our retirement and not-for-profit solutions; and

~~A one-time increase in transaction-based brokerage fees; partially offset by~~Asset funding from existing clients.

~~Decreased assets under management caused by declining capital market conditions.~~Page 32 of 42

Operating margins ~~increased~~decreased to 4239 percent as compared to 4041 percent in the ~~three month~~same period ~~and increased to 42~~a year ago. Operating income decreased $5.3 million, or 26 percent, as compared to ~~39 percent in~~ the ~~nine month period. Operating income increased $1.9 million, or 10 percent, in the three month period and $7.3 million, or 13 percent, in the nine month~~prior year corresponding period and was primarily affected by:

~~An increase~~A decrease in revenues;

~~Decreased~~Increased one-time personnel costs ~~for our investment management operations;~~

~~Decreased stock-based and incentive-based compensation expenses;~~associated with the workforce reduction; partially offset by

~~Increased~~Decreased direct expenses associated with the ~~increase in revenues.~~lower investment management fees;

~~Page 34 of 43~~Decreased salary, incentive-based compensation and other personnel expenses; and

Decreased discretionary marketing and promotion expenses associated with cost containment measures.

Revenues ~~increased $2.4~~decreased $3.2 million, or ~~seven~~nine percent, incompared to the ~~three month~~prior year corresponding period ~~and $6.9 million, or seven percent, in the nine month period ended September 30, 2008~~ and were primarily affected by:

~~Asset funding~~Negative cash flows from existing ~~clients of~~ hedge fund clients due to lower valuations from capital market declines as well as client redemptions; and ~~separately managed accounts solutions;~~

Negative cash flows from traditional fund administration clients due to capital market declines; partially offset by

Cash flows from new clients, primarily hedge fund ~~clients; partially offset by~~

~~Client losses, primarily traditional fund administration~~ clients.

Operating margins increased to 3031 percent as compared to 29 percent in the ~~three month~~same period ~~and increased to 31 percent, as~~a year ago. Operating income decreased slightly compared to ~~29 percent in~~ the ~~nine month period. Operating income increased $1.2 million, or 12 percent, in the three month period, and $4.0 million, or 13 percent in the nine month~~prior year corresponding period and was primarily affected by:

~~An increase~~A decrease in revenues; and

Increased one-time personnel costs associated with the workforce reduction; partially offset by

~~Increased personnel~~Decreased salary, incentive-based compensation and other ~~costs for our investment manager operations.~~personnel expenses; and

Decreased discretionary consulting and outsourcing expenses associated with cost containment measures.

Revenues decreased ~~$26.1~~$37.1 million, or 2948 percent, incompared to the ~~three month~~prior year corresponding period ~~and $48.0 million, or 18 percent, in the nine month period ended September 30, 2008~~ and were primarily affected by:

Decreased assets under management from declining capital ~~market depreciation.~~markets.

Our total partnership interest in LSV remained at approximately 43 percent during the ~~nine~~three month periods ended ~~September 30, 2008~~March 31, 2009 and ~~2007.~~2008. Operating margins decreased to 3734 percent as compared to 3839 percent in the ~~three month~~same period ~~and remained flat at 38 percent in the nine month periods.~~a year ago. Operating income decreased ~~$10.6~~$16.2 million, or 3154 percent, incompared to the ~~three month period, and $19.5 million, or 19 percent in the nine month~~prior year corresponding period and was primarily affected by:

The decrease in revenues as previously described.

Other income and expense items on the accompanying Consolidated Statements of Operations consists ~~of the following:~~of:

~~Minority interest includes the amount owned by other shareholders in which we have a significant or controlling interest.~~

~~Losses~~Gryphon notes from Capital Support Agreements include a non-cash charge of $34.2 million and $87.3 million in the three and nine months ended September 30, 2008, respectively, related to agreements that provide capital support to money market funds (See Note 7 to the Consolidated Financial Statements).

~~On September 30, 2008, we purchased the securities issued by the SIVs held by~~ the SDIT ~~Money Market~~PO Fund and the SLAT PO Fund. The cash purchase price of ~~$15.3~~$194.9 million was equal to the amortized cost of these ~~securities and their fair value at this date was $8.7 million.~~securities. In September 2008, we purchased all of the Gryphon notes from the SDIT MM Fund. We elected the fair value option under SFAS 159 whereby the unrealized gains and losses of the securities are recognized in current earnings. The unrealized losses of the securities of approximately ~~$6.6~~$130.5 million as of March 31, 2009 are included in Decrease in fair value of financial ~~instruments (See Notes 6 and 7 to the Consolidated Financial Statements).~~

We have investments in two SEI-sponsored mutual funds which primarily invest in fixed-income securities, including debt securities issued by municipalities and mortgage-backed securities. These investments have been in an unrealized loss position for an extended period of time. Management believes that the earnings potential and near term prospects of someinstruments. As a result of the ~~issuers~~purchases of the ~~underlying securities held in~~Gryphon notes from the funds are uncertain and has determined that it is unlikely the investments will fully recover from a loss position in the foreseeable future. Due to these factors, we recorded an impairment charge of approximately $2.0 million during the three months ended September 30, 2008 and classified this charge as an Other-than-temporary decline in market value. At September 30, 2008, the new cost basis of these investments, inclusive of the impairment charge, was approximately $16.0 millionSDIT PO Fund and the ~~fair value~~SLAT PO Fund, the letters of credit posted to collateralize our obligations under the Capital Support Agreements was ~~approximately $14.6~~reduced from an aggregate $195.0 million to $69.0 million. This reduction in our required collateral of $126.0 million is included in Gains (losses) from Capital Support Agreements (See “Money Market Fund Support” earlier in this discussion).

Interest and dividend income is earned based upon the amount of cash that is invested daily. The decrease in interest and dividend income in the ~~nine month period~~first quarter of ~~2008~~2009 compared to ~~2007~~2008 was due to alower interest rates on cash balances and lower yields on money market mutual fund investments.

Interest expense includes the borrowings of LSV Employee Group and interest charges and fees related to the borrowings under our Credit Facility. The decline in interest ~~rates~~expense in 2009 compared to 2008 is due to the lower amount of outstanding debt of LSV Employee Group. The decrease was partially offset by interest expense incurred through our borrowings under the Credit Facility in March 2009.

Noncontrolling interest primarily includes the amount owned by other shareholders or partners of LSV and ~~lower cash balances.~~LSV Employee Group in which we have a significant or controlling interest.

Our effective tax rates were ~~36.5~~20.5 percent and ~~34.4~~37.1 percent for the three months ended ~~September 30,~~March 31, 2009 and 2008, respectively. Our tax rate in 2009 was favorably impacted by the recognition of certain tax benefits as discrete items. The discrete items amounted to $7.5 million and 2007, respectively. For the nine months ended September 30, 2008 and 2007, our effective tax rates were 36.9 percent and 36.5 percent, respectively. The increase in our effective tax rates was primarily dueare related to the ~~unavailability~~realization of prior unrecognized tax ~~credits for research~~benefits that have been resolved by the conclusion of the federal and ~~development. The statute~~state income tax audits during the first quarter of 2009. Tax discrete items generally are not related to current year income or expense and must be entirely recognized in the quarter that ~~allows research and development tax credit expired on December 31, 2007 and it was not renewed until October 3, 2008 when the President signed the Emergency Economic Stabilization Act.~~they are identified. We expect ~~to see a favorable impact on~~ our effective tax rate will be higher for the remaining quarters in ~~the fourth quarter due to the renewal of this legislation.~~2009.

WeThe fair value of our financial assets and liabilities ~~under~~is determined in accordance with the fair value hierarchy established in SFAS 157. ~~Most~~The fair value of most of our financial assets are ~~valued~~determined using Level 1 or Level 2 ~~inputs.~~inputs and consist mainly of investments in equity or fixed-income mutual funds that are quoted daily and Government National Mortgage Association (GNMA) securities that are single issuer pools that are valued based on current market data of similar assets. Our Level 3 financial assets and liabilities consist ~~solely~~mainly of SIV securities ~~issued by SIVs~~ and the Capital Support Agreements. The Capital Support Agreements are considered derivative liabilities for accounting purposes, for which ~~there~~the fair value is ~~not an active~~based principally on changes in the fair value of SIV securities held by our money market for identical assets or liabilities from which to determine fair value. Also, there is not enough sufficient, current market information about similar assets or liabilities to use as observable data for all significant inputs into a valuation model. As of September 30, 2008, our Level 3 financials assets consist of approximately nine percent of the total assets we record at fair value.funds.

The underlying collateral of the SIV securities is mainly comprised of asset-backed securities and collateralized debt obligations. Recent liquidity issues surrounding collateralized debt obligations and asset-backed securities has greatly affected the fair value of SIV securities. Given the lack of any reliable market data on the SIV securities ~~issued~~owned by us or held by our money market funds, the ~~SIVs~~fair value of these SIV securities is determined using a net asset value approach which considers the value of the underlying ~~assets. The underlying assets are valued using~~collateral. We utilize external pricing services that incorporate market ~~information,~~data, where available, or through the use of matrix pricing or other acceptable measures. ~~Securities which~~The valuation methodology used by these service providers considers various characteristics of the underlying collateral including, but not limited to, the issuer, collateral attributes, prepayment speeds, and credit ratings. The underlying collateral that lack any market ~~information~~data are grouped by sector and valued ~~by utilizing~~using the most recent quoted price, ~~of the underlying asset~~which may be longer than one year, and adjusting that price by the percentage change in the respective sector using ~~indices or~~relative benchmarks. Prices for the SIV securities as well as the underlying collateral are subject to internal reviews that consider broker quotes, current market observations and other ~~relative benchmarks.~~

~~The Capital Support Agreements are~~analyses to verify the ~~only financial liabilities recorded at~~ fair value. ~~The~~In the event a market transaction does exist, we will evaluate the circumstances surrounding the transaction in order to assess if the price used represents the fair value according to the guidance in SFAS 157. In our opinion, the price of certain SIV securities used in recent transactions were from distressed sales and did not represent the implied fair value of the ~~Capital Support Agreements is determined through the use of an option pricing model designed for credit default swaps. The value is primarily affected~~SIV securities held by ~~assumptions pertaining to the underlying assets, mainly default percentages and recovery rates specific to each security covered~~us or by ~~the Capital Support Agreement.~~our money market funds.

The table below presents a reconciliation for all of our financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period from January 1, ~~2008~~2009 to ~~September 30, 2008:~~March 31, 2009:

Fair value models or other techniques are sensitive to assumptions used for significant inputs. Where market data is available, the inputs used for valuation reflect that information as of our valuation date. When there is a lack of market data to use in the valuation process, judgment is then applied in formulating those inputs.

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At ~~September 30, 2008,~~March 31, 2009, our unused sources of liquidity consisted of cash and cash equivalents ~~of $345.8 million~~ and the amount available under our credit facility. During March 2009, we borrowed $195.0 million through the credit facility and used the proceeds to purchase SIV securities from SEI-sponsored money market funds (See “Money Market Fund Support” earlier in this discussion). Cash and cash equivalents of $428.1 million includes ~~$74.4~~$44.4 million at ~~September 30, 2008~~March 31, 2009 from LSV, of which ~~the Company has~~we have a 43 percent partnership interest (See Note 2 to the Consolidated Financial Statements). Our cash and cash equivalents include accounts managed by our subsidiaries and minority-owned subsidiaries that are used in their operations or to cover specific business and regulatory requirements. The availability of this cash for other purposes beyond the operations of these subsidiaries may be limited. The actual amount of cash and cash equivalents that is free and available for other general corporate purposes is reduced by these cash accounts. ~~The~~

We have capacity for additional borrowings through a five year unsecured senior revolving credit facility ~~agreement became effective in July, 2007~~with JPMorgan Chase Bank, N.A., individually and ~~initially provided for borrowings~~as agent and a syndicate of upother lenders. We have no reason to ~~$200.0 million. The agreement was amended in March 2008~~believe that any of the participating lenders will be unable to ~~provide an additional $100.0 million in borrowings, raising~~honor their respective commitments relating to all of the ~~total aggregate limit to $300.0 million. The aggregate amount~~terms of the credit facility may be increased by an additional $100.0 million under certain conditions set forth in the agreement. Due to the outstanding letters of credit associated with the Capital Support Agreements (See “Money Market Fund Support” earlier in this discussion), the unrestricted amount available for working capital needs is limited to $144.0 million.facility. The availability of the credit facility is subject to the compliance with certain covenants set forth in the agreement.

~~We have arrangements with two mutual funds sponsored by SEI as previously described under the section “Money Market Fund Support.” As of November 6, 2008, we may be required~~ Currently, our ability to provide capital to these mutual funds under certain conditions up to an aggregate amount of $296.4 million. In the event that capital must be provided to these mutual funds, we may, at our discretion, utilizeborrow from the credit facility is not limited by any covenant of the agreement. Of all of the covenants, we believe satisfying the leverage ratio could be the most difficult in the future. The leverage ratio is calculated as consolidated indebtedness divided by earnings before interest, taxes, depreciation, amortization and other items as defined by the covenant during the last four quarters (EBITDA). The amount of consolidated indebtedness according to the terms of the covenant include the capital commitments under the Capital Support Agreements and the outstanding debt of LSV Employee. We must maintain at all times prior to and including September 30, 2009, a ratio of consolidated indebtedness of not more than 2.25 times the amount of EBITDA, at all times from October 1, 2009 through and including December 31, 2009, not more than 2.00 times EBITDA, and at all times thereafter, not more than 1.75 times EBITDA. As of March 31, 2009, our leverage ratio is 1.24 times EBITDA. Although we expect this ratio to increase in 2009 if unfavorable market conditions persist, we do not anticipate that this covenant or ~~contribute~~any covenant of the ~~required capital~~credit facility will restrict our ability to borrow from ~~unrestricted cash. However, so long as~~ the credit facility.

The obligations under the Capital Support Agreements are secured by letters of credit ~~remain outstanding,~~of a third party bank rated A-1 by S&P. The letters of credit were issued under the credit facility. The letters of credit have a term of one year with various expiration dates beyond the expiration date of the Capital Support Agreements. The amount available under the credit facility ~~will be~~is reduced by the total amount of the letters of ~~credit.~~credit outstanding. As of February 28, 2009, we had $195.0 million of letters of credit outstanding. During March 2009, we purchased all of the Gryphon notes from the SDIT PO Fund and the SLAT PO Fund, using borrowings of $195.0 million through the credit facility to finance the purchase. As a result of these purchases, the letters of credit posted to collateralize our obligations under the Capital Support Agreements was reduced from an aggregate $195.0 million to $69.0 million.

As of April 29, 2009, letters of credit of $69.0 million remained outstanding and our total borrowings through the credit facility remained at $195.0 million. Therefore, ~~only~~ the remaining ~~$144.0~~$36.0 million of the credit facility is unrestricted and may be used for other purposes as determined by management. Some of the covenants contained within the credit facility were amended as a result of the Capital Support Agreements that provide certain allowances and exemptions for transactions arising solely from the Capital Support Agreements. As of November 6, 2008, capital contributions made to the mutual funds by the Company were minimal.general purposes.

Cash flows from operations decreased ~~$55.6~~$18.7 million in ~~2008~~2009 compared to ~~2007~~2008 due primarily ~~due~~ to the decline in net income and the net change in working capital accounts. Our working capital accounts were primarily affected by ~~increased~~lower expected payments for incentive compensation in ~~2008~~2009 compared to ~~2007~~2008, increased receivable balances for anticipated income tax refund payments and the change in deferred taxes in ~~2008~~2009 due to the non-cash charge related to the Capital Support Agreements.

We have long-term contractual agreements with banks and other financial institutions, especially within our Private Banks segment. These banks and financial institutions continue to meet the scheduled payment terms under these contracts. We have no reason to believe that these clients will be unable to satisfy current and future obligations. Additionally, the Investment Managers segment has contractual agreements with managers of hedge funds. There have been recent concerns and issues within the hedge fund industry. We believe our clients are stable and well-respected managers that will continue to remain viable entities over the long-term. These firms continue to meet all of their obligations. Our clients continue to meet their current financial obligations with us. We do not have any significant collectibility issues regarding our receivables as of March 31, 2009 and we have not received any indications that we should anticipate significant collectibility issues regarding our receivables in the near term.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for ~~continuing~~ongoing operations; our obligations with respect to the Capital Support Agreements, continued investment in new products and equipment; our common stock repurchase program; and future dividend ~~payments; and expansion of our corporate headquarters.~~payments.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information contained in this discussion is or may be considered forward-looking. Forward-looking statements relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates and assumptions that involve certain risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe our assumptions are reasonable, they could be inaccurate. Our actual future revenues and income could differ materially from our expected results. We have no obligation to publicly update or revise any forward-looking statements.

Among the risks and uncertainties which may affect our future operations, strategies, financial results or other developments are those risks described in our latest Annual Report on Form 10-K in Part I, Item 1A. These risks include the following:

changes in capital markets that may affect our revenues and earnings;

product development risk;

liquidity issues in the ~~subprime~~ credit markets;

the performance of the funds we manage;

consolidation within our target markets, including consolidations between banks and other financial institutions;

the affect of extensive governmental regulation;

systems and technology risks;

data security risks;

third party approval of our investment products with advisors affiliated with independent broker-dealers or other networks;

operational risks associated with the processing of investment transactions;

risk of failure by a third-party service provider;

changes in, or interpretation of, accounting principles or tax rules and regulations;

fluctuations in foreign currency exchange rates; and

retention of senior management personnel.

During the past several months, there has been widespread turmoil in the financial services industry. Much of this concern recently has been focused on the financial health of banks and involves our risks regarding the consolidation within our target markets and the failure by a third-party service provider. We have significant relationships with banks. A substantial portion of our revenues is derived from servicing banks. Additionally, we utilize the services of banks in our operations. In the event that any of these banks should fail, this could cause a disruption in our ability to provide services to our clients. Our revenues and earnings could be significantly affected if the financial health of certain banks continues to deteriorate or if they become insolvent.

The Company and our clients are subject to extensive governmental regulation. Our various business activities are conducted through entities which may be registered with the Securities and Exchange Commission (SEC) as an investment advisor, a broker-dealer, a transfer agent, an investment company or with the United States Office of Thrift Supervision or state banking authorities as a trust company. Our broker-dealer is also a member of the Financial Industry Regulatory Authority and is subject to its rules and oversight. In addition, various subsidiaries of the Company are registered with, and subject to the oversight of, regulatory authorities primarily in the United Kingdom and the Republic of Ireland. Many of our clients are subject to substantial regulation by federal and state banking, securities or insurance authorities or the Department of Labor. Compliance with existing and future regulations and responding to and complying with recent regulatory activity affecting broker-dealers, investment companies and their service providers could have a significant impact on us. We have responded and are currently responding to various regulatory examinations, inquiries and requests. As a result of these examinations, inquiries and requests, we review our compliance procedures and business operations and make changes as we deem necessary. One of these regulatory requests and inquiries relate to the payment by certain of our subsidiaries of expenses related to the marketing and distribution of shares of certain mutual fund clients of our fund administration and distribution business. A similar inquiry resulted in an SEC order sanctioning one of our mutual fund administrator competitors in 2006.

We offer investment and banking products that also are subject to regulation by the federal and state securities and banking authorities, as well as non-United States regulatory authorities, where applicable. Existing or future regulations that affect these products could lead to a reduction in sales of these products. ~~Directed brokerage payment arrangements offered~~

Our bank clients are subject to supervision by usfederal and state banking authorities concerning the manner in which such clients purchase and receive our products and services. Our plan sponsor clients and our subsidiaries providing services to those clients are ~~also~~ subject to supervision by the Department of Labor and compliance with employee benefit regulations. Investment advisor and broker-dealer clients are regulated by the SEC and ~~other federal regulatory~~state securities authorities.

~~Changes in the regulation of directed brokerage~~ Existing or ~~soft dollar payment arrangements or strategic decisions~~future regulations applicable to our clients may affect our clients’ purchase of our ~~clients regarding these arrangements could affect sales~~products and services.

In addition, see the discussion of ~~some services, primarily~~governmental regulations in Item 1A “Risk Factors” in our ~~brokerage services.~~latest Annual Report on Form 10-K for a description of the risks that proposed regulatory changes may present for our business.

Interest Rate Risk - Our exposure to changes in interest rates primarily relates to our investment portfolio. Our excess cash is principally invested in short-term, highly liquid financial instruments, mainly money market funds, with a substantial portion of such investments having initial maturities of three months or less. The holdings in our investment portfolio most sensitive to interest rate risk include Government National Mortgage Association (GNMA) securities and a short-term mutual fund principally invested in securities of U.S. and foreign commercial banks and government agencies. We place our investments in financial instruments that meet high credit quality standards. While changes in interest rates could decrease interest income, we do not believe that we have a material exposure to changes in interest rates. We do not undertake any specific actions to cover our exposure to interest rate risk and are not a party to any interest rate risk management transactions.

Additionally, LSV Employee Group entered into two interest rate swap agreements to convert its floating rate long-term debt to fixed rate debt. ~~These swaps have~~One of these swap agreements terminated on March 31, 2009. The remaining swap agreement has a ~~total~~ notional value of ~~$33.4~~$27.4 million. Payments are made every 90 days and the termination ~~dates~~date of the ~~swaps are March 2009 and~~swap agreement is January 2011. The net effect from the interest rate swaps on the Company’s earnings during the first quarter of 2009 was minimal.

~~Price~~Foreign Currency Risk – We ~~are exposed to price risk associated with changes~~transact business in the ~~fair value~~local currencies of ~~investments in marketable securities relating to~~various foreign countries, principally Canada, Ireland, the ~~startup~~United Kingdom and South Korea. The total of ~~new pooled investment offerings. The length~~all of ~~time that~~ our ~~funds remain invested in these new pooled investment offerings is dependent on client subscriptions. We will redeem~~foreign operations accounts for approximately 11 percent of total consolidated revenues. Also, most of our ~~investments as clients subscribe~~foreign operations match local currency revenues with local currency costs. Due to these ~~new investment offerings. We did~~reasons, we do not, ~~enter into or hold any derivatives for trading purposes during 2008 or 2007.~~

Income before income taxes include gains of $676 thousand and losses of $1.4 million in the nine month periods of 2008 and 2007, respectively, relating to changes in the fair value of derivative financial instruments. The aggregate effect of a hypothetical ten percent change in the fair value of our investments would be:at this time, hedge against foreign operations.

We are also exposed to price risk associated with certain agreements that provide capital support to money market funds holding senior notes issued by structured investment vehicles and securities issued by structured investment vehicles purchased from the SDIT MM Fund (See Note 7 to the Consolidated Financial Statements and “Money Market Fund Support” earlier in this discussion).

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are ~~effective in ensuring~~functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

No change in our internal control over financial reporting occurred during the quarter ended ~~September 30, 2008~~March 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

On September 30, 2004, SIDCO was named as a defendant in a putative consolidated amended class action complaint (the “PBHG Complaint”) filed in the United States District Court for the District of Maryland titled “Stephen Carey v. Pilgrim Baxter & Associates, LTD, et. al.” The PBHG Complaint was purportedly made on behalf of all persons that purchased or held PBHG mutual funds during the period from November 1, 1998 to November 13, 2003 and related generally to various market timing practices allegedly permitted by the PBHG Funds. The suit named as defendants some 36 persons and entities, including various persons and entities affiliated with Pilgrim Baxter & Associates, Ltd., various PBHG Funds, various alleged market timers, various alleged facilitating brokers, various clearing brokers, various banks that allegedly financed the market timing activities, various distributors/underwriters and others. The PBHG Complaint alleged that SIDCO was the named distributor/underwriter from November 1998 until July 2001 for various PBHG funds in which market timing allegedly occurred during that period. The PBHG Complaint generally alleged that the prospectus for certain PBHG funds made misstatements and omissions concerning market timing practices in PBHG funds. The PBHG Complaint alleged that SIDCO violated Sections 11 and 12(a)(2) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 34(b) and 36(a) of the Investment Company Act of 1940, and that SIDCO breached its fiduciary duties, engaged in constructive fraud and aided and abetted the breach by others of their fiduciary duties. The PBHG Complaint did not name SIDCO or any of its affiliates as a market timer, facilitating or clearing broker or financier of market timers. The PBHG Complaint sought unspecified compensatory and punitive damages, disgorgement and restitution. In 2006, the plaintiffs submitted a proposed form of order dismissing SIDCO from the action, but the Court has not yet acted on the proposed order.

Information regarding risk factors appears in Part ~~I -~~ I—Item 1A of ~~our~~the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. The description of the risk factor regarding our exposure to liquidity issues in the subprime credit markets in our Annual Report on Form 10-K for the year ended December 31, 2007 has been modified to the following:

~~Liquidity issues in the subprime credit markets may affect our earnings and liquidity resources~~. Certain of our money market funds hold senior notes issued by structured investment vehicles which have either ceased making payments or potentially may cease making payments on its outstanding notes on the scheduled maturity dates. Because of the market conditions, we entered into support agreements to protect the shareholders of our money market funds from the liquidity risk associated with these securities. The amount of our obligation under these agreements and the corresponding charge against our earnings is dependent upon prevailing conditions in the credit markets that affect the value of money market instruments, including structured investment vehicles, on the creditworthiness of the structured investment vehicle securities and the overall asset levels of our money market funds. Additionally, in the event the fund realizes a loss from the sale or disposition of a structured investment vehicle, we would be required to pay an amount to the funds of our obligation that could negatively impact our liquidity resources.

2008. There have been no ~~other~~ material changes in our risk factors from those disclosed in ~~Part I – Item 2 under the caption ‘Forward-Looking Information and Risk Factors’ of this quarterly report on Form 10-Q and in~~ our Annual Report on Form
10-K for ~~2007.~~2008.

Information regarding the repurchase of common stock during the three months ended ~~September 30, 2008~~March 31, 2009 is as follows:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
		(Do not check if a smaller reporting company)


	September 30, 2008		December 31, 2007		March 31, 2009		December 31, 2008
Assets
Current Assets:
Cash and cash equivalents	$	345,790	$	360,921	$	428,084	$	416,643
Restricted cash		34,250		10,250		16,400		14,000
Receivables from regulated investment companies		35,047		38,198		22,591		28,364
Receivables, net of allowance for doubtful accounts of $2,956 and $3,032 (Note 4)		218,729		236,911
Receivables, net of allowance for doubtful accounts of $2,904 and $2,656 (Note 4)						166,291		179,845
Deferred income taxes		52,417		17,310		43,082		84,830
Securities owned		12,093		16,777
Other current assets		15,791		14,567		55,232		15,989

Total Current Assets		714,117		694,934		731,680		739,671

Property and Equipment, net of accumulated depreciation and amortization of $136,968 and $126,591 (Note 4)		150,735		143,516
Property and Equipment, net of accumulated depreciation and amortization of $142,743 and $142,240 (Note 4)						145,551		148,124

Capitalized Software, net of accumulated amortization of $47,455 and $34,915		258,190		231,684
Capitalized Software, net of accumulated amortization of $56,988 and $52,113						279,368		270,606

Marketable Securities (Note 6)		86,017		77,169
Investments Available for Sale (Note 6)						71,733		75,380

Trading Securities (Note 6)						74,400		11,313

Goodwill (Notes 2 and 3)		22,842		22,842		22,842		22,842

Intangible Assets, net of accumulated amortization of $21,607 and $15,864 (Notes 2 and 3)		54,434		60,177
Intangible Assets, net of accumulated amortization of $25,437 and $23,523 (Notes 2 and 3)						50,604		52,518

Other Assets		17,039		22,043		20,219		21,261

Total Assets	$	1,303,374	$	1,252,365	$	1,396,397	$	1,341,715


			Nine Months Ended September 30,
			2008				2007
Revenues:
Asset management, administration and distribution fees			$	764,152			$	813,338
Information processing and software servicing fees				173,804				168,131
Transaction-based and trade execution fees				41,561				34,150

Total revenues				979,517				1,015,619
Expenses:
Commissions and fees				130,676				129,857
Compensation, benefits and other personnel				248,353				261,293
Consulting, outsourcing and professional fees				79,581				67,199
Data processing and computer related				33,102				31,404
Facilities, supplies and other costs				54,458				51,867
Depreciation and amortization				34,693				25,867

Total expenses				580,863				567,487
Income from operations				398,654				448,132
Net loss from investments				(93,387	)			(1,515	)
Interest and dividend income				10,745				13,314
Interest expense				(2,678	)			(3,696	)
Minority interest				(107,837	)			(134,439	)
Other				—				2,952

Net income before income taxes				205,497				324,748
Income taxes				75,892				118,571

Net income				129,605				206,177

Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments				(10,625	)			3,906
Unrealized holding (loss) gain on investments:
Unrealized holding (losses) gains during the period net of income tax benefit (expense) of $1,343 and $(383)	(2,271	)				510
Less: reclassification adjustment for losses realized in net income, net of income tax benefit of $74 and $34	112			(2,159	)	60		570

Other comprehensive (loss) income				(12,784	)			4,476

Comprehensive income			$	116,821			$	210,654

Basic earnings per common share			$	.67			$	1.05

Diluted earnings per common share			$	.66			$	1.02

Dividends declared per common share			$	.08			$	.07


			Three Months Ended March 31,
			2009					2008
Net income			$	51,063				$	88,461
Other comprehensive loss, net of tax:
Foreign currency translation adjustments				(1,770	)				(2,922	)
Unrealized holding loss on investments:
Unrealized holding losses during the period, net of income tax (expense) benefit of $(242) and $134	(89	)				(242	)
Less: reclassification adjustment for gains realized in net income, net of income tax expense of $11 and $395	(27	)		(116	)	(671	)		(913	)

Total other comprehensive loss, net of tax				(1,886	)				(3,835	)

Comprehensive income			$	49,177				$	84,626
Comprehensive income attributable to the noncontrolling interest				(16,377	)				(38,544	)

Comprehensive income attributable to SEI Investments Company			$	32,800				$	46,082


	For the Nine Month Period Ended September 30, 2008
	Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	129,605	192,457	$	.67

Dilutive effect of stock options		—	3,843

Diluted earnings per common share	$	129,605	196,300	$	.66


	For the Nine Month Period Ended September 30, 2007
	Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	206,177	196,720	$	1.05

Dilutive effect of stock options		—	6,155

Diluted earnings per common share	$	206,177	202,875	$	1.02


SEC 1296 (04-09)		Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.


	For the Three Month Period Ended September 30, 2008					For the Three Month Period Ended March 31, 2009
	Income (Numerator)		Shares (Denominator)	Per Share Amount		Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	34,495	191,554	$	.18	$	34,200	191,084	$	.18

Dilutive effect of stock options		—	3,142				—	325

Diluted earnings per common share	$	34,495	194,696	$	.18	$	34,200	191,409	$	.18


	For the Three Month Period Ended September 30, 2007					For the Three Month Period Ended March 31, 2008
	Income (Numerator)		Shares (Denominator)	Per Share Amount		Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	73,299	194,930	$	.38	$	48,946	193,629	$	.25

Dilutive effect of stock options		—	5,391				—	4,582

Diluted earnings per common share	$	73,299	200,321	$	.37	$	48,946	198,211	$	.25


	Foreign Currency Translation Adjustments			Unrealized Holding Gains (Losses) on Investments			Accumulated Other Comprehensive Income (Loss)
Beginning balance (Dec. 31, 2007)	$	9,174		$	816		$	9,990
Current period change		(10,625	)		(2,159	)		(12,784	)

Ending balance (September 30, 2008)	$	(1,451	)	$	(1,343	)	$	(2,794	)


	Foreign Currency Translation Adjustments			Unrealized Holding Losses on Investments			Accumulated Other Comprehensive Loss
Total accumulated comprehensive loss at December 31, 2008	$	(9,787	)	$	(1,524	)	$	(11,311	)
Less: Total accumulated comprehensive loss attributable to noncontrolling interest at December 31, 2008		3,148			—			3,148

Total accumulated comprehensive loss attributable to SEI Investments Company at December 31, 2008	$	(6,639	)	$	(1,524	)	$	(8,163	)

Total comprehensive loss for the three months ended March 31, 2009	$	(1,770	)	$	(116	)	$	(1,886	)
Less: Total comprehensive loss attributable to noncontrolling interest for the three months ended March 31, 2009		486			—			486

Total comprehensive loss attributable to SEI Investments Company for the three months ended March 31, 2009	$	(1,284	)	$	(116	)	$	(1,400	)

Total accumulated comprehensive loss at March 31, 2009	$	(11,557	)	$	(1,640	)	$	(13,197	)
Less: Total accumulated comprehensive loss attributable to noncontrolling interest at March 31, 2009		3,634			—			3,634

Total accumulated comprehensive loss attributable to SEI Investments Company at March 31, 2009	$	(7,923	)	$	(1,640	)	$	(9,563	)


	September 30, 2008			December 31, 2007			March 31, 2009			December 31, 2008
Buildings	$	128,604		$	128,296		$	131,342		$	131,321
Equipment		64,414			62,272			60,090			63,952
Land		9,695			9,548			9,695			9,695
Purchased software		58,029			43,580			59,643			58,846
Furniture and fixtures		18,526			19,603			18,040			18,141
Leasehold improvements		5,850			6,357			5,254			5,288
Construction in progress		2,585			451			4,230			3,121

		287,703			270,107			288,294			290,364
Less: Accumulated depreciation and amortization		(136,968	)		(126,591	)		(142,743	)		(142,240	)

Property and Equipment, net	$	150,735		$	143,516		$	145,551		$	148,124


	September 30, 2008		December 31, 2007
Accrued compensation	$	44,269	$	74,509
Accrued distribution fees		16,599		16,040
Accrued consulting		10,089		11,065
Accrued sub-advisor and investment officer fees		11,420		16,026
Other accrued liabilities		52,085		69,262

Total accrued liabilities	$	134,462	$	186,902


	March 31, 2009		December 31, 2008
Accrued employee compensation	$	18,767	$	35,425
Accrued employee benefits and other personnel		7,112		8,012
Accrued consulting, outsourcing and professional fees		18,465		15,055
Accrued distribution fees		3,532		14,228
Accrued brokerage fees		16,412		14,001
Accrued other commissions and fees		15,587		15,537
Accrued dividend payable		—		15,297
Other accrued liabilities		14,991		17,221

Total accrued liabilities	$	94,866	$	134,776


	Fair Value Measurements at Reporting Date Using
Assets	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity available-for-sale securities	$	20,904	$	20,904	$	—	$	—
Fixed income available-for-sale securities		56,380		—		56,380		—
Securities issued by SIVs		8,733		—		—		8,733
Fixed income securities owned		12,093		—		12,093		—

	$	98,110	$	20,904	$	68,473	$	8,733

Liabilities
Capital Support Agreements	$	112,423	$	—	$	—	$	112,423

	$	112,423	$	—	$	—	$	112,423


	Securities Issued by SIVs			Capital Support Agreements
Balance, January 1, 2008	$	—		$	(25,122	)
Total gains (losses) (realized/unrealized):
Included in earnings		(6,588	)		(87,301	)
Included in other comprehensive income		—			—
Purchases, issuances and settlements		15,321			—
Transfers in and out of Level 3		—			—

Balance, September 30, 2008	$	8,733		$	(112,423	)


	Trading Securities Issued by SIVs			Other Trading Securities			Capital Support Agreements
Balance, January 1, 2009	$	5,713		$	1,697		$	(173,983	)
Purchases, issuances and settlements, net		193,624			—			—
Total gains or losses (realized/unrealized):
Included in earnings		(130,480	)		(112	)		116,038
Included in other comprehensive income		—			—			—
Transfers in and out of Level 3		—			—			—

Balance March 31, 2009	$	68,857		$	1,585		$	(57,945	)


Period	Stock-Based Compensation Expense		Stock-Based Compensation Expense
Remainder of 2008	$	3,627
2009		14,498
Remainder of 2009			$	9,989
2010		13,456		12,279
2011		9,695		11,327
2012		6,067		6,824
2013		4,227		5,084
2014		2,109		1,498
2015				1,498

	$	53,679	$	48,499


	As of September 30, 2008									As of March 31, 2009
	Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
SEI-sponsored mutual funds	$	18,829	$	61	$	(1,449	)	$	17,441	$	18,868	$	—	$	(3,974	)	$	14,894
Other mutual funds		3,806		—		(343	)		3,463		3,218		—		(632	)		2,586
Debt securities		56,781		—		(401	)		56,380		51,989		2,264		—			54,253

	$	79,416	$	61	$	(2,193	)	$	77,284	$	74,075	$	2,264	$	(4,606	)	$	71,733


	As of December 31, 2007									As of December 31, 2008
	Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
SEI-sponsored mutual funds	$	34,213	$	306	$	(935	)	$	33,584	$	18,739	$	—	$	(3,759	)	$	14,980
LSV-sponsored mutual funds		6,781		1,608		—			8,389
Other mutual funds		4,055		62		—			4,117		3,336		—		(569	)		2,767
Debt securities		30,823		256		—			31,079		55,762		1,871		—			57,633

	$	75,872	$	2,232	$	(935	)	$	77,169	$	77,837	$	1,871	$	(4,328	)	$	75,380


	As of March 31, 2009
	Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
SIV securities	$	208,657	$	—	$	(139,800	)	$	68,857
LSV-sponsored mutual funds		4,000		—		(42	)		3,958
Other securities		1,971		—		(386	)		1,585

	$	214,628	$	—	$	(140,228	)	$	74,400


	As of December 31, 2008
	Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
SIV securities	$	15,034	$	—	$	(9,321	)	$	5,713
LSV-sponsored mutual funds		4,000		—		(97	)		3,903
Other securities		1,971		—		(274	)		1,697

	$	21,005	$	—	$	(9,692	)	$	11,313


	Nine Months Ended September 30,
	2008			2007
Stock-based compensation expense	$	12,956		$	20,460
Less: Deferred tax benefit		(3,765	)		(6,501	)

Stock-based compensation expense, net of tax	$	9,191		$	13,959

Basic and diluted earnings per share	$	.05		$	.07


	Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total			Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total
	For the Three Month Period Ended September 30, 2008																					For the Three Month Period Ended March 31, 2009
Revenues	$	99,882		$	58,846		$	52,757		$	38,202		$	1,811		$	64,588		$	316,086		$	96,948		$	37,508		$	39,379		$	33,332		$	1,254		$	40,190		$	248,611
Expenses (1)		79,545			30,775			30,525			26,566			4,023			40,754			212,188			78,798			27,109			24,170			22,867			3,293			26,446			182,683

Operating profit (loss)	$	20,337		$	28,071		$	22,232		$	11,636		$	(2,212	)	$	23,834		$	103,898		$	18,150		$	10,399		$	15,209		$	10,465		$	(2,039	)	$	13,744		$	65,928
Profit margin		20	%		48	%		42	%		30	%		N/A			37	%		33	%		19	%		28	%		39	%		31	%		N/A			34	%		27	%


	Capital Expenditures				Depreciation and Amortization
	2008		2007		2008		2007
Private Banks	$	16,175	$	13,437	$	6,806	$	6,085
Investment Advisors		5,832		4,898		1,618		1,571
Institutional Investors		2,009		1,146		409		429
Investment Managers		2,799		1,437		520		478
Investments in New Businesses		505		248		100		119
LSV		28		59		204		275

Total from business segments	$	27,348	$	21,225	$	9,657	$	8,957
LSV Employee Group		—		—		1,820		1,821
Corporate Overhead		919		407		198		213

	$	28,267	$	21,632	$	11,675	$	10,991


	2008			2007
Total operating profit from segments above	$	320,429		$	341,410
Corporate overhead expenses		(30,876	)		(30,459	)
Minority interest reflected in segments		114,561			142,641
LSV Employee Group (2)		(5,460	)		(5,460	)

Income from operations	$	398,654		$	448,132


Asset Balances	As of September 30,				Percent Change
(In millions)	2008		2007		Percent Change
Private Banks:
Equity and fixed income programs	$	14,436	$	21,816	(34	%)
Collective trust fund programs		1,028		1,056	(3	%)
Liquidity funds		9,253		8,836	5	%

Total assets under management	$	24,717	$	31,708	(22	%)
Client assets under administration		12,301		15,655	(21	%)

Total assets	$	37,018	$	47,363	(22	%)
Investment Advisors:
Equity and fixed income programs		27,817		37,751	(26	%)
Collective trust fund programs		2,471		2,325	6	%
Liquidity funds		2,859		1,619	77	%

Total assets under management	$	33,147	$	41,695	(21	%)
Institutional Investors:
Equity and fixed income programs		39,775		43,504	(9	%)
Collective trust fund programs		1,001		907	10	%
Liquidity funds		3,930		4,342	(9	%)

Total assets under management	$	44,706	$	48,753	(8	%)
Investment Managers:
Equity and fixed income programs		10		24	(58	%)
Collective trust fund programs		6,453		6,814	(5	%)
Liquidity funds		699		360	94	%

Total assets under management	$	7,162	$	7,198	(1	%)
Client assets under administration		256,553		205,251	25	%

Total assets	$	263,715	$	212,449	24	%
Investments in New Businesses:
Equity and fixed income programs		704		907	(22	%)
Liquidity funds		115		40	188	%

Total assets under management	$	819	$	947	(14	%)
LSV:
Equity and fixed income programs	$	51,296	$	71,349	(28	%)
Consolidated:
Equity and fixed income programs (1)		134,038		175,351	(24	%)
Collective trust fund programs		10,953		11,102	(1	%)
Liquidity funds		16,856		15,197	11	%

Total assets under management	$	161,847	$	201,650	(20	%)
Client assets under administration (2)		268,854		220,906	22	%

Total assets	$	430,701	$	422,556	2	%


Asset Balances (In millions)	As of March 31,				Percent
Asset Balances (In millions)	2009		2008		Change
Private Banks:
Equity and fixed income programs	$	9,679	$	18,904	(49	%)
Collective trust fund programs		1,198		1,008	19	%
Liquidity funds		8,929		9,198	(3	%)

Total assets under management	$	19,806	$	29,110	(32	%)
Client proprietary assets under administration		9,920		13,897	(29	%)

Total assets	$	29,726	$	43,007	(31	%)
Investment Advisors:
Equity and fixed income programs	$	18,832	$	32,736	(42	%)
Collective trust fund programs		2,716		2,310	18	%
Liquidity funds		3,458		2,461	41	%

Total assets under management	$	25,006	$	37,507	(33	%)
Institutional Investors:
Equity and fixed income programs	$	32,565	$	43,134	(25	%)
Collective trust fund programs		791		924	(14	%)
Liquidity funds		3,802		4,077	(7	%)

Total assets under management	$	37,158	$	48,135	(23	%)
Investment Managers:
Equity and fixed income programs	$	3	$	20	(85	%)
Collective trust fund programs		6,917		6,571	5	%
Liquidity funds		898		571	57	%

Total assets under management	$	7,818	$	7,162	9	%
Client proprietary assets under administration		221,798		225,005	(1	%)

Total assets	$	229,616	$	232,167	(1	%)
Investments in New Businesses:
Equity and fixed income programs	$	472	$	869	(46	%)
Liquidity funds		157		77	104	%

Total assets under management	$	629	$	946	(34	%)
LSV:
Equity and fixed income programs	$	32,308	$	61,765	(48	%)
Consolidated:
Equity and fixed income programs	$	93,859	$	157,428	(40	%)
Collective trust fund programs		11,622		10,813	7	%
Liquidity funds		17,244		16,384	5	%

Total assets under management	$	122,725	$	184,625	(34	%)
Client proprietary assets under administration		231,718		238,902	(3	%)

Total assets under management and administration	$	354,443	$	423,527	(16	%)


					Third Quarter 2008				Cumulative
	Par Value of Securities		Support Amount		Gross Charge		After-Tax Charge		Gross Charge		After-Tax Charge
Capital Support Agreement (1)	$	274,069	$	150,000	$	27,871	$	17,698	$	93,659	$	59,099
Capital Support Agreement (2)		74,286		20,000		7,289		4,629		18,765		11,841

Total	$	348,355	$	170,000	$	35,160	$	22,327	$	112,424	$	70,940


							Fourth Quarter to date November 6, 2008				Cumulative as of November 6, 2008
	Par Value of Securities		Support Amount		Required Collateral		Gross Charge		After-Tax Charge		Gross Charge		After-Tax Charge
Capital Support Agreement (1)	$	271,438	$	271,438	$	128,563	$	19,029	$	12,007	$	112,688	$	71,106
Capital Support Agreement (2)		73,710		25,000		25,000		1,344		848		20,109		12,688

Total	$	345,148	$	296,438	$	153,563	$	20,373	$	12,855	$	132,797	$	83,794


	Hypothetical Change In Value
Capital Support Agreement for SDIT PO Fund	$	634
Capital Support Agreement for SLAT PO Fund (1)		588

	$	1,222


	Change in Stock-Based Compensation Expense
Stock-based compensation expense recognized in 2007 for grants that vested in December 2007	$	(10,075	)
Stock-based compensation cost recognized in 2008 for grants made in December 2007		4,985
Change in management’s estimate in 2008 of expected vesting of stock options		(2,413	)

	$	(7,503	)


	Change in Stock-Based Compensation Expense
Stock-based compensation cost recognized in 2009 for grants made in December 2008	$	1,772
Change in management’s estimate of expected vesting of stock options for grants that were outstanding at December 31, 2008		(2,867	)
Other items		(159	)

	$	(1,254	)


	Three Months Ended						Nine Months Ended						For the Three Months Ended March 31,
	Sep 30, 2008		Sep 30, 2007		Percent Change		Sep 30, 2008		Sep 30, 2007		Percent Change		2009		2008		Percent Change
Revenues:
Investment processing and software servicing fees	$	56,105	$	56,183	—		$	170,418	$	161,018	6	%
Information processing and software servicing fees													$	61,792	$	57,701	7	%
Asset management, administration & distribution fees		32,387		39,111	(17	%)		106,524		112,022	(5	%)		20,224		37,113	(46	%)
Transaction-based and trade execution fees		11,390		8,986	27	%		33,596		29,068	16	%		14,932		12,240	22	%

Total revenues	$	99,882	$	104,280	(4	%)	$	310,538	$	302,108	3	%	$	96,948	$	107,054	(9	%)


	Securities Issued by SIVs			Capital Support Agreements
Balance, January 1, 2008	$	—		$	(25,122	)
Total gains (losses) (realized/unrealized):
Included in earnings		(6,588	)		(87,301	)
Included in other comprehensive income		—			—
Purchases, issuances and settlements		15,321			—
Transfers in and out of Level 3		—			—

Balance, September 30, 2008	$	8,733		$	(112,423	)


	For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2008			2007			2009			2008
Net cash provided by operating activities	$	210,280		$	265,902		$	49,552		$	68,265
Net cash used in investing activities		(95,774	)		(74,630	)		(209,764	)		(28,826	)
Net cash used in financing activities		(129,637	)		(181,026	)
Net cash provided by (used in) financing activities								171,653			(63,981	)

Net (decrease) increase in cash and cash equivalents		(15,131	)		10,246
Net increase (decrease) in cash and cash equivalents								11,441			(24,542	)
Cash and cash equivalents, beginning of period		360,921			286,948			416,643			360,921

Cash and cash equivalents, end of period	$	345,790		$	297,194		$	428,084		$	336,379


Investment	Hypothetical Change In Value
Mutual Funds	$	2,090
Debt securities		6,511

	$	8,601


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
July 1 – 31, 2008	100,000	$	22.39	100,000	$	113,554,000
August 1 – 31, 2008	125,000		23.53	125,000		110,612,000
September 1 – 30, 2008	545,000		21.11	545,000		99,102,000

Total	770,000		21.67	770,000



~~10.23.3~~10.32.1		Amendment No. 31 to ~~Credit Agreement, dated as of November 5, 2008, among SEI Investments Company, JPMorgan Chase Bank, N.A., as administrative agent and certain financial institutions.~~

~~10.29.12~~		~~Twelfth Amendment, dated November 7, 2008, to Capital Support Agreement, dated December 3, 2007 between SEI Investments Company and SEI Liquid Asset Trust Prime Obligation Fund.~~

~~10.32~~		Amended and Restated Capital Support Agreement, dated ~~November 5, 2008,~~March 13, 2009, between SEI Investments Company and SEI Daily Income Trust for and on behalf of its ~~Prime Obligation Fund.~~

~~10.33~~		~~Letter of Credit, dated November 7, 2008 in favor of SEI Daily Income Trust~~ Prime Obligation Fund.

31.1		Rule 13a-15(e)/15d-15(e) Certification of Chief Executive Officer.

31.2		Rule 13a-15(e)/15d-15(e) Certification of Chief Financial Officer.

32		Section 1350 Certifications.


	SEI INVESTMENTS COMPANY

Date: ~~November 10, 2008~~May 4, 2009	By:	/s/ Dennis J. McGonigle
		Dennis J. McGonigle
		Chief Financial Officer