Hedge Funds Are Buying SEI Investments Company (SEIC)

SEI Investments Company (NASDAQ:SEIC) has experienced an increase in support from the world’s most elite money managers recently.

To most shareholders, hedge funds are viewed as underperforming, outdated investment vehicles of years past. While there are greater than 8000 funds trading at the moment, we choose to focus on the upper echelon of this club, around 450 funds. It is widely believed that this group controls most of the smart money’s total asset base, and by tracking their top picks, we have deciphered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as key, optimistic insider trading activity is another way to break down the marketplace. Just as you’d expect, there are a number of incentives for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this strategy if piggybackers know where to look (learn more here).

With all of this in mind, let’s take a glance at the recent action surrounding SEI Investments Company (NASDAQ:SEIC).

How are hedge funds trading SEI Investments Company (NASDAQ:SEIC)?

In preparation for this quarter, a total of 22 of the hedge funds we track were long in this stock, a change of 38% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings considerably.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in SEI Investments Company (NASDAQ:SEIC), worth close to $122.3 million, comprising 0.4% of its total 13F portfolio. On Royce & Associates’s heels is Glenn Russell Dubin of Highbridge Capital Management, with a $79.2 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, Richard Blum’s Blum Capital Partners and Robert Joseph Caruso’s Select Equity Group.

With a general bullishness amongst the heavyweights, key money managers have jumped into SEI Investments Company (NASDAQ:SEIC) headfirst. Renaissance Technologies, managed by Jim Simons, assembled the biggest position in SEI Investments Company (NASDAQ:SEIC). Renaissance Technologies had 6.2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $2.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management, Israel Englander’s Catapult Capital Management, and Mike Vranos’s Ellington.

Insider trading activity in SEI Investments Company (NASDAQ:SEIC)

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time period, SEI Investments Company (NASDAQ:SEIC) has experienced 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to SEI Investments Company (NASDAQ:SEIC). These stocks are Och-Ziff Capital Management Group LLC (NYSE:OZM), Legg Mason, Inc. (NYSE:LM), Lazard Ltd (NYSE:LAZ), American Capital Ltd. (NASDAQ:ACAS), and Eaton Vance Corp (NYSE:EV). This group of stocks belong to the asset management industry and their market caps are similar to SEIC’s market cap.