<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q


(Mark One)*
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the quarterly period ended June 30, 2001 or
[_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the transition period from _________ to _________

                                    0-10200
--------------------------------------------------------------------------------
                           (Commission File Number)

                            SEI INVESTMENTS COMPANY
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

          Pennsylvania                                         23-1707341
          ------------                                         ----------
(State or other jurisdiction of                               (IRS Employer
 incorporation or organization)                          Identification Number)


             1 Freedom Valley Drive, Oaks, Pennsylvania 19456-1100
--------------------------------------------------------------------------------
                   (Address of principal executive offices)
                                  (Zip Code)

                                (610) 676-1000
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

                                      N/A
--------------------------------------------------------------------------------
  (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 ___
                                      ---
*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 ___


*APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of June 30, 2001: 108,947,791 shares of common stock, par value
$.01 per share.

                                       1
<PAGE>

PART I.  FINANCIAL INFORMATION
------   ---------------------

Item 1.  Financial Statements
------   --------------------

                          Consolidated Balance Sheets
                          ---------------------------
                                (In thousands)

<TABLE>
<CAPTION>

                                                                    June 30, 2001           December 31, 2000
                                                                    -------------           ------------------
                                                                     (unaudited)
<S>                                                                  <C>                    <C>
Assets
------

Current assets:

Cash and cash equivalents (including restricted
    cash of $10,889 and $11,900)                                       $ 137,962                 $ 159,576
Receivables from regulated investment companies                           29,076                    27,607
Receivables, net of allowance for doubtful
    accounts of $1,700                                                    62,568                    47,404
Deferred income taxes                                                      6,524                     9,030
Prepaid expenses and other current assets                                  5,182                     5,414
                                                                       ---------                 ---------

         Total current assets                                            241,312                   249,031
                                                                       ---------                 ---------

Property and equipment, net of accumulated
    depreciation and amortization of $92,434
    and $83,874                                                           85,405                    75,111
                                                                       ---------                 ---------

Capitalized software, net of accumulated
    amortization of $12,620 and $11,733                                   11,936                    12,823
                                                                       ---------                 ---------

Investments Available for Sale                                            38,521                    20,294
                                                                       ---------                 ---------

Other assets, net                                                         23,348                    18,323
                                                                       ---------                  --------

         Total Assets                                                  $ 400,522                 $ 375,582
                                                                       =========                 =========
</TABLE>

       The accompanying notes are an integral part of these statements.

                                       2
<PAGE>

                          Consolidated Balance Sheets
                         ---------------------------
                       (In thousands, except par value)


<TABLE>
<CAPTION>
                                                                    June 30, 2001          December 31, 2000
                                                                    -------------          -----------------
                                                                     (unaudited)
<S>                                                                 <C>                    <C>
Liabilities and Shareholders' Equity
------------------------------------

Current liabilities:

Current portion of long-term debt                                    $     2,000               $     2,000
Accounts payable                                                           4,175                     6,721
Accrued expenses                                                         121,392                   121,282
Deferred revenue                                                          10,218                    16,450
                                                                     -----------               -----------

         Total current liabilities                                       137,785                   146,453
                                                                     -----------               -----------


Long-term debt                                                            25,000                    27,000
                                                                     -----------               -----------

Deferred income taxes                                                      4,268                     4,708
                                                                     -----------               -----------


Shareholders' equity:

Common stock, $.01 par value, 750,000 shares
   authorized; 108,948 and 108,560 shares issued
   and outstanding                                                         1,089                     1,086
Capital in excess of par value                                           156,334                   125,473
Retained earnings                                                         77,829                    72,521
Accumulated other comprehensive losses                                    (1,783)                   (1,659)
                                                                     -----------               -----------

         Total shareholders' equity                                      233,469                   197,421
                                                                     -----------               -----------

         Total Liabilities and Shareholders' Equity                  $   400,522               $   375,582
                                                                     ===========               ===========
</TABLE>


       The accompanying notes are an integral part of these statements.

                                       3
<PAGE>

                       Consolidated Statements of Income
                                  (unaudited)
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                     Three Months
                                                                     --------------------------------------------
                                                                                    Ended June 30,
                                                                     --------------------------------------------
                                                                                  2001                  2000
                                                                                  ----                  ----
<S>                                                                  <C>                              <C>
Revenues                                                                        $ 168,480             $ 146,440

Expenses:
  Operating and development                                                        77,314                69,164
  Sales and marketing                                                              39,135                38,809
  General and administrative                                                        6,121                 4,243
                                                                                 --------              --------

Income from operations                                                             45,910                34,224

Equity in the earnings of unconsolidated affiliate                                  2,554                 1,757
Interest income                                                                     1,541                 1,066
Interest expense                                                                     (534)                 (551)
                                                                                 --------              --------

Income before income taxes                                                         49,471                36,496
Income taxes                                                                       18,304                13,869
                                                                                  -------               -------

Net income                                                                         31,167                22,627
                                                                                  -------               -------

Other comprehensive loss, net of tax:
    Foreign currency translation adjustments,
        net of income tax benefit of $13 and $115                                     (21)                 (186)
    Unrealized holding losses on investments,
        net of income tax benefit of $47 and $18                                      (81)                  (30)
                                                                                ---------             ---------

Other comprehensive income (loss)                                                    (102)                 (216)
                                                                                 --------              --------

Comprehensive income                                                            $  31,065             $  22,411
                                                                                  =======               =======


Basic earnings per common share                                                 $     .29             $     .21
                                                                                  ========              =======

Diluted earnings per common share                                               $     .27             $     .20
                                                                                  ========              =======
</TABLE>


       The accompanying notes are an integral part of these statements.

                                       4
<PAGE>

                       Consolidated Statements of Income
                                  (unaudited)
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                     Six Months
                                                                   ----------------------------------------------
                                                                                   Ended June 30,
                                                                   ----------------------------------------------
                                                                                  2001                   2000
                                                                                  ----                   ----

<S>                                                                <C>                                 <C>
Revenues                                                                       $  329,781              $285,186

Expenses:
  Operating and development                                                       153,343               135,446
  Sales and marketing                                                              77,391                77,179
  General and administrative                                                       11,504                 7,785
                                                                                ---------              --------

Income from operations                                                             87,543                64,776

Equity in the earnings of unconsolidated affiliate                                  4,792                 3,510
Interest income                                                                     3,790                 2,051
Interest expense                                                                   (1,084)               (1,150)
                                                                                ---------              --------

Income before income taxes                                                         95,041                69,187
Income taxes                                                                       35,165                26,291
                                                                                ---------              --------

Net income                                                                         59,876                42,896
                                                                                ---------              --------

Other comprehensive income (loss), net of tax:
   Foreign currency translation adjustments,
       net of income tax (benefit) expense of $(149) and $5                          (253)                    9
   Unrealized holding gains (losses) on investments,
       net of income tax expense (benefit) of $76 and $(82)                           129                  (134)
                                                                                ---------              --------

Other comprehensive loss                                                             (124)                 (125)
                                                                                ---------              --------

Comprehensive income                                                           $   59,752              $ 42,771
                                                                                =========               =======



Basic earnings per common share                                                $      .55              $    .40
                                                                                =========               =======


Diluted earnings per common share                                              $      .52              $    .38
                                                                                =========               =======
</TABLE>


       The accompanying notes are an integral part of these statements.

                                       5
<PAGE>

                     Consolidated Statements of Cash Flows
                     -------------------------------------
                                  (unaudited)
                                (In thousands)

<TABLE>
<CAPTION>
                                                                                       Six Months
                                                                           --------------------------------
                                                                                     Ended June 30,
                                                                           --------------------------------
                                                                                 2001              2000
                                                                                 ----              ----
<S>                                                                            <C>              <C>
Cash flows from operating activities:
Net income                                                                     $ 59,876         $  42,896
Adjustments to reconcile net income
  to net cash provided by operating activities:
     Depreciation and amortization                                                9,616             8,399
     Equity in the earnings of unconsolidated affiliate                          (4,792)           (3,510)
     Tax benefit on stock options exercised                                      20,679             4,880
     Other                                                                         (138)            3,850
     Change in current assets and liabilities:
       Decrease (increase) in
        Receivables from regulated investment companies                          (1,469)           (1,809)
        Receivables                                                             (15,164)          (16,356)
        Prepaid expenses and other current assets                                   232              (419)
       Increase (decrease) in
         Accounts payable                                                        (2,546)              642
         Accrued expenses                                                         4,457            (9,375)
         Deferred revenue                                                        (6,232)            2,380
                                                                               --------         ---------
       Net cash provided by operating activities                                 64,519            31,578
                                                                               --------         ---------

Cash flows from investing activities:
     Additions to property and equipment                                        (18,883)          (10,460)
     Additions to capitalized software                                               --              (449)
     Purchase of investments available for sale                                 (25,006)          (17,263)
     Sale of investments available for sale                                       6,783             2,135
     Other                                                                        2,317             2,847
                                                                               --------         ---------
       Net cash used in investing activities                                    (34,789)          (23,190)
                                                                               --------         ---------

Cash flows from financing activities:
     Payment on long-term debt                                                   (2,000)           (2,000)
     Purchase and retirement of common stock                                    (49,962)          (14,328)
     Proceeds from issuance of common stock                                      10,404             4,420
     Payment of dividends                                                        (9,786)           (7,785)
                                                                               --------         ---------
       Net cash used in financing activities                                    (51,344)          (19,693)
                                                                               --------         ---------

Net decrease in cash and cash equivalents                                       (21,614)          (11,305)

Cash and cash equivalents, beginning of period                                  159,576            73,206
                                                                               --------         ---------

Cash and cash equivalents, end of period                                       $137,962         $  61,901
                                                                               ========         =========
</TABLE>


       The accompanying notes are an integral part of these statements.

                                       6
<PAGE>

                  Notes to Consolidated Financial Statements
                  ------------------------------------------

Note 1.    Summary of Significant Accounting Policies
           ------------------------------------------

           Nature of Operations
           --------------------
           SEI Investments Company (the "Company") is organized around its five
           primary business lines: Private Banking & Trust, Investment Advisors,
           Enterprises, Money Mangers, and Investments in New Businesses.
           Private Banking & Trust provides investment processing solutions,
           fund processing solutions and investment management programs to banks
           and private trust companies. Investment Advisors provides investment
           management programs and investment processing solutions to affluent
           investors through a network of financial intermediaries, independent
           investment advisors and other investment professionals. Enterprises
           provide retirement and treasury business solutions for corporations,
           unions, foundations and endowments, and other institutional
           investors. Money Managers provides investment solutions to U.S.
           investment managers, mutual fund companies and alternative investment
           managers worldwide. Investments in New Businesses include the
           Company's global asset management businesses as well as initiatives
           into new U.S. markets.


           Summary Financial Information and Results of Operations
           -------------------------------------------------------
           In the opinion of the Company, the accompanying unaudited
           Consolidated Financial Statements contain all adjustments (consisting
           of only normal recurring adjustments) necessary to present fairly the
           financial position as of June 30, 2001, the results of operations and
           cash flows for the three and six months ended June 30, 2001 and 2000.

           Interim Financial Information
           -----------------------------
           While the Company believes that the disclosures presented are
           adequate to make the information not misleading, these Consolidated
           Financial Statements should be read in conjunction with the
           Consolidated Financial Statements and the notes included in the
           Company's latest annual report on Form 10-K.

           Principles of Consolidation
           ---------------------------
           The Consolidated Financial Statements include the accounts of the
           Company and its wholly owned subsidiaries. The Company's principal
           subsidiaries are SEI Investments Distribution Company, SEI
           Investments Management Corporation, and SEI Private Trust Company.
           All intercompany accounts and transactions have been eliminated.
           Investment in unconsolidated affiliate is accounted for using the
           equity method due to the Company's less than 50 percent ownership.
           The Company's portion of the affiliate's operating results is
           reflected in Equity in the earnings of unconsolidated affiliate on
           the accompanying Consolidated Statements of Income, (See Note 6).

           Property and Equipment
           ----------------------
           Property and equipment on the accompanying Consolidated Balance
           Sheets consist of the following:

<TABLE>
<CAPTION>
                                                                                                              Estimated
                                                                                                             Useful Lives
                                                         June 30, 2001             December 31, 2000          (In Years)
                                                         -------------             -----------------          ----------
<S>                                                    <C>                         <C>                     <C>
           Equipment                                    $ 76,768,000                $ 71,377,000                   3 to 5
           Buildings                                      34,752,000                  34,695,000                 25 to 39
           Land                                            9,345,000                   9,345,000                      N/A
           Purchased software                             19,380,000                  16,035,000                        3
           Furniture and fixtures                         14,689,000                  14,230,000                   3 to 5
           Leasehold improvements                          7,321,000                   7,313,000               Lease Term
           Construction in progress                       15,584,000                   5,990,000                      N/A
                                                        ------------                ------------

                                                         177,839,000                 158,985,000
           Less:  Accumulated depreciation
                  and amortization                       (92,434,000)                (83,874,000)
                                                        ------------                ------------

           Property and Equipment, net                  $ 85,405,000                $ 75,111,000
                                                        ============                ============
</TABLE>

                                       7
<PAGE>

              Property and equipment are stated at cost. Depreciation and
              amortization are computed using the straight-line method over the
              estimated useful life of each asset. Expenditures for renewals and
              betterments are capitalized, while maintenance and repairs are
              charged to expense when incurred.

              Capitalized Software
              --------------------
              The Company accounts for software development costs in accordance
              with Statement of Financial Accounting Standards No. 86,
              "Accounting for the Costs of Computer Software to Be Sold, Leased,
              or Otherwise Marketed" ("SFAS 86"). Under SFAS 86, costs incurred
              to create a computer software product are charged to research and
              development expense as incurred until technological feasibility
              has been established. The Company establishes technological
              feasibility upon completion of a detail program design. At that
              point, computer software costs are capitalized until the product
              is available for general release to customers. The establishment
              of technological feasibility and the ongoing assessment of
              recoverability of capitalized software development costs require
              considerable judgment by management with respect to certain
              external factors, including, but not limited to, anticipated
              future revenues, estimated economic life, and changes in
              technology. Amortization begins when the product is released.
              Capitalized software development costs are amortized on a
              product-by-product basis using the straight-line method over the
              estimated economic life of the product or enhancement, which is
              primarily three to ten years, with a weighted average remaining
              life of approximately 7.1 years.

              Earnings per Share
              ------------------
              The Company computes earnings per common share in accordance with
              Statement of Financial Accounting Standards No. 128, "Earnings per
              Share" ("SFAS 128"). Pursuant to SFAS 128, dual presentation of
              basic and diluted earnings per common share is required on the
              face of the statements of income for companies with complex
              capital structures. Basic earnings per common share is calculated
              by dividing net income available to common shareholders by the
              weighted average number of common shares outstanding for the
              period. Diluted earnings per common share reflects the potential
              dilution from the exercise or conversion of securities into common
              stock, such as stock options. All common share figures have been
              restated to reflect the two-for-one stock split in February 2001.

<TABLE>
<CAPTION>
                                                                              For the Three month period ended
                                                                                        June 30, 2001
                                                                   ------------------------------------------------------
                                                                     Income                  Shares             Per Share
                                                                   (Numerator)            (Denominator)           Amount
                                                                   ----------              -----------            ------
             <S>                                                   <C>                    <C>                   <C>
             Basic earnings per common share                       $31,167,000             108,662,000            $.29
                                                                                                                  ====
             Dilutive effect of stock options                               --               6,346,000
                                                                   -----------             -----------

             Diluted earnings per common share                     $31,167,000             115,008,000            $.27
                                                                   ===========             ===========            ====

<CAPTION>
                                                                             For the Three month period ended
                                                                                       June 30, 2000
                                                                   ------------------------------------------------------
                                                                      Income                 Shares             Per Share
                                                                   (Numerator)           (Denominator)            Amount
                                                                    ---------             -----------             ------
             <S>                                                   <C>                   <C>                    <C>
             Basic earnings per common share                       $22,627,000             106,156,000            $.21
                                                                                                                  ====

             Dilutive effect of stock options                               --               6,840,000
                                                                   -----------             -----------

             Diluted earnings per common share                     $22,627,000             112,996,000            $.20
                                                                   ===========             ===========            ====
</TABLE>

                                       8
<PAGE>

              Options to purchase 1,299,000 shares of common stock, with an
              average exercise price of $49.73 were outstanding during the
              second quarter of 2001, but were excluded from the diluted
              earnings per common share calculation because the options'
              exercise prices were greater than the average market price of the
              Company's common stock. All stock options outstanding during the
              second quarter of 2000 were included in the diluted earnings per
              common share calculation.


<TABLE>
<CAPTION>
                                                                                For the Six month period ended
                                                                                         June 30, 2001
                                                                   ---------------------------------------------------------
                                                                     Income                   Shares             Per Share
                                                                   (Numerator)             (Denominator)            Amount
                                                                    ---------               -----------             ------
             <S>                                                   <C>                     <C>                   <C>
             Basic earnings per common share                       $59,876,000              108,631,000              $.55
                                                                                                                     ====

             Dilutive effect of stock options                               --                6,782,000
                                                                   -----------              -----------

             Diluted earnings per common share                     $59,876,000              115,413,000              $.52
                                                                   ===========              ===========              ====

<CAPTION>
                                                                              For the Six month period ended
                                                                                       June 30, 2000
                                                                ------------------------------------------------------------
                                                                      Income                  Shares             Per Share
                                                                   (Numerator)             (Denominator)           Amount
                                                                    ---------               -----------            ------
             <S>                                                   <C>                     <C>                   <C>
             Basic earnings per common share                       $42,896,000              106,072,000            $.40
                                                                                                                   ====

             Dilutive effect of stock options                               --                6,712,000
                                                                   -----------              -----------

             Diluted earnings per common share                     $42,896,000              112,784,000            $.38
                                                                   ===========              ===========            ====
</TABLE>


              Options to purchase 1,299,000 and 2,202,000 shares of common
              stock, with an average exercise price of $49.73 and $19.75 were
              outstanding during the first six months of 2001 and 2000,
              respectively, but were excluded from the diluted earnings per
              common share calculation because the options' exercise prices were
              greater than the average market price of the Company's common
              stock.

              Statements of Cash Flows
              ------------------------
              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.

              Supplemental disclosures of cash paid/received during the six
              months ended June 30 is as follows:

<TABLE>
<CAPTION>
                                                                          2001                      2000
                                                                          ----                      ----
             <S>                                                       <C>                     <C>
             Interest paid                                             $1,073,000              $  1,146,000
             Interest and dividends received                           $4,184,000              $  1,782,000
             Income taxes paid                                         $       --              $ 25,485,000
</TABLE>

              Management's Use of Estimates
              -----------------------------
              The preparation of financial statements in conformity with
              accounting principles generally accepted in the Unites States
              requires management to make estimates and assumptions that affect
              the reported amounts of assets and liabilities and disclosure of
              contingent assets and liabilities at the date of the financial
              statements and the reported amounts of revenues and expenses
              during the reporting period. Actual results could differ from
              those estimates.


Note 2.       Comprehensive Income - The Company computes comprehensive income
              --------------------
              in accordance with Statement of Financial Accounting Standards No.
              130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
              establishes standards for reporting and presentation of
              comprehensive income and its components (revenues, expenses, gains
              and losses) in a full set of general-purpose financial statements
              that is presented with equal prominence as other financial
              statements. Comprehensive

                                       9
<PAGE>

          income includes net income, foreign currency translation adjustments,
          and unrealized holding gains and losses and is presented on the
          accompanying Consolidated Statements of Income.

<TABLE>
<CAPTION>
                                                           Foreign                Unrealized            Accumulated
                                                           Currency                 Holding                Other
                                                         Translation             Gains(Losses)         Comprehensive
                                                         Adjustments            on Investments            Losses
                                                         -----------            --------------            ------
          <S>                                             <C>                   <C>                    <C>
          Beginning balance                                $(736,000)             $ (923,000)           $(1,659,000)
          Current period change                             (253,000)                129,000               (124,000)
                                                             --------                -------            -----------

          Ending Balance                                   $(989,000)             $ (794,000)           $(1,783,000)
                                                             =======                 =======              =========
</TABLE>



Note 3.   Receivables - Receivables on the accompanying Consolidated Balance
          -----------
          Sheets consist of the following:

<TABLE>
<CAPTION>
                                                          June 30, 2001           December 31, 2000
                                                          -------------           -----------------
             <S>                                          <C>                     <C>
             Trade receivables                              $26,986,000                 $22,558,000
             Fees earned, not received                        1,743,000                   1,801,000
             Fees earned, not billed                         35,539,000                  24,745,000
                                                             ----------                  ----------

                                                             64,268,000                  49,104,000
             Less:  Allowance for doubtful accounts          (1,700,000)                 (1,700,000)
                                                            -----------                 -----------

                                                            $62,568,000                 $47,404,000
                                                             ==========                  ==========
</TABLE>

          Fees earned, not received represent brokerage commissions earned but
          not yet collected. Fees earned, not billed represent receivables
          earned but unbilled and result from timing differences between
          services provided and contractual billing schedules.

          Receivables from regulated investment companies on the accompanying
          Consolidated Balance Sheets represent fees collected from the
          Company's wholly owned subsidiaries, SEI Investments Distribution
          Company and SEI Investments Management Corporation, for distribution,
          investment advisory, and administration services provided by these
          subsidiaries to various regulated investment companies sponsored by
          the Company.


Note 4.   Investments Available for Sale - Investments available for sale
          ------------------------------
          consist of investments in mutual funds sponsored by the Company. The
          Company accounts for investments in marketable securities pursuant to
          Statement of Financial Accounting Standards No. 115, "Accounting for
          Certain Investments in Debt and Equity Securities" ("SFAS 115"). SFAS
          115 requires that debt and equity securities classified as available
          for sale be reported at market value. Unrealized holding gains and
          losses, net of income taxes, are reported as a separate component of
          comprehensive income. Realized gains and losses, as determined on a
          specific identification basis, are reported separately on the
          accompanying Consolidated Statements of Income.

          At June 30, 2001, Investments available for sale had an aggregate cost
          of $39,790,000 and an aggregate market value of $38,521,000 with gross
          unrealized holding losses of $1,269,000. At that date, the net
          unrealized holding losses of $794,000 (net of income tax expense of
          $475,000) were reported as a separate component of Accumulated other
          comprehensive losses on the accompanying Consolidated Balance Sheets.

          At December 31, 2000, Investments available for sale had an aggregate
          cost of $21,710,000 and an aggregate market value of $20,294,000 with
          gross unrealized holding losses of $1,416,000. At that date, the net
          unrealized holding losses of $923,000 (net of income tax expense of
          $493,000) were reported as a separate component of Accumulated other
          comprehensive losses on the accompanying Consolidated Balance Sheets.

                                       10
<PAGE>

Note 5    Derivative Instruments and Hedging Activities - The Company accounts
          ---------------------------------------------
          for its derivatives in accordance with Statement of Financial
          Accounting Standards No. 133, "Accounting for Derivative Instruments
          and Hedging Activities," ("SFAS 133" ) and SFAS No. 138, "Accounting
          for Certain Derivative Instruments and Certain Hedging Activities - an
          amendment of FASB Statement No. 133", ("SFAS 138").

          The Company recognizes all derivatives on the balance sheet at fair
          value. On the date the derivative instrument is entered into, the
          Company generally designates the derivative as a hedge of the fair
          value of a recognized asset. Changes in the fair value of a derivative
          that is designated as, and meets all the required criteria for, a fair
          value hedge, along with the gain or loss on the hedged asset that is
          attributable to the hedged risk, are recorded in current period
          earnings. The portion of the change in fair value of a derivative
          associated with hedge ineffectiveness or the component of a derivative
          instrument excluded from the assessment of hedge effectiveness is
          recorded currently in earnings. The Company formally documents all
          relationships between hedging instruments and hedged items, as well as
          its risk-management objective and strategy for undertaking various
          hedge transactions. This process includes relating all derivatives
          that are designated as fair value hedges to specific assets on the
          balance sheet.

          The Company also formally assesses, both at the inception of the hedge
          and on an ongoing basis, whether each derivative is highly effective
          in offsetting changes in fair values of the hedged item. If it is
          determined that a derivative is not highly effective as a hedge or if
          a derivative ceases to be a highly effective hedge, the Company will
          discontinue hedge accounting prospectively.

          Operating Expense for the three and six months period ended June 30,
          2001, includes $273,000 of net loss from hedge ineffectiveness or from
          excluding a portion of a derivative instruments' gain or loss from the
          assessment of hedge effectiveness related to derivatives designated as
          fair value hedges.

Note 6.   Other Assets - Other assets on the accompanying Consolidated Balance
          ------------
          Sheets consist of the following:

<TABLE>
<CAPTION>
                                                          June 30, 2000        December 31,2000
                                                          -------------        ----------------
          <S>                                             <C>                  <C>
          Investment in unconsolidated affiliate            $  6,184,000          $  5,627,000
          Other, net                                          17,164,000            12,696,000
                                                              ----------           -----------

          Other assets                                      $ 23,348,000          $ 18,323,000
                                                              ==========            ==========
</TABLE>


          Investment in Unconsolidated Affiliate - LSV Asset Management ("LSV")
          --------------------------------------
          is a partnership formed between the Company and several leading
          academics in the field of finance. LSV is a registered investment
          advisor, which provides investment advisory services to institutions,
          including pension plans and investment companies. LSV is currently the
          portfolio manager for a number of Company-sponsored mutual funds. The
          Company's interest in LSV was approximately 45 percent in 2001 and 47
          percent in 2000. LSV is accounted for using the equity method of
          accounting due to the less than 50 percent ownership. The Company's
          portion of LSV's net earnings is reflected in Equity in the earnings
          of unconsolidated affiliate on the accompanying Consolidated
          Statements of Income.



          The following table contains the Condensed Statements of Income of LSV
          for the three months ended June 30:

                                                   2001                2000
                                                   ----                ----

          Revenues                               $7,736,000          $5,385,000
                                                  =========           =========

          Net income                             $5,744,000          $3,786,000
                                                  =========           =========

                                       11
<PAGE>

        The following table contains the Condensed Statements of Income of
        LSV for the six months ended June 30:

                                                  2001                  2000
                                                  ----                  ----

        Revenues                               $14,688,000           $10,679,000
                                                ==========            ==========

        Net income                             $10,772,000           $ 7,547,000
                                                ==========            ==========

        The following table contains the Condensed Balance Sheets of LSV:


                                             June 30, 2001     December 31, 2000
                                             -------------     -----------------

        Current assets                        $ 12,442,000           $10,976,000
        Non-current assets                         134,000               103,000
                                               -----------            ----------

        Total assets                          $ 12,576,000           $11,079,000
                                               ===========            ==========

        Current liabilities                   $  1,229,000           $ 1,285,000
        Partners' capital                       11,347,000             9,794,000
                                               -----------            ----------
        Total liabilities and
           partners' capital                  $ 12,576,000           $11,079,000
                                               ===========            ==========



Note 7. Accrued Expenses - Accrued expenses on the accompanying Consolidated
        Balance Sheets consist of the following:


                                             June 30, 2000     December 31, 2000
                                             -------------     -----------------

        Accrued compensation                  $ 34,156,000          $ 49,890,000
        Accrued proprietary fund services       14,384,000            14,834,000
        Accrued consulting services              6,731,000             8,200,000
        Other accrued expenses                  66,121,000            48,358,000
                                               -----------           -----------

        Total accrued expenses                $121,392,000          $121,282,000
                                               ===========           ===========


Note 8. Line of Credit - The Company has line of credit agreement with its
        --------------
        principle lending institutions. The fAgreement provides for borrowings
        of up to $50,000,000, and expires on August 31, 2001, at which time the
        outstanding principal balance, if any, becomes due unless the Agreement
        is extended. Management believes the agreement will be extended. The
        line of credit, when utilized, accrues interest at the Prime rate or one
        and one-quarter percent above the London Interbank Offered Rate (LIBOR).
        The Company is obligated to pay a commitment fee equal to one-quarter of
        one percent per annum on the average daily unused portion of the
        commitment. Certain covenants under the Agreement require the Company to
        maintain specified levels of net worth and place certain restrictions on
        investments.


Note 9. Long-term Debt - On February 24, 1997, the Company signed a Note
        --------------
        Purchase Agreement authorizing the issuance and sale of $20,000,000 of
        7.20% Senior Notes, Series A, and $15,000,000 of 7.27% Senior Notes,
        Series B, (collectively, the "Notes") in a private offering with certain
        financial institutions. The Notes are unsecured with final maturities
        ranging from 10 to 15 years. The proceeds from the Notes were used to
        repay the outstanding balance on the Company's line of credit at that
        date. The Note Purchase Agreement, as amended, contains various
        covenants,

                                       12
<PAGE>

              including limitations on indebtedness, maintenance of minimum net
              worth levels, and restrictions on certain investments. In
              addition, the agreement limits the Company's ability to merge or
              consolidate, and to sell certain assets. The Company was in
              compliance with all covenants during the first six months of 2001.

              Principal payments on the Notes are made annually from the date of
              issuance while interest payments are made semi-annually. The
              Company made its scheduled payment of $2,000,000 in February 2001.
              The current portion of the Notes amounted to $2,000,000 at June
              30, 2001. The carrying amount of the Company's long-term debt is
              not materially different from its fair value.

              On June 26, 2001 the Company entered into a loan agreement (the
              "Agreement") with a separate lending institution. The agreement
              provides for borrowing up to $25,000,000 in the form of a term
              loan, and expires on March 31, 2006 and is payable in seventeen
              equal quarterly installments. The term loan, when utilized,
              accrues interest at the Prime rate or plus one and thirty-five
              hundredths of one percent above the London Interbank Offered Rate
              (LIBOR). The Agreement contains various covenants, including
              limitations on indebtedness and restrictions on certain
              investments. On August 2, 2001, the Company borrowed $25,000,000
              on this term loan. The loan was necessary to support capital
              improvement projects for our corporate campus and other business
              purposes. None of these covenants negatively affect the Company's
              liquidity or capital resources.




Note  10.     Common Stock Buyback - The Board of Directors has authorized
              --------------------
              the purchase of the Company's common stock on the open market or
              through private transactions of up to an aggregate of
              $453,365,000. Through June 30, 2001, a total of 99,592,000 shares
              at an aggregate cost of $405,053,000 have been purchased and
              retired. The Company purchased 1,327,000 shares at a total cost of
              $49,962,000 during the six month period ended June 30, 2001.

              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.


Note  11.     Dividend - On May 29, 2001, the Board of Directors declared a cash
              --------
              dividend of $.05 per share on the Company's common stock, which
              was paid on June 26, 2001, to shareholders of record on June 12,
              2001.


Note  12.     Segment Information - The Company defines its business segments in
              -------------------
              accordance with Statement of Financial Accounting Standards No.
              131, "Disclosures about Segments of an Enterprise and Related
              Information" ("SFAS 131"). SFAS 131 establishes standards for the
              way public business enterprises report financial information about
              operating segments in financial statements. SFAS 131 also requires
              additional disclosures about product and services, geographic
              areas, and major customers. The company redefined its segments
              during the second quarter 2001 and restated all prior periods to
              conform with the current presentation.

              The Company is organized around its five primary business lines:
              Private Banking & Trust, Investment Advisors, Enterprises, Money
              Mangers, and Investments in New Businesses. Private Banking &
              Trust provides investment processing solutions, fund processing
              solutions and investment management programs to banks and private
              trust companies. Investment Advisors provides investment
              management programs and investment processing solutions to
              affluent investors through a network of financial intermediaries,
              independent investment advisors and other investment
              professionals. Enterprises provide retirement and treasury
              business solutions for corporations, unions, foundations and
              endowments, and other institutional investors. Money Managers
              provides investment solutions to U.S. investment managers, mutual
              fund companies and alternative investment managers worldwide.
              Investments in New Businesses include the Company's global asset
              management business as well as initiatives into new U.S. markets.

                                       13
<PAGE>

              The information in the following tables is derived from the
              Company's internal financial reporting used for corporate
              management purposes. The accounting policies of the reportable
              segments are the same as those described in Note 1. The Company's
              management evaluates financial performance of its operating
              segments based on income before income taxes.

              The following tables highlight certain unaudited financial
              information about each of the Company's segments for the three
              months ended June 30, 2001 and 2000. (In thousands)

<TABLE>
<CAPTION>
                                Private                                             Investments          General
                                Banking    Investment                      Money      In New               And
                                & Trust     Advisors     Enterprises     Managers   Businesses       Administrative     Total
                               -------      --------     -----------     --------    ----------      --------------     -----

                                                        For the Three-Month Period Ended June 30, 2001
                                                                (In thousands)
                           ---------------------------------------------------------------------------------------------------------
<S>                            <C>           <C>          <C>            <C>         <C>           <C>               <C>
       Revenues                 $93,170       $38,687      $17,290        $ 8,708     $ 10,625                        $168,480
                                -------       -------      -------        -------     --------                        --------

       Operating
        income (loss)           $35,465       $14,399      $ 6,335        $   735     $ (4,903)      $(6,121)         $ 45,910
                                -------       -------      -------        -------     --------       -------

       Other income,
       net                                                                                                            $  3,561
                                                                                                                      --------

       Income before
        income taxes                                                                                                  $ 49,471
                                                                                                                      --------

       Depreciation and
        amortization            $ 3,129       $   762      $   260        $   229     $    329       $   172          $  4,881
                                -------       -------      -------        -------     --------       -------          --------

       Capital
        Expenditures            $ 6,992       $ 1,238      $   454        $   372     $    430       $   482          $  9,968
                                -------       -------      -------        -------     --------       -------          --------


<CAPTION>
                                Private                                             Investments         General
                                Banking    Investment                     Money        In New             And
                                & Trust     Advisors     Enterprises     Managers    Businesses      Administrative   Total
                               -------      --------     -----------     --------    ----------      --------------   -----

                                                       For the Three-Month Period Ended June 30, 2000
                                                                (In thousands)
                           ---------------------------------------------------------------------------------------------------------
<S>                            <C>           <C>          <C>            <C>         <C>           <C>               <C>
       Revenues                   $83,479     $30,944      $13,613         $8,452       $ 9,952                       $146,440
                                  -------     -------      -------         ------       -------                       --------

       Operating
        income (loss)             $32,555     $ 9,786      $ 1,537         $  302       $(5,713)       $(4,243)       $ 34,224
                                  -------     -------      -------         ------       -------        -------

       Other income,                                                                                                  $  2,272
       net                                                                                                            --------

       Income before
        income taxes                                                                                                  $ 36,496
                                                                                                                      --------

       Depreciation and
        amortization              $ 2,825     $   686      $   204         $  230       $   278        $   123        $  4,346
                                  -------     -------      -------         ------       -------        -------        --------

       Capital
        Expenditures              $ 4,530     $   291      $   136         $  380       $   747        $   240        $  6,324
                                  -------     -------      -------         ------       -------        -------        --------
</TABLE>

                                       14
<PAGE>

        The following tables highlight certain unaudited financial information
        about each of the Company's segments for the six months ended June 30,
        2001 and 2000. (In thousands)

<TABLE>
<CAPTION>
                         Private                                             Investments         General
                         Banking    Investment                    Money         In New             And
                         & Trust     Advisors     Enterprises    Managers     Businesses      Administrative     Total
                         -------     --------     -----------    --------     ----------      --------------     -----

                                                For the Six-Month Period Ended June 30, 2001
                                                               (In thousands)
                         ----------------------------------------------------------------------------------------------
<S>                      <C>        <C>            <C>            <C>          <C>            <C>              <C>
 Revenues                 $182,592    $ 76,766        $33,198     $ 16,472     $ 20,753                        $329,781
                          --------    --------        -------     --------     --------                        --------

 Operating
    income (loss)         $ 69,135    $ 29,121        $10,473     $    612     $(10,294)      $(11,504)        $ 87,543
                          --------    --------        -------     --------     --------       --------
 Other income, net                                                                                             $  7,498
                                                                                                               --------
 Income before
    income taxes                                                                                               $ 95,041
                                                                                                               --------
 Depreciation and
    amortization          $  6,156    $  1,511        $   516     $    447     $    649       $    337         $  9,616
                          --------    --------        -------      -------      -------       --------         --------

 Capital
    Expenditures          $ 13,779    $  2,001        $   734     $    647     $    721       $  1,001         $ 18,883
 <CAPTION>
                         Private                                             Investments          General
                         Banking    Investment                    Money         In New             And
                         & Trust     Advisors     Enterprises    Managers     Businesses      Administrative     Total
                         -------     --------     -----------    --------     ----------      --------------     -----

                                                For the Six-Month Period Ended June 30, 2001
                                                               (In thousands)
                         ----------------------------------------------------------------------------------------------
<S>                      <C>        <C>            <C>            <C>          <C>            <C>              <C>
 Revenues                 $164,312    $ 59,941        $26,349     $ 15,111     $ 19,473                        $285,186
                          --------    --------        -------     --------     --------                        --------

 Operating
    income (loss)           62,939    $ 15,796        $ 3,805     $     11     $(69,990)      $ (7,785)        $ 64,776
                          --------    --------        -------     --------     --------       --------

 Other income, net                                                                                             $  4,411
                                                                                                               --------
 Income before
    income taxes                                                                                               $ 69,187
                                                                                                               --------
 Depreciation and
    amortization          $  5,449    $  1,329        $   442     $    397     $    525       $    257         $  8,399
                          --------    --------        -------     --------     --------       --------         --------
 Capital
    Expenditures          $  7,348    $    538        $   207     $    592     $  1,271       $    504         $ 10,460
                          --------    --------        -------     --------     --------       --------         --------
</TABLE>

                                       15
<PAGE>

Item 2.   Management's Discussion and Analysis of Financial Condition and
-------   -----------------------------------------------------------------
                            Results of Operations.
                            ---------------------
                     (In thousands, except per share data)

We are organized around our five business lines: Private Banking & Trust,
Investment Advisors, Enterprises, Money Mangers and Investments in New
Businesses. Financial information on each of these segments is reflected in Note
12 of the Notes to Consolidated Financial Statements.

Results of Operations
---------------------

Three and Six Months Ended June 30, 2001 Compared to Three and Six Months Ended
June 30, 2000

Consolidated Overview

<TABLE>
<CAPTION>
Income Statement Data
(In thousands, except per common                        Three Months Ended                        Six Month Ended
 share data)                                                 June 30,                                June 30,
                                                                           Percent                                  Percent
                                                  2001         2000        Change         2001          2000        Change
                                                  ----         ----        ------         ----          ----        ------
<S>                                               <C>          <C>         <C>           <C>         <C>           <C>
Revenues:
   Private Banking & Trust                        $  93,170    $  83,479       12%       $ 182,592   $ 164,312      11%
   Investment Advisors                               38,687       30,944       25%          76,766      59,941      28%
   Enterprises                                       17,290       13,613       27%          33,198      26,349      26%
   Money Mangers                                      8,708        8,452        3%          16,472      15,111       9%
   Investments in New Businesses                     10,625        9,952        7%          20,753      19,473       7%
                                                  ---------    ---------                 ---------   ---------
     Total revenues                               $ 168,480    $ 146,440       15%       $ 329,781   $ 285,186      16%

Operating Income (Loss):
   Private Banking & Trust                        $  35,465    $  32,555        9%       $  69,135   $  62,939      10%
   Investment Advisors                               14,399        9,786       47%          29,121      15,796      84%
   Enterprises                                        6,335        1,537      312%          10,473       3,805     175%
   Money Mangers                                        735          302      143%             612          11   5,464%
   Investments in New Businesses                     (4,903)      (5,713)      14%         (10,294)     (9,990)     (3%)
   General and Administrative                        (6,121)      (4,243)     (44%)        (11,504)     (7,785)    (48%)
                                                  ---------    ---------                 ---------   ---------
     Income from operations                          45,910       34,224       34%          87,543      64,776      35%

Other income, net                                     3,561        2,272       57%           7,498       4,411      70%
                                                  ---------    ---------                 ---------   ---------

Income before income taxes                           49,471       36,496       36%          95,041      69,187      37%

Income taxes                                         18,304       13,869       32%          35,165      26,291      34%
                                                  ---------    ---------                 ---------   ---------
Net Income                                        $  31,167    $  22,627       38%       $  59,876   $  42,896      40%
                                                  =========    =========                 =========   =========

Diluted earnings per common share                 $     .27    $     .20       35%       $     .52   $     .38      37%
                                                  =========    =========                 =========   =========
</TABLE>

Revenues and earnings increased over the corresponding prior year periods
primarily because of increased sales to new clients and the delivery of new
products and services to existing clients in our primary business lines. We
believe our growth is due to increased market acceptance of our products and
services. Also, the economies of scale built within our operations have
partially contributed to our growth in earnings. The increase in margins is
accomplished at the same time we are investing heavily in the future.

We believe our future growth is dependent upon our ability to deliver new
products and services in our diversified portfolio of business. Also, we must
continue to generate economies of scale in most of our back-office and
investment management operations, as well as having many shared technology
development projects that leverage our technology spending. However, any
expected growth in revenues and earnings may be negated by volatility in the
capital markets, and mergers and acquisitions within the banking industry that
would result in the loss of any significant clients.

                                       16
<PAGE>

Asset Balances
(In millions)

<TABLE>
<CAPTION>
                                                                              As of June 30,
                                                                              --------------            PERCENT
                                                                         2001               2000         CHANGE
                                                                         ----               ----         ------
<S>                                                                    <C>                <C>           <C>
Assets invested in equity and fixed income programs                    $  56,196          $  48,278        16%
Assets invested in liquidity funds                                        23,710             23,412         1%
                                                                       ---------          ---------
   Assets under management                                                79,906             71,690        11%

Client proprietary assets under administration                           220,103            187,259        18%
                                                                       ---------          ---------
   Assets under management and administration                          $ 300,009          $ 258,949        16%
                                                                       =========          =========
</TABLE>

Assets under management consist of total assets invested in our equity and fixed
income investment programs and liquidity funds for which we provide management
services. Assets under management and administration consist of total assets for
which we provide management and administrative services, including client
proprietary fund balances for which we provide administration and/or
distribution services.

Private Banking and Trust
-------------------------

Private Banking & Trust provides investment processing solutions, fund
processing solutions, and investment management programs to banks and private
trust companies. Investment processing services primarily include outsourcing
services provided through our TRUST 3000 product line. TRUST 3000 includes many
integrated products and sub-systems that provide a complete investment
accounting and management information system for trust institutions. Revenues
are primarily earned from monthly processing and software services fees and
project fees associated with the conversion of new and merging clients.

Fund processing solutions include administration and distribution services
provided to bank proprietary mutual funds. These services primarily include fund
administration and accounting, legal services, shareholder recordkeeping, and
marketing. Revenues are based on a fixed percentage, referred to as basis
points, of the average daily asset value of the proprietary funds.

Investment management revenues are primarily earned through management fees that
are based upon a fixed percentage, referred to as basis points, of the average
daily net asset value of assets under management.

<TABLE>
<CAPTION>
                                                           Three Months Ended                        Six Months Ended
                                                   June 30,       June 30      Percent      June 30,      June 30     Percent
                                                     2001           2000        Change        2001          2000       Change
                                                     ----           ----        ------        ----          ----       ------
<S>                                                <C>            <C>          <C>          <C>           <C>         <C>
Revenues:
Investment processing fees                         $59,689        $51,184     17%          $115,905      $100,008       16%
Fund processing fees                                22,539         21,992      2%            44,701        43,923        2%
Investment management fees                          10,942         10,303     6%             21,986        20,381        8%
                                                   -------        -------                  --------      --------
     Total revenues                                 93,170         83,479     12%           182,592       164,312       11%

Expenses:
Operating and development                           44,911         39,180     15%            88,854        78,197       14%
Sales and marketing                                 12,794         11,744      9%            24,603        23,176        6%
                                                   -------        -------                  --------      --------

     Total operating profits                       $35,465        $32,555      9%          $ 69,135      $ 62,939       10%
                                                   =======        =======                  ========      ========

     Profit margin                                      38%            39%    --                 38%           38%      --

Percent of Revenue:
Operating and development                               48%            47%                       49%           48%
Sales and marketing                                     14%            14%                       13%           14%
</TABLE>

                                       17
<PAGE>

The increase in Investment processing revenues over the corresponding prior year
periods is primarily attributable to increased sales in our core service bureau
business. This improvement reflects the installation of new clients onto TRUST
3000 that contracted for services during the past several quarters. Revenues
were also affected by an increase in brokerage services through SEI's captive
broker/dealer.

Operating profits and profit margin reflect increased revenue and continued
investments in new products.

We believe our future growth in revenues and earnings will come from maintaining
a consistent level of investment in the development of new products and services
to grow existing markets and to expand into new markets. However, consolidations
among our banking clients continue to be a major strategic issue facing this
segment.


Investment Advisors
-------------------

Investment Advisors provides investment management programs and investment
processing solutions to affluent investors distributed through a network of
investment professionals. Revenues are primarily earned through management fees
that are based upon a fixed percentage, referred to as basis points, of the
average daily net asset value of assets under management.

<TABLE>
<CAPTION>
                                                    Three Months Ended                           Six Months Ended
                                             June 30,       June 30,   Percent          June 30,        June 30,    Percent
                                               2001           2000      Change            2001            2000      Change
                                               ----           ----      ------            ----            ----      ------
<S>                                          <C>            <C>        <C>               <C>            <C>         <C>
Total Revenues                                $38,687       $30,944       25%            $76,766        $59,941       28%

Expenses:
Operating and development                      11,916         9,229       29%             23,168         19,844       17%
Sales and marketing                            12,372        11,929        4%             24,477         24,301        1%
                                              -------       -------                      -------        -------

     Total operating profits                  $14,399       $ 9,786       47%            $29,121        $15,796       84%
                                              =======       =======                      =======        =======

     Profit margin                                 37%           32%      --                  38%            26%      --

Percent of Revenue:
Operating and development                          31%           30%                          30%            33%
Sales and marketing                                32%           38%                          32%            41%
</TABLE>

The increase in revenues in both comparable periods was primarily due to growth
in assets under management as a result of new business. Our net cash flow from
funds for the second quarter 2001 was $1.0 billion and $2.4 billion for the
first six months of 2001. We attribute most of this growth to our continued
success at recruiting new registered investment advisors. We established
approximately 700 new registered investment advisor relationships during the
first six months of 2001, of which 200 occurred in the second quarter, bringing
our total network to about 8,300 advisors.

Operating profits and profit margin improvement was due to increased sales of
our investment management programs while controlling costs, primarily sales and
marketing. We have been able to continue to make investments in developing new
products without affecting margins.

Despite the recent volatility in the marketplace, we continue to attract new
business that will support future growth. However, continued volatility in the
capital markets could negatively affect future revenues and profits.

                                       18
<PAGE>

Enterprises
-----------

Enterprises provides retirement business solutions and treasury business
solutions for corporations, unions and political entities, endowments and
foundations and insurance companies. Revenues are primarily earned through
management fees that are based upon a fixed percentage, referred to as basis
points, of the average daily net asset value of assets under management.

<TABLE>
<CAPTION>
                                             Three Months Ended                          Six Months Ended
                                       June 30,      June 30        Percent       June 30,       June 30        Percent
                                         2001          2000          Change         2001           2000         Change
                                         ----          ----          ------         ----           ----         ------
<S>                                     <C>         <C>           <C>           <C>             <C>          <C>
Total Revenues                          $ 17,290       $13,613          27%         $ 33,198      $ 26,349         26%

Expenses:
Operating and development                  5,338         5,901         (10%)          10,791        10,218          6%
Sales and marketing                        5,617         6,175          (9%)          11,934        12,326         (3%)
                                        --------       -------                      --------      --------

     Total operating profits            $  6,335       $ 1,537         312%         $ 10,473      $  3,805        175%
                                        ========       =======                      ========      ========

     Profit margin                            37%           11%         --                32%           14%        --

Percent of Revenue:
Operating and development                     31%           44%                           32%           39%
Sales and marketing                           32%           45%                           36%           47%
</TABLE>


The increase in revenues over the comparable prior year periods was fueled by
growth in average assets under management due to new clients that were sold and
funded during the last twelve months. We feel this increase in new sales is the
result of increased market acceptance of our outsource business solution across
a diverse range of clients. We added 17 new institutional clients during the
second quarter of 2001 and 22 new institutional clients during the first six
months in 2001. Net cash inflow from funds during the quarter was approximately
$1.3 billion. We had an unfunded backlog of about $400 million as of June 30,
2001.

Operating profits and profit margins in both comparable periods were
significantly affected by the timing of certain expenditures. During the first
six months of 2000, we incurred significant technology costs associated with the
development of our treasury solutions platform that strained profits and
margins. In addition, the second quarter of 2001 reflects an unusual decrease in
sales and marketing expenditures due to the timing of marketing programs and
events. We do anticipate a increase in marketing expenditures in the near term.

We are encouraged by the receptivity of the market to our business solutions. We
will continue to build and invest in this business that is diversified by client
and solution types in markets that we believe offer new opportunities for our
services. However, future revenues and earnings could be significantly affected
by changes in the capital markets.


Money Managers
--------------

Money Managers provides investment solutions to U.S investment managers, mutual
fund companies and alternative investment managers worldwide. Revenues are
earned through administration and distribution fees that are based upon a fixed
percentage, referred to as basis points, of the average daily net asset value of
assets under management.

                                       19
<PAGE>

<TABLE>
<CAPTION>
                                             Three Months Ended                         Six Months Ended
                                       June 30,      June 30       Percent       June 30,       June 30      Percent
                                         2001          2000         Change         2001          2000        Change
                                         ----          ----         ------         ----          ----        ------
<S>                                     <C>         <C>          <C>            <C>            <C>         <C>
Total Revenues                           $8,708         $8,452          3%          $16,472      $15,111         9%

Expenses:
Operating and development                 4,280          4,543         (6%)           8,852        7,820        13%
Sales and marketing                       3,693          3,607          2%            7,008        7,280        (4%)
                                         ------         ------                      -------      -------

     Total operating profits             $  735         $  302        143%          $   612      $    11     5,464%
                                         ======         ======                      =======      =======

     Profit margin                            8%             4%        --                 4%           0%       --

Percent of Revenue:
Operating and development                    49%            53%                          54%          52%
Sales and marketing                          43%            43%                          42%          48%
</TABLE>


The increase in revenues over the prior years comparable periods was primarily
due to a significant increase in average assets under administration, mainly
during the second quarter of 2001. We experienced strong sales during the second
quarter 2001, including a significant client that funded during June 2001. We
contracted with eight alternative investment managers and six U.S. money
mangers, many of which will be funding during the third quarter of 2001.

Operating profits and profit margins increased over the corresponding prior year
periods due to the increase in new business activity. During 2000, we made
significant investments in developing the necessary infrastructure to tailor our
products and services in these markets. We will continue to make investments in
this business that could affect future profits and margins. In addition,
revenues are affected by swings in the capital markets. Any significant change
in value would have an impact on revenues.


Investments in New Businesses
-----------------------------

Investments in New Businesses include our global asset management and investment
processing initiatives that incorporate our investment products and services to
provide investment solutions to institutional and high-net-worth investors
outside the United States. Revenues are primarily earned through management fees
and processing fees that are based upon a fixed percentage, referred to as basis
points, of the average daily net asset value of assets under management.

<TABLE>
<CAPTION>
                                                Three Months Ended                           Six Months Ended
                                       June 30,      June 30        Percent       June 30,        June 30        Percent
                                         2001          2000         Change          2001            2000         Change
                                         ----          ----         ------          ----            ----         ------
<S>                                     <C>           <C>           <C>             <C>             <C>         <C>
Total Revenues                          $ 10,625      $  9,952          7%          $ 20,753        $ 19,473         7%

Expenses:
Operating and development                 10,869        10,311          5%            21,678          19,367        12%
Sales and marketing                        4,659         5,354        (13%)            9,369          10,096        (7%)
                                        --------      --------                      --------        --------


   Total operating losses               $ (4,903)     $ (5,713)        14%          $(10,294)       $ (9,990)       (3%)
                                        ========      ========                      ========        ========

   Profit margin                             (46%)         (57%)       --                (50%)           (51%)      --

Percent of Revenue:
Operating and development                    102%          104%                          105%             99%
Sales and marketing                           44%           53%                           45%             52%
</TABLE>

                                       20
<PAGE>

The increase in revenues over the corresponding prior year periods is primarily
due to an increase is assets under management from our Europe/South Africa,
Korea and Canada initiatives. Also, we are beginning to see some early positive
results from the launch of our U.K. pension plan initiative. Finally, revenues
in 2000 included our Canadian consulting business that was sold in July 2000.
Excluding those revenues, revenues would have increased 25 percent in the second
quarter 2001 and 28 percent for the first six months of 2001.

The pace of global asset gathering and revenue recognition continues to
accelerate. However, we also accelerated the pace of our investment efforts
especially in the European region. We plan to undertake new initiatives later in
the year, directed at high net worth and institutional investors in Europe.
We've also continued our substantial development efforts to enhance our global
capabilities of the TRUST 3000 system, especially multi-currency and global
reporting capabilities. We believe that global expansion is an area of
significant long-term growth for our firm. We will continue to make significant
investments in our global initiatives and expect to incur losses throughout the
remainder of this year and into 2002.


General & Administrative
------------------------

<TABLE>
<CAPTION>
                                                     Three Months Ended                         Six Months Ended
                                              June 30,      June 30     Percent       June 30,        June 30        Percent
                                                2001          2000      Change          2001           2000          Change
                                                ----          ----      ------          ----           ----          ------
<S>                                           <C>            <C>        <C>           <C>             <C>            <C>
General and Administrative                     $6,121        $4,243       44%         $11,504         $7,785           48%

Percent of Revenue                                  4%            3%                        3%             3%
</TABLE>


Other Income
------------

Other income on the accompanying Consolidated Statements of Income consist of
the following:

<TABLE>
<CAPTION>
                                                         Three Months ended                           Six Months ended
                                              June 30,        June 30,         Percent      June 30,       June 30,      Percent
                                                2001            2001           Change         2000           2001         Change
                                                ----            ----           ------         ----           ----         ------
<S>                                           <C>             <C>              <C>         <C>             <C>           <C>
Equity in the earnings of
    unconsolidated affiliate                   $2,554          $1,757             45%       $ 4,792        $ 3,510          37%
Interest income                                 1,541           1,066             45%         3,790          2,051          85%
Interest expense                                 (534)           (551)            (3%)       (1,084)        (1,150)          6%
                                               ------          ------                       -------        -------

Total other income, net                        $3,561          $2,272             57%       $ 7,498        $ 4,411          70%
                                               ======          ======                       =======        =======
</TABLE>


Equity in the earnings of unconsolidated affiliate on the accompanying
Consolidated Statements of Income includes our less than 50 percent ownership in
the general partnership of LSV Asset Management ("LSV") (See Note 6 of the Notes
to Consolidated Financial Statements). The increase in LSV's net earnings is due
to an increase in assets under management.

Interest income is earned based upon the amount of cash that is invested daily
and fluctuations in interest income recognized for one period in relation to
another is due to changes in the average cash balance invested for the period.
Although interest income increased over the corresponding prior periods, our
interest rates have substantially decreased.

Interest expense primarily relates to our long-term debt and other borrowings.

                                       21
<PAGE>

Liquidity and Capital Resources
-------------------------------

                                                               Six Months
                                                         ---------------------
                                                             Ended June 30,
                                                         ---------------------
                                                           2001         2000
                                                           ----         ----

Net cash provided by operating activities                $ 64,519     $ 31,578
Net cash used in investing activities                     (34,789)     (23,190)
Net cash used in financing activities                     (51,344)     (19,693)
                                                         --------     --------
Net decrease in cash and cash equivalents                 (21,614)     (11,305)

Cash and cash equivalents, beginning of period            159,576       73,206
                                                         --------     --------
Cash and cash equivalents, end of period                 $137,962     $ 61,901
                                                         ========     ========


Cash requirements and liquidity needs are primarily funded through operations
and our capacity for additional borrowing. We currently have a line of credit
that provides for borrowings of up to $50.0 million. The availability of the
line of credit is subject to compliance with certain covenants set forth in the
agreement, (See Note 8 of the Notes to Consolidated Financial Statements).
Additionally, we have a term loan agreement that provides for borrowings of up
to $25.0 million (See Note 9 of the Notes to the Consolidated Financial
Statements). At June 30, 2001, the unused sources of liquidity consisted of
unrestricted cash and cash equivalents of $127.1 million and the unused portion
of the line of credit of $50.0 million and $25.0 million of the term loan
agreement On August 2, 2001, we borrowed $25.0 on the term loan agreement.

The increase in cash flow from operations was primarily due to an increase in
income and the tax benefit received from stock options exercised as a result of
the rise in our stock price during the past 3 years. The tax benefit on stock
options exercised was previously included in cash flows from financing
activities. The prior year has been reclassified to conform with the current
year presentation.

Cash flows from investing activities are principally affected by capital
expenditures and investments in Company-sponsored mutual funds. Capital
expenditures in the first six months of 2001 primarily related to the expansion
of our corporate headquarters. Total cost of the expansion is estimated at $50.0
million, of which we have spent $15.5 million to date and $9.6 million during
2001. The expansion is expected to be completed by late 2002. Also, cash flow
from investing activities includes purchases of Company-sponsored mutual funds
of approximately $18.2 million during 2001, net of $6.8 million of sales, as
compared to $15.1 million during 2000, net of $2.1 million of sales.

Cash flows from financing activities are primarily affected by debt and equity
transactions. Principal payments on our long-term debt are made annually from
the date of issuance while interest payments are made semi-annually. Principal
and interest payments were made in the first six months of 2001 and 2000 (See
Note 9 of the Notes to Consolidated Financial Statements). We continued our
common stock repurchase program. We purchased approximately 1,327,000 shares of
our common stock at a cost of $50.0 million during the first six months of 2001.
As of July 31, 2001, we still had $46.1 million remaining authorized for the
purchase of our common stock. Cash dividends of $.09 per share were paid in the
first six months of 2001 and $.07 in the first six months of 2000. The Board of
Directors has indicated its intention to continue making cash dividend payments.

Our operating cash flow, borrowing capacity, and liquidity should provide
adequate funds for continuing operations, continued investment in new products
and equipment, our common stock repurchase program, expansion of our corporate
campus, future dividend payments, and principal and interest payments on our
long-term debt.

                                       22
<PAGE>

Forward-Looking Information
---------------------------

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.


Quantitative and Qualitative Disclosures About Market Risk.
----------------------------------------------------------

We do have a number of satellite offices located outside the United States that
conduct business in local currencies of that country. All foreign operations
aggregate approximately 6 percent of total consolidated revenues. Due to this
limited activity, we do not hedge against foreign operations nor do we expect
any material loss with respect to foreign currency risk.

Exposure to market risk for changes in interest rates relate primarily to our
investment portfolio and other borrowing. 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. We place our investments in
financial instruments that meet high credit quality standards. We are adverse to
principal loss and ensure the safety and preservation of our invested funds by
limiting default risk, market risk, and reinvestment risk. The interest rate on
our long-term debt is fixed and is not traded on any established market. We have
no cash flow exposure due to rate changes for our long-term debt.

We are exposed to market risk associated with changes in the fair value of our
investments available for sale. To provide some protection against potential
fair value changes associated with our investments available for sale, we have
entered into various derivative financial transactions. The derivative
instruments are used to hedge changes in the fair market value of certain
investments available for sale. The derivative instruments are qualifying hedges
and as such changes in the fair value hedge along with changes in the fair value
of the related hedged item are reflected in the statement of income. We
currently hold derivatives with a notional amount of $5.9 million with various
terms, generally less than one year. The effectiveness of these hedging
relationships is evaluated on a retrospective and prospective basis using
quantitative measures of correlation. If a hedge is found to be ineffective, it
no longer qualifies as a hedge and any excess gains or losses attributable to
such ineffectiveness as well as subsequent changes in fair value are recognized
in current period earnings. During 2001, the amount of hedge ineffectiveness
that was charged against current period earnings was $.3 million. We believe the
derivative financial instruments entered into provide protection against
volatile swings in market valuation associated with our Investments available
for sale. During 2001, we did not enter into or hold derivative financial
instruments for trading purposes.

                                       23
<PAGE>

PART II.  OTHER INFORMATION
--------  -----------------

Item 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------

         (a)     The following is a list of exhibits filed as part of the Form
                 10-Q.

                 None.

         (b)     Reports on Form 8-K

                 There were no reports on Form 8-K filed by the Company during
                 the quarter ended June 30, 2001.

                                       24
<PAGE>

                                  SIGNATURES




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.



                                           SEI INVESTMENTS COMPANY



      Date August 13, 2001                 By /s/ Kathy Heilig
           ----------------------             ---------------------------
                                                  Kathy Heilig
                                                  Vice President and Controller

                                       25

