This morning an interesting bit of news appeared in my in-box: it was a strategy overview from one of the women I most admire in South Africa’s tough, male-dominated asset management industry, Magda Wierzycka.
She was announcing the details of how she is going to ensure her company, Sygnia, becomes the largest passive investment manager in South Africa. For starters, she has fired the first salvo in what could easily develop into a price war in the index tracking fund arena.
Magda is one of those people who has it all: she is stunningly beautiful, has boundless brain power – as her qualification as an actuary attests – and the guts and acumen to make it in a fiercely competitive business sector. She married a man who evidently isn’t intimidated by women who have high earning power and she manages to spend quality time with her family, too. Having all those attributes has a downside: it inevitably attracts much jealousy.
I have been following Magda’s progress closely over the years. I have written about developments in her professional life as well as how she views investing and the industry for a variety of news organisations, from Leadership magazine to Moneyweb.co.za.
This week’s announcement reminds me of her plans when she became CEO of Sygnia in 2006. Over the past seven years, Magda has built what was a small company with a “happy family feeling” into the country’s second-largest institutional multi-manager. It now has assets under management in excess of R100bn (more than £6bn).
You can read more about Magda’s next steps at biznewz.com, where I’m working with Africa’s top business broadcaster Alec Hogg and a number of other journalists on building an exciting new independent news outlet. On my blog this week, I’ve posted a piece I wrote about Magda when she announced Phase 1 of Sygnia’s plans to grow in the investment world. I was Financial Services Correspondent for a business and investment news organisation at that time.
If you have any doubt that Magda will achieve her freshly revealed ambitions, I’m sure you will find that this question mark in your head has disappeared by the time you get to the end of this article (see below). What Magda says she does. Her competitors must – to borrow a phrase from journalist colleague Barry Sergeant – be trembling in their socks.
Asset management entrepreneur Wierzycka takes on big guns in R200bn industry. She spoke to Jackie Cameron.
Asset management entrepreneur Magda Wierzycka is set to take on the big guns in the R200bn multi-management industry, she told Moneyweb.
The 37-year-old Wierzycka, who recently made a cool R80m through the R300m sale of a stake in African Harvest Fund Managers to listed financial services company Cadiz late last year, has launched her own financial services group, Sygnia.
Business is already booming since Sygnia’s doors opened in December.
Staff numbers have grown from 15 to 20. Sygnia is looking for more people to join its team and Wierzycka is contemplating expanding her V&A Waterfront, Cape Town, operation to bigger premises.
Wierzycka nurtured the assets under management of African Harvest from R10bn to R32bn when she was CEO.
Then, Mzi Khumalo’s Metallon decided to sell its stake in African Harvest to free up some cash.
Wierzycka, who initially sold IQuest – a hedge fund of funds business she owned with husband Simon Peile – to African Harvest, kept that operation. It has been renamed Sygnia Asset Management.
With about R4bn under management, it continues to build customised multi-manager funds for pension funds and structure hedge funds of funds.
Also in Wierzycka’s stable is Sygnia Life, which gives the company the opportunity to structure investment products through its life licence.
Sygnia Systems, meanwhile, is an information technology company with a system, Sygnia Platinum, designed specifically for asset managers.
That product, which houses all the software requirements of an asset management company in one integrated system, was seen as a major competitive advantage for African Harvest Fund Managers where it was developed.
The team who created it, however, did not wish to move to Cadiz, hence Wierzycka kept that part of the operation, she said.
Sygnia will market the software to other asset managers.
Wierzycka said this week that after being in long-only asset management, it was time for “something new” in her career.
There was no time to take a break because many staff followed her, a number of whom also moved from Coronation Fund Managers where she was responsible for institutional business before it listed about five years ago, and they needed jobs.
In addition to seeing much more room for growth in the hedge funds of funds space, Wierzycka has her sights set on becoming a major player in the multi-manager arena.
She plans to take on companies like Investment Solutions, Advantage Asset Management, Old Mutual’s Mutual’s SYmmETRY Multi-manager and Sanlam Multi-Managers, who together control about R200bn of the country’s savings.
Wierzycka, an actuary who started her career as an Alexander Forbes consultant, said she believes there is room for a competitor – particularly one that offers greater transparency and lower fees to retirement funds.
“This is a segment of the market where you have very little competition,” she noted.
In addition, the idea is for Sygnia to offer customised multi-manager solutions to pension funds. “With customisation, we don’t squeeze the underlying managers,” Wierzycka said of the way fees are structured.
The aim is to produce better performance, through a combination of a better selection of managers and lower fees.
Sygnia also offers structures that can give retirement funds the risk-return profile of hedge funds without pension funds falling foul of legislation, she said.
Wierzycka is hunting for an additional investment professional to join her team, someone who has been a portfolio manager and knows the right questions to ask other fund managers.
Empowerment will also have to be addressed, she said.
For now, Wierzycka said she is enjoying that “happiness club” feeling that comes with owning a small business where everyone enjoys working together.
Clearly she has her sights set on building a massive organisation because, as she says, a successful multi-manager business requires volumes.
Her competitors should be quivering in their boots. If anyone knows how to attract flows to an asset management company it is Wierzycka.
Glamorous, blonde and undeniably astute, she is known as a master of marketing. The flip side of this is that all these traits, together with her wealth, leave some decidedly green with envy.
She also has a keen understanding of the financial services sector, not least of all that it is one of the most lucrative industries where basis point fees translate into “humungous amounts of money”.
Leaving nothing to chance in her new venture, Wierzycka has hired a London advertising agency to design Sygnia’s logo and help develop its brand.
“We wanted something fresh, modern and that would appeal to institutions and bodies around the world,” she said.
No doubt, the financial services industry is going to be seeing and hearing a lot more from Wierzycka.
* This article about Magda Wierzycka was published by Moneyweb.co.za. You can find the original article here.
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