- Magda Wierzycka, founder of investment management company Sygnia, will step down as co-CEO in May.
- She is shifting her attention to other priorities, including her own investment vehicle.
- Wierzycka is a large investor in a fund linked to Oxford University.
- The high-profile Wierzycka is intrinsically linked to the Sygnia brand, and is sometimes controversial.
- The company may want to craft a different image for itself – but she remains the biggest shareholder, and is still expected to call the shots.
- For more stories, go to www.BusinessInsider.co.za.
Investment company Sygnia's founder Magda Wierzycka has resigned as joint CEO - as she shifts her focus to finding overseas opportunities, and concentrates on her own investment vehicle.
David Hufton, who was named deputy CEO in 2018, then joined Wierzycka at the helm of Sygnia last year, will take the role of sole CEO from June.
Speaking to the Business Insider South Africa after the announcement, Wierzycka said stepping down was a decision long in the making. The move was not particularly huge from Sygnia’s perspective, she said, given she will remain a majority shareholder of the business and will continue to serve on its board.
“I will contribute as much as possible to the strategy of the business, to the innovation, to looking for opportunities for Sygnia; not only here in South Africa but also overseas. But the fact that I’m no longer tied to day-to-day operations gives me the freedom and the flexibility to do all of that,” she said.
Part of her plan involves looking for investment opportunities for Sygnia - particularly in the US, where she is looking to spend three months this year, to study its economy.
She is also focusing more attention on her investment vehicle Braavos Investment Advisors, which has already attracted £5 billion (more than R100 billion) in assets under management, she said.
Wierzycka owns Braavos with Sygnia director André Crawford-Brunt. The company holds a large stake in Oxford Sciences Innovation (OSI).
OSI has an exclusive deal with Oxford University to commercialise its research – which may include the Covid vaccine that the university designed in partnership with AstraZeneca. OSI’s other shareholders including Tencent, Huawei, and Google Ventures. But Braavos holds the biggest stake (20%), according to the UK publication The Telegraph.
OSI made headlines last year after the unexpected resignation of its chairman, Patrick Pichette, the former Google chief financial officer, shortly after the departure of its CEO Charles Conn.
The Telegraph blamed the departures on “internal wrangling over strategy at the fund, linked to the emergence of a new largest shareholder, South African investment vehicle Braavos Capital”. There appears to be disagreements about rising costs and staff turnover in OSI, according to the publication.
A possible factor in Wierzycka’s decision to step down as CEO of Sygnia may be the increasing danger of a conflict of interest between her role at Sygnia and her activities at Braavos and OSI.
Last year Sygnia announced that it will make investments into two Braavos venture capital funds and that it is appointing Braavos, Wierzycka, and Crawford-Brunt as “investment advisors and directors” as part of the deal. In terms of the deal, they will be paid around R25 million a year for these services – of which around R14 million will be paid back as part of an agreement to lease office space, and get legal and compliance support from Sygnia in the UK.
According to a CityWire report, Sygnia has invested R2 billion in Braavos. Some of Sygnia’s funds – including the Sygnia 4th Industrial Revolution Global Equity Fund and the Sygnia Health Innovation Fund – are also invested in OSI.
Sygnia’s investments in Braavos and OSI – which are closely linked to Wierzycka in her private capacity – have started to raise questions about conflicts of interests. At the company's recent AGM, Crawford-Brunt resigned as director, apparently due to these concerns among shareholders, CityWire reported.
Sygnia without Wierzycka as CEO
Wierzycka co-founded Sygnia 15 years ago, and grew its assets under management to R251 billion during her tenure.
From the start, she was intrinsically linked with the Sygnia brand. This has helped Sygnia, especially as Wierzycka won plaudits for her strong stance against state capture.
But it has also been a double-edged sword, with Wierzycka, for example, taking flak for insensitive social media posts.
And while Wierzycka's sustained attacks on the high fees earned by active investment managers have won her fans among retail investors, she has earned the ire of many in the investment industry .
For Sygnia to grow in the future, the company will have to win over more institutional investment business, including from large pension funds, one commentator told Business Insider. The retail market, which is aimed at individual investors, is not big enough in South Africa.
Given that she is a sometimes controversial figure, the company may now be attempting to create an impression that “it’s not the Magda show anymore”, says Casparus Treurnicht, portfolio manager at Gryphon Asset Management.
“She started the business and I think there’s a lot of emotional elements involved, and I think maybe the board of directors – including her – decided it’s time to give the business a new image,” he said.
"They’re stepping away from what appears to be a business run by Magda and now making it look like it’s running independently. But at the end of the day, I think Magda is still going to call some big shots,” Treurnicht said.
“I think we’ll see more of what Magda wanted this business to become and I think that’s exactly what they’re doing.