Magda Wierzycka, outgoing joint CEO of Sygnia Group. (Image: Getty Images)
- Magda Wierzycka, founder of Sygnia Investment Management Company, will step down as CEO in May.
- It focuses its attention on other priorities, including its own investment instrument.
- Wierzycka is a major investor in a fund affiliated with Oxford University.
- The high-profile Wierzycka is essentially associated with the Sygnia brand and is sometimes controversial.
- The company may want to create a different image for itself – bbut she is still the largest shareholder, and she is still expected to.
- For more stories go to www.BusinessInsider.co.za.
Sygnia investment firm founder Magda Wierzycka has resigned as co-CEO – as she shifts her focus to finding foreign opportunities and concentrating on her investment vehicle.
David Hufton, who was appointed deputy chief executive in 2018 and then joined Wierzycki at the helm of Sygnia last year, will take on the role of sole chief executive officer from June.
Addressing Business Insider of South Africa after the announcement, Wierzycka said the resignation was a long-standing decision. The movement has not been particularly large from Sygnia’s perspective, she said, given that she will continue to be the company’s majority shareholder and will continue to serve on its board.
“I will contribute as much as possible to the business strategy, innovation and search for opportunities for Sygnia; not only here in South Africa but also abroad. But the fact that I am no longer tied to everyday operations gives me the freedom and flexibility to do it all, ”she said.
Part of her plan includes looking for investment opportunities for Sygnia – especially in the US, where she wants to spend three months this year studying her economy.
It is also focusing more on its investment vehicle Braavos Investment Advisors, which has already attracted £ 5bn (more than R100bn) of assets under management, she said.
Wierzycka is the owner of Braavos with Sygnia director André Crawford-Brunt. The company has a large stake in Oxford Sciences Innovation (OSI).
OSI has an exclusive contract with Oxford University to commercialize its research – which may include the Covid vaccine, which the university designed in partnership with AstraZenec. Other shareholders of OSI, including Tencent, Huawei and Google Ventures. But Braavos has the biggest stake (20%), according to the British publication The Telegraph.
OSI hit the headlines last year following the unexpected resignation of its president, Patrick Pichette, former chief financial officer of Google, shortly after the departure of CEO Charles Conn.
The Telegraph blamed deviations from “internal disputes over the strategy in the fund, related to the emergence of a new largest shareholder, the South African investment vehicle Braavos Capital.” There appear to be disagreements about rising costs and staff turnover in PWDs, the publication said.
A possible factor in Wierzycke’s decision to step down as CEO of Sygnia may be the growing risk of a conflict of interest between her role in Sygnia and her activities in Braavos and OSI.
Last year, Sygnia announced that it would invest in two Braavos venture capital funds and would appoint Braavos, Wierzycka and Crawford-Brunt as “investment advisers and directors” as part of the deal. As for the deal, they will be paid around RUS 25 million a year for these services – of which around R14 million will be repaid as part of a business lease agreement and legal and compliance support from Sygnia in the UK.
According to a CityWire report, Sygnia has invested R2 billion in Braavos. Some Sygnia funds – including the Sygnia 4th Industrial Revolution Global Equity Fund and the Sygnia Health Innovation Fund – are also invested in PWDs.
Sygnia’s investments in Braavos and OSI – which in its private capacity are closely linked to Wierzyck’s – began to raise questions of conflict of interest. At a recent meeting of the company’s assembly, Crawford-Brunt resigned as director, apparently because of this shareholder concern, CityWire reported.
Sygnia without Wierzycke as CEO
Wierzycka founded Sygnia 15 years ago and during her tenure increased assets under management to RR 251 billion.
From the very beginning, it was essentially associated with the Sygnia brand. This helped Sygnia, especially as Wierzycka won praise for her firm stance against taking the state.
But it’s also a double-edged sword, for example, Wierzycka was taking flakes for insensitive posts on social media.
And while Wierzycke’s continued attacks on the high fees earned by active investment managers have won over her fans among retail investors, she has gained the anger of many in the investment industry.
For Sygnia to grow in the future, the company will need to acquire more institutional investment business, including large pension funds, one commentator told Business Insider. The retail market, which targets individual investors, is not large enough in South Africa.
Given that she is sometimes a controversial figure, the company may now be trying to create the impression that “this is no longer a Magda show,” says Casparus Treurnicht, portfolio manager at Argon Asset Management.
“She started the business and I think there are a lot of emotional elements involved, and I think maybe the board of directors – including her – decided it was time to give the business a new image,” he said.
“They’re moving away from what seems to be Magda’s company and now they seem to be doing business on their own. But at the end of the day, I think Magda will still do some great things,” Treurnicht said.
“I think we will see more of what Magda wanted this job to become and I think that’s exactly what they are doing.