Cape Town – Money manager Sygnia's Johannesburg Stock Exchange (JSE) debut on Wednesday saw its share price increase by 71% to R14.40 before smoothing out at R13.75 at 10:46.
It raised R262m after selling 22.8% of the company’s market capitalisation - 31 224 shares - as part of a private placing at a price of R8.40 per ordinary share before going live on the JSE.
Sygnia, which started out in 2003, prides itself on being an innovator and a market disruptor within the financial services industry in South Africa. It manages and administers R137bn on behalf of institutional and retail investors.
“We were very humbled by the level of interest and support expressed for Sygnia and its plans. Many of our potential investors liked our low-cost, market disruptor business model,” said Sygnia CEO Magda Wierzycka.
“This is a great validation of our core belief that South African savers are ready for low-cost financial services products and index-tracking funds in the face of low real returns, an uncertain future and the underperformance by many active asset managers.”
Professor Haroon Bhorat, Sygnia chairperson and UCT’s Development Policy Research Unit director, said Sygnia is a triple threat as a disruptor.
“As a firm in the financial industry, which has grown rapidly yet organically, constantly innovating, targeted at lowering costs to consumers and finally, led by a woman – Sygnia must surely be viewed as one of the corporate success stories of the decade."
Reputation for innovation
Sygnia has a reputation for innovation within the financial services industry.
In 2006, the company shook up the multi-manager industry by launching customised multi-management and investment administration platforms with full cost transparency.
In 2013 the company launched its range of low-cost savings products linked to index-tracking, charging just 0.40% per annum for a combination of a retirement annuity and an investment product.
This has shocked the industry, which is used to charging well in excess of 1% for similar products. Future strategies include the launch of robo-advisers and umbrella funds designed to meet the requirements of South Africa’s evolving regulatory landscape.
“We are very excited about our future. Given the level of support expressed by investors in our company we plan to aim higher and move faster,” said Wierzycka.