🔒 Magnus Heystek: The Sygnia fund I’ve invested in for ALL my grandchildren – PREMIUM

Magnus Heystek, a personal finance expert and former journalist who runs his own investment firm, Brenthurst Wealth Management, has put his own family’s money into the Sygnia Oxford Sciences Innovation Fund. This invests in the shares of Oxford Sciences Innovation Plc, a company that has partnered with the University of Oxford to convert its patents and research ideas into commercial enterprises and in select spin-out companies that have achieved scale and success, while having a positive impact on humanity. In partnership with the University of Oxford, OSI invests in fundamental technology companies, built on science. Currently, the Oxford University research team is among the frontrunners to get and develop a Covid-19 vaccine. Heystek’s confidence in this investment is so solid that he went as far as saying at a BizNews Finance Friday webinar, in only a few years time, people will say: ‘Wow, that was the Tesla of the medical world that we should have invested in’. – Nadya Swart

With me today, I’ve got Magnus Heystek, one of our favourite independent financial advisers. As many of you know, he’s written many personal finance books. He is the founder of Brenthurst Wealth Management. Not only does Magnus have many journalism awards behind his name, but he’s managed to build up his business so that he has R8bn worth of assets under management company. Magnus, is that right?

That’s roughly correct – depends on the markets and the state of the rand, but that’s roughly correct, yes. We’re very pleased to achieve that level. Thank you.

___STEADY_PAYWALL___

So the hot topic is investing offshore. And Magnus has been telling people for years, that’s the smart place to put your money. There’s been a lot of scepticism about that. But people are starting to come around to your way of thinking now, including people who’ve been quite critical of you in recent years.

Well, Jackie, the facts speak for themselves. And I think that there’s been a lot of vested interests that were threatened by my recommendation to take some of your money, in some cases all of your money offshore – it depends. But I think, that the facts after almost 10 years of underperformance are very difficult to argue against. So, we’re not talking about marginal underperformance – local versus offshore. We are talking about how over 10 years: the local market is down 9% in rand terms and the offshore market is down 19% in rand terms.

Also read: Magnus Heystek: Invest offshore or die! Even rockstar fund manager gives up on SA

And over five years, you know, it’s even worse: the local market is down 1% per year and the offshore market is down 16%. So what prompted my local column which was posted on BizNews on Monday, is that the fund managers themselves are now starting to begrudgingly admit that we need to get more money offshore. The Rainmaker Fund from Nedbank acknowledged this week that they should have had more offshore and they’ve applied to change their mandate by going 30% offshore now.

We’ve had Thys du Toit, one of the founders of Coronation, speaking to the asset management industry, where he’s saying: If you don’t have an offshore fund or offshore capabilities – you’re dead in the water. By implication, he’s saying the same to the investors: If you don’t have some offshore exposure in your portfolio – you’re gonna be dead in the water in terms of your investment returns.

I have a question here from somebody who wants to know if you’ve got any thoughts on the Sygnia Oxford Sciences Innovation Fund.

I’d like to disclaim that I’ve invested some of my own money in that fund and we have been assisting Sygnia and marketing that to our clients – so that’s upfront. And we did this after a very extensive due diligence on the Oxford Sciences Innovation Fund, which very briefly commercialises all the patents and innovations coming out of the Oxford University for Life. And the primary example right now is the vaccine against Covid-19, where the Oxford University research team are the front runners to get and develop the vaccine.

They’ve done a deal with AstraZeneca, the very large British pharmaceutical company. They’ve got a billion dollars worth of funding from President Donald Trump. They’re about to roll it out commercially. Now, if that is even remotely successful – the OSI Fund will benefit tremendously. The good news is you can get it offshore in large chunks: that’s for the private equity players as large amounts of money are required. But you can get it locally with Sygnia, in their living annuity, retirement annuity and endowment options for as little as R50,000.

I have invested in that for all my kids and my grandkids. I’ve said to them: open this envelope in 10 years from now, I think you’ll make money, it’s in the right space. Conceptually, it just makes so much sense and there’s a bit of a window of opportunity until the shares are taken up. So I can recommend it.

Wow. And then what about the fees associated with that Fund? Are they also lower than your average Fund managers’ fees?

No, they’re not. They’re private equity fees – Magda was very insistent. It’s not an index fund that simply just packs the fund where you don’t have to do any research. If you understand the Oxford Sciences Innovation Company: they’ve got very, very smart and expensive people doing the research individually on all these vaccines that come out of the university, all the patents. And so, this is not a cheap product and it shouldn’t be a cheap product.

Also listen to: Inside Covid-19: Adrian Gore – this is the future; Sygnia’s road to part owning world’s hot vaccine. Ep 29

You’re not going to argue about fees on this one. Mark my words, Jackie. You and I will talk about this five years from now. And we are going to say, wow, that was the Tesla of the medical world that we should have invested in. I really feel strongly about that.

  • Magnus Heystek is investment director at Brenthurst Wealth (www.bwm.co.za). You can follow him on Twitter on @magnusheystek.
  • If you missed the BizNews Finance Friday webinar with Magnus Heystek, where he answered many of your questions about how and where to invest offshore, watch the catch-up video.
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