She Disrupted Financial Services. Now It's on to South African Society
WHY YOU SHOULD CARE
Magda Wierzycka is changing the financial game – despite the death threats.
By Nick Dall
“What are we all going to do next?”
The question took Magda Wierzycka — then CEO of African Harvest Fund Managers — by surprise. She was focused on fulfilling the majority shareholder’s wish to sell the business and “hadn’t given the future much thought.”
“There are about six of us,” continued Niki Giles, the firm’s chief financial officer, “who’d like to do whatever you’re doing.”
Since then, Sygnia — the asset management company born out of that 2006 conversation — has disrupted (and angered) the closed South African financial services industry, by introducing passive management to the country, by disclosing all costs to clients and by slashing fees by 70 to 80 percent. What’s more, in the past year and a half, Wierzycka has become an outspoken anti-corruption activist, gaining as many devoted acolytes as sworn enemies. “I just wish a few other business leaders would do the same,” says veteran anti-corruption journalist Martin Welz, before positing that everyone else is either “too scared to say anything … or complicit in the corruption.”
[While most business leaders] buried their heads in the sand, I decided to take an active stance.
Wierzycka is used to being an outsider. She arrived in South Africa at age 13, after her medical doctor parents had been made economic refugees by communist Poland. After securing a place at the prestigious Pretoria High School for Girls, Magda was faced with the small matter of learning to speak both English and Afrikaans. Despite it being a “terrible, terrible time,” she excelled in both high school and college — her Soviet foundation in math and science served her well — and, after qualifying as an actuary, went on to occupy a string of increasingly senior roles at some of the biggest names in the South African financial services industry.
Fast-forward to 2006 and Sygnia’s accidental genesis. In rented offices, Wierzycka, Giles (now Sygnia’s chief operating officer) and a few others struggled to hammer out an identity for their fledgling company, let alone a business model. They settled on three potentially unique selling points. South Africa at the time had very few “funds of funds” and no passively managed funds, so the group decided to enter both markets. And Wierzycka was able to hang on to African Harvest’s “incredibly robust management software” as part of the buyout deal.
Almost immediately this software brought them two major clients (SEI in Philadelphia and one of South Africa’s largest private pension funds) that weren’t interested in Sygnia’s financial products but did desperately need its administrative powers. Being able to “put their logos on slides” made Sygnia “instant somebodies,” Wierzycka says, giving the company credibility as it pushed its low-cost model.
Within a year, the world plunged into financial turmoil, a storm Sygnia navigated by always being “only one step ahead” of the legal and financial demands, says Wierzycka, “like a hamster on a wheel.” On the backs of its low-fee products, the company has since grown to $14.7 billion in assets under management.
It’s not just Sygnia’s low fees and full disclosure that make Wierzycka unpopular among the old guard. She talks candidly about the “many barriers to entry” faced by women in financial services and the “EQ weaponry” needed to fight them. For her, this means learning how to speak up in meetings and to “never take things personally” — especially during bonus negotiations.
The latter skill has been put to the test recently as Wierzycka’s outspoken anti-corruption views have led to death threats and the dissemination of poorly photoshopped images of her head on dominatrices’ torsos that purported to reveal “Magda’s secret past.” As luck would have it, our interview coincided with the publication of a 1,000-word character assassination by one of her many targets: Black-owned Sagarmatha Technologies Ltd. (a new arm of one of the most aggressive and controversial media firms in the country), via a deputy chairwoman, accused Wierzycka of “covert racism” and called her “a minnow and publicity-seeking asset manager” for questioning its financial fundamentals. “I’ll sue. I’ll win. And I’ll donate the money to charity,” Wierzycka told me.
Last year was “a big year,” she says, referring to the succession of scandals that ultimately led to the collapse of the Zuma government. While most business leaders “buried their heads in the sand, I decided to take an active stance,” she says. Wierzycka, who for two decades had written articles about financial topics as PR for her various employers, turned her hand to investigative journalism. One “Sunday afternoon on the couch,” while perusing the Security and Exchange Commission reports of Nasdaq-listed NET1 — the company in charge of South Africa’s social grant system — she unpacked the “horror show” of a company with a “stated financial objective [to] exploit the most vulnerable strata of society.”
Since lifting the lid on NET1, Wierzycka has pursued them and other targets relentlessly, writing regular columns for two publications and tweeting prolifically. (In March she quit Twitter not long after a tweet promoting hiring more household help as economic stimulus was labeled racist, and while she says she’ll never “tweet for the sake of it” again, she hints that she will be back.) She has even offered rewards for any information leading to the apprehension of members of the Gupta family, who have become synonymous with the state capture presided over by President Jacob Zuma.
Wierzycka’s activism is a personal endeavor (Giles says, though, that the Sygnia board is “behind her all the way”) and she says any positive PR for Sygnia is a “secondary consequence.” Welz, the seasoned journalist, is not convinced, “but who cares? Every company markets itself … so why not market yourself by doing the right thing?” Either way, while Wierzycka would love to focus entirely on Sygnia, she’s well aware that the situation in South Africa likely requires more muckraking.
Instead of “whingeing,” she’s pushing ahead with plans to launch South Africa’s first cryptocurrency exchange later this year. And she’s working on a “really big idea” that she hopes will make the firm money and bring “lots of social benefits” to the African continent. Whatever it is, it won’t be quiet.
- Nick Dall, OZY Author Contact Nick Dall