DiGAME Investment Company, a key investor in leading online education game-changer GetSmarter, today announced that it had made a strategic investment in 10X Investments, a South African tech-enabled asset manager, alongside existing shareholder Old Mutual Private Equity.
Announcing a total of US$6.14mn in new funding, 10X said it would use the funds to further expand its retail offering and look at international opportunities. 10X – which manages more than ZAR8bn for individuals and blue-chip clients such as Virgin Active, General Motors and Deutsche Bank – is shaking up the sector in South Africa in much the same way Vanguard, now the second largest asset manager globally, has done in the U.S.
Since its inception in 2008, the 10X High Equity portfolio has outperformed the average large fund manager before fees, as published in the Alexander Forbes Large Manager Watch.
The company uses four core principles – index tracking, low fees, diversification and time-driven portfolios – to deliver competitive, long-term investment returns. “A simple online investing process, fees that are typically up to 80% less than the industry, and our award-winning investment strategy means more money for our clients at retirement,” said CEO and founder of 10X Investments, Steven Nathan. “The new round of funding will allow us to further empower South Africans who want to benefit from 10X’s simple and effective investment strategy.”
“We are delighted to have the support of our existing investors and to welcome DiGAME on board,” added Nathan.
Wealth managers have historically operated in a relatively low-tech environment, but millennial customer expectations, growing market competition and more stringent reporting requirements have compelled them to rethink their businesses using technology. In the US alone, the wealth tech sector will have an estimated market size of US$2.2trn by 2020, according to FT Partners Research Wealth Tech Report.
The opportunity to combine technology with proven investment strategies means there has never been a better time to be involved in the fintech sector. In South Africa, however, assets managed by index trackers remain a fraction of total assets under management, mainly due to a lack of awareness.
Samer Salty, a DiGAME board member, said, “10X is already a major player in the South African market, and the opportunity to scale the business, which has proven superior investment returns, is substantial.”
“Advanced analytical capabilities, quicker response times and improved customisation, all at significantly lower costs than traditional asset managers, means 10X plays to our expertise in technology growth investing as well as demonstrating a clear social benefit,” he added.
“We are excited to join Steven Nathan and the management team of 10X at this important time and are also pleased to be teaming up with Old Mutual Private Equity and the other shareholders in this investment,” Salty concluded.
About 10X Investments
10X Investments is an authorised financial services provider, a licensed retirement fund administrator and investment manager. 10X provides a range of simple, effective, low cost solutions to retirement investors. A force that changes the fundamental rules of an industry is known as a 10X force because it makes it 10 times harder for the existing players to compete. We thought the name appropriate, given that we are changing the fundamentals of the retirement fund industry. We pronounce it ten-ex, not ten times. 10X manages several billion rand in private and corporate retirement investment funds. Our clients include; Virgin Active, EOH, Deutsche Bank and Macquarie.
For more information, visit www.10X.co.za
About DiGAME Investment Company
DiGAME Investment Company is a permanent investment vehicle focused on digital growth in Africa. It is dedicated to investing in technology-enabled companies on the continent that have the potential to become regional and global leaders. Backed by a sovereign wealth fund, DiGAME provides investors with diversified sector exposure through a portfolio of high growth, digital companies operating in Africa. DiGAME is sector-agnostic with a technology core targeting education, healthcare, energy and financial services. It has a strong emphasis on investing in businesses that deliver scalable impact. DiGAME Investment Company is managed by DiGAME Investment Manager, a subsidiary of Zouk. It has made three investments since inception, one of which (online education provider GetSmarter) was sold to 2U in May 2017 for US$103mn.
About Old Mutual Private Equity
Old Mutual Private Equity (OMPE) is one of South Africa’s largest and most established private equity managers. It invests in high-quality unlisted businesses with quality management, significant growth potential and attractive characteristics. OMPE has successfully invested more than *US$750mn (ZAR10bn) and returned more than *US$1.15bn (ZAR15.4bn) to investors since 2004. The company is part of Old Mutual Alternative Investments, one of the largest alternative asset managers in Africa.