Asset manager Sygnia has made its first acquisition since listing last year, buying Gallet Group Employee Benefits in a deal that allows it to expand into the umbrella fund space.
Asset manager Sygnia has made its first acquisition since listing last year, buying Gallet Group Employee Benefits in a deal that allows it to expand into the umbrella fund space.
When Sygnia listed last year, it said it had ambitions to offer a simple and low-cost umbrella fund. To this end, it began hiring two professionals from Alexander Forbes to help it grow in this new area of business.
In November, Sygnia said it had more than R200m in cash available for growth, but would use smaller amounts to buy umbrella funds in the market.
Sygnia said on Monday that Gallet — which was acquired for an undisclosed amount — was founded in 1974, and had R5bn in assets under advice and administration. The firm is a consultant and administrator of the Setshaba Pension and Provident Funds, an umbrella fund.
Umbrella funds are schemes offering risk and investment benefits and employees normally participate in such funds through their employers.
Sygnia said it had offered investment administration and asset management services to some of Gallet’s clients including the Setshaba provident and pension funds for more than seven years. Since listing last year, Sygnia has had some positive growth, with its assets under management and administration growing to R146bn in the period ended-December, compared to the R137bn it had at the end of September last year.
The company has also experienced some growth in its share price. When it listed in October, its shares had been placed at R8.40 per share. At the end of trade on Monday, Sygnia’s share price was trading at about R15.
Sygnia’s share price has risen about 11% since the beginning of the year, making it an outperformer among its peers.
Shares in its peer Anchor Capital, which has also been popular, are down about 14% since the year started.
Peregrine and PSG Konsult are down about 6% and 9%, respectively, so far this year.
Sygnia CEO Magda Wierzycka said last year the firm would pay its maiden dividend as a listed entity next month.