Johannesburg - Sygnia said on Thursday it had signed an agreement to purchase db X-trackers from Deutsche Group Holdings for R325 million.
The deal is subject to regulatory approval.
Following this, and subject to approval from the Financial Services Board, the company and the ETFs will be rebranded.
DBX is a FSB authorised and approved Collective Investment Schemes management company, which offers a range of exchange traded funds listed on the JSE, referencing offshore listed shares.
The ETFs track the Euro Stoxx 50, FTSE 100, MSCI Japan, MSCI USA and MSCI World indices. The assets under management in the five ETFs as at February 28 were R11.3 billion.
Sygnia has managed assets on an index-tracking basis since the inception of its asset management company in 2003 and offers these to its retail and institutional clients through segregated accounts, unit trusts and unitised life funds.
Sygnia currently manages R16.9 billion in domestic and international index-tracking funds and has a stated intention of becoming a leading provider of passive solutions in South Africa. The acquisition of DBX allows Sygnia to enter the ETF market with a critical mass of assets and to launch a broader range of ETF products relatively quickly, it says.
Given the regulatory dispensation around ETFs referencing offshore assets, there are no foreign exchange limits on the amounts that South African retail investors can invest in these products, it adds.
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“The DBX ETFs are unique in that they offer investors access to international investments through a South African-regulated structure, in an easy and cost effective manner. There is no need to go through the complexity of obtaining approvals to take assets offshore”, says Magda Wierzycka, CEO of Sygnia.
“Investing offshore can be intimidating, costly and complex. The DBX ETFs make it simple and immediate.
“We are very excited to be able to acquire DBX. DBX is the largest provider of ETFs referencing foreign assets in South Africa, with a strong reputation and an established retail and institutional client base. This is a significant acquisition for Sygnia and is expected to be instantly earnings-enhancing and attractive for our shareholders.
“From the existing DBX clients’ perspective this acquisition will not, in any manner, affect the way in which their investments are managed. In fact, we hope that clients derive comfort from being serviced by a well-established South African financial services company.”
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