FINANCIAL services firm 10X Investments plans to acquire CoreShares, creating a full-service South African indexing investment specialist with more than R31 billion in assets under management, the firms said in a joint statement yesterday.
They said 10X had agreed to a 100 percent cash purchase of CoreShares, the value of which was not disclosed. The deal was subject to regulatory approvals, but no delays were expected.
10X is known for providing high-performing investment products and customer service at very fair prices. CoreShares has a wide product set covering discretionary saving products as well as ETFs, an important growth area for a rules-based investment business.
10X Investments CEO Tobie van Heerden said: “This deal brings together two great South African businesses with a shared investment philosophy and clear alignment around purpose.”
The firms said the deal would allow 10X and CoreShares clients, as well as other South African savers and investors, access to a wide selection of best-in-class products at the fairest fees possible.
“It is expected that existing clients at both companies will benefit from the additional scale, expertise and capacity offered by the combined entity,” they said.
The teams at the two businesses were complementary with little-to-no crossover. The CoreShares team would be joining 10X, adding breadth and depth to their team and ensuring continuity for CoreShares clients.
Gareth Stobie, the managing director at CoreShares, said: “10X has historically not serviced advice channels, but the new management team have wide experience working with advisers. The enlarged company will cater for both advisers and for clients who want to invest directly.”
10X Investments said it had recently embarked on a step-change in growth. A largely new senior management team, under the leadership of Van Heerden, had set a new course as a full-service asset manager for what was essentially a boutique retirement savings business.
Van Heerden said this transaction fast-tracks 10X’s growth plans.
In a joint statement welcoming the deal, the exiting corporate shareholders of CoreShares said they were “proud of the journey and the strong investment franchise built over a relatively short time frame, but also acknowledge the increasing role that scale plays when building a successful passive business”.
The statement said: “Accordingly, this transaction is in the best interests of the company and its clients, whilst allowing the exiting parties the ability to focus more on their other primary assets and activities.”
BUSINESS REPORT ONLINE