Old Mutual has agreed to acquire a majority stake in 10X Investments from Old Mutual Private Equity (OMPE), part of Old Mutual Alternative Investments, and DiGAME Investments (DiGAME) in a deal valued at R2.2 billion.
10X management will retain a 15% stake in the business.
The transaction is subject to the customary conditions and regulatory approvals, with completion expected in the second quarter of next year.
“In 2014, OMPE and DiGAME saw the opportunity to partner with 10X, a pioneer in the low-cost retirement savings market in South Africa, where challenges with financial wellness, education, and a poor savings culture persist. This reality guided the strategic decision to build a larger, lower-cost, and technology-led platform, making passive retirement savings solutions accessible to more people for a meaningful social impact,” Old Mutual said in a statement on Tuesday.
When 10X was acquired by OMPE and DiGAME, it had assets under management (AUM) of R3bn. Today, 10X has AUM of more than R68bn, serves over 60 000 clients, and has “a market-leading position in net flows into passive products, ETFs, and smart beta solutions”.
“Through OMPE and DiGAME, 10X has been guided by a stable ownership model that has supported its growth, independence, and client-first approach. The shareholders provided growth capital to build and promote the 10X brand and in partnership with management, supported the strategic push into the direct-to-consumer market,” Old Mutual said.
The execution of bolt-on acquisitions, including the acquisition of CoreShares in December 2022, further diversified products and channels.
Jurie Strydom, the chief executive of Old Mutual, said the acquisition supports the competitive delivery of investment capability into the South African market, positioning the group as a major force in the rules-based passive investment market.
“We share their long-term vision and see this partnership as a way to expand access to quality investment solutions for a wider base of investors. This also represents an acceleration of our retail direct strategy, with 10X strongly positioned in the self-directed retail market, with future fit technology, and a track record of excellent asset growth. We expect to leverage this leadership position by expanding their distribution reach and providing the capital strength to support sustained growth and returns to shareholders.”
10X will continue under the current management team and retain its independent structure and brand. The business will work in close partnership with Old Mutual Wealth.
Farhad Sader, the managing director of Old Mutual Wealth, said the management teams of 10X and Old Mutual Wealth have identified multiple areas of opportunity that create immediate value.
Jacci Myburgh, the co-head at OMPE, commented: “Our thesis was to move the needle on retirement outcomes by lowering fees, simplifying choices, and using technology at scale. Our investment in 10X delivered against that strategic vision.”
Myburgh added that “the exit reflects that we have established a strong foundation for the firm’s long-term success. Handing stewardship to Old Mutual Wealth is the right next step for the business.”
Samer Salty, a DiGAME board member, said: “Wealth managers have historically operated in a relatively low-tech environment, but changing customer needs, increased competition, and more stringent regulatory requirements have compelled them to rethink the role that technology plays in their business. DiGAME is honoured to have supported 10X through multiple funding rounds that helped build the market leading business that it is today, leveraging technology together with proven investment strategies, to deliver a low-cost, best-in-class service to ordinary South Africans.”
Tobie van Heerden, the chief executive of 10X Investments, said the partnership with OMPE and DiGAME enabled disciplined scaling while keeping the business focused on client outcomes.
“The outgoing shareholders provided the capital and strategic support to grow with purpose. We expanded our investment manufacturing capabilities, launched new ETF and multi-asset solutions, and deepened our intermediary partnerships, cementing our position as one of the country’s leading retirement solutions providers and one of its largest ETF issuers. As we enter the next phase, we remain committed to accessible, low-cost investing that is simple to understand and use.”
