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10X Investments to buy CoreShares, creating a R31bn business

In a 100% cash deal, however the value of the transaction has not been disclosed.
Tobie van Heerden, CEO of 10X Investments. Image: Supplied

10X Investments has agreed to purchase CoreShares, creating a full-service South African indexing investment specialist with more than R31 billion in assets under management.

The all-cash deal, announced by 10X and CoreShares on Thursday, is however still subject to regulatory approvals, but the groups do not expect any delays on this front.

10X did not reveal the purchase price for the CoreShares business.

Commenting on the transaction, 10X 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 group adds in a statement: “This 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.”

10X is known for providing high performing investment products, while CoreShares has a wide product set covering discretionary saving products as well as ETFs, an important growth area for a rules-based investment business.

Read: SA: A great place to retire and save for retirement

“The teams at the two businesses are complementary with little-to-no crossover. The CoreShares team will be joining
10X, adding breadth and depth to their team and ensuring continuity for CoreShares clients,” says the statement.

“We’re very excited about the range of funds and experience the CoreShares team brings to 10X,” said Anton Eser,
10X’s Chief Investment Officer.

“With this expanded capability, we aim to become the leading index provider in the South African market by tapping into proven global trends in the growing use of index funds as a core allocation in portfolios, as well as ESG investing and a greater use of technology-based solutions.”

“Scale is critical to being competitive in rules-based investing,” added Van Heerden.

“In the next couple of years, a small number of players in South Africa will have sufficient scale to participate in the market and bring down costs for South African investors.”

Van Heerden said the team at CoreShares correlates well with the people and the skill-sets 10X was planning to bring in over the next few years. He added that the deal is good news for staff at both businesses since it “combines two great, fast-growing companies and will significantly increase opportunities all round”.

Gareth Stobie, 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.”

Read: New funding for 10X

Meanwhile, 10X’s noted in its statement that the purchase advances its evolution into a leading, full-service rules-based investment manager providing a full suite of investment products across the various distribution channels.

“The deal acknowledges the value-adding role of quality financial advice in various contexts. CoreShares’s significant, established intermediated offering will complement 10X’s strong direct-to-client business.”

“10X Investments has recently embarked on a step-change in growth. A largely new senior management team, under the leadership of Van Heerden, has set a new course as a full-service asset manager for what was essentially a boutique retirement savings business.”

COMMENTS   1

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uhm : there is quite some difference between “a R31b business” and a business looking after R31b of other peoples’ money. Granted, many of the fun damagers got this concept confused

End of comments.

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