The global is temporarily transforming, and to stay on its feet, local wisdom is needed in a global context.
The global is becoming, and to stay on its feet, local wisdom is needed in a global context.
Sygnia founder and CEO Magda Wierzycka is one of the few South African business leaders who actually see the world as their oyster. Known for her forward-thinking vision, in 2015 she bought shares in OSI, a company that turns Oxford University patents into viable businesses for a 25% stake. Within the OSI solid is Vaccitech, a company that has developed a vaccine against the MERS virus and placed it at the forefront of the Covid-19 vaccine race. In an interview with Alec Hogg, editor-in-chief of Biznews, Wierzycka explains how her company has become the largest single shareholder in Oxford University’s Covid-19 vaccine. – Vanessa Marques
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Magda Wierzycka is the founder and CEO of Sygnia. I have to tell you that before I included Magda in the conversation, Magnus Heystek sent me an email that left me a little stunned. He said Magda’s company Sygnia is Oxford’s largest shareholder. Scientific Innovation Fund. Biznews had an interview with Professor Adrian Hill, who said that we are going to get a Covid-19 vaccine. On Friday, AstraZeneca announced it would begin production of the vaccine produced through the University of Oxford. Sygnia is the largest shareholder of the company which owns all life rights to all patents and inventions of the University of Oxford. Magda, that stunned me. Firstly, how did you realize the investment opportunity and secondly, where is the flaw in my argument?
Well, there isn’t. But leave me the layers to you. The University of Oxford, in 2015, struck a deal with several big-brand asset managers in the UK, including Goldman Sachs and Sequoias, and created a company called Oxford Sciences Innovation, which has the right to commercialise all intellectual property. which comes from the University of Oxford and is a perpetual and exclusive agreement.
Basically, the way it works is that if you have a varsity team, they come up with an innovation and register a patent. The University of Oxford owns 50% of the patent rights and the educational staff owns 50%. OSI reviews the patent, if the patent is deemed worthy of commercialization, then it establishes a company from its inception before any cash is transferred from that company’s OSI site. OSI owns 25% of the company’s shares. The University of Oxford has a 25% stake and the education staff holds a 50% stake. OSI then injects capital into that company so that it can rent control equipment and begin developing a product or service. And of course, at least at this point, the only user injecting capital is OSI.
When OSI started in 2015, its balance sheet stood at £600 million. OSI is deploying capital in this derivative business, it owns well the percentage of ownership of those changes, because the University of Oxford no longer invests capital and obviously doesn’t do the educational business either. When those corporations succeed at a giant enough size, OSI tends to own about 50% of each of those spin-offs. As they grow, more investors come in as those corporations raise capital. Since 2015, Oxford and OSI have created 80 corporations. They create about 10 corporations a year. One such corporation is Vaccitech, which runs on the Covid-19 vaccine.
They’ve been getting the MERS vaccine and they’re one step ahead of everyone else. Ownership of OSI’s shares was a closed club in the sense that the shares were never traded. Last year in the UK, few asset managers faced difficulties due to capital outflows, and I heard you talk earlier about passive investing. So, this was partly similar to the movement of cash from active to passive asset control and they have quickly become traders of OSI stock or at least all the shares they held.
One of my non-executive directors, Andre Crawford-Brunt, one of the founding shareholders of OSI, but knowing him and owning the shares are two other things. So when I became aware of asset managers in distress, we proactively approached them. and negotiated other transactions and acquired stakes in OSI, which means that, on behalf of clients we know, we own 16% of OSI, making us the largest shareholder. We also have a seat on the board of directors.
It’s an ordinary story. Andre Crawford-Brunt was a shareholder and is well known in South Africa from his time at Deutsche. And, of course, he has also been a huge success in the UK and among his major shareholders. He then he discovered Oxford Scientific Innovation or OSI, as you call it. He made an investment, told you openly and then the asset managers who, due to Covid-19, were in difficulty, put their shares on the market and you bought them.
Alec, one of them Neil Woodford, a bit like John Biccard from the UK, a very prominent asset manager who has amassed a lot of exposure and a lot of assets, whether it’s with ups and downs. He’s a big shareholder in OSI, so my first goal. When faced with huge capital outflows, I knew I had a pocket of those stocks. We got in touch with Woodford and bought his stake in OSI, and then there were a few more.
David, I’m seeing you just to ask Magda a question.
I would like to know if this is a component of your Fourth Industrial Revolution Fund or if it is held in some ETF or is simply a stake you own.
So, it sticks to a few proper mutual budgets, like the Fourth Industrial Revolution mutual budget, but we also have a proprietary product called the Sygnia OSI Fund. Obviously, access to those actions is limited and therefore we have many more commitments in the background. than the stock available at the moment. But we hope to be able to negotiate a few more agreements. So, this is a stake in some of our products, clearly the right products, as well as a standalone product where we will be offering investors direct access to OSI shares.
So if a personal investor needs to invest, can they apply through Sygnia OSI to an investor in their OSI fund?
That is correct, and it is an unlisted investment, what we have done specifically for retail investors is that Sygnia promises liquidity so that they can invest in the fund. But if you need to make a withdrawal, we will buy the shares and refund your cash at the existing market value.
What about Professor Adrian Hill’s vaccine and AstraZeneca’s announcement on Friday to start generating it?Is it to be assumed that this will be passed on to OSI at some point?
At some point. Therefore, the University of Oxford, unlike many American companies, is very adamant that it will never gain financial advantage, as an institution, from a global pandemic or a global catastrophe. So, in terms of agreement. . . Vaccitech is the spin-off – OSI has a 45% stake and is developing the vaccine. But what they did was create a separate corporation under Vaccitech, which is also directly owned through the University of Oxford so that intellectual assets would be protected.
The idea is that they will expand the vaccine. They have already moved on to human trials. I think another six thousand people per hour in human trials. According to the founders of Vaccitech, the probability of having an effective vaccine until September is 80%. According to Sir John Bell, dean of Oxford Medical School, he estimates the probability at 50/50, which is higher than any other expanding vaccine. So what will happen is that the vaccine will be manufactured and sold at a price of up to a year after the World Health Organization declared that Covid-19 is no longer a pandemic, at which point it will be a successful business. In the meantime, this will be done at a charge. Obviously, if this is successful, it will be just one of the other 80 corporations in which OSI has stakes.
Magnus tells us that he knows Roelof Botha, a prominent South African, wealthy from the Sequoia Fund.
Yes, he’s my most productive friend in college. He runs Sequoia Holdings in the United States.
Did it inspire you to do it in this background?
As you know, he left South Africa and became a member of PayPal. He then joined Sequoia Capital and now runs Sequoia Capital in the United States. Sequoia Holding is attractive because it owns shares of OSI that are not in the budget they manage on behalf of the client, but in the fund of their Sequoia spouse. There is no other Willis Towers Watson in the world. They also own a stake in OSI that they hold in the spouses’ fund and not in clients’ portfolios. This is partly due to the scarcity of such stocks. You know it’s been so hard to get into those stocks that when you get a pocket of stocks, probably selfishly, you give them up.
Dave, do you have one last word for Magda before you let her go?
What other spaces are you considering? Especially your personal funds?
I take a look at all the key factors that influence investing. So, if I think about the global future, I think active asset control is going to go through a very tough time, it’s going through a tough time overseas: cash is going to be a tough time. Above all, it will be a matter of accessing market returns at low cost. On the other side of the spectrum, there are selective investments and I think most investors are interested. Its main purpose is to have an effect on the investment. So, it has everything to do with climate change, offering affordable physical care, education, and housing, and the generation is the most important thing to offer that in a way that is affordable and available to the masses, which was previously unimaginable.
I’m incredibly excited about OSI and, along with us, the convergence of fitness and technology. You know, there’s a lot of interesting corporations in this portfolio. I know that the Covid-19 vaccine is everyone’s priority. But there are some amazing inventions in OSI’s portfolio. So, for me, physical care will become a precedent for investors, for the government, and what’s vital in the direction of government is that the direction of government is accompanied by subsidies. So, for example, Vaccitech doesn’t want to increase the budget of external investors. He won £29 million from the UK government with everyone’s support. If they want it. So, all of a sudden, you know that if you’re an investor, you have access to non-dilutable investment resources in this area. For example, climate change, physical care, technology. These are my focus spaces and the business we are creating for Sygnia offshore is a select investment business focused on that.
Magda, Founder and CEO of Sygnia. Thank you for joining us today and giving us your feedback on an investment opportunity.
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