The global is becoming, 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’s founder and CEO, Magda Wierzycka, is one of the few South African business leaders who do, in fact, see the world as their oyster. Known for its forward-thinkingness, in 2015 it 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 his company has become the largest single shareholder of the University of Oxford’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 vaccine against Covid-19. 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 allow me the other levels. The University of Oxford, in 2015, struck a deal with a number of big-brand asset managers in the UK, including Goldman Sachs and Sequoias, and set up a company called Oxford Sciences Innovation. , which owns the right to commercialize 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 university team, they come up with an innovation and file a patent. The University of Oxford owns 50% of the rights to the patent and 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 holds a 25% stake and educational staff maintain a 50% stake. OSI then injects capital into that company so 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 worked on the MERS vaccine, they are one step ahead of everyone else. Ownership of OSI’s inventories was an exclusive club in the sense that inventories were never traded. Last year in the UK, few asset managers faced difficulties due to capital outflows, and I’ve heard you talk about passive investing before. So, part of that had to do with the shift of cash from active control of assets to passive control and they’ve quickly become distributors of OSI inventory or at least any inventory that they own.
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 for his time at Deutsche. And, of course, it has also been a huge success in the UK and among its major shareholders. So he looked at Oxford Scientific Innovation, or OSI, as you call it. He made an investment, told you about it openly, and then the asset managers who, was it because of Covid-19, were struggling, 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 see you just to ask Magda a question.
I’d like to know if this is a component of their Fourth Industrial Revolution Fund or is held in some ETFs or is it just a stake they own.
So it sticks to some proper mutual budgets, like Fourth Industrial Revolution mutual funds, but we also have a proprietary product called Sygnia OSI Fund. Obviously, access to those shares is limited and that’s why we have many more commitments in the fund than shares available at the moment. But we hope to be able to negotiate some additional agreements. So this is a stake in some of our products, clearly the applicable products, as well as a stand-alone product where we offer 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’s right, and it’s a non-publicly traded investment, what we’ve done specifically for retail investors is that Sygnia promises liquidity so they can invest in the fund. But if you need to make a withdrawal, we’ll buy the shares and refund your cash back to you at the existing market value.
What about Professor Adrian Hill’s vaccine and AstraZeneca’s announcement on Friday to start generating it?Presumably, this will be sent 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 is 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, you left South Africa and became a member of PayPal. He later joined Sequoia Capital and now heads Sequoia Capital in the United States. Sequoia Holding is attractive because it owns OSI shares that are not in the budget they manage on behalf of the client, but in the fund of their spouse Sequoia. There is no other Willis Towers Watson in the world. They also own a stake in OSI which they hold in the spouses’ fund and not in clients’ portfolios. This is partly due to the scarcity of those stocks. You know it’s been so hard to get into those stocks that when you get a pocket of stocks, you probably selfishly leave them.
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 have a very difficult time, it is having a difficult time abroad: cash is becoming passive, investors are looking for reasonable tactics to enter the market. 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 objective 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 not before imaginable.
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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