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10X is one to watch even as CEO exits

10X Investments is definitely one to watch in 2021 even after Steven Nathan, leading South African pioneer of passive investing, stepped down as CEO after 15 years at the helm.

10X said Nathan had stepped down to “pursue other interests”, and that the company’s executive chairman, the industry veteran Henk Beets, would assume responsibility as CEO until a successor was in place. 

The media release about Nathan’s departure mentioned that Old Mutual Private Equity (OMPE) and DiGame Africa (DiGame), together with the 10X management team, now owned the substantial majority interest in the company.

OMPE and DiGame have been investors in 10X since 2017. OMPE is a unit of the Old Mutual Alternative Investments boutique (OMAI), one of Africa’s largest private alternative investment managers in private equity, impact investing and infrastructure funds. 

DiGame, a permanent investment vehicle focused on digital growth in Africa, invests in tech-enabled companies. DiGame was a key investor in GetSmarter.

Paul Boynton, Joint-CEO of OMAI, said: “Our investment in 10X is indicative of our faith in the company. 10X is well-positioned in the retirement and savings market, offering a simple, cost-effective solution that should outperform the industry over time.” 

“At OMAI, we marry competitive returns with making a positive impact in the communities in which we invest, and 10X Investments fits that mould well,” he added. 

Samer Salty, Director of DiGame, said: “10X, with its proven investment solutions and already ingrained native technology approach, will continue to lead the charge for South Africans who want to retire with dignity, safe in the knowledge their retirement asset manager is at the forefront of investment best practice and innovation.”

Some analysts see these two investors taking a majority stake in 10X as a vote of confidence in the business, and welcomed the possibility that significant firepower would be put behind Nathan’s vision. Others worried that Nathan’s shoes would be too big to fill, or that the company would be forced to change direction.

Even though we have long been Steven Nathan fans, Call Off The Search is among the former. We look forward to seeing his cutting-edge, client-focused offering being rolled out to more consumers, and can’t wait to see who 10X passes the captain’s hat to.

Nathan has long been a major force for good on the South African investing scene. After a very successful career as an analyst, he started 10X and threw his energy into “helping South Africans retire with dignity”.

The 10X model is based on keeping fees down and educating and empowering consumers to make good choices with their retirement savings. 10X brought a low-cost, index-tracking solution to South Africans when the overwhelming majority of retirement savers were invested in expensive actively managed products.

Nathan has always been outspoken about what he sees as a self-serving industry that keeps savers in the dark while taking the lion’s share of the earnings their savings generate. Having had personal experience on the inside of the industry for many years before he started 10X, Nathan was ruthless in his criticism of an industry of well-paid ‘experts’ whose customers were often shocked to find they arrived on retirement’s doorstep with nothing like what they had been expecting.

Of his departure from 10X, Nathan said: “I am very proud of 10X’s achievements and for being a force for good in the retirement and investment industry. Since 2008, 10X has helped South Africans to retire with dignity by providing a simple investment solution using index funds. 10X has delivered superior investment returns at a low cost and with high transparency to all its clients.”

He added: “10X has also focused on educating and empowering consumers to get better value for their long-term savings and achieve their financial goals. I would like to thank all of 10X’s clients for their trust and support in 10X and wish the company and all its stakeholders continued success in the future.”

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