Picture: ISTOCK
Picture: ISTOCK

With reference to the article by Magda Wierzycka  (Unknown entities thrive on incredible PIC largesse, February 5), Mergence Group  has engaged with the Public Investment Corporation (PIC)  in the past few weeks to  have figures corrected  that are erroneously stated in the “confidential” memo to which Wierzycka refers.

The Mergence Group has two subsidiaries that conduct business with the PIC: Mergence Africa Capital and Mergence Investment Managers. Mergence Africa Capital is a derivative broking, structuring and advisory business.  This subsidiary earned R36m in derivative broking and advisory fees from the PIC  from 2014 to 2018 — not R110m as stated.

We believe that the figures, which span a number of years, for both our companies Mergence Africa Capital and Mergence Investment Managers have been erroneously combined. If that is the case then the total fees, including asset management fees, for all service providers (including asset/investment managers) of the PIC, should also be published over the same period. We believe the information in the memo Wierzycka refers to does not compare apples with apples.

Mergence  Group was founded in 2004 and has a respectable track record. Contrary to the statement that these fees were paid to “unknown entities for a range of questionable and badly defined services”, both Mergence Investment Managers and Mergence Africa Capital are well-known and respected financial services businesses with  a track record of more than 15 years and a highly respected client base that includes Sygnia. 

The combined Mergence  Group manages assets to  the value of R43bn and employs  more than 86 people. Since 2014, Mergence Africa Capital has been highly rated within the derivative dealing category of the Financial Mail Ranking the Analysts awards, reflecting not only a skilled and experienced team but a team known by the market.

All services that these entities have conducted with all our clients, including the PIC, have been well defined and all fees have been negotiated at market-related rates. We have built this business with our own risk equity and independent bank financing. To have our reputation tarnished for what is obviously an error is very disconcerting. 

Masimo Magerman,MD, Mergence Africa Holdings