South Africa’s Doctor Doom who made millions for his clients

Brenthurst Wealth Management director Magnus Heystek, known as Doctor Doom due to his pessimism regarding local investments, proudly wears this moniker.

Heystek co-founded Brenthurst in 2004 with Brian Butchart and Sue Heystek. At the time, it was a 3-person team working from a small office in Johannesburg.

The company has shown exceptional growth and now employs 60 people, has eight offices in South Africa, and has one international office in Mauritius.

Brenthurst Wealth manages R17 billion on behalf of its clients and has focused strongly on investing offshore with significant success.

Brenthurst has been ranked among South Africa’s leading boutique wealth managers for seven consecutive years in the Intellidex Private Bank and Wealth Manager awards.

Daily Investor’s 2024 South African Investor Report showed that Brenthurst had the strongest brand among boutique wealth managers in South Africa.

Heystek is well-known for advising his clients to invest internationally as it offers better opportunities than local stocks.

For the first few years after starting Brenthurst, South Africa was a great place to invest, and Heystek advised his clients to invest locally, including John Biccard’s Value Fund.

Biccard’s fund returned over 40% per year for multiple years, and Brenthurst’s assets under management grew rapidly.

Heystek said it made sense to be entirely invested in the local market, and there was no reason to take money offshore.

There was a commodity boom, the rand strengthened, the property market produced excellent returns, and local stocks hit all-time highs.

However, this came to a sudden end during the global financial crisis and when President Jacob Zuma took the reins.

The devastation of the Zuma years quickly became evident, and the commodity cycle turned downwards in 2011 and 2012.

“We started to follow local politics closely and saw the signs of state capture, political greed, and institutional collapse early,” Heystek said.

“We realised this environment was not conducive to long-term investment and safeguarding our clients’ wealth.”

Heystek looked elsewhere for good returns for his clients. They partnered with some of the biggest global fund managers, including Franklin Templeton, Fidelity, and Vanguard.

Brenthurst also established two offshore funds: the Brenthurst Global Balanced Fund and the Brenthurst Global Equity Fund.

Brenthurst benefitted from the decade-long bull cycle in United States technology shares through these initiatives.

“It turned out to be a great decision. We are pleased to see so many asset managers now advise their clients to move money offshore,” he said.

Magnus Heystek wears the Doctor Doom label with pride

Over the years, many South African investment specialists and fund managers have criticised Heystek for his negativity towards South African investments.

Some critics have even labelled him Doctor Doom because they argue that he is too negative toward local investments.

However, Heystek was proven right. International equity returns, especially those of the S&P 500 and Nasdaq 100, dwarfed those of the South African market.

Speaking at the 2025 Biznews Conference, Heystek said he wears the Doctor Doom label with pride.

He explained that getting the truth about South Africa to the investment community has been very difficult.

“The media has been manipulated, the big corporations are too scared to speak out, and economists at the big banks get fired if they speak the truth,” he said.

He said the 2025 Budget is a good example. “The South African budget has failed year after year,” he said.

The Finance Minister has failed to grow the economy and stimulate the business environment. “We can see it in the numbers,” he said.

“South Africa’s gross domestic product (GDP) per capita is the same today as in 2007. This is why South Africa has such a high unemployment rate,” Heystek said.

He added that South Africa is one of the most difficult countries to do business in, and the economy has failed to recover properly since the pandemic.

“The truth is that South Africa has not been a great investment destination. This is what global fund managers are saying,” he said.

“Year after year, there have been net outflows of South Africa’s equity markets. That is what the world says about the local economy.”

Heystek said he works for his clients, and they expect the truth to ensure that they achieve good returns on their investments.

He added that South Africa allows citizens to externalise their wealth, which worked exceptionally well for Brenthurst’s clients.

Heystek said his negativity towards the local stock market remains. “I cannot yet make a case for investing in the South African stock market,” he said.

“The South African equity market is under severe pressure and will remain so, considering the 2025 Budget,” he said.

In contrast to the stock market, he said the South African bond market, which produces phenomenal returns, is a much better place to invest.

US Dollar versus South African rand chart

JSE Top 40 chart for 10 years

S&P 500 chart for 10 years, in US Dollars