Altshuler Shaham Explores Sale Amidst Challenging Performance

Israeli investment house Altshuler Shaham is reportedly considering a sale of its controlling stake, a move that sent its stock soaring over 16% on Wednesday. The company confirmed in a filing to the stock exchange that its controlling shareholders "periodically examine offers and opportunities" regarding their holdings.

Altshuler Shaham has faced significant underperformance in recent years compared to its competitors. A major factor contributing to this has been its substantial exposure to the Chinese stock market, particularly holdings in companies like Alibaba. Regulatory crackdowns in China and sharp market declines in 2022 severely impacted its investment returns. Furthermore, a heavy reliance on overseas markets meant the firm benefited less from the strong rallies seen in the Israeli stock market during the same period.

These investment strategies, coupled with currency fluctuations, have led to Altshuler Shaham consistently ranking at the bottom of pension and provident fund performance tables. This weakness has resulted in a significant outflow of assets, with the company now managing NIS 112 billion, down from a peak of NIS 215 billion.

In contrast, competitors like Meitav, IBI, and The Phoenix have seen substantial gains, with their stock prices rising hundreds of percent over the last five years. Altshuler Shaham's stock has fallen nearly 50% in the same period, and its market value has shrunk to approximately NIS 1.5 billion, a third of its 2021 valuation.

If a sale materializes, it could mark a turning point for the investment house after a difficult period of struggling to keep pace with its rivals.