Altshuler Shaham Nears Deal for Majority Stake Sale Amidst Fund Outflows

Investment house Altshuler Shaham is reportedly in advanced negotiations for the sale of its controlling 55% stake, valued at approximately 1.8 billion shekels. The deal, which has gained momentum recently, involves a group of investors including the company's CEO, Yair Levinstein, who currently holds a stake and is expected to increase his share.

One potential structure being considered is a split of the provident fund (GML) and investment house operations. Under this scenario, Levinstein and partners would acquire the provident fund business, while the founders would retain ownership of the investment house itself. The founders, Gilad Altshuler and Kalman Shaham, currently own 55% of Altshuler Shaham Finances, valued at 855 million shekels, with Levinstein holding 15%.

These discussions occur against a backdrop of significant fund outflows, totaling 142 billion shekels from provident funds and 20.5 billion shekels from pension funds. This represents more than half of the assets the firm managed at its peak. The company's valuation has plummeted from a high of 4.5 billion shekels to its current 1.5 billion shekels, despite a 70% stock increase over the past three years.

Altshuler Shaham's public company primarily manages long-term savings, including 109 billion shekels in provident funds and 37 billion shekels in pension funds, which constitute 92% of its revenue. The firm also has smaller, newer ventures in small business credit and construction project financing, as well as alternative investments, mainly in real estate. Other activities, such as mutual funds, portfolio management, and crypto, are held by the owners' private company.