Altshuler Shaham Sells Major Holdings, Rebrands Amid Investor Concerns

One of Israel's most prominent investment firms, Altshuler Shaham, is set to undergo a significant transformation within the next six months as its founders sell their stakes, leading to a rebranding of the company. Altshuler Shaham manages approximately 160 billion shekels in assets, making this a substantial event in the long-term savings sector. The sale is expected to impact the roughly two million savers with the company's provident and pension funds.

Founders Gilad Altshuler and Kalman Shaham are selling their shares. Insurance company WeSure will acquire 45% of the company for 800 million shekels, while CEO Yair Levinstein will purchase an additional 10%, bringing his total stake to 25%. WeSure, primarily focused on general insurance, also owns Ailon Insurance, which has provident fund operations.

The sale does not affect the savers' money, as these funds belong to the account holders, not the company's shareholders. The primary change for savers will be a rebranding, with the company adopting a new name and notifying clients via email and mail in the coming months.

Gilad Altshuler, long associated with the firm's investment strategy, is exiting ownership and has reduced his management involvement. His departure may influence the company's investment approach, potentially leading to more moderate shifts in portfolio strategy compared to Altshuler's historically decisive changes. A new management team has been established, tasked with proving their ability to generate strong returns without Altshuler's direct involvement.

Management fees are legally capped, and the sale does not permit the company to arbitrarily alter existing saver agreements. While current fees are protected, the average management fees at Altshuler Shaham are lower than those at Ailon, suggesting a potential future shift towards higher fees. The company's mutual fund operations remain with the original founders and are not part of this sale.

While there are no immediate plans to merge Altshuler Shaham's provident fund operations with Ailon's, a consolidation is anticipated within three to five years. The founders are bound by a non-compete agreement preventing them from establishing a competing provident and pension fund business.