Altshuler Shaham Founders Sell Stake in Pension Firm for $270 Million
Founders of the investment house Altshuler Shaham, Gilad Altshuler and Kalman Shaham, are set to sell their stakes in the public company Altshuler Shaham Finances, which manages pension and provident funds. The deal, valued at approximately 1 billion shekels (about $270 million), will see them transfer 55.4% of the company's shares.
The buyers are the insurance company WeSure, controlled by Emil Vinnels and Zvi Barak, and Yair Levinstein, the current CEO of Altshuler Shaham Finances. WeSure will acquire 45% of the shares, while Levinstein will purchase the remaining 10%, increasing his total holding to 25% from his current 15%. The sale price represents a premium of about 30% over the company's market price before the deal was announced.
Despite the significant sum, the founders' exit is described as bittersweet. The company's valuation has fallen significantly from its peak of 4.5 billion shekels a few years ago to 1.8 billion shekels in this transaction. This decline is attributed to massive outflows of assets from the firm, which once managed 142 billion shekels in provident funds and 20.5 billion shekels in pensions. These outflows have impacted management fees, revenue, and profits, and are believed to have played a role in the founders' decision to sell.
Altshuler Shaham Finances currently manages 109 billion shekels in provident funds and 37 billion shekels in pensions, totaling 145 billion shekels for approximately 2 million clients. The new ownership structure is not expected to affect clients' savings, with the company's name likely to change within months after regulatory approvals. The existing staff of 830 employees is expected to remain, with potential synergies explored between Altshuler Shaham's investment team and that of Ayalon, an insurance company also controlled by WeSure.
The deal requires approval from shareholders of both public companies, as well as Israel's Competition Authority and Capital Markets Authority. WeSure aims to become a significant insurance and finance group, with the acquisition of Altshuler Shaham filling a crucial long-term savings arm for the company.
