Secretive Billionaire Funds Major Israeli Investment Firm Acquisition
The acquisition of control over the Altshuler Shaham investment house by the Weשור group has been a major focus of attention this week, with key figures like Weשור Chairman Emil Vinnels and Altshuler Shaham CEO Yair Levinstein involved. Notably absent from the media spotlight is billionaire Zvi Barak, a discreet businessman who previously provided funding for Weשור's acquisition of the Ayalon insurance company. Barak, who sold his stake in a medical device company he founded earlier this decade, has since made various investments, most significantly holding a 28% stake in Weשור valued at 690 million shekels.
Weשור, led by Vinnels and CEO Nitzan Tze'ir Harim, has agreed to purchase 55% of Altshuler Shaham Financials, which manages approximately 145 billion shekels in pension and provident funds, for 1 billion shekels. Weשור will invest 815 million shekels for a 45% stake, while CEO Levinstein will acquire an additional 10%, bringing his total to a quarter of the company. Market analysts suggest Weשור has several financing options, including debt or equity, bringing in new partners, or involving its subsidiary Ayalon.
While Vinnels is positioned to become a major player in Israel's long-term savings market, Barak, known for his privacy, is a significant behind-the-scenes partner. He and his wife Anat, through their company Caesarea Medical Electronics, hold a similar stake in Weשור. Barak, 76, founded Caesarea Medical Electronics with his wife in 1993, developing and manufacturing infusion products. The company, which never raised external capital, operated discreetly, employing over 150 people and selling products internationally and domestically.
Barak's exit from the medical device sector occurred in two stages. In 2013, 40% of his company was sold to US-based CareFusion for $100 million. After CareFusion was acquired by Becton Dickinson (BD), BD exercised an option in 2017 to purchase the remaining 60% for a total company valuation of $250 million. Barak stated at the time that the sale was partly driven by a desire to increase investments in other areas.
Following his medical device exit, Barak channeled significant capital into energy, infrastructure, and insurance. He is described as a cautious investor who prefers to join deals with established partners. His investments include stakes in Road 6 (a toll road operator), the Palmahim desalination plant, Dalia Energy power station, and Navitas Petroleum. He also invested in the parking payment app Pango.
Barak's investment in Weשור has seen a dramatic turnaround. After an initial investment of 270 million shekels in September 2021 for a controlling stake in Ayalon Insurance, Weשור's stock plummeted, reflecting a paper loss of up to 75%. However, since October 2023, Weשור's stock has surged over 1,500%, now valued at approximately 2.4 billion shekels, yielding Barak a roughly 150% profit on his investment. This surge is largely attributed to its 70% holding in Ayalon Insurance. The success of the Altshuler Shaham acquisition remains to be seen, given the latter's recent heavy fund redemptions and market share erosion.
