Altshuler Shaham Cancels Leader Investment Two Months After Deal

Altshuler Shaham is canceling its investment in Leader, an Israeli underwriting and brokerage firm, just two months after the deal was signed. The decision stems from Altshuler Shaham's sale of its pension and provident fund operations to WeSure, which has altered its strategic plans. While the initiative to cancel came from Altshuler Shaham, Leader reportedly agreed to the termination.

Altshuler Shaham Investments Ltd., the parent company of Altshuler Shaham Finances, had agreed to acquire approximately 18% of Leader for 160 million shekels. This investment was intended to complement Leader's underwriting and brokerage activities with Altshuler Shaham's broader financial group, including its pension and provident fund operations. However, the sale of these pension operations to WeSure for 1 billion shekels, completed two weeks ago, removed the strategic advantage of holding such assets, which was also a factor for another investor, Harel Insurance.

Harel Insurance, which also invested in Leader around the same time as Altshuler Shaham, has completed its transaction and intends to remain a shareholder. For Harel, this marks a return to the underwriting sector, which it exited in 2007, recognizing its strategic importance in the current capital markets. Unlike Altshuler Shaham, Harel sees underwriting as a complementary business line for Harel Finances.

Following its exit from the pension sector, Altshuler Shaham plans to expand its own brokerage and potentially underwriting activities. This expansion could place it in direct competition with Leader, making the prior partnership problematic. Leader, led by Amit Vardi and Shi Ben Yakar, had viewed the new partners as providing significant advantages in securing underwriting and capital raising deals.

In March 2024, Bank Hapoalim also invested in Leader, injecting 58 million shekels. Following the initial deals, Harel, Altshuler Shaham, and Bank Hapoalim were each set to hold about 16.66% of Leader, totaling nearly 50% of the company, with the remaining shares held by existing owners led by CEO Vardi. Altshuler Shaham's investment funds will now be returned, an unusual move in the market. Other insurance companies, such as The Phoenix and Clal Insurance, are also active in or seeking entry into the underwriting sector.