2019 was a good year for the investment houses - and especially for Altshuler Shaham

The investment house, which successfully issued its provident company this year, is making huge profits of NIS 213 million since the beginning of the year - and has become the second largest volume of assets in the Israeli capital market

Gilad Altshuler (Photo: Eyal Yitzhar)

Gilad Altshuler (Photo: Photo: Eyal Yitzhar, Globes)

The first three quarters of 2019 benefited Israel's leading investment houses. Thanks to the tide recorded in the capital markets this year, which was marked by substantial increases in stock and bond indices, along with substantial fund raising in mutual funds, the assets managed by 11 public and "semi-public" investment houses, as well as in private investment houses, Pisgat and Altcholler Shaham NIS 803 billion, which comes from analyzing the reports of investment houses and insurance companies, as well as other data that came to Globes.

At the end of 2018, these entities managed aggregate assets of about NIS 713 billion - so that at the beginning of the year, they exhibited a 13% increase in the base from which their income and profits are derived over time. The increase in assets characterizes all these investment houses.

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To a large extent, 2019 marks the year of Altshuler Shaham, which, as Globes became known, generates huge profits of NIS 213 million in January-September 2019. Altshuler Shaham has this year become the second largest investment in the Israeli capital market - over the best and only two The investment house Psagot - which still enjoys a huge gap in its favor, which is mainly attributed to the activities of other institutional financial management (which provides for summit assets estimated at NIS 60 billion).

As of September 2019, Psagot managed more than NIS 190 billion in assets, while Altshuler Shaham managed NIS 140 billion in assets, which grew at the sharpest rate since the beginning of the year - 27%. Thanks to the accelerated growth in managed assets, in activities and provident and pension, but also in mutual funds, Altshuler Shaham has now bypassed the best lap in managed assets.

Meitav Dash currently manages about NIS 135 billion, which over the years has enjoyed growth jumps thanks to acquisitions and mergers. Next in line is another successful investment house, which was established only a decade ago and has grown organically, not through sales - Yalin Lapidot, which currently manages about NIS 89 billion.

The top quintet in the investment houses industry is closed by Harel Finance, which is owned by Harel Insurance Group. At the end of September 2019, Harel Finance managed a total of NIS 56 billion in assets, showing a handsome 21% increase in assets since the beginning of the year thanks to very strong fund raising in its mutual funds.

A very successful offering for a hot alcholar

Let us return to the line of profit of Altshuler Shaham, which this year includes a one-time, three-digit profit of NIS millions from the very successful offering (by way of a sale offer) of his provident management and pension company. This gain accounts for the vast majority of the improvement in results, but the improvement is also due to an improvement in the "regular" business of the investment house - for example, mutual fund management and pension and pension management.

Last July, Altshuler Shaham Gamel and Pensions joined the Tel Aviv Stock Exchange through a successful bid, which saw high demand for a quarter of the company's shares sold by the investment house and CEO, Yair Levinstein, for NIS 288 million. Since then, the share has soared 70% of the issue value And today, Altshuler Shaham's provident and training company is trading at a value of about NIS 2 billion - more than twice the value of the entire best-selling investment house (NIS 895 million).

Investment houses are growing sharply

Investment houses grow sharply (Photo: Globes, PR)

In fact, the value of long-term savings management operations, controlled by Altshuler Shaham, is higher than the value derived from the Yalin Lapidot investment house through Public Atrau (which holds 50% of the Yalin Lapidot shares), which stands at more than NIS 1.5 billion.

Improving the profitability of most investment houses

From early 2019, Altshuler Shaham's equity soared by about 48% to NIS 515 million (compared with NIS 858 million to the best of Dash, and NIS 344 million to Lilin Lapidot).

The increase in managed assets is accompanied by an increase in investment houses' income, along with an improvement in the profitability picture of the vast majority of investment houses. In addition, the investment houses' reports indicate the perceptual changes regarding the right business structure to come: on the one hand, the best flap and the IBI; And on the other side, Yellin Lapidot and analyst.

Bottom line improvement

Bottom line improvement (Photo: Globes, PR)

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what's the matter? Due to a desire to reduce the immediate and immediate dependence on the capital markets, the best deal is the investment house with the widest range of activities - credit, insurance, college, investment banking and more. If in 2015, 86% of household income was derived from public investment management, then in 2018 it was 74%, and according to the best Dash plans, in the next three years, non-investment management activities would already account for 40% of household income. Profit recorded at the beginning of 2019 was about NIS 70 million, a 27% increase over the same period in 2018.

The other extreme is, as mentioned, Yalin Lapidot, who only deals with the management of peer funds. Yellin Lapidot is the most lucrative body among large investment houses, with this year not only because of the one-time profit of a hot alcholar. In the first three quarters of 2019, Yellin earned NIS 125 million - a 16% increase over the same period last year - and this time it was second in the industry.

Like the best of lapels, the old investment house also operates in diverse and alternative areas. Last year, IBI sold its long-term savings activity to Helman Aldubi - a move that left its strong hold on shares of the joint provident company, managed by Helman Aldubi, which generated a profit before tax of NIS 31 million in the same period last year.

On the other hand, the investment house had an exceptional loss of NIS 26 million in tax in 2018, recorded in the second quarter of last year for losses of its clients due to an investment that failed to comply with Wall Street's "fear index" derivatives. Excluding the one-time profit from the sale of his camel, this year, IBM recorded a doubling of its profits to NIS 45 million.

We will also note the investment house Moore, which exhibits impressive mutual fund management activity, which is the bulk of its activity, and bypassed its long-term analyst in profitability. Alongside this, and due to the great dominance of this volatile area, the company invests a great deal of capital and managerial energy in expanding to other areas, most notably camel management and training, institutional brokerage and more. These investments are currently adversely affecting investment house profits.