Altshuler Shaham Brand to Disappear in Major 800 Million Shekel Sale
Altshuler Shaham, managing 160 billion shekels, is being acquired by Wobi and Yair Lewinstein. The iconic brand will disappear, but savers' funds remain secure.
In about six months, one of the strongest and most recognizable brands in Israel's investment market, Altshuler Shaham, is set to disappear in a process that will span several months. Altshuler Shaham is one of Israel's largest long-term savings institutions, managing assets worth 160 billion shekels. This move disrupts the savings industry business-wise, but it will also have consumer implications for approximately two million savers in Altshuler Shaham's provident and pension funds. The obvious consumer question concerns what this means for savers, and Calcalist addresses the primary issues surrounding the event.
What actually happened to my money at Altshuler Shaham?
The two founders of the provident fund and investment house, Gilad Altshuler and Kalman Shaham, who established Altshuler Shaham Provident and Pension in December 2001, have sold their holdings in the company. As part of the transaction, the insurance company Wobi will acquire 45% of the company's shares for 800 million shekels, while co-CEO Yair Lewinstein will purchase an additional 10%. Following the completion of the transaction, Lewinstein will hold 25% of the shares. Wobi focuses primarily on general insurance, including car and apartment insurance, but it also owns Ayalon Insurance, which operates in the provident fund sector similarly to Altshuler Shaham.
Is anything happening to my money following the sale?
No. The funds in the accounts and funds belong to the members, not to the shareholders of the managing company. A change of ownership in the managing company does not constitute a withdrawal, transfer, or sale of savers' money. The ownership change will bring about a rebranding of the company, which will no longer be called Altshuler Shaham. In the coming months, the company is expected to formulate the new brand and notify customers of the change, among other things via email or regular mail.
Who will manage my money now?
Gilad Altshuler, who was identified for decades with the investment house's investment policy, is exiting the ownership and has already reduced his involvement in investment management. His departure may have an indirect effect on the provident fund's conduct, the nature of its investments, and the asset allocation it has pursued so far. Altshuler was one of the most assertive investment managers regarding the need for investment diversification and investing a significant portion of funds in overseas stock markets rather than focusing on the Israeli market. His departure from the management ranks and the cessation of his central role in the company may also bring about a conceptual shift in the new company. It is expected that changes in investment philosophy, diversification, and portfolio structure will henceforth be more moderate, after significant portfolio changes characterized Altshuler's investment management style over the years.
In recent months, Lewinstein has built a new management cadre: Leah Perminger has been appointed head of the provident and pension investment system; Yotam Ironi, one of the investment house's veteran investment managers, was appointed head of overseas equities; alongside him operates Ido Sagi; Shimon Aliel, who arrived from Analyst, was appointed head of Israeli equities and corporate bonds; Saar Weintraub, Perminger's deputy, is responsible for derivatives, interest rates, and foreign exchange; and Shahar Goldstani manages overseas corporate bonds. All of them will have to prove to the industry that they can deliver excess returns even without Gilad Altshuler.
Can my management fees change because of the sale?
There are legal ceilings for management fees. In a provident fund and advanced training fund (keren hishtalmut), it is permitted to charge up to 1.05% annually of the accumulated balance and up to 4% of deposits. In practice, most savers pay much less than the ceiling. According to GemelNet, the official website of the Capital Market Authority, the average management fees charged by Altshuler Shaham on accumulated balances stand at 0.59%, a decrease of 0.07% over the past four years.
The sale, the replacement of controlling shareholders, and the change of the company's name do not cancel savers' existing terms. As mentioned, management fees in provident and advanced training funds are subject to ceilings and rules set by the Capital Market Authority, and management fee discounts cannot be arbitrarily canceled just because the company changed owners.
