Altshuler Shaham Investment House
Altshuler Shaham Pen
-1.16%
Base:657.5
opening:658
High:664
low:642
change:5,851,649
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A new field of activity is being opened – alternative investment management which will be called “alternative activity”. Altshuler will establish a dedicated subsidiary for this purpose, alongside the alternative investment management activity in the real estate sector. Where is Altshuler headed? It is likely to be in areas such as infrastructure (Route 6, desalination plants, etc.), young start-up and hi-tech companies, and other areas.
So why does he do it? It is basically the investment house’s need to create a stable footing from its point of view of revenues that do not depend on the fluctuations of the capital market, and certainly precisely at a time when money is leaking from other places. When there are declines in the markets, the amount of money managed by the companies shrinks (because of the declines) and therefore the management fees of the managers are cut. But the declines lead to another result – investors tend to take money out of the managers in such a period, so it’s a double hit to revenues.
In the case of Altshuler, the fact that the investment house was last in returns caused an even greater flight of funds and therefore he was hit three times. In the last year, Altshuler bled almost NIS 49 billion to its competitors (the biggest profiteer is the Moore investment house, which raised NIS 21 billion).
It should be noted that the one who is least connected to the line of alternative investments, in particular in the fields of high-tech, is the competitor Yair Lapidot, founder of the investment house Yilin Lapidot, who recently said at the Israel Investment Conference that the declines in the tradable market (the stock market) are not yet embodied in the non-tradable market. The start-up companies do not raise money so that their value will not be cut, but when the money runs out – they will have no choice and the value will be cut. The result will be that the investment houses that own them will be forced to register that they will be revised downwards (here is his explanation).
The last two years have been difficult for Altshuler Shaham, when the investment house fell from the first place to the last place in returns (but in the last six months it is reasonable compared to the competitors), and this coincides with the declines in the markets in the last year. So yes, after the purchase of Psagot Altshuler managed NIS 210 billion and a year later it only manages NIS 144 billion, a painful fall for sure, but it is still the largest investment house in Israel, and by a wide margin from the others.
And one more thing should be said – no one knows what will happen in the markets. No one can time the markets. Investment managers who were up one month or one year may find themselves at the bottom (as happened to Altschuler) and vice versa. It is quite possible that after the bad period, Altshuler will suddenly return to the top, or at least somewhere in the middle. A catalyst for this may happen if and when the markets abroad rise again. When will that happen? Of course no one knows.
And what happens in the meantime in January? The Nasdaq has completed a jump of 9% so far, while in Israel the indices fall by 1%. If this continues next week – Altshuler is expected to be the first in returns for the month of January.
In the latest reports, the investment house recorded a 24% drop in revenues to NIS 301 million, compared to NIS 394 million in the corresponding quarter. The company did not hide and explained that the reason is, as stated, “a decrease in the balance of assets managed by Altshuler Gamel”. But despite this, Altshuler managed to register a net profit of NIS 50 million. And we’ll just note that this is also a drop compared to 77 million in the corresponding quarter (for more on the reports).
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