A covert enforcement activity by the Securities Authority revealed that the investment house lighthouse Deviated from the provisions of the Securities Law and marketed some of his investments to too many people. Magdalor initiates and markets alternative investments, which include, among other things, raising private investments for real estate projects around the world.
In order not to deviate from the Israeli Securities Law, it is forbidden to market a project to more than 35 people (prospects) over a period of 12 consecutive months – otherwise it is actually a public offering procedure, and therefore it is necessary to raise through the publication of a prospectus. The authority’s enforcement activity discovered the anomaly, and an inspection by the company verified the findings.
“As part of an internal inspection carried out, following an inquiry by the Securities Authority, in relation to the marketing of five private partnerships for investment in projects in the Netherlands and Spain, managed by general partners from the Magdalor Group, carried out in 2021-2022, certain anomalies were found in the number of parties who received information about the said projects , which exceeds the scope of ‘general publication’, and therefore it is possible that they should have been counted as bidders in those projects (between 18 and 40 additional potential bidders in each of the above-mentioned projects beyond the number allowed according to Section 15 of the Securities Law).
“It will be clarified that the possible deviations in the number of offers were made contrary to the company’s guidelines and procedures. It will also be clarified that according to the findings of the inspection, there is no deviation in the scope of the actual investors in the said projects in relation to what is allowed by law and according to the company’s procedures.”
Magdalor noted that the inspection findings that were discovered were immediately forwarded to the Securities Authority, and the company “performed actions to prevent their recurrence, such as refreshing the training, updating work procedures and arranging the execution of additional controls on a regular basis.”
Magdalor added that “the matter was dealt with immediately as soon as it was made known to the company, and this despite the fact that, to the best of the company’s knowledge, the above findings do not affect the company’s activities, the above-mentioned projects or the activities of the private partnerships under its management.”
To Globes’ request, the Securities Authority stated that it does not refer to the actions it takes in relation to one or another company, but stated that “recently, the Authority issued a warning to entrepreneurs who wish to offer unsupervised investments, and presented the basic principles required for offering securities without a prospectus. These principles include the need to register and monitor the number of offers and the actual number of investors.”
A billion shekels are managed in 36 investment funds
The Maddalor Alternative Products Investment House was established in 2016, and its founders include Moti Weiss, one of the founders of the Viola Group, which specializes in providing credit, and the former CFO of Sapience; Assaf Banai and Shlomi Alberg, who founded and own the Profit Agency, which specializes in marketing financial products; and CEO Ran Tzadikario.
Magdalor is currently traded at a value of NIS 326 million. The company was issued in Tel Aviv last December and has since generated a return of 4.5%. Magdalor ended last year with more than NIS 1 billion in managed capital, in 36 investment funds.
Since its establishment, the company raised a little more than half a billion shekels for its real estate activities, and the value of the assets under management stands at 4.3 billion shekels. In its credit activities, the company raised 370 million shekels. The company’s revenues doubled in 2021 and amounted to 34.5 million shekels. The net profit increased from 316 thousand shekels in 2020 to 2.8 million shekels last year.