Psagot sale worth NIS 45m to CEO Vermus

Israelis have already become inured to investment house executives chalking up exits that would not embarrass a high-tech entrepreneur, and two more investment house executives may soon join the list of brokers who have made it. Sources inform ''Globes'' that if York Capital Management LLC goes ahead and sells its stake in Psagot Investment House Ltd. at a company value of NIS 3 billion, Psagot CEO Roy Vermus could make NIS 45 million on the exercise of his options (1.5% of the value of the deal), and chairman Arik Steinberg could make NIS 22.5 million (0.75% of the value of the deal).

Psagot's top 15 managers received options amounting to as much as 5% of the deal, for a total of NIS 150 million. Steinberg already made about NIS 6 million when he represented York Capital in the negotiations with Bank Leumi (TASE: LUMI) for the acquisition of Psagot three years ago.

Sources said yesterday that York Capital had received two offers for its holding in Psagot, one from Apax Partners and the other from Hellman and Friedman LLC.

Vermus and Steinberg are largely responsible for Psagot's success. Since York acquired it from Bank Leumi as an investment with NIS 25 billion in assets under management in mutual funds, strategic maneuvers by the two men have turned Psagot into Israel's largest investment house, with NIS 120 billion in assets under management.

Vermus has been sitting on his Psagot options for three years, since he was 36 and stepped into the shoes of Gabriella Ravid, the CEO of Psagot Ofek, as the company was known when it was a unit of Bank Leumi. Psagot's starting position was not easy when Vermus took over, but equipped with his record as a talented mutual funds manager with strong administrative and professional skills, he navigated the company forward in a very competitive environment, and sailed through the severe financial crisis to turn Psagot into Israel's largest investment house.

Psagot is Israel's largest manager of both mutual funds and provident funds, as well as one of the country's largest brokers and portfolio management companies.

Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2009

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