Merger negotiations by Tamir Fishman & Co. and Hadas Arazim Ltd. to create Israel's investment house are almost finished. Hadas Arazim's owners, chairman Isaac Sutton and Venezuelan businessman David Yisrael, will acquire half of Tamir Fishman, leaving the other half with two of its current owners, CEO Eldad Tamir and Royal Bank of Canada Inc. (NYSE; TSX: RY).
As "Globes" reported in May, Sutton will be appointed non-executive chairman of the merged company and Eldad Tamir will be the CEO. Hadas Arazim CEO Rami Dror will become chairman of Tamir Fishman Investment Management Ltd., overseeing the company's provident and mutual funds, investment portfolios, and employee options.
The spokesmen of Tamir Fishman and Hadas Arazim declined to comment on the report.
Tamir Fishman currently has NIS 4.5 billion in assets under management, and an additional NIS 10 billion in its employee options and funds business. Hadas Arazim currently has NIS 4.9 billion in assets under management, including NIS 3.5 billion in its provident funds, NIS 516 million in its mutual funds, which are hosted by Ayalon Holding Ltd. (TASE: AYAL), and NIS 450 million in portfolio management. The merged investment house will have NIS 10 billion in assets under management, in addition to its employee options and private equity businesses.
The merger is logical in a business where economies of scale count. Separately, they lack the critical mass to make profits on investment management. This threshold is the result of the heavy costs from regulations and the erosion of management fees for almost all financial products.
The two investment houses have 220 employees between them - 150 at Tamir Fishman and 70 at Hadas Arazim - and some employees will lose their jobs.
Published by Globes [online], Israel business news - www.globes-online.com - on June 12, 2012
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