Meitav yesterday began publishing figures for the Israeli investment portfolio management industry. Meitav, which previously reviewed the mutual and provident fund industries, asserts that 130 companies currently manage asset portfolios worth NIS 37 billion, owned by 30,000 private and business customers. 55% of the assets handled by the industry belong to private individuals, and 45% to business customers.
It is difficult to analyze the data for the Israel portfolio management industry, because in contrast to the funds’ figures, these figures are informal. Only estimates, such as those by Meitav, are available. The data do not include dormant accounts, consultant activities, the managers’ own nostro accounts, or options plans.
Meitav says that of the 130 portfolio management firms, only 100 are active, and only 50 have business in excess of NIS 100 million. 300 managers work in the industry.
An estimated 42 companies manage assets of NIS 10-50 million, 13 companies NIS 50-100 million, 10 companies NIS 100-250 million, 12 companies NIS 250-500 million, 14 companies NIS 500 million-1 billion, and only nine companies over NIS 1 billion. Meitav believes that 10 companies, accounting for 7.5% of the managers, manage NIS 21 billion, or 56% of the assets.
The major firms in this field include both bank subsidiaries (Ofek Securities and Investments (Bank Leumi (TASE:LUMI)), Peilim-Portfolio Management (Bank Hapoalim (LSE:BKHD; TASE:POLI)) and private companies (Ilana Batucha, Israel Brokerage and Investments (IBI), DS Securities & Investments, and Excellent Investment Group). The bank-owned firms have the advantage of access to bank customers. In contrast to the funds sector, however, the banks do not control the market.
In general, Meitav asserts that the investment portfolio management industry in Israel is far more decentralized that the mutual fund industry. There are more investment portfolio management companies than fund managers (there are only 50 of the latter). While every bank has an investment portfolio management company, these companies have far less power than their counterparts in the funds industry.
Meitav estimates the assets managed by the bank-controlled investment portfolio firms at NIS 10 billion, mostly by Ofek and Peilim. This amounts to only 30% of the industry total, compared with 88% of the total mutual funds industry, and 85% of the conventional mutual funds industry.
Published by Globes [online] - www.globes.co.il - on June 25, 2003