KSM acquiring Excellence Mutual Funds

Avner Hadad Photo: Tamar Matsafi

The deal is related to turning exchange traded funds into exchange traded notes.

Following the consistent decline in the mutual fund business of Excellence Investments Ltd. (TASE: EXCE), fellow subsidiary KSM Indices Certificates Trade is acquiring Excellence Mutual Funds. KSM Indices CEO Avner Hadad, who made KSM Indices an important business for Excellence, controlled by The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), will manage the consolidated company. The controlling shareholder in Phoenix is Yitzhak Tshuva-controlled Delek Group Ltd. (TASE: DLEKG).

Ostensibly, this is a deal in which money is passing from one pocket to another within the same house. While Excellence Investment is the sole owner of Excellence Mutual Funds, however, it owns only 84% of KSM Indices. The remaining 16% is owned by Hadad, KSM Indices chairman Boaz Nagar, and KSM Indices founder Roy Regev. Excellence Investments and Phoenix are not revealing the price of the deal, but estimates are that the funds' activity is worth over NIS 100 million to KSM Indices.

Excellence Investments has been managed by Phoenix CEO Eyal Lapidot since he replaced Uziel Danino at Excellence Investments after the latter recently resigned. Excellence Investments said that KSM Indices was acquiring its fellow subsidiary "following the expected implementation of Amendment 28, which states that exchange traded funds (ETFs) will become mutual funds called exchange traded notes (ETNs)." The deal is subject to approved by the Israel Securities Authority.

The background to the deal is the fading of Excellence Mutual Funds, which managed NIS 11.7 billion in assets as of July 31, constituting a 5.1% shares of the mutual funds market (NIS 3.5 billion of this consists of tracking funds, a direct alternative to ETFs). Excellence is currently the eighth largest player in this market.

Published by Globes [online], Israel Business News - www.globes-online.com - on August 14, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Avner Hadad Photo: Tamar Matsafi
Avner Hadad Photo: Tamar Matsafi
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