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(photo credit: Courtesy Photo)
Venture capital fund Markstone Capital Partners on Monday launched Israel's largest investment firm "Prisma," with assets of over NIS 50 billion under its management, resulting from key purchases it made from Bank Hapoalim and Bank Leumi last year.
"Prisma is being established as a direct result of the Bachar reforms," said Dov Kotler, CEO of Prisma, at the press launch in Tel Aviv. "The idea is that with our large customer base and variety of products, we will be able to service the customer in a smart and simple way."
Prisma's forerunner, Solomon Investments Ltd., which is 90 percent-owned by Markstone and 10% by Enter Holdings, last year agreed to buy Poalim Mutual Funds (PKN) for NIS 955m., however, Hapoalim lowered the price to NIS 860 earlier this year with the fall of the fund's asset value. Solomon followed up with the purchase of Bank Leumi's and Hapoalim's provident funds.
The disposals came as the banks were ordered to sell off their interests in mutual and provident funds in compliance with the Bachar reforms, a Finance Ministry program passed by the Knesset in July 2005 designed to open the capital markets to competition.
Since then, the banks have had no problem selling off their mutual and provident fund units and have struck deals with many of the country's leading investment houses and insurance brokerages including Harel Insurance Investments, Zur Shamir Holdings, Excellence Investments and Phoenix Assurance.
Prism said it's PKN Plus fund will give it around 12% share of the country's mutual fund market, bringing its total mutual fund assets under management to over NIS 15b., while its Leumi and Hapoalim provident funds combined will give it approximately 14% of that market and around NIS 35b. worth of assets under management. In addition to these services, the company will manage a NIS 1b. asset portfolio and offer brokerage services.
Kotler explained that through its parent company Markstone, Prism has been able to bring new products to the Israeli customer, including exclusivity in selling products from New York-based investment house Capital International, marking its entry into Israel. Other foreign-based investment houses that Prisma will be working with include UBS and Credit Suisse.
In so doing, the company has adopted its "smart & simple" marketing strategy, which Kotler said also resulted from the Bachar reforms.
"While Bachar has been successful and the results seem positive, many new products and massive advertising campaigns have created a surplus of information and with it confusion," he explained. "We intend to simplify the decision process and make it easier to make an investment."