WeSure’s NIS 1 billion Altshuler Shaham deal reshapes Israel’s investment industry
WeSure will take 45% of the pension and provident fund company alongside CEO Yair Levinstein, who will increase his stake to 25%, as Gilad Altshuler and Ran Shaham exit.
The insurance company WeSure Global Tech, controlled by Emil Vainshel and Zvi Barak, announced the day before yesterday that it is acquiring a controlling stake in pension and provident fund company Altshuler Shaham Finance, as first reported by Calcalist. The deal is expected to be signed by the end of the week, before Yom Kippur.
WeSure, which has a market capitalization of NIS 2.5 billion, will execute the NIS 1 billion deal jointly with Yair Levinstein, CEO of Altshuler Shaham. Levinstein will increase his stake by 10 percentage points to 25%, while WeSure will hold 45% of the pension and provident fund company. Of the total deal value, Levinstein will acquire shares worth NIS 180 million, while WeSure will acquire shares worth NIS 820 million.
The seeds of the deal were sown more than a year ago, when controlling shareholders Gilad Altshuler and Kalman Shaham, together with Levinstein, decided to merge the investment house’s private operations with the provident fund operations of the public company in which Levinstein was a partner. The separation had prevented provident fund members from being referred to the investment house’s mutual fund and hedge fund activities, as doing so would constitute a related-party transaction. Negotiations dragged on for months but ultimately failed, with Altshuler and Shaham on one side and Levinstein on the other unable to agree on the investment house’s valuation for the merger or, crucially, on the division of managerial authority in the merged entity.
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After the deal fell through, three options remained: Altshuler and Shaham could acquire Levinstein’s stake; Levinstein could acquire the stakes held by the other two; or all three could sell their holdings together. Levinstein decided against selling and quietly began searching for a strong financial partner to join him in the acquisition. He held discussions with Guy Bernstein, CEO of Formula; Gil Deutsch and Roni Biram, former CEOs of Excellence who now manage investment funds; and other potential partners.
About two weeks ago, however, Emil Vainshel and WeSure entered the picture. Vainshel and Levinstein quickly developed a strong rapport, leading Levinstein to conclude that Vainshel was the right partner. The decision was driven by the potential synergies between Vainshel’s brand and Ayalon, the belief that the battered Altshuler Shaham brand could be revitalized, and the positive relationship between insurance agents and Ayalon, in contrast to their cooler relations with Altshuler Shaham. Vainshel also expressed a willingness to step into the shoes of Altshuler and Shaham under the existing joint-control agreement, helping facilitate the transaction.
While the process between Levinstein and Vainshel proceeded relatively smoothly, negotiations with Shaham and Altshuler proved more difficult, largely because of problematic clauses concerning future non-compete arrangements between the investment house and the provident fund company. For Altshuler, the decision to sell was relatively straightforward. Ran Shaham, who is younger, found it more difficult to part with the holding. Ultimately, however, likely influenced by the position of his father, who founded the investment firm and remains its majority shareholder, he decided to sell.
The new partnership nevertheless faces significant challenges. One is the relationship between Ran Shaham and Levinstein, both of whom have strong and complex personalities. Another is whether insurance agents will embrace the new venture.
And with Levinstein now at the helm, a central question will be whether he can steer the company toward stronger returns, with or without the current chief investment officer.
