Clal Finance Ltd. has closed the sale of its exchange traded funds (ETF) unit Mabat to Meitav Investment House Ltd.. The sale was made at a value of NIS 85 million for the operations, and does not include Mabat's shareholders' equity and other adjustments, which raised the price to NIS 105 million. Clal Finance will report a capital gain of NIS 35 million.
Meitav wants Mabat CEO Lior Kagan and his team to stay on, but the final decision is due after the closing.
"After a thorough review of the ETF segment, we concluded that if Clal Finance could not have a certain volume of assets, the business was not worthwhile," said Clal Finance CEO Tal Raz. "Seeing that the ETF market is a saturated market based on market share of assets and marginal pricing of deals, as well as tightening regulation that is liable to erode profit margins, we decided to sell Mabat."
Mabat currently has NIS 6.6 billion in assets under management and a market share of 11.3%. It is Israel's fourth largest ETF management company.
Meitav is owned by chairman and CIO Zvi Stepak and Meitav Portfolio & Mutual Fund Management co-manager Shlomo Simanovsky (50%), B. Gaon Holdings Ltd. (TASE: GAON) (28.6%), and IDI Israel Direct Insurance Ltd. (TASE: IDI) (21.4%). Since Meitav's merger with Gaon Investment House and Yashir Investment House, it has been seeking its place in the ETF market. Meitav's ETF subsidiary Hadas is the smallest player in the market, with a negligible 1.7% market share. After some deliberation, Meitav decided to use Hadas as a platform for ETFs and to expand it through acquisitions.
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