Less than eighteen months after it entered into a partnership in mutual funds and exchange traded funds, private equity firm Markstone Capital Group is likely to end its part in the venture shortly. Sources inform "Globes" that Markstone, which holds 45% of Excellence's funds company, is holding talks with the investment house on selling its holding to it. This is despite the fact that under the original contract it is due to sell its share on between 2014 and 2017. It is estimated that if a sale goes ahead now, it will reflect a value of NIS 150 million for the funds company. Markstone will receive NIS 80-100 million for the shares, and in addition almost NIS 60 million will be released from debt (Markstone's proportionate share of the debt of the funds company, which stands at NIS 130 million,, which originally belonged to Markstone through its holding in Prisma). Markstone said in response that "there is nothing concrete in this matter."
Industry sources estimated today that Markstone chiefs Ron Lubash and Amir Kess were seeking to realize their stake in Excellence early than expected because eof a need for cash and in order to improve the firm's level of leverage. They also said that because of this the price at which any deal might be carried out would probably be lower than stipulated in the original agreement.
At the beginning of 2009, Markstone sold investment house Prisma to Excellence (the mutual funds and ETFs), Psagot (the provident funds), and Ayalon Financial Solutions (the portfolio management business). In exchange, Markstone received 45% of the Excellence funds company, and 24% of Psagot.
Published by Globes [online], Israel business news - www.globes-online.com - on April 28, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010