Israel’s Largest Institutional Investment Conference; Over $500 Billion Under Management

DC Finance is hosting Israel’s largest Institutional Investor Conference in Tel Aviv, with the participation of the Israeli Government, leading national banks and major institutional bodies.

The event brings approximately 300 investment managers and investment committee members of pension, provident and mutual funds, nostro managers at the local banks and insurance firms, CFOs of large cap firms and private institutional investors with approximately US$500 billion under management (not including capital managed by CFOs of large cap companies).

The agenda explores the following areas: commodities, infrastructure, real estate, forex, asset allocation strategies, risk management, equities, fixed income, global private equity strategies, ETFs, green energy projects, Chilean pension system based investment vehicles, institutional credit loans and other related topics.

The conference provides an annual meeting place for the investment decision makers of the insurance firms, provident funds, pension funds, continued educational funds, mutual funds, banks, large companies and other nostro managers. The conference brings CIOs and CEOs of Israel’s largest Institutional bodies for an update on the recent developments in the investment world. The speakers include leading worldwide CIOs, regulators, administration officials and academic lecturers from Israel and abroad.

The Israeli Institutional Investors – facts and figures:

Israeli Institutions boost overseas investing to 22% of all assets; Exchange-traded notes were a favorite vehicle, but there was ‘investment in everything in sight.’ (The Marker Magazine, 2017)

“Israel’s institutional investors have sharply increased their holdings in overseas markets, which now represent 22% of assets under management at the end of last year, up from just 15% three years ago, according to a study by the economic research firm Praedicta and provided to TheMarker.
In shekel terms, the bigger exposure translated into an increase in foreign holdings of 67 billion shekels ($19.1 billion), or 84%, from 80 billion shekels at the end of the third quarter of 2010 to 147 billion shekels. The rise was led by provident funds, pension funds and managers’ insurance policies.”

Israeli institutional investors manage more than 500 billion USD (these figures do not include insurance firms’ notro capital, private investors’ or private firms’ nostro capital) . Until recently, the government either heavily taxed or prohibited investment in foreign instruments while granting generous exemptions for local investment forcing the institutional investors to manage most of their investments within the Israeli capital markets. Recent years witnessed a significant shift in the attitude of the Israeli Commissioner of Capital Markets Insurance & Savings. The Commissioner currently advocates global investment diversification as a risk management strategy. As a result, Israeli institutional investors are starting to seek investment alternatives abroad.

Provident, coalition and pension funds manage 195 Billion USD,  Mutual funds 42 Billion USD and insurance firms manage 58 Billion USD, banks manage 40.5 Billion USD in nostro accounts.

The long term savings market in Israel, excluding the banking system, companies and family funds, has more than 860 Billion NIS under management.

The market is centralized and is managed by six dominant managing firms: Migdal (76 Billion NIS), Clal (52 Billion NIS), Harel (38 Billion NIS), Phoenix and Excellence (38 Billion NIS), Menorah (21.5 Billion NIS).

Banks – Nostro: Leumi manages 16 Billion USD, Poalim 7.7 Billion USD, First International 4.4 Billion USD and Mizrahi with 2.2 Billion USD.

There are three investment tools: provident funds with approximately 280 Billion NIS under management, pension funds with approximately 360 Billion under management and life insurance firms with approximately 225 Billion under management. Most of the large institutional bodies offer all  of these three investment vehicles.

The local market is opening itself more and more to investments abroad and the government is supporting the diversification of investments abroad very seriously.

The exposure to funds in general and to hedge funds in particular is growing yearly, especially amongst the large institutional bodies. Some invest through FOF and others directly. In insurance firms out of total assets, around 3% is invested in funds and 1.25% in hedge funds, in pension funds 0.75 is invested in funds and 0.2 in hedge funds and provident funds invest 1.5% in funds and 0.5% in hedge funds.

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