IDB's Titanium Assets Taps London Institutionals for $60 Million

Group doesn't do anything yet but is in advanced talks to buy three investment firms, is trolling for fourth

Titanium Assets Management Corp, which is controlled by IDB (TASE: IDBH)  group company Clal Finance, raised $60 million from institutional investors on London's AIM market at the end of last week.

Clal Finance itself had bought the controlling interest in Titanium Assets in exchange for $60 million. Post-offering, the Israeli parent company has been diluted to 47%. At present, therefore, Titanium Assets has about $120 million in cash.

Titanium Assets is managed by none other than Shuki Abramovich, formerly the chief economist of the Ministry of Industry and Trade, who says the company means to borrow another $80 million.

It could be said that Titanium Assets is a blank-check company - it doesn't do anything yet. But IDB, which is controlled by Nochi Dankner, has plans for it. With some $200 million in hand from the various infusions, Titanium Assets means to buy four investment firms. It's already carrying out due diligence on three of them and hopes to wrap up the acquisitions by the autumn of this year, or by year-end at the latest.

The investment firms in question have more than $10 billion in assets under management, which is more than Clal Finance Batucha itself has - about NIS 35 billion.

The three companies that Titanium Assets is checking made combined annual revenues of about $100 million and net about $12.5 million.
Regarding the fourth company, Titanium Assets is pursuing talks with five candidate firms, one of which it means to buy.

Ultimately Titanium Assets intends to have $20 billion in assets under management.

Buying Titanium Assets, which operates abroad, is part of a general drive at IDB to diversify its sources of income. The group had been tightly focused on  Israel but  is spreading its wings. By the end of 2008, Abramovich confided in TheMarker, the group hopes that two-thirds of Clal Finance's clients will be foreign residents.