Excellence Investments Did Well in 2006, Management Did Beautifully

Company's income and profits shot up, including from buying provident funds; leaders earned NIS 625,000 a month

Increasing assets under management and the boom on the financial markets did well by Excellence Investments in 2006. The brokerage and investments firm reported a 45% leap in revenues last year to NIS 325 million, against NIS 224 million the year before. Its revenues were double the take in 2004, when income totaled NIS 161 million.

Net profit grew 44% to 1IS 65 million, Excellence Investments said, against NIS 45 million in 2005 and NIS 37 million in 2004.

Excellence Investments is run by Roni Biram as chairman and Gil Deutsche as chief executive. The company has NIS 25.5 billion in assets under management, after it bought provident funds from Mizrahi-Tefahot Bank (TASE: MZRH)  in March (other than the provident fund Netivot). It paid NIS 343 million for these Mizrahi funds, which have NIS 10 investment bank in assets under management.

The two most lucrative areas of activity for Excellence Investments in the last year were ETFs (exchange-traded funds) and deposits. These brought NIS 107 million in revenues in 2006, double the figure for the year before. The main reason for the jump in income was the issue of new ETFs, and also, Excellence Investments broadened existing series of these derivatives, which typically track given indexes.

Exchange-traded funds and deposits contributed NIS 66 million to earnings in 2006 compared with NIS 38 million in 2005.

Investment management contributed NIS 116 million revenues in 2006, against NIS 75 million a year ago.

Underwriting, handled by a subsidiary, brought in NIS 21 million in 2006, up from NIS 19 million the year before. It also contributed NIS 13 million profit in 2006, against NIS 11 million the year before.

Rather less lucrative areas for the investment house were offerings of structured instruments, and securities and options. Structured instruments generated a loss because of the premature redemption of several series of bonds that had contributed to profit in previous years. Also, Excellence Investments sold its subsidiary Opmat that had engaged in securities and options trading, which reduced its volume of activity in that sphere.

Trading in securities generated revenues of NIS 7 million in 2006, Excellence Investments said, compared with NIS 20 million the year before. It generated no profits, while in 2005 it had brought in 10 million profit.

So Excellence Investments had a pretty good year, all told, and its management had a wonderful one, going by their paychecks. Israeli companies must reveal the wage cost of their top five people. At Excellence Investments, Deutsch and Biram each took NIS 7.5 million, making them among the best-paid managers in the land. In other words, they get NIS 625,000 a month.

The only one who made more (according to the financial statements published so far) is Yaki Yerushalmi, the departing chairman of American Israeli Paper Mills  (TASE, Amex: AIP), and Shlomo Yanai, last year chief executive of Makhteshim Agan Industries (TASE: MAIN) and this year, the chief executive of none other than the drugs giant Teva Pharmaceuticals (TASE, Nasdaq: TEVA). His wage cost amounted to NIS 24 million in 2006.