Markstone Dismantling Prisma

Psagot to buy provident funds.

Three years after founding the Prisma investment house, its owner, the Markstone Capital Group, has decided to dismantle Prisma. Markstone managing directors Ron Lubash and Amir Kess are in negotiations with Psagot over the sale of the provident funds, while also negotiating with a number of other investment houses, such as Meitav, over a merger of mutual funds.

Markstone, or Prisma, will most likely receive shares in Psagot for the provident funds, while it is possible the mutual funds merger will remain part of a joint firm under the Prisma name. The main reason Prisma wants to sell the provident funds and merge the mutual funds is an attempt to avoid the huge expenses involved in running an entire investment firm, including advertising and marketing, personnel and operating expenses - especially as Prisma has very heavy bank debts it took out to buy the funds in the first place.

Prisma's mutual fund assets under management have dropped from NIS 21.4 billion in June 2007 to only NIS 10.2 billion in November of this year. The decline is actually even larger, since Prisma agreed to buy the PKN and Lahak funds originally when they had about NIS 40 billion in assets in them.