Taking Stock / Say Alony Hetz, and Tremble!

If you run an investment company, especially one specializing in real estate, you'd better hope your shareholders never heard of Alony Hetz Properties & Investments. It could just ruin your day.

If you invest abroad and find yourself laboriously explaining to your annoyed spouse two or three times a month just why you "have" to fly to London, New York or Toronto to close a deal, you'd better hope your beloved doesn't know Nathan Hetz.

If you run a successful publicly traded company that has generated hundreds of millions of shekels in profit in the last few years, and feel you "deserve" to be paid millions of dollars a year, you'd better hope your management board never looked at Hetz's pay slip.

If you belong to one of the 100 itty-bitty companies that floated stock in the 1993 bubble, you'd better hope your backers haven't been following the performance of Alony Hetz stock. You might find yourself burned in effigy.

If you manage a successful investment company that "needs" to constantly increase its workforce because business is expanding, you don't want to call Alony Hetz's automated answering system. It would just ruin your day.

And if you employ a full-time PR officer and keep moaning how you hate to see your picture in the paper, but there is really "no choice" because it's good for business, you don't want to use Nathan Hetz as your example.

In short, Alony Hetz, which Nathan Hetz floated in 1993, is an environmental hazard. It sticks in the craw of just about everybody. It makes just about everybody around it, from the companies to their managements to their investors, feel lousy.

Why? Nathan Hetz is no Gil Shwed. He invented nothing. Nor is he Eli Hurvitz, a genius at management and a prince of mergers & acquisitions. He doesn't have the charisma of Nochi Dankner, the chairman of IDB Holding Corporation, nor is he any Ilan Ben-Dov or Gil Agmon, masters of marketing and networking.

Nathan Hetz is trained in that most maligned of professions, accounting. Fifteen years ago he was managing Ackerstein, the floor materials maker. He left and established a company with the industrialist Nathanel Alony, since deceased. And Alony Hetz floated on the stock market in that accursed bubble year, 1993.

Unlike 95 percent of the companies that went public that year, Alony Hetz has provided real value for its shareholders, far beyond what they could get from risk-free investments.

Unlike most of the minnows, Alony Hetz did not spend almost all its profits on wages and bonuses or on insider transactions.

Time to quit the table

The company proved once and for all on Monday that unlike most of the major financial players in the Tel Aviv sphere, Hetz knows that at some point it is legitimate, indeed necessary, to quit the table, pick up his chips, give a whole bunch of them to his faithful investors as dividends, and go out and look for new investments.

Alony Hetz advised the Tel Aviv Stock Exchange Monday that it is in advanced negotiations to sell all its assets in Great Britain, where it has made most of its investments.

The company estimates its revenues from the deal will be around NIS 1.8 billion, with capital gains of about NIS 350 million.

His transaction turns one of the greatest value accretions the Tel Aviv Stock Exchange has seen in a decade into cold cash.

If you bought Alony Hetz shares in 1993 when it went public, and invested the dividends it distributed back into its shares, you made 25 times your initial investment. Meaning, for each thousand shekels you invested, you have NIS 25,000.

In the last three years, Alony Hetz stock has generated a yield of 300 percent, compared with 140 percent generated by the TA-100 index. In the last seven years, its real yield is 700 percent, four times that achieved by the TA-100. Much of that profit was cashed out, since during that period, Alony Hetz distributed NIS 180 million in dividends.

Alony Hetz did not achieve that through some exploit of genius. Nor did it do anything particularly unusual. It chose good properties in Britain, at good timing, too.

Here are some surprising figures. Although 90 percent of Alony Hetz's properties are outside Israel, Hetz himself spent only 22 days abroad last year for work. Note well, all you spouses and families: it is possible to track and manage successful investments abroad without immediately joining the El Al frequent flyers' club.

Even though Alony Hetz is on the TA-100 index, if you call its switchboard you get a list of all its workers. How's that? It has all of six. One is Hetz himself. Another is Rina Freund, his secretary. For Nathan himself, dial extension 103.

Over the years Hetz gave himself a yearly salary of about NIS 2.5 million, not low compared with the norm in Israel, but certainly low compared with the profits and yields he generated for investors, and low compared with the norm in the fat-cat club.

What about PR? Hetz does not convene press conferences. He has never had his picture taken opening or closing the Tel Aviv Stock Exchange session, or ringing the bell on Wall Street. He hasn't employed Rani Rahav, and doesn't lunch with the business press. Maybe none of that is really key to doing good business?

So if you manage an investment or real estate company, you could do worse than take Alony Hetz and its manager as good, challenging examples. And if you invest in stocks, identifying companies that are run like that could be a good way to start picking.