The hedge fund Manikay Partners, headed by Shane Finemore, currently posts a profit of about NIS 700 million on its investment in the Tel Aviv Stock Exchange, mostly on paper for the time being.
Manikay Partners is currently the largest shareholder in the Tel Aviv Stock Exchange, which does not have a controlling core. It bought 20% of the shares in the company in August 2018 for NIS 110 million, at a valuation of just NIS 550 million. This was part of a move by Tel Aviv Stock Exchange CEO Ittai Ben-Zeev to remove most of the shares in the company from the banks and transfer them to foreign shareholders and to the Israeli public.
Last Thursday, the Tel Aviv Stock Exchange reported that it would buy 4.82% of its own shares from Manikay Partners for NIS 202 million. The company reported that it initiated the purchase "having in mind the date on which the Manikay fund was set up and the normal period of activity of investment funds of this kind."
In selling part of its holding, Manikay Partners fixes a fantastic return of eight times the money it invested in Tel Aviv Stock Exchange shares six and a half years ago. It bought the shares at NIS 5.51 each, and is now selling part of them at NIS 43.79. As a result of the sale, Manikay Partners' holding in the Tel Aviv Stock Exchange falls from 19.3% to 15.2%, a holding worth NIS 620 million.
Buying shares in the Tel Aviv Stock Exchange (TASE: TASE) has proved to be a very successful investment in the past few years, much more than in its own main indices or in any other stock exchange. The share price of the Tel Aviv Stock Exchange, which is among the stocks that make up the Tel Aviv 125 Index, gives it a market cap of over NIS 4 billion. Anyone who invested in it a year ago doubled his money. Anyone who did so five years ago has made a return of 332%. And anyone who invested in the flotation of the Tel Aviv Stock Exchange in 2019, has made a return of almost 600%.
Not a great deal is known about Manikay Partners. It was reported in the past that it specializes in investment in stock exchanges around the world. The firm is incorporated in the US and its offices are in New York. It holds its shares in the Tel Aviv Stock Exchange through a fund called Manikay Global Opportunities, which reported assets to the US authorities last year of NIS 403 million.
The mystery surrounding Manikay Partners thickens when one goes to its website, which looks as though it has not been updated in along time. The site mainly reports the deal for investment in the Tel Aviv Stock Exchange. The firm's investment strategy is described as being "focused on the long term return for its investors, utilizing an opportunistic approach to investing."
Manikay Partners was founded by Shane Finemore, an Australian described in filings in the US as the firm's managing partner and chief investment manager. Another partner is Salah Saabneh (56), an Israeli citizen resident in the US, who serves as a director of the Tel Aviv Stock Exchange. Saabneh holds a first degree in law from The Hebrew University of Jerusalem, a similar degree from Georgetown University in Washington DC, and an MBA from Columbia University in New York.
Finemore (55) founded the firm in 2008. On his personal LinkedIn page he is described as having thirty years experience in the financial markets in Australia, the US, and the UK, in "multi-strategy trading, arbitrage and investment." Before founding Manikay Partners, Finemore worked in various roles in the Australian branch of UBS. He holds a first degree in commerce, accounting and finance from the University of New South Wales.
In an article published in "Globes" at the time of Manikay Partners' investment in the Tel Aviv Stock Exchange, it was stated that a prominent investor in the firm was Australian businessperson Sir Frank Lowy (90). Lowy, a Holocaust survivor, lived in Israel and fought in the War of Independence in the Golani Brigade. He later moved to Australia, and founded global shopping center company Westfield Corporation, which was sold to French company Unibail-Rodamco in 2018 in a $16 billion deal. Lowy's own net worth is estimated by Forbes magazine at $6.5 billion.
In the same article, it was stated that Manikay Partners raised $300 million in the year that it was founded. It is not possible to verify the identities of the current investors in the firm or the extent (if any) of Lowy's investment. When it was founded it was reported that it managed assets worth $2-2.5 billion, but, as mentioned, according to filings in the US last year, one fund that it manages held assets of just over $400 million. According to reports in the UK, Manikay Partners' partnership there was dissolved in August 2021.
CEO Ben-Zeev holds shares worth NIS 147 million
Besides Manikay Partners, another party of interest in the Tel Aviv Stock Exchange is a fund of Danish pharmaceuticals company Novo Nordisk. Before the sale of shares by Manikay Partners, the fund held an 8.2% stake in the company, worth NIS 330 million. Another party at interest is the company's CEO Ben-Zeev, who holds a 3.57% stake, worth NIS 147 million.
A well-known investor in the Tel Aviv Stock Exchange is US-based hedge fund billionaire Bill Ackman, who, together with his wife Neri Oxman, bought about 5% of the shares in the company in January last year for an estimated NIS 100 million, since when the value of the stake has doubled. That purchase was part of a distribution of 18.5% of the shares in the Tel Aviv Stock Exchange held by local banks to overseas investors led by investment bank Jefferies.
In the first nine months of 2024, the Tel Aviv Stock Exchange had revenue of NIS 322 million, 12% more than in the corresponding period of 2023. The company's revenue mainly derives from trading and clearing commissions, which grew by 8% in the first nine months of last year in comparison with the corresponding period of 2023.
The Tel Aviv Stock Exchange's fastest-growing revenue stream in that period derived from information distribution and connectivity services, which grew by 29% in a year to NIS 68 million as the number and price of licenses to use its indices rose. Operating profit before financing income grew 26% to NIS 93 million, and net profit grew 22% to NIS 76 million.