Israel Market Overview December 2017

Following the recent trip to Israel, Delta summarised some key data points about the financial services market:

Overview

  • Liquidity events from company sales such as Mobileye being bought by Intel for $15.3bln, Kite Pharma sale to Gilead for $11.9bln, Netafim sale to Mexichem for $1.5bln and Aristocrat buying Plarium for $500mn, to name a few, have led to an increase in the number of UHNW & HNW Israelis both on the ground and abroad. This type of wealth creation lends itself well to wealth management coverage with an investment banking product suite, allowing private banks to offer structured credit, specialty finance, single stock loans as well as more traditional private banking products. In light of the above, there has been an evident interest in strengthening teams by both established players such as Credit Suisse and UBS, as well as notable brands such as J. Safra Sarasin, who are looking to re-renter the local Israeli market after 6 years of absence

  • Investment Banking teams remained lean over the last decade with bulge bracket headcount on the ground averaging at 6 people, with very limited movement of resources between platforms. Client relationships are held by a tightly knit group of senior Managing Directors who have remained loyal to their employers, in the majority of cases throughout their professional careers

  • Following the upgrade of Israel from 'emerging' to 'developed' status on the MSCI index back in 2010, the majority of equity research teams that had presence on the ground were substantially reduced or fully disbanded, with Citi and Bank of America Merrill Lynch maintaining coverage out of the internationals and Excellence Nessuah out of the locals. MiFID II is likely to have a further impact on this leadership set up  

  • Having been burnt by a set of lawsuits, local players including Bank Hapoalim and Bank Leumi are allegedly scaling down private banking both locally and abroad, with Hapoalim having already sold their operations in Luxembourg and Switzerland to J. Safra Sarasin

Hiring Trends

  • Investment banks with strong Wealth Management franchises looking at Israel are competing for key relationships in the UHNW and HNW Entrepreneur community, given wealth creation in the segment, with several key hires made over the last year both in Tel Aviv, as well as in London and Zurich. These include the move of Hila GOLDENBERG and Ido BEN-HAIM to Credit Suisse UHNW team at the beginning of 2017 from UBS, Ohad GREENFELD joining UBS in London from Edmond de Rothschild, Moshe FISHER relocating to UBS in Zurich from JP Morgan, and Jeffrey ZERMATI joining JP Morgan in London from UBS Tel Aviv, among others

  • Bulge brackets have been selectively considering adding headcount at Associate and Analyst level on the ground in Tel Aviv, with a particular interest towards internationally trained Healthcare and Tech sector bankers who are looking to move back for family reasons or make Aliyah. The focus has been primarily on junior resources, given the limited attrition of headcount at officer level

  • Several international financial institutions chose to target local candidates for junior level hiring, quoting lower associated costs and the comparatively high quality of resources. This creates a significant compensation gap with talent sourced abroad in London or New York as well as a potential deterrent for internal relocation back to Israel. Local graduate hiring has also increased with some preference towards hiring graduates straight from Israeli universities

Competitive Landscape

  • The limited demand for senior resources in investment banking and markets has pushed high quality talent to reinvent themselves at corporates, independent advisory boutiques and family offices. With the latter seeking sophisticated top down advice with a view to optimise their current internal operations, this change will inevitably lead to a recalibration in the complexity of solutions that they would wish to pay their private banker for

For the Delta house view and related mandates please reach out to Irina Perova

Best Regards,

Delta Executive Search Team

Posted by Irina Perova
Wednesday 13th December, 2017

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