Hedge fund founder who bought TASE stake says exchanges are ‘good businesses’
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Hedge fund founder who bought TASE stake says exchanges are ‘good businesses’

Shane Finemore, whose Manikay fund now owns some 20% of the Tel Aviv Stock Exchange, says he ‘could have sold it 50 times over’

Shane Finemore's hedge fund Manikay Partners LLC has acquired an almost 20% stake in the Tel Aviv Stock Exchange (Screenshot/Vimeo),
Shane Finemore's hedge fund Manikay Partners LLC has acquired an almost 20% stake in the Tel Aviv Stock Exchange (Screenshot/Vimeo),

Shane Finemore, whose hedge fund Manikay Partners LLC has acquired an almost 20% stake in the Tel Aviv Stock Exchange (TASE), said in comments reported by The Australian Financial Review that after news broke of his investment in the Israeli exchange he was overwhelmed by people expressing interest in the deal.

“I’ve never had so many emails in one day — I could have sold it 50 times over,” the generally media-shy Finemore said at a conference in Sydney, the Financial Review said.

In April, the TASE board approved the sale of stakes to five foreign investors, including a nearly 20 percent stake to New York-based fund Manikay Partners LLC, as part of a push to restructure the exchange, draw additional investors, and make it more competitive and efficient, enabling it to become a more dominant player globally and more accessible to the public.

As part of its strategy, the TASE will also hold an IPO of at least a 31.7% stake at a valuation of at least NIS 551 million ($153 million).

A broker at the Tel Aviv Stock Exchange (photo credit: Moshe Shai/Flash90)
A broker at the Tel Aviv Stock Exchange (photo credit: Moshe Shai/Flash90)

During his conversation at the conference with Paul Chadwick of Nanuk Asset Management, Finemore said he remains very keen on stock exchanges in general, and when he heard that the Tel Aviv Stock Exchange was being demutualized and up for sale, his first thought was “surely everyone knows [exchanges] are good businesses?” the paper cites him as saying.

The investment in the Tel Aviv Stock Exchange is “an example of his underlying attitude to investing,” the paper writes.

“I make money studying natural stupidity,” Finemore said at the conference, according to the paper. “The human element doesn’t change. We make irrational decisions and the ability to take advantage of large mis-pricings due to irrational behavior is still there.”

Following the sale to Manikay and the other investors, which last month got the green light from the Israel Securities Authority, players in Israel’s capital markets expressed surprise at the seemingly covert manner in which the transactions were carried out. But TASE CEO Ittai Ben-Zeev said the sales were the best option for the exchange.

Manikay was founded by Australians Finemore and Russell Aboud, two former directors of the Australian Securities Exchange. They resigned from the ASX board in 2013, after the US Securities and Exchange Commission fined Manikay for short-selling shares in Citigroup in 2009.

“It was a painful experience but the lessons were very valuable. Reputation is everything,” Finemore told the forum in Sydney, referring to the incident, the Financial Review wrote. “Good intentions don’t count for much. What matters is whether the regulators think you have done that right and customers think you got it right.”

After TASE holds its IPO of shares, Manikay will hold 19.99% of the exchange, current TASE members will hold up to 22.3%, and four other foreign funds will own 4.99% each. Employees of the exchange will own a 6% stake. The four other funds are Sunsuper PTY Ltd, Moelis Australia Asset Management Ltd, Dalton Investments LLC and Novo Nordisk Foundation.

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