Subscribe to Print Edition | Thu., November 20, 2008 Cheshvan 22, 5769 | | Israel Time: 17:56 (EST+7)
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Prisma firing 10% of workers
By Sharon Shpurer

Someone is paying the price for the failures at the Prisma investment house, and seems to be the employees. Prisma made its debut three years ago with huge influxes of funds, as well as hundreds of employees at high salaries. Now the firm is firing at least 10% of its workforce, 20-40 out of 350. The company is also examining the possibility of moving its offices from the Ayalon building in Ramat Gan to cheaper premises in Petah Tikva.

Prisma has engaged the services of consulting firm Tefen, which is working hard on a new organizational plan for the company.
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The investment house is controlled by the Markstone investment fund, 90%, which put up NIS 2.1 billion to buy the PKN and Lahak mutual funds in 2005. At the time, Prisma had NIS 60 billion under management and NIS 40 billion in PKN and Lahak, which have since shrunk to a total of only NIS 15 billion.

Prisma's star brokers and advisers have not managed to stop the enormous outflow of funds, despite their high compensation. The straw that broke the camel's back came when its Tavor and Hermon provident funds lost 8% in January of this year due to high risk bets on options. Prisma was forced to bring in an outside auditor, and promised to return NIS 100 million in compensation to customers. Even before this affair, CEO Dov Kotler was forced to resign.

Prisma said it has hired Tefen to recommend an appropriate organizational structure in light of developing competition. Its conclusions and recommendations will be presented in coming weeks.
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