The recent banking crisis has hurt a lot of people, do doubt.  While stocks have plummeted and firms gone under, there has been a bright side for very conservative investors: lots of CDs (certificates of deposit) to choose from.  While rates have varied wildly, as banks need short term deposit money, they’ve become quite aggressive and prolific in their borrowing from account holders.  As Goldman Sachs and Morgan Stanley morph into deposit institutions and race to gather assets to shore up their deposit base, they are quickly offering CDs in volume to attract new customers.

We’ve heard of aggressive teaser rates at local banks trying to bring in new customers by offering more than a new toaster.  An interesting offshoot of this competitiveness is manifesting itself in new internet distribution models.  There seems to be a buzz surrounding one of these companies, MoneyAisle.

Like other Internet business models, MoneyAisle turns a traditional model on its head and gets companies competing for your business.  In this case, banks bid via live auctions for your business.  Much like LendingTree, which does something similar for mortgages, MoneyAisle allows a consumer with investable funds to enter deposit terms and state of residence (it matters for CDs, as some are not available in certain states).  In a few minutes, that information is put out to auction and you’re connected with the winning bidder bank and hopefully, get a better rate on better terms than you would have received scoping out the local shopping strip.

Right now, MoneyAisle works its magic for 2 products: Bank CDs and Savings accounts.  These are typically easy-to-compare and standardized products, so it seems to work well.  It will be interesting if MoneyAisle branches out to other types of investments (I guess structured products could fit into this model, as well).

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This interview with an asset manager active in Israeli markets is part of our new subscription newsletter, Israel Opportunity Investor. You can find out more about the product and the opportunities we cover at www.israelnewsletter.com

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Can you tell us about your firm?
Marc Lesnick, Fortissimo Capital: Fortissimo Capital Fund is a special situations Israeli-related private equity fund focused primarily on maturing technology companies that are at a point of inflection. We provide transformational capital, taking an active role in assisting portfolio companies with improving fundamentals and facilitating growth. Our initial fund manages in excess of $100 million and is backed by the leading Israeli financial institutions (banks, insurance companies and pension funds). We plan to initiate fund raising for our second fund in the coming weeks. (Continue »)

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