Manor inside IBI Underwriting: how much of 2025 profit is mark-to-market, and how much cash is actually accessible

What This Follow-Up Is Isolating

The main article argued that underwriting came back, but 2025 profit was not a pure underwriting story. This follow-up isolates Manor because that is where almost the entire jump in long-term investment profit sits, and that is also where the gap opens between value that looks strong in the report and cash that can actually be extracted, distributed, or redeployed.

The numbers are already sharp enough. By year-end 2025 the company had invested NIS 46.1 million in Manor, carried it at fair value of NIS 79.3 million, and recognized a NIS 29.6 million uplift in 2025 alone. In other words, within roughly two and a half years Manor had become an asset equal to about 83% of the company's long-term investment book and about 44% of its equity. This is no side position. It is now a material balance-sheet line.

How Much of 2025 Profit Really Came from Manor

The non-obvious point is that Manor did not just help earnings. It almost carried the entire long-term investment line on its own. The income statement shows NIS 29.22 million of profit from long-term investments in 2025, while the Manor note shows a NIS 29.6 million uplift. That means Manor's contribution was not just large. It was slightly larger than the reported net line, so the rest of the long-term holdings modestly diluted it.

That matters because it changes how 2025 earnings quality should be read. Manor's uplift was equal to about 54% of profit from ordinary operations and about 47% of profit before tax. That is not a side effect. It is one of the main earnings engines of the year. The fourth quarter makes the same point even more clearly: the line for gains from long-term investments reached NIS 13.94 million, and management ties the year-over-year increase in that line mainly to the Manor revaluation. So even the quarter that most shapes the year-end read is already heavily colored by the fund's NAV.

There are two wrong ways to read this. One is to dismiss Manor as "paper profit" and ignore the value that was created. The other is to treat the NIS 29.6 million as if it were underwriting income or cash already sitting in the bank. Both are wrong. What exists here is real accounting and economic value creation, but it sits inside an evergreen fund, not inside a cash account.

One more nuance matters. The NIS 29.6 million uplift in 2025 was explained mainly by the increase in the value of RP, with a NIS 15.9 million rise versus September 30, 2025. In January 2026 the fund also completed the sale of about 37% of its RP holding for about NIS 133.5 million. That is an important signal that the value inside Manor is not necessarily fictitious. But the report does not say that this realization immediately became a distribution to IBI Underwriting, so fund-level realization still cannot be confused with accessible cash at the company level.

Why NIS 79.3 Million Is Not NIS 79.3 Million of Accessible Cash

This is the core of the follow-up. Manor may be carried at NIS 79.3 million, but economically there are several clear layers of friction between that figure and cash the company can actually use.

The first is time. Anchor investors may redeem only after 7 years from the investment date. During that period they may transfer their units only to other limited partners in the fund, to institutional investors, or to related parties. That is not a total lock, but it is also not open liquidity.

The second is the fund structure itself. Manor is an evergreen vehicle, meaning its investment period continues throughout its life and it can keep admitting new investors over time. That is a strong structure for compounding and recycling value, but it is far less clean for anyone looking for a straight line from carrying value to a near-term distribution. Value can stay inside the fund, be recycled, and be reinvested without moving quickly out to the listed company.

The third layer is control. The company states that it does not hold equity in the fund's general partner and does not take part in the fund's management. Put simply, IBI Underwriting benefits from the NAV, but it does not control the timing of realizations, the pace of capital calls, or the decision whether matured value stays inside the fund, is distributed, or is redeployed into the next deal.

The fourth layer is the nature of the assets. The company explicitly says the fund may invest in illiquid assets whose realization may be difficult and may impair fund liquidity. It also notes that investments in public companies can still be subject to lock-up periods and different regulatory constraints. So even when the value is real, the distance between that value and fast cash can be longer than the profit headline suggests.

Level 2 Improves Measurement, Not Liquidity

One of the more interesting disclosures in the report is that Manor moved on June 30, 2025 from a Level 3 fair-value measurement to Level 2. It is easy to read that as proof that the debate is over and that there is barely any valuation question left. That is too flat a reading.

What changed is the measurement basis, not the economic character of the money. The company explains that the move to Level 2 came because the fund allows quarterly entries and exits by investors in regular market transactions at a price that reflects the fund's NAV. The company also says explicitly that it relies on the NAV reported by the fund each quarter.

That is clearly positive. It means the 2025 carrying value is not based only on a private internal model at IBI Underwriting, but on a quarterly NAV for a fund that has a recurring entry and exit mechanism. But that does not erase the accessibility question. Level 2 does not remove the 7-year redemption restriction, does not give the company control over monetization timing, and does not change the fact that the fund itself can hold illiquid assets. The right way to read the move to Level 2 is as a measurement upgrade, not as a shortcut from value to cash.

What It Does to IBI Underwriting's Cash Picture

If the right frame is all-in cash flexibility, meaning how much cash is left after the year's actual cash uses, Manor was a cash use in 2025, not a cash source.

The cash flow statement strips NIS 27.092 million of long-term investment revaluation out of operating cash flow, which is exactly the right treatment for a non-cash gain. At the same time, investing cash flow shows NIS 28.157 million of purchases of long-term investments. In the board report the company itself says the decline in cash and short-term investments, from NIS 160.1 million at the end of 2024 to NIS 107.8 million at the end of 2025, stemmed mainly from a NIS 19.4 million investment in Manor and a NIS 25 million capital reduction.

In other words, Manor helped the income statement, but it did not finance the 2025 distribution and it did not refill the cash box. It required more cash from it. That is not automatically negative, because the company still ended the year with liquid balances of NIS 103.7 million, excluding NIS 4.1 million held with a trustee, and it does not borrow from banks or bondholders. The blockage here is not leverage. The blockage is accessibility.

That is exactly why the dividend-policy language matters so much. The company states explicitly that when profit stems from unrealized revaluation of long-term investments, it may consider postponing a dividend in order to preserve its ability to meet expected obligations. At the end of 2025 retained earnings stood at only NIS 14.446 million. So even a company that carries Manor at NIS 79.3 million does not show an immediately distributable layer that comes anywhere close to that number. That is the gap between accounting value and accessible value.

What Has to Happen Next

The next read on Manor should become simpler, not more complicated. The next question is no longer how attractive the NAV looks, but whether it starts to move toward actual realizations, distributions, or at least a visibly shorter exit path for IBI Underwriting.

The first test is what happens after the partial RP sale. If the next report shows that the fund realized value but kept the cash inside the vehicle and redeployed it into the next investment, the market will still need to read Manor as a strategic value layer with limited liquidity. If real distributions start to appear, or if the effective distance to redemption or transfer narrows, a large part of the skepticism will fade.

The second test is more internal. Underwriting returned to stronger revenue and better profitability in 2025. If that continues into 2026, Manor can remain an interesting value layer without carrying the whole burden of earnings quality for the company. If underwriting cools and Manor revaluations are again needed to hold up the bottom-line read, the quality-of-earnings debate will sharpen again.

And then there is capital allocation. As long as there is still as much as about NIS 28.9 million of unused commitment against Manor, the story is not only about what has already been marked into profit. It is also about how much more capital may still need to go into the fund before shareholders see cash come back out.

Bottom line: Manor created material value for IBI Underwriting in 2025, and the report even offers an early sign that part of that value can reach realizations at the fund level. But as of year-end 2025, most of Manor's contribution still sits as NAV-based revaluation inside an evergreen investment vehicle, with a redemption lock-up, transfer restrictions, and no control by the company over monetization pace. So the right way to read Manor is neither as "hidden cash" nor as "fake profit." It is a real strategic value layer that is still too far from cash to call truly accessible.