At a celebratory press conference today, FAIRE (First American-Israel Real Estate) Fund managers Zalman Shoval and Shlomo Grofman announced the establishment of the FAIRE 2 Fund, with an initial shareholders’ capital of $50 million. The FAIRE 2 Fund will finance $200 million worth of residential projects in Israel.
Shoval and Grofman have already raised $40 million for the FAIRE 2 Fund and will soon go to London to raise additional capital. The fund will operate for seven years, parallel with the FAIRE 1 Fund, which has been operating for four years.
The FAIRE 2 Fund will be established in the same way as the FAIRE Fund, but with the addition of a group of South African Jewish expatriates incorporated in Stonehage Wealth Management, managed by director Colin Schachat. Stonehage manages $20 billion in assets worldwide. It has invested $25 million in the FAIRE 2 Fund, and will cooperate with Grofman and Shoval.
The FAIRE Fund started with $24 million in shareholders’ equity. Each investor bought one participation unit for $1.5 million. The fund has raised $42 million to date. It is involved in a large number of residential projects in central Israel, with 800 apartments altogether and estimated sales proceeds of $250 million.
Grofman and Shoval want to repeat the success of the FAIRE Fund, and develop more projects in Israel. The innovation in the FAIRE 2 Fund is that it might go public on the Tel Aviv Stock Exchange (TASE).
Shoval, a former Likud MK and Israeli Ambassador in Washington, said, “The participation of so many investors in the FAIRE 2 Fund is a vote of confidence in us as managers and in Israel’s real estate market.”
Grofman said, “Land prices in Israel’s real estate market already reflect expectations of recovery. We’ll definitely see the real estate market continue to strengthen. A number of foreign developers are visiting Israel, and think that they’ll be able to develop projects on their own without a local partner. Their lack of knowledge and experience, means that we see projects in receivership daily.”
Published by Globes [online], Israel business news - www.globes.co.il - on July 9, 2006
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