Sources inform ''Globes'' that banker David Blumberg is setting up a $100 million real estate investment trust (REIT). The REIT will focus on mezzanine investments and provide developers with a financing layer between their shareholders’ equity and bank credit. Blumberg has already raised $30 million, which will enable the REIT to begin operating soon. The REIT will make ten-year investments.
Mezzanine loans are interim financing, a type of financing between shareholders’ equity and external capital, for companies or businesses. Mezzanine finance is common overseas, but except for First Israel Mezzanine Investors Fund (FIMI), there are few such funds in Israel. Banks rarely grant mezzanine loans because of the excessive risk.
Blumberg, 62, was until recently chairman of both Bank of Jerusalem (TASE: JBNK) and Ashra Israel Export Insurance Corp. Ltd. He was CEO of Tefahot Mortgage Bank in 1993-95. He was recently appointed chairman of Israeli Credit Insurance Company Ltd. (ICIC) (TASE:BSSC), which was recently acquired by Harel Insurance Investments Ltd. (TASE: HARL).
After leaving the Bank of Jerusalem and Ashra, he founded an investment company David Blumberg Ltd, which provides non-bank banking services and specializes in credit advice and mediation in general and non-bank credit in particular.
Blumberg declined to comment on the report.
Published by Globes [online], Israel business news - www.globes.co.il - on November 27, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006