Poalim Capital Markets - Investment Bank Ltd. is to raise $125 million for its third fund, Poalim Ventures III, which will focus on investment in late-stage companies. The raising of the new fund and the new investment strategy is part of a wider repositioning process that Poalim Capital has been carrying out over the past year. The company recently announced that it aimed to become a significant private equity player in Israel and that it was in the process of raising five or six funds totaling $1 billion which would operate in differing fields and regions.
Poalim Capital currently manages $650 million in seven funds investing in various fields. The new fund has been given a tail wind from Bank Hapoalim (LSE: BKHD; TASE: POLI), which has undertaken to invest $20 million. The company will raise capital from new and current Israeli and foreign investment institutions. These include some of Bank Hapoalim's major customers. Poalim has also expanded its management team with the appointment of former ECI Telecom CFO Giora Bitan, and former Pitango Venture Capital partner Sharon Gelbaum-Shpan who will manage the new fund alongside managing director Eran Gersht, Shirley Sheffer, and Orly Yaniv Harari.
Poalim Capital president and CEO Nir Brunstein said today that the new Poalim Ventures fund would invest in later-stage companies, in the view of the shortfall in finance for companies at these stages.
Eran Gersht added, "In the US, one third of venture capital investment is earmarked for mature companies. In Israel it is just 6% of total fund investments. The slowdown in exits in Israel last year has made the need for funding at these stages even more acute."
Globes: How many companies on the market are there that deserve investment?
Bitan: "We've seen at least 60 companies that may be deserving of investment. We plan to make four or five investments a year, so there'll definitely be an interesting deal flow. It should be remembered that Poalim Ventures has invested in companies like these in the past, such as Discretix, Negevtech, and Techtium. We're looking for companies that need substantial capital prior to their exit, in order to boost growth. I refer to companies that already have sales of around $10 million and which need substantial capital to help make a further jump."
Published by Globes [online], Israel business news - www.globes.co.il - on July 10, 2007
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