Israeli VC funds have large investment potential

Funds whose first investment or capital call was in 2007 raised over $1 billion.

Israeli venture capital funds have $2 billion in capital currently available for investment, according to the IVC Research Center 2008 Yearbook. $1.2 billion of this amount is intended for first investments in high-tech companies and the remainder is reserved for follow-on investments. Israeli venture capital funds expect to raise $800 million in 2008 for investment in Israeli high technology over the next few years.

In 2007, Israeli venture capital funds raised a total of $1.1 billion by vintage year, 21% more than the $903 million raised in 2006. A vintage year means the first capital call or first investment.

Vintage 2007 funds include the Pitango Venture Capital fifth fund, which closed at $330 million; Pontifax II, which raised $85 million; 7Health Ventures, a new life sciences fund of $70 million; and Wanaka Capital Partners Mid-Tech Opportunity Fund LP, a fund of $45 million.

In addition, six Israeli venture capital funds announced first closings in 2007. These include two new cleantech funds - AquAgro and Israel Cleantech Ventures Funds - and a new medical device fund, Agate Medical Investments LP. Included, too, are Aviv Venture Capital's second fund and two funds established by Israeli firms in partnership with foreign investors - SCP Vitalife Partners and DFJ Tamir Fishman, the third fund of Tamir Fishman Venture Capital (TASE: TFVC).

IVC CEO Guy Holtzman said, “The current economic climate is affecting both VC funds and high-tech companies. Still, the level of foreign institutional investor interest and activity continues high, and Israeli institutional investors are increasing their allocations to Israeli VC and private equity funds. Concurrently, uncertainty in the capital markets and the weakness of the dollar are causing Israeli high-tech companies to seek more funds in order to meet their financial needs.”

In the past ten years, Israeli venture capital funds attracted a total of $10.6 billion.

Published by Globes [online], Israel business news - - on April 7, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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