The quiet millionaire

"Globes" profiles Roni Yitzhaki, the enigmatic real estate tycoon with the midas touch, and an aversion to the media.

It was just over a year ago that we first met Roni Yitzhaki, one of the most secretive businessmen in Israel, in the Polish capital Warsaw. Yitzhaki, one of the shareholders in real estate developer Atlas Estates Ltd. (AIM:ATLS), was celebrating the official opening of the Warsaw Hilton, one of the company's flagship projects, together with his partners.

On approaching him and shaking his hand, we met a modest person who is extremely wary of the press and media and keeps away from them as from as from fire. When we asked him, quite casually, when he would be willing to be interviewed, he asked us to excuse him, his parting words being, "No, I don't like that sort of thing." And Yitzhaki truly doesn't. So much so, that even a good many of his acquaintances and business partners were unwilling to cooperate with us, in any way, in writing a profile of him.

Yizthaki, who turns 50 this week, is one of the most mysterious businessmen in Israel. He is well known, and some of his business holdings are publicly traded and transparent to investors, but it was only last year that he made headlines, largely because of two deals. In the first, he sold his holdings in online auction company QXL, and in the second, he attempted to float a grain company he controls on the Russian stock exchange.

Weintraub's associate

Yitzhaki is considered someone who keeps his cards close to his chest, is very centralist in his management style, and relies on just a few people. He has a very select circle of friends, both in his business and personal life, which consists largely of the following people: his father, Yaakov Yizthaki, Shimon Weintraub, the owner of investment company Brack Capital Real Estate Ltd. , whom he has known since they attended kindergarten together in Rishon LeZion, and businessman Avihai Stolero.

Another close friend is Rafi Berber, who heads UK-based investment firm RB Capital Group, and who served for many years as head of the real estate division at Merrill Lynch. The two are said to have become acquainted while Berber was still at Merrill Lynch, when the bank financed several of Yitzhaki's deals. Yitzhaki also makes a point of working with people he has known for a long time. His secretary, Vered, has worked for him ever since she finished her army service, and is also considered his confidante.

The family business in Beer Yaakov

Roni Yitzhaki is a scion of a family that owns extensive land in Beer Yaakov, a settlement that is even named after his great grandfather, Rabbi Yaakov Yitzhaki, who was the communal rabbi. Upon his discharge from military service in a top secret unit in the Intelligence Corps., his father brought him into the family's construction business. Yitzhaki took over the reigns and grew the business rapidly. His two sisters, Hadar and Michaela, are partners in some of his companies.

But Yitzhaki junior was not content with managing the family's original business, and it wasn't long before he diversified. Today, through the Yitzhaki Group which he owns, he controls an empire consisting of income-producing properties, residential properties, high-tech businesses, commodities and even shipping. His businesses span the globe, from the Marina in Herzilya, where he lives, to the UK and Russia.

The British eBay's exit

It was high-tech, in which his investment has been fairly limited, which propelled Yitzhaki into the spotlight recently. Towards the end of 2007, UK online auction company QXL was sold to South African media group Naspers for $1.9 billion. Yitzhaki, who invested together with other Israeli partners, such as Weintraub and Ronen Peled when the company's value was far lower, made an exit of $280 million on the sale, after the group earlier sold holdings worth $50 million. Before it was acquired, QXL was traded on the London Stock Exchange, and was considered the European version of US online auction giant eBay Inc. (Nasdaq: EBAY).

As mentioned earlier, most of Yitzhaki's fortune, estimated at around $500 million and possibly worth even more, came from the real estate businesses he built. His two leading properties in Israel are the Design Center Mall (opposite the Ayalon Mall in Ramat Gan), where his offices are located, and the Tzamarot neighborhood in Herzilya, home to many financiers. In addition, Yitzhaki's group is building thousands of apartments in Kfar Yona, Beer Yaakov, Rishon LeZion, and the Marina in Herzilya.

Predominantly private

Aside from Rodemco Ltd. (TASE:RDMC) and the AIM-listed Atlas Estates, most of Yitzhaki's businesses are privately held. Among the company's shareholders are RP Capital with 14%, and Livemore Investment Group, controlled by Noam Lanir, with 22%. Yitzhaki manages the rest of his privately held businesses via Mainrom, through which he is a partner, together with Avihai Stolero and Yehuda Sayag, in the port of Giurgu on the banks of the Danube in Romania.

In addition, part of his fortune was generated by well-timed investments in the US and also in the UK, where he acquired a chain of retirement homes at a total investment of €300 million, on the basis of an estimate that the high level of returns in the sector made it an attractive investment. Earlier this year, Yitzhaki also formed a joint venture with Migdal Insurance (TASE: MGDL) for the purpose of investment in real estate projects overseas, principally in Europe, the US, Russia, and India, with NIS 350 million in shareholders' equity. Yitzhaki owns 80% of the venture and Migdal the remaining 20%.

Yitzhak's academic career took him to the Technion Israel Institute of Technology, where he earned a degree in civil engineering. An associate who knows him well says his education has become a way of life, since he "engineers everything right down to the last detail, looks five years forward, and has the guts to go for the really big deals.

"Yitzhaki is a calm, level-headed person who makes decisions fast, and can make up his mind about a $100 million deal in five minutes," the associate adds. "However, he has to the see place with his own eyes, and get a sense of the business himself. He can't make decisions from a distance. He is courteous in meetings with other people and listens to additional opinions, but ultimately, he decides on his own as he sees fit."

Yet, despite this, people close to him describe Yitzhaki as a very modest person, who although he owns a private jet, does not have a driver. He generally dresses casually, preferring jeans and a buttoned shirt, or slightly smarter trousers if the occasion warrants them. If he has to attend a meeting abroad where a jacket and tie are required, he usually takes them off as soon as he leaves the event. "He can't stand it," says his associate. His father, in total contrast to him, always wears a jacket and tie.

While many of his associates describe him as someone "who has no enemies", a senior executive in the Israeli real estate sector who came into contact with Yitzhaki during the course of his business dealings, was not impressed. "I wouldn't want to be his partner," he says, "I would be scared to turn my back to him. He negotiates with several parties simultaneously, without telling them they're not the only ones."

Yitzhaki is married to Yael, a doctor by profession, who runs a non-profit women's rights organization, and has three sons and a daughter. Like many other businessmen at his level, he contributes to charitable causes generously, especially to the medical aid charity founded by Rabbi Elimelech Furer. A few years ago he found himself embroiled, much to his embarrassment, in the battle over the estate of singer Ofra Haza. Her relatives filed a claim against him, demanding the return of $100,000 he received from her husband, Doron Ashkenazi. Ashkenazi was friendly with Yitzhaki, and the Ashkenazi-Haza couple even lived in a luxury apartment in the Tzamarot neighborhood, that Yitzhaki made available to them. The $100,000 was apparently a loan that the couple had repaid to Yitzhaki, and Haza's relatives later withdrew their claim.

Wheat and sunflower fields worth hundreds of millions of dollars

Whether it was because he is a member of a wealthy landowing family, or because he spotted the potential, Yitzhaki, like many others, has also wasted little time in grabbing a share of the commodities market. Yitzhaki, it appears, is one of the main controlling shareholders in crop company RAV Agro Pro, which operates in Russia only.

RAV officially announced its intention to hold an IPO on the stock exchange in Moscow at the beginning of July, but sources inform ''Globes'' that the commodities crisis that erupted a few days later caused it to back out of the planned float and postpone it to a more convenient time. The offering was to have been led by Merrill Lynch and the UK branch of Unicredit Group, one of the leading investment houses in Europe.

RAV sought a value of $239-543 million in its offering, according to a report by "Reuters." The company planned to raise almost $250 million, for the purchase of additional land and the repayment of debts, but the offering was subsequently shelved. In other words, its estimated value is far less today.

RAV is 99.7% controlled by RAV Agriculture Ventures, with the remaining 0.3% held by an investment group called FRAP Investments. RAV Agriculture Ventures is controlled by, among others, RF Capital (31.4%), Yitzhaki (through a company he controls), and the Cargill Foundation, an investment group that invests in agriculture & animal nutrition, food, and pharmaceuticals. The exact size of Yitzhaki's holding is not known, but it is probably worth a few hundred million dollars.

Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2008

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

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