US financier, George Soros has apparently marked Israel as one of his preferred spots for high-tech and technology investment. After having invested significant amounts in recent years, in companies such as Indigo and Geotek, Soros has decided to bring in another Israeli high-tech entrepreneur, Comverse controlling shareholder Kobi Alexander. Together, the two have established a new fund for the purposes of investing in Israeli technology.
Comverse and the Quantum fund, which is managed by Soros, will each invest $15 million in the new Comsor fund, which will be registered in Holland.
Soros manages a number of US-based funds, under the Quantum name, whose total asset value is estimated at $15 billion. Earlier this month, one of the funds acquired shares in real estate firm El-Rov. Comsor will invest in technology and industry.
Comverse, a US company, owns Efrat Technologies of Israel. Efrat is a supplier of enhanced services platforms to international telecommunications network operators with over 80 customer installations in 32 countries. During the past year, Comverse has undergone rapid growth, and 1996 sales volume is expected to reach $200 million. Comverse has other investments in Israeli start-ups in varying stages of development. One possibility is that the new fund will join in Comverse’s existing investments.
During the second half of 1996, Soros was involved in a private placement made by Indigo, which had encountered serious cash flow difficulties due to a drop in sales and efficiency measures. Indigo raised $100 million and Soros increased his holdings to 20%, making him the company’s second largest shareholder after founder Benny Landa.
Last month, Soros’ investment funds began acquiring large share blocs in Alfred Akirov’s real estate firm El-Rov, primarily in off-floor transactions. Within a short time, Soros’ funds owned 14% of El-Rov, having invested a total $8 million.
Altough El-Rov deals in real estate, the company is affiliated with the Israeli high-tech community, via investment firm Techno-Rov owned together with Leumi & Co.
Another major Soros investment is in wireless communications company Geotek, whose production and development activity is based on know-how developed in Israel at Rafael, the Armament Development Authority. Soros participated in a private placement of Geotek shares in early 1997, investing an additional $25 million in return for convertible bonds. To date, Soros’ investment in Geotek stands at $125 million. The 6-year old Geotek continues to incur heavy losses and is not expected to become profitable before 1998.