Mofet Israel Technology Fund, controlled by Yitzhak Tshuva's company Green, announced today that is examining the possibility of setting up another venture capital fund as a subsidiary which will raise capital from the public. The new fund will be managed by Mofet Technology 2000 Fund,
which acts as the managing company for the established fund. Mofet also announced that it will invest at least $30 million in the subsidiary.
In response to a "Globes" question as to why it preferred to raise money in another company instead of a second offering for the existing fund, Mofet general manager Eli Bar said the main purpose of the decision is to avoid current shareholder dilution, and the continuing need for additional investors. Another consideration is the long, convoluted process required in preparing a prospectus for the existing fund in order to hold a second offering. Bar declined to relate to the amount of the new fund's offering, but estimates say it will be a large sum of at least $100 million.
Mofet Israel Technology Fund is the largest of its kind on the stock exchange. It was the first to be taken over by businessman Yitzhak Tshuva last year, through Green, which is controlled by Tshuva (Marathon, Sadot R&D and Inventech followed). To date, the fund has invested $100 million in 26 portfolio companies, two of which are public companies: Nasdaq traded Paradigm Geophysical and VCON, trade on the Nouveau Marche. Mofet also has a 4.2% holding in BreezeCOM, which is about to issue its shares on Nasdaq. Mofet recently sold its shares in Netro, also listed on Nasdaq, for $49 million, and at a pre-tax capital gain of $48.4 million.
Published by Israel's Business Arena on 15 March, 2000