As reported in "Globes," five groups are submitting bids in the Israel Securities Authority's tender to select four managing groups for high tech investment funds with state guarantees. The deadline for submitting bids was last Thursday, and sources informed "Globes" of the identity of the five groups competing to manage these funds. Each fund will manage at least NIS 400 million.
The bidding groups are a combination of investment houses and figures from the local high-tech and venture capital industry. One is Ran Kesem Excellence High Technology, with advice from Canaan Partners and Ion Israel Fund. The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), the fund's parent company, will be an investor in the fund. Another bidder is Ayalon Startup Fund, with advice from Halman-Aldubi Technologies, led by Dr. Rony Halman and other shareholders in Halman-Aldubi Investment House, and in cooperation with serial entrepreneur Uri Levine, cofounder of the Waze navigation app, sold to Google for $1 billion, who is also involved in 10 startups. A third bidder is IBI Tech Fund, "which will work according to a new model based on up-to-date academic research," with advice from Dan Aks from the Tel Aviv University Faculty of Management Administration; Dor Lilo, currently finishing a PhD in financial economics at Tel Aviv University; 3i Equity Partners managing partner Eran Wagner; R&D entrepreneur Alon Aginsky; and Uri Weinheber, a managing partner in the Thetime investment company. A fourth bidder is Eucalyptus Innovation Capital, led by Tamir Fishman founder and CEO Eldad Tamir, former Intel executive David Perlmutter, Infinity Private Equity founder and managing partner Amir Gal-Or, and Evergreen Venture Partners general partner Adi Gan. The fifth and last bidder is Alumot Fund, led by the investment house managed by Yacob Nimkovsky.
Protection against losses
Last July, the Ministry of Finance Accountant General department and the Israel Securities Authority, which oversees mutual funds, jointly published a tender to select managers for funds investing in high tech companies. The funds, which are to be listed on the Tel Aviv Stock Exchange (TASE), will manage NIS 400 million in assets (the state will put NIS 100 million into each fund), and will receive state protection against losses of the investors in the funds and guarantees for raising credit. The funds can exist for up to 15 years.
The model for the tender is similar to the model for the Manof funds founded during the global economic crisis 10 years ago for the purpose of promoting investment by institutions in corporate bonds. The new funds are designed to channel more money from investment institutions to the local high-tech industry. They will invest at least 30% of their assets (on the day they are founded) in R&D companies that are usually under the radar of the major investment institutions, or which are inaccessible to the general public in the framework of management of diverse investments.
The government safety cushion involves limited payment by the government for losses up to NIS 20 million, or 20% of the amount of the investments in R&D companies (whichever is lower). The funds will be like a marketable venture capital fund with the structure of a mutual fund that is also open to the general public for investment. The state will certify the tender winners as suitable managers, who will then publish a prospectus. The new funds will then hold offerings and be listed for trading on the TASE.
Published by Globes [online], Israel Business News - www.globes-online.com - on October 25, 2017
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