Pitango (formerly Polaris originating in Israel) has so many stars that one might forget momentarily that Rami Kalish was the first. Kalish has been mentioned in the press quite a bit during the past year, often owing to the huge salary that he received while serving as manager of Shrem-Fudim-Kellner, (then Dovrat-Shrem) which founded the Polaris/Pitango group. This oft-mentioned salary is no coincidence, and is closely connected to the Pitango I fund’s transactions.
Rami Kalish invested in Medinol as early as 1994 and in Card Guard in 1993. Both these companies yielded Pitango I - a fund of only $20 million - combined returns of over $50 million. Moreover, Kalish owns preferred shares in the fund’s biggest second-generation round of financing in Israel (Pitango II, 1996, $125 million). Pitango II was not only the first of the second-gen funds, but also the largest. In the context of this fund, Kalish invested (according to Koldoon.com) in Radware, which yielded Pitango II returns of $20 million.
In the third generation of funds, Kalish blazed a new trail without SFK, but with Nechemia (Chemi) Peres - who had joined up with Kalish as early as 1996 - and two new partners, “graduates” of the superb Eucalyptus fund: Aaron Manovski Mankovsky and Bruce Crocker. This time too, the Pitango “club” set a new standard when it raised commitments of $500 million – the issue was 60% over-subscribed - and formed Israel’s first “mega-fund”: Pitango III.
Recently Kalish has gone back to talking to the press, more than likely because of investments that he made recently in Cash-U (along with funds like Fidelity and Greylock) and ForeScout Technologies (together with the Accel Fund). In a rare moment of openness, Kalish told “Globes” a few months ago, that “Dozens of companies that shouldn’t have come into being have sprung up in Israel”. In public forums, Kalish has come out against Ministry of Finance policy on all things related to the taxing of foreign investors.
Yitzhak Shrem says of Kalish that he’s “the best VC manager there is”. And indeed, Kalish and his firm are at the hub of Israel’s VC wheel. Currently Kalish and his friends are entering the crucial trial period with a huge fund, an extensive portfolio, and a recession with no end in sight. Kalish and Pitango, as always, will be the first to enjoy an upswing in the business environment; but this time, they’ll also be first exposed in the event that the recession goes on for too long.
Published by Israel's Business Arena on September 16, 2001.