IDB group controlling shareholder Nochi Dankner is looking for ways to spend his group’s large cash reserves. The Bezeq (TASE: BZEQ) option was considered a possibility, as was increasing the group’s stake in Cellcom, and Israel Discount Bank (TASE: DSCT) also received consideration. In short, Dankner wishes to show that he also knows how to make investments, not just how to sell them, as he did consistently in his first year at the IDB helm.
IDB Development Corp. (TASE: IDBD) announced today that it would invest $25 million in the MidOcean Partners 2 fund, which is registered as a limited partnership in the Cayman Islands, and is managed from the US. The fund is expected to raise $500 million, and will invest mostly in companies in Canada, Western Europe, the US, and Japan. IDB Development will be a limited partner in the fund. One of the other investors in the fund is expected to be Aktiva Holdings BV, controlled by Aktiva Group CEO Darko Horvat, or a company associated with it. Aktiva Holdings, likely to be considered the controlling shareholder in the fund, is expected to invest in it under terms not significantly different from those for IDB Development’s investment.
Under these terms, the general partner can ask the various partners to invest in the fund for at most two years after its founding. The limited partners are not obligated to participate in all of the fund’s investments; they have the right to choose whether or not to take part in each one. The investment partners in most funds are passive, with the fund making all the investment decisions.
In contrast to investments, all the partners will bear their proportionate share of the fund’s expenses. Sources inform “Globes” that another benefit granted IDB Development in the fund includes an investment as a partner of the fund, i.e. if the fund decides on an investment, IDB Development will have the right to make an additional investment in the same company, independently of the fund.
Published by Globes [online] - www.globes.co.il - on August 4, 2004