A year and a half after leaving Lehman Brothers Israel for Markstone Capital Group LLC, Ron Lubash has succeeded in forming a new $500 million fund. The fund initially raised $400 million in January; today's announcement marks the second installment, in the amount of $100 million. Markstone has the option of continuing the investment round until early 2005, and it may go on to raise a few more hundred million dollars in the coming months.
The new Markstone fund will focus on investment mainly in industrial, retail, defense, real estate, banking, media and certain other sectors. The average investment will be $10-25 million, although it may make a major investment of up to 20% of its commitments, in other words, up to $100 million, (assuming that the current fund does not expand beyond $500 million).
To date, three companies have been mentioned as possible investments for the new Markstone fund: Bezeq (TASE:BZEQ), Cellcom, and Tnuva. However, the fund's non-Israeli investors, chiefly the New York State Common Retirement Fund (NYSCRF), which has made a $200 million capital commitment, has placed a limitation on Markstone to not acquire control in companies. There are many other possible investments for the new Markstone fund, including the pension funds tender offers.
At the end of last week, Hebrew daily ''Yediot Ahronot'' reported that Histadrut (General Federation of Labor in Israel) chairman Amir Perez met with Markstone's US institutional investors after they requested a guarantee that their money would only fund projects where labor was organized, and labor relations were fair and equitable. To this end, the institutional investors demanded the Histadrut's approval.
The fund's strategic advisory board includes Lehman Brothers vice chairman Harvey Krueger, Invemed Associates chairman Kenneth Langone, who is also one of the founders of the Home Depot, as well as Teva chairman Eli Hurvitz, and United Mizrahi Bank chairman Jacob Perry. Dr. Yaakov Neeman serves as legal advisor to the board. Reportedly, all three Israelis have invested personally in the fund.
Published by Globes [online] - www.globes.co.il - on Sunday, August 08, 2004