Robert Kapito, president of US investment manager BlackRock, the world's largest asset manager, is a regular visitor to Israel. During his most recent visit he took time out to discuss global investment trends and the importance of Israel in the global financial community.
He said, "We are here because we think Israel is a very important market, and we want to participate in the market. I come here each year and we have a conference to which we invite clients and competitors to share information with them on the global market, to help them to get a global perspective and to make better decisions on behalf of their clients. So our theory is if our clients do well - we'll all do well together. We try to come with different investment ideas."
Speaking about BlackRock's presence in Israel he explained, "The way BlackRock has participated in most markets is to have a local presence. So in order to invest in Israel, in order to invest with Israel and for the people of Israel we wanted to have an office here, so we can understand what the client needs and in order to be able to do the proper due diligence to invest in companies in Israel - and that's why we are here."
"We have been covering the market (in Israel) for a long time, over 10 years, but 18 months ago we opened an office and what I have been really struck by is the impact of having a local office. The conversation with the client is changing because we have a local team; the conversations we have with the regulators, I think it's really brought us much more into the ecosystem. We have six people here in Israel, prior to which we had been servicing Israel from other parts of the world, but we are going to look to add more people, probably 20 people in the very near future, and that will be both in product development and in technology."
He added, "We'd like to continue to be a trusted advisor around the globe, and we'd also like to be able to develop products that are going to meet some of the needs of clients and investors in Israel, which might be different from other clients from around the globe. We also want to create awareness - not only in Israel but around the globe - about the future retirement issues: that in order to retire in dignity, you can't invest for the future in the future, you have to invest now."
"What BlackRock is trying to do is to create awareness that the money that people have in cash and in savings needs to be invested long term into good income-producing securities. We would love to help organizations provide those products. That is one side."
Israel is a tech-hub
Kapito also stressed the high-tech nature of Israel. "The second side is that we all know that Israel is an incredible technology hub, and we continue to spend a lot of time and effort building technology for the financial services industry. We have a very well-known technology product called Aladdin, the technology infrastructure for over 200 institutions around the world."
"That technology continues to be maintained, updated with all the new features, and we need people to work on that technology. Israel is a great hub for people who are interested in technology and creating new technologies, and can help us build the infrastructure for the future. So we're here to hire people into the technology area and develop new tools to the financial services industry. So those two reasons that bring us to Israel."
Is Israel interesting from an investment perspective?
"I think Israel has always been interesting for investments. Obviously it's a technology hub, so there are many technology-related companies including the startups that are here. I think there are huge opportunities as technology develops, given Israel has always been a leader in technology."
What about political concerns - do these affect interest in investment in Israel
"I don't think those concerns are new, and quite frankly I feel in the last several years long-terms investors have looked past those issues. It is very hard to value political uncertainties and risk, but I think that long term investors look through that because there have always been political issues, uncertainties, violence - all of those, not just in Israel but across the globe."
Does the situation in Middle East have an impact on global markets? "It's certainly a terrible situation in Syria and it is a concern to investors around the world. But on the other hand I think that investors who are investing for the long term tend to look past those shorter term issues. I think investors should not make short term investment decisions based upon each time there is a conflict or a political uncertainty around the globe. They should be investing for the long term and take that into consideration but it shouldn't be their primary consideration for buying or selling."
Kapito spoke about BlackRock's strategic partnership with Israel's Altshuler Shaham Ltd. investment house. "We evaluate a lot of companies to partner with. We have found that Altshuler has some of the same goals that BlackRock has and has very outstanding individuals that we are excited to partner with in Israel. We are very happy with the partnership."
"Altshuler is a pioneer in getting Isreal to invest in global markets. When I first came here 10 years ago, institutions here had very little exposure to any asset outside of Israel."
How do you see the situation in Tel Aviv Stock Exchange, for example the low liquidity?
You have to start somewhere. We would like to see more listings and more liquidity. BlackRock is going to help the exchanges understand potential mechanical elements that might need more thought. We would welcome the opportunity to be a trusted advisor to help improve the amount of listings and liquidity in the market."
Published by Globes [online], Israel business news - www.globes-online.com - on May 2, 2018
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