Infrastructure investment fund Generation Capital, founded in the summer of 2018 by CEO Erez Balasha and chairperson Yossi Singer in partnership with the Viola fund, is on the way to being listed on the Tel Aviv Stock Exchange (TASE).
Generation Capital yesterday completed a NIS 52 million financing round in the part of an offering for investment institutions, with demand reaching NIS 72 million. The round was at a 7% discount on the minimum share price for the offering, at a value of NIS 277 million, before money.
The institutional stage of the offering will be followed by the public stage in the coming days, making Generation Capital the first marketable fund in Israel through which the public can invest in infrastructure and energy in Israel. The fund's share will be included in the SME60 Index.
Leading the offering was Poalim IBI Underwriting and Investments (TASE: PIU), together with Epsilon Investment House, Rosario Capital, and Active. Fischer Behar Chen Well Orion & Co. law firm partner Adv. Nitzan Sandor accompanied the offering.
Balasha and Singer hoped to raise over NIS 100 million, but had to compromise on a lower amount because of relatively low demand from investment institutions.
Like real estate investment trust (REIT) funds, a number of which are already listed on the TASE (REIT 1 Ltd. (TASE:RIT1), Sella Capital Real Estate (TASE: SLARL), Megurit, and Menivim The New REIT (TASE: MNRT)), infrastructure funds holding offerings on the TASE will also receive tax benefits if the fund undertakes to distribute at least 50% of its profits, but no more than the cash flow resulting from its assets, to its shareholders as a dividend. This undertaking applies from a fund's second year.
The management fees paid to General Capital's managers are derived from the value of the investments it actually makes, starting from 1.75% before the offering and up to 1% insofar as the volume of the investments increases (following the offering, management fees are slated to drop to 1.5%). The management company will also receive options in the fund's future public offerings.
Yossi Singer is a former CEO of Granite Hacarmel, which was the controlling shareholder in Sonol, Supergas, Via Maris Desalination, and Tambour (TASE:TMBU). Before that, he headed the Giza-Singer-Even group, one of Israel's most prominent business consultation firm, in which he led infrastructure projects.
Balasha has been CEO or CFO in leading energy, transportation, and environmental companies, including Granite Hacarmel, GES, the desalination facility at Palmachim, and CityPass. He was also a financial advisor at TASC providing consultation about infrastructure to the state and companies.
Generation Capital focuses on infrastructure and energy investments, such as in electricity, natural gas, transportation, the environment, water, franchise construction, etc. The company held its first financing round in June 2018, with participation from a number of investment institutions and individuals in the Israeli market, led by corporate funds managed by Psagot Investment House Ltd. and Poalim IBI.
The fund has closed three deals to date. In early July 2018, shortly after the first offering, the fund acquired 49% of transportation company Bon Tour for NIS 100 million. The fund then paid NIS 70 million for 50% of Rapac Energy, which owns two power stations under construction in northern Israel: Ramat Gabriel and Alon Tavor. In a smaller deal, Generation Capital acquired 50% of solar energy company Lahav Green Mountains for NIS 34 million.
Published by Globes, Israel business news - en.globes.co.il - on February 19, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019