Israeli financial services firm Value Base said it has secured NIS 700 million ($182 million) for its new private equity fund VBF to target investments into local, mainly publicly traded tech companies.
Founded in 2013 by chairman Victor Shamrich and CEO Ido Neuberger, two veterans of the Israeli capital market, Value Base said it expects to bump up the capital raised for the debut fund to up to NIS 1 billion by the end of this year. Shamrich and Neuberger previously served as co-CEOs of DS Apex Holdings, which merged with Meitav Dash investment house in 2012, to create Israel’s second-largest brokerage after Psagot Investment House.
Tel Aviv-based Value Base provides investment banking consulting services for private and public companies, including mergers & acquisitions, underwriting services, alternative investments, and debt and equity fundraisings on the Israeli capital market.
The main investors in the VBF fund are Clal Insurance & Finance, with a lion’s share of NIS 310 million, and More investment house. Other private investors include the controlling owner of the Fox fashion retail chain Harel Wizel; former Bank of Israel governor Jacob Frankel, who also serves as a consultant at Value Base; and Danny Rimoni, one of the founders and CEO of Rimoni Industries Ltd.
Value Base shareholders, including Neuberger; Shamrich; Dudi Wertheim of the Wertheim family, which is the owner of Coca-Cola Israel and controlling shareholder of Mizrahi Tfahot Bank; and Nathan Hetz, founder and CEO of Alony Hetz Properties and Investments Ltd., invested NIS 100 million in the VBF fund.
The fund will mainly invest in publicly traded Israeli companies in various sectors, such as traditional industry, and technology, as well as private companies. It aims to make investments into about 8 to 12 companies of between NIS 70 million and NIS 150 million each. Specifically, the private equity fund will be targeting to buy “significant positions” in Israeli companies with an established business model that are traded at a significant discount to their intrinsic value.
“What differentiates us from other funds is that they go for private companies and look for an exit in the capital market, with a control premium in the purchase and at full value,” Neuberger wrote in a LinkedIn post. “When you don’t insist on ownership or control, the positions you buy are cheaper.”
“Our investments will have a much shorter investment horizon of between 2.5 to 4 years compared to 7-10 years in the large [traditional private equity] funds. Our niche is much less competitive today compared to the density in the large funds that compete for every transaction,” he added.
The VBF fund will be managed by Shamrich; Neuberger; Tal Yaacobi, former partner in the Shamrock Growth Fund; Yair Ephrati, former CEO of Meitav Dash mergers & acquisitions; and Uriel Goren, CEO of GAR Capital.