ISRAEL AT WAR - DAY 143

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Jared Kushner’s Saudi-backed private equity fund clinches first investment in Israel

Affinity Partners, headed by Trump’s son-in-law, to invest $150 million for a 15% stake in Shlomo group’s car and credit business unit

Sharon Wrobel is a tech reporter for The Times of Israel.

Affinity Partners' Jared Kushner (left) and Shlomo group chairman Asi Shmeltzer. (Courtesy)
Affinity Partners' Jared Kushner (left) and Shlomo group chairman Asi Shmeltzer. (Courtesy)

Jared Kushner’s US private equity firm Affinity Partners is buying a 15 percent stake in Shlomo group’s car and credit unit, for NIS 570 million ($150 million).

The deal marks Miami-based Affinity Partners first investment in the country. As part of the investment agreement, a new subsidiary will be created with an equity valuation of NIS 3.8 billion consolidating Shlomo Holdings’ car leasing, car rentals and sales, and its credit business operations.

Shlomo Holdings will hold 85% of the new company’s issued share capital and Kushner’s private equity fund — which is backed by Saudi Arabia’s sovereign wealth fund — will hold the remainder 15%. The transaction is still subject to necessary approvals, the two partners said in a statement.

The investment comes on the heels of continued determination by the Biden administration to broker an elusive deal for a normalization agreement between Saudi Arabia and Israel. Israel does not have formal diplomatic ties with Saudi Arabia, but the countries have inched closer in recent years.

Kushner, an adviser and son-in-law of former US president Donald Trump, launched Affinity Partners soon after leaving the White House in 2020. As an adviser to the Middle East he traveled to the region several times and was instrumental in negotiating the Abraham Accords — the normalization agreements Israel signed with the United Arab Emirates, Bahrain, Morocco and Sudan.

“We are bullish on the long-term growth prospects of Israel and the broader new Middle East,” said Kushner. “Shlomo’s historical growth has been rock solid, and the company has many exciting opportunities in its future.”

Shlomo group’s headquarters in Kiryat Shlomo, Tzrifin. (Courtesy)

The private equity firm, which has $3 billion in assets under management, is largely supported by Kushner’s close contacts in the Arab world, with whom he worked closely during his time in the White House. Earlier this year, it was reported that the UAE and Qatar added hundred of millions more dollars to the $2 billion already deposited by Saudi Arabia’s sovereign wealth fund in Kushner’s private equity firm.

Founded as a family business by the late Shlomo Shmeltzer 55 years ago, the Shlomo group started out as a car rental, leasing and automotive services company and has since grown into a conglomerate with subsidiaries in the areas of transport, insurance, finance, infrastructure, construction, shipping, logistics and real estate. The group’s automotive services operation operates a fleet of over 78,000 vehicles with a market share of about 30% in the car industry.

Among the group’s subsidiaries are Shlomo Holdings, Afcon Holdings, Shlomo Insurance, Shlomo Motors, Israel Shipyards, Shlomo Real Estate, Tadiran Telecom and Talma Shlomo Tourism. It operates in Israel, Romania and Germany, and in 2022 generated a consolidated turnover of about NIS 4.9 billion, employing over 5,000 people.

Commenting on the deal, Shlomo Group chairman Asi Shmeltzer said that it “represents the capstone of my late father’s, Shlomo Shmeltzer, life’s work.”

“Partnering with Jared Kushner and Affinity symbolizes the Middle East my father always dreamt of a region of potential where Israel can play a critical role in its prosperity,” Schmeltzer remarked.

Kushner’s fund said it found the Israeli group’s growing and profitable operational car leasing model adoptable and suitable for the growing middle class in markets in the Middle East and North Africa.

As part of the investment agreement, the fund will act to foster joint business transactions in the Middle East and North Africa, the Shlomo group said.

Shmeltzer said that the “strategic partnership will unlock meaningful value for our group, specifically in the rental, leasing and credit industries.”

“The introduction of a strategic investor, such as Affinity Partners, will help us enhance our ties with businesses and identify new economic opportunities for Shlomo’s companies in the Middle East, US and other countries,” he added.

Late in August, Hebrew media reported that that Affinity Partners was in talks to acquire a 25% stake in Israel’s Phoenix Insurance Agencies for about $250 million.

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