Private equity investment in Israel rose 22 percent to $316 million in 24 transactions in the first quarter of the year from the $260 million invested in the same quarter a year earlier, a new survey by Israel’s IVC Research Center and Shibolet & Co. corporate law firm shows. The number of deals was up 26% from the 19 transactions recorded in the first quarter of last year.
Even so, compared to the previous quarter, private equity investment in the first quarter dropped 45%, the survey showed.
The first quarter of the year registered no large private equity deals – those defined above $50 million — while in the past two years, several such deals were performed in each quarter. The six largest deals in Q1/2017 were above $25 million each, attracting $201 million, or 64%, of total capital proceeds.
The number of PE deals, specifically in the tech sector, in the first quarter of the year reflects a “healthy PE local market,” said Omer Ben-Zvi, partner at Shibolet & Co., in a statement. And even if the quarter did not register any major deals, “we do expect to see those kinds of deals in the next quarter,” he said.
“Considering the fact that PE secondary buyouts have become one of the most prominent exit routes globally, and that new records have recently been broken by the growing Israeli tech industry, we believe that last quarter’s figures should not be considered as indicative of a slowdown in Israeli PE industry,” Ben-Zvi said.
In Q1/2017, Israeli private equity funds led capital investments with $226 million or 72% of total capital, an upsurge of 105% from the $110 million they invested in Q1/2016, the lowest quarter for Israeli PE funds in the preceding two years. Foreign PE funds invested just $89 million, or 32%, of total capital proceeds in Q1/2017, 41% below the $150 million, or 58% of total capital proceeds, in the same quarter a year earlier, as the amounts invested shrunk, even as the number of foreign funds active in the local market rose to 13 from eight in the same period a year ago, and the number of transactions rose to 12 from nine.