Clal Insurance, Psagot Investment House, Migdal, Bank Hapoalim Capital Market, Discount Capital, Mizrahi Tefahot Bank, Menora Mivtachim, Bank Leumi Capital Market, Moore Investment House and Phoenix: These are the institutional bodies whose applications for protection from the state for their high-tech investments have been approved. The track provides state protection for investment portfolios of institutional entities that invest in Israeli high-tech companies.
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The members of the joint committee of the Ministry of Finance, the Capital Market Authority, the Securities Authority and the Innovation Authority, in a program to encourage the investment of institutional entities in Israel in high-tech companies in the sales and growth stages, elected these entities tonight (Wednesday). As part of the plan, applications in the amount of more than NIS 3 billion were submitted, and applications in the amount of NIS 2 billion were approved.
As part of the plan, the state will protect investments in high-tech companies, amounting to 40% of the investment. The management of the portfolio will remain in the hands of the institutional investment body for 8.5 years, and the funds will be invested over the next year and a half. In the event of an increase in value at the end of the plan period, the institutional investment body will transfer to the Innovation Authority a rate of 10% of the difference between the portfolio yield and the government bond yield for the portfolio period. The portfolio will be managed by the institutional investment body
All institutional entities will connect to venture capital funds and other investors to set up entities that will invest in medium-sized companies.
As part of the program, applications were submitted from a large number of institutional entities, including most of the largest financial entities in Israel, and the total volume of applications amounted to NIS 3.5 billion. The applications included collaborations with several dozen venture capital entities – venture capital funds in the early and late stages, Israeli and foreign, and other entities that specialize in investment activities in the high-tech field.
Some of the applications focused on investing in companies in the field of Healthcare (in which the lack of Israeli investors was evident and their potential was revealed in the wake of the 19COVID epidemic and global trends). An end in itself in promoting the assimilation of financial innovation in the capital market.
Dr. Ami Applebaum, Chief Scientist at the Ministry of Economy and Industry and Chairman of the Innovation Authority: “We believe that this move will mark the beginning of a structural change in the Israeli capital market to specialize in technology investment, which will accelerate the Israeli economy towards high-tech and digital economics. “Institutional investment bodies for a significant increase in their investments in technology will give tremendous impetus to the growth of companies in Israel and accelerate the transition of the financial sector and the Israeli economy to a more digital and established future for emerging technology companies.”
Dr. Moshe Barkat, Commissioner of the Capital Market: “As part of the program we have created, the Capital Market Authority is a precedent that supports institutional financial investments in Israeli high-tech when they are made in a balanced and measured manner for the benefit of savers and while preserving their money. Accordingly, we demanded to give 40% protection to savers, even though we were pressured to give a lower protection rate. We also insisted that the rate of unprotected investors be raised to about 35%. In addition, the Capital Market Authority acted to ensure that the target companies were sufficiently mature for investment and insisted on introducing companies in advanced rounds of recruitment only. I am convinced of the success of the program under these conditions. It will contribute to pension savers, the promotion of high-tech and the growth of the Israeli economy. The fact that a significant part of the allocation goes to banks and not to pension savers, will lead the authority to demand that the outline be expanded so that NIS 2 billion will go to pension savers and not to banks. “
Anat Guetta, Chairman of the Securities Authority: “Connecting the capital market to high-tech is a strategic goal of the Authority out of a desire to share the Israeli high-tech investors with the success of Israeli high-tech and diversify the public market industries in a way that gives due weight to the industry.” To the digital-technological stream of life. In recent months, we are beginning to see a number of processes we have led, bearing fruit that herald the beginning of change – we have received dozens of prospectuses from high-tech companies and research and development partnerships. “We are seeing a growing interest of institutional entities in investing in high-tech companies and in implementing financial innovation, which is intended to lay the groundwork for the transition of the Israeli capital market to the third millennium.”
Adam Fischer, a partner in the venture capital fund Bessemer, tweeted today that Israeli high-tech is on fire and the State of Israel is only burning it more. “This is the last place in the country that needs help right now and I am ashamed,” he said.
The SOMV Fund has collaborated with Menora, which is its anchor investor, in submitting the tender, and will work together to take part in the realization of their share in the tender. Stagevan will also accompany some of the institutional bodies. Additional leading funds will take an active part in investments alongside the institutional ones.
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