Israeli firm closes maiden infrastructure fund

Tel Aviv-based Israel Infrastructure Fund has raised NIS 400 million for its first fund, 40 percent of which has been deployed.

Israel Infrastructure Fund has completed its maiden fundraising effort and closed on NIS 400 million ($115 million; €72 million).

The fund, which will invest in the initiation, pre-development, construction and operation of infrastructure projects, has been raised from Israeli pension funds, insurance companies and high net worth individuals; limited partners include Bank Leumi and Union Bank of Israel.

Up to 40 percent of the fund’s capital can be allocated to deals outside of Israel, without a focus on any region or country, Yaron Kestenbaum, chief executive officer of Israel Infrastructure Fund, told PEO.

Kestenbaum said that the fund will make diverse investments and will not focus on any particular segment of the infrastructure sector. He added that since opportunities in the “Israeli market and the markets close by are limited, we are focusing on a wider range of infrastructure assets and companies”.

About 40 percent of the fund’s capital has been deployed in three deals thus far, Kestenbaum said. Investments have been made in Dalia Power Energies, an Israeli electricity producer; East Mediterranean Gas Company, an Egyptian gas company that is constructing a pipeline to supply natural gas to Israel; and Swissport Cargo Services Israel, which is building a new air cargo terminal at Israel’s Ben-Gurion airport.

The firm is currently in the process of raising its second fund, which it expects to close in the “coming months,” according to Kestenbaum. He added that the size of the fund has not been determined yet, but is expected to be in the range of $200 million to $500 million.

The Tel Aviv-based firm was co-founded by Harel Insurance Investments, an Israeli insurance and financial services company, along with Kestenbaum and Yehuda Raveh and began operations in September 2006.

Kestenbaum was earlier a director at the Israeli Ministry of Finance's Division for Public Private Partnership Projects where he worked with project companies and lenders on a number of large infrastructure projects.

Raveh is a senior partner at the Yehuda Raveh & Co. law firm and a member of a United Nations group that advises governments in Central and Eastern Europe on the structuring and implementation of build-operate-transfer and private finance initiative projects.