Shamrock to Start New $250 Million Israeli Fund

Shamrock Holdings, the Disney family's investment branch, is planning a new fund of at least $250 million for further investments in Israel. The fund will be established within a year, after Shamrock completes investing the monies in its present fund, according to capital market sources. Shamrock began investing in Israel in the mid-1980s and has put about half a billion dollars into Israeli companies since then.

The fund operates as a private equity investor, mostly in industrial firms with an export bias. A number of Shamrock's holdings, such as Koor and Tadiran Communications, have been sold off with particularly high profits.

Two and a half years ago Shamrock established another fund for continued investments in Israel, with $125 million. It has already invested half of this sum in Teva Naot, Kaman Trade, Orad and other companies and is negotiating toward additional investments, particularly in kibbutz-owned industries. It is thought that the remaining funds will be invested within a year.

Stanley Gold, President of Shamrock and the person responsible for its investments, refused to comment on the size of the new fund, say only that the Disney family would continue to invest in Israel.

"The Disney family is committed to a further fund when this one ends. The family is very pleased with its investment portfolio in Israel and believes in the Israeli economy. We have been here for over 20 years, and in that number of years you make friends, partners and money. You would have to be crazy not to continue," Gold said.

According to Gold, the fund's profits measured by the internal rate of return (IRR) reach 31 percent on its investments this year.

The new fund is expected to perform even better than its predecessors. "I have never seen a better economic climate here," said Gold. He gives credit to the present political and economic leadership, but also mentions Benjamin Netanyahu's reforms as finance minister in the previous government.

Shamrock held an investor's meeting in Israel last week, attended by many senior executives and investors from Israel and abroad - though it refused to publish the names of most of those attending.

Among those attending was John Myers, former CEO of GE Asset Management, General Electric's $200 billion investment subsidiary. He is now the CEO of Forstmann-Leff investments.

Myers told TheMarker that he sees a surplus of capital over investment opportunities, but nevertheless believes that company values are excessive as a result. However, experience has shown that surplus capital does lead to bubbles, he said. He recommended to Israelis looking to invest overseas to find a local partner who knows the general atmosphere and investing rules in the country, pointing to the way that he brought GE to invest in Israel via Shamrock as an example.