Israeli merchant bank closes first fund

Asquith prides itself on taking a long view of investment, looking to help undervalued companies scale up for the long haul.

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December 9, 2013 03:33
1 minute read.
Israeli currency.

Money cash Shekels currency 521. (photo credit: Reuters)

 
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Israel’s first merchant bank, Asquith, has closed its first fund and intends to substantially increase the size of its next one.

“We want to be able to write quarter- million-dollar checks, not just hundred-thousand-dollar ones,” Asquith executive director Michael Freedman told The Jerusalem Post in an interview last week.

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The investment company prides itself on taking a long view of investment, looking to help undervalued companies scale up for the long haul.

Merchant banks deal mostly in international finance, long-term loans for companies and underwriting, but do not provide regular banking services for the general public.

“We’re not a fund that’s motivated by having an exit in three years.

We’re value investors,” Freedman said. The management and investors often add their own value to the companies they invest in, whether through business know-how or good old-fashioned connections, he added.

One example is Phoebus, the energy company that received Asquith’s first investment. Asquith is domiciled in Jersey, an island off the coast of France. In a recent trip there, the company ended up pitching Phoebus’s product – a smart system that saves energy on water heating and cooling – to Jersey’s electricity board. It convinced the board to buy 15 installations in a multimillion- dollar deal, which is expected to be announced this week.



Keeping the long-run value of its companies in sight helps it carve out a unique space in Israel, where a push to quick exits often drive the game, Freedman said.

“There is so little capital in this space because the VC [venture-capital] community in Israel is not patient,” he said.

Asquith has also invested in Aquaera, which created a fish-farming technology, and Support Machines, a customer-service technology provider.

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