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(photo credit: Courtesy)
New York State will invest $100 million of venture capital in Israeli hi-tech companies, NY State Comptroller Alan Hevesi revealed Wednesday.
The New York State pension fund, directed by Hevesi, is establishing a new "fund of funds" to invest the money into companies including those in biotechnology, Internet, telecommunications and military technology.
"We are long-term investors," Hevesi said. "We see a very positive future for Israel."
The fund, to be set up through international financial consulting firm Hamilton Lane, will make the money available to eight to 12 investment funds, Hevesi said, noting that the investment brings the pension fund's total investment in Israel to over $1 billion. Hevesi said the latest investment program "starts now. The money is already available."
More than half of the pension fund's current total investment in Israel is concentrated in Israel bonds. Among the pension fund's other major holdings in the country is a $250m. investment in Markstone Private Equity Fund, focusing on traditional industry in the country - from construction and irrigation companies to the print industry and book chains.
Hevesi said the pension fund was confident it would continue to receive returns on investments in Israel for the good of New York's public sector workers.
"Israel has a stable democracy, a stable currency, a very supportive legal system, a government that favors privatization, and an impressive regulatory system," Hevesi said, reserving particular praise for the Israel Securities Authority as a "very, very serious" regulator whose vigilence has encouraged the fund to invest.
Finance Minister and Acting Prime Minister Ehud Olmert called "the impressive scope of the investment" a further indication of the faith the world has in Israel's economic leadership, in the resilience of the economy, and in its status as an attractive destination for foreign investment.
New York's pension fund is the second biggest of 2,569 public pension funds in the US, after California. It currently holds about $130b. in assets, up from $95b. three years ago, Hevesi said, noting that the growth figure takes into account some $16b. paid out to retirees over that period. The pension's membership consists of 982,000 state and local government officials, one third of which have already retired.
Hevesi said the pension fund maintains diverse holdings, both geographically and in terms of the range of financial instruments used. About 15% of the pension's investments are located outside of the US.