British businessman Coller says will withdraw funds over judicial reform

Several leading Israeli high-tech companies have threatened to pull funds or relocate from the country if the reforms pass.

 Jeremy Coller, of Coller Holdings and Coller Capital (photo credit: COURTESY / COLLER HOLDINGS AND COLLER CAPITAL)
Jeremy Coller, of Coller Holdings and Coller Capital

British businessman and philanthropist Jeremy Coller has threatened to withdraw his investments in Israel if the government’s plans to overhaul the judicial system go through.

In a letter sent “with a heavy heart” on Friday to Prof. Ariel Porat, president of Tel Aviv University, Coller wrote that he wanted “to discuss the current situation in Israel and the impact it may have on my future commitments to Tel Aviv University.”

In 2016, Coller made the most significant gift to TAU for $50 million to fund research and development, study programs and teaching at the Coller School of Management. He also sponsors TAU’s Coller Start-Up Competition and the Coller-Menmon Animal Rights and Welfare program for animal law. 

A serial entrepreneur and philanthropist, Coller founded Coller Capital, which currently manages $27.5 billion in assets. The Jeremy Coller Foundation focuses on ending factory farming and improving venture management and education. In 2015, he founded FAIRR, considered the world’s fastest-growing environmental, social and governance investor network, with $70 trillion in assets under management. 

His venture capital business, CPT Capital, invests in more than 100 global start-ups, including more than 30 in Israel, such as the well-known Aleph Farms.

 Jeremy Coller, of Coller Holdings and Coller Capital (credit: COURTESY / COLLER HOLDINGS AND COLLER CAPITAL) Jeremy Coller, of Coller Holdings and Coller Capital (credit: COURTESY / COLLER HOLDINGS AND COLLER CAPITAL)

And he is one of the largest supporters of the Jewish Agency's Ben Yakir Youth Village.

“I’ve always felt a deep connection to the State of Israel and have made a personal commitment to invest in the future of the country, not only through the endowment of the Coller School of Management & Venture at TAU but also through my personal investments in a number of Israeli food technology businesses that leverage Israel’s rich intellectual capital and entrepreneurial spirit,” Coller wrote in his letter. “I’m saddened that despite the widespread protests, the government is pursuing this restructuring of the legal system while ignoring the impact of undermining democracy and the inevitable economic damage to the country. 

“Such a significant change to Israel’s legal system, at the very least, demands a considered, thoughtful consultation and engagement across society with the business, education and health sectors and other stakeholders,” he wrote.

Coller stressed that from where he sits as an international businessman and investor, he understands the impact these reforms could have on domestic capital flight and withdrawal of foreign direct investment. 

“The certainty that the rule of law will be respected is one of the cornerstone requirements for investors,” Coller wrote. “If this is allowed to go ahead, Israel will be on the path from a respected democracy to an authoritarian state from which there are dire long-term consequences.”

Coller said he was considering resigning as deputy chair of the TAU board of governors and reviewing his investments in the country, but he hoped he could refrain from taking such actions. 

“I’m hopeful that it is not too late for the government to recognize that it must take a more considered and thoughtful approach, and I will be watching this issue with deep interest,” he wrote.

Would Coller really pull his investments from Tel Aviv University?

ON SATURDAY, TAU President Porat told The Jerusalem Post that the letter “came as a shock” and that if Coller pulled his funds, it would be “very damaging to the university.”

He said, “Coller is one of our most important and generous donors… Unfortunately, this decision stands to harm us severely, and there is a danger that there will be others who do the same.”

Porat said that since the reforms were rolled out, the school has received many negative responses. 

“Just three days ago, an Israeli scientist in the US who had received an offer from us to teach at TAU responded that he decided to wait a few years to return to Israel because of the constitutional revolution,” Porat said. “There are indications that he is not the only one thinking this way. 

“In addition, more and more universities in the world, mostly in the US and Europe, are reconsidering their relationships with TAU. I am sure this is happening to other universities, too,” he said.

Moreover, Porat added that several international students have said they might reconsider coming to Israel and living and learning here. 

However, he noted that even though he said he understands why donors would want to withdraw funds, he stressed that the universities do not represent the government. Rather, conversely, Israeli universities - especially TAU - have many faculty members speaking out against it.

“I have come out against the revolution,” Porat told the Post, noting that he had even spoken at one of the protests that many faculty members and students from his school attended. 

“We expect and would be happy if all those who are against this constitutional revolution would strengthen and support us because we are an important opposition,” he concluded. 

LAST WEEK, a Finance Ministry report was presented to Finance Minister Bezalel Smotrich, warning that if the legal overhaul passes and Israel’s credit rating is downgraded, the country could lose between NIS 13 and 30 billion. 

The Finance Ministry report came in the shadow of a similar announcement by Moody’s credit rating agency, which said earlier this month that “if implemented in full, the proposed changes could materially weaken the strength of the judiciary and as such be credit negative.” 

Moody’s predicted that Israel’s credit rating might be downgraded from positive to stable, impacting its ability to attract investment.

Several leading Israeli high-tech companies have threatened to pull funds or relocate from the country if the reforms pass. Most recently, the Israeli financial technology company Riskified announced it would transfer $500 million of its $1 billion assets out of Israel. The company also offered relocation support for employees interested in moving to Lisbon, where it has a research and development site.

Other companies, including unicorn Papaya Global, Disruptive Technologies Venture Capital and Verbit, announced they would pull out too.

More than 10% of Israel’s workforce is engaged in the high-tech sector, with employees providing around 25% of all income taxes, according to a report by the Finance Ministry last year. In addition, the Israel Innovation Authority has said that 54% of Israel’s exports come from high-tech. 

A negative impact on the innovation sector could result in damage to Israel’s health and security sectors, as well.