Israeli VCs, funds seek capital in China

Delek to sell Phoenix Holdings, reportedly to China’s Fosun.

Money (photo credit: INGIMAGE / ASAP)
(photo credit: INGIMAGE / ASAP)
A delegation of 22 Israeli venture-capital and private-equity funds arrived in China this week in a first-of-its-kind group seeking to rise capital for Israeli hi-tech.
In meetings in Hong Kong, Shanghai and Beijing, the Economy Ministry-organized delegation will seek to raise funds for companies already in their portfolios, as well as identify strategic cooperation with Chinese companies.
“These events mark a milestone in our efforts over the past two years aimed at diversifying the sources of investment in Israeli industry,” Economy Ministry director- general Amit Lang said. “This delegation sends a message to Israeli industry and exporters that China is an attractive market for both Israeli hi-tech exports and for raising capital for investment in the Israeli hi-tech industries.”
Even though China’s economy has moderated of late, it continues to grow at an enviable pace and remains an important market for Israeli hi-tech.
“Asian markets in general, and China specifically, have become key destinations for identifying investors,” said Col. (res.) Ziva Eger, who headed the delegation. The trip is just the first in a series of planned events in China this year, he said, and the delegation is an effort to “leverage foreign investments as an engine of growth and as a strategic tool for advancing diplomacy and strengthening the Israeli economy.”
Last week, China’s e-commerce giant Alibaba made its first investment in Israel, in Visualead, an Israeli company that specializes in QR codes and “offline-to-online” (020) technology.
The delegation, which included representatives from Infinity, JVP, OurCrowd and the Catalyst CEL fund, represented companies active in a range of fields, including life sciences, communications, cleantech and ICT.
In related news, Israeli energy and insurance conglomerate Delek Group has struck a deal to sell control of insurer Phoenix Holdings to a foreign company – rumored to be Chinese – active in the insurance sector.
The stake would amount to 42 percent to 52.3% of the share equity of Phoenix, Delek said on Tuesday.
Delek did not name the company, but Israeli media said the buyer is China’s largest private investment firm, Fosun International, and estimated the deal would be worth about NIS 1.9 billion ($478 million).
The amount, to be paid in cash, will be based on the shareholders’ equity of Phoenix as of September 30, 2014, subject to certain adjustments. The transaction is dependent on due diligence and on reaching a binding agreement.
Last July, Delek signed a nonbinding memorandum of understanding to sell a 47% stake in Phoenix to New York-based Kushner Group for nearly NIS 1.7b., but that deal fell apart in December.
Phoenix has a market value of NIS 2.6b.
Delek, which owns stakes in the giant Tamar and Leviathan natural-gas fields off Israel’s Mediterranean coast, has been divesting its financial and other non-core holdings.