Mnuchin, Friedman opening investment office in Tel Aviv

Former US secretary of the Treasury Steven Mnuchin is opening an office in Tel Aviv of his new investment fund Liberty Strategic, to be led by former US ambassador to Israel David Friedman.

“We’re opening an office here because of the extraordinary technology, especially in cybersecurity and fintech, which are major areas of interest for us,” Mnuchin said, from a conference room in a Tel Aviv hi-rise overlooking the city with a sea view.

Mnuchin said Liberty Strategic is looking to make major investments in “proven technology and business models where there can still be enormous amounts of growth,” but is not a venture capital fund.

Mnuchin touted his own experience overseeing cybersecurity for the entire financial services industry of the US, as well as the IRS, and is seeking to invest in companies in related fields.

“We hope to be considered one of the best strategic partners in these areas,” he said, adding that in Israel, “there is a lot of great technology and we think we can grow businesses.”

Israel’s tech sector remains strong and was not at all impacted by the political instability of recent years, Mnuchin asserted.

“It is as robust as anything I’ve seen in the sheer size and number of start-ups coming out of Israel and amount of capital being invested,” he stated. “We just heard a statistic that investments in the first six months of this year were as much as the investments of all of 2020.”

Friedman said that leading Mnuchin’s investment office in Israel is the rare job that combines business with working for a cause in which he strongly believes.

“I love this country, and the last four years have been just a blessing to be here, and I want to participate in the further growth of Israel,” said Friedman. “This is the growth of Israel. This is part of what makes the country great: it is a job creator, a growth creator, and an area about Israel that the world admires.”

As for working with Mnuchin, Friedman said: “I wanted to get involved with the smartest guys.”

Mnuchin would not say whether the rumors that former Mossad chief Yossi Cohen is joining his venture are true, saying that Cohen is “considering a lot of different things.”

But the former Treasury secretary had high praise for Cohen, whom he called a “terrific friend,” and said they worked closely together because the Mossad is one of the US’s closest intelligence-sharing partners. Mnuchin said that before the COVID-19 pandemic, about half of his time was spent on national security issues.

Prior to joining the Trump administration in 2017, Mnuchin was a senior banker at Goldman Sachs, a hedge fund manager, and a Hollywood film producer. Friedman was a bankruptcy attorney, whose clients included former president Donald Trump.

Liberty Strategic is expected to raise money from sovereign wealth funds across the Persian Gulf.

Mnuchin said he plans to open several offices across the Middle East, including in some of the countries that established diplomatic ties with Israel in the past year through the Abraham Accords. Friedman visited the United Arab Emirates and Bahrain in recent weeks to that end, as well as for a documentary film he is preparing about the accords.

“Given our relationships here, the opportunity to bridge the economic transactions between different Abraham Accords member states is also a tremendous opportunity for us,” Mnuchin said. “The technology that is being developed here [in Israel] creates tremendous opportunities throughout the Middle East, and tremendous growth in the economy here as the result of the Abraham Accords doing business with other countries.”

Friedman said the Abraham Accords are “brimming with potential,” and after the governments of the countries involved took the steps to normalize diplomatic relations, “the people are now taking over” and developing interpersonal and business ties.

Asked if they were satisfied with how the Biden administration is handling the continuation of the Abraham Accords, Mnuchin said he is “in a wait-and-see approach. Hopefully they’ll embrace it and participate.”

Friedman encouraged the Biden administration to use the Abraham Accords branding, which they have mostly avoided, because it is “deeply meaningful to the people involved.”

Both Trump administration officials avoided criticizing the current administration in Washington.

When it comes to the negotiations between Iran and the US to rejoin the 2015 Iran nuclear deal, Mnuchin, who played a large part in the “maximum pressure” sanctions against Iran, said that the goal of the sanctions was to come to a better agreement with Iran.

“That agreement needs to include and address all the significant issues, including the term [of the nuclear limitations]. If Iran is serious and doesn’t want nuclear weapons, it needs to be long enough term,” Mnuchin said. The current Iran deal would expire in 2030.

In addition, Mnuchin said that “other regional players” are especially concerned about Iran’s ballistic missile capabilities and sponsorship of terrorism, and should be involved in the talks.

“Those issues, in my opinion, need to be part of regional discussions and not just between the US and Iran, because it is much broader,” he said.