Israeli government looking for technology fund managers
Israel has become a popular destination for technology start-ups and has a vibrant and flourishing technology sector. Its government is now looking for high-profile companies to handle government-backed investment funds that will focus on high-tech start-ups and businesses.
A spokesperson for the Israeli government said that these funds will be traded on the stock exchange and will enjoy government-backed protection against losses.
The Israeli government has been pressured for some time to open up the technology sector to encourage local investors. At the moment, this sector attracts more foreigners, who are benefiting from the great returns that technology companies and businesses are offering.
Most investments in technology companies are in research and development. Also, many high-tech start-ups and organisations have been taken over by foreign companies such as Symantec and Google, who prefer acquiring them in the initial stages.
Symantec has just acquired a cybersecurity start-up, while earlier in the year, Intel reached an agreement to purchase an autonomous vehicle company. In 2013, Google acquired Waze, which is a mapping service based in Israel.
The Israeli Finance Ministry and Israel Securities Authority said that the government will be issuing a tender to find suitable companies to manage two new funds. Each fund will have a minimum of US$113 million, and the government will be selecting up to four investment managers.
Each fund will have investment in technology stocks, and about 30 per cent of this investment will be in early stage start-ups so that institutions and individual investors can get good returns in a safe manner. Also, each fund is backed by a government guarantee of up to US$14 million and will be able to raise credit, which will be supported by the Israeli government up to about US$28 million.
Shmuel Hauser, Chairman of the Israel Securities Authority, said that the two funds were created to ensure that the public can benefit from the boom that Israel’s technology sector is witnessing. Its investment will be safe due to the protection offered by the government.