NEW YORK – Genesis Partners II, a venture capital fund focused on Israel-based communications, Internet and information technology companies, recently held a first close on $100 million.
The fund, which is managed by E. Shalev Management Ltd. of Israel and CIBC World Markets, is the successor to the $90 million Genesis Partners I, and has a target of approximately $150 million, said Jeff Stern, head of private equity at CIBC World Markets.
“Eddy Shalev is definitely the lead, he and his partners source and negotiate the deals, and serve on the boards of directors,” Stern said. “CIBC raises all the capital, assists with due diligence and is responsible for the administration of the fund.”
Launched late last fall, the fund secured a commitment from IBM Corp. as a new limited partner. Stern said the balance of the limited partner group consists of institutional investors – including endowments and corporations – private family offices and high-net-worth individuals.
“One other feature is that we are raising a parallel CEO fund for successful CEOs of Israeli companies,” Stern said.
He said that fund is not limited to Genesis Partners portfolio CEOs.
The investment strategy for Fund II keys on the discrepancies in valuations of Israeli technologies versus comparable U.S.-based companies. A direct result of less competition for deals, Stern said the exit options for Israeli companies – Nasdaq IPO or acquisition by a multinational corporation at U.S. comparable valuations – allow for high returns.
Stern added that the larger fund will not lead the firm to change its stage of investment, rather Genesis II will take larger stakes in deals with smaller venture syndicates.