Israel Investment Partners (IIP) is an employee owned private equity firm focused on opportunistic value-based investing. Our debut fund, IIP I, is a $350 million fund targeting market leading assets, in infrastructure, real estate, and securities.
Helping mid-large scale investors gain a competitive advantage, IIP was established to facilitate foreign investments in Israel as well as abroad. IIP works in union with the vision and efforts of the Ministry of Economy and Prime Minister's office to continuously improve international relations and further secure foreign investments and partnerships.
IIP seeks to invest in established businesses, comprised of hard assets with leading market positions, in the following sectors; agriculture, communications, defense, electric utilities, energy & natural resources, financial services, life sciences, real estate & construction, power & renewables, technology, transportation, waste management and water.
Founded in 2019, IIP is led by a team of senior investment professional with over 85 years of combined industry experience and strong ties to government.
Our focus is to identify and invest in high quality opportunities that results in solid returns for all stakeholders. We understand the value of trusted relationships in optimizing the environment for success. Strong partnerships and empowerment of people permeate every aspect of our organization.
Where others see obstacles, we see opportunities
The most important element of our investment process is to identify and align ourselves with outstanding and principled management teams. To that end, IIP only invests behind incumbent management and our management teams typically invest meaningful equity alongside IIP.
IIP focuses on value-based investments, which means we seek to invest in companies that have a positive impact on the environment, culture, society, and government.
Complementing the experience of our investment professionals, IIP's Executive Board and Executive Network can provide a tremendous depth of resources to our companies. A collaborative team, comprised of management, board members and our investment professionals works to identify and address key strategic and operational priorities. We then entrust operations and execution entirely to management. IIP's objective is to provide our management partners with the capital and environment they need to grow and succeed.
We only engage where we can add genuine value
It is no secret that Israeli innovation is changing the world. However, Israel itself is still in the process of building and improving its technology and infrastructure, whilst providing landmark opportunities to investment professionals.
A leading investment destination far beyond what its small size and short history might suggest. With a striking concentration of innovative people and countless cutting edge technologies, Israel continues to stand out.
Israel has an increasingly strong and resilient economy. Israel has seen consecutive years of significant GDP growth above that of the OECD and the US, and our 5% unemployment rate is among the world’s lowest. Despite the regional geopolitical challenges, the Israeli economy has been identified as one of the healthiest and most secure in the world.
Israel's renowned academic system fosters an extraordinarily talented workforce. Israel is ranked fourth for research personnel, and has the highest concentration of engineers and PhDs per capita in the world. These unique features lat the foundation for successful research and innovation.
Israel is the world's spiritual hub for innovation and a powerhouse for revolutionary R&D. Israeli thinkers, makers and doers are changing the world of Internet, cyber security, water technology, agrotech, health & life sciences, financial technology, automotive, high-tech and smart manufacturing.
Israel’s groundbreaking technologies offer countless opportunities for high-level industries and products. From 3D printers, to nano technology, to cyber security, Israel is home to some of the most advanced procedures and industrial technologies in the world.
A wide range of governmental incentives and grants makes Israel a perfect place for foreign investors to shine. The scale in Israel investments and demand is enormous, and there is a growing need to replace and expand infrastructure including all parts of the energy supply chain and a wide array of public services such as roads, railways, airports, and communication networks. Initiatives in these areas have become more difficult due to a reduction in traditional public funding and weakened economic conditions. These resource issues have created a heightened need for experienced private capital.
We are committed to helping to meet this resource imbalance by investing in various infrastructure assets and technology in Israel. Our goal is to achieve returns through the investment and operational improvement of such assets, which are important to the functioning of Israel's economy. We look to use these investments to generate current income and capital appreciation for investors in our funds.
IIP is a private equity firm investing in traditional assets. The coming years will see many offerings, specifically relating to technology, gas exploration and extraction, seaports, airports, highways, railways, energy and natural resources, and water.
The discovery of vast reserves of natural gas in the Mediterranean, including the Leviathan gas field, the largest deepwater gas reservoir found anywhere in the world over the past decade, has revolutionized the geopolitical situation in the region.
Furthermore, the government has committed large sums to develop the transportation sector, while simultaneously encouraging the privatization of many major utilities to enhance competitiveness. There are numerous tenders for construction of roads, railways, pipelines and various other major projects planned for the coming years. This is an opportune time for foreign investors and IIP.
IIP takes a holistic approach to traditional infrastructure investing
IIP Supports Infrastructure
As a new asset class, infrastructure has proved itself over the last decade, establishing a strong track record that highlights its potential to enhance returns and mitigate risk.
Furthermore, the expected total return for private infrastructure is now greater than the expected total return of a 60/40 portfolio, with income also representing a substantial component of the return from infrastructure.
Infrastructure investment can provide investors with the D-I-Y benefits of diversification, inflation protection and yield along with a strong focus on environmental, social and governance (ESG) principles.
Institutional investors have been allocating a growing share of their portfolios to infrastructure assets in Israel as well as in the UK and USA — including regulated utilities, transportation, and contracted power. The focus has been on core investment strategies, which can produce stable, forecastable cash flows through the use of prudent leverage and some combination of transparent and consistent regulatory environments, long-term contracts with credible counter-parties, and mature demand profiles.
Most core infrastructure assets have monopolistic positions in the markets they serve, so prices and usage are relatively insensitive to periods of economic weakness. Instead, core infrastructure investments are driven by a different—and uncorrelated—set of factors, including political and regulatory risk, development risk, operational risk, and leverage. Also, each core infrastructure sector has unique risk factors, so core strategies include investments from multiple sectors to reduce volatility within the asset class.
A key benefit of infrastructure investments is their ability to provide relatively high total returns with low correlations to traditional asset classes. Consequently, an allocation to infrastructure may reduce the volatility of an institutional portfolio and can potentially limit the maximum drawdown during times of market stress.
Infrastructure’s strong yield potential is a major reason why institutional investors are attracted to the asset class in today’s low-yield environment. Yields on infrastructure investments have been remarkably resilient, as forecastable cash flows, long economic lives and creditworthy counterparties have bolstered asset-level cash flows.
IIP and Open-ended Funds
IIP is an open-ended perpetual life vehicle, the fund size will increase commensurate with deal capacity and investor commitments.
Open-ended funds are the most common vehicle through which institutions invest in private infrastructure, especially in Israel. By pooling capital from several foreign investors, open-ended funds can provide greater diversification than a single institution might be able to create with its own capital. In addition, such funds obviate the need to build an internal team with the in-depth sector- specific knowledge necessary to acquire and manage infrastructure assets in Israel.
IIP open-ended fund is focused on the D-I-Y aspects of core and core-plus investments with longer investment horizons and somewhat lower fees. Ownership by long-term investors may accrue benefits for external stakeholders, and encourage favorable regulatory treatment.
Open-ended funds also facilitate an ongoing relationship between investors and managers and may present co-investment and direct investment opportunities to investors who are interested in focusing more on specific sectors and geographies.
Infrastructure is a distinctive asset classes, making selection, based on a variety of factors, critically important. We focus on investments where we believe risk can be minimized in order to deliver attractive risk-adjusted returns, and we use a risk-based asset selection process to make our decisions. We seek to invest in operating businesses with a long standing history, reputation, performance and expertise in their distinctive field. We seek cashflow, attractive yields and opportunities.
Sourcing and Structuring
Proactive outreach, strong reputation and relationships, focused personal networks, and resources valued by management teams and entrepreneurs have the potential to yield investments not available to others.
The team is focused on creating a broadly diversified portfolio across the core segments of infrastructure, whilst securing cash flow and maximize returns for our limited partners.
Successful Partnerships that Build Better Businesses
The team of IIP investment professionals that are responsible for securing the investment of a company remains with the portfolio company throughout the life of the investment. Each team will comprise of highly experienced, on-the-ground investment professionals with deep roots in their sector.
IIP will work closely with management to create a strong operational framework that will enable the business to thrive, and providing decisive strategic direction as it grows. Key drivers of outperformance are typically:
Investing for organic growth
Ensuring operational efficiency
Securing top quality management teams
Driving growth through acquisition
Optimising capital structures