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Investing in Israel: Considerations in a down market |
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Global economic conditions require investors to look more carefully at their diversification strategies, break free from short-term thinking, and return to basic fundamentals in investing in good business models with proper due diligence.
In this context, long-term investing in Israel based companies and projects may be an ideal solution. Some of our projects in Israel’s emerging independent power sector, for example, still require years before they come online. Others are R&D driven and look to address long-term, global needs in alternative energy generation, waste management and water purification.
Israel is often described as a bedrock of technological and industrial innovation, offering an entrepreneurial drive, cost-effective labor force and attractive climate for investment which makes it a destination for the world’s top companies and individual investors alike.
Israel has fared relatively well in the downturn, and 2008 was a relatively strong year for Israel: the country’s industrial sector climbed 10.1%, private consumption grew 4.4%, exports were up 5.8%, private automobile purchases, up 15.2%, residential building, up 2.1%, overall economic growth, up 4.5%.
As for the outlook for 2009, we think it is worthwhile to keep in mind the following:
· Israel is certainly affected by the global downturn, yet its banking institutions have remained largely stable relative to their counterparts in the US and Europe. Exposure to toxic assets or highly leveraged securities in foreign markets has been minimal. · Israel’s government continues to steer the economy through choppy waters fairly well using fiscal and monetary stimulus to help stem widespread layoffs. · The downturn has not diminished a pressing global need for clean water, energy technologies and smart infrastructure. · The Israeli manufacturing base can be characterized as a maturing sector, with private equity and foreign partnerships playing an increasing role. Those with the ability to see beyond the horizon and think long-term stand to benefit. · For a fuller picture of the private equity / venture capital environment in Israel, or particular sector trends and opportunities, get in touch with us. |
