Israel hedge funds constantly top industry average, says fund administrator
A survey conducted by Israeli fund administrator Tzur Management highlights the significant expansion in the country’s funds industry over the last five years.
A survey conducted by Israeli fund administrator Tzur Management highlights the significant expansion in the country’s funds industry over the last five years.
A survey conducted by Israeli fund administrator Tzur Management highlights the significant expansion in the country’s funds industry over the last five years.
A survey conducted by Israeli fund administrator Tzur Management highlights the significant expansion in the country’s funds industry over the last five years.
Since 2006 the number of funds in Israel has increased 162 per cent, reflecting the emergence of a high growth investment industry in the country. Israeli financial institutions, and particularly alternative investment funds, have evolved into sophisticated global investors with billions of dollars under management. However, a lack of knowledge and awareness of the potential of the Israeli investment industry means that less than a third of funds under management are raised from international sources, the survey has discovered. Assets under management in Israel grew 30 per cent in 2011 and an additional 10 per cent in Q1 2012. Israeli hedge funds have consistently outperformed the HFRX Global Hedge Fund Index since the financial crisis (2009: IHF +33.7 per cent, HFRX +13.4 per cent; 2010: IHF +17.6 per cent, HFRX +5.2 per cent; 2011: IHF +7.9 per cent HFRX -8.9 per cent). Over 80 per cent of participants agreed that foreign investors are not aware of the Israeli hedge fund industry. Equity long/short funds currently hold the largest share of the industry, with 43 per cent of assets under management, with quantitative strategies the second largest accounting for 23 per cent (doubling since 2008). Over 50 per cent of funds invest all their capital in international markets with no direct exposure to the markets in Israel.
Over the past decade, deregulation and new legislation in securities and tax law, together with structural changes in the institutional market, have made it possible for a robust financial services industry to emerge.
Yitz Raab, founder and managing partner of Tzur Management, says: “This report marks the first-ever survey of the Israeli hedge fund industry. Israel’s impressive academic and scientific infrastructure, continuing immigration of highly skilled professionals, and a developed economy with a strong entrepreneurial culture are all fuelling the industry’s rapid growth. Although in its early stages, it is our belief that, as in the areas of technology and life sciences, the Israeli hedge fund industry will grow to become a recognised centre of excellence over the coming decade.”
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