First-ever survey of the Israeli hedge fund industry
Israel, already widely acknowledged as a global leader for innovation in technology and life sciences, is now making major strides in the financial services industry. A survey released today, conducted by Tzur Management, a leading platform and fund administrator for the Israeli fund industry, highlights the significant expansion in the industry over the last five years. Since 2006 the number of funds in Israel has increased 162%, reflecting the emergence of a high growth investment industry in the country.
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. 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.
The report’s other key findings include:
- Assets under management in Israel grew 30% in 2011 and an additional 10% in Q1 2012.
- Israeli hedge funds (“IHF”) have consistently outperformed the HFRX Global Hedge Fund Index since the financial crisis (2009: IHF +33.7%, HFRX +13.4%; 2010; IHF +17.6%, HFRX +5.2%; 2011: IHF +7.9% HFRX -8.9%).
- Over 80% 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% of assets under management, with quantitative strategies the second largest accounting for 23% (doubling since 2008).
- Over 50% of funds invest all their capital in international markets with no direct exposure to the markets in Israel.
Yitz Raab, Founder and Managing Partner of Tzur Management, said:
“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 fueling 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 recognized center of excellence over the coming decade.”
All inquiries regarding this survey or requests for additional information can be addressed to firstname.lastname@example.org