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Israeli Institutional Investors Exposed to SVB

 

Roi Weinberger

Globes, Mar. 12, 2023

 

“Harel’s investments are not affected by the state of the bank but by the state of the companies to which the loans were given.”

 

The collapse of Silicon Valley Bank (SVB) has raised immediate concerns about the impact on Israeli institutional investors. In recent years they have been transferring more and more investments overseas in order to increase returns for savers, as the amount of assets under management has been growing.

At present no Israeli institutional investors hold SVB shares directly. Psagot held a modest $234,000 worth of shares as of the end of the third quarter of 2022 in its mutual fund but that stake was sold three weeks ago.

However, according to SmartBull, a platform which analyzes institutional investments, Israeli institutional investors have invested hundreds of millions of dollars in the bank’s investment funds, in venture capital funds and tech companies from Israel that managed funds in it, and here the question arises as to how those investments will be affected by its collapse. In any case, the savings market estimates that the impact of the collapse of SVB on the pension savings of the public in Israel will be marginal, if at all.

Investment of hundreds of millions of dollars

Two Israeli institutional investors, which in recent years have sought to increase their exposure to the growing tech sector have invested hundreds of millions of dollars in investment funds managed by SVB.

Migdal Group (TASE: MGDL) has investments in the SVB Capital venture capital fund amounting to $213 million and investment commitments amounting to an additional $41 million.

Harel Group (TASE: HARL) invested $18 million in SVB Capital and a further $28 million in SVB Innovation venture debt fund, which provides loans to startups against surety. Harel has also committed to investing a further $107 million in the fund. …Source 



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