Israel's Advanced Investment World Is Evolving Nonstop — On the Added Value of Professionalism and Expertise in the Field

The world of advanced investments encompasses a wide range of options — from private equity funds and debt funds to real estate, infrastructure, and secondary funds, and that is only a partial list. Each channel requires deep expertise and understanding of the underlying asset, the investment structure, the associated risks, and the expected return potential. This complexity presents a series of significant challenges for private investors trying to navigate the field on their own.

Before making an informed investment decision in a specific fund, several critical parameters must be examined: the fund’s performance over time, the stability of the management team, how it performed during previous crises, the fund’s structure and tax implications, its liquidity policy, and its investment strategy.

Inbar Steiner, Managing Partner at Value Advanced Investments, explains: “In the world of advanced investments, the possibilities are almost endless. The key is knowing how to identify the highest-quality funds and those that precisely match each investor’s unique needs.”

The Challenge Facing the Private Qualified Investor

Although qualified investors have the financial means to invest in advanced funds, they face significant challenges when trying to build an advanced investment portfolio on their own. These challenges stem from several factors: lack of time and resources, lack of information, the complexity of analysis, high entry barriers, and an absence of the business relationships that lead to access to opportunities and attractive terms.

“Most qualified investors are busy people — entrepreneurs, senior executives, or business owners,” says Steiner. “They simply cannot dedicate the time required to deeply study the market and perform the necessary due diligence.”

Beyond that, “it is almost impossible for a private investor to perform all the required checks on their own,” she adds. “They don’t have access to comprehensive information about all the funds and non-traded assets in the world, the way experienced professional firms like Value do.”

Even if investors have all the required information, “there is still a real difficulty in deeply analyzing macroeconomic data and tailoring it to personal needs,” Steiner notes.

The fact that these are private investors — who do not maintain ongoing relationships with funds and industry players — leads to strict entry barriers for certain channels and less favorable terms. “Most leading funds focus on institutional investors and do not approach private investors,” Steiner explains, “which makes it difficult for private investors to access the highest-quality funds.” The lack of the right business relationships “makes it harder to negotiate terms or gain access to certain funds,” she adds.

These factors make it difficult for private investors to independently manage the full value chain of advanced investments and to obtain the best terms most suited to their needs — compared to working with firms that specialize in advanced investments.

Pioneers of the Field in Israel

When examining the advanced investment market in Israel, a small number of companies can be identified that have led the field and made new investment channels accessible to local investors. Value was one of the pioneers in this area and has played a significant role in the market’s development.

The company has led major initiatives, including obtaining a license for a private pension fund, bringing the IRA to private provident funds, implementing a default pension fund, and creating public partnerships and debt fund investments for non-qualified investors. These moves helped open the Israeli market to new and advanced investment channels.

“We were the first to establish an Israeli feeder fund for a foreign international fund,” Steiner recounts. “Today we manage the largest feeder funds in Israel, each with a volume of $100 million.” This achievement demonstrates the ability of leading Israeli companies to bridge the gap between the local market and global investment opportunities.

A feeder fund paves the way for private investors to access an international fund — one characterized by strict entry barriers and a minimum investment threshold of several million dollars. Through a feeder fund that aggregates many investors, a much lower threshold can be set for each individual investor, typically around $250,000 or more. This is only a few percent of the amount the main fund requires as a minimum entry without a feeder. In this way, the capital required to join the main fund is raised from multiple investors grouped under the feeder.

The Added Value of Experts — The Professional Process Made Accessible to Private Investors

Faced with the many challenges the market presents, firms specializing in advanced investments — like Value — offer significant value to qualified investors. They provide a comprehensive solution and take responsibility for managing the entire value chain: “From rigorous fund screening, through adapting the strategy to the needs of the moment, to continuous monitoring of the funds’ own investment activities,” Steiner explains. This approach allows investors to enjoy the benefits of advanced investments without having to deal with the complexity of managing them.

Value takes pride in its institutional DNA. “Our team was carefully selected from the staff of a leading investment house,” Steiner explains. “We built a specialized team — the best of the best — that brings rich experience in institutional-level investment management, which we now make accessible to private investors.”

The company’s rigorous screening process includes an in-depth mapping and review of investment funds according to the strictest standards: examining long-term performance, team stability, behavior during extreme events, and more. “Only the best funds pass our filter,” Steiner attests.

Regarding the business relationships that enable access and preferred terms, Steiner says: “We invest significant resources in creating unique relationships and collaborations with leading fund managers. Our long-standing relationships with the leading players in the field give us access to quality funds that are typically closed to private investors.”

Leading firms in the advanced investment space continue to innovate and adapt to market changes. “Today, for example, we understand that the institutional market has a diversified and mature portfolio,” Steiner explains. “Therefore, we won’t invest in the giant funds managing $20 billion across many assets and strategies. Instead, we’ll look for added value in industries that institutional investors don’t have access to, where significant knowledge is required to invest — such as debt and infrastructure, which are capable of delivering double-digit returns with a quality risk profile.”

Among other things, Value was a pioneer of secondary funds, which allow entry into investments in private equity funds not directly traded on the capital market. Today it offers access to several funds with this strategy — for example, the Coller Fund, the largest fund of its kind in the world, founded and managed by Jeremy Coller, the father of the field. “This is a solution for the beginning investor, creating a portfolio in the most diversified and rapid way, in order to receive significant cash flow and skip the learning curve of the early stages,” Steiner explains.

The Future of Advanced Investments in Israel — Broader, More Professional, More Accessible

As the alternative market in Israel continues to develop, firms specializing in advanced investments — like Value — continue to play a central role in making advanced investment opportunities accessible to qualified investors. “Our goal is to enable investors in Israel to enjoy the same investment opportunities that until now were reserved exclusively for the large institutional investors,” Steiner concludes.

On this point, it is worth noting that Preqin, one of the world’s largest research firms, published a forecast for the alternative investments field, estimating that exposure to these assets will continue to grow in the coming years at a rate of nearly 10% per year (CAGR), with total investments in the field expected to surpass the $17 trillion threshold next year. This means that while the field has already seen a significant leap — it is far from exhausting its potential.

As the global industry continues to develop and become more sophisticated, the role of specialized firms in bridging the gap between private investors and the world of alternative investments is only expected to grow. For qualified investors and family offices, partnering with professional firms like VALUE can be the key to success in a complex and challenging field.

Disclaimer: The information in this article may contain details that constitute a general presentation of data and does not constitute a “public offering,” investment advice, or investment marketing, and is not a substitute for investment advice tailored to an individual’s data and needs. Nothing in this article constitutes a guarantee of return or profit; past results of a fund do not guarantee its future results.