Blackstone Group have publicly admitted that they are considering opening an office in Israel. This admission comes in light of increased interest in the region from buyout firms. Israel have forged a reputation in recent years as being the most popular place on Earth for start-ups, particularly in the technology industry. However, buyout firms are looking at a number of different industries in the country, including energy, pharmaceuticals, and retail.
From an Israeli economy perspective, news that a group such as Blackstone is not just looking at the area but wants to open headquarters there is wholly positive. While Israel gets a lot of attention and a lot of private equity (PE) and venture capital (VC) coming into the country, there have been fears that the trend of businesses leaving Israel for mainland Europe or the United States following buyouts would weaken the Middle Eastern nation in the longer term.
This announcement and potential move is a clear indication that there is an appetite to establish continuity in Israel, which will help the country grow into an important hub between Europe, Asia, and Africa in the long term, for PE and VC as well as with the wider economy in mind.
Gillerman indicated that the Group is looking at “big deals and…investing substantial funds in Israel,” which is why they are looking to establish a base there rather than manage their investments remotely.
As well as Israel’s burgeoning reputation for being a hotbed of technology entrepreneurs and businesses primed for early stage investment, the stability of the economy alongside regular, high GDP growth, low unemployment, low inflation, and increasing education standards mean that is an ideal location for PE houses looking for relatively low risk yet potentially highly lucrative and profitable long-term opportunities.