Israeli Hedge Funds: A Fast Growing, Dynamic Industry

Erol Dusi wrote this on March 12, 2019

This past week, I had the privilege to participate in a breakfast discussion on Building Your Asset Management Business: Case Studies for Success in Israel. The event was coordinated by Lital Dagan of the Israel Hedge Funds Association (IHFA) and graciously hosted by Meitar law firm.

IHFA

The event kicked off with a discussion on the legal aspects of hedge fund marketing led by Yael Weiss of Meitar law firm. Yael focused on a recent court ruling that has the potential to change the regulatory landscape for the burgeoning hedge fund industry in Israel. Ran Raba from Meitav Dash, continued the discussion by highlighting the opportunities within pension law - notably, the Israeli version of an IRA, that allows individuals to manage their pensions, including investing into alternatives. These were eye-opening presentations which highlighted the potential of these laws to provide tremendous growth for the alternative fund management industry in Israel. 

Yitz Raab, Managing Director of Tzur Management, and I both presented on the importance of building strategic asset raising and thoughtful investor relations processes from the get-go. The competitive nature of this industry has forced asset managers to think beyond just positive returns when it comes to articulating their value to prospective investors. As such, establishing sound processes and practices early are essential steps to take in building a long-term, successful asset management business. Creating a solid investor relations strategy which incorporates consistent communication (both through the highs and lows of performance), promotes transparency, and fosters high touch relationship management is essential for lasting growth. Leveraging technology to support this strategy allows a firm to optimize their workflows as well as measure their investor success and easily identify areas for improvement.

I shared the results of our annual Investor Relations Survey, along with some insights we gleaned from the responses, such as the importance of building a brand, establishing trust with investors and prospects, and utilizing investor interviews and client segmentation to better service existing investors.

This event and the IHFA organization itself, provide an invaluable opportunity to asset managers of all shapes and sizes to come together and gain guidance and learn from industry leaders and experts. There are about 150 hedge funds in Israel serving local investors and investing both locally and globally. IHFA as an industry organization represents about 80% of the asset under management of these funds. These are amazing stats for Israel, and it was great to see and meet some of the folks making all of this happen last week. Wishing all of them lots of success as they navigate the growth of the hedge fund industry and their businesses in Israel.