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Capital raised by Israeli VCs surges to $1.2bn in 200516/08/2006. Source: IVC Research Center.
 In 2005, the favourable capital raising trend begun in 2004 intensified, finds the IVC Research Center. Israeli venture capital funds raised $1.2bn, an increase of 40 percent from the $724m raised in 2004.
Capital raised by Israeli venture capital in 2005 was primarily the result of six new Israeli venture capital funds that completed their fund raising in the course of 2005. These were Benchmark Israel II that closed a $250 million fund, Carmel that closed its $200 million second fund and Israel Healthcare Ventures that closed on a $140 million second fund dedicated to the life sciences. Sequoia Israel and Genesis both closed third funds of $200 million and $160 million, respectively, while Giza closed its fourth fund after adding $30 million to the $120 million raised in 2004.
In addition, first closings were carried out by four Israeli venture capital funds, including Vertex Israel III which closed $120 million and the life science-focused Medica-Poalim, which closed on $80 million in 2005.
Several firms, including Concord, Israel Seed and Tamar Ventures suspended their plans to raise new funds in 2005.
During the past 18 month foreign pension funds increased their involvement in the Israeli VC market. These included CalSTRS - California State Teachers' Retirement System , CalPERS, NY State Retirement System ,Oregon Public Employees Retirement Fund, Pennsylvania State Employees Retirement System and TIAA-CREF, and others. Zeev Holtzman, Chairman of IVC Research Center and Giza Venture Capital, said, "2005 capital raising set a four-year record, confirming the pullout from the year 2000 crises. Investments came mostly from foreign sources, while local investors were generally on the sidelines. Local inactivity raises concern that Israeli institutions will miss out on the new wave of promising investment opportunities." $2.3 billion available for investments
According to IVC estimates, $2.3 billion in capital is currently available for investment by Israeli VCs, of which $1.4 billion is intended for First investments in high-tech companies. The remainder is reserved for Follow-on investments. An additional $1 billion is expected to be raised in 2006 by Israeli VCs for investment in Israeli high technology.
Top funds capital raising 1992-2005
Between 1992 and 2005, Israeli venture capital funds raised approximately $10.3 billion that was exclusively allocated to investments in Israeli technology companies. Of this amount, approximately $6.8 billion (66 percent) was raised between 2000 and 2005. The largest Israeli funds shown in the table below – ranked according to capital raised between 1992 and 2005 – accounted for $5.8 billion of the latter amount.
Largest Israeli Venture Capital Funds Ranked by Capital Raised 1992-2005 ($m)
2. Includes SVE X ($6m) and 50 percent of Star’s other managed capital, the estimated allocation to Israel.
3. Refers only to Israeli funds, which have a local management team.
4. Includes an Annex Fund to JVP III ($22m), and 50 percent of JVP IV ($405m), the estimated allocation to Israel.
5. Does not include Evergreen’s secondary funds, fund of funds, and a ceased fund.
6. Includes $50m of Vitalife, which was acquired in 2003 from Discount Capital Markets & Investments; does not include $180m
managed for other entities: $50m for Vertex Europe, $65m for UBS Capital, and $65m for an undisclosed European bank fund.
7. Includes an Annex Fund to Israel Seed III ($4m).
8. Life sciences fund
9. Reflects an estimated $44m reduced commitment of a limited partner.
10. Does not include $35m managed for UBS Capital.
11. Including Infinity-CSVC Fund ($20m) operating in China, which according to an IVC estimate will invest 50 percent of its
capital in Israeli companies; does not include capital managed for Clal.
12. After $100m was returned to investors in 2002.
The IVC Research Centre is Israel's leading research centre specialising in analysis and monitoring of Israel's high-tech and venture capital industries. IVC's publications are used by major financial entities and government organizations in Israel and abroad. A comprehensive quarterly report based on survey results is available to IVC clients. For more details about VCs & High-Tech industry in Israel, please visit our website www.ivc-online.com
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