Home Uncategorized Jared Kushner’s new fund plans to invest Saudi Arabia’s money in Israel

Jared Kushner’s new fund plans to invest Saudi Arabia’s money in Israel

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According to people familiar with the investment plan, Jared Kushner’s new private equity fund plans to invest millions of dollars of Saudi Arabian money in Israeli startups, as a sign of warming ties between the two historical rivals.

These people said Affinity Partners, which has raised more than $ 3 billion, including $ 2 billion from the kingdom’s sovereign wealth fund, has already selected the first two Israeli firms to invest.

This decision is the first known case that the funds of the Saudi Public Investment Fund will be sent to Israel, which indicates the growing willingness of the kingdom to do business with the country, even if they do not have diplomatic relations. This could help lay the groundwork for a breakthrough normalization pact between the two countries.

Israel is deepening business and security ties with Arab states, including the United Arab Emirates, nearly two years after the U.S. concluded historic normalization agreements. Mr. Kushner, former president

Donald TrumpThe son-in-law and former senior White House adviser played an important role in the so-called Abraham Accords. He also established strong ties with the Crown Prince of Saudi Arabia, Mohammed bin Salman, the de facto ruler of the kingdom. Since leaving the White House, Mr. Kushner listened to his contacts at the White House in the Middle East for the development of his private investment firm, an enterprise that can earn him lucrative fees, regardless of the success or failure of his investment.

Meeting in Saudi Arabia in 2017, left, Prince Mohammed bin Salman, then-President Donald Trump, Jared Kushner and chief economic adviser Gary Cohn.


Photo:

JONATHAN ERNST / REUTERS

As part of talks to secure funding for the kingdom, Saudi officials agreed that Affinity Partners could invest in Israeli firms, people familiar with the firm’s plans said. They noted that the kingdom could open its economy to Israeli business through working with Mr Kushner.

During talks with Saudi leaders, Mr. Kushner and his team warned them that their country could lose access and opportunities in what they called “Silicon Valley of the Middle East,” neighbors who signed Abraham’s agreements with the country, people said.

In an interview, Mr Kushner said he saw his investment plans as expanding his work in the White House to develop ties between Israel and its Arab neighbors, who had long refused to normalize relations with Israel until its leaders agreed to a Palestinian state.

“If we can get Israelis and Muslims in the region to do business together, it will focus people on common interests and common values,” he said. “We have begun historic regional changes that need to be strengthened and nurtured to reach their potential.”

Mr Kushner and his team declined to discuss which companies they are cooperating with and how much money is likely to be sent to Israel. Mr Kushner also declined to discuss his talks with Prince Mohammed, who oversees the Saudi investment fund’s strategic decisions. People familiar with the talks said Prince Muhammad would have to approve any decision to invest directly in Israel.

A spokesman for Saudi Arabia’s $ 600 billion state investment fund, whose council is headed by Prince Mohammed and includes senior government ministers, declined to comment. The government’s media service did not respond to requests for comment.

The PIF is tasked with transforming Saudi Arabia’s domestic economy through investment in new industries and extensive real estate development, such as a futuristic $ 500 billion city-state called Neom. Prince Mohammed told advisers and diplomats that he hopes the Israelis will play a big role in the development of Neoma with potential investments in biotechnology and cybersecurity. In November 2020 the prince met at Neome with then-Israeli Prime Minister Benjamin Netanyahu in a sign that Saudi Arabia could join Abraham’s agreements. But new administrations in the United States and Israel have slowed.

The satellite photo shows an empty desert around which the future city of Neom in Saudi Arabia is planned.


Photo:

Planet Labs PBC / Associated Press

After receiving Saudi investment, Mr Kushner and his team traveled to Israel in March to meet with dozens of Israeli companies seeking financial support from Affinity, according to meeting participants. Mr Kushner has met with Israeli startups working on everything from health and agriculture to software and cyber, they said.

“Increasing prosperity in the region and building business bridges across the region provides an opportunity to strengthen the long-term relationship that has developed since the signing of the Abraham Accords,” said Eli Wurtman, co-founder of PICO Venture Partners, who helped organize meetings for Kushner and his team.

Mr Kushner has introduced his investment firm to other oil-rich Arab states, including the UAE and Qatar, which is not a party to the Abraham agreements, according to The Wall Street Journal.

Even before the conclusion of the agreements, the UAE allowed access to its market to Israeli companies operating outside other countries. The Gulf state can now make its own direct investments in Israel and conclude deals. Abu Dhabi Mubadala Investment Co., which manages assets of $ 250 billion, has invested up to $ 20 million in six Israeli or focused venture companies. Abu Dhabi’s other sovereign wealth fund, ADQ, has invested $ 105 million in Aleph Farms, an Israeli firm that produces lab-grown meat.

Saudi Arabia is not the only country where Mr Kushner is seeking diplomatic relations with Israel. Affinity is also looking to bring Israeli technology to Indonesia, the world’s largest Muslim-majority country, according to people familiar with the discussions. Before leaving the White House, Mr. Kushner and his team worked on a normalization agreement with Indonesia and Israel, but the agreement did not take place until President Biden took office.

Indonesian officials did not respond to requests for comment.

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Affinity faces competition among investors for Israel’s best startups. The oversaturation of global capital has caused a boom in Israel’s technology scene over the past few years, and 2021 has been a record year for fundraising, although the market has cooled in the first quarter of this year.

Ayelet Frisch, an Israeli strategic advisor and branding expert who helped organize meetings for Affinity, said Mr Kushner’s presentation had resonated with many companies.

“Jared Kushner can open the door for you,” said Ms. Frisch, who served as chief strategic adviser to the late Israeli President Shimon Peres. “It can open the door for Israeli companies even in countries where we don’t have real relations, such as Saudi Arabia and Indonesia.”

Mr Kushner said the prospect of normalizing Saudi Arabia’s relations with Israel would be accelerated by deepening economic ties.

“The more we can establish business ties and introduce innovators from the region, the more we strengthen people who want to follow this new path, weakening those stuck in the old paradigm,” Mr Kushner added.

Write Dion Nissenbaum at dion.nissenbaum@wsj.com and Rory Jones in rory.jones@wsj.com

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