The business model establishes the fund as a new entity under Markstone's management. Gillerman, Kess and Lubash will represent Blackstone in Israel and seek new investment opportunities on the Israeli market. The funds will be raised from Blackstone and Markstone per investment. The new fund will begin raising capital in the next few weeks and will seek large-scale investments on a $100 million to one billion dollar scale.
The three directors have been meeting various sources within the capital market in negotiations over the fund's first three investments. This is the first time the fund is investing in Israel although it had examined investments in leading companies such as Makhteshim Agan and Netafim in the past, eventually deciding not to go ahead with the deals.
It has been speculated that the fund plans to invest in Partner Communications, Cellcom and Clal Industry which are traded on the stock exchange.
Sources said that Blackstone believes that Israel offers some interesting investment opportunities and looks upon Israel as a strategic market. The new fund headed by Markstone's directors (which will not bear Markstone's name) may begin investing in foreign markets at a later stage, possibly in partnership with Blackstone.
The joint fund is an unexpected and dramatic turn of events in the career of its three directors after Markstone co-founder and chairman Elliot Briody was charged by US authorities with bribery two years ago, resulting in an $18 million settlement and Briody's resignation. To date, Marktone's has a little over $200 million left from the $800 million it had raised in 2004.
Markstone was unavailable for comment.
This report was originally published in Hebrew by Calcalist