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Strategies in 2023 for the Israeli Hedge Fund Industry

04 November 2022

Key highlights following the 10th Annual Israel Hedge Fund Association conference in Tel Aviv, Israel.

Apex Group was a recent event sponsor at the 10th Annual Israeli Hedge Fund Association meeting that took place on October 25 2022 at the Tel Aviv Stock Exchange. Apex Group in Israel has a very strong presence in the local fund industry with approximately 350 clients managing 550 funds with more than $30b assets under administration. 

Resuming after 3 years the energy was high and many whom attended the conference felt reinvigorating by resuming their personal and friendly relationships. Speaking at the conference, Shmuel Menahem, Head of Israel at Apex Group warmly welcomed the chance to meet old friends, colleagues and clients and mentioned how Apex is planning to substantially increase its support to customers and help them navigate the challenging macroeconomic times ahead.

The agenda for the conference was rich with economic forecasts, discussions on how institutional investors are looking at hedge funds, how are family offices reacting and their allocations to hedge funds, hedge fund strategies for the year ahead, how are prime brokers and exchanges responding and supporting hedge funds. The conference concluded with a fascinating fireside chat from Lynn Martin, President at NYSE Group.

In particular, Ariel Bino, Managing Partner at Gilboa Funds, presented the Annual Israeli Hedge Fund Survey. Apex Group used to be associated with this survey till recently and still has a deep interest in this area. The survey showed a 39% growth in AUM from July 21 – June 22 in the hedge fund industry. That is quite extraordinary given the past 4-6 months of that time period was roiled with the beginnings of some serious macro-economic and geopolitical tensions. The median Israeli Hedge Fund is $20m in size and average is $90m.Some of the few larger players skew the distribution but this is fairly typical of what you would see in developed markets in London, Hong Kong or Connecticut. There are 34 funds with more than $100m AUM representing 93% of the industry. 

Strategies for the Year Ahead

TASE and others pointed out that Tel Aviv should not be considered as just an offshoot of a Global financial centre but has the maturity, presence and ambition to become a substantial Global Financial Centre in its own right. An aim that Apex Group fully supports and will invest in to achieve it. 

Where the Israeli hedge fund footprint slightly differs from international centres is the geographical assets breakdown. 61% of the investment is in Israel with 39% international. This shows that the market is maturing and starting to be confident enough to start trading internationally and finding inefficiencies globally. The investor base also shows that Israel is starting to become more mature. Almost 30% of the investor base is Institutional and 27% Foreign. Whilst it is creditable that 74% of the investor base is private money and 73% is domestic Israeli money, Apex Group believe that the road to growth for the Israeli Fund Industry is to substantially widen the investor base, boost the institutional money and bring in foreign investors (both institutional and private).

With an international footprint spanning 42 countries and supporting nearly $3 Trillion AuA globally, Apex Group is looking forward to helping our Israeli fund customers thrive, grow and make a positive impact in the industry.



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