Israeli investors still suffering from Madoff hangover
Domestic and foreign hedge fund managers need to better educate the Israeli investor community about the merits of the asset class amid concerns some of the country’s allocators have negative perceptions of the industry, buoyed in part by a hangover from the Bernard Madoff fraud.
Israeli institutions are not averse to alternative investing – indeed, many have money in private equity, real-estate and venture capital firms both within the country and abroad. “The Bernard Madoff fraud has tainted Israeli investor opinions of hedge funds. There is a widespread misperception among the Israeli investor community that hedge funds are high-risk, or worse fraudulent,” said Tally Zingher, counsel at Epstein Rosenblum Maoz, a Tel Aviv-based law firm.
While the Madoff fraud affected a number of institutions, his actions had a particularly devastating impact on the Jewish community. A number of victims of the fraud were Jewish educational institutions and charities including the Yeshiva University, Hadassah, the Jewish Community Centers Association of North America and the Elie Wiesel Foundation for Humanity. The Chais Family Foundation, a charity that worked on educational projects within Israel, was forced to shutter because of its exposure to Madoff.
Zingher highlighted hedge fund managers needed to better educate Israeli institutions about the opportunities of investing in the asset class.
The Israeli investor community also should not be ignored by foreign hedge funds. “There is a lot of money in Israel and investors are looking at hedge funds with growing interest,” said Galia Ron, senior director for business development at Apica Green, a Tel Aviv-based fund manager.