Jared Kushner’s New Fund Plans to Invest Saudi Money in Israel

Jared Kushner’s new private equity fund plans to invest millions of dollars of Saudi money in Israeli startups, according to people familiar with the plan, according to people familiar with the investment plan. investment, in a sign of the warm relationship between the two historic rivals.

These people said Affinity Partners, which has raised more than $3 billion, including a $2 billion pledge from the kingdom’s sovereign wealth fund, has chosen the first two Israeli companies to invest in.

The decision marks the first known case that Saudi Arabia’s Public Investment Fund cash will be remitted to Israel, a sign of the kingdom’s growing willingness to do business with the country, albeit They have no diplomatic relations. This could help lay the groundwork for a ground-breaking normalization treaty between the two countries.

Israel is strengthening business and security ties with Arab nations, including the United Arab Emirates, nearly two years after the US brokered historic normalization deals. Mr. Kushner, son-in-law of former President Donald Trump and former senior White House adviser, played a key role in the so-called Abraham Accords. He has also established close ties with Saudi Crown Prince Mohammed bin Salman, the de facto ruler of the kingdom. Since leaving the White House, Mr. Kushner has reached out to White Houses across the Middle East to grow his private equity firm, a venture that is likely to earn him lucrative fees regardless of success. or failure of investments.

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


Photo:

JONATHAN ERNST / REUTERS

People familiar with the company’s plans said that as part of negotiations to secure the kingdom’s capital, Saudi officials agreed that the General Partnership could invest in the companies. of Israel. The kingdom could also open its economy to Israeli businesses through working with Mr. Kushner, they noted.

In talks with Saudi leaders, Mr. Kushner and his team warned that their country could lose access and opportunity in what they call the “Silicon Valley of the Middle East.” ” to the neighboring countries that signed the Agreement of Abraham with this country, it was said.

In an interview, Mr. Kushner said he views his investment plan as an extension of his work at the White House to promote ties between Israel and its Arab neighbors, which have long been established. refused to normalize relations with Israel until their leaders agreed to create a Palestinian state.

“If we can attract Israelis and Muslims in the region to do business together, that will focus everyone on shared interests and shared values,” he said. “We launched historic change in the region that needs to be strengthened and nurtured to reach its potential.”

Mr. Kushner and his team declined to discuss which companies they were working for or how much cash was likely to be remitted to Israel. Mr. Kushner also declined to discuss his negotiations with Crown Prince Mohammed, who oversees strategic decisions for the Saudi investment fund. People familiar with the negotiations said Crown Prince Mohammed would have to approve any decision to invest directly in Israel.

A spokesman for Saudi Arabia’s $600 billion Public Investment Fund, which is chaired by Crown Prince Mohammed and includes senior government ministers, declined to comment. The government’s communications office did not respond to a request for comment.

PIF has a mission to transform the domestic Saudi economy through investment in new industries and extensive real estate development, such as a $500 billion future city called Neom . Crown Prince Mohammed has told advisers and diplomats that he expects the Israelis to play a key role in the development of Neom, with potential investments in biotechnology and cybersecurity. In November 2020, the prince met in Neom with then-Israeli Prime Minister Benjamin Netanyahu in a sign that Saudi Arabia could join the Abraham Accords. But new administrations in the US and Israel have slowed the momentum.

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The satellite image shows the empty desert surrounding the proposed future construction of the city of Neom, Saudi Arabia.


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Planet Labs PBC / Associated Press

After securing the Saudi investment, Mr. Kushner and his team traveled to Israel in March to meet with dozens of Israeli companies seeking financial backing from Affinity, according to participants in the polls. meeting. Mr. Kushner has held meetings with Israeli startups working on everything from healthcare and agriculture to software and networking, they said.

Elie Wurtman, co-founder of PICO Venture Partners, who helped arrange meetings for Mr. Kushner and his team.

Mr. Kushner has recommended his investment firm to other oil-rich Arab nations, including the UAE and Qatar, which are not parties to the Abraham Agreement, The Wall Street Journal reported.

Even before the accord, the UAE allowed Israeli companies to access its market with operations outside of other countries. The Persian Gulf country can now invest directly in Israel on its own and has already made deals. Abu Dhabi’s Mubadala Investments, a $250 billion asset manager, has invested up to $20 million in six Israel-focused or based venture capital firms. Another Abu Dhabi sovereign wealth fund, ADQ, led a $105 million investment in Aleph Farms, an Israeli company specializing in the production of lab-grown meat.

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Steaks are grown in a lab at Aleph Farms, an Israeli company.


Photo:

amir cohen / Reuters

Saudi Arabia is not the only country that does not have diplomatic relations with Israel that Mr. Kushner is endorsing. According to people familiar with the discussions, Affinity is also looking to bring Israeli technology to Indonesia, the world’s largest Muslim-majority country. Before leaving the White House, Mr. Kushner and his team were working to secure a normalization deal with Indonesia and Israel, but the deal did not come to fruition before President Biden took office.

Indonesian officials did not respond to a request for comment.

Mr. Kushner’s decision to focus his post-government business in the Middle East has drawn criticism from some Democratic lawmakers, who question whether Saudi Arabia’s support is a repay him for his steadfast support of Crown Prince Mohammed while in the White House or not. Mr. Kushner and the Trump administration sided with Crown Prince Mohammed after US intelligence concluded that he approved a plan to kill or capture Jamal Khashoggi, a Saudi columnist for the Washington Post who was killed. by a Saudi attack group in Istanbul in 2018. Crown Prince Mohammed has denied that he ordered the operation.

Affinity said it was proud of its partnership with the Saudi fund and dismissed suggestions it had anything to do with Mr Kushner’s support of Crown Prince Mohammed while he was in the White House. .

The relationship faces competition among investors for Israel’s best startups. Excess global capital has fueled a boom in Israel’s tech sector over the past few years, with 2021 a record fundraising year, although the market cooled in the first quarter of this year.

Ayelet Frish, an Israeli strategy consultant and branding expert who helped arrange meetings for Affinity, said Mr. Kushner’s offering resonated with many companies.

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“Jared Kushner can open the door for you,” said Ms. Frish, who was a key strategic adviser to the late Israeli President Shimon Peres. “He can open doors for Israeli companies even in countries with which we don’t have a real relationship, like Saudi Arabia and Indonesia.”

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

Mr. Kushner added: “The more we can forge business relationships and introduce regional innovators to each other, the more we strengthen those who want to go down this new path, while at the same time doing so. weaken those stuck in the old pattern”.

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

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