Investing in Israel: How the Capital Market Differs from Real Estate or Private Equity Investments.
For the past decade, the Israeli economy has enjoyed - and continues to register - extraordinary growth across a number of sectors. Consistently good performance has not only invited the praise and endorsement from the global world of heavy-weight investors but has economists referring to the last 10 years of strong growth as "the golden decade".
This certainty has been echoed in the increased rankings attributed by at least 3 of the leading credit agencies and mirrored by the likes of Warren Buffet, Bill Gates & Donald Trump among an ever-increasing number of investors putting millions of dollars into the Israeli economy.
While both high-tech & pharmaceutical industries tend to attract most of the limelight, the Israeli real estate sector is significant for both the economy and individual investors. A recent announcement by The Central Bureau of Statistics declared a decrease of the housing cost index, making the Israeli real estate sector even more of an investment opportunity.
Given the scope of today's opportunities for investment, the key question remains: How does investing in the Israeli capital market differ from real estate or private equity investments?
Firstly, while Israel’s capital markets, real estate, and private equity sectors all offer solid returns, the risk index in investing in the capital markets is significantly lower, making it more attractive to the passive investor.
Secondly, sectors such as real estate are fixed, compared to the vast scope of opportunity and diversity presented by investment in the capital market's multiple sectors.
Lastly, with lower barriers to entry (and as a result of being regulated by the government - making it less bureaucratic), the capital markets hold more sway to certain investors than the real estate sector, which despite many advantages, has higher barriers to entry, as well as other non-finance related obstacles.
Which sector to invest in is just one question on the lips of investors looking towards Israel today. For us at GPI, a measured understanding of the delicate balance between the flux of potential and the right analysis of opportunity and risk is a driving force. Expertise of the inner workings of the local market, teamed with our continually fine-tuned knowledge of the investment sector today, means we are always ready for tomorrow.
For guidance, or even if you have just a couple of questions, ask us