Fortissimo raising over $500m for 5th fund
The Israeli private equity fund specializes in investments in tech and industrial companies associated with Israel.
The financing round itself is planned for several months from now, once fourth fund invests 75% of the money it raised. Fortissimo's managers, however, led by Yuval Cohen, have already begun meeting with investment institutions and private investors. Sources said that the investors included kibbutzim trying to band together in order to jointly invest in the fund. The minimum for a single investor is several million dollars. These kibbutzim have surplus liquid funds that they want to invest in alternative instruments likely to generate a high return for them.
Fortissimo, which manages $1 billion, specializes in investments in high-tech and industrial companies with an affinity to Israel. Fortissimo focuses mainly on mature companies with growth potential and global activity in need of a significant change and active leadership in order to enhance their growth.
Fortissimo has raised four funds that have given investors high returns. The first fund raised $80 million in 2004 and generated a seven-fold return on its money - an IRR of over 40%. The second fund raised $110 million in 2008 and generated a 4.5-fold return on its money - a 30% IRR. The third fund raised $265 million in 2012 and generated 3.5-fold return on its money - a 30% IRR. The fourth fund raised $470 million in 2015, following demand amounting to $1.3 billion. This fund has achieved several impressive exits.
Investors in Fortissimo's fourth fund included investment institutions from Israel, the US, and Europe, including pension funds, global investment funds, investment houses, and insurance companies.
Fortissimo's investment portfolio contains software, industrial, digital printing, and agro-tech companies. Prominent exits by the fund, which were enormously profitable for Fortissimo, include investments in Sodastream, Dip-Tech, Nur Macroprinters, Cadent, AOD, and Starhome. Fortissimo sold its shares in digital printing company Kornit Digital last year, coming away with nearly $300 million on an investment of only $20 million.
Last week, Fortissimo reached agreement on the acquisition of Sugat, Israel's leading company in the marketing of sugar, rice, and legumes, for $60 million. Fortissimo will carry out the acquisition through Salt of the Earth, Israel's largest salt manufacturer, which it acquired early this year from Shari Arison for NIS 160 million, much lower than the NIS 250-300 million that Arison originally expected to get for the company.