Jared Kushner’s private equity firm, Affinity Partners, is set to acquire a 15% stake in Shlomo group’s car and credit unit for NIS 570 million ($150 million).
This will be Affinity Partners’ first investment in Israel. As part of the transaction, a new subsidiary will be created with an equity valuation of NIS 3.8 billion, consolidating Shlomo Holdings’ car leasing, sales, rentals, and credit business operations.
Image: Affinity Partners’ Jared Kushner (left) and Shlomo group chairman Asi Shmeltzer. (Courtesy)
Shlomo Holdings will hold 85% of the new company’s issued share capital, while Kushner’s private equity fund, backed by Saudi Arabia’s sovereign wealth fund, will hold the remaining 15%.
The two partners have stated that the transaction is still subject to necessary approvals.
Kushner’s private equity fund is largely supported by his close contacts in the Arab world, with whom he worked closely during his time in the White House. The fund has $3 billion in assets under management and is backed by $2 billion from Saudi Arabia’s sovereign wealth fund.
The investment comes at a time when the Biden administration is determined to broker a normalization agreement between Saudi Arabia and Israel. Although Israel does not have formal diplomatic ties with Saudi Arabia, the countries have made progress in recent years.
Kushner was instrumental in negotiating the Abraham Accords, which are normalization agreements that Israel signed with the United Arab Emirates, Bahrain, Morocco, and Sudan. He launched Affinity Partners soon after leaving the White House in 2020 and has since traveled to the region several times as an adviser to the Middle East.
Shlomo group, founded as a family business by the late Shlomo Shmeltzer 55 years ago, started as a car rental, leasing, and automotive services company. It has since grown into a conglomerate with subsidiaries in transport, insurance, finance, infrastructure, construction, shipping, logistics, and real estate. The group’s automotive services operation operates a fleet of over 78,000 vehicles with a market share of about 30% in the car industry.
The group operates in Israel, Romania, and Germany and generated a consolidated turnover of about NIS 4.9 billion in 2022, employing over 5,000 people. Among its subsidiaries are Shlomo Holdings, Afcon Holdings, Shlomo Insurance, Shlomo Motors, Israel Shipyards, Shlomo Real Estate, Tadiran Telecom, and Talma Shlomo Tourism.
Shlomo group’s chairman, Asi Shmeltzer, stated that the deal “represents the capstone of my late father’s, Shlomo Shmeltzer, life’s work.” He also said that the “strategic partnership will unlock meaningful value for our group, specifically in the rental, leasing, and credit industries.”
Kushner’s fund found the Israeli group’s growing and profitable operational car leasing model adoptable and suitable for the growing middle class in markets in the Middle East and North Africa. As part of the investment agreement, the fund will act to foster joint business transactions in the Middle East and North Africa, according to the Shlomo group.
Shmeltzer added that the “introduction of a strategic investor, such as Affinity Partners, will help us enhance our ties with businesses and identify new economic opportunities for Shlomo’s companies in the Middle East, US, and other countries.”
In August, Hebrew media reported that Affinity Partners was in talks to acquire a 25% stake in Israel’s Phoenix Insurance Agencies for about $250 million.
Frequently Asked Questions
What is Jared Kushner’s private equity fund?
Jared Kushner’s private equity fund is a $3 billion investment vehicle called Affinity Partners. The fund is backed by Saudi Arabia’s sovereign wealth fund and other investors.
Who are the investors in Jared Kushner’s private equity fund?
In addition to Saudi Arabia’s sovereign wealth fund, Kushner’s private equity fund has received investments from other sources, including wealthy individuals and institutions.
What is the significance of the fund’s first investment in Israel?
The fund’s first investment in Israel is significant because it marks the first time that Kushner’s private equity fund has invested in the country. The investment is also seen as a sign of warming relations between Saudi Arabia and Israel.
How much money was invested in the fund’s first investment in Israel?
Affinity Partners, Kushner’s private equity fund, invested $150 million in the Israeli car company Shlomo Group in its first investment in Israel.
What industries is the fund targeting for investment?
Kushner’s private equity fund is targeting a range of industries for investment, including real estate, infrastructure, and technology.
What is the long-term goal of Jared Kushner’s private equity fund?
The long-term goal of Kushner’s private equity fund is to generate significant returns for its investors by investing in a range of industries and companies. The fund aims to take advantage of opportunities in both the US and international markets.
