Venture Capital Fund Calls on its Companies to Withdraw Investments from Israel
Bessemer Venture Partners is one of the major investors in the hi-tech sector in Israel. On Sunday evening, they issued a stark warning to their companies in the country.
They were told that they should consider moving foreign currency and cash out of the banking system in Israel.
More than $1 billion has been invested by BVP since 2007 in some of the top hi-tech companies in Israel, including Wix, MyHeritage, Yotpo, HiBob and Fiverr.
The managers of the fund issued a letter to their companies in which they highlighted the plans of the government to overhaul the judicial system.
They warned that this would bring about a new period of instability for Israel, which was not due to the unstable coalitions that had been seen in the last four years, but due to the policies of the new government.
The letter stated that the government had ignored the warnings and opinions of experts, such as business owners, investors, bankers and economists in the first six weeks.
It said that rather than listening to them, the government had instead attacked the media and even talked about imprisoning the critics.
The company did add that they had not lost faith in the hi-tech sector of Israel, but there were concerns that local consumption and non-technological foreign investments in the country would take a hit due to the current climate.
Therefore, the fund recommended that exposure to the shekel may have to be reconsidered. It said that they were recommending shekel exposure for six months.
Their recommendations also included using overseas bank accounts for holding foreign currency. The letter comes after a warning from the association of investment houses in Israel.
They had also warned that the stability of the public savings of the country was at risk due to the planned judicial overhaul.
Some of the top savings and pension funds have the same opinion, including Epsilon, Psagot, IBI, Meitav, Phoenix, Altshuler Shaham and Yelin Lapidot.
It should be noted that there is growing discontent amongst the Israeli financial elites about the judicial overhaul, as an increasing number of institutions and organizations have called for halting the process.
However, the government has not paid heed to anything. The Likud party of Benjamin Netanyahu, along with its coalition partners, has already passed the first reading of the controversial legislation on Monday.
The bill in question is aimed at giving the ruling coalition power over the Judicial Appointments Committee, which is responsible for selecting new judges of the Supreme Court.
Now that the bill has passed its first reading, it will move back to the committee and then brought to the Knesset again for its two final readings.
The bill is also going to include amendments to a Basic Law, preventing the High Court from overturning a Basic Law.
In addition, there will not be any judicial oversight on controversial laws. Tens of thousands of protestors had gathered outside the Knesset at the time of the readings.