Markstone Capital Partners Group LLC will not acquire failing companies whose recovery requires mass lay-offs, Markstone chairman Elliot Broidy told “Globes” in an exclusive interview. “I am not going to invest in companies that require firing large numbers of employees in order to be successful. This would go against everything I am trying to achieve in Israel,” he said.
Broidy said, “Our focus is to invest in traditional companies, but our investment mandate permits to invest up to 10% of our capital in the high-tech and bio-tech sectors… I believe that the traditional sectors of the economy are where capital can be put to use in the most efficient fashion. This is the basic premise underlying our investment thesis and the limitation was agreed to with our founding institutional investors.” Markstone has invested $350 million to date in acquiring Israeli companies, all of which are traditional industries.
Broidy said, “We continue to look at all sectors of the Israeli economy as opportunities present themselves and evaluate each in a most careful fashion. This includes the defense and security industry.” He declined to name which companies could become take-over targets.
In response to the question that many private equity funds target returns of two times capital raised, Broidy said, “We expect our investments to be very successful over time and reach target returns similar to those you refer to.”
Broidy said, “Ownership of Israel’s productive assets will change over an extended period of time and this poses great opportunities and challenges. A major challenge will be the shift from an economy controlled by a few to an economy in which capital will be increasingly democratized.”
Broidy said he traveled to Israel approximately every five weeks or so, that a normal visit lasts seven to ten days, and that he hoped one day to purchase a home or apartment in Israel.
In response to a question whether there would be a Markstone II fund, Broidy said, “We will cross that bridge when we get to it.”
The full interview with Elliot Brody will be published next week by “Globes” online.
Published by Globes [online], Israel business news - www.globes.co.il - on November 10, 2005