US hedge fund buys 25% of IGI's stake in Hydro-Industries

Old Lane is an investment house which manages a hedge fund with over $4 billion in assets.

5 October 06 16:44, Batya Feldman

Sources informed "Globes" that US investment house Old Lane's hedge fund recently bought 25% of local private equity fund Israel Growth Investor's (IGI) stake in Israeli technology company Hydro-Industries Ltd. This is Old Lane's first deal in Israel. Industry sources estimate that Old Lane paid about $2 million to IGI for the stake.

Old Lane is an investment house which manages a hedge fund with over $4 billion in assets. Former executives at Morgan Stanley Dean Witter Investment Bank: Vikram Pandit, John Havens and Guru Ramakrishnan founded Old Lane two years ago. Pandit was the head of institutional securities, Havens was the deputy head of equities and Ramakrishnan was global head of trading, technology and new products in the equities group at Morgan Stanley.

Old Lane, based in New York, invests in various sectors including energy and infrastructure, and owns one of the largest hedge funds on the East Coast. In January this year it was reported that Old Lane was set to allocate $500 million to an equity fund which would operate in India.

Since IGI has invested in Hydro-Industries slightly more than a third of the $20 million that has been invested in it, Old Lane will now own 9% of the company. This is a small stake in a high-tech company. The importance of the move is less about the size of the stake in the company and more about the actual entrance into the Israel market of a hedge fund of this magnitude.

The Israeli high-tech industry welcomes the move, as it is the first time a US hedge fund has shown interest in an Israeli technology company. The local industry hopes that subsequent to regulatory easement, to allow US hedge funds to invest in private companies, Israeli companies will find investors from a new field.

IGI managing partner Tirza Florentin said that Old Lane would assist Hydro-Industries through its international operations in reaching new markets with large potential for its products.

Hydro-Indutsries, founded by chairman Zvi Yemini, has developed a proprietary technology that utilizes water pressure to generate kinetic and other energy. The company's first application was for automatic hose reels. The company is applying the technology for additional products.

Published by Globes [online], Israel business news - www.globes.co.il - on October 5, 2006

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