Apax Co-founder Warns of Economic Boycott Against Israel
Translated & summarized from Globes by baba
Sir Ronald Cohen, a prominent investor and co-founder of Apax Partners, warns that Israel faces a growing economic boycott due to political extremism, potentially impacting its banking sector. He notes that international investors are becoming cautious and that boycotts could expand from consumer goods to finance. Cohen also highlighted the war's significant economic cost and the need for a better global image strategy, while also identifying a bubble in AI valuations within the venture capital industry.
The story in 6 lines · by baba
- Investor Sir Ronald Cohen warns of an economic boycott against Israel, potentially reaching its banks.
- Cohen believes political extremism is causing international investors to become wary of Israel.
- The war's cost is estimated at $150-$200 billion, increasing Israel's public debt.
- He sees a bubble in AI valuations and predicts a sharp correction in the venture capital market.
- Cohen advocates for a strategic approach and funding to combat rising antisemitism globally.
- He hopes for a return to stability and a more moderate government in Israel.
Sir Ronald Cohen, a co-founder of the investment firm Apax Partners and a pioneer of Europe's venture capital industry, has expressed concern over Israel's economic future, warning that political extremism is already exacting a financial toll. He believes international institutional investors are becoming wary of investing in Israel, and that boycotts initially seen in cultural and consumer sectors could spread to the financial system.
"An economic boycott is starting now," Cohen stated in an interview with Globes. "It's beginning with the settlements, but it's very difficult to distinguish between Israeli products from the settlements and products from Israel. If this boycott reaches the banks, it will be very dangerous for us." He hopes for a more moderate government and a return to stability, expressing concern that Israeli startup founders might leave the country.
Cohen, 81, who was born in Egypt and moved to Britain, has had a distinguished career in finance for over five decades. He co-founded Apax Partners, a major private equity firm that made significant investments in Israel, including acquiring control of Tnuva and Bezeq. He has since focused on promoting impact investments, which aim for both financial returns and positive social or environmental impact. He currently heads GSG Impact and chairs Portland Trust, while continuing to invest in Israeli tech companies.
He also noted the significant budgetary cost of the recent war, estimating it at $150-$200 billion, which has increased Israel's public debt from about 60% of GDP to nearly 70%. Cohen believes the negative perception of Israel began in 2022, before the elections, when the country was at its economic and global image peak as the "Start-up Nation."
Cohen also addressed the rise in antisemitism, attributing it partly to Israel's government neglecting the battle for global public opinion in favor of military action. He stressed the need for a strategic approach and significant funding to combat antisemitism and improve Israel's international image through social media and embassies.
Regarding the venture capital world, Cohen identified a bubble in AI valuations, predicting a sharp market correction. He observed that while some companies are raising vast sums at extremely high valuations, others with solid profitability struggle to secure funding. He also noted changes in venture capital, with seed rounds now reaching $25 million, a trend he believes is unsustainable. Despite these challenges, he sees opportunities in areas where technology meets impact, such as education, health, and construction, and highlighted Israeli entrepreneurs' continued ability to innovate.