Jared Kushner’s new fund plans to invest Saudi Arabia’s money in Israel

According to people familiar with the project, Jared Kushner’s new direct investment fund plans to invest millions of Saudi dollars in Israeli startups. A sign of warming relations between two historical opponents.

Affinity Partners, which has raised more than $ 3 billion, including $ 2 billion from the kingdom’s sovereign wealth fund, has already selected the first two Israeli companies to invest, sources said.

This is the first time that funds from the Public Investment Fund (PIF), a Saudi sovereign wealth fund, have been known to go to projects in Israel. A novelty that shows the growing desire of the kingdom to do business with this country, even if the two countries do not officially maintain any diplomatic relations. The move could help lay the groundwork for a decisive normalization agreement between the two capitals.

Israel is strengthening its trade and security partnerships with Arab states, including the United Arab Emirates, almost two years after the United States-led talks that led to historic normalization treaties. Mr. Kushner, the son-in-law of former President Donald Trump, whose chief adviser he was, played a crucial role in signing these so-called Abraham Accords. During this period, he also established strong ties with the Crown Prince of Saudi Arabia, Mohammed bin Salman (MBS), the de facto ruler of the kingdom. After Mr. Kushner left the administration, he used the contacts he made during his time in the White House in the Middle East to expand his direct investment fund, an enterprise that was to bring him significant commissions, whether or not his investment was successful. or not.

“Increasing prosperity in the region and building economic bridges will help strengthen the long-term relationship established after the signing of the Abraham Agreements”

As part of talks on obtaining funding from the kingdom, Saudi officials agreed to allow Affinity Partners to invest in Israeli companies, sources familiar with the matter said, adding that Riyadh could also open its economy to them through a partnership with Mr Kushner. .

In discussions with Saudi leaders, Mr. Kushner and his team warned them that their country risks losing access and opportunities to what they call the “Silicon Valley of the Middle East” for their neighbors who signed Abraham’s agreements with Israel. , sources say. say.

In an interview, Kushner said he saw his investment plans as expanding his work in the White House, which was to strengthen ties between Israel and its Arab neighbors. The latter have long refused to normalize relations with the Jewish state if Israeli leaders do not agree to a Palestinian state.

“If we can force Israelis and Muslims in the region to work together, it will push them to focus on common interests and values,” he added. We have launched a historic regional upheaval that needs to be strengthened and sustained to realize its potential. »

Mr Kushner and his team declined to comment on the companies they work with or the amount of money that is likely to be placed in Israel. He also declined to discuss his relationship with MBS, which oversees the Saudi investment fund’s strategic direction. Those familiar with the discussions say that Prince Muhammad had to approve any decision to invest directly in Israel.

A spokesman for the Saudi Sovereign Wealth Foundation (PIF), whose board is headed by MBS and includes senior ministers, declined to comment on the article. The government’s press service did not want to answer our questions.

PIF’s mission is to transform Saudi Arabia’s national economy by investing in new sectors and giant real estate projects such as the futuristic $ 500 billion city-state called Neom. Prince Mohammed bin Salman told his advisers and diplomats that he hoped the Israelis would play an important role in Neom’s development, including investment in biotechnology and cybersecurity. In November 2020, MBS met with then-Israeli Prime Minister Benjamin Netanyahu in Neomi, which was a sign that Saudi Arabia, in turn, could ratify the Abraham Accords. But with the coming to power of new governments in the United States and Israel, that dynamic has waned.

Attracting Saudi investment, Mr Kushner and his team traveled to Israel in March to meet with dozens of local companies interested in Affinity’s financial support, according to informed sources. According to them, Mr. Kushner organized meetings with Israeli startups working in various sectors, from health care to agriculture, software and cybernetics.

“Jared Kushner can open the door for you. He is able to bring Israeli companies to countries with which we have no real relations, such as Saudi Arabia and Indonesia. “

“Increasing prosperity in the region and building economic bridges will help strengthen the long-term relationship established after the signing of the Abraham Agreement,” said Eli Wurtman, co-founder of PICO Venture Partners, who helped organize meetings for Mr. Kushner and his team.

Mr Kushner introduced his investment company to other oil-rich Arab states, including the United Arab Emirates and Qatar, which did not sign the Abraham agreement. The Wall Street Journal.

Prior to the agreement, Israeli companies operating in other countries had already granted access to their markets to the United Arab Emirates. Today, Abu Dhabi has the opportunity to make direct investments in Israel itself and has signed a number of contracts. The Emirati sovereign wealth fund Mubadala Investment, which manages $ 250 billion in assets, has invested up to $ 20 million in six venture capital companies located in Israel or located in the country. Abu Dhabi’s other sovereign wealth fund, ADQ, has donated $ 105 million to Aleph Farms, an Israeli synthetic meat company.

Saudi Arabia is not the only country without diplomatic relations with Israel that Mr. Kushner is courting. According to sources familiar with the talks, Affinity also seeks to bring Israeli technology to Indonesia, the world’s most populous Muslim country. Before leaving the White House, Mr. Kushner and his team worked on a normalization agreement between the two countries, but it was not finalized until President Biden took office.

Indonesian officials did not respond to our inquiries.

Mr Kushner’s choice to make the Middle East the center of his business after his work in the White House drew criticism from some Democrat lawmakers. The latter wonders whether the support of Saudi Arabia is not retribution for its unwavering support for the MBS during his time in the White House. Mr Kushner and the Trump administration defended the Crown Prince after US intelligence revealed that he had approved a plan to assassinate or capture Jamal Hashoggi, a Saudi columnist for the magazine. washington post killed by a Saudi team in Istanbul in 2018. Mohammed bin Salman has always denied that he ordered this operation.

Affinity says it is proud of its partnership with the Saudi Foundation and rejects accusations that it is in any way related to the support that Mr. Kushner provided to MBS while working for the White House.

On the ground, Affinity faces competition from other investors to attract the best Israeli startups. In recent years, the flow of international capital has led to a local technological boom. 2021 was even a record year in terms of fundraising, before the market slowed during the first quarter of 2022.

Aylet Frisch, a strategic adviser and Israeli branding expert who helped organize meetings for Affinity, said Mr Kushner’s speech resonated with many companies.

“Jared Kushner can open the door for you, says the former strategic adviser to the late Israeli President Shimon Peres. He knows how to introduce Israeli companies to countries with which we have no real relations, such as Saudi Arabia and Indonesia. »

Kushner said the prospect of normalizing relations between Saudi Arabia and Israel would be accelerated by closer economic ties.

“The more we can build business relationships and introduce each other to the region’s innovators, the more opportunities we will give to those who want to follow this new path, and the more we will weaken those stuck in the old paradigm,” he said. Kushner.

(Translated from the original English version by Gregoire Arnol)